Share Name Share Symbol Market Type Share ISIN Share Description
Euromoney Institutional Investor Plc LSE:ERM London Ordinary Share GB0006886666 ORD 0.25P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  16.00 1.21% 1,338.00 1,334.00 1,338.00 1,366.00 1,314.00 1,366.00 286,785 16:35:02
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Media 390.3 161.2 187.2 7.1 1,462

Euromoney Institutional InvestorPLC Full Year Results

21/11/2019 7:01am

UK Regulatory (RNS & others)


Euromoney Institutional ... (LSE:ERM)
Historical Stock Chart

3 Months : From Oct 2019 to Jan 2020

Click Here for more Euromoney Institutional ... Charts.

TIDMERM

RNS Number : 1346U

Euromoney Institutional InvestorPLC

21 November 2019

Euromoney Institutional Investor PLC

('Euromoney')

Full Year Results

21 November 2019

Strong underlying profit growth

Euromoney Institutional Investor PLC (Euromoney), the global B2B information services provider of essential information to global and specialist markets, announces results for the year ended 30 September 2019.

 
                                       2019  2018 (restated(2)  Change   Underlying(3) 
GBP'm unless stated                                          )               change 
Adjusted(1) 
-- Total revenue                      401.7              390.3    3%          0% 
-- Adjusted operating profit          105.4              101.6    4%          5% 
-- Adjusted operating profit margin     26%                26%     -         1ppt 
-- Adjusted profit before tax         104.6               99.9    5%          9% 
-- Adjusted diluted earnings per 
 share                                77.6p              73.6p    5% 
 Statutory 
-- Revenue                            256.1              244.8    5% 
-- Operating profit                    30.6              107.9   (72%) 
-- Operating profit margin              12%                44%  (32ppt) 
-- Profit before tax                   29.5              106.8   (72%) 
-- Diluted earnings per share         56.6p             181.3p   (69%) 
 
Net cash                               50.1               78.3   (36%) 
Total dividend per share              33.1p              32.5p    2% 
A detailed reconciliation of the Group's adjusted and 
 underlying results is set out on pages 6 to 11 of this 
 statement 
                                                                         ------------- 
 

Strategic and operational highlights

   --      Continued progress towards building a 3.0 business model 

o Fastmarkets, the price reporting agency, was selected as the LME partner to develop the lithium benchmark

o Launch of new Fastmarkets platform for customers

   --      Active portfolio management to drive higher growth 

o BoardEx and The Deal integrated, performing well and supporting evolution of other Group companies

o Disposal of Mining Indaba

   --      Strategic review of Asset Management segment continues 

Financial highlights

   --      Results slightly above Board expectations 

-- Continuation of recent trends: Price, Data & Market Intelligence ('PDMI') grew strongly; Asset Management declined

-- Statutory revenue up 5% primarily due to the impact of acquisitions, revenues flat on an underlying basis

   --      Fastmarkets underlying subscription revenue growth of 10% 

-- Good profit growth: Underlying profit before tax of +9%, reflecting PDMI subscription revenue growth, lower central costs and interest expense

-- Statutory profit before tax reduced due to the non-recurring gain on the disposal of Dealogic in 2018

   --      Highly cash generative: strong underlying cash conversion of 98% 
   --      Total dividend up 2% 
   --      Strong balance sheet with net cash from continuing and discontinued operations of GBP50.1m 

Andrew Rashbass, CEO, said:

"We continue to evolve towards a 3.0 information-services business. Our performance in the 2019 financial year reflects a continuation of recent trends in our businesses, with good momentum for our pricing, data and market intelligence products offset by conditions in Asset Management markets. We were pleased that Fastmarkets was selected as the London Metal Exchange's partner to develop the lithium benchmark. We are continuing the strategic review of our Asset Management business.

We have a clear strategy, focused on services that are firmly embedded in the workflow of customers. The acquisition of BoardEx is a good example of this. We look forward to further progress in the year ahead."

(1) Adjusted measures include the results of continuing and discontinued operations and exclude the impact of the amortisation of acquired intangible assets, exceptional items and other adjusting items in accordance with the Group's policy. 2018 excludes the results of discontinued operations relating to GMID. A detailed reconciliation of the Group's adjusted and underlying results is set out on pages 6 to 11 of this statement.

(2) The 2018 comparatives have been restated to reflect the two prior year tax exposures and discontinued operations relating to Asset Management as outlined in

note 1.

(3) Underlying measures are the adjusted results stated at constant exchange rates, including pro forma prior year comparatives for acquisitions and new business launches and excluding disposals, business closures and significant event and publication timing differences.

Operating Review

Euromoney delivered strong underlying profit growth in the financial year, reflecting continued growth in PDMI revenue and good cost management. On an underlying basis, strong revenue growth in the Group's businesses that are 3.0 (or approaching 3.0) was offset by the ongoing challenges in our Asset Management businesses.

Euromoney has a well-established strategy to transition towards a 3.0 business-to-business information services Group, which is reflected in the Company's capital allocation. A 3.0 business is typically one which is embedded in its customers' workflows, providing significant operating leverage from "create one, sell many" services, in semi-opaque markets, with low capital requirements and high cash flow conversion.

M&A activity during the year was driven by this strategy, including the disposal of Mining Indaba and acquisition of BoardEx and The Deal. In this context, on 10 September 2019, Euromoney announced that it is conducting a strategic review of Asset Management, which is made up of Institutional Investor, BCA Research and NDR. Although still at a relatively early stage, the strategic review is progressing well. The segment is presented as discontinued operations and held for sale.

Total revenue for the year increased by 3% to GBP401.7m, supported by the contribution from the acquisition of BoardEx and The Deal. Statutory revenue from continuing operations, which excludes the Asset Management segment, increased by 5% to GBP256.1m. Underlying revenue was flat, with growth of 4% from the Pricing, Data & Market Intelligence ("PDMI") segment offset by continued challenges in the Asset Management segment. We continue to see the impact of the structural and cyclical issues facing the Asset Management segment, where underlying revenue declined by 4%. Revenue from Banking & Finance, which makes up 15% of the Group's total revenue, declined by 1% on an underlying basis.

Subscription revenue, which makes up 60% of total revenue, was unchanged year on year on an underlying basis, with continued strong growth of 8% in PDMI mainly offset by declines in the Asset Management segment.

Events revenue, which is 31% of total revenue, increased 2% on an underlying basis. Growth from events in the Asset Management and Banking & Finance segments was offset by the lack of growth in PDMI events due to the previously flagged delegate marketing challenges in the first half, although these events did return to growth in the second half. Advertising and other revenues, which represent only 10% of total revenue, declined by 4% on an underlying basis.

Adjusted operating profit of GBP105.4m increased by 5% on an underlying basis reflecting good cost management and subscription revenue growth in PDMI. The adjusted operating profit margin was 26%, a 1ppt increase compared to last year, on an underlying basis. Strong underlying growth in adjusted profit before tax of 9% reflects adjusted operating profit growth and lower interest costs. Adjusted diluted earnings per share increased by 5% to 77.6p (2018: 73.6p). Statutory operating profit was GBP30.6m (2018: GBP107.9m) and statutory profit before tax was GBP29.5m (2018: GBP106.8m), the decrease was mainly due to the gain on the disposal of Dealogic in the prior year.

Segmental Review

Adjusted results for the twelve months ended 30 September 2019

 
                                                 Total revenue                                  Adjusted operating 
                                                                                                       profit 
                      Subscriptions         Events         Advertising          Total              Total        Margin 
                                                              & Other 
                     GBP'm  Growth(1)  GBP'm  Growth(1)  GBP'm  Growth(1)  GBP'm  Growth(1)  GBP'm   Growth(1) 
PDMI                 115.5     8%      61.6      1%      19.3     (6%)     196.4     4%       69.4      5%       35% 
Asset Management     117.9    (6%)     16.9      6%      10.8      2%      145.6    (4%)      62.1      0%       43% 
Banking & Finance      7.2    (6%)     45.7      1%       8.2     (6%)     61.2     (1%)      13.7     (8%)      22% 
                     -----  ---------  -----  ---------  -----  ---------  -----  ---------  ------  ---------  ------ 
                     240.6     0%      124.2     2%      38.3     (4%)     403.2     0%      145.2      2% 
FX losses on 
 forward contracts                                       (3.5)             (3.5)             (3.5) 
Sold/closed 
 businesses                             2.0                                 2.0                0.4 
Central costs                                                                                (36.7)     8% 
                     -----  ---------  -----  ---------  -----  ---------  -----  ---------  ------  ---------  ------ 
Total                240.6             126.2             34.8              401.7     0%      105.4      5%       26% 
                     -----  ---------  -----  ---------  -----  ---------  -----  ---------  ------  ---------  ------ 
 

(1) Values shown above are adjusted, growth percentages underlying and are compared to the restated 2018 results. Adjusted and underlying measures are explained on pages 6 to 11 of this statement.

Pricing, Data & Market Intelligence

The Group's PDMI businesses (49% of total revenue) generated underlying revenue growth of 4% and underlying operating profit growth of 5%. Subscription revenue, which accounts for the majority of PDMI revenue, increased by 8% on an underlying basis. In Fastmarkets, our price reporting agency, a number of factors helped drive adoption and increased use of our pricing benchmarks: including close engagement of the business with its clients and market; Fastmarkets being selected as the London Metals Exchange partner to develop the lithium benchmark; and the launch of the new Fastmarkets platform for customers. Our strong value proposition enabled us to reflect this through increased data licensing sales, which has resulted in excellent underlying subscription revenue growth in Fastmarkets of 10%.

As previously flagged, underlying events revenue declined by 4% in the first half of the year due to delegate marketing challenges, but recovered to grow by 1% for the year. There were strong performances from Coaltrans Asia, Capacity Europe and the Legal Media Group, which were offset by increased competitive pressure on our Real Asset Finance portfolio and a lack of growth at our flagship telecoms event in the US, ITW, which changed location in the year to Atlanta.

Following the $93.4m acquisition in February 2019 of BoardEx and The Deal, BoardEx, the executive profiling and relationship mapping platform, and The Deal, a source of data, news and intelligence on mergers and acquisitions, are now fully integrated and firmly aligned to our 3.0 strategy. BoardEx generated underlying growth of 11% in the year on a proforma basis.

New segmental structure

From 1 October 2019, Fastmarkets will be reported as a separate Pricing segment and the remainder of PDMI will combine with the Banking & Finance segment and be reported as the Data & Market Intelligence segment. For the next financial year, the Group will report under three new segments: Asset Management; Pricing; and Data & Market Intelligence.

Asset Management

Following the announcement of the strategic review in September 2019 and the update earlier in November 2019, Asset Management is reported as discontinued operations and held for sale in the Consolidated Financial Statements for the year.

Asset Management revenue (36% of total revenue) was down 4% on an underlying basis, in line with last year's decline, as growth in events (up 6%) and advertising (up 2%) was more than offset by continued decline in subscriptions (down 6%). Asset Management remains affected by structural and cyclical challenges and, whilst new sales in Europe continued to be impacted by uncertainty around the UK's exit from the EU, there was strong new sales growth in Asia. In addition, underlying revenues for Institutional Investor, where revenues are sourced from asset-management marketing rather than research budgets were flat year on year. The investment in professionalising sales and marketing in Investment Research continued with the new sales structure in place by the year end.

In response to continued market and performance challenges, Institutional Investor management took the decision to reshape the senior management and global sales teams, and close the Centre for Continuing Education ("CIE", an investment forum for asset management firms) at the end of 2019. As a result, CIE is shown as a closed business in the year.

Asset Management adjusted operating profit was flat on an underlying basis with adjusted operating profit margins increasing by 2ppt to 43%, reflecting the benefit of prior year restructuring and careful cost control, while investing in extra sales and marketing resource. As outlined at our capital markets event in July 2019, this investment is part of a four stage programme to support an improvement in our short and medium term performance, and position Asset Management for long-term growth through innovation and development of 3.0 products.

Banking & Finance

Revenue within Banking & Finance (15% of total revenue) declined by 1% on an underlying basis. A strong performance from IMN across 13 new events and key repeat events helped to offset the decline in Euromoney and Global Capital events. The global backdrop of trade and geopolitical tensions as well as financial market volatility put pressure on subscriptions and advertising revenues which both declined by 6% on an underlying basis in the year, although the decline in advertising revenue was, in part, offset by successful Euromoney @50 and Asiamoney @30 campaigns.

During the year, the Banking & Finance segment consolidated its structure into three brands, Global Capital, Euromoney and IMN, supported by an operational pillar, to deliver logistics and production efficiencies. Investment in employee costs relating to the new operating structure, together with investment in new events, drove a decline in underlying operating profit of 8%.

From 1 October 2019, Banking & Finance has been merged with the Specialist Information division to form the new Financial & Professional Services division, bringing together complementary markets and customers across financial and professional services. In addition, the annual ABS East event, which generated GBP3.3m revenue in the year, will move from September to October for 2020 onwards to reduce the risk of impact from hurricanes in Florida.

Other Financial Items

Exceptional items

An exceptional credit of GBP3.9m in the year principally comprises GBP17.0m of profit on disposal of Mining Indaba, as previously announced, offset, in part, by an impairment charge of GBP2.4m resulting from the closure of CIE, recognition of earn-out payments of GBP2.5m and acquisition related costs of GBP5.4m. In addition, it includes GBP2.5m for discontinued operations relating to costs for major restructuring within Asset Management and costs to engage with advisors in connection with the strategic review of the segment. Full details are included in note 3.

Tax

The adjusted effective tax rate is 20% (restated 2018: 21%) which is based on adjusted profit before tax and excludes deferred tax effects of intangible assets and goodwill, tax on exceptional items and prior year items. The tax rate in each year depends mainly on the geographic mix of profits and applicable tax rates. We expect that the adjusted effective tax rate for the next financial year will be in line with the current year rate.

The Group's statutory effective tax rate, which excludes discontinued operations, decreased to 32% compared to 39% in 2018. The rate in 2018 was largely driven by one-off items such as tax on disposal of shares in GMID and non-recoverable foreign withholding tax which did not recur in 2019. The rate in 2019 relates largely to expenses that are capital in nature and therefore not deductible for tax purposes. Significant reconciling items between the adjusted and statutory tax expense include tax on profit on disposal of Mining Indaba and prior year items.

The Group continues to have a number of uncertain tax positions, primarily the Canadian and UK exposures which have been highlighted in previous periods for which the maximum exposures are explained in note 5.

Dividend

The Group's dividend policy targets a dividend pay-out ratio of approximately 40% of adjusted diluted earnings per share, with the half year dividend based on 33% of the previous year's total dividend, subject to the capital needs of the Group. The Directors are recommending a final dividend of 22.3 pence per share, which is subject to Shareholder approval at our AGM on 28 January 2020 and, if approved, will be paid on 13 February 2020 to shareholders on the register at the close of business on 29 November 2019. Together with the interim dividend, this makes a total dividend for the year ended 30 September 2019 of 33.1 pence per share, a 2% increase on the 32.5 pence dividend for the year ended 30 September 2018.

Net cash and cash flow

Net cash from continuing and discontinued operations at 30 September 2019 was GBP50.1m, compared with GBP78.3m at 30 September 2018. The Group had strong underlying operating cash inflows of GBP103.5m. The overall decrease in net cash largely reflects a GBP67.8m net outflow from the acquisition of BoardEx and The Deal partially offset by the sale of Mining Indaba. Further outflows included dividend payments of GBP35.6m and net tax payments of GBP38.4m, which included a one-off non-recoverable withholding tax payment of GBP14.6m, as previously announced.

The Group is highly cash generative, with underlying operating cash conversion for the 12 months to September 2019 being 98% (2018: 102%). The slightly lower cash conversion rate largely resulted from timing differences associated with transitioning from a subscription to a data licensing model within Fastmarkets and falling subscription revenue in Asset Management.

Currency

The Group generates approximately 75% of its revenues in US dollars, including approximately 40% of its UK revenues and two thirds of the Group's operating profits. The exposure to US dollar revenues in our UK businesses is partially hedged using forward contracts to sell US dollars, which delays the impact of movements in exchange rates for at least a year.

The average sterling-US dollar rate for the year to 30 September 2019 was $1.28 (2018: $1.35). This improved headline revenue growth rates for the year by approximately three percentage points and adjusted profit before tax by GBP4.1m. Each one cent movement in the US dollar rate has an impact on translated profits, net of UK revenue hedging, of approximately GBP0.7m on an annualised basis. The Group also translates its non-sterling denominated balance sheet items resulting in a loss in 2019 of GBP0.6m (2018: GBP1.5m).

Impact of adopting new accounting standards

The adoption of IFRS 9 from 1 October 2018 has led to an increase to opening equity by GBP0.4m. In addition, the Group has adopted IFRS16 from 1 October 2019. As a result, major building leases and lease liabilities have come onto the balance sheet. We estimate this will reduce profits before tax by GBP1m for the year ending 30 September 2020.

Restatements

The financial statements include three areas of restatement, as detailed in note 1. As a result of the ongoing strategic review of Asset Management, this segment has been disclosed as discontinued operations and as held for sale. The other two restatements have arisen due to significant prior year tax exposures, which internal processes identified during the year. One is an under-payment of PAYE and NI to HMRC in respect of contractors. The second is in respect of the treatment of VAT on intra-group transactions. Management took immediate steps to improve controls as a result of these issues.

Outlook

We expect weakness in our Asset Management segment into 2020 but continued good growth in the Pricing segment. Euromoney continues to make progress towards a 3.0 business model guided by our clear strategy, underpinned by a strong balance sheet and excellent cash flow conversion.

Definitions

Total revenue includes the revenues of continuing and discontinued operations, but excludes the discontinued operations relating to GMID in 2018.

The 2018 comparatives have been restated to reflect the two prior year tax exposures as outlined in note 1 as well as the impact of Asset Management being reported as discontinued operations.

Adjusted measures include the results of continuing and discontinued operations and exclude the impact of amortisation of acquired intangible assets, exceptional items and other adjusting items in accordance with the Group's policy. 2018 excludes the results of discontinued operations relating to GMID. A detailed reconciliation of the Group's adjusted and underlying results is set out on pages 6 to 11 of this statement.

Underlying measures include the adjusted results stated at constant exchange rates, including pro forma prior year comparatives for acquisitions and new business launches and excluding disposals, business closures and significant event and publication timing differences.

The adjusted effective tax rate is based on the adjusted profit before tax and excluding deferred tax movements on intangible assets, prior year items, tax on exceptional items and other tax adjusting items, in accordance with the Group's policy.

For further information, please contact:

Euromoney Institutional Investor PLC

   Wendy Pallot, Chief Financial Officer:            +44 20 7779 8866; wendy.pallot@euromoneyplc.com 
   Sarah Cooke, Head of Investor Relations:     +44 20 7779 7363; sarah.cooke@euromoneyplc.com 

FTI Consulting

Charles Palmer / Jamie Ricketts / Amy Hurnell / Jamille Smith: +44 20 3727 1000; euromoney@fticonsulting.com

NOTE TO EDITORS

Euromoney is a global information business providing essential B2B information to global and specialist markets. Euromoney provides discovery, market intelligence and events across our segments. Euromoney is listed on the London Stock Exchange and is a member of the FTSE 250 share index. (www.euromoneyplc.com)

CAUTIONARY STATEMENT

This Preliminary Statement ("Statement") is prepared for and addressed only to the Company's shareholders as a whole and to no other person. The Company, its Directors, employees, agents and advisers accept and assume no liability to any person in respect of this Statement save as would arise under English law. Statements contained in this Statement are based on the knowledge and information available to the Group's Directors at the date it was prepared and therefore facts stated and views expressed may change after that date.

This document and any materials distributed in connection with it may include forward-looking statements, beliefs, opinions or statements concerning risks and uncertainties, including statements with respect to the Group's business, financial condition and results of operations. Those statements and statements which contain the words "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning, reflect the Company's Directors' beliefs and expectations and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and which may cause results and developments to differ materially from those expressed or implied by those statements and forecasts. No representation is made that any of those statements or forecasts will come to pass or that any forecast results will be achieved. You are cautioned not to place any reliance on such statements or forecasts. Those forward-looking and other statements speak only as at the date of this Statement. The Group undertakes no obligation to release any update of, or revisions to, any forward-looking statements, opinions (which are subject to change without notice) or any other information or statement contained in this Statement. Furthermore, past performance of the Group cannot be relied on as a guide to future performance.

No statement in this document is intended as a profit forecast or a profit estimate and no statement in this document should be interpreted to mean that earnings per Euromoney Institutional Investor PLC share for the current or future financial years would necessarily match or exceed the historical published earnings per Euromoney Institutional Investor PLC share.

Nothing in this document is intended to constitute an invitation or inducement to engage in investment activity. This document does not constitute or form part of any offer for sale or subscription of, or any solicitation of any offer to purchase or subscribe for, any securities nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract, commitment or investment decision in relation thereto. This document does not constitute a recommendation regarding any securities.

LEI Number: 213800PZU2RGHMHE2S67

Appendix to Preliminary Statement

Reconciliation of Consolidated Income Statement to adjusted results for the year ended 30 September 2019.

The Directors believe that the adjusted measures provide additional useful information for shareholders to evaluate and compare the performance of the business from period to period. These measures are used by management for budgeting, planning and monthly reporting purposes and are the basis on which executive management is incentivised. The non-IFRS measures also enable the Group to track more easily and consistently the underlying operational performance by separating out exceptional income, charges and non-cash items.

Total and segment revenue represents the combined reported revenue from continuing operations and discontinued operations revenue for Asset Management.

Adjusted results include continuing operations and discontinued operations for Asset Management. The discontinued operations for Asset Management have been included in the adjusted results as it was owned and managed as part of the Group for the entire period and to aid year-on-year comparability of the Group's results. This treatment is consistent with that of Global Markets Intelligence Division (GMID) when the strategic review was announced for that disposal in September 2017. In the period of the disposal and upon the chief operating decision maker (CODM) not considering the discontinued operation in the review of the business, the discontinued operation will then be excluded from the adjusted results.

The discontinued operations in 2018 relating to the disposal of GMID have been excluded in the adjusted results to reflect the basis on which the CODM reviews the business. The comparatives have been updated to reflect this change in management's adjusted measures in order to provide a more like-for-like view of continuing operations.

In December 2018, the Group engaged external advisors to undertake an independent review of the Group's compliance with the off-payroll working rules. As a result of the review, the Group has identified an underpayment of payroll taxes to HMRC for the years ended 30 September 2013 to 30 September 2018. A restatement has been made to recognise the historical exposure, consisting of payroll taxes underpaid, interest and penalties. These restatements are not excluded from adjusted measures as the costs incurred are in the ordinary course of business and will recur.

Adjusted figures are presented before the impact of amortisation of acquired intangible assets (comprising trademarks and brands, customer relationships, databases and software); exceptional items, share of associates' and joint ventures' acquired intangible asset amortisation and exceptional items; net movements in deferred consideration and acquisition commitments; fair value remeasurements; related tax items and other adjusting items described below.

The amortisation of acquired intangible assets is adjusted as the premium paid relative to the net assets on the balance sheet of the acquired business is classified as either goodwill or as an intangible asset arising on a business combination and is recognised on the Group's balance sheet. This differs to organically developed businesses where assets such as employee talent and customer relationships are not recognised on the balance sheet. Impairment and amortisation of intangible assets and goodwill arising on acquisitions are excluded from adjusted results as they are balance sheet items that relate to historical M&A activity rather than the trading performance of the business.

Exceptional items are items of income or expense considered by the Directors to be significant, non-recurring and not attributable to underlying trading. It is Group policy to treat as exceptional significant earn-out payments required by IFRS to be recognised as a compensation cost. IFRS requires that earn-out payments to selling shareholders retained in the acquired business for a contractual time period are treated as a compensation cost. Given that these payments are in substance part of the cost of an investment and will not recur once the earn-out payments have been made, they have been excluded from adjusted profit.

During the second half of the year, the Group discovered a VAT exposure relating to the understatement of VAT on intra-group transactions in respect of the four years ended 30 September 2018. This VAT exposure is considered by the Directors as being material and non-recurring. A restatement has been made to recognise the historical exposure and related interest. The 2018 VAT expense has been classified as an exceptional item and the related interest for 2018 and 2019 has been treated as an adjusted finance expense because these charges are not expected to recur.

Adjusted finance costs exclude interest arising on the uncertain tax provisions, as the provisions relate to tax adjusting items. In addition, for the year ended 2018, adjusted finance costs exclude a net gain realised on the close-out of interest rate swaps of GBP1.2m following the repayment of the Group's term-loan. The net gain had been excluded from adjusted finance costs as it would not have crystallised had the disposal of GMID not completed.

For the 2018 reporting period, adjusted share of results in associates and joint ventures excludes the share of exceptional items that relates to restructuring and earn-out costs in Dealogic, which was sold in December 2017.

In respect of earnings, adjusted amounts reflect a tax rate that includes the current tax effect of goodwill and intangible assets. Many of the Group's acquisitions, particularly in the US, give rise to significant tax savings as the amortisation of goodwill and intangible assets on acquisition is deductible for tax purposes. The Group considers that the resulting adjusted effective tax rate is therefore more representative of its tax payable position. Tax on exceptional items relates primarily to the gain that arose on the disposal of Mining Indaba which is fully taxable and nondeductible costs relating to the acquisition of BoardEx and The Deal. Prior year items primarily reflect true-up of deferred tax items. These items are excluded from the adjusted tax expense as they do not relate to current year underlying trading.

Further analysis of the adjusting items is presented in notes 2, 3, 4, 5, 8, 9 and 10 in the notes to the Preliminary Statement. Further details of the restatements are included in note 1 of the notes to the Preliminary Statement.

The Group has applied these principles in calculating adjusted measures and it is the Group's intention to continue to apply these principles in the future.

The reconciliation below sets out the adjusted results of the Group and the related adjustments to the statutory Income Statement that the Directors consider necessary to provide useful and comparable information about the Group's adjusted trading performance.

 
                                               2019                                            2018 
 ----------------  -----  ----------------------------------------------  ---------------------------------------------- 
                                     Discontinued                          Restated  Discontinued 
                          Statutory    operations  Adjustments  Adjusted  Statutory    operations  Adjustments  Adjusted 
                   Notes     GBP000        GBP000       GBP000    GBP000     GBP000        GBP000       GBP000    GBP000 
 ----------------  -----  ---------  ------------  -----------  --------  ---------  ------------  -----------  -------- 
 Revenue               2    256,051       145,622            -   401,673    244,825       145,454            -   390,279 
 ----------------  -----  ---------  ------------  -----------  --------  ---------  ------------  -----------  -------- 
 
 Adjusted 
  operating 
  profit               2     38,514        66,929            -   105,443     39,945        61,660            -   101,605 
 ----------------  -----  ---------  ------------  -----------  --------  ---------  ------------  -----------  -------- 
 Acquired 
  intangible 
  amortisation         9   (14,215)      (10,928)       25,143         -   (11,990)      (10,749)       22,739         - 
 ----------------  -----  ---------  ------------  -----------  --------  ---------  ------------  -----------  -------- 
 Exceptional 
  items                3      6,350         (812)      (5,538)         -     79,910       (3,850)     (76,060)         - 
 ----------------  -----  ---------  ------------  -----------  --------  ---------  ------------  -----------  -------- 
 
 Operating profit            30,649        55,189       19,605   105,443    107,865        47,061     (53,321)   101,605 
 ----------------  -----  ---------  ------------  -----------  --------  ---------  ------------  -----------  -------- 
 Operating profit 
  margin                        12%           38%            -       26%        44%           32%            -       26% 
 ----------------  -----  ---------  ------------  -----------  --------  ---------  ------------  -----------  -------- 
 Share of results 
  in associates 
  and joint 
  ventures            10       (88)             -         (38)     (126)        157             -          953     1,110 
 ----------------  -----  ---------  ------------  -----------  --------  ---------  ------------  -----------  -------- 
 
 Finance income        4      1,873             -        (675)     1,198      5,248            84      (4,468)       864 
 ----------------  -----  ---------  ------------  -----------  --------  ---------  ------------  -----------  -------- 
 Finance expense       4    (2,983)          (99)        1,214   (1,868)    (6,454)             -        2,757   (3,697) 
 ----------------  -----  ---------  ------------  -----------  --------  ---------  ------------  -----------  -------- 
 Net finance 
  (costs)/income       4    (1,110)          (99)          539     (670)    (1,206)            84      (1,711)   (2,833) 
 ----------------  -----  ---------  ------------  -----------  --------  ---------  ------------  -----------  -------- 
 
 Profit before 
  tax                        29,451        55,090       20,106   104,647    106,816        47,145     (54,079)    99,882 
 ----------------  -----  ---------  ------------  -----------  --------  ---------  ------------  -----------  -------- 
 Tax expense on 
  profit               5    (9,317)      (12,349)          820  (20,846)   (41,358)       (8,802)       29,550  (20,610) 
 ----------------  -----  ---------  ------------  -----------  --------  ---------  ------------  -----------  -------- 
 Profit for the 
  year                       20,134        42,741       20,926    83,801     65,458        38,343     (24,529)    79,272 
 ----------------  -----  ---------  ------------  -----------  --------  ---------  ------------  -----------  -------- 
 
 Profit for the 
  year from 
  discontinued 
  operations           8     41,059      (42,741)        1,682         -    129,685      (38,343)     (91,342)         - 
 ----------------  -----  ---------  ------------  -----------  --------  ---------  ------------  -----------  -------- 
 Profit for the 
  year                       61,193             -       22,608    83,801    195,143             -    (115,871)    79,272 
 ----------------  -----  ---------  ------------  -----------  --------  ---------  ------------  -----------  -------- 
 
 Attributable to: 
 ----------------  -----  ---------  ------------  -----------  --------  ---------  ------------  -----------  -------- 
 Equity holders 
  of the parent              60,929             -       22,586    83,515    195,004             -    (115,871)    79,133 
 ----------------  -----  ---------  ------------  -----------  --------  ---------  ------------  -----------  -------- 
 Equity 
  non-controlling 
  interests                     264             -           22       286        139             -            -       139 
 ----------------  -----  ---------  ------------  -----------  --------  ---------  ------------  -----------  -------- 
                             61,193             -       22,608    83,801    195,143             -    (115,871)    79,272 
 ----------------  -----  ---------  ------------  -----------  --------  ---------  ------------  -----------  -------- 
 
 Diluted earnings 
  per share            7      56.6p                                77.6p     181.3p                                73.6p 
 ----------------  -----  ---------  ------------  -----------  --------  ---------  ------------  -----------  -------- 
 

Underlying measures

When assessing the performance of our businesses, the Board considers the adjusted results. The year-on-year change in adjusted results may not, however, be a fair like-for-like comparison as there are a number of factors which can influence growth rates but which do not reflect underlying performance.

Underlying results include the adjusted results of continuing operations and discontinued operations for Asset Management and are stated:

-- At constant exchange rates, with the prior year comparatives being restated using current year exchange rates;

-- Including pro forma prior year comparatives for acquisitions and new business launches and excluding all results for disposals or business closures;

-- Excluding events and publications which took place in the comparative period but did not take place in the current period and, including in the comparative period at the same amount events and publications which took place in the current period but did not take place in the comparative period.

For example, this means we adjust for:

-- Biennial events;

-- Events which run in one of the current or comparative periods due to changes in the event date; and

-- Cancelled events that did not take place in the current year.

The Group's adjusted and underlying measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with IFRS. The adjusted and underlying measures used by the Group are not necessarily comparable with those used by other companies.

The 2018 comparatives have been restated to reflect the two prior year tax exposures and discontinued operations as outlined in note 1 of the notes to the Preliminary Statement.

The following table sets out the reconciliation from statutory to underlying for revenue, operating profit and profit before tax:

 
                                                      Restated 
                                                2019      2018 
                                              GBP000    GBP000  Change % 
-------------------------------------------  -------  --------  -------- 
Statutory revenue                            256,051   244,825        5% 
-------------------------------------------  -------  --------  -------- 
Discontinued operations - Asset Management   145,622   145,454 
-------------------------------------------  -------  --------  -------- 
Total revenue                                401,673   390,279        3% 
-------------------------------------------  -------  --------  -------- 
Net M&A and closed businesses                (1,997)     2,829 
-------------------------------------------  -------  --------  -------- 
Timing differences                                 -   (5,362) 
-------------------------------------------  -------  --------  -------- 
Foreign exchange                                   -    11,438 
-------------------------------------------  -------  --------  -------- 
Underlying revenue                           399,676   399,184        0% 
-------------------------------------------  -------  --------  -------- 
 
Statutory operating profit                    30,649   107,865     (72%) 
-------------------------------------------  -------  --------  -------- 
Adjustments                                   19,605  (53,321) 
-------------------------------------------  -------  --------  -------- 
Discontinued operations - Asset Management    55,189    47,061 
-------------------------------------------  -------  --------  -------- 
Adjusted operating profit                    105,443   101,605        4% 
-------------------------------------------  -------  --------  -------- 
Net M&A and closed businesses                  (443)   (3,906) 
-------------------------------------------  -------  --------  -------- 
Timing differences                                 -   (2,228) 
-------------------------------------------  -------  --------  -------- 
Foreign exchange                                   -     4,122 
-------------------------------------------  -------  --------  -------- 
Underlying operating profit                  105,000    99,593        5% 
-------------------------------------------  -------  --------  -------- 
 
Statutory profit before tax                   29,451   106,816     (72%) 
-------------------------------------------  -------  --------  -------- 
Adjustments                                   20,106  (54,079) 
-------------------------------------------  -------  --------  -------- 
Discontinued operations - Asset Management    55,090    47,145 
-------------------------------------------  -------  --------  -------- 
Adjusted profit before tax                   104,647    99,882        5% 
-------------------------------------------  -------  --------  -------- 
Net M&A and closed businesses                  (443)   (5,110) 
-------------------------------------------  -------  --------  -------- 
Timing differences                                 -   (3,408) 
-------------------------------------------  -------  --------  -------- 
Foreign exchange                                   -     4,135 
-------------------------------------------  -------  --------  -------- 
Underlying profit before tax                 104,204    95,499        9% 
-------------------------------------------  -------  --------  -------- 
 

Cash conversion

Cash conversion measures the percentage by which cash generated from operations covers adjusted operating profit.

 
                                                                                 Restated 
                                                                           2019      2018 
                                                                         GBP000    GBP000 
----------------------------------------------------------------------  -------  -------- 
Adjusted operating profit                                               105,443   101,605 
----------------------------------------------------------------------  -------  -------- 
Discontinued operations - GMID                                                -     7,510 
----------------------------------------------------------------------  -------  -------- 
Adjusted operating profit including discontinued operations             105,443   109,115 
----------------------------------------------------------------------  -------  -------- 
 
Cash generated from continuing and discontinued operations               92,407   108,560 
----------------------------------------------------------------------  -------  -------- 
Exceptional items                                                        10,519     5,580 
----------------------------------------------------------------------  -------  -------- 
Other working capital adjustments                                           627   (2,461) 
----------------------------------------------------------------------  -------  -------- 
Underlying cash generated from continuing and discontinued operations   103,553   111,679 
----------------------------------------------------------------------  -------  -------- 
 
Adjusted cash conversion %                                                  88%       99% 
----------------------------------------------------------------------  -------  -------- 
Underlying cash conversion %                                                98%      102% 
----------------------------------------------------------------------  -------  -------- 
 

The underlying basis is after adjusting for significant timing differences affecting the movement on working capital and exceptional items. For the year ended 30 September 2019, exceptional items largely consist of cash payments for acquisition and disposal costs and deferred compensation costs in relation to acquisitions. For the year ended 30 September 2018, exceptional items largely consist of restructuring payments and cash payments for the legal and professional fees in relation to acquisitions and disposals, net of the favourable settlement of a legal dispute. The other working capital adjustments in 2019 and 2018 are largely the result of the landlord's contribution to the fit-out of the New York office which will be amortised over the period of the lease and the rent-free period of the London and New York offices, there is a further adjustment for payroll taxes in 2018.

As cash generated from operations in the Consolidated Statement of Cash Flows includes those from discontinued operations of Asset Management and GMID, the statutory cash conversion rate has not been provided as it would not give a fair indication of the Group's cash conversion performance.

The 2018 comparatives have been restated to reflect the two prior year tax exposures and discontinued operations as outlined in note 1 of the notes to the Preliminary Statement.

Net cash

 
                                                                                     2019       2018 
                                                                                   GBP000     GBP000 
-------------------------------------------------------------------------------  --------  --------- 
At 1 October                                                                       78,273  (154,621) 
-------------------------------------------------------------------------------  --------  --------- 
Net increase in cash and cash equivalents                                        (30,151)     57,875 
-------------------------------------------------------------------------------  --------  --------- 
Decrease in borrowings                                                                  -    167,740 
-------------------------------------------------------------------------------  --------  --------- 
Other non-cash changes                                                                  -      (955) 
-------------------------------------------------------------------------------  --------  --------- 
Effect of foreign exchange rate movements                                           1,956      8,234 
-------------------------------------------------------------------------------  --------  --------- 
At 30 September                                                                    50,078     78,273 
-------------------------------------------------------------------------------  --------  --------- 
 
Net cash comprises: 
-------------------------------------------------------------------------------  --------  --------- 
Cash at bank and short-term deposits                                               49,751     78,273 
-------------------------------------------------------------------------------  --------  --------- 
Classified as held for sale                                                           327          - 
-------------------------------------------------------------------------------  --------  --------- 
Total cash and cash equivalents held by continuing and discontinued operations     50,078     78,273 
-------------------------------------------------------------------------------  --------  --------- 
Net cash                                                                           50,078     78,273 
-------------------------------------------------------------------------------  --------  --------- 
Average exchange rate adjustment                                                  (1,452)    (2,216) 
-------------------------------------------------------------------------------  --------  --------- 
Adjusted net cash                                                                  48,626     76,057 
-------------------------------------------------------------------------------  --------  --------- 
 
Adjusted operating profit                                                         105,443    101,605 
-------------------------------------------------------------------------------  --------  --------- 
Share of results in associates and joint ventures                                   (126)      1,110 
-------------------------------------------------------------------------------  --------  --------- 
Add back: 
-------------------------------------------------------------------------------  --------  --------- 
Intangible amortisation on licences and software                                    1,245      2,577 
-------------------------------------------------------------------------------  --------  --------- 
Depreciation of property, plant and equipment                                       2,417      2,561 
-------------------------------------------------------------------------------  --------  --------- 
Share of associates' interest, depreciation and amortisation                            -        721 
-------------------------------------------------------------------------------  --------  --------- 
M&A annualised adjustment                                                           2,425    (1,225) 
-------------------------------------------------------------------------------  --------  --------- 
Adjusted EBITDA                                                                   111,404    107,349 
-------------------------------------------------------------------------------  --------  --------- 
Adjusted net cash to EBITDA ratio for continuing and discontinued operations         0.44       0.71 
-------------------------------------------------------------------------------  --------  --------- 
 

The Group's borrowing facilities have covenants requiring the Group's net debt to be no more than three times adjusted EBITDA and minimum levels of interest cover of three times on a rolling 12-month basis. The amounts and foreign exchange rates used in the covenant calculations are subject to adjustments as defined under the terms of the arrangement.

The bank covenant ratio uses an average exchange rate in the calculation of net debt and includes discontinued operations of Asset Management and GMID and an annualised adjustment attributable to acquisitions and disposals in the calculation of adjusted EBITDA. When businesses are acquired after the beginning of the financial year, the calculation of adjusted EBITDA includes EBITDA attributable to the business as if the acquisition had been completed on the first day of the financial year. The calculation excludes the EBITDA of any businesses disposed of during the year.

The 2018 comparatives have been restated to reflect the two prior year tax exposures and discontinued operations as outlined in note 1 of the notes to the Preliminary Statement.

Consolidated Income Statement

for the year ended 30 September 2019

 
                                                                                                   Restated 
                                                                                             2019      2018 
                                                                                  Notes    GBP000    GBP000 
 -------------------------------------------------------------------------------  -----  --------  -------- 
 CONTINUING OPERATIONS 
 -------------------------------------------------------------------------------  -----  --------  -------- 
 Revenue                                                                              2   256,051   244,825 
 -------------------------------------------------------------------------------  -----  --------  -------- 
 
 Operating profit before acquired intangible amortisation and exceptional items       2    38,514    39,945 
 -------------------------------------------------------------------------------  -----  --------  -------- 
 Acquired intangible amortisation                                                     9  (14,215)  (11,990) 
 -------------------------------------------------------------------------------  -----  --------  -------- 
 Exceptional items                                                                    3     6,350    79,910 
 -------------------------------------------------------------------------------  -----  --------  -------- 
 
 Operating profit                                                                     2    30,649   107,865 
 -------------------------------------------------------------------------------  -----  --------  -------- 
 Share of results in associates and joint ventures                                   10      (88)       157 
 -------------------------------------------------------------------------------  -----  --------  -------- 
 
 Finance income                                                                       4     1,873     5,248 
 -------------------------------------------------------------------------------  -----  --------  -------- 
 Finance expense                                                                      4   (2,983)   (6,454) 
 -------------------------------------------------------------------------------  -----  --------  -------- 
 Net finance costs                                                                    4   (1,110)   (1,206) 
 -------------------------------------------------------------------------------  -----  --------  -------- 
 
 Profit before tax                                                                    2    29,451   106,816 
 -------------------------------------------------------------------------------  -----  --------  -------- 
 Tax expense on profit                                                                5   (9,317)  (41,358) 
 -------------------------------------------------------------------------------  -----  --------  -------- 
 Profit for the year from continuing operations                                       2    20,134    65,458 
 -------------------------------------------------------------------------------  -----  --------  -------- 
 
 DISCONTINUED OPERATIONS 
 -------------------------------------------------------------------------------  -----  --------  -------- 
 Profit for the year from discontinued operations                                     8    41,059   129,685 
 -------------------------------------------------------------------------------  -----  --------  -------- 
 
 PROFIT FOR THE YEAR                                                                       61,193   195,143 
 -------------------------------------------------------------------------------  -----  --------  -------- 
 
 Attributable to: 
 -------------------------------------------------------------------------------  -----  --------  -------- 
 Equity holders of the parent                                                              60,929   195,004 
 -------------------------------------------------------------------------------  -----  --------  -------- 
 Equity non-controlling interests                                                             264       139 
 -------------------------------------------------------------------------------  -----  --------  -------- 
                                                                                           61,193   195,143 
 -------------------------------------------------------------------------------  -----  --------  -------- 
 Earnings per share 
 -------------------------------------------------------------------------------  -----  --------  -------- 
 From continuing operations 
 -------------------------------------------------------------------------------  -----  --------  -------- 
    Basic                                                                             7     18.5p     60.8p 
 -------------------------------------------------------------------------------  -----  --------  -------- 
    Diluted                                                                           7     18.5p     60.7p 
 -------------------------------------------------------------------------------  -----  --------  -------- 
 From continuing and discontinued operations 
 -------------------------------------------------------------------------------  -----  --------  -------- 
    Basic                                                                             7     56.6p    181.5p 
 -------------------------------------------------------------------------------  -----  --------  -------- 
    Diluted                                                                           7     56.6p    181.3p 
 -------------------------------------------------------------------------------  -----  --------  -------- 
 Dividend per share (including proposed dividends)                                    6     33.1p     32.5p 
 -------------------------------------------------------------------------------  -----  --------  -------- 
 

A detailed reconciliation of the Group's statutory results to the adjusted and underlying results is set out on pages 6 to 11.

The 2018 Income Statement has been restated as detailed in note 1.

Consolidated Statement of Comprehensive Income

for the year ended 30 September 2019

 
                                                                                                           Restated 
                                                                                                     2019      2018 
                                                                                                   GBP000    GBP000 
-----------------------------------------------------------------------------------------------   -------  -------- 
Profit for the year                                                                                61,193   195,143 
------------------------------------------------------------------------------------------------  -------  -------- 
 
Items that may be reclassified subsequently to profit or loss: 
-----------------------------------------------------------------------------------------------   -------  -------- 
Change in fair value of cash flow hedges                                                          (5,061)     (711) 
------------------------------------------------------------------------------------------------  -------  -------- 
Transfer of losses/(gains) on cash flow hedges from fair value reserves to Income Statement: 
-----------------------------------------------------------------------------------------------   -------  -------- 
   Foreign exchange losses/(gains) in revenue                                                       3,483   (1,037) 
------------------------------------------------------------------------------------------------  -------  -------- 
   Foreign exchange losses/(gains) in administrative expenses                                         361     (409) 
------------------------------------------------------------------------------------------------  -------  -------- 
   Gains on interest rate swaps to hedge interest on committed borrowings                               -   (2,121) 
------------------------------------------------------------------------------------------------  -------  -------- 
Net exchange differences on translation of net investments in overseas subsidiary undertakings     22,644    24,311 
------------------------------------------------------------------------------------------------  -------  -------- 
Net exchange differences on foreign currency loans                                                  1,524   (5,642) 
------------------------------------------------------------------------------------------------  -------  -------- 
Translation reserves recycled to Income Statement                                                       -     8,250 
------------------------------------------------------------------------------------------------  -------  -------- 
Fair value remeasurement                                                                            2,131         - 
------------------------------------------------------------------------------------------------  -------  -------- 
Tax on items that may be reclassified                                                                   -       630 
------------------------------------------------------------------------------------------------  -------  -------- 
 
Items that will not be reclassified to profit or loss: 
-----------------------------------------------------------------------------------------------   -------  -------- 
Actuarial (losses)/gains on defined benefit pension schemes                                       (5,175)     6,495 
------------------------------------------------------------------------------------------------  -------  -------- 
Tax credit/(charge) on actuarial (losses)/gains on defined benefit pension schemes                    880   (1,104) 
------------------------------------------------------------------------------------------------  -------  -------- 
 
Other comprehensive income for the year                                                            20,787    28,662 
------------------------------------------------------------------------------------------------  -------  -------- 
 
Total comprehensive income for the year                                                            81,980   223,805 
------------------------------------------------------------------------------------------------  -------  -------- 
 
Continuing operations                                                                               7,629   130,584 
------------------------------------------------------------------------------------------------  -------  -------- 
Discontinued operations                                                                            74,351    93,221 
------------------------------------------------------------------------------------------------  -------  -------- 
Total comprehensive income for the year                                                            81,980   223,805 
------------------------------------------------------------------------------------------------  -------  -------- 
 
Attributable to: 
-----------------------------------------------------------------------------------------------   -------  -------- 
Equity holders of the parent                                                                       81,716   223,830 
------------------------------------------------------------------------------------------------  -------  -------- 
Equity non-controlling interests                                                                      264      (25) 
------------------------------------------------------------------------------------------------  -------  -------- 
                                                                                                   81,980   223,805 
 -----------------------------------------------------------------------------------------------  -------  -------- 
 

Consolidated Statement of Financial Position

as at 30 September 2019

 
                                                                               Restated 
                                                                   Restated   1 October 
                                                            2019       2018        2017 
                                                Notes     GBP000     GBP000      GBP000 
----------------------------------------------  -----  ---------  ---------  ---------- 
Non-current assets 
----------------------------------------------  -----  ---------  ---------  ---------- 
Intangible assets 
----------------------------------------------  -----  ---------  ---------  ---------- 
   Goodwill                                         9    246,281    414,722     399,971 
----------------------------------------------  -----  ---------  ---------  ---------- 
   Other intangible assets                          9    159,140    173,503     193,991 
----------------------------------------------  -----  ---------  ---------  ---------- 
Property, plant and equipment                             15,294     16,112      17,235 
----------------------------------------------  -----  ---------  ---------  ---------- 
Investment in associates and joint ventures        10      5,271        715      26,820 
----------------------------------------------  -----  ---------  ---------  ---------- 
Other equity investments                           10          -      3,546       3,546 
----------------------------------------------  -----  ---------  ---------  ---------- 
Convertible loan note                                      3,759      2,677       2,503 
----------------------------------------------  -----  ---------  ---------  ---------- 
Deferred consideration                                         -        470       1,570 
----------------------------------------------  -----  ---------  ---------  ---------- 
Deferred tax assets                                        2,232      2,178       2,965 
----------------------------------------------  -----  ---------  ---------  ---------- 
Retirement benefit asset                                   1,511      1,937           - 
----------------------------------------------  -----  ---------  ---------  ---------- 
Other non-current assets                                     317        583         929 
----------------------------------------------  -----  ---------  ---------  ---------- 
Derivative financial instruments                              93         55         662 
----------------------------------------------  -----  ---------  ---------  ---------- 
                                                         433,898    616,498     650,192 
----------------------------------------------  -----  ---------  ---------  ---------- 
Current assets 
----------------------------------------------  -----  ---------  ---------  ---------- 
Trade and other receivables                               48,955     68,285      64,483 
----------------------------------------------  -----  ---------  ---------  ---------- 
Contract assets                                            1,457          -           - 
----------------------------------------------  -----  ---------  ---------  ---------- 
Deferred consideration                                         -        650         419 
----------------------------------------------  -----  ---------  ---------  ---------- 
Current income tax assets                                  4,362      4,605       5,112 
----------------------------------------------  -----  ---------  ---------  ---------- 
Cash and cash equivalents                                 49,751     78,273       4,426 
----------------------------------------------  -----  ---------  ---------  ---------- 
Derivative financial instruments                             219        131       2,686 
----------------------------------------------  -----  ---------  ---------  ---------- 
Total assets of businesses held for sale            8    292,356     13,719      50,671 
----------------------------------------------  -----  ---------  ---------  ---------- 
                                                         397,100    165,663     127,797 
----------------------------------------------  -----  ---------  ---------  ---------- 
Current liabilities 
----------------------------------------------  -----  ---------  ---------  ---------- 
Acquisition commitments                                    (986)       (97)     (9,904) 
----------------------------------------------  -----  ---------  ---------  ---------- 
Deferred consideration                                     (138)      (209)       (350) 
----------------------------------------------  -----  ---------  ---------  ---------- 
Trade and other payables                                (43,929)   (44,931)    (38,452) 
----------------------------------------------  -----  ---------  ---------  ---------- 
Current income tax liabilities                          (16,564)   (31,016)    (16,117) 
----------------------------------------------  -----  ---------  ---------  ---------- 
Group relief payable                                           -          -       (387) 
----------------------------------------------  -----  ---------  ---------  ---------- 
Accruals                                                (48,562)   (64,143)    (67,819) 
----------------------------------------------  -----  ---------  ---------  ---------- 
Deferred income and contract liabilities                (87,150)  (117,088)   (113,487) 
----------------------------------------------  -----  ---------  ---------  ---------- 
Derivative financial instruments                         (3,578)    (2,424)     (1,001) 
----------------------------------------------  -----  ---------  ---------  ---------- 
Provisions                                                 (785)      (248)       (337) 
----------------------------------------------  -----  ---------  ---------  ---------- 
Total liabilities of businesses held for sale       8   (71,534)    (1,994)    (29,998) 
----------------------------------------------  -----  ---------  ---------  ---------- 
                                                       (273,226)  (262,150)   (277,852) 
----------------------------------------------  -----  ---------  ---------  ---------- 
Net current assets / (liabilities)                       123,874   (96,487)   (150,055) 
----------------------------------------------  -----  ---------  ---------  ---------- 
Total assets less current liabilities                    557,772    520,011     500,137 
----------------------------------------------  -----  ---------  ---------  ---------- 
 

Consolidated Statement of Financial Position

as at 30 September 2019 continued

 
                                                                         Restated 
                                                             Restated   1 October 
                                                       2019      2018        2017 
                                            Notes    GBP000    GBP000      GBP000 
-----------------------------------------  ------  --------  --------  ---------- 
Non-current liabilities 
-----------------------------------------  ------  --------  --------  ---------- 
Acquisition commitments                             (1,640)     (175)     (3,221) 
-------------------------------------------------  --------  --------  ---------- 
Deferred consideration                                    -     (125)           - 
-------------------------------------------------  --------  --------  ---------- 
Borrowings                                                -         -   (168,893) 
-------------------------------------------------  --------  --------  ---------- 
Other non-current liabilities                         (227)   (1,348)       (486) 
-------------------------------------------------  --------  --------  ---------- 
Deferred income and contract liabilities            (1,278)   (3,316)     (3,491) 
-------------------------------------------------  --------  --------  ---------- 
Deferred tax liabilities                           (17,718)  (27,553)    (23,431) 
-------------------------------------------------  --------  --------  ---------- 
Retirement benefit obligations                      (7,723)   (4,870)     (9,954) 
-------------------------------------------------  --------  --------  ---------- 
Derivative financial instruments                      (293)     (166)       (230) 
-------------------------------------------------  --------  --------  ---------- 
Provisions                                          (2,845)   (3,872)     (2,600) 
-------------------------------------------------  --------  --------  ---------- 
                                                   (31,724)  (41,425)   (212,306) 
 ------------------------------------------------  --------  --------  ---------- 
Net assets                                          526,048   478,586     287,831 
-------------------------------------------------  --------  --------  ---------- 
 
 
Shareholders' equity 
-------------------------------------------------      --------  --------  -------- 
Called up share capital                            12       273       273       273 
-------------------------------------------------      --------  --------  -------- 
Share premium account                                   104,306   103,790   103,147 
-------------------------------------------------      --------  --------  -------- 
Other reserve                                            64,981    64,981    64,981 
-------------------------------------------------      --------  --------  -------- 
Capital redemption reserve                                   56        56        56 
-------------------------------------------------      --------  --------  -------- 
Own shares                                             (19,682)  (20,462)  (21,005) 
-------------------------------------------------      --------  --------  -------- 
Reserve for share-based payments                         40,120    39,687    38,395 
-------------------------------------------------      --------  --------  -------- 
Fair value reserve                                     (27,087)  (27,616)  (23,071) 
-------------------------------------------------      --------  --------  -------- 
Translation reserve                                     143,243   119,075    89,269 
-------------------------------------------------      --------  --------  -------- 
Retained earnings                                       218,795   198,802    26,628 
-------------------------------------------------      --------  --------  -------- 
Equity shareholders' surplus                            525,005   478,586   278,673 
-------------------------------------------------      --------  --------  -------- 
Equity attributable to non-controlling interests          1,043         -     9,158 
-------------------------------------------------      --------  --------  -------- 
Total equity                                            526,048   478,586   287,831 
-------------------------------------------------      --------  --------  -------- 
 

The Consolidated Statements of Financial Position at 1 October 2017 and 30 September 2018 have been restated as detailed in note 1.

Approved by the Board of Directors on 21 November 2019.

Consolidated Statement of Changes in Equity

for the year ended 30 September 2019

 
                              Share              Capital            Reserve for      Fair 
                     Share  premium    Other  redemption       Own  share-based     value  Translation  Retained            Non-controlling     Total 
                   capital  account  reserve     reserve    shares     payments   reserve      reserve  earnings     Total        interests    equity 
                    GBP000   GBP000   GBP000      GBP000    GBP000       GBP000    GBP000       GBP000    GBP000    GBP000           GBP000    GBP000 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
At 1 October 2017 
 (reported)            273  103,147   64,981          56  (21,005)       38,395  (23,071)       89,269    35,594   287,639            9,158   296,797 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Restatements 
 (note 1)                -        -        -           -         -            -         -            -   (8,966)   (8,966)                -   (8,966) 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
At 1 October 2017 
 (restated)            273  103,147   64,981          56  (21,005)       38,395  (23,071)       89,269    26,628   278,673            9,158   287,831 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Profit for the 
 year (restated)         -        -        -           -         -            -         -            -   195,004   195,004              139   195,143 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Other 
 comprehensive 
 (expense)/income 
 for the year            -        -        -           -         -            -   (4,545)       27,349     6,022    28,826            (164)    28,662 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Total 
 comprehensive 
 (expense)/income 
 for the year            -        -        -           -         -            -   (4,545)       27,349   201,026   223,830             (25)   223,805 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
De-recognition of 
 non-controlling 
 interest and 
 related 
 liabilities on 
 disposal                -        -        -           -         -            -         -            -       317       317            (170)       147 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Adjustment 
 arising from 
 change in 
 non-controlling 
 interest                -        -        -           -         -            -         -        2,457     6,082     8,539          (8,539)         - 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Credit for 
 share-based 
 payments                -        -        -           -         -        1,741         -            -         -     1,741                -     1,741 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Cash dividend 
 paid                    -        -        -           -         -            -         -            -  (34,361)  (34,361)            (424)  (34,785) 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Exercise of share 
 options                 -      643        -           -       543        (449)         -            -      (94)       643                -       643 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Tax relating to 
 items taken 
 directly to 
 equity                  -        -        -           -         -            -         -            -     (796)     (796)                -     (796) 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
At 30 September 
 2018 (restated)       273  103,790   64,981          56  (20,462)       39,687  (27,616)      119,075   198,802   478,586                -   478,586 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
 

Consolidated Statement of Changes in Equity

for the year ended 30 September 2019 continued

 
                              Share              Capital            Reserve for      Fair 
                     Share  premium    Other  redemption       Own  share-based     value  Translation  Retained            Non-controlling     Total 
                   capital  account  reserve     reserve    shares     payments   reserve      reserve  earnings     Total        interests    equity 
                    GBP000   GBP000   GBP000      GBP000    GBP000       GBP000    GBP000       GBP000    GBP000    GBP000           GBP000    GBP000 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
At 30 September 
 2018 (restated)       273  103,790   64,981          56  (20,462)       39,687  (27,616)      119,075   198,802   478,586                -   478,586 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Impact of 
 adopting IFRS 9         -        -        -           -         -            -     (385)            -       828       443                -       443 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
At 1 October 2018 
 (restated)            273  103,790   64,981          56  (20,462)       39,687  (28,001)      119,075   199,630   479,029                -   479,029 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Profit for the 
 year                    -        -        -           -         -            -         -            -    60,929    60,929              264    61,193 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Other 
 comprehensive 
 income/(expense) 
 for the year            -        -        -           -         -            -       914       24,168   (4,295)    20,787                -    20,787 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Total 
 comprehensive 
 income for the 
 year                    -        -        -           -         -            -       914       24,168    56,634    81,716              264    81,980 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Recognition of 
 acquisition 
 commitments             -        -        -           -         -            -         -            -   (1,429)   (1,429)                -   (1,429) 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Non-controlling 
 interest 
 recognised on 
 acquisition             -        -        -           -         -            -         -            -         -         -              779       779 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Credit for 
 share-based 
 payments                -        -        -           -         -          883         -            -         -       883                -       883 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Cash dividend 
 paid                    -        -        -           -         -            -         -            -  (35,586)  (35,586)                -  (35,586) 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Exercise of share 
 options                 -      516        -           -       780        (450)         -            -     (330)       516                -       516 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
Tax relating to 
 items taken 
 directly to 
 equity                  -        -        -           -         -            -         -            -     (124)     (124)                -     (124) 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
At 30 September 
 2019                  273  104,306   64,981          56  (19,682)       40,120  (27,087)      143,243   218,795   525,005            1,043   526,048 
-----------------  -------  -------  -------  ----------  --------  -----------  --------  -----------  --------  --------  ---------------  -------- 
 

The other reserve represents the share premium arising on the shares issued for the purchase of Metal Bulletin plc in October 2006.

The investment in own shares is held by the Euromoney Employees' Share Ownership Trust and Euromoney Employee Share Trust.

The trusts waived the rights to receive dividends. Interest and administrative costs are charged to the profit and loss account of the trusts as incurred and included in the Consolidated Financial Statements.

 
                                                   2019       2018 
                                                 Number     Number 
-------------------------------------------   ---------  --------- 
Euromoney Employees' Share Ownership Trust       58,976     58,976 
--------------------------------------------  ---------  --------- 
Euromoney Employee Share Trust                1,593,198  1,656,575 
--------------------------------------------  ---------  --------- 
Total                                         1,652,174  1,715,551 
--------------------------------------------  ---------  --------- 
Nominal cost per share (p)                         0.25       0.25 
--------------------------------------------  ---------  --------- 
Historical cost per share (GBP)                   11.91      11.93 
--------------------------------------------  ---------  --------- 
Market value (GBP000)                            24,452     23,091 
--------------------------------------------  ---------  --------- 
 

Consolidated Statement of Cash Flows

for the year ended 30 September 2019

 
                                                                                        Restated 
                                                                                  2019      2018 
                                                                       Notes    GBP000    GBP000 
---------------------------------------------------------------------  -----  --------  -------- 
Cash flow from operating activities 
---------------------------------------------------------------------  -----  --------  -------- 
Operating profit from continuing operations                                2    30,649   107,865 
---------------------------------------------------------------------  -----  --------  -------- 
Operating profit from discontinued operations                              8    55,189    53,602 
---------------------------------------------------------------------  -----  --------  -------- 
Operating profit                                                                85,838   161,467 
---------------------------------------------------------------------  -----  --------  -------- 
Long-term incentive expense                                                        883     1,487 
---------------------------------------------------------------------  -----  --------  -------- 
Acquired intangible amortisation                                                25,143    22,739 
---------------------------------------------------------------------  -----  --------  -------- 
Licences and software amortisation                                               2,099     2,908 
---------------------------------------------------------------------  -----  --------  -------- 
Depreciation of property, plant and equipment                                    2,744     3,356 
---------------------------------------------------------------------  -----  --------  -------- 
Loss on disposal of property, plant and equipment                                   19         6 
---------------------------------------------------------------------  -----  --------  -------- 
Loss on disposal of intangible assets                                                -       432 
---------------------------------------------------------------------  -----  --------  -------- 
Impairment charges                                                         3     2,410     3,048 
---------------------------------------------------------------------  -----  --------  -------- 
Amendment to defined benefit pension plan                                  3   (1,224)         - 
---------------------------------------------------------------------  -----  --------  -------- 
Profit on disposal of businesses/associates                                3  (16,998)  (86,817) 
---------------------------------------------------------------------  -----  --------  -------- 
Cost of disposal of discontinued operations - exceptional items            3   (1,682)         - 
---------------------------------------------------------------------  -----  --------  -------- 
(Decrease)/increase in provisions                                                (552)       734 
---------------------------------------------------------------------  -----  --------  -------- 
Profit on deemed disposal of associate                                           (687)         - 
---------------------------------------------------------------------  -----  --------  -------- 
Operating cash flows before movements in working capital                        97,993   109,360 
---------------------------------------------------------------------  -----  --------  -------- 
Decrease/(increase) in receivables                                               6,122   (7,498) 
---------------------------------------------------------------------  -----  --------  -------- 
(Decrease)/increase in payables                                               (11,708)     6,698 
---------------------------------------------------------------------  -----  --------  -------- 
Cash generated from operations                                                  92,407   108,560 
---------------------------------------------------------------------  -----  --------  -------- 
Income taxes paid                                                             (38,418)  (38,692) 
---------------------------------------------------------------------  -----  --------  -------- 
Group relief tax paid                                                                -     (229) 
---------------------------------------------------------------------  -----  --------  -------- 
Net cash generated from operating activities                                    53,989    69,639 
---------------------------------------------------------------------  -----  --------  -------- 
 
Investing activities 
---------------------------------------------------------------------  -----  --------  -------- 
Interest received                                                                1,128       950 
---------------------------------------------------------------------  -----  --------  -------- 
Purchase of intangible assets                                                  (8,379)   (3,262) 
---------------------------------------------------------------------  -----  --------  -------- 
Purchase of property, plant and equipment                                      (1,637)   (1,703) 
---------------------------------------------------------------------  -----  --------  -------- 
Proceeds from disposal of property, plant and equipment                             14        74 
---------------------------------------------------------------------  -----  --------  -------- 
Purchase of businesses/subsidiary undertakings, net of cash acquired      11  (68,101)  (19,200) 
---------------------------------------------------------------------  -----  --------  -------- 
Proceeds from disposal of businesses                                      11    19,653   124,805 
---------------------------------------------------------------------  -----  --------  -------- 
Dividends received from associate                                                  197         - 
---------------------------------------------------------------------  -----  --------  -------- 
Proceeds from disposal of associate                                       10         -   100,142 
---------------------------------------------------------------------  -----  --------  -------- 
Receipt of deferred consideration                                                9,671     1,607 
---------------------------------------------------------------------  -----  --------  -------- 
Payment of deferred consideration                                                (232)   (1,470) 
---------------------------------------------------------------------  -----  --------  -------- 
Net cash (used in)/generated from investing activities                        (47,686)   201,943 
---------------------------------------------------------------------  -----  --------  -------- 
 

Consolidated Statement of Cash Flows

for the year ended 30 September 2019 continued

 
                                                                                             Restated 
                                                                                      2019       2018 
                                                                           Notes    GBP000     GBP000 
-------------------------------------------------------------------------  -----  --------  --------- 
 
Financing activities 
-------------------------------------------------------------------------  -----  --------  --------- 
Dividends paid                                                                 6  (35,586)   (34,361) 
-------------------------------------------------------------------------  -----  --------  --------- 
Dividends paid to non-controlling interests                                              -      (424) 
-------------------------------------------------------------------------  -----  --------  --------- 
Interest paid                                                                      (1,287)    (3,786) 
-------------------------------------------------------------------------  -----  --------  --------- 
Cash settlement on interest rate swaps                                                   -      2,091 
-------------------------------------------------------------------------  -----  --------  --------- 
Issue of new share capital                                                    12       516        643 
-------------------------------------------------------------------------  -----  --------  --------- 
Decrease in borrowings                                                                   -  (167,740) 
-------------------------------------------------------------------------  -----  --------  --------- 
Purchase of additional interest in subsidiary undertakings                    11      (97)   (10,130) 
-------------------------------------------------------------------------  -----  --------  --------- 
Net cash used in financing activities                                             (36,454)  (213,707) 
-------------------------------------------------------------------------  -----  --------  --------- 
 
Net (decrease)/increase in cash and cash equivalents                              (30,151)     57,875 
-------------------------------------------------------------------------  -----  --------  --------- 
Cash and cash equivalents at beginning of year (including held for sale)            78,273     14,272 
-------------------------------------------------------------------------  -----  --------  --------- 
Effect of foreign exchange rate movements                                            1,956      6,126 
-------------------------------------------------------------------------  -----  --------  --------- 
Cash and cash equivalents at end of year (including held for sale)                  50,078     78,273 
-------------------------------------------------------------------------  -----  --------  --------- 
Cash and cash equivalents classified as held for sale                          8     (327)          - 
-------------------------------------------------------------------------  -----  --------  --------- 
Cash and cash equivalents at end of year                                            49,751     78,273 
-------------------------------------------------------------------------  -----  --------  --------- 
 

This statement includes discontinued operations (note 8).

Notes to the Preliminary Statement

1. Basis of Preparation

While the financial information contained in this Preliminary Statement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board as adopted by the European Union and interpretations issued by the IFRS Interpretations Committee (IFRS IC), this announcement does not itself contain sufficient information to comply with IFRS.

The information for the year ended 30 September 2019 does not constitute statutory accounts for the purposes of section 435 of the Companies Act 2006. A copy of the accounts for the year ended 30 September 2018 has been delivered to the Registrar of Companies. The auditors' report on those accounts was not qualified and did not contain statements under section 498(2) or 498(3) of the Companies Act 2006. The accounts for the year ended 30 September 2019 have been audited and finalised on the basis of the financial information presented by the Directors in this Preliminary Statement and will be delivered to the Registrar of Companies following the Annual General Meeting.

Accounting Policies

The consolidated financial statements have been prepared under the historical cost convention, except for the revaluation of certain financial instruments.

The same accounting policies, presentation and methods of computation are followed in these financial statements as were applied in the Group's 2018 annual audited financial statements, except as described below.

-- IFRS 9 'Financial Instruments' - the mandatory effective date of implementation is 1 January 2018

-- IFRS 15 'Revenue from Contracts with Customers' - the mandatory effective date of implementation is 1 January 2018

The adoption and impact of these new pronouncements from 1 October 2018 have been disclosed within this note.

Certain changes to IFRS will be applicable to the Group Financial Statements in future years. Set out below are those which are considered to be most relevant to the Group.

Relevant new standards, amendments and interpretations issued but effective subsequent to the year end:

-- IFRS 16 'Leases' - the mandatory effective date of implementation is 1 January 2019

-- Amendment to IFRS 2 'Share-based Payments' - the mandatory effective date of implementation is 1 January 2019

-- IFRIC 22 'Foreign Currency Transactions and Advance Consideration' - the mandatory effective date of implementation is 1 January 2019

-- IFRIC 23 'Uncertainty over Income Tax Treatments' - the mandatory effective date of implementation is 1 January 2019

-- Amendments to IAS 28 'Investments in Associates' - the mandatory effective date of implementation is 1 January 2019

-- Amendments to IAS 19 'Employee Benefits' - the mandatory effective date of implementation is 1 January 2019

As at 30 September 2019, the following standards have not been endorsed by the European Union:

-- Amendment to definition of a business in IFRS 3 'Business Combinations' - the mandatory effective date of implementation is 1 January 2020

-- Amendments to Interest Rate Benchmark Reform - 'Financial Instruments' - IFRS 9, IAS 39 and IFRS 7 - the mandatory effective date of implementation is 1 January 2020

-- Amendments to IAS 1 'Presentation of Financial Statements'- the mandatory effective date of implementation is 1 January 2020

-- Amendments to IAS 8 'Accounting Policies, Changes in Accounting Estimates and Errors' - the mandatory effective date of implementation is 1 January 2020

-- Amendments to the Conceptual framework - the mandatory effective date of implementation is 1 January 2020

IFRS 9 'Financial Instruments'

The Group adopted IFRS 9 'Financial Instruments' on 1 October 2018. Differences in the carrying amount of financial assets and liabilities resulting from the adoption of IFRS 9 have been recognised in opening reserves as at 1 October 2018 and comparatives have not been restated.

1 Basis of Preparation continued

Classification and measurement of financial assets

Under IFRS 9, financial assets are required to be measured at either amortised cost, fair value through other comprehensive income (FVTOCI) or fair value through profit or loss (FVTPL).

The impact of IFRS 9 on the Group's financial assets are as follows:

-- The Group has elected to classify as FVTOCI the equity financial asset which was previously classified as available-for-sale held at cost less any identified impairment losses in accordance with IAS 39. IFRS 9 allows for an irrevocable election on an instrument-by-instrument basis to classify equity financial assets as either FVTOCI or FVTPL. As a result, fair value movements are now recorded in other comprehensive income. Gains or losses will not be recycled to the income statement on disposal of the investments. The classification of future purchases of equity financial investments will be considered on an individual basis based on their merits. A fair value loss of GBP0.4m on transition has been recognised in opening fair value reserves.

-- The Group classified the convertible loan note asset as FVTPL as the contractual cash flows are not solely payments of principal and interest on the principal amount outstanding. This asset was previously measured at cost less any identified impairment losses in accordance with IAS 39. At the date of transition, there was no difference between the fair value and carrying value of the asset.

-- The Group has classified its investments in money market funds included in cash and cash equivalents as FVTPL as the contractual cash flows are not solely payments of principal and interest on the principal amount outstanding. These assets were previously classified as amortised cost financial assets under IAS 39. At the date of transition, there was no difference between the fair value and carrying value of the asset.

Trade debt provisions

IFRS 9 introduces a new impairment model which requires the recognition of impairment provisions based on expected credit losses (ECL) rather than only incurred credit losses, which was the case under IAS 39. The IFRS 9 impairment model recognises anticipated losses evidenced by both historical recovery rates and forward-looking indicators. The Group has applied the simplified approach for trade receivables and contract assets and recognised the loss allowance at an amount equal to lifetime expected credit losses. The reduction in expected credit loss allowance of GBP0.8m at 1 October 2018 has been recognised against opening retained earnings. Deferred consideration receivables are considered to have low credit risk and the loss allowance is therefore limited to 12 months expected losses and is not considered material.

Hedge accounting

IFRS 9 introduces a new hedge accounting model with a principles-based approach designed to align the accounting result with the economic hedging strategy. The Group uses cash flow hedge relationships to hedge its exposure to US dollar and euro revenues in its UK businesses and the operation's Canadian dollar cost base in Canada. The Group confirms that its existing hedge relationships continue to qualify as hedges upon the transition to IFRS 9.

Differences between the previous carrying amount and the restated carrying amount at 1 October 2018 are disclosed in the restatement table on page 24.

IFRS 15 'Revenue from Contracts with Customers'

The Group adopted IFRS 15 'Revenue from contracts with customers' on 1 October 2018 and adopted the modified retrospective method. This method recognises the cumulative effect of initially applying IFRS 15 as an adjustment to the opening balance sheet in the period of initial application and comparative periods will not be adjusted. There is no material impact on the timing of revenue recognition arising from the implementation of IFRS 15.

Vote revenue and best efforts revenue are treated as variable consideration under IFRS 15. This requires the Group to include an estimate of the variable consideration in the transaction price to the extent that it is highly probable that the related revenue, if recognised, would not be reversed. Any incremental amounts would be included in the transaction price once the confirmation of the vote or the best efforts revenue is given. The assessment of whether an amount of revenue is highly probable may require significant judgement. In some instances, the amount may not be highly probable until the Group has received specific notification of the amount from the customer or has received the payment. In other cases, established relationships, past patterns of behaviour or informal correspondence with the customer may provide sufficient evidence that at least an element of revenue is highly probable before the amount is formally confirmed.

Where multiple services are bundled within one contract, revenue is allocated to the different performance obligations on a relative standalone selling price basis and recognised separately when the performance obligation is satisfied. Where this occurs, the Group's treatment under IAS 18 was consistent with that under IFRS 15.

IFRS 15 requires revenue to be recognised over time where research is unique to a specific customer and where the customer is obligated to pay for the work performed should it terminate the contract. Limited cases of customised research are performed across the Group whereby revenue is recognised over time in line with the stage of completion.

1. Basis of Preparation continued

The Group recognises all costs and commissions to obtain contracts with a term of one year or less when incurred. Commissions which relate to multi-year contracts are recognised as an asset and amortised in line with the proportion of the contract's revenue recognised in the period. The Group does not have significant costs and commissions to obtain contracts with a term of more than one year.

The Group does not adjust the amount of consideration for the effects of a significant financing component if it expects that the period between when the customer pays and when the Group transfers the promised good or service will be one year or less.

Amounts recoverable on contracts relating to accrued income of GBP1.5m, previously included within trade and other receivables, have been reclassified to contract assets net of the loss allowance. Deferred income has been reclassified as a contract liability as at 1 October 2018.

Accounting policy for revenue

Revenue represents income from subscriptions, advertising, sponsorship and delegate fees, net of value added tax.

-- Subscription revenues for print and online publications and memberships are recognised in the Income Statement on a straight-line basis over the period of the subscription and the satisfaction of the performance obligation, reflecting the pattern over which the customer receives benefits. These revenues are due in advance on a monthly or annual basis.

-- Advertising revenues represent the fees that customers pay in advance to place an advertisement in one or more of the Group's publications, either in print or online, to commission ad hoc consulting and thought leadership projects and to purchase survey reports. Advertising revenues for print publications are recognised in the Income Statement when the publications have been delivered which is when the performance obligation is satisfied. This is the time at which the benefit becomes available to the customer. Revenue for online advertising is recognised on a straight-line basis over the period that the advert is run, reflecting the period over which the customer receives benefit.

-- Events revenues are received in advance and recognised in the Income Statement over the period the event is run.

-- Variable consideration is included in the transaction price to the extent that it is highly probable that the related revenue, if recognised, would not be reversed.

Revenues invoiced but relating to future periods are deferred and treated as contract liabilities in the Statement of Financial Position. The Group does not have individual long-term revenue contracts that are material.

Amounts recoverable on contracts relating to accrued income have been classified to contract assets net of any loss allowance.

IFRS 16 'Leases'

IFRS 16 comes into effect for accounting periods starting on or after 1 January 2019. Therefore for the Group, the standard will be applied from 1 October 2019.

The new standard will change the way in which leases will be recognised and disclosed in the Group's Financial Statements. It also brings into scope contracts which would not previously have been accounted for as leases. The Group also enters into agreements which gives it the rights to specific technology assets that in the future could be accounted for as leases under the new standard. This change in accounting policies will result in the recognition of 'right of use' assets and lease liabilities on the Statement of Financial Position, as well as having an impact on the Group's Income Statement, by replacing rental expense with depreciation and introducing a finance expense where the discount on lease liabilities is unwound.

Upon transition, the Group will apply the modified retrospective adoption of the standard. The right of use assets for the leases will be calculated using a mixture of the 'simplified' and 'asset' methods. Under the 'simplified' method the right of use asset is equal to the present value of future lease payments. Under the 'asset' method the right of use asset is estimated as if IFRS 16 had always been applied. The following practical expedients will be applied on transition:

-- On initial application, IFRS 16 will only apply to contracts that would have previously been classified as leases under IAS 17 'Leases';

-- The Group has relied on its onerous lease assessment instead of performing an impairment review; and

-- Initial direct costs will be excluded from the measurement of the right of use asset at the date of initial application

Following transition the Group will also apply the practical expedient to expense to the Income Statement leases with a term of 12 months or less; and for assets that would have cost less than $5,000.

1. Basis of Preparation continued

Based on the relevant contracts in place at 1 October 2019, an estimate of IFRS 16's impact on the Group's financial statements for the year ended 30 September 2020 is as follows:

 
Component of financial statements                                   Estimated impact 
------------------------------------------------------------------  -------------------- 
Consolidated Statement of Financial Position at 1 October 2019 
------------------------------------------------------------------  -------------------- 
Right of use assets                                                 Increase of GBP56m 
------------------------------------------------------------------  -------------------- 
Lease liabilities                                                   Increase of GBP71m 
------------------------------------------------------------------  -------------------- 
Deferred tax assets                                                 Increase of GBP1m 
------------------------------------------------------------------  -------------------- 
Accruals                                                            Reduction of GBP12m 
------------------------------------------------------------------  -------------------- 
Retained earnings                                                   Reduction of GBP2m 
------------------------------------------------------------------  -------------------- 
Consolidated Income Statement for the year ended 30 September 2020 
------------------------------------------------------------------  -------------------- 
Depreciation                                                        Charge of GBP6m 
------------------------------------------------------------------  -------------------- 
Finance expense                                                     Charge of GBP2m 
------------------------------------------------------------------  -------------------- 
Operating profit                                                    Improvement of GBP1m 
------------------------------------------------------------------  -------------------- 
Profit before tax                                                   Loss of GBP1m 
------------------------------------------------------------------  -------------------- 
 

Restatements

Discontinued operations

Following the Group's decision to explore the strategic options for Asset Management, the segment has met the recognition criteria of discontinued operations under IFRS 5 'Non-current Assets Held for Sale and Discontinued Operations' and is therefore presented as such throughout this report. In order to comply with this presentation, the 2018 Income Statement disclosures have been re-presented.

IFRS 9 'Financial Instruments'

The Group has adopted IFRS 9 using the modified retrospective approach. The adjustment on transition has therefore been recognised in opening reserves at 1 October 2018. The Group has applied the simplified approach for trade receivables and contract assets and recognised the loss allowance at an amount equal to lifetime expected credit losses. The reduction in the expected credit loss allowance of GBP0.8m at 1 October 2018 has been recognised against opening retained earnings. The Group has elected to classify as FVTOCI the equity financial asset which was previously classified as available-for-sale held at cost less any identified impairment losses in accordance with IAS 39. A fair value loss of GBP0.4m on transition has been recognised in opening fair value reserves. Further details for the adoption of IFRS 9 are on pages 20 and 21.

Payroll taxes

In December 2018, the Group engaged external advisors to undertake an independent review of the Group's compliance with the off-payroll working rules. As a result of the review, the Group has identified an underpayment of payroll taxes to HMRC for the six years to 30 September 2019. A restatement has been made to recognise a historical exposure of GBP6.6m prior to the current financial period, consisting of GBP5.4m of payroll taxes underpaid, GBP0.4m of interest and GBP0.8m of penalties. The Group notified HMRC that a voluntary disclosure will be made with respect to the Group's Pay as You Earn (PAYE) and National Insurance Contribution (NIC) obligations. This restatement is not excluded from adjusted measures, as defined on page 6, as the related charges are expected to recur.

Value Added Tax (VAT)

During the second half of the year, the Group discovered a VAT exposure in the UK relating to the understatement of VAT on supplies made between entities within the Group in respect of the four years ended 30 September 2018. Based on the current assessment, the exposure at the end of 2018 is GBP11.0m, consisting of GBP10.7m of VAT and GBP0.3m of interest. A further GBP0.3m of interest accrued in 2019. The 2018 VAT expense has been classified as an exceptional item and the interest has been treated as an adjusted finance expense. As a result, this restatement is excluded from adjusted measures, as defined on page 6, because these charges are not expected to recur.

1. Basis of Preparation continued

The below is a summary of the restatements:

Restatements

 
                                       2017                                                              2018 
                ---------------------------------------------------  ---------------------------------------------------------------------------- 
                                                                                                                                IFRS 9 
                                                                  1                                              Restated   transition 
                                      1                     October                                                    30  - 1 October   Restated 
Statements                      October  Payroll               2017      2018  Payroll            Discontinued  September         2018  1 October 
adjusted        Line item          2017    taxes      VAT  restated  reported    taxes       VAT    operations       2018  restatement       2018 
-------------   -------------  --------  -------  -------  --------  --------  -------  --------  ------------  ---------  -----------  --------- 
                 Operating 
                  profit 
                  before 
                  acquired 
                  intangible 
                  amortisatio 
Consolidated      n and 
 Income           exceptional 
 Statement        items                                               103,198  (1,593)         -      (61,660)     39,945            -     39,945 
--------------   ------------  --------  -------  -------  --------  --------  -------  --------  ------------  ---------  -----------  --------- 
  Acquired intangible 
   amortisation                                                      (22,739)        -         -        10,749   (11,990)            -   (11,990) 
  ---------------------------  --------  -------  -------  --------  --------  -------  --------  ------------  ---------  -----------  --------- 
  Exceptional items                                                    81,396        -   (5,336)         3,850     79,910            -     79,910 
  ---------------------------  --------  -------  -------  --------  --------  -------  --------  ------------  ---------  -----------  --------- 
  Finance expense                                                     (6,034)    (162)     (174)          (84)    (6,454)            -    (6,454) 
  ---------------------------  --------  -------  -------  --------  --------  -------  --------  ------------  ---------  -----------  --------- 
  Tax expense on profit                                              (51,360)      294       906         8,802   (41,358)            -   (41,358) 
  ---------------------------  --------  -------  -------  --------  --------  -------  --------  ------------  ---------  -----------  --------- 
  Profit for the year from 
   discontinued operations                                             91,342        -         -        38,343    129,685            -    129,685 
  ---------------------------  --------  -------  -------  --------  --------  -------  --------  ------------  ---------  -----------  --------- 
  Basic earnings per share                                             187.18   (1.36)    (4.28)             -     181.54 
  ---------------------------  --------  -------  -------  --------  --------  -------  --------  ------------  ---------  -----------  --------- 
  Diluted earnings per share                                           186.96   (1.36)    (4.28)             -     181.32 
  ---------------------------  --------  -------  -------  --------  --------  -------  --------  ------------  ---------  -----------  --------- 
Consolidated 
 Statement of 
 Financial 
 Position and 
 Consolidated 
 Statement of    Trade and 
 Changes in       other 
 Equity           receivables         -        -        -         -    68,285        -         -                   68,285          828     69,113 
--------------   ------------  --------  -------  -------  --------  --------  -------  --------  ------------  ---------  -----------  --------- 
  Net deferred tax 
   liability(1)                (21,882)      506      910  (20,466)  (27,191)        -     1,816                 (25,375)                (25,375) 
  ---------------------------  --------  -------  -------  --------  --------  -------  --------  ------------  ---------  -----------  --------- 
  Other equity investments            -        -        -         -     3,546        -         -                    3,546        (385)      3,161 
  ---------------------------  --------  -------  -------  --------  --------  -------  --------  ------------  ---------  -----------  --------- 
  Current income tax 
   liabilities                 (16,117)        -        -  (16,117)  (31,816)      800         -                 (31,016)            -   (31,016) 
  ---------------------------  --------  -------  -------  --------  --------  -------  --------  ------------  ---------  -----------  --------- 
  Trade and other payables     (28,070)  (4,913)  (5,469)  (38,452)  (27,284)  (6,668)  (10,979)                 (44,931)            -   (44,931) 
  ---------------------------  --------  -------  -------  --------  --------  -------  --------  ------------  ---------  -----------  --------- 
  Fair value reserve                  -        -        -         -  (27,616)        -         -                 (27,616)        (385)   (28,001) 
  ---------------------------  --------  -------  -------  --------  --------  -------  --------  ------------  ---------  -----------  --------- 
  Retained earnings              35,594  (4,407)  (4,559)    26,628   213,833  (5,868)   (9,163)                  198,802          828    199,630 
  ---------------------------  --------  -------  -------  --------  --------  -------  --------  ------------  ---------  -----------  --------- 
 

(1) At 1 October 2017, the Group's net deferred tax liabilities were split between deferred tax assets of GBP1.6m and deferred tax liabilities of GBP23.4m. The restatements increased the Group's deferred tax asset from GBP1.6m to GBP3.0m. At 30 September 2018, the Group's previously reported net deferred tax liabilities were split between deferred tax assets of GBP1.3m and deferred tax liabilities of GBP28.5m. Included within the Group's deferred tax liabilities at 30 September 2018 were UK deferred tax liabilities of GBP0.9m. The restatements resulted in a restated UK deferred tax asset of GBP0.8m. The Group's restated deferred tax assets and deferred tax liabilities at 30 September 2018 are GBP2.2m and GBP27.6m respectively.

Going concern

Having assessed the principal risks and the other matters discussed in connection with the viability statement, the Directors consider it appropriate to adopt the going concern basis of accounting in preparing this Preliminary Statement.

2. Segmental analysis

Segmental information is presented in respect of the Group's segments and reflects the Group's management and internal reporting structure. The Group is organised into three segments: Asset Management; Pricing, Data & Market Intelligence; and Banking & Finance.

Revenues generated in the Asset Management and Pricing, Data & Market Intelligence segments are primarily from subscriptions. Banking & Finance revenues consist mainly of sponsorship income and delegates revenue. A breakdown of the Group's revenue by type is set out below.

Following the disposal of Mining Indaba (note 11) during the year, the Commodity Events segment has been incorporated into the Pricing, Data & Market Intelligence segment. The segment information for the Mining Indaba business has been reclassified as a sold business.

As a result of the closure of Centre for Investor Education (CIE), the segment information for this business has been reclassified from Asset Management to closed businesses.

Euromoney Financing Events and Thought Leadership have been moved from Banking & Finance to the Pricing, Data & Market Intelligence segment. Global Investor has also moved from Asset Management to the Pricing, Data & Market Intelligence segment. These movements are due to the realignment of how the businesses are managed internally.

The comparative split of segmental revenues, revenue by type, operating profits, acquired intangible amortisation, exceptional items and depreciation and amortisation has been restated to reflect Commodity Events, Euromoney Financing Events, Thought Leadership and Global Investor being incorporated into the Pricing, Data & Market Intelligence segment and Mining Indaba and CIE being reclassified as a sold/closed business.

The Asset Management segment has been classified as discontinued operations (note 8), therefore it is presented as such throughout this report and the 2018 Income Statement disclosures have been re-presented. In 2018, the Global Markets Intelligence Division (GMID) was classified as a discontinued operation and disposed of on 30 April 2018 and is therefore presented as such throughout this report.

Events revenue consists of sponsorship and delegates revenue.

Analysis of the Group's three main geographical areas is also set out to provide additional information on the trading performance of the businesses.

Inter-segment sales are charged at prevailing market rates and shown in the eliminations columns.

 
                                                                                 Advertising                Total 
                                                                                   and other    Events    revenue 
2019                                           Subscriptions and content GBP000       GBP000    GBP000     GBP000 
---------------------------------------------  --------------------------------  -----------  --------  --------- 
Revenue by segment and type: 
---------------------------------------------  --------------------------------  -----------  --------  --------- 
Asset Management                                                        117,891       10,789    16,942    145,622 
---------------------------------------------  --------------------------------  -----------  --------  --------- 
Pricing, Data & Market Intelligence                                     115,449       19,360    61,569    196,378 
---------------------------------------------  --------------------------------  -----------  --------  --------- 
Banking & Finance                                                         7,248        8,173    45,738     61,159 
---------------------------------------------  --------------------------------  -----------  --------  --------- 
                                                                        240,588       38,322   124,249    403,159 
---------------------------------------------  --------------------------------  -----------  --------  --------- 
Sold/closed businesses                                                        -            -     1,997      1,997 
---------------------------------------------  --------------------------------  -----------  --------  --------- 
Foreign exchange losses on forward contracts                                  -      (3,483)         -    (3,483) 
---------------------------------------------  --------------------------------  -----------  --------  --------- 
Segment revenue                                                         240,588       34,839   126,246    401,673 
---------------------------------------------  --------------------------------  -----------  --------  --------- 
Discontinued operations - Asset Management                            (117,891)     (10,789)  (16,942)  (145,622) 
---------------------------------------------  --------------------------------  -----------  --------  --------- 
Continuing operations                                                   122,697       24,050   109,304    256,051 
---------------------------------------------  --------------------------------  -----------  --------  --------- 
 

2. Segmental analysis continued

 
                                                                         Advertising                Total 
                                              Subscriptions and content    and other    Events    revenue 
2018                                                             GBP000       GBP000    GBP000     GBP000 
--------------------------------------------  -------------------------  -----------  --------  --------- 
Revenue by segment and type: 
--------------------------------------------  -------------------------  -----------  --------  --------- 
Asset Management                                                118,876       11,216    15,362    145,454 
--------------------------------------------  -------------------------  -----------  --------  --------- 
Pricing, Data & Market Intelligence                              92,489       19,408    56,126    168,023 
--------------------------------------------  -------------------------  -----------  --------  --------- 
Banking & Finance                                                 7,496        8,641    47,581     63,718 
--------------------------------------------  -------------------------  -----------  --------  --------- 
                                                                218,861       39,265   119,069    377,195 
--------------------------------------------  -------------------------  -----------  --------  --------- 
Sold/closed businesses (excluding GMID)                               -            -    11,826     11,826 
--------------------------------------------  -------------------------  -----------  --------  --------- 
Foreign exchange gains on forward contracts                           -        1,258         -      1,258 
--------------------------------------------  -------------------------  -----------  --------  --------- 
Segment revenue                                                 218,861       40,523   130,895    390,279 
--------------------------------------------  -------------------------  -----------  --------  --------- 
Discontinued operations - Asset Management                    (118,876)     (11,216)  (15,362)  (145,454) 
--------------------------------------------  -------------------------  -----------  --------  --------- 
Continuing operations                                            99,985       29,307   115,533    244,825 
--------------------------------------------  -------------------------  -----------  --------  --------- 
 

Continuing events revenue of GBP115.5m and print advertising of GBP13.2m are recognised at a point in time. The remaining subscription and online advertising revenue is recognised over time.

 
                       United Kingdom      North America       Rest of World      Eliminations           Total 
                      ----------------  --------------------  ----------------  ----------------  -------------------- 
                         2019     2018       2019       2018     2019     2018     2019     2018       2019       2018 
                       GBP000   GBP000     GBP000     GBP000   GBP000   GBP000   GBP000   GBP000     GBP000     GBP000 
--------------------  -------  -------  ---------  ---------  -------  -------  -------  -------  ---------  --------- 
Revenue by segment 
and source: 
--------------------  -------  -------  ---------  ---------  -------  -------  -------  -------  ---------  --------- 
Asset Management            -      884    145,696    144,660        -        -     (74)     (90)    145,622    145,454 
--------------------  -------  -------  ---------  ---------  -------  -------  -------  -------  ---------  --------- 
Pricing, Data & 
 Market Intelligence  139,295  124,425     53,482     37,924    6,565    6,568  (2,964)    (894)    196,378    168,023 
--------------------  -------  -------  ---------  ---------  -------  -------  -------  -------  ---------  --------- 
Banking & Finance      32,628   34,479     25,159     24,943    3,796    4,766    (424)    (470)     61,159     63,718 
--------------------  -------  -------  ---------  ---------  -------  -------  -------  -------  ---------  --------- 
Sold/closed 
 businesses 
 (excluding GMID)           -    7,269          -      1,073    1,997    3,484        -        -      1,997     11,826 
--------------------  -------  -------  ---------  ---------  -------  -------  -------  -------  ---------  --------- 
Foreign exchange 
 (losses)/gains on 
 forward contracts    (3,483)    1,258          -          -        -        -        -        -    (3,483)      1,258 
--------------------  -------  -------  ---------  ---------  -------  -------  -------  -------  ---------  --------- 
Segment revenue       168,440  168,315    224,337    208,600   12,358   14,818  (3,462)  (1,454)    401,673    390,279 
--------------------  -------  -------  ---------  ---------  -------  -------  -------  -------  ---------  --------- 
Discontinued 
 operations - Asset 
 Management                 -    (884)  (145,696)  (144,660)        -        -       74       90  (145,622)  (145,454) 
--------------------  -------  -------  ---------  ---------  -------  -------  -------  -------  ---------  --------- 
Continuing 
 operations           168,440  167,431     78,641     63,940   12,358   14,818  (3,388)  (1,364)    256,051    244,825 
--------------------  -------  -------  ---------  ---------  -------  -------  -------  -------  ---------  --------- 
 
Statutory revenue by 
 destination           41,695   36,347    105,456     90,480  108,900  117,998        -        -    256,051    244,825 
--------------------  -------  -------  ---------  ---------  -------  -------  -------  -------  ---------  --------- 
 

2. Segmental analysis continued

 
                                            United Kingdom      North America      Rest of World          Total 
                                          ------------------  ------------------  ----------------  ------------------ 
                                              2019      2018      2019      2018     2019     2018      2019      2018 
                                            GBP000    GBP000    GBP000    GBP000   GBP000   GBP000    GBP000    GBP000 
----------------------------------------  --------  --------  --------  --------  -------  -------  --------  -------- 
Adjusted operating profit(1) by segment 
and source: 
----------------------------------------  --------  --------  --------  --------  -------  -------  --------  -------- 
Asset Management                                 3       150    62,148    58,739        -        -    62,151    58,889 
----------------------------------------  --------  --------  --------  --------  -------  -------  --------  -------- 
Pricing, Data & Market Intelligence         54,715    46,199    18,552    16,468  (3,860)  (2,495)    69,407    60,172 
----------------------------------------  --------  --------  --------  --------  -------  -------  --------  -------- 
Banking & Finance                            4,458     5,279     9,524     9,674    (313)      692    13,669    15,645 
----------------------------------------  --------  --------  --------  --------  -------  -------  --------  -------- 
Sold/closed businesses (excluding GMID)      (134)     3,759       (7)     3,048      590    (908)       449     5,899 
----------------------------------------  --------  --------  --------  --------  -------  -------  --------  -------- 
Unallocated corporate costs               (35,899)  (33,909)   (2,807)   (3,168)  (1,527)  (1,923)  (40,233)  (39,000) 
----------------------------------------  --------  --------  --------  --------  -------  -------  --------  -------- 
Adjusted operating profit(1)                23,143    21,478    87,410    84,761  (5,110)  (4,634)   105,443   101,605 
----------------------------------------  --------  --------  --------  --------  -------  -------  --------  -------- 
Discontinued operations - Asset 
 Management                                    (3)     (244)  (66,926)  (61,416)        -        -  (66,929)  (61,660) 
----------------------------------------  --------  --------  --------  --------  -------  -------  --------  -------- 
Continuing operations                       23,140    21,234    20,484    23,345  (5,110)  (4,634)    38,514    39,945 
----------------------------------------  --------  --------  --------  --------  -------  -------  --------  -------- 
Acquired intangible amortisation(2) 
 (note 9)                                  (7,128)   (7,609)   (7,049)   (4,343)     (38)     (38)  (14,215)  (11,990) 
----------------------------------------  --------  --------  --------  --------  -------  -------  --------  -------- 
Exceptional items (note 3)                  15,861   (9,483)   (6,739)    75,434  (2,772)   13,959     6,350    79,910 
----------------------------------------  --------  --------  --------  --------  -------  -------  --------  -------- 
Operating profit/(loss)                     31,873     4,142     6,696    94,436  (7,920)    9,287    30,649   107,865 
----------------------------------------  --------  --------  --------  --------  -------  -------  --------  -------- 
Share of results in associates and joint 
 ventures (note 10)                                                                                     (88)       157 
----------------------------------------  --------  --------  --------  --------  -------  -------  --------  -------- 
Finance income (note 4)                                                                                1,873     5,248 
----------------------------------------  --------  --------  --------  --------  -------  -------  --------  -------- 
Finance expense (note 4)                                                                             (2,983)   (6,454) 
----------------------------------------  --------  --------  --------  --------  -------  -------  --------  -------- 
Profit before tax                                                                                     29,451   106,816 
----------------------------------------  --------  --------  --------  --------  -------  -------  --------  -------- 
Tax expense on profit (note 5)                                                                       (9,317)  (41,358) 
----------------------------------------  --------  --------  --------  --------  -------  -------  --------  -------- 
Profit for the year from continuing 
 operations                                                                                           20,134    65,458 
----------------------------------------  --------  --------  --------  --------  -------  -------  --------  -------- 
 

1 Operating profit including discontinued operations of Asset Management before acquired intangible amortisation and exceptional items. A detailed reconciliation of the Group's statutory results to the adjusted and underlying results is set out on pages 6 to 11.

2 Acquired intangible amortisation represents amortisation of acquisition-related non-goodwill assets such as trademarks and brands, customer relationships, databases and software (note 9).

2. Segmental analysis continued

 
                               Acquired intangible amortisation    Exceptional items    Depreciation and amortisation 
                              ----------------------------------  -------------------  ------------------------------- 
                                          2019              2018       2019      2018             2019            2018 
                                        GBP000            GBP000     GBP000    GBP000           GBP000          GBP000 
----------------------------  ----------------  ----------------  ---------  --------  ---------------  -------------- 
Other segmental information 
by segment: 
----------------------------  ----------------  ----------------  ---------  --------  ---------------  -------------- 
Asset Management                      (10,928)          (10,749)    (2,494)   (3,850)          (1,181)         (1,126) 
----------------------------  ----------------  ----------------  ---------  --------  ---------------  -------------- 
Pricing, Data & Market 
 Intelligence                         (11,283)           (8,642)    (7,916)   (5,277)            (907)         (1,374) 
----------------------------  ----------------  ----------------  ---------  --------  ---------------  -------------- 
Banking & Finance                        (234)             (222)          -         -                -               - 
----------------------------  ----------------  ----------------  ---------  --------  ---------------  -------------- 
Sold/closed businesses 
 (excluding GMID)                      (2,432)           (2,853)     14,226    90,523              (9)            (12) 
----------------------------  ----------------  ----------------  ---------  --------  ---------------  -------------- 
Unallocated corporate costs              (266)             (273)         40   (5,336)          (2,746)         (3,752) 
----------------------------  ----------------  ----------------  ---------  --------  ---------------  -------------- 
Continuing operations                 (25,143)          (22,739)      3,856    76,060          (4,843)         (6,264) 
----------------------------  ----------------  ----------------  ---------  --------  ---------------  -------------- 
Discontinued operations - 
 Asset Management                       10,928            10,749      2,494     3,850            1,181           1,126 
----------------------------  ----------------  ----------------  ---------  --------  ---------------  -------------- 
Total                                 (14,215)          (11,990)      6,350    79,910          (3,662)         (5,138) 
----------------------------  ----------------  ----------------  ---------  --------  ---------------  -------------- 
 

The closing net book value of goodwill, other intangible assets, property, plant and equipment and investments is analysed by geographic area as follows:

 
                                 United Kingdom    North America     Rest of World         Total 
                                ----------------  ----------------  ----------------  ---------------- 
                                   2019     2018     2019     2018     2019     2018     2019     2018 
                                 GBP000   GBP000   GBP000   GBP000   GBP000   GBP000   GBP000   GBP000 
------------------------------  -------  -------  -------  -------  -------  -------  -------  ------- 
Goodwill                        102,367  104,227  139,246  303,399    4,668    7,096  246,281  414,722 
------------------------------  -------  -------  -------  -------  -------  -------  -------  ------- 
Other intangible assets          42,763   45,656  115,898  127,326      479      521  159,140  173,503 
------------------------------  -------  -------  -------  -------  -------  -------  -------  ------- 
Property, plant and equipment     4,617    5,325   10,310   10,165      367      622   15,294   16,112 
------------------------------  -------  -------  -------  -------  -------  -------  -------  ------- 
Investments                       5,271    4,261        -        -        -        -    5,271    4,261 
------------------------------  -------  -------  -------  -------  -------  -------  -------  ------- 
Non-current assets              155,018  159,469  265,454  440,890    5,514    8,239  425,986  608,598 
------------------------------  -------  -------  -------  -------  -------  -------  -------  ------- 
Additions to property, 
 plant and equipment              (112)    (602)  (1,408)  (1,006)    (117)    (370)  (1,637)  (1,978) 
------------------------------  -------  -------  -------  -------  -------  -------  -------  ------- 
 

The Group has taken advantage of paragraph 23 of IFRS 8 'Operating Segments' and does not provide segmental analysis of net assets as this information is not used by the Directors in operational decision making or monitoring of business performance.

3. Exceptional items

Exceptional items are items of income or expense considered by the Directors as being significant, non-recurring and which require additional disclosure in order to provide an indication of the underlying trading performance of the Group.

 
                                                                             Restated 
                                                                       2019      2018 
                                                                     GBP000    GBP000 
------------------------------------------------------------------  -------  -------- 
Profit on disposal of businesses/associates                          16,998    86,817 
------------------------------------------------------------------  -------  -------- 
Impairment charges                                                  (2,410)   (3,048) 
------------------------------------------------------------------  -------  -------- 
Amendment to defined benefit pension scheme                           1,224         - 
------------------------------------------------------------------  -------  -------- 
VAT underpayments                                                         -   (5,336) 
------------------------------------------------------------------  -------  -------- 
Other exceptional (costs)/income                                    (9,462)     1,477 
------------------------------------------------------------------  -------  -------- 
Continuing operations                                                 6,350    79,910 
------------------------------------------------------------------  -------  -------- 
Exceptional items from discontinued operations - Asset Management     (812)   (3,850) 
------------------------------------------------------------------  -------  -------- 
Cost of disposal of discontinued operations - Asset Management      (1,682)         - 
------------------------------------------------------------------  -------  -------- 
                                                                      3,856    76,060 
------------------------------------------------------------------  -------  -------- 
 

For the year ended 30 September 2019, the Group recognised a continuing operations exceptional credit of GBP6.4m.

The Group sold Mining Indaba for a profit of GBP17.0m (note 11).

3. Exceptional items continued

The impairment charge relates to goodwill of GBP2.4m resulting from the closure of Centre for Investor Education (CIE). Costs associated with this closure are included in the other exceptional costs and restructuring.

The Trustees of the Metal Bulletin plc Pension Scheme, which is a defined benefit scheme, changed the scheme rules for the underlying index of deferred revaluation from RPI to CPI, which resulted in a GBP1.2m reduction in the net pension deficit.

Other exceptional (costs)/income consist of the recognition of the earn-out payments of GBP2.5m for the acquisitions of Site Seven Media Ltd (TowerXchange) and Random Lengths which are treated as compensation costs. It is Group policy to treat, as exceptional, significant earn-out payments required by IFRS to be recognised as a compensation cost. The acquisition-related costs of GBP5.4m for Random Lengths, BoardEx and The Deal (note 11) are treated as exceptional due to the magnitude of the costs associated with the acquisitions. Significant costs associated with an acquisition project that did not complete of GBP1.2m are treated as exceptional items. The remaining costs are as a result of a strategic review undertaken for the major restructuring of CIE have been treated as exceptional items. Normal restructuring costs are not treated as exceptional items.

The Group's tax charge includes a related tax charge on the continuing operations exceptional items of GBP2.8m (note 5).

The discontinued operations have incurred exceptional costs, including engaging with advisors to assist with the strategic review of Asset Management. These exceptional costs of GBP1.7m have been disclosed separately (note 8). The exceptional items incurred by the discontinued operation relate to a strategic review undertaken for the major restructuring of certain businesses. The Group's tax charge includes a related tax credit on the discontinued operations exceptional items of GBP0.2m (note 5).

For the year ended 30 September 2018, the Group recognised a continuing operations exceptional credit of GBP79.9m.

The Group sold Adhesion (profit GBP9.8m), World Bulk Wine (profit GBP0.9m) and Institutional Investor Journals (profit GBP4.4m) which resulted in a net profit of GBP15.1m. The disposal of the associate investment in Dealogic resulted in a profit of GBP71.7m.

The impairment charge related to a goodwill impairment of GBP3.0m for Layer123 Events and Training Limited (Layer123). The impairment of Layer123 was a result of its disappointing financial performance post acquisition.

Other exceptional (costs)/income consisted of restructuring costs, earn-out payments treated as compensation costs and acquisition related costs offset by the favourable settlement of the legal dispute with the previous owners of CIE. The acquisition related costs of Random Lengths were treated as exceptional due to the magnitude of the costs associated with the acquisition. Acquisition costs for smaller acquisitions were not treated as exceptional.

The 2018 exceptional charge has been restated for the VAT underpayment of GBP5.3m (note 1).

The Group's tax charge included a related tax charge on the continuing operations exceptional items of GBP12.1m (note 5).

The Asset Management discontinued operations exceptional items related to costs as a result of a strategic review undertaken for the major restructuring of certain businesses. Normal restructuring costs are not treated as exceptional items.

4. Finance income and expense

 
                                                                Restated 
                                                          2019      2018 
                                                        GBP000    GBP000 
-----------------------------------------------------  -------  -------- 
Finance income 
-----------------------------------------------------  -------  -------- 
   Interest receivable from short-term investments       1,198     2,870 
-----------------------------------------------------  -------  -------- 
   Movements in acquisition commitments                      -     2,378 
-----------------------------------------------------  -------  -------- 
   Fair value remeasurement                                675         - 
-----------------------------------------------------  -------  -------- 
                                                         1,873     5,248 
-----------------------------------------------------  -------  -------- 
Finance expense 
-----------------------------------------------------  -------  -------- 
   Interest payable on borrowings                      (1,362)   (4,201) 
-----------------------------------------------------  -------  -------- 
   Net interest expense on defined benefit liability     (100)     (248) 
-----------------------------------------------------  -------  -------- 
   Movements in acquisition commitments                (1,022)         - 
-----------------------------------------------------  -------  -------- 
   Movements in deferred consideration                    (36)   (1,122) 
-----------------------------------------------------  -------  -------- 
   Interest on tax                                       (463)     (883) 
-----------------------------------------------------  -------  -------- 
                                                       (2,983)   (6,454) 
-----------------------------------------------------  -------  -------- 
Continuing operations net finance costs                (1,110)   (1,206) 
-----------------------------------------------------  -------  -------- 
 

The 2018 finance expense has been restated for the payroll taxes (GBP0.2m) and VAT underpayments (GBP0.2m) to reflect the estimated interest related to these exposures as detailed in note 1.

 
                                                                                                 Restated 
                                                                                           2019      2018 
                                                                                         GBP000    GBP000 
--------------------------------------------------------------------------------------  -------  -------- 
Reconciliation of net finance costs in Income Statement to adjusted net finance costs 
--------------------------------------------------------------------------------------  -------  -------- 
Continuing operations net finance costs in Income Statement                             (1,110)   (1,206) 
--------------------------------------------------------------------------------------  -------  -------- 
Add back: 
--------------------------------------------------------------------------------------  -------  -------- 
   Movements in acquisition commitments                                                   1,022   (2,378) 
--------------------------------------------------------------------------------------  -------  -------- 
   Movements in deferred consideration                                                       36     1,122 
--------------------------------------------------------------------------------------  -------  -------- 
   Fair value remeasurement                                                               (675)         - 
--------------------------------------------------------------------------------------  -------  -------- 
   Other                                                                                    156     (455) 
--------------------------------------------------------------------------------------  -------  -------- 
                                                                                            539   (1,711) 
--------------------------------------------------------------------------------------  -------  -------- 
Continuing operations adjusted net finance costs                                          (571)   (2,917) 
--------------------------------------------------------------------------------------  -------  -------- 
Discontinued operations adjusted net finance income - Asset Management                     (99)        84 
--------------------------------------------------------------------------------------  -------  -------- 
Total adjusted net finance costs                                                          (670)   (2,833) 
--------------------------------------------------------------------------------------  -------  -------- 
 

The reconciliation of net finance costs in the Income Statement has been provided since the Directors consider it necessary in order to provide an indication of the adjusted net finance costs (page 7).

Charges and credits relating to the movements in acquisition commitments and deferred consideration reflect future payments and receipts expected on historical transactions that do not directly relate to the current year results.

The Group's convertible loan note asset is measured at fair value through profit or loss (FVTPL) (note 1). The fair value remeasurement is an adjusting item as it relates to historical M&A activity rather than the current trading performance and is as a result of the revaluation of the convertible loan note as at 30 September 2019.

Other items in the adjusted net finance costs consist of interest income of GBP0.2m (September 2018: GBP0.6m charge) for movements in respect of uncertain tax positions. Finance costs of GBP0.3m (2018: GBP0.2m) as a result of the VAT underpayment are excluded as the related charge is not expected to recur. In addition, at 30 September 2018, the other items included a gain realised on the close-out of the interest rate swaps of GBP2.1m offset by the write-off of capitalised borrowing costs of GBP0.9m following the repayment of the Group's term loan. The net gain was excluded from adjusted finance costs as it would not have crystallised had the disposal of GMID not completed.

5 Tax expense on profit

 
                                                          Discontinued                         Discontinued operations 
                                                          operations -                                               - 
                         Continuing operations        Asset Management  Continuing operations         Asset Management 
                                          2019                    2019                   2018                     2018 
                                        GBP000                  GBP000                 GBP000                   GBP000 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
Current tax expense 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
UK corporation tax 
 expense                                 9,438                       -                 17,661                        - 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
Foreign tax expense                      1,754                  12,638                 10,596                   12,743 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
Adjustments in respect 
 of prior years                          (959)                   (759)                  8,063                     (61) 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
                                        10,233                  11,879                 36,320                   12,682 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
Deferred tax 
expense/(credit) 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
Current year                           (1,821)                     603                  5,694                  (3,880) 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
Adjustments in respect 
 of prior years                            905                   (133)                  (656)                        - 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
                                         (916)                     470                  5,038                  (3,880) 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
Tax expense in Income 
 Statement                               9,317                  12,349                 41,358                    8,802 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
 
Effective tax rate                         32%                     23%                    39%                      19% 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
 

The adjusted effective tax rate for the year is set out below:

 
                                       Discontinued                                       Discontinued 
                                       operations -                                       operations - 
                        Continuing            Asset                        Continuing            Asset 
                        operations       Management  Total adjusted        operations       Management  Total adjusted 
                              2019             2019            2019              2018             2018            2018 
                            GBP000           GBP000          GBP000            GBP000           GBP000          GBP000 
----------------  ----------------  ---------------  --------------  ----------------  ---------------  -------------- 
Reconciliation 
of tax expense 
in Income 
Statement to 
adjusted tax 
expense 
----------------  ----------------  ---------------  --------------  ----------------  ---------------  -------------- 
Total tax 
 expense in 
 Income 
 Statement                   9,317           12,349          21,666            41,358            8,802          50,160 
----------------  ----------------  ---------------  --------------  ----------------  ---------------  -------------- 
Add back: 
----------------  ----------------  ---------------  --------------  ----------------  ---------------  -------------- 
   Deferred tax 
    on acquired 
    intangible 
    amortisation             2,258                -           2,258             3,668            1,364           5,032 
----------------  ----------------  ---------------  --------------  ----------------  ---------------  -------------- 
   Tax on 
    exceptional 
    items                  (2,837)              173         (2,664)          (12,116)                -        (12,116) 
----------------  ----------------  ---------------  --------------  ----------------  ---------------  -------------- 
   Other tax 
    adjusting 
    items                    (479)                -           (479)          (13,725)            1,313        (12,412) 
----------------  ----------------  ---------------  --------------  ----------------  ---------------  -------------- 
   Deferred tax 
    on goodwill 
    and 
    intangible 
    amortisation             (843)                -           (843)           (3,043)                -         (3,043) 
----------------  ----------------  ---------------  --------------  ----------------  ---------------  -------------- 
   Share of tax 
    on profits 
    of 
    associates 
    and joint 
    ventures                  (38)                -            (38)               333                -             333 
----------------  ----------------  ---------------  --------------  ----------------  ---------------  -------------- 
   Adjustments 
    in respect 
    of prior 
    years                       54              892             946           (7,407)               61         (7,346) 
----------------  ----------------  ---------------  --------------  ----------------  ---------------  -------------- 
                           (1,885)            1,065           (820)          (32,290)            2,738        (29,552) 
----------------  ----------------  ---------------  --------------  ----------------  ---------------  -------------- 
Adjusted tax 
 expense                     7,432           13,414          20,846             9,068           11,540          20,608 
----------------  ----------------  ---------------  --------------  ----------------  ---------------  -------------- 
 
Adjusted profit 
 before tax                                                 104,647                                             99,882 
----------------  ----------------  ---------------  --------------  ----------------  ---------------  -------------- 
Adjusted 
 effective tax 
 rate                                                           20%                                                21% 
----------------  ----------------  ---------------  --------------  ----------------  ---------------  -------------- 
 

The Group presents the above adjusted effective tax rate reconciliation to help users of this report better understand its tax charge. In arriving at this rate, the Group removes the tax effect of exceptional and adjusting items that reconcile statutory to adjusted profit. A detailed reconciliation of the Group's statutory results to the adjusted and underlying results is set out on pages 6 to 11. The Group excludes the deferred tax effects of intangible assets and goodwill, as the Group considers that this more accurately reflects its expected cash tax payable position. The deferred tax effects on goodwill and intangible items would only crystallise in the event of a disposal and that is not the current intention.

5. Tax expense on profit continued

Tax on exceptional items are excluded as exceptional items are adjusted in terms of the Group policy. For the year ended 30 September 2019, tax on exceptional items relates largely to tax on gain on the disposal of Indaba of GBP3.2m. Adjustments in respect of prior years are excluded on the basis that they relate mainly to finalisation of US tax reform related items which are one off in nature. Share of tax on profits of associates and joint ventures is calculated on the adjusted profits of associates and joint ventures and excludes tax on exceptional items consistent with the Group's historical approach and policy.

The actual tax expense for the year is different from the UK blended rate of 19% of profit before tax for the reasons set out in the following reconciliation:

 
                                                          Discontinued 
                                                    operations - Asset                         Discontinued operations 
                         Continuing operations              Management  Continuing operations       - Asset Management 
                                          2019                    2019                   2018                     2018 
                                        GBP000                  GBP000                 GBP000                   GBP000 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
Profit before tax                       29,451                  55,090                106,816                   47,145 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
Cost of disposal of 
 discontinued 
 operations                                  -                 (1,682)                      -                        - 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
                                        29,451                  53,408                106,816                   47,145 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
 
Tax at 19.0% (2018: 
 19.0%)                                  5,596                  10,148                 20,295                    8,958 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
Factors affecting tax 
charge: 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
Different tax rates of 
 subsidiaries operating 
 in overseas 
 jurisdictions                              27                   4,635                  1,330                    4,164 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
Share of tax on 
 associates and joint 
 ventures                                   38                       -                   (67)                        - 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
Non-taxable income                           -                     (9)                     13                  (2,257) 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
Goodwill and 
 intangibles                                 -                       -                  1,401                    (181) 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
Disallowable 
 expenditure                             1,613                     404                  1,601                      789 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
Disposal of businesses                       -                       -                (3,227)                        - 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
Other timing 
 differences                                83                       -                      -                        - 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
Other items deductible 
 for tax purposes                        1,915                 (1,915)                (1,746)                  (2,202) 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
US tax reform                                -                       -                  3,169                        - 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
Non-recoverable 
 withholding tax                             -                       -                 14,553                      905 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
Impact of change in 
 rate                                       99                    (22)                (3,371)                  (1,313) 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
Adjustments in respect 
 of prior years                           (54)                   (892)                  7,407                     (61) 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
Total tax expenses for 
 the year                                9,317                  12,349                 41,358                    8,802 
-----------------------  ---------------------  ----------------------  ---------------------  ----------------------- 
 

The Group's effective tax rate depends mainly on the geographic mix of profits and applicable tax rates. Different tax rates of subsidiaries operating in overseas jurisdictions of GBP4.7m (2018: GBP5.5.m) reflects higher profits earned in jurisdictions which have a higher tax rate than the UK.

Disallowable expenditure of GBP2.0m (2018: GBP2.4m) relates largely to expenses that are capital in nature and therefore not deductible for tax purposes.

Other items deductible for tax purposes reflects the tax impact of allocating group interest expense between continuing operations and discontinued operations on a proportionate basis. There is no net impact on the total tax expense for the year.

Adjustments in respect of prior years of GBP0.9m (2018: GBP7.3m) relate to adjustments made to US tax reform related items following the release of certain final regulations during the current period and a reassessment of temporary differences.

In addition to the amount charged to the Income Statement, the following amounts relating to tax have been directly recognised in other comprehensive income and equity:

 
                Other comprehensive income        Equity 
               ----------------------------  ---------------- 
                        2019           2018     2019     2018 
                      GBP000         GBP000   GBP000   GBP000 
-------------  -------------  -------------  -------  ------- 
Deferred tax           (880)            474      124      796 
-------------  -------------  -------------  -------  ------- 
 

5. Tax expense on profit continued

European Commission investigation into state aid

On 2 April 2019, the EC concluded its state aid investigation into the Group Financing Exemption (GFE) in the UK controlled foreign company rules on the GFE and ruled that the GFE is only justified where there are no UK activities involved in generating the finance profits. The UK government has decided to appeal against the EC decision but an aid recovery process has also commenced as this is required under EU law.

The estimated maximum liability is approximately GBP8.0m. On the basis that the UK government has appealed against the EC decision, and the Group's own analysis, no provision is being made in respect of this issue as management judges that it is not probable that the Group will suffer an outflow of funds.

Uncertain tax positions

The Group considers each uncertain tax matter on the technical merits of the case law, taking into account all relevant evidence, including the known attitude of tax authorities in making an assessment of the likelihood a matter will crystallise. The provisions for uncertain tax are calculated by determining the Directors' best estimate of the single most likely cash flow for each issue.

The Group has fully provided for an exposure relating to an HMRC enquiry, which has a maximum exposure of GBP10.7m. This matter is now proceeding to litigation. The outcome of the litigation is binary. The Group received HMRC's statement of case in May 2019 and responded with its witness statements in September 2019. A court hearing date will be advised in due course and it is expected that the hearing will take place in mid to late 2020. No adjustment to the provision is being made at this time.

The maximum additional exposure for the Group in relation to challenges by tax authorities not provided for is approximately GBP20m which is for the challenge by the Canadian Revenue Agency (CRA) and the Quebec Tax Authorities (Revenu Quebec) on a foreign currency trade in 2009. The CRA views that the loss sustained by BCA on an intra-group derivative transaction cannot be deducted in computing income has not changed. The case will be heard in the Tax Court of Canada, Ottawa in June 2020. BCA has provided satisfactory security for payment to the CRA for 50% of the tax being contested of GBP3.5m and to Revenu Quebec for 50% of the tax owing amounting to GBP3.2m. The outcome of the case is binary. No provision is recognised based on external counsel's opinion that the Group's case should ultimately prevail.

The Group reviews and assesses other indirect tax exposures across the Group and a GBP4.6m provision is the Group's best estimate of the most probable outflow relating to these exposures, excluding the VAT and payroll tax exposures outlined below. This provision relates largely to US sales tax.

Payroll taxes and VAT

During the year, the Group has identified an underpayment of PAYE and NIC to HMRC in respect of contractors. The Group has notified HMRC that a voluntary disclosure will be made and is currently in the process of finalising this voluntary disclosure. The Group will seek to engage with HMRC to agree a settlement during the first half of 2020. As such, the provision recognised in the current period is subject to ongoing discussion with HMRC. The Group considered the most probably outcome at this stage is a cash outflow of GBP8.2m. A provision of GBP1.5m, including interest and penalties, has been recognised in the current year. The prior year has been restated to reflect the exposure up to the opening Balance Sheet position in October 2017 and a provision of GBP1.8m (including interest and penalties) for 2018.

During the second half of the year, the Group discovered a VAT exposure relating to the understatement of VAT on intra-group transactions in respect of the four years ended 30 September 2018. The Group notified HMRC as soon as the exposure was identified in September 2019. A protective assessment was subsequently issued by HMRC in respect of the year ended 30 September 2015. Details of the exposure will be discussed and finalised with HMRC during the first half of the 2020 financial year. The Group considered that the most probable outcome at this stage is a cash outflow of GBP11.3m, including GBP0.3m of interest accrued in 2019. A prior year provision of GBP11.0m has been recognised and due to the amount being considered material the 2018 comparative financial information has been restated. The VAT element of the provision has been treated as an exceptional item in line with the Group's accounting policy because it is material and is not expected to recur. The interest element is excluded from the adjusted results as it relates directly to the exceptional item.

6. Dividends

 
                                                                                  2019     2018 
                                                                                GBP000   GBP000 
-----------------------------------------------------------------------------  -------  ------- 
Amounts recognisable as distributable to equity holders in the year 
-----------------------------------------------------------------------------  -------  ------- 
Final dividend for the year ended 30 September 2018 of 22.30p (2017: 21.80p)    24,348   23,784 
-----------------------------------------------------------------------------  -------  ------- 
Interim dividend for year ended 30 September 2019 of 10.80p (2018: 10.20p)      11,799   11,136 
-----------------------------------------------------------------------------  -------  ------- 
                                                                                36,147   34,920 
-----------------------------------------------------------------------------  -------  ------- 
Employee share trusts dividend                                                   (561)    (559) 
-----------------------------------------------------------------------------  -------  ------- 
                                                                                35,586   34,361 
-----------------------------------------------------------------------------  -------  ------- 
 
Proposed final dividend for the year ended 30 September                         24,363   24,347 
-----------------------------------------------------------------------------  -------  ------- 
Employee share trusts dividend                                                   (368)    (383) 
-----------------------------------------------------------------------------  -------  ------- 
                                                                                23,995   23,964 
-----------------------------------------------------------------------------  -------  ------- 
 

The proposed final dividend of 22.30p (2018: 22.30p) is subject to approval at the AGM on 28 January 2020 and has not been included as a liability in these Financial Statements in accordance with IAS 10 'Events after the Reporting Period'.

7. Earnings per share

 
                                                             Restated 
                                                      2019       2018 
                                                    GBP000     GBP000 
-------------------------------------------------  -------  --------- 
Profit for the year from continuing operations      20,134     65,458 
-------------------------------------------------  -------  --------- 
Non-controlling interests                            (264)      (139) 
-------------------------------------------------  -------  --------- 
Earnings from continuing operations                 19,870     65,319 
-------------------------------------------------  -------  --------- 
Profit for the year from discontinued operations    41,059    129,685 
-------------------------------------------------  -------  --------- 
Total earnings                                      60,929    195,004 
-------------------------------------------------  -------  --------- 
Adjustments                                         22,586  (115,871) 
-------------------------------------------------  -------  --------- 
Total adjusted earnings                             83,515     79,133 
-------------------------------------------------  -------  --------- 
 

7. Earnings per share continued

 
                                                     2019     2018 
                                                   Number   Number 
                                                      000      000 
------------------------------------------------  -------  ------- 
Weighted average number of shares                 109,226  109,148 
------------------------------------------------  -------  ------- 
Shares held by the employee share trusts          (1,667)  (1,733) 
------------------------------------------------  -------  ------- 
Weighted average number of shares                 107,559  107,415 
------------------------------------------------  -------  ------- 
Effect of dilutive share options                       95      131 
------------------------------------------------  -------  ------- 
Diluted weighted average number of shares         107,654  107,546 
------------------------------------------------  -------  ------- 
 
                                                    Pence    Pence 
------------------------------------------------  -------  ------- 
Earnings per share from continuing operations 
------------------------------------------------  -------  ------- 
   Basic                                             18.5     60.8 
------------------------------------------------  -------  ------- 
   Diluted                                           18.5     60.7 
------------------------------------------------  -------  ------- 
 
Earnings per share from discontinued operations 
------------------------------------------------  -------  ------- 
   Basic                                             38.1    120.7 
------------------------------------------------  -------  ------- 
   Diluted                                           38.1    120.6 
------------------------------------------------  -------  ------- 
 
Total earnings per share 
------------------------------------------------  -------  ------- 
   Basic                                             56.6    181.5 
------------------------------------------------  -------  ------- 
   Diluted                                           56.6    181.3 
------------------------------------------------  -------  ------- 
 
Total adjusted earnings per share 
------------------------------------------------  -------  ------- 
   Basic                                             77.6     73.7 
------------------------------------------------  -------  ------- 
   Diluted                                           77.6     73.6 
------------------------------------------------  -------  ------- 
 

The adjusted earnings per share figures have been disclosed since the Directors consider it necessary in order to give an indication of the adjusted trading performance reflecting the performance both of the Group's continuing and discontinued operations. A detailed reconciliation of the Group's statutory results to the adjusted and underlying results is set out on pages 6 to 11.

8. Discontinued operations and disposal groups classified as held for sale

Following the announcement on 10 September 2019 that the Group was to explore strategic options for Asset Management, the Group has engaged with advisors to assess its options and the segment is being actively marketed. The Asset Management segment meets the IFRS 5 'Non-current Assets Held for Sale and Discontinued Operations' criteria to be classified as held for sale at 30 September 2019. The assets and liabilities of Asset Management have been disclosed separately on the face of the Consolidated Statement of Financial Position. The assets and liabilities held for sale are recorded at the lower of their carrying value and fair value less costs to sell. No impairment of these net assets has been identified at 30 September 2019. The segment also meets the IFRS 5 criteria to be treated as discontinued operations due to its size and the fact that it constitutes a major line of the Group's business. Asset Management is therefore presented as discontinued operations throughout this report and the 2018 Income Statement disclosures have been re-presented.

On 30 April 2018, the Group completed the disposal of GMID. This division met the IFRS 5 'Non-current Assets Held for Sale and Discontinued Operations' criteria to be treated as discontinued operations at 30 September 2018.

The results of the discontinued operations are as follows:

 
                                                                 Asset Management  Asset Management     GMID     Total 
                                                                             2019              2018     2018      2018 
                                                                           GBP000            GBP000   GBP000    GBP000 
---------------------------------------------------------------  ----------------  ----------------  -------  -------- 
Total revenue                                                             145,622           145,454   23,815   169,269 
---------------------------------------------------------------  ----------------  ----------------  -------  -------- 
 
Operating profit before acquired intangible amortisation and 
 exceptional items                                                         66,929            61,660    7,510    69,170 
---------------------------------------------------------------  ----------------  ----------------  -------  -------- 
Acquired intangible amortisation                                         (10,928)          (10,749)        -  (10,749) 
---------------------------------------------------------------  ----------------  ----------------  -------  -------- 
Exceptional items                                                           (812)           (3,850)    (969)   (4,819) 
---------------------------------------------------------------  ----------------  ----------------  -------  -------- 
 
Operating profit                                                           55,189            47,061    6,541    53,602 
---------------------------------------------------------------  ----------------  ----------------  -------  -------- 
 
Finance income                                                                  -                84       43       127 
---------------------------------------------------------------  ----------------  ----------------  -------  -------- 
Finance expense                                                              (99)                 -     (11)      (11) 
---------------------------------------------------------------  ----------------  ----------------  -------  -------- 
Net finance income                                                           (99)                84       32       116 
---------------------------------------------------------------  ----------------  ----------------  -------  -------- 
 
Profit before tax                                                          55,090            47,145    6,573    53,718 
---------------------------------------------------------------  ----------------  ----------------  -------  -------- 
Tax (expense)/credit on profit                                           (12,349)           (8,802)      200   (8,602) 
---------------------------------------------------------------  ----------------  ----------------  -------  -------- 
Profit after tax from discontinued operations                              42,741            38,343    6,773    45,116 
---------------------------------------------------------------  ----------------  ----------------  -------  -------- 
 
(Cost of)/profit on disposal of discontinued operation - 
 exceptional items                                                        (1,682)                 -   91,263    91,263 
---------------------------------------------------------------  ----------------  ----------------  -------  -------- 
Tax expense on cost of/(profit on) disposal                                     -                 -  (6,694)   (6,694) 
---------------------------------------------------------------  ----------------  ----------------  -------  -------- 
(Cost of)/profit after tax on disposal of discontinued 
 operations                                                               (1,682)                 -   84,569    84,569 
---------------------------------------------------------------  ----------------  ----------------  -------  -------- 
 
Profit for the year from discontinued operations                           41,059            38,343   91,342   129,685 
---------------------------------------------------------------  ----------------  ----------------  -------  -------- 
 
 
                                                                                                                 Asset 
Reconciliation of profit before tax from discontinued operations in Income Statement to  Asset Management   Management 
adjusted                                                                                             2019         2018 
discontinued operations:                                                                           GBP000       GBP000 
---------------------------------------------------------------------------------------  ----------------  ----------- 
Profit before tax for the year from discontinued operations                                        55,090       47,145 
---------------------------------------------------------------------------------------  ----------------  ----------- 
Add back: 
---------------------------------------------------------------------------------------  ----------------  ----------- 
   Acquired intangible amortisation                                                                10,928       10,749 
---------------------------------------------------------------------------------------  ----------------  ----------- 
   Exceptional items                                                                                  812        3,850 
---------------------------------------------------------------------------------------  ----------------  ----------- 
Adjusted discontinued operations profit before tax for the year                                    66,830       61,744 
---------------------------------------------------------------------------------------  ----------------  ----------- 
 

8. Discontinued operations and disposal groups classified as held for sale continued

The impact of the discontinued operations on the cash flows is as follows:

 
                       Asset Management  Asset Management     GMID    Total 
                                   2019              2018     2018     2018 
                                 GBP000            GBP000   GBP000   GBP000 
---------------------  ----------------  ----------------  -------  ------- 
Operating cash flows             35,388            58,347  (2,520)   55,827 
---------------------  ----------------  ----------------  -------  ------- 
Investing cash flows              (887)           (2,594)  112,639  110,045 
---------------------  ----------------  ----------------  -------  ------- 
Financing cash flows                 86             (424)     (14)    (438) 
---------------------  ----------------  ----------------  -------  ------- 
Total cash flows                 34,587            55,329  110,105  165,434 
---------------------  ----------------  ----------------  -------  ------- 
 

The main classes of assets and liabilities comprising the businesses classified as held for sale are set out in the table below. These assets and liabilities are recorded at the lower of their carrying value and fair values less costs to sell.

 
                                                              Asset Management 
                                                                          2019 
                                                                        GBP000 
------------------------------------------------------------  ---------------- 
Goodwill                                                               213,030 
------------------------------------------------------------  ---------------- 
Acquired intangible assets                                              50,165 
------------------------------------------------------------  ---------------- 
Licenses and software including internally generated assets              2,821 
------------------------------------------------------------  ---------------- 
Property, plant and equipment                                              604 
------------------------------------------------------------  ---------------- 
Trade and other receivables                                             20,383 
------------------------------------------------------------  ---------------- 
Deferred consideration receivable                                          185 
------------------------------------------------------------  ---------------- 
Contract assets                                                          1,450 
------------------------------------------------------------  ---------------- 
Derivative financial instruments                                            23 
------------------------------------------------------------  ---------------- 
Current income tax assets                                                3,368 
------------------------------------------------------------  ---------------- 
Cash and cash equivalents                                                  327 
------------------------------------------------------------  ---------------- 
Total assets of the businesses held for sale                           292,356 
------------------------------------------------------------  ---------------- 
 
Trade and other payables                                                 (661) 
------------------------------------------------------------  ---------------- 
Accruals                                                              (13,769) 
------------------------------------------------------------  ---------------- 
Contract liabilities                                                  (44,853) 
------------------------------------------------------------  ---------------- 
Derivative financial instruments                                         (106) 
------------------------------------------------------------  ---------------- 
Deferred tax liabilities                                              (12,145) 
------------------------------------------------------------  ---------------- 
Total liabilities of the businesses held for sale                     (71,534) 
------------------------------------------------------------  ---------------- 
 
Net assets                                                             220,822 
------------------------------------------------------------  ---------------- 
 

9. Goodwill and other intangible assets

Goodwill for the period 30 September 2018 to 30 September 2019 decreased by GBP168.4m. This movement relates to goodwill arising on the acquisition of BoardEx and The Deal of GBP27.6m (note 11) and favourable effect of currency translation of GBP19.4m, offset by impairment of CIE goodwill of GBP2.4m and assets classified as held for sale of GBP213.0m.

The net carrying value of goodwill and other intangible assets is as follows:

 
                                            2019     2018 
                                          GBP000   GBP000 
---------------------------------------  -------  ------- 
Goodwill                                 246,281  414,722 
---------------------------------------  -------  ------- 
 
Trademarks and brands                     53,471  100,464 
---------------------------------------  -------  ------- 
Customer relationships                    88,650   64,135 
---------------------------------------  -------  ------- 
Databases and software                     7,425    3,245 
---------------------------------------  -------  ------- 
Total acquired intangible assets         149,546  167,844 
---------------------------------------  -------  ------- 
Internally generated intangible assets     9,594    5,659 
---------------------------------------  -------  ------- 
Total intangible assets                  159,140  173,503 
---------------------------------------  -------  ------- 
 
Total                                    405,421  588,225 
---------------------------------------  -------  ------- 
 

Intangible assets, other than goodwill, have a finite life and are amortised over their expected useful lives.

Acquired intangible asset amortisation for the year for continuing operations is GBP14.2m (2018: GBP12.0m).

10. Investments

 
                            Investment in associates         Investment in joint    Other equity investments     Total 
                                              GBP000             ventures GBP000                      GBP000    GBP000 
--------------------------  ------------------------  --------------------------  --------------------------  -------- 
At 1 October 2017                             26,820                           -                       3,546    30,366 
--------------------------  ------------------------  --------------------------  --------------------------  -------- 
Disposals                                   (26,194)                           -                           -  (26,194) 
--------------------------  ------------------------  --------------------------  --------------------------  -------- 
Exchange difference                             (81)                           -                           -      (81) 
--------------------------  ------------------------  --------------------------  --------------------------  -------- 
Provision against 
 investment losses                                 -                          13                           -        13 
--------------------------  ------------------------  --------------------------  --------------------------  -------- 
Share of profits/(losses) 
 after tax                                       170                        (13)                           -       157 
--------------------------  ------------------------  --------------------------  --------------------------  -------- 
At 30 September 2018                             715                           -                       3,546     4,261 
--------------------------  ------------------------  --------------------------  --------------------------  -------- 
Impact of adopting IFRS 9                          -                           -                       (385)     (385) 
--------------------------  ------------------------  --------------------------  --------------------------  -------- 
At 1 October 2018 
 (restated)                                      715                           -                       3,161     3,876 
--------------------------  ------------------------  --------------------------  --------------------------  -------- 
Disposals                                        100                           -                           -       100 
--------------------------  ------------------------  --------------------------  --------------------------  -------- 
Fair value remeasurements                          -                           -                       2,131     2,131 
--------------------------  ------------------------  --------------------------  --------------------------  -------- 
Transfer from other equity 
 to associate investment                       5,292                           -                     (5,292)         - 
--------------------------  ------------------------  --------------------------  --------------------------  -------- 
Share of losses after tax                       (88)                           -                           -      (88) 
--------------------------  ------------------------  --------------------------  --------------------------  -------- 
Dividends                                      (197)                           -                           -     (197) 
--------------------------  ------------------------  --------------------------  --------------------------  -------- 
Transfer to subsidiary                         (551)                           -                           -     (551) 
--------------------------  ------------------------  --------------------------  --------------------------  -------- 
At 30 September 2019                           5,271                           -                           -     5,271 
--------------------------  ------------------------  --------------------------  --------------------------  -------- 
 

In accordance with IFRS 9 'Financial Instruments', other equity investments are classified as financial assets measured at fair value through other comprehensive income. The 'Available-for-sale investments' category has changed to 'Other equity investments' with effect 1 October 2018.

All of the above investments in associates and joint ventures are accounted for using the equity method in these consolidated financial statements.

10. Investments continued

 
                                                                                                2019     2018 
                                                                                              GBP000   GBP000 
-------------------------------------------------------------------------------------------  -------  ------- 
Reconciliation of share of results in associates and joint ventures in Income Statement to 
 adjusted share of results in associates and joint ventures 
-------------------------------------------------------------------------------------------  -------  ------- 
Total share of results in associates and joint ventures in Income Statement                     (88)      157 
-------------------------------------------------------------------------------------------  -------  ------- 
Add back: 
-------------------------------------------------------------------------------------------  -------  ------- 
   Share of tax on profits                                                                      (38)      333 
-------------------------------------------------------------------------------------------  -------  ------- 
   Share of tax on acquired intangible amortisation and exceptional items                          -    (266) 
-------------------------------------------------------------------------------------------  -------  ------- 
   Share of acquired intangible amortisation                                                       -      761 
-------------------------------------------------------------------------------------------  -------  ------- 
   Share of exceptional items1                                                                     -      125 
-------------------------------------------------------------------------------------------  -------  ------- 
                                                                                                (38)      953 
-------------------------------------------------------------------------------------------  -------  ------- 
Adjusted share of results in associates and joint ventures                                     (126)    1,110 
-------------------------------------------------------------------------------------------  -------  ------- 
 

1 The share of exceptional items related to restructuring and earn-out costs in Dealogic, which was disposed of in December 2017.

The reconciliation of share of results in associates and joint ventures in the Income Statement has been provided since the Directors consider it necessary in order to provide an indication of the adjusted share of results in associates and joint ventures. A detailed reconciliation of the Group's statutory results to the adjusted and underlying results is set out on pages 6 to 11. The share of profit after tax in 2018 included a finance expense of GBP0.3m (none in 2019).

For the year ended 30 September 2018, the Group disposed of its minority equity stake of 15.5% in Diamond TopCo Limited (Dealogic) for $135.0m (GBP100.1m) on 27 December 2017. The disposal of the associate with a net book value of GBP26.2m gave rise to a profit on disposal of GBP71.7m, after deducting disposal costs, which was recognised as an exceptional item (note 3) in the Income Statement. The Group's share of the trading profit of Dealogic was GBP83k.

Information on investment in associates, investment in joint ventures and other equity investments:

 
                                          Year             Date of 
                    Principal activity   ended         acquisition  Type of holding  Group interest  Registered Office 
------------------  ------------------  ------  ------------------  ---------------  --------------  ----------------- 
Investment in 
associates 
------------------  ------------------  ------  ------------------  ---------------  --------------  ----------------- 
Zanbato, Inc        Private capital     30 Sep           Sept 2015         Ordinary            9.9%  715 N Shoreline 
(Zanbato)           placement and                                                                    Boulevard, 
                    workflow                                                                         Mountain View CA, 
                                                                                                     94043, United 
                                                                                                     States 
------------------  ------------------  ------  ------------------  ---------------  --------------  ----------------- 
Investment in 
joint ventures 
------------------  ------------------  ------  ------------------  ---------------  --------------  ----------------- 
Sanostro            Hedge fund manager  31 Dec            Dec 2014         Ordinary           50.0%  Allmendstrasse 
Institutional AG    trading signals                                                                  140, 8041 Zurich, 
(Sanostro)                                                                                           Switzerland 
------------------  ------------------  ------  ------------------  ---------------  --------------  ----------------- 
Other equity 
investments 
------------------  ------------------  ------  ------------------  ---------------  --------------  ----------------- 
Estimize, Inc       Financial           31 Dec           July 2015         Ordinary           10.0%  43 West 24th 
(Estimize)          estimates platform                                                               Street, New York, 
                                                                                                     NY 10010, United 
                                                                                                     States 
------------------  ------------------  ------  ------------------  ---------------  --------------  ----------------- 
 

The Group previously held an associate interest of 49% of the equity share capital of Broadmedia Communications Limited (BroadGroup). On 12 April 2019, the Group acquired an additional 17% of the equity share capital of BroadGroup and is subsequently accounted for as a subsidiary (note 11).

It has been determined that the Group has significant influence over Zanbato from 26 July 2019. The Group has therefore used the equity method to account for its 9.9% equity investment in Zanbato.

The Group interests in Sanostro and Estimize have remained unchanged since their respective dates of acquisition.

11. Acquisitions and disposals

Purchase of businesses

The Deal, LLC (BoardEx and The Deal)

On 14 February 2019, the Group acquired 100% of the equity share capital of The Deal LLC, comprising BoardEx, an executive profiling and relationship-mapping platform, and The Deal, a trusted source of data, news and intelligence on mergers and acquisitions, activist investing, private equity and restructuring, for $93.4m (GBP72.5m). Both products are highly complementary to the Group's existing portfolio, serving a number of shared customer groups, particularly investors, banks and professional services firms. BoardEx and The Deal are included in the Pricing, Data & Market Intelligence segment.

The acquisition accounting is set out below and is provisional pending final determination of the fair value of the assets and liabilities acquired:

 
                                                       Book                                 Provisional 
                                                      value                                  fair value 
                                                     GBP000  Fair value adjustments GBP000       GBP000 
-------------------------------------------------  --------  -----------------------------  ----------- 
Net assets/(liabilities): 
-------------------------------------------------  --------  -----------------------------  ----------- 
Intangible assets                                     1,414                         43,945       45,359 
-------------------------------------------------  --------  -----------------------------  ----------- 
Property, plant and equipment                           285                              -          285 
-------------------------------------------------  --------  -----------------------------  ----------- 
Deferred tax assets                                   1,335                          (547)          788 
-------------------------------------------------  --------  -----------------------------  ----------- 
Trade and other receivables                           5,585                              -        5,585 
-------------------------------------------------  --------  -----------------------------  ----------- 
Trade and other payables                            (3,411)                              -      (3,411) 
-------------------------------------------------  --------  -----------------------------  ----------- 
Contract liabilities                               (10,645)                          2,180      (8,465) 
-------------------------------------------------  --------  -----------------------------  ----------- 
Cash and cash equivalents                             4,777                              -        4,777 
-------------------------------------------------  --------  -----------------------------  ----------- 
                                                      (660)                         45,578       44,918 
-------------------------------------------------  --------  -----------------------------  ----------- 
 
Net assets acquired (100%)                                                                       44,918 
-------------------------------------------------  --------  -----------------------------  ----------- 
Goodwill                                                                                         27,619 
-------------------------------------------------  --------  -----------------------------  ----------- 
Total consideration                                                                              72,537 
-------------------------------------------------  --------  -----------------------------  ----------- 
Consideration satisfied by: 
-------------------------------------------------  --------  -----------------------------  ----------- 
Cash                                                                                             72,472 
-------------------------------------------------  --------  -----------------------------  ----------- 
Working capital adjustment                                                                           65 
-------------------------------------------------  --------  -----------------------------  ----------- 
                                                                                                 72,537 
-------------------------------------------------  --------  -----------------------------  ----------- 
Net cash outflow arising on acquisition: 
-------------------------------------------------  --------  -----------------------------  ----------- 
Cash consideration                                                                               72,537 
-------------------------------------------------  --------  -----------------------------  ----------- 
Less: cash and cash equivalent balances acquired                                                (4,777) 
-------------------------------------------------  --------  -----------------------------  ----------- 
                                                                                                 67,760 
-------------------------------------------------  --------  -----------------------------  ----------- 
 

Intangible assets represent customer relationships of $47.4m (GBP36.8m), brands of $3.8m (GBP3.0m), databases of $5.4m (GBP4.2m) and software of $1.8m (GBP1.4m) for which amortisation of $2.8m (GBP2.2m) has been charged for the period ended 30 September 2019. The intangible assets will be amortised over their respective expected useful economic lives; customer relationships of between four and 22 years, databases of between one and 10 years, software of three years and brands of 10 years.

Goodwill arises from the anticipated future operating synergies from integrating the acquired operations within the Group and the acquired workforce. Goodwill recognised in respect of the US business is expected to be deductible for US income tax purposes.

The $2.8m (GBP2.2m) fair value adjustment to contract liabilities relates to an adjustment to reduce the deferred revenue balance. The related deferred tax liability of $0.7m (GBP0.5m) has been recognised as a fair value adjustment against deferred tax assets.

The fair value of the assets acquired includes gross trade receivables of $4.1m (GBP3.2m) and are expected to be fully collectable.

BoardEx and The Deal contributed $14.8m (GBP11.6m) to the Group's revenue, $1.4m (GBP1.1m) to the Group's operating profit and $1.4m (GBP1.1m) to the Group's profit before tax for the period between the date of acquisition and 30 September 2019. If the acquisition had been completed on the first day of the financial year, BoardEx and The Deal would have contributed $24.6m (GBP19.2m) to the Group's revenue and $2.8m (GBP2.2m) to the Group's operating profit.

11. Acquisitions and disposals continued

Transfer to subsidiary

Broadmedia Communications Limited (BroadGroup)

On 12 April 2019, the Group acquired an additional 17% shareholding in BroadGroup for a cash consideration of GBP0.4m, bringing the Group's total shareholding to 66%. The Group previously held an associate interest of 49% of the equity share capital. The Group accounts for its increased equity shareholding in BroadGroup of 66% as a subsidiary. At the acquisition date, the non-controlling interest of 34% is measured using the proportion of net assets method. BroadGroup is included in the Pricing, Data & Market Intelligence segment.

On the date that the additional 17% shareholding was acquired, there was a revaluation gain of GBP0.6m on the associate investment, bringing the fair value of the associate when disposed of to GBP1.1m.

The remaining interest in BroadGroup is subject to put and call options under an earn-out agreement, in two instalments, based on the profits of BroadGroup for its years ended 30 September 2020 and 2021. At acquisition, the total amount that the Group expected to pay under this option agreement was GBP1.4m and was recognised as an acquisition commitment.

The acquisition accounting is set out below and is provisional pending final determination of the fair value of the assets and liabilities acquired:

 
                                                      Book                                 Provisional 
                                                     value                                  fair value 
                                                    GBP000  Fair value adjustments GBP000       GBP000 
-------------------------------------------------  -------  -----------------------------  ----------- 
Net assets/(liabilities): 
-------------------------------------------------  -------  -----------------------------  ----------- 
Intangible assets                                        -                          2,865        2,865 
-------------------------------------------------  -------  -----------------------------  ----------- 
Trade and other receivables                          3,364                              -        3,364 
-------------------------------------------------  -------  -----------------------------  ----------- 
Trade and other payables                           (3,503)                              -      (3,503) 
-------------------------------------------------  -------  -----------------------------  ----------- 
Deferred tax liabilities                                 -                          (487)        (487) 
-------------------------------------------------  -------  -----------------------------  ----------- 
Cash and cash equivalents                               54                              -           54 
-------------------------------------------------  -------  -----------------------------  ----------- 
                                                      (85)                          2,378        2,293 
-------------------------------------------------  -------  -----------------------------  ----------- 
 
Net assets acquired (66%)                                                                        1,514 
-------------------------------------------------  -------  -----------------------------  ----------- 
Goodwill                                                                                            20 
-------------------------------------------------  -------  -----------------------------  ----------- 
Total consideration                                                                              1,534 
-------------------------------------------------  -------  -----------------------------  ----------- 
Consideration satisfied by: 
-------------------------------------------------  -------  -----------------------------  ----------- 
Cash                                                                                               395 
-------------------------------------------------  -------  -----------------------------  ----------- 
Fair value of associate                                                                          1,139 
-------------------------------------------------  -------  -----------------------------  ----------- 
                                                                                                 1,534 
-------------------------------------------------  -------  -----------------------------  ----------- 
Net cash outflow arising on acquisition: 
-------------------------------------------------  -------  -----------------------------  ----------- 
Cash consideration                                                                                 395 
-------------------------------------------------  -------  -----------------------------  ----------- 
Less: cash and cash equivalent balances acquired                                                  (54) 
-------------------------------------------------  -------  -----------------------------  ----------- 
                                                                                                   341 
-------------------------------------------------  -------  -----------------------------  ----------- 
 

Intangible assets represent customer relationships of GBP1.4m and the brand of GBP1.4m for which amortisation of GBP0.1m has been charged for the year. The customer relationships will be amortised over their expected useful economic lives of 15 years. The brand will be amortised over its expected useful life of 15 years.

Goodwill arises from the anticipated future operating synergies from integrating the acquired operations within the Group and the acquired workforce.

The fair value of the assets acquired includes net trade receivables of GBP3.0m, all of which are contracted and are expected to be collectable.

BroadGroup contributed GBP2.5m to the Group's revenue, GBP0.8m to the Group's operating profit and GBP0.8m to the Group's profit after tax for the period between the date of acquisition and 30 September 2019. If the acquisition had been completed on the first day of the financial year, BroadGroup would have contributed GBP3.5m to the Group's revenue and GBP0.7m to the Group's operating profit (excluding exceptional costs).

11. Acquisitions and disposals continued

Increase in equity holdings

Reinsurance Security (Consultancy).Co.Uk (ReSec)

On 19 December 2018, the Group made an earn-out payment of GBP0.1m to increase its equity shareholding in ReSec. The payment increased the Group's holding from 83% to 88%.

Sale of business

Mining Indaba

On 23 October 2018, the Group completed the sale of Mining Indaba. The gross consideration for the sale was GBP30.1m, with GBP20.0m payable on completion and net deferred consideration of GBP8.7m received in June 2019. The settlement of the deferred consideration has been offset against a working capital adjustment in favour of the buyer. The sale resulted in a pre-tax profit of GBP17.0m after transaction costs of GBP0.3m, which was recognised as an exceptional item (note 3). The assets and liabilities of this business sold were classified as held for sale and disclosed separately on the face of the Consolidated Statement of Financial Position for the year ended 30 September 2018.

The net assets of the businesses at the date of disposal were as follows:

 
                                                                Indaba 
                                                                GBP000 
-------------------------------------------------------------  ------- 
Net assets: 
-------------------------------------------------------------  ------- 
Intangible assets                                               12,783 
-------------------------------------------------------------  ------- 
Trade and other receivables                                      1,211 
-------------------------------------------------------------  ------- 
Deferred income                                                (2,620) 
-------------------------------------------------------------  ------- 
                                                                11,374 
-------------------------------------------------------------  ------- 
 
Net assets disposed                                             11,374 
-------------------------------------------------------------  ------- 
Directly attributable costs                                        347 
-------------------------------------------------------------  ------- 
Profit on disposal (note 3)                                     16,998 
-------------------------------------------------------------  ------- 
Total consideration                                             28,719 
-------------------------------------------------------------  ------- 
Consideration satisfied by: 
-------------------------------------------------------------  ------- 
Cash                                                            20,000 
-------------------------------------------------------------  ------- 
Deferred consideration (net of working capital adjustments)      8,719 
-------------------------------------------------------------  ------- 
                                                                28,719 
-------------------------------------------------------------  ------- 
Cash inflow arising on disposal: 
-------------------------------------------------------------  ------- 
Cash consideration (net of directly attributable costs paid)    19,653 
-------------------------------------------------------------  ------- 
Receipt of deferred consideration                                8,719 
-------------------------------------------------------------  ------- 
Total cash inflow                                               28,372 
-------------------------------------------------------------  ------- 
 

12. Called up share capital

 
                                                                                                  2019     2018 
                                                                                                GBP000   GBP000 
--------------------------------------------------------------------------------------------   -------  ------- 
Allotted, called up and fully paid 
--------------------------------------------------------------------------------------------   -------  ------- 
109,249,352 ordinary shares of 0.25p each (2018: 109,180,729 ordinary shares of 0.25p each)        273      273 
---------------------------------------------------------------------------------------------  -------  ------- 
 

During the year, 68,623 ordinary shares of 0.25p each (2018: 79,121 ordinary shares) with an aggregate nominal value of GBP172 (2018: GBP198) were issued following the exercise of share options granted under the Company's share option schemes for a cash consideration of GBP516,126 (2018: GBP642,612).

13. Contingent liabilities

Claims in Malaysia

Four writs claiming damages for libel were issued in Malaysia against the Group and three of its employees in respect of an article published in one of the Group's magazines, International Commercial Litigation, in November 1995. The writs were served on the Group on 22 October 1996. Two of these writs were discontinued. The total outstanding amount claimed on the two remaining writs was Malaysian ringgit 83.4m (GBP15.5m) at 30 September 2018. As the limitation period for enforcing these claims has passed, the case has closed during the year.

European Commission (EC) Inspection

In January 2018, the EC conducted an unannounced inspection at the Brussels office of RISI Sprl (RISI), a wholly-owned subsidiary within the Group, as part of an investigation into the sector of kraft paper and industrial paper sacks in the European Union/European Economic Area. On 10 May 2019, the Group received confirmation that this case has been closed.

EC investigation into state aid

On 2 April 2019, the EC concluded their state aid investigation into the Group Financing Exemption (GFE) in the UK controlled foreign company rules on the GFE and ruled that the GFE is only justified where there are no UK activities involved in generating the finance profits. The UK government has decided to appeal against the EC decision but an aid recovery process has also commenced as this is required under EU law. The maximum exposure is GBP8.0m.

14. Related party transactions

Daily Mail & General Trust plc (DMGT) shareholders approved distribution of DMGT's shares in Euromoney Institutional Investor PLC, amounting to approximately 49% of the issued share capital of the Group, to its participating shareholders, following a review by the DMGT Board. There is no direct accounting impact of the transaction for the Group. The relationship deed entered into between DMGT and the Group in December 2016 has terminated and DMGT's representative Directors on the Board have stepped down. This was effective from 2 April 2019. The related party transactions with DMGT below are up to this effective date.

The Group has taken advantage of the exemption allowed under IAS 24 'Related Party Disclosures' not to disclose transactions and balances between group companies that have been eliminated on consolidation. Other related party transactions and balances are detailed below:

(i) During the year ended 30 September 2019, the Group expensed services recharged by DMGT and other fellow group companies of GBP57k (2018: GBP64k).

(ii) The Group participates in the Harmsworth Pension Scheme (HPS), a defined benefit scheme operated by DMGT. The Group's share of the HPS surplus is GBP1.5m (2018: GBP1.9m).

(iii) During the year, the Group provided services to Risk Management Solution Ltd, a DMGT subsidiary, for HKD713,337 (2018: HKD1,336,936).

(iv) During the year the Group charged BroadGroup for services when it was accounted for as an associate of GBP48k (2018:40k). In addition, the Group received dividends of GBP197k (2018: nil).

(v) The Directors who served during the year received dividends of GBP0.1m (2018: GBP0.2m) in respect of ordinary shares held in the Company.

(vi) During the year ended 30 September 2018, the Group's equity shareholding in NDR increased to 100%.

(vii) During the year ended 30 September 2018, the Group sold sponsorship revenue to Trepp LLC, a DMGT subsidiary, 2018: $60k.

15. Events after the balance sheet date

The Directors propose a final dividend of 22.30p per share (2018: 22.30p) totalling GBP24.0m (2018: GBP24.0m) for the year ended 30 September 2019. The dividend will be submitted for approval by shareholders at the AGM to be held on 28 January 2020. In accordance with IAS 10 'Events after the Reporting Period', these Financial Statements do not reflect this dividend payable which will be accounted for in shareholders' equity as an appropriation of retained earnings in the year ending 30 September 2020.

There were no other events after the balance sheet date.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

FR MMMZMZGZGLZZ

(END) Dow Jones Newswires

November 21, 2019 02:01 ET (07:01 GMT)

1 Year Euromoney Institutional ... Chart

1 Year Euromoney Institutional ... Chart

1 Month Euromoney Institutional ... Chart

1 Month Euromoney Institutional ... Chart
Your Recent History
LSE
ERM
Euromoney ..
Register now to watch these stocks streaming on the ADVFN Monitor.

Monitor lets you view up to 110 of your favourite stocks at once and is completely free to use.

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V:gb D:20200127 19:19:11