Tarsus Regulatory News (TRS)

 29 July 2015

Tarsus Group plc

Interim results for the six months ended 30 June 2015

Record first half performance and confident 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 2015.

Tarsus continued to concentrate on the execution of its "Quickening the Pace" strategy, which is focused on accelerating the pace of financial returns to shareholders. The Group made good progress in the period strengthening and investing in its portfolio of events resulting in sector leading organic revenue and visitor growth across the portfolio of 14% and 9% respectively in the period.

Financial highlights

· Sector leading organic revenue up 14% on 2014 as adjusted for biennial exhibitions and acquisitions clearly demonstrates delivery of our Quickening the Pace Strategy

· Record adjusted profit before tax* and adjusted EPS up 39% and 31% respectively over the biennial cycle

· Interim dividend up 4% to 2.5p (2014: 2.4p)

Operational highlights

· Strong performance from Emerging Markets

o Asansor and Komatek (Turkey) performed well

· Visitor growth across portfolio of 9%

· Launches of two brand replications in Mexico - GESS and Industrial Print Expo

Strategic highlights

· Strategic repositioning of portfolio complete

o Disposal of French business (July 2015)

· Acquisition of PAINWeek in US adding final pillar to the Group's preventative medicine portfolio

· Acquisition of AMB doubles South East Asia portfolio

· Banking facilities increased to £75m and extended to 2020

Outlook

· Forward bookings currently 15% ahead of 2014 (adjusted for biennial exhibitions)

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

· Turkey and Medical divisions in line with expectations

· Group remains confident of delivering a strong performance in 2015

Douglas Emslie, Group Managing Director, said:

"Our record trading performance in the first half was very encouraging and we also made further strategic progress with our replications in Emerging Markets. The investment in our portfolio has resulted in sector leading organic revenue and visitor growth.

"The execution of our strategy gathered pace recently with acquisitions of PAINWeek and AMB and the agreement to dispose of our French business.

"Revenues for the year as a whole are heavily second-half weighted owing to the timing of the Group's larger exhibitions. Bookings overall are 15% ahead adjusting for biennials. Prospects for our two largest events in the second half - Labelexpo Europe and the Dubai Airshow - are encouraging. The Group is increasingly confident of delivering a strong result 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 30 July 2015.

Notes

*Adjustments include exceptional items, share option charges, amortization, impairment charges and associated tax impacts. Further reconciliation between reported profits and adjusted profits is included in note 6 to the financial statements.

Organic revenues are on a constant currency basis and after adjusting for the impact of acquisitions, disposals and biennials.

Overview

The recent announcement of the agreement to dispose of Tarsus' French business is an important milestone in the strategic progress of the Group. In the last five years Tarsus has steadily evolved its portfolio by focusing on expanding into its chosen geographies of the US and selected Emerging Markets whilst also reducing its exposure to the lower growth Eurozone.

In 2009 53% of the Group's revenues were derived from the US and Emerging Markets and we expect this to increase to 85% in 2015 on a pro-forma basis. Over the same period, the number of shows held by the Group has grown from 62 to 95.

This reshaping has been achieved through the acquisition of a number of strongly branded assets across our chosen markets supported by increased investment in a programme of new launches and replications to drive organic growth, in line with our "Quickening the Pace" strategy.

The Group's size, flexibility, speed and willingness to work with entrepreneurs to develop their businesses in partnership with Tarsus is becoming increasingly attractive to partners and helps accelerate the overall strategy.

Financial review

Group revenue for the period was £34.0 million (2014: £23.1 million). Adjusting for acquisitions and biennial events, the Group achieved underlying organic revenue growth of 14% in the quieter half of the year.

Adjusted profit before tax was £5.5 million (2014: £3.0 million; 2013: £3.9 million), reflecting strong revenue growth in the portfolio together with the enhanced operational gearing as a result of the move towards higher growth markets. The Group incurred exceptional costs of £0.7 million (2014: £0.2 million) in respect of completed and pending corporate transactions. The Group also incurred an amortisation charge of £1.8m (2014: £1.3m) and an impairment charge of £1.8m (2014: nil) on the disposal of the French business. Other adjusting items are set out in note 6 to the financial statements. Loss before tax was £1.9 million (2014: Profit before tax £0.3 million).*

Adjusted earnings per share were 3.4p (2014: 1.5p). Basic loss per share was 3.0p (2014: 1.1p).

An interim dividend of 2.5p per share (2014: 2.4p) has been declared and will be paid on 15 January 2016 to Shareholders on the Register on 4 December 2015. The Group will continue to offer a scrip alternative.

Operating cash inflow was £9.5 million (2014: inflow £1.9 million). The strong operating cash flow performance was helped by the difference in timing between cash collections and payments for the large biennial events.

Net debt at 30 June 2015 was £43.5 million (2014: £34.7 million). Tarsus has increased its existing bank facility to £75million and extended it to 2020 to provide the financial resources to continue to support our strategy. In addition, Tarsus will use the expected net proceeds from the disposal of the French business to strengthen the Group's balance sheet and fund expansion in the Group's core geographies.

In May 2015, the Group announced the acquisition of PAINWeek in the US.

Post balance sheet events

In July 2015 the following post balance sheet events occurred:

· Acquisition of 50% of a JV vehicle, AMB Tarsus Exhibitions Sdn. Bhd.

· Disposal of Tarsus' French business for €9.2m to French management

Operating review

Geographic Analysis

Emerging Markets - strong performances from Dubai, Turkey and China

USA - growth in Off Price; Medical business expanded

Europe - stable first half in France; good

progress for 3D Printshow

Emerging markets

Trading in Turkey continued to be good in the first half with strong performances from the two large biennials, Asansor (lifts) and Komatek (construction). It was the first Komatek event under Tarsus' ownership and revenue increased 46% compared to the previous edition in late 2013. The outlook for the construction sector in Turkey remains positive providing the event with opportunities to grow. Ideal Home took place in April 2015 and produced a solid result with visitor growth of 5% over the previous edition. The outlook for the division's larger events in the second half - Zuchex, Sign and the Flower Show - is good.

In Dubai, Tarsus' education event GESS performed solidly with visitor attendance up 11%. GESS is one of our key brands being replicated into other markets. In the first half of 2015, the launch into Mexico City (in conjunction with our partner EJ Krause) was successful and in the second half of 2015 the brand is being launched into Indonesia. The outlook for the Dubai Airshow - increasingly regarded as the premier industry event - is very encouraging and forward bookings are tracking well ahead of the 2013 edition.

In China, Hope, the Group's Central China operation has continued to perform well with revenues ahead of 2014. SIUF, Asia's largest underwear show, demonstrated good progress over the 2014 edition. AAITF performed well in the first edition in its new venue in Shenzhen.

In South East Asia, the first Big 5 Construct exhibition in Indonesia had a successful launch and the outlook for the Group's other construction events in November 2015 is promising. The Group recently announced the acquisition of 50% of AMB which will allow Tarsus to accelerate its strategic development in the region with an experienced and entrepreneurial partner.

In Mexico, there was a strong performance at Expo Manufactura, the country's premier metalworking/manufacturing exhibition which took place in February 2015. This included a successful launch of our replication event Industrial Print Expo.

USA

The February 2015 Off Price (clothing) show in Las Vegas was a good event, with solid visitor and revenue growth. Bookings for the August 2015 edition of the exhibition are ahead of the 2014 edition.

We have continued the work we undertook in 2014 to reposition the Medical Division. Following the acquisitions of CMHC and SouthBeach in 2014 the addition of PAINWeek to the division has extended our reach to cover all four pillars of preventative medicine. This, alongside the launch of the Metabolic Medical Institute and the restructuring of its educational offering means the Group now reaches a significantly higher percentage of the mainstream medical market and is well placed for growth. The Medical Division's established education business - while performing satisfactorily - now represents less than 25% of the overall Medical Division.

Future growth is expected to be achieved through a combination of launching new events across the different therapeutic areas combined with an educational offering that will increasingly target the mainstream medical market.

Europe

The 3D Printshow business has shown good progress in 2015 with events in both New York and London, in addition to successful events launched in Berlin and Madrid. Further events in Paris, California and Dubai are planned in the second half, the latter co-located with the Dubai Airshow.

Like-for-like sales in France were slightly ahead of 2014.

Outlook

Revenues for the year as a whole are heavily second-half weighted owing to the timing of the Group's larger exhibitions. Overall bookings are 15% ahead of 2014 (adjusted for biennial exhibitions) and we are expecting strong editions of our major shows in the second half. The Group remains confident of delivering a strong performance for the year as a whole.

Neville Buch Douglas Emslie

Chairman Group Managing Director

29 July 2015

INDEPENDENT REVIEW REPORT TO TARSUS GROUP PLC

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2015 which comprises the Condensed Consolidated Interim Income statement, Condensed Consolidated Interim Statement of Comprehensive Income, Condensed Consolidated Interim Statement of Financial Position, Condensed Consolidated Interim Statement of Changes in Equity, the Condensed Consolidated Interim Statement of Cash Flows and the related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2015 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Deloitte LLP

Chartered Accountants and Statutory Auditor

London, United Kingdom

29 July 2015

CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT

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 29 July 2015 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 2015 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 2014 are available upon request from the Company Secretary at 17 Upper Pembroke Street, Dublin 2, Ireland.

In June 2015 the Group renegotiated their borrowing facilities. The new facility will extend until July 2020. 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 2014 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 29 July 2015.

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 2014.

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 2014.

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 2014.

6. PROFIT AND LOSS ANALYSIS

The following analysis illustrates the performance of the Group's activities, and reconciles the Group's profit as shown in the condensed consolidated interim income statement, to adjusted profits. 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 and unwinding of discount charges.

*In 2015, the Group incurred exceptional one-off costs resulting from acquisition costs or potential acquisition costs.

7. SEGMENTAL ANALYSIS

As at 30 June 2015, 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)

8. TAXATION CHARGE

The taxation charge for the six months ended 30 June 2015 is based upon the estimated effective tax rate of 14.7% on adjusted profit before tax (2014: 15.9%) for the year ending 31 December 2015.

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 £3,069,045 (June 2014 loss: £1,056,620) and 101,216,717 (June 2014: 98,387,303) 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 £3,069,045 (June 2014 loss: £1,056,620) and 101,656,130 (June 2014: 99,625,372) 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):

10. INTANGIBLE FIXED ASSETS

* The French business, which has been agreed to be sold post 30 June, has been impaired by £1.8m to reflect fair value.

11. ACQUISITIONS

The Group completed one acquisition during the first half of 2015, in line with the Group's "Quickening the Pace" strategy.

The following table sets out the book values of the identifiable assets and liabilities acquired and their fair value to the Group, in respect of the acquisition made during 2015:

From the date of acquisition to 30 June 2015, the acquisition has contributed £0.2m of revenue to the Group.

Goodwill of £6.3 million, recognised on this acquisition, relates to certain assets that cannot be separated and reliably measured. These items include sector knowledge, customer loyalty and the anticipated future profitability that the Group can bring to the business acquired.

The Group incurred transaction costs of £200,000 in respect of the acquisition, which were expensed.

The values used in accounting for the identifiable assets and liabilities and related contingent consideration of this acquisition are estimates and are therefore provisional in nature at the balance sheet date. If necessary, adjustments will be made to these carrying values and the related goodwill, within 12 months of the acquisition date. The non-controlling interest is measured as their proportionate share of the fair value of the net assets.

12. DIVIDENDS

The following dividends were paid and proposed by the Group: