Tarsus Regulatory News (TRS)

Tarsus Group plc

Interim results for the six months ended 30 June 2016

Strong buyer growth and confidence in full year outlook

Tarsus Group plc ('Tarsus', the 'Group' or 'Company'), the international business-to-business media group, announces its results for the six months ended 30 June 2016.

Tarsus continued to execute its "Quickening the Pace" strategy which is focused on accelerating the pace of financial returns to shareholders. The Group made good progress in strengthening, investing in and scaling up its portfolio of events, resulting in organic revenue and buyer growth across the portfolio of 11% and 7% respectively.

Financial highlights

· Like-for-like revenue* up 11% on 2015

· Adjusted profit before tax* and adjusted EPS* up 26% and 75% respectively over the biennial cycle demonstrating success of the Quickening the Pace Strategy

· Interim dividend up 8% to 2.7p (2015: 2.5p)

Operational highlights

· Strong performance from Emerging Markets continues

· Solid growth in the US with improving revenues in Medical division

· Buyer growth across portfolio of 7%

· Continuing momentum in replication launches

Strategic highlights

· Buy-in of minority interest - Life Media (Turkey)

· Expansion in South East Asia - PEP (Philippines)

Outlook

· Promising outlook for larger events in second half

· Group remains confident of delivering a strong performance in 2016 - forward bookings for the full year currently 10% ahead on a like-for-like basis

· Strong forward bookings for larger biennials in 2017

Douglas Emslie, Group Managing Director, said:

"Trading across our business has been encouraging in the first half of 2016. The long-term investment we are continuing to make in our portfolio is delivering industry leading attendee growth and we are making good progress with replicating events across our markets. These developments are strengthening the Group's prospects for future organic growth and are key elements of our "Quickening the Pace" strategy.

"Forward bookings for the current year are 10% ahead and we are expecting strong editions of the larger shows - notably Labelexpo Americas - in the busier second half. Forward bookings for our larger biennial events in 2017 remain positive.

"The Group is mindful of the global macroeconomic background and geopolitical risk but is confident of delivering a strong performance for the year as a whole."

For further information contact:

Tarsus Group plc:

Douglas Emslie, Group Managing Director 020 8846 2700

Dan O'Brien, Group Finance Director

IR Focus

Neville Harris 07909 976044

The Group will be hosting a presentation to analysts at 11.30am today at the offices of Investec Bank plc, 2 Gresham Street, London EC2V 7QP. A webcast of the presentation will be available on Tarsus's website (www.tarsus.com) from 9.30am on 28 July 2016.

*Definitions can be found in note 17 to the financial statements

Overview

Following the reshaping of the Group's portfolio over the past five years, the bulk of our revenues over the two-year cycle is now derived from the US and a carefully targeted selection of Emerging Markets - Turkey, Dubai, China, South East Asia and Mexico - the majority of which generate revenues in US Dollars. This has been achieved through the acquisition of a number of strongly branded assets across our chosen markets alongside the disposal of our lower growth domestic European assets. Our acquisitions - which in their own right have produced good returns on investment - have enabled the Group to achieve increased scale in a number of markets and geographic areas. Greater scale and reach both enhance the Group's ability to invest for the future and launch replications of successful brands. This further supports the individual brand's ecosystem, increasing the level of future organic growth and beneficially leveraging the Group's core infrastructure. These strategic initiatives lie at the heart of the Group's "Quickening the Pace" strategy.

In addition, the Group's scale, flexibility, speed and willingness to work with entrepreneurs to develop their businesses in partnership is becoming increasingly attractive not only to vendors of businesses but other brand owners. Tarsus is working in partnership with EJ Krause and DMG (through the Big 5 construction series) in Indonesia. These Global Brand Partnerships bring together third party brands with our established infrastructure, local expertise and marketing capability enabling us to launch brands quickly and efficiently.

Financial review

Group revenue for the period was £27.0m (2015: £29.0m). Adjusting for acquisitions and biennial events, the Group achieved underlying organic revenue growth of 11% in the period.

Adjusted profit before tax was £4.0m (2015: £5.1m; 2014: £3.1m), reflecting strong revenue growth in the portfolio as a result of the move towards higher growth markets. The Group incurred exceptional costs of £0.8m (2015: £0.7m) in respect of completed and pending corporate transactions. The Group also incurred an amortisation charge of £2.5m (2015: £1.8m). Other adjusting items are set out in note 6 to the financial statements below. Loss before tax was £3.1m (2015: £2.2m).

Adjusted earnings per share were 2.8p (2015: 3.1p). Basic loss per share was 3.1p (2015: 3.0p).

An interim dividend of 2.7p per share (2015: 2.5p) has been declared and will be paid on 13 January 2017 to Shareholders on the Register on 2 December 2016. The Group will continue to offer a scrip alternative.

Operating cash inflow was £1.1m (2015: inflow £9.5m). Owing to the timing of the Group's events for this year, working capital inflows are also expected to be second half weighted. Net debt at 30 June 2016 increased to £57.3 million (2015: £43.5m) driven primarily by acquisitions and deferred consideration payments. At the period end, gearing stood at 2.0x net debt:EBITDA which is in line with the Group's target of 1.5-2.0x. Tarsus has bank facilities of £75m to 2020 providing the financial resources to support our strategic development.

Corporate activity

In line with the strategy outlined at the Group's Final Results in March 2016, in which we indicated we will look to buy in a number of outstanding minority interests, the Group has purchased the remaining 30% equity interest in Life Media (Zuchex) in accordance with the terms of the original acquisition agreement.

Tarsus furthered its strategic development in South East Asia through the acquisition of 51% of PEP in the Philippines. PEP, organisers of WOFEX (World Food Expo) which runs annually in August and is the country's largest food trade show, links strongly with the Group's food interests in Myanmar and Cambodia and substantially increases sector scale. Following the purchase of 50% of AMB in 2015 which accelerated our strategic development in South East Asia, the Group's industry focus in the region is now concentrated on the Food, Automotive and Infrastructure sectors.

Operating review

Geographic breakdown of results

Emerging markets

Trading in Turkey, which constitutes some 11% of Group revenues on an annual basis, continued to be good in the first half and there was a particularly strong performance from Ideal Homex - the largest first half event. The outlook for this division's larger events in the second half - Zuchex, Sign and the Flower Show - is also good. We are mindful of the political situation in Turkey and continue to monitor developments closely. Whilst some 90% of our customers in Turkey are domestic and continue to grow well, we have tempered our growth expectations for international customers.

In Dubai, Tarsus' education event GESS performed well with buyer attendance up 18%. GESS is one of the key brands being replicated into other markets. In the first half of 2016, the second edition of the event took place in Mexico City with buyer attendance up 9% and in the second half of 2016 the second edition in Indonesia looks promising. Our aerospace events, AIME and MRO, also performed well.

In China, the Group's exhibitions focus predominantly on the internal Chinese market which is benefiting from strong growth in consumer spending as the Chinese economy transitions. AAITF (auto), SIUF (underwear), Labelexpo Asia and medical equipment all fall into this category. Additionally, in terms of geography, Tarsus is focused on the key growth areas of Shanghai, Shenzhen and central China. The Group remains optimistic about opportunities in China and will seek to expand its presence there.

In the first half, SIUF, Asia's largest underwear show, demonstrated good progress over the 2015 edition with buyer growth of 13%. AAITF showed good growth in its second edition in its new venue in Shenzhen with revenue returning to previous levels. Hope, the Group's Central China division continued to perform well with revenues ahead of 2015.

In South East Asia, the majority of events take place in the second half of 2016. Following the acquisition of PEP, the Group is now the largest international organiser in the Philippines covering three core sectors of food, auto and infrastructure. The launch of an infrastructure show in Manila in 2017 will increase the Group's scale in the Philippines. South East Asia is a key area of focus for Tarsus and, in the medium-term, the Group expects its revenues from this region to double and comprise some 10% of Group revenues.

In Mexico, Plastimagen (plastics) and Expo Manufactura (metalworking/manufacturing), performed in line with expectations.

USA

The work undertaken in 2014 and 2015 to reposition, diversify and scale up the Medical Division is beginning to gain traction with revenues up 5% in the period. With this division now addressing all four pillars of preventative medicine, revenues are growing and attendances are rising underpinned by continuing portfolio investment. Further growth will be achieved through a combination of launching new events across the different therapeutic areas combined with an educational offering that is increasingly targeting the mainstream medical market.

The Medical Division has performed in line with our expectations in the first half with a steadily increasing number of events across the four therapeutic areas. PainWeek in particular has shown good progress with 22 events in the first half (2015:11). The South Beach Symposium, held in February 2016, also delivered a very solid performance.

The February 2016 Off Price (clothing) show in Las Vegas was another good event. Bookings for the August 2016 edition are in line with our expectations.

Europe

Following the sale of our French business in 2015, the size of our European business is much reduced with the main event - Labelexpo Europe - held in the second half of odd years.

The Additive Manufacturing show in Amsterdam at the end of June saw the Group's first event for the B2B market from its 3D printing portfolio. The event had a strong attendance and was well received by exhibitors and is expected to be repeated in 2017.

Outlook

Revenues for the year as a whole are heavily second-half weighted owing to the timing of many of the Group's larger exhibitions. Overall bookings are 10% ahead of 2015 on a like-for-like basis and we are expecting strong editions of the larger shows - notably Labelexpo Americas - in the second half.

Given the revenue of the Group is predominantly in US Dollars Tarsus expects the recent weakness in Sterling, if it continues, to have a positive influence on future results starting in 2017. The Group is not expecting the recent referendum result in the UK on membership of the European Union to have a significant impact on trading, given our geographical diversification and lack of exposure to UK/EU trade.

The Group remains mindful of the global macroeconomic background and geopolitical risks but is confident of delivering a strong performance for the year as a whole. Bookings for our larger biennial events in 2017 remain positive.

Neville Buch Douglas Emslie

Chairman Group Managing Director

27 July 2016

CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT

* See note 6 for adjusting items

CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 June

Other comprehensive income relating to foreign exchange translation differences, fair value movements in cash flow hedges and the tax effects thereon may all subsequently be reclassified to profit and loss if certain conditions are met.

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

The financial statements of Tarsus Group plc, registered number 101579 (Jersey), were approved by the board and authorised for issue on 27 July 2016 and signed on its behalf by:

Douglas Emslie Daniel O'Brien

Group Managing Director Group Finance Director

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1. REPORTING ENTITY

Tarsus Group plc (the "Company") is a company incorporated in Jersey and resident in Ireland. The condensed consolidated financial statements of the Company as at and for the six months ended 30 June 2016 comprise the Company and its subsidiaries (together referred to as the "Group") and the Group's interest in jointly controlled entities.

The consolidated financial statements of the Group as at and for the year ended 31 December 2015 are available upon request from the Company Secretary at 77 Sir John Rogerson's Quay, Dublin 2, Ireland.

Having reviewed the Group's liquid resources, borrowing facilities and cash flow forecasts, the directors believe that the Group has adequate resources to continue as a going concern for the foreseeable future.

2. STATEMENT OF COMPLIANCE

These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) IAS 34 Interim Financial Reporting. They do not constitute the Group's statutory accounts.

The interim financial statements should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2015 which were prepared under International Financial Reporting Standards, as adopted by the European Union, and have been reported on by the Company's auditor. The auditor report was unqualified.

The financial statements of Tarsus Group plc, registered number 101579 (Jersey), were approved by the board and authorised for issue on 27 July 2016.

3. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2015.

4. ESTIMATES

The preparation of consolidation interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2015.

5. FINANCIAL RISK MANAGEMENT

The Group's financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as at and for the end for the year ended 31 December 2015.

The following analysis details the adjusting items in the consolidated interim income statement. Adjusted profit is prepared to provide a better indication of overall financial performance and to reflect how the business is managed and measured on a day to day basis. The adjusted profit excludes share option charges, amortisation and impairment of intangible assets, movements in fair value measurement of unsettled derivatives and unwinding of discount charges.

*In 2016, the Group incurred exceptional one-off costs resulting from acquisition costs or potential acquisition costs of £0.8m.

In 2015, adjusting items would have reduced by £305,000 if discontinued operations were excluded which would reduce adjusted profit before tax to £5,147,000, adjusted profit after tax to £4,346,000 and EPS to 3.1p.

7. SEGMENTAL ANALYSIS

As at 30 June 2016, the Group is organised into three main operating segments - Europe, USA and Emerging Markets. These segments are the basis on which the Group reports its segments are the basis on which the Group reports its segment information for management purposes.

The main activities of all segments are the production of exhibitions, conferences, magazines, directories and online media.

The following table sets out the revenue and profit information and certain asset and liability information for the Group's reportable segments:

7. SEGMENTAL ANALYSIS (CONTINUED)