Half year results to June 2003

Transcription

1 Half year results to June 2003

2 Agenda Introductions / Overview 2003 Interim Results Operating Review Outlook 2

3 Key Financial Highlights Turnover Up 28% Like for like advertising revenues Includes RIM for the comparative period Up 3% Operating Profit pre- exceptionals Up 35% - like for like Up 7% Profit before taxation Up 51% Headline earnings per share Up 18% Operating margin pre-exceptionals Up to 33.8% JP businesses excluding RIM Up to 34.5% Former RIM companies Up to 32.6% Dividend per share Up 11% Free cash flow Up 49% 3

4 Operational Highlights Continued modest advertising revenue growth Yield increases in all advertising categories Ongoing tight cost control / continued efficiencies Record operating margins with all divisions ahead Weekly circulation growth in seventh successive year RIM integration ahead of expectations Improved Print Division performance and capability Major investment in new Sheffield print centre for

5 Financial Review

6 Profit & Loss Account - EBITDA 26 weeks to 30 th June 2003 Turnover m m % Change 28 EBITDA Depreciation 92.7 (8.4) 70.1 (7.7) 32 Operating profit before exceptionals Operational exceptionals (0.9) (1.1) Exceptional items - (3.8) EBIT Net interest (16.7) (13.2) Profit before taxation Taxation Profit after taxation 66.7 (19.8) (13.0) Earnings per share Headline 16.82p 14.26p 18 Basic 16.51p 12.49p 32 6

7 Publishing and Printing 26 weeks to 30 th June 2003 enlarged group - Proforma Advertising Volume Advertising Yield Advertising Sales Newspaper Sales Contract Printing Other Sales Total Revenue Total Production Costs Editorial Advertising & Marketing Distribution Administration Depreciation Total Costs Operating Profit Operating Profit/Revenue (cms) ( /ccm) 2003 m 2002 m Variance % (3) (5) % 30.4% 7

8 Publishing and Printing 26 weeks to 30 th June 2003 excluding RIM 2003 m 2002 m Variance % Advertising Volume (cms) Advertising Yield ( /ccm) Advertising Sales Newspaper Sales Contract Printing (3) Other Sales Total Revenue Total Production Costs Editorial (4) Advertising & Marketing Distribution (5) Administration (2) Depreciation (5) Total Costs (2) Operating Profit Operating Profit/Revenue 34.5% 33.4% 8

9 RIM Acquisition Trading results 26 weeks to 30/06/03 26 weeks to 31/12/02 11 weeks to 30/06/02 Revenue Advertising Sales m 65.1 m 59.9 m 26.8 Newspaper Sales Contract Printing Other sales Total Revenue Total costs Trading Profit Operating Margin 32.6% 28.5% 26.8% 9

10 Advertising Revenue Analysis - Like for like 26 weeks to 30 th June 2003 enlarged group Revenue Increase % Proportion of business % % Employment Property Motors Other Classified Display (1.7) TOTAL

11 Advertising Revenue Analysis - Like for like 26 weeks to 30 th June 2003 Revenue Increase % RIM Proportion of business % Existing Group Revenue Increase % Proportion of business % Employment (0.9) 25.8 Property Motors Other Classified Display (2.3) 28.6 (1.4) 29.0 TOTAL

12 Advertising increase by division Like for like 26 weeks to 30 th June 2003 Volume Yield Revenue % % % Scotland / Isle of Man (3.6) Northeast 4.7 (2.4) 2.1 North of England North Midlands (4.4) East Midlands 4.9 (2.6) 2.2 South Midlands 3.1 (3.6) (0.6) South of England Sub Total Former RIM companies Total

13 Cash Flow 2003 m Operating Profit Exceptionals inc ESOT write off ( 0.4) (3.4) Depreciation - net Movement in working capital (9.3) 0.9 Net cash flow from operating activities Returns on investment and servicing of finance (15.2) (17.8) Taxation (7.7) (8.1) Capital expenditure and financial investment (9.4) (7.2) FREE CASH FLOW Acquisitions and disposals 0.6 ( 573.3) Dividends (10.2) 2002 m (6.6) Net cash flow before financing 39.9 (546.7) % Inc 23.4% 49.1% 13

14 Capital Expenditure / Depreciation Year to 31 December m 26 weeks to June Forecast Year 2003 Capital Expenditure (Cash) Depreciation

15 Net Debt/Interest Cover As at Net assets ( m) Net Debt ( m) Interest Cover (times) Net Debt / EBITDA

16 Finance other issues Private placement completed 7 th January million 10 year notes Pensions million one-off payment - approved by Board - both funds MFR over 90% 16

17 Operating Review

18 Operating Review Organic revenue growth Focus on circulations Continuing cost control/operating efficiencies Ongoing capex programme in presses / systems Progressing electronic publishing strategy Investment in training/management development 18

19 Organic Revenue Growth Targeting New Markets Nationally & locally, Industry Initiatives - Health -Travel -Tourism - Lifestyle Magazines - Niche publications 19

20 Organic Revenue Growth Sharing best practice - ADS4U (Group Intranet) Ideas exchange - Share visuals and ideas - Connects to all centres - Demonstrates best practice - Provides group commercial Information 20

21 Other Revenue Proforma 26 weeks to 30 June 2003 m % change Leaflets % Exhibitions % Outbound/Days Out UK % Off road magazines * % *included in advertising revenue 21

22 Focus on Circulations 6 months to 20 June % increases/(decreases) Weeklies Daily - total Daily ex bulk Existing 1.0 (2.0) (1.5) RIM 1.7 (4.3) (3.9) 22

23 Circulation Action Plans Added Value Supplements - new launches, a reason to buy Improved Canvassing - better use of databases Continued focus on direct delivery and supply arrangements - closer to our readers 23

24 Containing costs / Improving Efficiency IOM Falkirk Sunderland Scarborough Leeds Preston Doncaster Sheffield Chesterfield Peterborough Northampton Portsmouth Regionalised administration 7 / 8 Divisions going through change Common systems across regions - Advertising - Finance - Newspaper sales 24

25 Containing costs / Improving Efficiency Printing Division developments - Additional external contracts - More colour in Sunderland and Leeds - New management team bedding in - Sheffield Printing project 25

26 Electronic Media Jobs & Motors search engine upgrades Real progress on content Property/Motors Propertynet - structured data from estate agents Trader desk - structured data from motor dealers Page Impressions - well ahead Local & regional sites - Yorkshiretoday.co.uk 26

27 Electronic Media Jan June 2003 (like for like) Page Impressions Increase 66.6m 43% Revenue 2.4m 88% Jobs Uploads 147k 11% Property Uploads 1m 101% Motor Uploads 2.2m 59% 27

28 Investment in People Launch of commercial development programme Succession management planning Staff turnover focus 28

29 Outlook

30 Future Growth Organic development of existing business Ongoing capital investment to drive growth opportunities Further acquisitive growth within sector Industry consolidation, despite regulation Local market leadership in print and on-line 30

31 Outlook Positive start to second half Continued modest Advertising Revenue Growth Improving yields from increased colour availability Costs well controlled throughout business Continued improvements in operating efficiency Continuing benefits from RIM integration Stable newsprint prices, no evidence of upward pressure Continued strong cash flows reducing debt levels On course to report further progress in the full year 31

32 Half year results to June 2003