Interim Results

    RNS Number : 9240D
  Expomedia Group PLC
  22 September 2008
   
    22 September 2008

    EXPOMEDIA GROUP PLC
    ("Expomedia" or "the Group")

    INTERIM RESULTS 
    FOR THE SIX MONTHS ENDED 30 JUNE 2008


    The Board of Expomedia, the AIM quoted media group with interests in exhibitions, conferences, venue management and related publishing,
is pleased to announce its Interim Results for the six months ended 30 June 2008. 

    FINANCIAL HIGHLIGHTS

    * Turnover up 19 per cent on continuing activities, excluding share of joint ventures, to EUR18.5 million (2007: EUR15.5 million);    *
Adjusted EBITDA * profit of EUR2.0 million (2007: adjusted EBITDA profit EUR2.1 million);    * Operating profit on continuing activities for
the period of EUR0.4 million (2007: EUR0.9 million);    * Increase in profit before taxation to EUR0.6 million (2007: EUR0.1 million);     *
Basic and diluted earnings per share on continuing operations per share 1 cent (2007: loss 1 cent); and    * Net debt of EUR6.7 million
excluding finance lease obligations and non bank debt; (2007: EUR3.7 million).    OPERATIONAL HIGHLIGHTS

    * Significant fully expensed investment in additional exhibition sales teams for Indian and Russian markets;    * The Group is second
half weighted and there has been strong performance from repeat business with forward bookings for 2008 up 19 per cent;    * Continuing
progress in emerging markets of Russia, Poland and India in core business units: exhibitions and conferences;    * Disposal of German assets
in progress;    * Additional venue space available in Warsaw.
    * Adjusted EBITDA is calculated by taking profit before tax on continuing activities and adding back amortisation, depreciation, share
option costs, net financing costs and loss on joint ventures and exceptional items.

    Commenting on today's results, Chief Executive, Mark Shashoua, stated:

    "We are pleased to have increased turnover and profit before tax during the period under review. Strategically, the Group continues to
focus on its events and conference businesses in the emerging markets of Poland, Russia and India. Each of these territories has
demonstrated strong growth in the period and we expect that this will continue in the second half of the year. The outlook for the rest of
the year is positive and we look forward to continued growth."


    --END--


    Enquiries:

    Expomedia Group Plc
Mark Shashoua
Tel: [phone]

    Bishopsgate Communications Ltd.
Maxine Barnes
Gemma O'Hara
    Tel: [phone]

    Charles Stanley Securities (Nominated Adviser)
Mark Taylor
Tel: [phone]





    CHIEF EXECUTIVE'S STATEMENT 

    Financials

    Group turnover on continuing activities, excluding share of joint ventures, for the period was up 19 per cent to EUR18.5 million (2007:
EUR15.5 million). Turnover growth is continuing in the second half of 2008, with contracted revenue for 2008 currently 19 per cent ahead of
the same period in 2007.

    EBITDA on continuing activities and share option costs ("adjusted EBITDA") was EUR2.0 million (2007: adjusted EBITDA EUR2.1 million) and
the operating profit on continuing activities was EUR0.4 million (2007: EUR0.9million). The profit before tax on continuing ordinary
activities was EUR0.6 million (2007: EUR0.1 million).

    The loss before tax on discontinued activities was EUR0.7 million (2007: EUR0.1 million).  The Group is currently in discussions with
third parties relating to the disposal of these businesses. Proceeds from the prospective sales are not included in these figures and it is
expected that the discontinued loss will be reversed for the full year. 

    Basic and diluted earnings per share from continuing operations were 1 cent (2007: loss 1 cent).

    Review of Operations

    India

    The Board has continued its stated strategy for India as there are a significant opportunities for Expomedia in the medium to long term.
The market is evolving and the demand for exhibitions and conferences is expected to grow as quickly as recent years in other emerging
markets such as Russia and China. 

    Expomedia aims to be a leading player in the Indian market and the investments made to date are designed to achieve this.

    Exhibitions

    Expomedia's Indian exhibition business continues to make good progress. During the first half of 2008 two exhibitions were held, with a
further four events being held in the second half of the year. 

    Key events such as "MMMM", the 7th International Exhibition on Minerals, Metals, Metallurgy and Materials, which is being held in
November this year, is scheduled to increase in size by 150 per cent from 3,250 square metres of sold space last year to 8,000 square metres
of sold space this year.   

    Other event topics include some of the key growth industries for the Indian economy including construction, paper and pulp, home
interiors, lighting, packaging and mining. We continue the strategy of working closely with local trade associations and have recently won
the contract to run the main lighting event, Lighting South Asia 2009, with the local trade association. This contract win demonstrates the
effectiveness of our strategy to work closely with these organisations. The Group has also won the contract to run the trade association-led
packaging show, IndiaPack, in 2008.

    As a result of this strategy, the Board expects that further events will be added to our portfolio in due course and that these events
can be cloned within India itself. The Group's strategy is to clone existing and new events across the main Indian cities of Delhi, Mumbai,
Chennai, Bangalore and Calcutta during 2009.  

    We have further strengthened our partnership with Tafcon, with whom we organised "IME" - the international mining exhibition and entered
into an agreement with them for further new events.

    Conferences

    The Indian conference division is operated from Mumbai and has recorded a 54 per cent increase in revenue in the period. The growth of
this division has been deliberately slow as we continue to build the right teams and infrastructure locally. We are confident that our
continued investment will lead to the creation of a significant business, enjoying a similar position in the Indian market as we have
achieved in Russia and Poland. 

    Despite the Indian market being immature and underdeveloped the Board believes that this market represents the Group's greatest
opportunity in the long term. The efforts of the past few years and additional investment in 2008 gives Expomedia an ideal platform and
position in the market from which to grow and capitalise in the future.

    Venue

    Despite the venue operation in Greater Noida having been instrumental in securing the long term future tenancies for our events, the
scale of profit we can achieve from this is limited and therefore not the best use of our resources. As a result we are currently working
with a new management company that is willing to invest further in the infrastructure locally, which will allow Expomedia to concentrate
only on its exhibitions and conferences, whilst having secured its long term tenancies for its exhibitions on favourable terms.
    Russia
    The Group's Russian conference business continues to grow substantially with a 44 per cent increase in revenues in the period and a 35
per cent increase in the number of delegates. This business is continuing its growth to achieve the level of synergies required to maximise
profits and to capitalise on its leading position in the Moscow conference market. In the first half of the year we have expended additional
funds, when compared to 2007, amounting to EUR0.8 million on new personnel and other expensed infrastructure costs. This investment
comprises predominantly of additional resources for new industry sector conferences, such as energy.
    The strategy of the Russian conference business is to continue to focus on growing annual repeat events that are industry leaders -
"Large Scale Events". An example of these leading events is "Retail Director", which has grown to 700 delegates in 2008, an increase of 55
per cent when compared with 2007. Our strategy is to convert a high percentage of our current events into Large Scale Events, eventually
replicating these across other Russian and central Asian markets.
    The Board believes that the Group has now established itself as the main conference company in Russia with significant growth still to
be achieved. The Group will continue to focus on both developing this business through organic growth as well as seeking further targeted
acquisitions in the conference field.
    Poland
    Conferences
    The Group's subsidiary, Infor-media Poland, has continued its strong growth in the period, with a 28 per cent increase in revenues in
the first half and a modest increase in delegates reflecting a focus on higher yielding events. The business continued to increase its
profitability despite ongoing investment in personnel and infrastructure.
    We believe that Infor-media has now established itself as the main conference organiser in Poland, both in terms of size and number of
events in the market. 
    Venue
    Revenue from our venue operation in Warsaw for the first half of 2008 increased by 18 per cent.  The venue is almost fully booked at
peak periods and the utilisation level is relatively stable at 42 per cent. We are pleased to report that the construction of the extension
to the existing venue has commenced and once completed this will increase the capacity of the venue by 40 per cent to 14,000 square metres. 
We anticipate that the impact on revenue and profit for 2009 will be limited, with the full impact seen in 2010.
    United Kingdom
    The Group's operations in the UK have been the most affected by the problems in the credit markets and its consequent impact on our
subsidiary, Homebuyer Events Limited, which organises the largest portfolio of property investment events in the UK market. Despite the
extremely challenging market conditions, we are confident that our events can remain the premier events in the sector, while other
competitor events have been cancelled. We expect that once the property market begins to improve, these events will again show the strong
growth that made them the leading events in the market. 
    Following consultation with our customers, we expect to launch editions of these property events in Russia and Dubai in June and
December 2009 respectively. It is expected that these will offset the current slow down in the UK market.  
    We held two other events in the UK in the period and both of these performed well. With continued and strong cost control we aim to
maximise the profitability of the UK operation.
    Germany
    The Group currently has two operations in Germany. 
    Our venue in Cologne has been successful, yet following the Board's decision to focus on exhibitions and conferences, the Group is
currently finalising discussions relating to the future of the German venue business. 
    The Board has also been discussing the future of the joint venture with our partners, Gruner & Jahr.  This business is looking to expand
its number of titles and therefore will require additional investment over the next 12-18 months. It is our opinion that these resources
would be better deployed in our core emerging markets and therefore we are considering our options with regard to this business. 
    Capital Reduction
    A resolution was passed at the Annual General Meeting (AGM) to carry out a restructure of Expomedia's capital structure, by way of a
reduction of its share premium account. On 25 June 2008, we received confirmation from the High Court that an amount of £20 million, which
formed part of the credit on the share premium account was credited to the Company's profit and loss account. This process was subject to an
undertaking from Expomedia to the High Court to protect the Company's creditors, which is standard for a company in the position of
Expomedia. As a consequence of the restructure, the Group expects to be in a position to pay dividends from future profits earlier than
would have been possible otherwise. 
    Outlook
    There is no doubt that the problems emerging for the financial and property markets have created challenges for our UK Homebuyer Events
businesses. We expect this to continue into 2009. 
    With the planned disposal of some of our non core business as outlined above, we will be able to significantly decrease our overheads,
and the Group will focus on its events and conference businesses in the emerging markets of Poland, Russia and India. Each of these
territories has demonstrated strong growth in the period and we expect that this will continue in the second half of the year.
    The Group's trading, which is historically second half weighted, is showing a strong performance from repeat business and forward
bookings for 2008 are up 19 per cent compared to the prior year period.
    By focusing on high growth areas of the world economy, the Group should see the profitable benefits of this strategy in 2009 and
beyond.
    Chief Executive
Mark Shashoua
    22 September 2008 






    CONSOLIDATED INCOME STATEMENT (UNAUDITED)

                                           Six months  Six months         Year
                                                ended       ended        ended
                                              30 June     30 June  31 December
                                    Notes        2008        2007         2007
                                              EUR'000     EUR'000      EUR'000
 Revenue including share of joint             18,674      15,979        36,326
 ventures
 Less: share of joint ventures'                 (213)       (441)      (1,345)
 revenue
 Group revenue                                 18,461      15,538       34,981
 Cost of sales                               (10,121)     (7,463)     (19,827)
 Gross profit                                   8,340       8,075       15,154
 Net administrative expenses                  (6,612)     (6,195)     (11,055)
 before amortisation and
 depreciation
 Amortisation of intangible                     (640)       (286)      (1,039)
 assets
 Depreciation of property, plant                (658)       (708)      (1,217)
 and equipment 
 Group administrative expenses                (7,910)     (7,189)     (13,311)
 Profit/(loss) from operations                    430         886        1,843
 Finance income                                1,874         439         2,454
 Financing cost                                 (987)       (779)      (1,953)
 Net financing income/(costs)                     887       (340)          501
 Share of loss of joint ventures                (747)       (471)        (488)
 Profit before taxation                          570           75        1,856
 Income tax (expense)/income                      133        (55)        1,221
 Profit after taxation                            703          20        3,077
 Discontinued operations                                                      
 Profit/(loss) from discontinued      [4]       (656)          87      (2,523)
 operations (net of taxation)
 Profit after discontinued                         47         107          554
 operations for the period
                                                                              
 Attributable to:                                                             
 Equity holders of the parent                    175          419          804
 Minority interests (equity                     (169)       (312)        (250)
 interests)
 Profit for the period                              6         107          554
 Earnings per share                                                           
                                                                 
 Basic and diluted loss per share    [2]        0.01        0.002         0.01
 (EUR)
                                                                              
 Earnings per share from                                                      
 continuing operations
 Basic and diluted                               0.01      (0.01)         0.06
 earnings/(loss) per share (EUR) 



    CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE (UNAUDITED)

                                                   Six months  Six months         Year
                                                        ended       ended        ended
                                                      30 June     30 June  31 December
                                                         2008        2007        2007 
                                                      EUR'000     EUR'000      EUR'000
 Foreign exchange translation                         (2,164)        218         (179)
 differences 
 Fair value of hedging reserve                             96          -         (159)
 Tax on income and expenses                                 -         234             
 recognized directly in equity
 Net income recognised directly in                    (2,068)        452         (338)
 equity
 Profit for the year                                        6        107           554
 Recognised income and expense                        (2,062)        559           216
                                                                                      
 Recognised income and expense for the period is attributable
 to:
 Equity holders of the parent                         (1,893)        871           466
 Minority interest                                      (169)       (312)        (250)
                                                      (2,062)        559           216



    CONSOLIDATED BALANCE SHEET (UNAUDITED)

                                                30 June   30 June  31 December
                                                   2008      2007         2007
                                                EUR'000   EUR'000      EUR'000
 Non-current assets                                                           
 Goodwill                                        15,364    22,150       17,064
 Other intangible assets                         11,626    11,919       13,160
 Property, plant and equipment                   28,712    28,651       27,405
 Investments accounted for using the equity           -       291          572
 method 
 Lease prepayment                                 2,835     1,396        2,486
 Deferred tax assets                              2,743       444        2,295
 Total non-current assets                        61,280    64,851       62,982
 Current assets                                                               
 Trade and other receivables                      8,989    11,799       10,542
 Cash and cash equivalents                        2,681     8,210        5,876
 Assets classified as held for sale                 645     1,225        1,050
 Total current assets                            12,315    21,234       17,468
 Total assets                                    73,595    86,085       80,450
 Current liabilities                                                          
 Loans and borrowings                           (1,676)   (2,716)      (3,973)
 Trade and other payables                       (9,396)  (15'600)     (12,485)
 Obligation under finance lease and               (730)     (686)        (707)
 hire-purchase contract
 Provisions                                       (200)     (692)        (214)
 Investments accounted for using the equity       (156)         -            -
 method
 Liabilities classified as held for sale          (876)   (1,147)        (885)
  Total current liabilities                    (13,034)  (20,841)     (18,264)
 Non-current liabilities                                                      
 Loans and borrowings                           (8,619)   (9,210)      (7,955)
 Obligation under finance lease and            (18,780)  (17,073)     (19,083)
 hire-purchase contract
 Provisions                                     (3,448)   (8,422)      (3,711)
 Deferred tax liabilities                       (4,014)   (3,292)      (3,969)
  Total non-current liabilities                (34,861)  (37,997)     (34,718)
 Total liabilities                             (47,895)  (58,838)     (52,982)
 Net assets                                      25,700    27,247       27,468
 Equity                                                                       
 Issued capital                                   3,972     3,972        3,972
 Share premium                                    3,322    34,973       33,732
 Other reserves                                  15,556    12,315       15,397
 Retained earnings                                3,405  (23,415)     (25,223)
 Equity attributable to equity holders of        26,255    27,845       27,878
 parent
 Minority interests                               (555)     (598)        (410)
 Total equity                                    25,700    27,247       27,468


    CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)


                                           Six months  Six months         Year
                                                ended       ended        ended
                                              30 June     30 June  31 December
                                                 2008        2007         2007
                                              EUR'000     EUR'000      EUR'000
 Cash flows from operating activities                                         
 Profit for the period                              6         108          554
 Share of operating loss in joint                 747         471          488
 ventures
 Foreign exchange gains                       (1,843)       (306)      (2,244)
 Interest income                                 (32)       (141)        (210)
 Interest expense                                 924         779        1,953
 (Profit)/loss from discontinued                  697       (401)        2,523
 operations (net of tax)
 Income tax expense/(income)                    (133)          55      (1,221)
 Depreciation of property, plant and              658         738        1,217
 equipment
 Amortisation of intangible assets                640         286        1,039
 Amortisation of loan costs capitalised            18           -            -
 Share option charge                              294         207          500
 Operating profit before changes in             1,976       1,796        4,599
 working capital 
 Decrease/(increase) in trade and other         1,803       1,247      (1,024)
 receivables
 (Decrease)/increase in trade and other       (2,797)     (1,205)          287
 payables
 Cash generated from operations                   982       1,838        3,862
 Interest paid                                  (924)       (768)      (1,953)
 Income tax paid                                (670)       (164)        (238)
 Net cash used in operating activities          (612)         906        1,671
 Cash flows from investing activities                                         
 Interest received                                 32         101          210
 Disposal of subsidiary net of cash             (288)           -           80
 disposed of
 Acquisition of subsidiary undertaking              -    (12,784)     (13,568)
 net of cash acquired
 Purchase of other intangible assets            (303)       (815)      (2,962)
 Purchase of property, plant and                (322)       (172)        (981)
 equipment
 Joint venture funding                          (250)           -        (200)
 Funding of discontinued activities                 -       (713)        (934)
 Net cash from investing activities           (1,131)    (14,383)     (18,355)
 Cash flows from financing activities                                         
 Own shares purchased                               -       (109)        (158)
 New long term loan                                 -       8,584        7,575
 Repayment of borrowings                        (871)       (739)      (1,967)
 Proceeds of finance lease                          -           -        2,370
 Net cash (outflow)/inflow from financing       (871)       7,736        7,820
 activities
 Net increase/(decrease) in cash and cash     (2,614)     (5,741)      (8,864)
 equivalents
 Cash and cash equivalents at 1 January         5,163      14,164       13,903
 Effect of exchange rate fluctuations on           50       (332)          124
 cash held
 Cash and cash equivalents at 30 June           2,599       8,091        5,163
 Comprised of:                                                                
 Cash and cash equivalents                      2,681       8,210        5,876
 Bank overdrafts                                 (82)       (119)        (713)
                                                2,599       8,091        5,163


    NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) CONTINUED


    1   Basis of preparation 
Expomedia Group plc has prepared these Interim statements in accordance with International Financial Reporting Standards as adopted by the
EU ("Adopted IFRSs") including International Accounting Standards ('IAS') and interpretations published by the International Accounting
Standards Board ('IASB') and its committees.
    2   Earnings per share
Basic earnings per share have been based on the profit for the financial period divided by the weighted average number of actual shares in
issue of 48,490,177 (June 2007: 48,572,795; December 2007: 48,536,911). Diluted earnings per share have been based on the profit for the
financial period divided by the weighted average number of actual shares in issue of 48,799,700 (June 2007: 51,254,044; December 2007:
50,765,665).
    3   Reconciliation of Loss on activities before taxation to adjusted EBITDA
                               Six months ended 30   Six months ended 30 June
                                  June Continuing            Continuing  2007
                                              2008                    EUR'000
                                           EUR'000
 Operating profit                              430                        886
 Depreciation & amortisation                 1,298                        994
 Share option costs                            294                        208
 Adjusted EBITDA                             2,022                      2,088
    4 Discontinued operations
    Discontinued operations in the current period relate to operations held for sale in Hungary and Germany. 
    In 2007, the Group began the process of selling the following subsidiaries, Budapest Nemzetkozi Rendezveny es Kiallitasszervezo Kft in
Hungary and Expocenter K GmbH in Germany. As at 30 June 2008, the directors are confident that the sale of both subsidiaries are highly
probable during 2008, and an active marketing plan has been initiated and negotiations commenced with potential buyers. In both cases the
businesses are regarded as separate cash generating units.


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