Centaur Media’s Interim Management Statement:
Current trading and outlook
Underlying revenues increased by 6% in the period, a significant improvement relative to the negative trends reported over the last 18 months. The aggregate rate of growth across paid-for content and live events revenues is now outstripping declines in advertising revenues.
Paid-for content revenues grew by 20%, with the rate of growth continuing to accelerate. Live events revenues returned to growth whilst advertising revenues fell by 7% in the period compared to an 11% decline in the first six months of 2014.
Underlying deferred revenues at 31 October 2014 were £15m, 17% ahead of the same period last year. Forward bookings across the exhibitions portfolio are 6% ahead of the same point last year, and annualised contract values in respect of the group's digital subscription revenues grew by 32%.
The Board is encouraged by the momentum across the business and anticipates trading for 2014 to be in line with its expectations.
Andria Vidler, Chief Executive, commented: "We are building momentum, especially in paid-for content and live events; these are now growing faster than the decline in more traditional advertising.
"We are confident of delivering a much stronger performance in H2 2014. This reflects a combination of the operational changes and efficiencies implemented across the business earlier in the year and a sharper focus on the markets that we serve.
"Bringing together our range of complementary products under market portfolio management is delivering stronger insight, interaction and impact and a better audience experience.
"Trading over the last four months has been encouraging and with an improving rate of growth, the outlook for 2015 is increasingly positive."
Business review
The marketing portfolio, which grew revenues by 11%, re-launched Marketing Week in print, desktop and mobile and also launched the US version of Fashion Monitor. The Festival of Marketing, one of the Group's flagship events, now in its second year, is expected to report revenue growth of 15%.
Across the professional portfolios, the second edition of The Meetings Show grew revenues by 38%, the rate of growth across the legal portfolio is increasing, and the HR portfolio is now returning to growth after a challenging H1. As a whole this portfolio grew revenues by 14%.
Trading across the financial portfolio continues as expected to be challenging, but this portfolio is benefiting from new leadership and forward bookings are improving. As a whole, revenues across this portfolio declined by 15%.
The home interest portfolio grew revenues by 8%; the re-launch of the London Homebuilding & Renovating Show was well received with strong re-bookings for the 2015 event.
The group as a whole is continuing to benefit from procurement and efficiency initiatives, and annualised savings of £1m will be delivered in 2014 as anticipated. The grouping of complementary products in market portfolios and the restructuring of the commercial sales and marketing teams is also delivering operational improvements.
Cash flow and balance sheet
Net debt at 31 October 2014 was £17.2m, and includes the impact of the £4.2m earn-out payment in respect of The Platforum that was settled in August 2014.
Reporting and KPI targets
The Board has identified new KPI targets. Reported KPIs will in future measure underlying revenue growth, adjusted operating profit margin, adjusted EPS and cash conversion. The group will also monitor the development of recurring revenue streams, including subscriptions and live events revenues, and the return on investment on acquisitions and new product development.
Alongside these KPI measures the group also intends to report against adjusted operating profit rather than adjusted EBITDA. This better reflects the underlying profitability across each of the market portfolios and is consistent with many of Centaur's peers. Underlying revenue measures will be reported across each market portfolio and in aggregate across three revenue categories: paid-for content, live events and advertising.
Appointment of new Chairman
Following the announcement that Patrick Taylor, the group's Chairman, intends to retire by the next AGM, the Board has commenced the search for a suitable replacement.
