Tarsus Regulatory News (TRS)

 Tarsus Group plc

("Tarsus", the "Company" or the "Group")

Interim results for six months to 30 June 2017

Tarsus, the international business-to-business media group, reports significant progress.

The 'Quickening the Pace' strategy - to accelerate financial returns - continues to gain momentum

with a concerted drive to scale up the Group's portfolio delivering strong organic revenue growth.

Highlights

· Strong growth in adjusted profits and earnings

· Like-for-like revenue* up 4% in smaller first half (8% excluding Turkey)

· Interim dividend up 11% to 3.0p (2016: 2.7p)

· Continuing strong visitor growth up 8%

· Encouraging performances from recent acquisitions - Connect, Hometex and Intex

· Acceleration of replication programme

· Award winning - AEO Marketing Campaign of the Year (fifth time) and IAEE International Excellence Award

Outlook

· Promising outlook for larger events in second half, including the Dubai Airshow and Labelexpo Europe

· Forward bookings for the full year currently 9% ahead on a like-for-like basis

· Group remains confident of delivering a strong performance in 2017 in line with expectations

Douglas Emslie, Group Managing Director, said:

"2017 is set to be a strong year for Tarsus. Our determination to build a high quality portfolio in fast-growth markets is paying off, with recent acquisitions performing well and replications extending the reach of Tarsus brands across the world.

"We are seeing impressive results across the portfolio, thanks to the Group's clear strategy of driving scale and momentum. We acquire businesses in exciting markets and industries on the cusp of change; we partner with entrepreneurs who share our vision; we replicate these success stories across the world. Thanks to our increasing scale, we are positioned to deliver future growth - Quickening the Pace of returns to our shareholders.

"As we look ahead to the next six months, the picture is bright. Forward bookings for the current year are already 9% ahead - and we are expecting strong editions of our largest shows, notably Labelexpo Europe and the Dubai Airshow. Given the progress made in 2017, and our excellent portfolio, the Group is confident of delivering a strong performance for the year as a whole."

Overview

The past five years have seen a major strategic re-shaping of the Tarsus portfolio, with a number of strong brands acquired and the Group's ambitions focused on geographies which promise significant growth. The portfolio of exhibitions is diversified by both geography and sector, from the emerging markets of Dubai, Turkey, South East Asia and Mexico to the world-leading markets of the US and China, Tarsus has laid the foundations for future progress.

Following this period of expansion, Tarsus now enjoys the scale and reach to build momentum rapidly: anchored in key markets, with the dexterity and drive to replicate leading brands worldwide. The company continues to invest in new innovations and products, with a constant eye on increasing future organic growth. Together, these actions allow the Group to fulfil its strategy of 'Quickening the Pace': constantly accelerating the rate of return to shareholders.

Financial review

Group revenue for the period was £39.8m (2016: £27.0m). Adjusting for acquisitions and biennial events, underlying organic revenue growth of 4% was achieved in the smaller first half. Revenues in Turkey in the first half were impacted by the geopolitical uncertainty in the region; excluding this impact the revenue growth for the group was 8% on a like-for-like basis.

Adjusted profit before tax was £6.8m (2016: £4.0m; 2015: £5.1m), reflecting strong revenue growth in the portfolio as a result of the move towards higher growth markets and a strong performance from acquisitions. The Group incurred exceptional costs of £0.6m (2016: £0.8m) in respect of completed and pending corporate transactions. The Group also incurred an amortisation charge of £3.7m (2016: £2.5m). Other adjusting items are set out in note 6 to the financial statements below. Loss before tax was £1.4m (2016: £3.1m).

Adjusted earnings per share were 3.5p (2016: 2.8p). Basic loss per share was 3.2p (2016: 3.1p).

An interim dividend of 3.0p per share (2016: 2.7p) has been declared and will be paid on 12 January 2018 to Shareholders on the Register on 1 December 2017. The Group will continue to offer a scrip alternative to qualifying shareholders.

Operating cash inflow in the first half was £16.1m (2016: £1.1m), a strong performance ahead of the Group's large biennial shows in the second half of the year. As expected net debt at 30 June 2017 increased to £85.3 million (2016: £57.3m), driven primarily by acquisitions and deferred consideration payments. The Group remains on target to return to its stated long-term target range of 1.5 - 2.0x net debt: EBITDA by the end of the year. Tarsus has bank facilities of £111m to 2020, providing the financial resources to support its strategic development.

Corporate activity

Tarsus completed the acquisition of 65% of Foshan Huaxia Home Textile Development Co., Ltd on 25 January 2017.

There were no other acquisitions or disposals during the period.

Operating review

Geographic breakdown of results

The Group has changed its reporting structure to better reflect the geographic management of the businesses. Previously the Group reported under US, Europe and Emerging Markets. The segments are now Americas (US and Latin America), Asia (China and South East Asia) and EMEA (Europe, Middle East and Turkey).

Americas

The Connect events are second-half weighted and are performing in line with expectations. We are seeing good opportunities to expand the Connect portfolio with 10 new events planned this year. The Medical portfolio continues its return to revenue growth and the Off Price February 2017 show produced another solid performance.

In Mexico, trading was positive with a strong performance from Expo Manufactura. Two replications were also held (GESS Mexico and Airport Solutions) in the period and both did well.

Asia

The Group's Chinese portfolio, which is heavily first half weighted, performed strongly. AAITF showed good growth in its third edition in Shenzhen, and SIUF performed well. The first editions of events held under the Group's ownership of Hometex and Intex were all encouraging and in line with management expectations. The outlook for the second half in China remains positive.

The majority of events in South-East Asia fall in the second half of the year. Performance of the first half events was in line with management's expectations.

EMEA

Dubai saw a solid performance across events in the first half, including GESS: one of the key brands being replicated into other markets. The first edition in Turkey will take place in October 2017.

Given the unsettled political background, the Group budgeted cautiously for Turkey in 2017. Overall, a number of events in the first half saw lower revenues than previous editions. The market has now recovered resulting in an improved outlook for 2017 compared with 2016 for the Group's larger shows in the second half: Zuchex, Sign and Flower Show.

Outlook

Revenues for the year as a whole are heavily weighted to the second half, owing to the timing of the Group's larger events. Overall, bookings are 9% ahead of 2016 on a like-for-like basis - and Tarsus expects strong editions of the larger shows (notably Labelexpo Europe and the Dubai Airshow) in the second half.

Recent acquisitions are performing well, further enhancing the Group's organic growth potential through increased scale and additional replication opportunities.

The Group remains confident of delivering a strong performance for the year as a whole and in line with the Board's expectations.

For further information contact:

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 27 July 2017.

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

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 26 July 2017 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 2017 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 2016 are available upon request from the Company Secretary at 15 Harcourt Street, 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 2016 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 26 July 2017.

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 2016.

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 2016.

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 2016.

6. ADJUSTING ITEMS

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 of intangible assets, unwinding of discount charges, changes in fair value of contingent consideration and put/call liabilities, acquisition related costs and related taxation impact.

7. SEGMENTAL ANALYSIS

As at 30 June 2017, the Group is organised into three main operating segments - Americas, Asia and EMEA. This has changed from the prior year when the three main segments were - Europe, USA and Emerging Markets. The change in segments reflects the format in which the key decision makers now review the business, the composition of the business and strategic intent.

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)

8. TAXATION CHARGE

The taxation charge for the six months ended 30 June 2017 is based upon the estimated effective tax rate of 16.0% on adjusted profit before tax (2016: 15.2%) for the year ending 31 December 2016.

9. EARNINGS PER SHARE

Basic earnings per share

Basic earnings per share has been calculated on loss after tax attributable to ordinary shareholders for the six months of £3,551,775 (June 2016 loss: £3,121,652) and 112,249,882 (June 2016: 101,365,693) ordinary shares, being the weighted average number of shares in issue during the period.

Diluted earnings per share

Diluted earnings per share has been calculated on loss after tax attributable to ordinary shareholders for the six months of £3,551,775 (June 2016 loss: £3,121,652) and 112,662,685 (June 2016: 101,516,395) ordinary shares, being the diluted weighted average number of shares in issue during the period.

Adjusted earnings per share

Adjusted earnings per share is calculated using adjusted profit after tax as reconciled in note 6 and the weighted average number of ordinary shares (as below) in issue in the year.

Adjusted diluted earnings per share

Adjusted diluted earnings per share is calculated using loss after tax as reconciled in note 6 and the weighted average number of diluted ordinary shares (as below) in issue in the year.

Weighted average number of ordinary shares (diluted):