A new force in specialist information delivery T&F informa plc Interim Report for the six months ended 30 June 2004 T&F Informa will become a growing global force in the provision of both academic and business information. We offer a well balanced and robust portfolio of assets encompassing professional and commercial operations with strong academic and scientific publishing assets. The merged company T&F Informa benefits from increased operational and financial scale, and geographic reach. This puts us in a great position to further consolidate our markets and increase investments where we see market and geographical opportunities. T&F Informa has a broad portfolio of high quality information products that it provides to a number of specialist global markets. This gives a strong profitable base through its subscription products and a response to economic upturn via its events and advertising. “The merger brings clear benefits to both companies. Most importantly, we Company Overview will generate increased revenue and will have a well balanced portfolio, capable of taking advantage of a wider range of economic conditions. Academic Professional Commercial Our increased scale will stand us in & Scientific good stead for further consolidation in our professional, academic and business markets.” David Smith Chairman of T&F Informa (Previously Chief Executive of Taylor & Francis) “The merger of Informa and Taylor & Francis will create an exciting new The division comprises the The Professional division The Commercial division force in specialist information. Both Taylor & Francis businesses comprises the Finance comprises Maritime, Trade companies performed well in 2003 together with the Informa life information, Insurance and & Transport, Telecoms & and are coming together from sciences business. On an Law & Tax business segments. Media, Commodities and positions of strength at a time when ongoing basis this division International Conferences. there are significant opportunities will be analysed by the key The Finance information for enhanced future growth. The market segments of Scientific, business is led by the US Maritime includes Lloyd’s new Group will be better placed to Technical and Medical and based Informa Financial List and Seasearcher.com, capture and exploit this growth. The Humanities and Social Information division, which Telecoms the 3GSM World combined new management team Sciences. includes the iMoneyNet, Congress and Telecoms.com, has the experience to build on the Informa Investment Solutions Commodities the Agra, The Taylor & Francis Group and Informa Global Markets Foodnews and FO Licht existing platforms to create a strong publishes more than 1,000 product ranges. The Insurance ranges and the Sparks and resilient business that will be a journals and around 2,300 new and Law & Tax businesses are Strategic Forum, and major industry player over the next books each year, with a books based in the UK and Holland. International Conferences few years.” backlist in excess of 37,500 The product portfolio includes covers events in Continental Peter Rigby specialist titles. Informa’s life Insurance Day, Lloyd’s Law Europe, Australasia, South Chief Executive of T&F Informa science division produces Reports, Legal IT Forum and America and the Middle East (Previously Chairman of Informa) several leading events, Fiscaal Up to Date. across many market sectors. including Drug Discovery Technology Congress and Chips to Hits, as well as publishing the BioTechniques magazines and the PJB portfolio of products, including Scrip and Pharmaprojects. 01 T&F Informa Interim Report 2004 Highlights Financial highlights of the period •Turnover of £246.3m (2003: £209.5m) • Normalised Operating Profit1 of £46.6m (2003: £36.0m) •Operating Profit of £27.0m (2003: £24.1m) • Normalised Pre-tax Profit2 of £38.0m (2003: £31.7m) •Profit Before Tax of £0.2m (2003: £19.8m) • Normalised Diluted Earnings Per Share2 of 9.2p (2003: 8.2p) •Diluted (Loss)/Earnings Per Share of (2.4)p (2003: 3.9p) 1Excludes goodwill amortisation of £17.6m (2003: £9.8m) and exceptional items of £2.0m (2003: £2.1m) 2Excludes goodwill amortisation of £17.6m (2003: £9.8m), exceptional items of £2.0m (2003: £2.1m), merger costs of £15.7m and bank facility fees expensed on merger of £2.4m Operational highlights • Businesses acquired in 2003 and 2004 performing ahead of expectations •Merger integration well advanced – Revenue synergies quantified (£9m in 2005) – Greater cost savings identified (2005 expectations nearly doubled to £9m) • Enlarged Group provides platform to Contents Highlights of the period 01 drive further profitable growth Chairman’s statement 02 Independent review report •Balanced product portfolio ideally to T&F Informa plc 08 Consolidated profit and loss account 09 positioned for recovery in key markets Consolidated balance sheet 10 Consolidated cash flow statement 11 •Good momentum into second Notes to the unaudited interim statements 12 half of 2004 02 T&F Informa Interim Report 2004 Introduction confirmed and begun to take advantage Chairman’s T&F Informa has had a good first six of the significant revenue and cost months of 2004 with turnover up 18% to benefits which the merger brings. Our £246.3m from £209.5m and Normalised detailed analysis has revealed more statement Operating Profit (operating profit before opportunities and potential synergies goodwill amortisation and exceptional than we had originally anticipated. These items) up 29% to £46.6m from £36.0m. include among others a strengthened Normalised Pre-tax Profit (profit before tax, publishing programme and 80 new goodwill amortisation, exceptional items, events planned for 2005. merger costs and bank loan facility fees expensed on merger) rose 20% to Financial results “This was a strong performance £38.0m (2003: £31.7m). Normalised The results covered by this review were during what was a busy period of Diluted Earnings Per Share rose 12% produced under merger accounting to 9.2p (2003: 8.2p) per ordinary share. principles which combine the results of integrating acquisitions and the the Taylor & Francis and Informa groups merger. It confirms both the strength These results were achieved despite as if both groups had always been of the Group’s portfolio of businesses the adverse effects of exchange rate merged. On 1 January 2005 the and its staff as well as the rationale movements, which reduced sales by combined Group will be required to adopt for the creation of T&F Informa. We approximately £7.3m and operating International Accounting Standards which are also well placed for the rest of profits by approximately £3.1m compared will necessitate further material changes the year and into 2005.” with the first half of 2003. The adverse to both the bases and format of reports currency impact is predominantly due to to shareholders. More information will be “Although the merger is just four the weakness in the US Dollar as around provided with the Group’s full year 2004 months old, we have already half of the Group’s turnover is US Dollar results early in 2005. established new revenue streams of denominated. £9 million for next year and nearly Turnover grew by 18% to £246.3m doubled our expectations for cost All three divisions, Academic & Scientific, (2003: £209.5m) despite adverse savings. Central to this is the excellent Professional, and Commercial, have exchange rate movements which had cultural fit of the integration teams as performed strongly during the period, the effect of reducing turnover by 3% combining solid organic growth with (£7.3m) compared to 2003. The Marcel they seek to exploit new opportunities good contributions from the acquisitions Dekker acquisition was completed on within the enlarged Group.” made during the previous 18 months. 2 January 2004 and contributed £11.6m David Smith The Group has seen an improvement to first half turnover. Chairman of T&F Informa in trading conditions in a number of its market sectors with particularly pleasing Normalised Operating Profit was £46.6m results from the Scientific, Technical and in the first six months, up 29% over 2003 Medical (STM), Maritime and Finance (£36.0m). Excluding the adverse effect of information businesses. exchange rate movements of £3.1m, operating profit growth was 38%. STM has seen the successful integration Underlying profit growth, excluding the of the CRC Press, PJB and Marcel effect of acquisitions and exchange rate Dekker acquisitions; the Maritime movements, was approximately 8%. business has done well in a period of higher freight rates and oil prices while The Normalised Operating Margin was the Finance information business has 18.9%, compared to 17.2% in the first performed strongly as markets recover half 2003, reflecting continuing cost and the benefits of the MMS acquisition control, improving attendances at have come through. conferences and the successful integration of acquisitions. The merger of Taylor & Francis Group plc and Informa Group plc was completed on Operating profit after exceptional items 10 May 2004. This is therefore the first set and goodwill amortisation increased by of results for T&F Informa as a combined 12% to £27.0m (2003: £24.1m). Group. The integration of the two businesses is progressing well and in the period since the completion of the merger we have brought the central management of the two businesses together and have 03 T&F Informa Interim Report 2004 Analysis of turnover Exceptional items EPS by media Exceptional costs of £2.0m (2003: £2.1m) Normalised Diluted Earnings Per Share for 2% were incurred in the period, primarily in the first half increased 12% to 9.18p per (2003: 3%) relation to the integration of recent ordinary share compared to 8.19p in the acquisitions as well as initial costs first half of 2003. There was a basic loss 28% incurred in respect of the planned per share of 2.4p for the first half of 2004 (2003: 32%) 42% (2003: 37%) relocation, in September, of the Academic (2003: basic earnings per share of 3.9p).