Tarsus Regulatory News (TRS)

28 Feb 2005 07:00

Tarsus Group PLC28 February 2005 28 February 2005 Tarsus Group plc Preliminary results for the year ended 31 December 2004 Tarsus Group plc ("Tarsus"), the international business-to-business media groupwith interests in exhibitions, conferences and related publishing is pleased toannounce record results for 2004. Financial Highlights • Adjusted profit before tax* increased by 43% to £3.0 million (2003: £2.1 million) • Statutory profit before tax improved to £1.8 million (2003: loss of £1.4 million) • Adjusted EPS* increased by 25% to 5.0p (2003: 4.0p) • Basic earnings per share improved to 2.5p (2003: loss per share 4.7p) • Strong cash flow reduced year-end debt by 33% to £7.9 million (2003: £11.7 million) • Dividend raised by 13.6% to 2.5p (2003: 2.2p) * prior to amortisation of goodwill and for 2003 loss on disposal of discontinued activities. Operational Highlights • Healthy organic growth from both existing products and new launches. • Major US shows performed well with strong repeat bookings. • European performance transformed by good French results. • 12 new products were launched into new geographic markets (China, Russia, Mexico, Brazil, Thailand, Japan) and related sectors (smart labelling, packaging). Financial Results Actual exchange rates Constant exchange rates*** 2004 2003 2003 2004 2003 2003 Total Continuing Total Continuing £ m £ m £ m £ m £ m £ m Turnover* 15.5 17.7 15.5 16.5 17.7 15.5 Adjusted profit beforetax** 3.0 2.1 2.8 3.6 2.1 2.8 Statutory profit/(loss)before tax 1.8 (1.4) Adjusted earnings pershare** 5.0p 4.0p 5.1p 6.0p 4.0p 5.1p Basic earnings/(loss)per share 2.5p (4.7)p * Including share of joint ventures. ** Results are adjusted to exclude goodwill amortisation and the 2003comparative numbers exclude loss on sale of discontinued activities. Thecontinuing column has additionally been adjusted to exclude discontinuedactivities. *** The Group operates in three currencies - sterling, euro and US dollars. Theweighted average exchange rates for the years under review were: £: $1.80 (2003:$1.57); £: €1.45 (2003: €1.46). All numbers in the constant exchange rate tableare calculated using the 2003 weighted average exchange rates. Neville Buch, Executive Chairman of Tarsus commented: "We are pleased to be reporting record results for 2004 - a year in which Tarsushas made considerable progress both operationally and strategically. Theseresults reflect our ability to satisfy our customers' needs for increased sales,marketing and profile in their industries. They were achieved despite anunhelpfully weak dollar, which accounted for approximately 53% of our revenues,and the cycling of biennial events. We anticipate that our revenues for 2005 will be more evenly split between USdollars, euros and sterling. We are investing our cash flow into improving andbroadening the opportunities for our customers. The strength of repeat bookingsfor 2005 and 2006 gives us great confidence for the future. We are now entering an exciting growth phase for Tarsus. While the medium-termprospects for our emerging markets business particularly excite us, moregenerally the combination of our core shows (including our largest biennialexhibition - Labelexpo Europe), new product launches and recent acquisitionsmean that we expect 2005 to show substantial growth over 2004." For further information please contact: Tarsus Group plc:Douglas EmslieGroup Managing Director : Tel. 020 8846 2700 Media:Sarah Landgrebe/Zoe SandersBell Pottinger Corporate & Financial : Tel. 020 7861 3232 Investors:Neville HarrisIRfocus : Tel. 020 7378 7033 CHAIRMAN AND MANAGING DIRECTOR'S STATEMENT We are pleased to be reporting record results for 2004 - a year in which Tarsushas made considerable progress both operationally and strategically. Theseresults reflect our ability to satisfy our customers' needs for increased sales,marketing and profile in their industries. They were achieved despite anunhelpfully weak dollar, which accounted for approximately 53% of our revenues,and the cycling of biennial events. Turnover, including our share of joint ventures, was £15.5 million (2003: £17.7million) but if the operations discontinued in 2003 are excluded, the underlyingturnover was unchanged. At constant exchange rates underlying turnover increased6.5% to £16.5 million (2003: £15.5 million). Adjusted profits before tax (excluding goodwill amortisation and, for 2003,excluding loss on sale of discontinued activities) rose by 43% to £3.0 million(2003: £2.1 million). At constant exchange rates and excluding discontinuedoperations, adjusted profits before tax would have risen by 29% to £3.6 million(2003: £2.8 million). After goodwill amortisation of £1.1 million (2003: £3.0 million) profits beforetax were £1.8 million (2003: loss of £1.4 million including £0.5 million loss ondisposal of discontinued activities). Adjusted earnings per share (excluding goodwill amortisation and, for 2003, losson disposal of discontinued activities) rose by 25% from 4.0p to 5.0p. Basicearnings per share improved to 2.5p from a loss of 4.7p per share in 2003. As a result of good operating cash flows, net debt was reduced to £7.9 millionat the year end compared with £11.7 million at the end of 2003. Your directors propose to pay a final dividend of 2.5p per share - an increaseof 13.6%. In future years we expect to pay both an interim and final dividendwith an approximate split of one third and two thirds respectively reflectingour confident view of the Group's prospects going forward. We will be continuingto offer a scrip alternative for the current year. Your directors intend, basedon the current share price, to take scrip in respect of 11,941,744 of theirordinary shares, in aggregate, representing approximately 93.2% of their totalshareholdings and 24.1% of the issued share capital of the Company. OPERATING REVIEW USA During the year we ran five successful Off-Price events and our biennialLabelexpo Americas exhibition. The Off-Price division grew its like-for-like USdollar revenues by 10% whilst Labelexpo Americas' revenues were up 13% on thelast edition in 2002. The strength of these brands and their importance to our visitors' andexhibitors' businesses, is reflected in the high level of rebookings for theirnext editions. The performance of these shows, combined with our deep knowledge of these nichesectors, has persuaded us to extend our offerings into related areas in 2005. Anew Packaging Services exhibition in Chicago is planned for May and a new SmartLabel event, covering Radio Frequency Identification, is planned for June. Theinitial response to both events is encouraging. Europe Our European operations made significant progress during 2004. Overall,continuing revenues for our French business were up 12% to €8.04 million (2003:€7.19 million), benefiting from a successful launch programme as well as agradual improvement in the economic climate which has extended into 2005. In August, the Group bought the outstanding 65% interest in the SeCA call centreexhibition in Paris which we have managed since 2001. In addition, we acquiredthe Solutions Linux exhibition. Both purchases were funded through the issue of4,495,990 new ordinary shares, placed at 87p. The impact of these acquisitionswill accrue for the first time in 2005. In the United Kingdom, Labels and Labeling magazine built on its world leadingposition with year-on-year revenues up 23%. Emerging Markets These markets represent the most exciting opportunities for the Group in themedium-term, with China in particular offering significant scope. As theireconomies grow, there is a concomitant increase in demand for labellingequipment currently supplied largely by Western manufacturers. The Group'sexhibitions are enabling our client base to penetrate these new and importantmarkets. The Group ran four new labelling events during 2004 in Russia, Mexico, EasternEurope and India. Our launch programme continued during the year with newlabelling events planned in 2005/2006 for Thailand, Brazil and Japan. There will be two events in China in 2005, Labelexpo Asia in December, which isalready significantly larger than the first edition in 2003 and BITTM, the firstexclusively outbound travel show in China in April. OUTLOOK The global labels industry is worth some $50 billion annually and is growing inexcess of 8% per annum. Our leading Labelexpo brand - now 25 years old - isenabling us to grow organically and penetrate new and rapidly growing markets.Space revenues from our largest event Labelexpo Europe, which takes place inSeptember, are already 13% ahead of the 2003 edition. Our Off-Price shows in the USA are unrivalled and continue to benefit from thegrowing percentage of retail spend directed towards discount merchandise. OurFebruary 2005 Off-Price clothing show in Las Vegas was another record event withrevenues up 10% on the 2004 edition. Our French business with its diversified exhibition and directory portfolio isnow fully participating in the Group's overall growth prospects. The impact ofthe SeCA and Linux transactions will accrue for the first time in 2005 and theGroup will continue to seek infill acquisitions to help it achieve its target ofdoubling the 2005 contribution from the French business in the next two to threeyears. Date of 2004 Prior event Growth RebookingsMajor Events next m2 sold m2 sold % to date event m2 sold Labelexpo Europe Sept 05 N/A 23,664 N/A 24,896Labelexpo Americas Sept 06 17,293 16,410 5 16,046Labelexpo Asia (China) Dec 05 N/A 2,892 N/A 4,215Off-Price Clothing Feb 05 9,365 8,861 6 9,591Off-Price Clothing Aug 05 9,734 9,304 5 N/AEducatec Nov 05 4,206 4,552 (8) 2,581 We anticipate that our revenues for 2005 will be more evenly split between USdollars, euros and sterling. We are investing our cash flow into improving andbroadening the opportunities for our customers. The strength of repeat bookingsfor 2005 and 2006 gives us great confidence for the future. We are now entering an exciting growth phase for Tarsus. While the medium-termprospects for our emerging markets business particularly excite us, moregenerally the combination of our core shows (including our largest biennialexhibition - Labelexpo Europe), new product launches and recent acquisitionsmean that we expect 2005 to show substantial growth over 2004. Neville Buch Douglas EmslieExecutive Chairman Group Managing Director GROUP FINANCIAL REVIEW Earnings per share Basic and diluted earnings per share improved to 2.5p from a loss per share of4.7p in 2003. The Group achieved adjusted earnings per share of 5.0p comparedwith 4.0p in 2003. Adjusted earnings per share is based on profits after taxbefore amortisation of goodwill and, for 2003, loss on the disposal ofdiscontinued activities. Acquisitions and fundraising In August, the Group made two acquisitions for its French operations. For aconsideration of US$2.23 million, it purchased the 65% outstanding interest inthe SeCA call centre exhibition which has been managed by the Group since 2001.It also paid an initial consideration of €1.05 million for the Solutions Linuxexhibition. Total consideration is capped at €3.0 million with deferredconsideration of up to €1.95 million payable if profit targets are achieved forthe two editions of the Linux exhibition in 2005 and 2006. Both acquisitions were funded by the placing of 4,495,990 new ordinary shares at87p. Total funds raised were £3.78 million (net of expenses) and the balance ofthe monies after acquisition expenditure provided the Group with additionalworking capital. Tax charge The tax charge of £0.66 million represents 22% of profit before tax and goodwillamortisation. The Group anticipates that in the medium term the tax charge willremain at this level as it continues to take advantage of existing tax assetsaided by the restructuring of its US holdings. Cash flow Net debt at 31 December 2004 was £7.9 million (2003: £11.7 million). Net cashinflow from operating activities was £2.9 million (2003: £3.9 million). Duringthe year the Group repaid bank borrowings of £4.6 million (2003: £0.5 million)and made further payments of net interest of £0.4 million (2003: £0.9 million)and dividends of £0.7 million (2003: £0.3 million). The outflow on acquisitions was for the purchase of the SeCA and Solutions Linuxexhibitions in France. At 31 December 2004, the Group's net debt was denominated in US dollars (2003:US$8.0 million and €13.9 million). Foreign currency risk The Group is exposed to movements in foreign exchange rates against sterling fortrading transactions, the translation of net assets and the profit and lossaccounts of overseas operations. The principal exposure is to the US dollar and euro exchange rates which form the basis of pricing for customers. Owing to thebiennial nature of the Group's largest shows, even years have greater US dollarrevenues (approximately 53% of total revenue and in the odd years the ratio forUS dollar revenues falls to approximately 27% of total revenue). The eurorevenues in even years are approximately 38% of total revenue and in the oddyears 42% of total revenue. The weighted average exchange rate for the US dollarin 2004 was £: $1.80 (2003: $1.57) and the weighted average exchange rate forthe euro was £: €1.45 (2003: €1.46). Liquidity risk The Group policy is to ensure continuity of funding for operational needsthrough cash deposits and debt facilities as appropriate. The key requirementfor the business is to maintain flexibility to allow it to take advantage of opportunities that could arise over the short term. The needs of the businessare determined on a rolling cash flow forecast basis, covering weekly, monthlyand twelve monthly requirements. International Financial Reporting Standards Under European Union legislation, all listed companies will be required toreport under International Financial Reporting Standards (IFRS) for accountingperiods commencing on or after 1 January 2005. The first Annual Report andAccounts for Tarsus prepared under IFRS will be for the year ending 31 December2005. Interim results for the period ending 30 June 2005 will also be preparedon an IFRS basis and include comparative figures for the six months ended 30June 2004 and the year ended 31 December 2004. Preparations for IFRS haveprogressed significantly during 2004 and project work is well on track to ensurethat appropriate deadlines are met. The restatement of the opening balance sheet will be completed in early 2005.While the exact financial impact of the changes in Group accounting policies asa result of IFRS is still being assessed and has not yet been finalised, thefollowing key areas of difference have been identified: a) accounting for options and other share-based payments. This will require a charge against profit;b) the treatment of goodwill. Existing goodwill, and goodwill on future acquisitions, will no longer be amortised. Amortisation will continueto be charged on other intangibles, more of which are expected to be identifiedin future business acquisitions. In addition, future annual impairment reviewsof goodwill could result in periodic charges against profit; andc) accounting for subsidiary undertakings, joint ventures and investments. The accounting treatment of acquisitions in 2004 may differ under IFRS with potential for investments and certain contracts which do not currentlygive rise to an equity interest to be reclassified as either joint ventures orsubsidiaries. As the impact of IFRS is finalised, other issues may arise. The Group's auditors have been kept informed of, and consulted on, thedevelopment of the IFRS project and the preparation of the new Group accountingpolicies. Douglas EmslieGroup Managing Director CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED31 DECEMBER 2004 Notes 2004 2003 2003 2003 Total Continuing Discontinued Total £000's operations operations £000's £000's £000'sTurnover (includingshare of 2 15,491 15,463 2,253 17,716joint ventures) Less: share of turnoverof joint ventures (1,007) (1,048) (194) (1,242) Turnover (excludingjoint ventures) 14,484 14,415 2,059 16,474 Operating costsexcluding (11,322) (11,256) (2,567) (13,823)intangible amortisation Intangible amortisation- continuing business (1,140) (2,852) - (2,852) Intangible amortisation- discontinued business - - (74) (74) Total operating costs (12,462) (14,108) (2,641) (16,749) Operating profit/(loss) 2,022 307 (582) (275) Share of operatingprofit/(loss) 247 172 (153) 19in joint ventures 1 Loss on sale ofdiscontinued - - (518) (518)activities Profit/(loss) onordinaryactivities before 2,269 479 (1,253) (774)interest andtaxation Interest receivable 5 150 - 150Interest payable (439) (768) - (768) Profit/(loss) onordinary 1,835 (139) (1,253) (1,392)activities beforetaxation Taxation 5 (657) (718) 217 (501) Profit/(loss) for thefinancial 1,178 (857) (1,036) (1,893)year Dividend 6 (1,236) (982) - (982) Retained loss for thefinancial (58) (1,839) (1,036) (2,875)year Earnings/(loss) per share (pence) 7Basic and diluted 2.5 (4.7)Adjusted 5.0 4.0 There is no difference between the profit reported above and the historical costprofit. 1 After charging £9,000 goodwill amortisation (2003: £60,000) STATEMENT OF GROUP TOTAL RECOGNISED GAINS AND LOSSES 2004 2003 £000's £000's Profit/(loss) for the financial year 1,178 (1,893)Foreign exchange gains/(losses) offset in reserves 176 (185) Total recognised gains/(losses) for the year 1,354 (2,078) RECONCILIATION OF MOVEMENTS IN GROUP SHAREHOLDERS' (DEFICIT)/FUNDS 2004 2003 £000's £000's Profit/(loss) attributable to shareholders 1,178 (1,893)Nominal value of scrip dividend 13 141Proceeds of ordinary shares issued for cash - Placing 3,782 2,005Premium on scrip dividend 237 373Recognised foreign exchange gains/(losses) for the year 176 (185)Dividend declared (1,236) (982) Net change in shareholders' funds/(deficit) 4,150 (541)Opening equity shareholders' deficit (2,626) (2,085) Closing equity shareholders' funds/(deficit) 1,524 (2,626) Included in recognised foreign exchange gains and losses are foreign exchangegains of £740,000 (2003: loss £343,000) arising on borrowings denominated inforeign currencies designated as hedges of net investments overseas. CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2004 GROUP COMPANY 2004 2003 2004 2003 £000's £000's £000's £000's FIXED ASSETSIntangible assets 17,516 15,009 - -Tangible assets 147 236 6 6 Investments 491 - 49,962 8,611Interests in joint ventures 205 1,804 - -- Share of gross assets 366 995 - -- Share of gross liabilities (318) (542) - -- Goodwill arising on acquisition 157 1,351 - - 18,359 17,049 49,968 8,617 CURRENT ASSETSDebtors 5,878 6,505 519 29,778Cash at bank and in hand 909 2,545 119 977 6,787 9,050 638 30,755 CREDITORS: Amounts falling duewithin one year (15,286) (19,380) (10,496) (8,256) NET CURRENT (LIABILITIES)/ASSETS (8,499) (10,330) (9,858) 22,499 TOTAL ASSETS LESS CURRENTLIABILITIES 9,860 6,719 40,110 31,116 CREDITORS: Amounts falling dueafter more than one year (7,831) (8,447) (5,640) (100) PROVISIONS for liabilities andcharges (505) (898) - (184) 1,524 (2,626) 34,470 30,832 CAPITAL & RESERVESCalled up share capital 2,473 2,235 2,473 2,235Share premium account 29,404 25,610 29,404 25,610Capital redemption reserve 15 15 15 15Other reserves (443) (443) (443) (443)Profit and loss account (29,925) (30,043) 3,021 3,415 Equity shareholders'funds/(deficit) 1,524 (2,626) 34,470 30,832 CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED31 DECEMBER 2004 2004 2003 £000's £000's £000's £000's Operating activitiesNet cash inflow from operating activities 2,924 3,875 Dividend from joint ventures - 145 Returns on investment and servicing offinance Interest received on cash deposit 5 172Interest paid on bank overdraft (408) (1,120) Net cash outflow from returns oninvestment and servicing of finance (403) (948) Tax paid - overseas (126) (275) Capital expenditurePurchase of tangible fixed assets (64) (28)Purchase of intangible assets (806) (28)Purchase of investment (491) -Proceeds on disposal of tangible fixedasset - 6 Net cash outflow from capital expenditure (1,361) (50) Acquisitions and disposalsPurchase of subsidiary undertakings (1,768) -Proceeds on disposal of subsidiary - 831Costs of disposal of subsidiary - (852)Deferred consideration paid for prior yearacquisitions (192) (448)Cash acquired with subsidiary 834 - Net cash outflow for acquisitions anddisposals (1,126) (469) Equity dividends paid (727) (298) Cash (outflow)/inflow before financing (819) 1,980 FinancingIssue of ordinary share capital 3,912 2,072Cost of share issue (135) (87)Repayment of loan (4,594) (479)Repayment of loan note - (5,200) Net cash outflow from financing (817) (3,694) Decrease in cash in the period (1,636) (1,714) RECONCILIATION OF OPERATING PROFIT/(LOSS) TO NET CASH INFLOW FROM OPERATINGACTIVITIES 2004 2003 £000's £000's Group operating profit/(loss) 2,022 (275) Depreciation 150 178Amortisation of goodwill 1,140 2,926Loss on disposal of fixed assets - 55Decrease in debtors 819 1,104Decrease in creditors < 1year (67) (92)(Decrease)/increase in creditors > 1year (747) 747Decrease in provisions (393) (768) Net cash inflow 2,924 3,875 ANALYSIS OF CHANGES IN NET DEBT At 1 Cash flow Exchange At 31 January £000's Movement December 2004 £000's 2004 £000's £000's Cash at bank and in hand includingon deposit 2,545 (1,636) - 909 Subtotal 2,545 (1,636) - 909 Debt due within one year (6,674) 4,150 910 (1,614)Debt due after one year (7,600) 444 - (7,156) Net debt (11,729) 2,958 910 (7,861) RECONCILIATION OF NET CASH FLOWS TO MOVEMENTS IN NET DEBT 2004 2003 £000's £000's Decrease in cash in the period (1,636) (1,714)Repayment of loan 4,594 479Repayment of loan note - 5,200 Change in net debt resulting from cash flows 2,958 3,965 Net debt at 1 January (11,729) (15,351)Translation differences on loans 910 (343)Net debt at 31 December (7,861) (11,729) NOTES TO THE FINANCIAL STATEMENTS 1. BASIS OF PREPARATION The preliminary results for the year ended 31 December 2004 have been preparedin accordance with the accounting policies set out in the financial statementsfor the year ended December 2003. 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. 2. SEGMENTAL ANALYSIS Group turnover, including share of joint ventures turnover; continuing operatingprofit including joint ventures; and adjusted profit/(loss)2 by origin is setout below. 2004 2003 Turnover Turnover £000's £000's Geographical Segment Europe (inc. joint ventures) 7,778 13,444United States of America 6,960 3,814Emerging markets 753 458 Total including joint ventures 15,491 17,716 Continuing 15,491 15,463Discontinued - Europe - 2,253 Total including joint ventures 15,491 17,716 Group 14,484 16,474Share of joint ventures 1,007 1,242 Total including joint ventures 15,491 17,716 2 Profit/(loss) before tax and amortisation, excluding loss on disposal ofdiscontinued activities, including share of joint venture operating profit. 2004 2003 2004 2003 Continuing Continuing Adjusted Adjusted operating operating profit/(loss) profit/(loss) profit/(loss) profit/(loss) £000's £000's £000's £000's GeographicalSegment Europe (inc.joint (1,092) (331) (566) 1,649ventures) United States ofAmerica 3,451 937 3,638 1,234 Emerging markets (90) (127) (88) (122) Europe - - - (649)discontinued Total includingjoint 2,269 479 2,984 2,112ventures Group 2,022 307 Share of jointventures 247 172 Total includingjoint 2,269 479ventures Operating losson discontinued - (582)activitiesShare of jointventures (247) (172) Group operatingprofit/(loss) 2,022 (275) Inter-segmental turnover and profit is not material. Geographical segmentationby destination is not materially different from turnover by origin. Turnover andprofit on continuing ordinary activities are wholly derived from the ownership,organisation and management of exhibitions, conferences and related tradepublications. Operating loss on discontinued activities and share of joint ventures originatein Europe. Group net (liabilities)/assets by origin were as follows: 2004 2003 Net Net (liabilities)/ (liabilities)/ assets assets £000's £000's Geographical Segment Europe (8,673) (13,314)United States of America 9,762 10,224Emerging markets 435 464 1,524 (2,626) 3. PROFIT AND LOSS ANALYSIS The following analysis illustrates the performance of the Group's continuing anddiscontinued activities and reconciles the Group's adjusted profits (beforeexceptional items, amortisation and loss on discontinued activities) tostatutory profit/(loss). 2004 2003 2003 2003 Total Continuing Discontinued Total £000's operations operations £000's £000's £000's Revenue 14,484 14,415 2,059 16,474 Cost of sales (5,990) (5,804) (1,654) (7,458) Gross profit 8,494 8,611 405 9,016 Overheads (5,332) (5,452) (913) (6,365) Operating profit/(loss) beforejoint ventures 3,162 3,159 (508) 2,651and amortisation Joint ventures 256 220 (141) 79Net interest (434) (618) - (618) Profit/(loss) before tax andamortisation 2,984 2,761 (649) 2,112 Joint venture amortisation (9) (48) (12) (60)Intangible amortisation (1,140) (2,852) (74) (2,926) 1,835 (139) (735) (874) Loss on sale of discontinuedactivities - - (518) (518) Profit/(loss) before tax 1,835 (139) (1,253) (1,392) Taxation (657) (718) 217 (501) Profit/(loss) for the period 1,178 (857) (1,036) (1,893) Dividend (1,236) (982) - (982) Retained loss for the year (58) (1,839) (1,036) (2,875) 4. ACQUISITIONS On 5 August 2004 the Group acquired all of the ordinary shares of SECA SA and,as a result, the remaining 65% shareholding in MM Star SA. The resultinggoodwill was capitalised and will be written off over 20 years. Book value and fair value £000's Fixed assetsTangible 1 Current assetsDebtors 191Cash 834 Total assets 1,026 LiabilitiesCreditors 370 Total liabilities 370 Net assets 656 Goodwill 1,112 Purchase consideration and costs of acquisition (cash) 1,768 The acquired undertaking made a profit of £543,000 from the beginning of itsfinancial year to the date of acquisition. In its previous financial year theloss was £274,000. Goodwill of £1,185,000 relating to the Group's 35% shareholding in MM Star SAwas transferred from "Interest in joint venture" to goodwill on 5 August 2004. On 5 August 2004 the Group acquired all the rights and assets of the SolutionsLinux exhibition, an initial consideration of €1.05 million was paid. Totalconsideration is capped at €3.0 million with deferred consideration of up to€1.95 million payable if profit targets are achieved for the two editions of theexhibition in 2005 and 2006. Goodwill of £1,360,000 and trademarks of £214,000were capitalised and will be written off over 20 years. 5. TAXATION 2004 2003 £000's £000's Current taxUK tax on profits for the period 395 -Overseas tax on profits for the period 222 199Overseas tax on joint ventures - 156Adjustments of UK corporation tax in respect of previousperiods (183) 146Provision 32 - Current tax charge for the period 466 501 Deferred taxMovement in the period 34 -Adjustments in respect of previous periods 157 - Total deferred tax 191 - Tax charge for the year 657 501 The current tax charge for the year is lower than the standard rate ofcorporation tax in the UK. The differences are explained below: 2004 2003 £000's £000's Profit/(loss) before taxation per consolidated accounts 1,835 (1,392) Tax at the standard rate of corporation tax in UK of 30% 550 (418)Effects of:Expenses not deductible 223 510Income not chargeable to tax (58) -Marginal tax on overseas profits 47 35Capital allowances for period in excess of depreciation (27) 30Utilisation of losses/unutilised losses in the year (87) 198Adjustment to tax charge in respect of previous periods (182) 146 Current tax charge for the period 466 501 2004 2003 £000's £000's Deferred tax asset Balance as at 1 January 622 622Credit to the profit and loss account (191) - Balance as at 31 December 431 622 Comprising:Accelerated capital allowances 103 68Tax losses 398 554Other timing differences (70) - 431 622 The Group has an unrecognised deferred tax asset of £1,543,000 (2003:£1,827,000). This relates to accelerated capital allowances of £208,000 (2003:£206,000), trade losses of £605,000 (2003: £891,000) and non-trade losses of£730,000 (2003: £730,000). The deferred tax asset recognised is based onforecasts that indicate suitable taxable profits will arise. 6. DIVIDENDS 2004 2003 £000's £000's Equity - OrdinaryFinal proposed: 2.5p/2.2p per share 1,236 982 1,236 982 The directors announced the proposed final dividend for 2004, of 2.5p per share,on 28 February 2005. Subject to approval at the Annual General Meeting on 15April 2005 the proposed date of payment is 22 April 2005 to shareholders on theregister on 11 March 2005. 7. EARNINGS/(LOSS) PER SHARE 2004 2003 £000's Per share £000's Per share Profit/(loss)/basic profit/(loss)per share 1,178 2.5p (1,893) (4.7)p Adjustments: Amortisation - Group 1,140 2.4p 2,926 7.3p Amortisation - joint ventures 9 0.1p 60 0.1p Loss on sale of discontinuedactivities - - 518 1.3p Adjusted earnings per share 2,327 5.0p 1,611 4.0p Reconciliation of the earnings/(loss) and the weighted average number of sharesused in the calculations are set out below: Earnings 2004 Weighted Earnings (Loss)/ 2003 (Loss)/ £000's average per share earnings Weighted earnings number p £000's average per share of shares number p of shares Basic EPS 1,178 46,887,267 2.5 (1,893) 40,357,925 (4.7) Dilutiveeffect of:Options 1,110,857 - 807,964 -* Dilutive 1,178 47,998,124 2.5 (1,893) 41,165,889 (4.7)EPS Basic EPS 1,178 46,887,267 2.5 (1,893) 40,357,925 (4.7) Amortisation- Group 1,140 2.4 2,926 7.3 Amortisation- joint 9 0.1 60 0.1ventures Loss on saleof discontinuedactivities - - 518 1.3 Adjusted 2,327 46,887,267 5.0 1,611 40,357,925 4.0EPS * Because in 2003 basic EPS resulted in a loss per share the options had nodilutive effect. The adjusted EPS figures have been calculated using earnings before amortisationand in 2003 before loss on sale of discontinued activities as this representsthe ongoing operational earnings per share of the Group. This information is provided by RNS The company news service from the London Stock Exchange