RNS Number:9930P
Expomedia Group PLC
22 September 2003
EXPOMEDIA GROUP PLC
Interim results for the six months ended 30 June 2003
Highlights
* Group revenue increases by 15%
* Forward bookings for the second half of 2003 up 120%
* Lease signed for Cologne Expocentre
* Number of events in the six months up 37%
* Acquisition of 'Exhibition Bulletin'
* Appointed to publish UFI's 'Exhibition World'
* Informa expands with Expomedia into 5 key markets
* Outlook positive as new venues become established
Chairman's Statement
Dear Shareholders
The period since our last report has been another one of significant progress by
the group, the most important of which are outlined below.
Results
Group turnover for the period was Euro4.5 million (2002: Euro3.9 million) an
increase of 15 per cent. The loss before interest, taxation, depreciation and
amortisation was Euro1.3 million (2002: Euro0.2 million). The momentum behind
the group's expansion continues and our bookings for the year are up by 50 per
cent and for the second half of 2003 forward bookings are up 120 per cent.
Included in the costs for the period was Euro1.1 million of expansion costs
(2002: Euro0.2 million). Excluding these costs the loss before interest,
taxation, depreciation and amortisation would have been Euro0.2 million (2002:
loss Euro0.1 million). These costs are incurred in relation to the new
businesses which we have initiated over the last twelve months. Such costs are a
necessary part of our expansion programme and will continue at a relatively high
level until the latter part of 2004 when we expect most of our new venues and
exhibition organising companies to be fully operational.
Business model
Expomedia is present in the developing markets of Russia, Poland, Hungary and
Serbia-Montenegro. In these markets we are developing cost effective venues
aimed at the mainstream exhibition market. In general our venues in these
markets are larger than those we develop in Western Europe and are aimed at
providing high quality, cost effective facilities which are not otherwise
available in these territories. To complement our venues we have formed
exhibition organising businesses. Combined with partnerships with many of the
key players in the exhibition and conference industry we are able to bring their
expertise and brands into these growing markets where they have limited exposure
at present. This has led to the creation and launch of a range of new
specialised events many of which will have their first edition in 2004.
In Western Europe we are currently operating in The Netherlands and Germany.
Here our centres are generally smaller and will cater for niche events which are
presently not served by the existing infrastructure. Likewise our organising
business in these markets is also focussed on smaller niche trade events with
trade associations and consumer titles operated in conjunction with local media
groups.
The group's venue expansion continues, with leases already signed for 3 new
centres. The company also anticipates that it will organise 62 events in 2003,
compared to 40 in 2002 and rising to 94 in 2004.
Russia
Last year we commenced our operations in the expanding Russian market when we
announced the leasing of a 20,000m(2) ExpoSportsCentre to be built in central
Moscow. Since our announcement we have been working with the lessors and the
local authorities to obtain the necessary permissions and carrying out the
architectural and engineering work to enable construction to commence. We expect
that construction will begin before the end of this year with completion
anticipated for late autumn 2004. The level of interest in the venue to date has
been exceptional and we already have a high level of preliminary reservations.
During the period we also successfully commenced the operations of our
exhibition organising subsidiary in Moscow OOO Tsentralnye Yevropeyskiy
Vistavskiy ("CEV"). We are organising 4 exhibitions and conferences this year
the first of which was 'Wireless Russia', which took place in Moscow in June,
organised with Informa Group. This conference was very successful and has led to
the launch, with Informa Group, of several additional exhibitions in 2004
including 'Seafood Russia' and 'Transport and Logistics Russia'. Our Russian
co-operation with Informa Group has also been expanded to include the launch of
a conference business in Moscow next year, based on their successful model used
elsewhere in Europe.
In 2004 we also plan to hold 15 events. Of these, 13 are to be held in
co-operation with other major international exhibition organisers, including
Montgomery International Ltd, Penton Media Europe Ltd and Nurnberg Messe GmbH.
It is part of our policy that we launch events which will ultimately become a
significant customer of our exhibition venue.
Germany
Expomedia announced on 17 June 2003, that it had entered into a 20 year lease on
a new 6,688m2 multifunctional Expocentre in the centre of Cologne, which will be
built to the group's specification. It is anticipated that the Expocentre will
be fully operational by November 2004. Expomedia is currently activating a
German exhibition organising subsidiary and anticipates a number of title
launches with existing and new partners for 2004.
The Netherlands
Our exhibition organising business in The Netherlands, Telegraaf Expomedia
Events, will organise 3 new consumer events in the last quarter of 2003 and we
are planning a further 7 consumer events for 2004. Each event has extensive
media backing from N.V Holdingmaatschappij De Telegraaf and its newspaper and
magazine titles which are the market leaders in The Netherlands.
In addition to the consumer events organised by Telegraaf Expomedia Events we
are also launching a number of highly specialised trade events on behalf of
certain trade associations in niche sectors to be held in 2004.
As previously announced, the construction of Expo XXI Amsterdam International
Expocentre is due to commence in early 2004 with completion scheduled for the
end of 2004. This centre is located next to the Amsterdam Stadium (home of Ajax
football club), with excellent transport links.
Morocco
During the period our subsidiary International Exhibitions Company Sarl (IEC)
organised 2 events in Morocco and its first event in Dakar, Senegal, an
international oil, gas and mining exhibition. In the second half of the year we
expect to organise a further 3 events. In 2004 we are planning to hold a total
of 9 events a 50 per cent increase on 2003.
Poland
We currently have three operations in Poland. In Warsaw, our exhibition venue
has now been operating for 18 months and in that time its income has steadily
grown despite the economic situation in Poland. We hosted 60 events in the first
half of the year and expect that this will grow to 108 events for the full year.
Our own exhibitions provided 9 of these events and represented 27 per cent of
the revenue of the venue, a level we anticipate will remain and in line with our
model.
Our exhibition organiser CEE Miedzynarodowe Targi Warszawskie Sp.Zo.o ("MTW")
organised a total of 9 events in the period (2002: 4) and we expect that this
will grow to 16 (2002: 12) events for the full year. Total square meterage grew
from 4,500m(2) to 7,765m(2), representing an increase of 70 per cent. The most
significant events in the period were 'Meeting Premiera' a stationery exhibition
and 'IFE' organised in conjunction with Montgomery International.
Our venue in Katowice has continued to experience difficult trading with overall
meterage for the period falling by 30 per cent. However the gross margin
improved to 52 per cent from 45 per cent as a result of cost restructuring
measures carried out in the latter part of last year. This helped to reduce the
effect on the results of this decline.
Conference Expansion
We have significantly expanded our co-operation with Informa Group Plc, the
world's leading conference organiser with over 3,000 annual events. This
strategic agreement is a natural progression from our previous exhibition and
conference agreements which included the successful 'Wireless Russia',
'Transport and Logistics Russia', and 'Seafood Russia'.
The agreement will see at least 5 to 10 specialised conferences brought to each
one of these important markets: Russia, Poland, India, Hungary and North West
Africa. Informa Professional Information Group (IPIG), a trading division of
Informa UK Ltd, has established an internationally recognised conference
portfolio which includes banking and finance, insurance, legal, oil and gas and
healthcare. The agreement will also introduce cloned editions of the
conferences into London where appropriate. CEE Exhibitions will handle all
local sales, marketing and operational activities and will work to secure local
government and association support in the host countries. This milestone
agreement represents a significant product increase for Expomedia and we welcome
the challenge.
In addition, we have also concluded an agreement with IBC Global Conferences,
part of Informa Group Plc to launch a series of conferences leading up to a
major exhibition, covering the redevelopment and reconstruction of Iraq. The
series will launch in London in October 2003 with further worldwide events
anticipated throughout 2004
Trade Publications
On 9 June 2003 we announced that our 51 per cent subsidiary, Mash Media Group,
had acquired the publication 'Exhibition Bulletin', which was first published in
1948 and which has since been the main trade publication for the UK exhibition
industry. The addition of this title has transformed the company into the
leading trade publisher in its field and we anticipate that the addition of
'Exhibition Bulletin' to our existing titles will produce substantial synergies
once it has been fully integrated into the existing portfolio. Mash Media
already produces 6 titles aimed at the exhibition market, including three new
titles launched in the last 9 months. We are planning further expansion in due
course in this business through the publication of new titles such as
'Exposegodnia', a Russian edition of our UK title 'Exhibition News', published
for the first time in July 2003.
We are also pleased to announce that in August 2003, Mash Media was elected to
publish 'Exhibition World', the official publication of UFI (Union des Foires
Internationales) the leading exhibition industry association in Europe. This is
a significant endorsement of our publishing portfolio and we believe will prove
to be a catalyst in our expansion plans.
Other Developments
Expomedia operates in a fast moving industry and is proving adept at seizing
opportunities when they arise. We do not expect this process to stop and expect
that in the near future we will announce new ventures in India, Belgrade
(Serbia-Montenegro) and Spain as well as further major developments in Russia,
Hungary, The Netherlands and Germany.
Outlook
Despite the worldwide economic slowdown, our exhibition centre EXPO XXI Warsaw
International Expocentre, and exhibition organising company, CEE Miedzynarodowe
Targi Warszawskie Sp. Z o.o., in Warsaw are showing signs of continued growth.
The board also believes that Poland's anticipated entry into the EU in 2004 will
enable Expomedia to capitalise on its strong position in Poland.
The Board also anticipates that the number of events will grow from 62 in 2003
to approximately 94 in 2004, representing a growth of 50 per cent, the result of
our organising ventures being successful in launching new events in Moscow,
Budapest, Warsaw and Amsterdam with the group's international partners.
With the planned expansion of our exhibition operations into Russia, Germany and
The Netherlands and the continuing development of the new ExpoSportsCentre in
Moscow, Expomedia will incur further expansion costs until the new events and
venues become fully operational and revenue generating in 2004 and 2005. The
Board anticipates that additional expansion costs of approximately Euro2 million
will be incurred in the current financial year. The consequent increase in
revenue from this expansion will be realised in 2004 and 2005 when our growth
rate will accelerate even further.
The Board believes that the outlook for the group is positive and that its true
value will rapidly become fully apparent once the proposed new venues have had a
chance to establish themselves. The quality of our partners is a good
indication of the strength and product position of your company as a significant
force in the exhibition, conference and events industry.
Roger Shashoua
Chairman
Consolidated profit and loss account
Restated
Notes Six months Six months Year ended 31
ended 30 June ended 30 June December
2003 2002 2002
Euro'000 Euro'000 Euro'000
Turnover
Continuing operations 4,534 3,878 7,032
Cost of sales (2,584) (2,055) (3,521)
Gross profit 1,950 1,823 3,511
Administrative expenses:
Expansion costs (1,129) (154) (957)
Other administrative (2,717) (2,321) (4,797)
expenses
Administrative expenses (3,846) (2,475) (5,754)
Operating loss
Continuing operations (1,896) (652) (2,243)
Loss on ordinary (1,896) (652) (2,243)
activities before
interest
Other interest receivable 21 21 44
and similar income
Interest payable and (331) (265) (374)
similar charges
Loss on ordinary (2,206) (896) (2,573)
activities before
taxation
Taxation (13) (117) (47)
Loss on ordinary (2,219) (1,013) (2,620)
activities after
taxation
Minority interest 88 172 214
Retained loss for the (2,406)
period transferred to
reserves
(2,131) (841)
Basic loss per share 2 (0.06) (0.03) (0.07)
(Euro)
Diluted loss per share 2 (0.06) (0.03) (0.07)
(Euro)
Statement of consolidated recognised gains and losses
Six months Six months Year ended 31
ended 30 June ended 30 June December
2003 2002 2002
Euro'000 Euro'000 Euro'000
Loss for the financial period (2,131) (841) (2,406)
Currency translation differences
on foreign currency net
investments (1,753) (2,337) (2,274)
Total recognised loss (3,884) (3,178) (4,680)
Consolidated balance sheet
30 June 30 June 31 December
2003 2002 2002
Euro'000 Euro'000 Euro'000
Fixed assets
Tangible assets 23,903 26,063 26,301
Goodwill 4,166 4,134 4,235
Negative goodwill (807) (823) (813)
3,359 3,311 3,422
Exhibitions and publications titles 2,408 733 746
29,670 30,107 30,469
Current assets
Stock 11 22 12
Debtors 2,704 1,158 2,125
Cash at bank and in hand 914 600 506
3,629 1,780 2,643
Creditors:
amounts falling due within one year (5,913) (4,331) (4,437)
Net current liabilities (2,284) (2,551) (1,794)
Total assets less current liabilities 27,386 27,556 28,675
Creditors: amounts falling due after more
than one year (3,321) (3,775) (3,497)
Provisions for liabilities and charges (1,167) (1,196) (1,187)
22,898 22,585 23,991
Capital and reserves
Called up share capital 3,141 2,878 3,017
Share Premium Account 21,533 15,953 18,774
Other Reserves 5,998 5,998 5,998
Profit and loss account (11,012) (5,626) (7,128)
Shareholders funds 19,660 19,203 20,661
Minority interest 3,238 3,382 3,330
22,898 22,585 23,991
Consolidated cash flow statement
Six months Six months Year ended 31
ended 30 June ended 30 June December
2003 2002 2002
Euro'000 Euro'000 Euro'000
Operating loss (1,896) (652) (2,243)
Depreciation 419 426 847
Amortisation of goodwill 133 49 204
Loss on disposal of tangible - - 27
assets
Decrease in stock 3 8 15
(Increase)/decrease in debtors (577) 132 (862)
Increase/(decrease) in 830 (1,736) 634
creditors
Net cash outflow from operating (1,088) (1,773) (1,378)
activities
Returns on investments and
servicing of finance
Interest received 21 21 36
Interest paid (134) (190) (348)
Realised foreign exchange (loss)/ (50) 183 (18)
gain
Net cash (outflow)/inflow from (163) 14 (330)
investments and servicing of
finance
Taxation
Tax paid (43) (118) (115)
Capital expenditure
Payments to acquire exhibition
and publication titles
(718) (159) (173)
Payments to acquire other (45)
intangible fixed assets
Payments to acquire tangible (316) (340) (1,750)
fixed assets
Receipts from sale of fixed - - 100
assets
Net cash outflow from investing (1,079) (499) (1,823)
activities
Acquisitions and disposals
Purchase of subsidiary (9) (2,750) (2,837)
undertakings
Net cash acquired with - 18 18
subsidiaries
(9) (2,732) (2,819)
Cash outflow before financing (2,382) (5,108) (6,465)
Financing
New shares issued 2,993 4,153 7,236
Expenses paid in connection with (110) (128) (1,355)
share issues
Movement in loans from related - (570) (570)
undertakings
New Long term loan 215 - -
Repayment of borrowings - - (52)
Reduction in long term loan (418) (606) (1,072)
Net cash inflow from financing 2,680 2,849 4,187
Increase/(decrease) in cash 298 (2,259) (2,278)
Notes
1. Basis of preparation
The interim accounts have been prepared on a basis consistent with the
accounting policies set out on pages 20 to 22 of Expomedia Group Plc's Annual
Report and Financial Statements for the year ended 31 December 2002. As
highlighted on page 20 of the Annual Report, the group revised the basis of
allocation of certain expenditure between 'cost of sales' and 'administrative
expenses', the comparative figures for the six months ended 30 June 2002 have
been restated accordingly.
The results for the six months are unaudited and do not comprise statutory
accounts within the meaning of Section 240 of the Companies Act 1985.
The comparative figures for the year ended 31 December 2002 have been extracted
from the statutory accounts which have been reported on by the Group's auditors
and delivered to the Registrar of Companies. The Auditor's report was
unqualified and did not contain a statement under Section 237(2) or (3) of the
Companies Act 1985.
Copies of this document are being sent to Shareholders and are available for
members of the public from the company's registered office.
2. Earnings per share
Basic Earnings per share has been based on the loss for the financial period
divided by the weighted average number of actual shares in issue of 36,370,764
(June 2002: 33,054,406; December 2002: 35,213,096). In accordance with FRS 14
the diluted loss per share for the period is equivalent to the basic loss per
share as any conversion of options would decrease the net loss per share.
Enquiries:
Mark Shashoua 020 7376 3300
Chief Executive
Sonya Gillespie 020 7376 3300
Communications Director
This information is provided by RNS
The company news service from the London Stock Exchange
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