News

Centaur Media plc interim results for the six months ended 31 December 2006

HIGHLIGHTS

Centaur Media plc ("Centaur") announces its results for the six months ended 31 December 2006.

• 12% growth in Group revenue, led by advertising up 19%, due to impact of acquisitions, increasing strength of online products and Legal & Financial division.
• High operational gearing supports adjusted EBITDA margin improvement by 3 percentage points to 15%.
• Revenue growth leads to adjusted profit before tax ahead by 45% and adjusted EPS ahead by 69%.
• High levels of new product development activity since June 2006 including 5 new events, 9 new online channels, the launch of Web TV and the announcement of a joint venture with YouGov.
• Interim dividend of 1.0 pence per share proposed.

Geoff Wilmot, Chief Executive Officer of Centaur Media plc, said: "The results in the first half show further year-on-year growth, reflecting the success of our strategy of creating market-leading products across a range of market sectors. The outlook for the second half is positive and we remain confident about the outcome for the full year to 30 June 2007."

Enquiries:

1. One of Centaur's key measures of profit, which is used to measure the relative performance of divisional units of the Group, is earnings before interest, tax, depreciation and amortisation, excluding exceptionals and other significant non-cash items (Adjusted EBITDA).

4. Cash conversion rate is free cash flow expressed as a percentage of adjusted operating profit. Free cash flow is defined as cash generated from operations (note 7 to the interim report), less capital expenditure on property, plant and equipment and software. Adjusted operating profit is operating profit after making adjustments for amortisation of acquired intangibles and exceptional items.

Intermim Business Review

Introduction

I am pleased to announce that Centaur achieved further impressive growth in both turnover and adjusted profit before tax in the six months to 31 December 2006. In what is seasonally Centaur's weaker half of the year (due to the low levels of publishing and event activity in August and December) revenue grew 12% to £37.7 million and adjusted profit before tax increased by 45% to £4.2 million (FY2006: £2.9 million).

Reported profit before tax was £3.8 million (FY2006: £4.9 million). The Company's results for the six months ended 31 December 2005 included an exceptional gain of £2.0 million arising from the release of a provision for contingent consideration relating to the acquisition of Synergy Software Solutions Ltd. In addition, in the current period the Company reported amortisation of acquired intangibles of £0.4 million (FY2006: £nil).

The Board has declared an interim dividend of 1.0p per share (2006: 0.6p). The interim dividend will be paid on 20 April 2007 to shareholders on the share register at 23 March 2007.

Business Overview

Centaur benefits from a strong presence in a number of high-value vertical market sectors, in which it pursues its strategy of building market leading positions through multiple media platforms. During the period, it has continued to experience growth in a number of these sectors, shown by the analysis of results set out at the end of this business review.

Advertising remains the principal source of revenue, generating 59% of revenues during the first half. Overall advertising revenues grew 19% in the period, led by the impact of acquisitions in the previous financial year and by the strength in online advertising. Recruitment and other advertising, principally display, both recorded solid growth in the period.

Total revenues from online products grew 30%, reflecting the continued strong growth in internet advertising, particularly online recruitment, which increased by 41% year on year, supplementing a relatively robust recruitment performance in the magazines. Events revenues declined by 8%, largely due to the highly successful Mortgage Strategy Summit moving to April 2007 in Dubai in order to accommodate significant growth.

Centaur has a strong record of organic growth, with most of its current portfolio having been launched rather than acquired. During the period, our new developments included four new websites. These new websites are now trading at or above break-even and are expected to make a significant contribution in the medium term. The most important of these are marketingweek.co.uk and designweek.co.uk. These two websites will build on the strength of their related magazine brands and will enable us to extend our service offering to these important communities.

The pace of new business activity has increased since the period end. In January 2007 we launched a new monthly magazine, Mortgage Distributor, part of the Mortgage Strategy portfolio. We launched the title alongside a new event, the Packager Summit, which ran successfully in Nice in January. Both products are expected to make a positive profit contribution in this financial year. Also in January, we launched The Lawyer HR awards, which has further cemented our relationship with our core law firm clients and key sponsors. The event made a small positive contribution.

We have also launched a series of important podcast and web TV services in several of our online products, which we believe will generate good growth in the medium term. During January, we also launched Headline Property ("HP"), an extension of our highly successful news service for financial journalists, Headline Money. HP will perform a similar service for professional property journalists. January also saw the launch of the Marketing Week Interactive Summit, a successful and profitable new conference and workshop-based event designed to equip senior marketers to develop effective digital strategies.

In the last month we have agreed to partner with Dnata World of Events, a leading events and travel management business based in Dubai and part of the Emirates Group. The joint venture's first initiative will be a Dubai edition of the successful Business Travel show, which will be staged in October 2007. Planning for other shows with Dnata will commence in the next few months.

We have also just announced a joint venture with the leading online research business YouGov. The joint venture, YouGovCentaur Ltd, will establish specialist online research panels in each of Centaur's vertical markets. These will be used to create customised and syndicated research-based products for our core markets. Two such projects are already underway. This is an exciting new venture that strongly supports our strategic goal of increasing the proportion of our revenues derived from content.

Review of Divisional Results

We continue to report our results in five major operating business segments. These are Legal & Financial; Marketing, Creative & New Media; Construction & Engineering; Perfect Information and General Business Services (formerly Other).

Legal & Financial

Revenues grew 15% in the period compared with the corresponding period in 2005 and this led to adjusted EBITDA margins rising to 28% (2005: 26%). This division's target markets lawyers and IFA's remained strong, benefiting the major established brands in this division. In the financial sector, Mortgage Strategy and Headline Money in particular delivered rapid growth in turnover and profits. In the legal sector, The Lawyer magazine and thelawyer.com delivered further strong growth to new record levels, reflecting the strength of the market and the growing value of The Lawyer brand. Revenue growth in the division was advertising-driven, with recruitment ahead by 25% and other advertising up 18%.

Marketing, Creative & New Media

Revenues declined 4% on the corresponding period in 2005 but earlier cost savings led to adjusted EBITDA margins improving to 9% (2005: 8%). Ongoing weakness in the media, retail and consumer goods sectors continued to have an adverse impact on the marketing and creative division, although market shares were broadly stable in the period. Marketingweek.co.uk and designweek.co.uk were both successfully launched, partly offsetting the overall revenue decline. Both websites traded close to break-even in the period and are now generating a small profit. There are some signs of an improving outlook for the sector, including recruitment revenues growing 7% in the period and good growth in the interactive marketing area, with New Media Age strongly ahead and a successful launch of the Interactive Marketing Summit referred to above. Looking forward, the latest quarterly Bellwether Report (published by the Institute of Practitioners in Advertising in January 2007), which is an important forward indicator of activity in the marketing services sector, reported that new budget-setting for 2007-08 marketing budgets was at its most buoyant level for seven years.

Engineering & Construction

Revenues grew 41% helped by the impact of recent bolt-on acquisitions. Adjusted EBITDA margins remained unchanged at 17% reflecting the impact of lower margins currently being achieved on the recent new launch, Move or Improve. The engineering sector remains challenging but The Engineer and its associated website continued to deliver satisfactory growth. In Construction, the self-build market showed modest improvement, though the DIY market remained challenging. Nevertheless, Homebuilding & Renovating and its extensions, especially the regional shows, delivered further healthy growth, whilst the newly launched Move or Improve recorded an improved profit in the period. Period Living, acquired in February 2006, performed well in the period, in line with expectations.

Perfect Information

Revenues were flat but adjusted EBITDA margin improved to 23% (2005: 20%). The underlying market remained favourable, but growth in the core filings product was offset by continued declines in revenues from non-core services acquired with the Synergy acquisition. Perfect Analysis' Excel add-in was successfully launched in early February 2007, after an extensive period of testing. It is currently being trialled by several existing and prospective new clients. On the filings side, we have recommenced development activity previously deferred due to the focus of our development resources on Perfect Analysis. We have recently launched a unique new database of collateralised debt obligations and an improved SEC filings product. These and other planned initiatives are expected to support renewed growth in revenues in the next few months. We have also identified cost savings that should positively impact on the second half.

General Business Services

Revenues grew 10% in the period, and adjusted EBITDA losses reduced to £0.6 million (2005: £0.9 million loss). Growth was led by The Recruiter, which we acquired in December 2005, which performed well, in line with expectations. The Employee Benefits portfolio experienced a decline in revenues due to a loss of advertising relating to the home computing initiative, the tax benefit of which was discontinued a year ago. However, we expect to recover some of this shortfall in the second half. Business Travel Germany performed well in September, as did the main London show which has just taken place in February 2007. The logistics portfolio also grew steadily and we relaunched the monthly title Logistics Europe under the brand Supply Chain Standard in January. It has moved into profit in the second half, after making a small loss in the interim period. As previously announced, we sold the loss-making Televisual magazine to its former publisher in August 2006. During the period, we also discontinued publication of Finance Week. We entered into an agreement with Sift Media Ltd, publishers of Accountingweb, who are continuing to publish Finance Week as part of that business. Centaur will share advertising revenues with Sift and will deliver events for the Finance Week community.

Management changes

As we reported last autumn, Geoff Wilmot (former CFO) was appointed Chief Executive Officer of the Company on 1st November 2006. Graham Sherren remains as Chairman. Mike Lally (former Finance Director) joined the board as Group Finance Director.

Current trading & outlook

The overall outlook for the second half is positive and we expect further year on year growth in revenues and profits in the six months to June 2007. Most parts of the business are currently trading comfortably ahead of last year. With a strong pipeline of new products and further growth in our established business, we are confident of a positive outcome for the full year.

Geoff Wilmot, Chief Executive Officer