RNS No 0833d
HODDER HEADLINE PLC
9th March 1998
Hodder Headline announces pre-tax profits increased by 24% for
the twelve months to 31st December 1997.
The key points are:
* Pre-tax profits #8.2 million (1996, #6.6 million)
* Earnings per share 15.8 pence (1996, 13.3 pence)
* Sales #93.2 million (1996, #92.8 million)
* Like-for-like publishing sales #91.6 million (1996, #86.4
million)
* Underlying operating cash flow #6.8 million (1996, #5.7
million)
* Net borrowings #2.5 million (1996, #3.8 million)
* Recommended final dividend of 5.0 pence net per share,
making a total dividend of 7.2 pence net per share (1996, 6.5
pence total net per share)
* Sales in the first two months of 1998 were encouraging
Tim Hely Hutchinson, Group Chief Executive, commented on the
results and prospects:
"1997 was a record year for Hodder Headline. Our operating
margins, pre-tax profits and earnings per share all grew
substantially.
These good results were achieved in uneven market conditions.
The important UK retail bookselling market was buoyant, but
this factor was offset by weak UK institutional markets and
overall weak markets overseas. Meanwhile, we continued to
invest vigorously in our publishing lists so as to be able to
provide good quality growth by gains in market share.
1998 has started well, with UK booksellers continuing to report
encouraging results. Our good presence on bestseller lists has
helped us to increase sales by 9% so far this year and the
Group is looking forward to another year of progress in 1998.
I would like to thank all those who have continued to support
the Group and have enabled it to continue prospering,
especially our authors, our customers and our staff."
Attached is a copy of the Preliminary Statement. This
comprises a shortened version of the text that will be included
in our Annual Report and Accounts 1997, to be published in
early April, together with the Group's profit and loss account,
balance sheet and cash flow statement as at 31st December 1997.
For further information, please contact:
Tim Hely Hutchinson 0171 404 5959 on 9th March 1998
Group Chief Executive 0171 873 6000 thereafter
Mark Opzoomer As above
Deputy Chief Executive
Richard Adam As above
Group Finance Director
Russell Ross-Smith 0171 404 5959
Brunswick Group Limited
9th March 1998
HODDER HEADLINE PLC
KEY FINANCIAL FIGURES
1997 1996 %
#000 #000 change
Profit & loss account
_____________________
Like-for-like publishing sales 91,582 86,374 6.0
Reported sales 93,162 92,830 0.4
Operating profit before interests
in associated undertakings
and joint ventures 8,698 7,279 19.5
Operating profit - continuing 8,898 7,469 19.1
operations
Profit before taxation 8,174 6,605 23.8
Earnings per share 15.8p 13.3p 18.8
Dividends
_________
Dividends per share (net) 7.2p 6.5p 10.8
Dividend cover (times) 2.2 2.0 10.0
Cash flow statement
___________________
Net cash inflow from continuing
operating activities before
property disposal proceeds 6,856 5,661 21.1
Operating profit conversion 79% 78% 1.3
Net cash inflow before financing 1,267 3,725 (66.0)
Balance sheet
______________
Debt (net) 2,449 3,837 (36.2)
Gearing 7% 12% (40.5)
Interest cover (times) 12.3 8.6 43.0
Net assets 35,450 33,049 7.3
Net assets per share 100.5p 93.7p 7.3
RESULTS SUMMARY & DIVIDEND
Results
Pre-tax profits increased by 24% to #8.2 million (1996, #6.6
million). Earnings per share increased by 19% to 15.8 pence
(1996, 13.3 pence), slightly less than the pre-tax profits
growth rate because of the return to a more normal tax rate of
32.0% (1996, 29.5%). The Group's sales in the year were #93.2
million (1996, #92.8 million). Like-for-like publishing sales,
excluding the effects of currency translation differences,
discontinued agency business and rationalised distribution
services, grew by 6%. Net debt was reduced at the year end to
#2.5 million (1996, #3.8 million) and net assets rose to #35.5
million (1996, #33.0 million).
Dividend
The Board is recommending payment of a final dividend of 5.0
pence net per share (1996, 4.5 pence net per share), making a
total dividend for the year of 7.2 pence net per share (1996,
6.5 pence net per share). This 11% increase in the total
dividend gives dividend cover of 2.2 times (1996, 2.0 times).
The final dividend will be payable on 19th May 1998 to
shareholders on the register at the close of business on 24th
April 1998.
REVIEW OF MARKETS, STRATEGY & PROSPECTS
The record results achieved in 1997 reflect the benefits of
publishing policies that have been developed and implemented
over at least the last three years. Building successful book
publishing programmes requires patient, thoughtful and very
detailed work but we have now created a good quality platform
for further earnings growth.
UK Consumer Publishing
Following the ending of the Net Book Agreement in 1995, a
development for which we vigorously campaigned, UK book
retailing has begun to enjoy significant growth. This has been
apparent in the specialist bookselling sector, as evidenced by
figures announced by the wholesalers who primarily serve
independent booksellers and by chains such as Waterstone's,
Dillons, Books etc and Ottakars. The chains have plans to open
more stores of all sizes. With the entry of the USA-based
Borders 'superstore' operator into the market and the early
success of the Waterstone's superstore in Glasgow, there is now
the prospect that the British reading public will have access
to perhaps 20 or 30 bookshops of over 20,000 square feet, each
carrying over 100,000 titles, within the next three years. The
new management at WH Smith has affirmed its commitment to books
and has recently increased its range of titles by 25%.
Simultaneously, most of the major supermarket chains and
Woolworths have increased space devoted to books, with
substantial consequent increases in sales. As a result of the
latter development, and to some extent discounting by other
booksellers, the quantities that can be sold of popular
bestsellers - especially in hardback editions - have risen
dramatically. At the same time, however, funding of public
libraries has fallen. It has also been a difficult time for
book clubs.
Our editorial response to these overall market developments has
been assertive. We have substantially raised the estimated
sales value thresholds beneath which we do not take on new
titles. Instead, we concentrate on acquiring or commissioning
potential retail bestsellers that can benefit from being
merchandised in the full range of outlets now available and
that do not rely on library support. In fiction publishing, for
both adults and children, and in religious publishing, this
policy has to be pursued with sensitivity. We take into account
the long-term potential of authors as much as any immediate
bestseller potential. Indeed, we have been outstandingly
successful in finding and developing new and relatively
unexposed writing talent.
Our marketing approach has also developed boldly. We are
supporting potential bestsellers with PR and marketing
campaigns of unprecedented magnitude. We have tiered our sales
forces into separate groupings to specialise in selling our
titles in each sector of the market. We have introduced
telephone selling and merchandiser operations to maximise
repeat order business, and we are currently establishing a full-
time direct sales team.
This strong but adaptable editorial and marketing approach to
Britain's radically changed consumer book marketplace delivered
strong results in 1997 and offers good growth for the future.
UK Educational, Academic & Professional Publishing
Funding of UK state schools has recently been flat. We are
campaigning, alongside other publishers, for the Government to
improve the situation either by allocating more public funds or
by introducing a greater element of parental purchase, or both.
Meanwhile we are seeking to increase our share of the schools
and colleges markets by broadening the subject areas in which
we publish, mostly concentrating on core textbook projects, and
by ever stronger marketing activity.
At least in the foreseeable future, better growth prospects are
apparent in the home learning area. In 1997, we added a very
successful range of revision guides to our Teach Yourself
series. This range will be further developed and we have plans
to expand our home learning publishing very substantially,
creating new series both under our own imprints and as own
brand titles for leading retailers.
At Arnold, we are concentrating on publishing core textbook
titles and producing, primarily for sale to professionals and
libraries, major reference works and journals that are central
to the subject areas they address.
Overseas Operations
We have been improving the quality of our overseas companies by
developing high calibre local publishing lists. Normally, the
development (from a very small base) of such lists would be a
slow process. However, our attempt to accelerate the process
by buying Moa Beckett Publishers in New Zealand at the end of
1994 has been far more successful than we dared hope at the
time. Largely because of the excellent sales of the Anne Geddes
range of books, our New Zealand company enjoyed an even better
year in 1997 than in 1996. In years when there are relatively
few new Anne Geddes titles and the markets themselves are flat
(and both these factors are likely to be present in 1998), the
inevitably slow pace of developing underlying profits growth
from local publishing will be more apparent. Nevertheless, the
local publishing strategy is valid and will produce better
results over the years ahead than could be derived from
exclusive reliance on distributing British books.
The Electronic World
The exponential worldwide growth in screen-based and other
electronic communication provides both challenges and
opportunities for any business that essentially sells
information and entertainment.
From a production point of view, we have the skills and other
resources necessary to create substantial ranges of multi-media
products. It is therefore both the perception that worldwide
markets have quickly become saturated and the fact that well
over half our sales are of novels (which nobody wants to read
on a screen) that continue to prevent us from making large
investments in electronic publishing at present. Nevertheless,
where levels of demand promise adequate profits, we are
publishing electronically. In addition to our spoken word audio
list, we are now, for example, publishing on-line journals and
CD-ROM reference and language teaching materials. We shall
continue to build our range of electronic products and this
will become increasingly important.
From a marketing point of view, Internet bookselling seems
likely to develop into an important sales channel. We are
working with Internet booksellers to make the best of this new
marketing opportunity by digitising all our marketing
information and organising promotions via the Internet. We are
ensuring that, when Hodder Headline titles compete with
American editions available via the Internet, our books are
published earlier, or simultaneously, at competitive prices and
with vigorous marketing support. By taking this positive
approach we are confident that we shall benefit to the fullest
extent from the development of this important new sales
channel.
Summary of Group Current Trading and Prospects
The Group's sales in January and February 1998 were up by 9%
compared to the same period in 1997. For this period there was
no significant difference between reported sales and like-for-
like sales.
We continue to plan for profitable growth generated by our own
editorial and marketing initiatives rather than by any expected
overall growth in our markets. However, the condition of the
UK consumer book market remains encouraging at present and, as
this market accounts for just over half of the Group's sales,
its buoyancy could be helpful.
The prospects for each of our main businesses are set out below
in the Segmental Operating Reviews. In summary, the Group is
looking forward to another year of good progress in 1998.
We are planning further ahead than ever before and we are well
advanced in acquiring and developing high quality new
publishing projects for 1999 and later years. Throughout the
Group, we continue to place great emphasis on striving to
provide the very best possible service to our authors and our
customers. It would not be possible for us to continue growing
and prospering without the support they give us in return. The
number and calibre of new authors joining us, together with the
loyalty of existing authors, is extremely encouraging and
further underpins our confidence in a bright future.
GROUP OPERATING REVIEW
Operating Profits
Group operating profits increased in the year by 19% to #8.9
million (1996, #7.5 million) with our operating margin widening
to 9.6% of sales (1996, 8.0%). Most of the profits growth came
from our largest business segment, UK Consumer Publishing, with
Headline producing excellent growth, following changes we made
in 1996, and with strong performances from all the Hodder &
Stoughton divisions. Across the Group, the key positive
factors for operating profit were improved gross margins and
increased income from joint publishing arrangements and
subsidiary rights.
Underlying Sales Growth
Like-for-like publishing sales increased by 6%. This was led by
our UK Consumer Publishing segment where like-for-like sales
grew by 10%. The Group's reported total sales grew only
slightly, to #93.2 million (1996, #92.8 million). This was a
planned and temporary pause in our sales growth as noted in
last year's Annual Report. We have been discontinuing low
margin agency and door-to-door business in overseas markets and
terminating unprofitable third party distribution contracts in
the UK. Now that these policy changes have been implemented, we
expect the Group's reported sales growth to be resumed.
Gross Margins
For the full year, the Group's gross margins increased to 47.1%
(1996, 45.5%). Improved margins from the UK Consumer Publishing
segment were the principal factor. The improvement was driven
by a reduction in the number of lower volume, lower margin
titles that were published, accompanied by significantly
increased average sales per title from the titles that we did
publish. The economies of scale involved in higher average
print runs more than offset the costs of major marketing
campaigns and incentives to retailers.
Overheads
Distribution costs rose by 4.4% to #10.0 million (1996, #9.6
million). This largely reflected the incremental costs of our
Next Day service to UK retailers, investment in direct sales
services and other pre-retailing services. These enhanced
services supported the sales and marketing initiatives
underlying the sales and margin growth in our UK Consumer
Publishing segment. Administrative expenses grew by 3.0% to
#28.7 million (1996, #27.9 million) as we continue to keep
overall costs under tight control.
Other Income
Other operating income increased to #3.5 million (1996, #2.5
million) in the year. This increase was largely due to the
continued phenomenal success of our joint publishing
arrangement for the works of Anne Geddes, the internationally
renowned photographer. Income from interests in associated
undertakings and joint ventures also grew.
SEGMENTAL OPERATING REVIEWS
UK Consumer Publishing
1997
UK Consumer Publishing operating profits increased by 35% to
#5.3 million (1996, #3.9 million) on sales up by 9% to #58.9
million (1996, #53.9 million). All divisions recorded strong
performances.
The sales growth was primarily driven by increased unit sales
per title and tight control of pricing despite pressure for
higher discounts from most retailers. All divisions continued
to implement the Group's margin-enhancing policy of forcefully
marketing fewer new titles and strongly promoting the backlist.
Prospects
The continued benefits in all the divisions of the consumer
publishing policies outlined above, together with substantial
further growth expected at Headline, offer the prospect of
another year of significant progress for Hodder Headline's UK
Consumer Publishing.
UK Educational, Academic & Professional Publishing
1997
The Group's UK Educational, Academic & Professional segment
continued to expand in 1997, with sales up by 6% to #20.6
million (1996, #19.4 million) and operating profits up by 7% to
#2.6 million (1996, #2.5 million).
Gross margins improved in the year and increased gross profits
were largely re-invested in further editorial and marketing
capacity to fuel future expansion.
Prospects
We have been developing publishing programmes that are designed
to generate editorially led growth each year in these important
publishing areas, without assuming any positive new funding
factors in the relevant markets. We therefore expect progress
to continue well.
Overseas Operations
1997
Overseas Operations sales were #17.6 million, down from #22.8
million in the prior year. As we have mentioned in previous
reports, the 1996 sales included #3.8 million of discontinued
sales from agency and door-to-door business. There were also
exchange rate differences of #0.6 million. These are the
primary reasons for the lower 1997 figure. However, very
difficult market conditions in Australia also had an impact on
sales.
Operating profits amounted to #0.9 million (1996, #1.6
million). The Anne Geddes list in New Zealand had a record
year. However, this was offset by the implications of the
difficulties in the Australian marketplace. South Africa's
contribution was similar to the previous year in a tough but
promising market.
Prospects
Overseas consumer book markets are likely to remain soft and
1998 will be a year of re-adjustment as we respond to these
conditions. However, not least thanks to a major new Anne
Geddes project scheduled for 1999, the longer term prospects
are more encouraging.
UK Distribution and Other Activities
Our wholly owned UK warehousing and customer service company,
Bookpoint, recorded a nominal operating profit in 1997 (1996,
loss #0.5 million). This improvement was achieved by driving
through productivity, quality and service gains. We also
continued to rationalise the number of third party clients
which now amounts to 26, down from over 90 three years ago.
We have not included a full report on this segment this year,
nor do we intend to in the future, now that we have returned
Bookpoint to break-even and the operation represents only 2% of
the Group's consolidated sales.
We shall continue to invest in people, training and equipment
to deliver further service improvements in 1998.
GROUP FINANCIAL REVIEW
Interest
The net interest charge of #0.7 million in 1997 was 16.2% lower
than in 1996. This was achieved through lower borrowing levels
throughout most of the year. The underlying average rate of
interest for the year was approximately 8.0%. Interest cover
improved to 12.3 times compared with 8.6 times in 1996.
Effective Tax Rate
The tax charge for the year was #2.6 million, producing an
effective tax rate of 32.0% (1996, 29.5%). This compares with
a weighted standard rate of taxation of 31.3% for the main
countries in which the Group operates. The lower 1996 effective
rate benefited from the final reinstatement of tax losses
previously utilised in Hodder & Stoughton Limited against
dividend income at a rate of 25.0% and subsequently utilised
against taxable profit at 33.0%.
Year End Net Debt and Gearing
During the year, net debt once again benefited from positive
underlying free cash flow. This resulted in net debt decreasing
from #3.8 million to #2.5 million and gearing reducing to 6.9%
from the 1996 year end level of 11.6%.
Cash Flow and Funding
In 1997 net cash flow from continuing operations, before
property disposal proceeds of #0.2 million, was #6.8 million
(1996, #5.7 million before property disposal proceeds of #3.4
million). This represents 78.8% of operating profits (1996,
77.8%) and is after a further net investment of #4.7 million
(1996, #2.8 million) in new copyright assets, as the Group
continues to add to its future publishing programme.
Underlying free cash flow, before payments in respect of
dividends, the acquisition of subsidiary undertakings and
property disposal proceeds, amounted to #3.4 million. This
compares favourably with the previous year's underlying free
cash flow of #2.8 million, especially when the #4.7 million net
investment in copyright assets made during 1997 is taken into
account.
Working capital throughout the Group was carefully managed,
with stock being reduced from 1996 levels and the ratio of
stock compared to sales continuing the previous two years'
trend by falling from 19.5% to 19.2%. In February 1998, the
Group reviewed and increased from #20.0 million to #30.0
million its bank facilities in the United Kingdom, which
comprise a mixture of two-and four-year committed facilities.
Exchange Rates
In the second half of the year, the Group changed its
accounting policy relating to the translation into sterling of
the trading results of foreign subsidiaries from year end rates
to average rates for the year. This change was made to enable
the Group's results to reflect more accurately the underlying
performance of the business, as the value of sterling
fluctuates. It has also been made in a year when the effect on
the Group's results is minimal; for example, earnings per share
have changed by less than 0.1 pence. In view of the immaterial
effect of this change of policy on the 1996 results, the latter
have not been restated.
The average exchange rates used and those that would have been
used under the previous policy, together with the Group's
associated turnover, pre-tax profits and earnings per share are
as follows:
Current Policy Previous Policy
(Average Rates (Closing Rates as
for the years at
ended 31st December)
31st December)
1996 1997 1996 1997
__________________ _______ ________ ______ ______
Exchange Rates
Australian Dollar 2.01 2.24 2.16 2.53
New Zealand Dollar 2.29 2.52 2.42 2.83
South African Rand 6.74 7.56 8.00 8.01
__________________ _______ ________ ______ ______
Results
#000 #000 #000 #000
Turnover 94,525 93,162 92,830 91,276
Pre-tax profits 6,688 8,174 6,605 8,112
Earnings per share 13.4p 15.8p 13.3p 15.7p
__________________ _______ _______ ______ _______
Purchase of Own Shares
The Directors consider that it would be beneficial to the
Company if, in certain circumstances, the Company had the power
to purchase its own Ordinary Shares. At the present time, the
Directors have no wish to exercise the power to purchase any of
the Shares of the Company. However, they consider it is
appropriate to have the flexibility to do so. Accordingly, they
will be recommending that power in certain circumstances to buy
in and cancel Ordinary Shares should be granted for a limited
period. The Directors would only implement such purchases if
they were satisfied, after careful consideration, that these
would be in the best interests of the Company and all its
shareholders and would result in an increase in expected
earnings per share. Furthermore, account would be taken of the
overall financial implications for the Company. A special
resolution will be proposed at the Company's Annual General
Meeting authorising the Directors to purchase up to a maximum
of 3,527,296 Ordinary Shares, 10 per cent of the issued share
capital of the Company.
Financial Statements
The Group's profit and loss account, balance sheet and cash
flow statement as at 31st December 1997 are set out below.
CONSOLIDATED PROFIT & LOSS ACCOUNT
YEAR ENDED 31ST DECEMBER
1997 1996
Note #000 #000
Turnover - 2 93,162 92,830
continuing operations
Cost of sales (49,314) (50,568)
_______ _______
Gross profit 43,848 42,262
Distribution costs (10,004) (9,582)
Administrative expenses (28,687) (27,854)
Other operating income 3,541 2,453
_______ ________
Operating profit - before
interests in associated undertakings
and joint ventures 8,698 7,279
Income from interests in associated
undertakings and joint ventures 200 190
_____ _____
Operating profit - continuing
operations 2 8,898 7,469
Net interest payable and
similar charges (724) (864)
Profit on ordinary activities
before taxation 8,174 6,605
Tax on profit on ordinary
activities 3 (2,616) (1,948)
_______ _______
Profit on ordinary activities
after taxation 5,558 4,657
Equity minority interests (1) 15
______ ______
Profit for the financial year 5,557 4,672
Dividends 4 (2,540) (2,292)
_______ _______
Retained profit for the financial
year transferred to reserves 3,017 2,380
======= =======
Earnings per share 5 15.8p 13.3p
CONSOLIDATED BALANCE SHEET
31ST DECEMBER
1997 1996
Note #000 #000
Fixed assets
Intangible assets 495 536
Tangible assets 3,695 3,900
Investments 358 373
_______ ______
4,548 4,809
_______ ______
Current assets
Stocks 17,880 18,144
Debtors 45,123 42,976
Cash at bank and in hand 3,492 1,341
_______ _______
66,495 62,461
Creditors : amounts falling due within one
year (29,110) (32,029)
_______ _______
Net current assets 37,385 30,432
_______ _______
Total assets less current liabilities 41,933 35,241
Creditors : amounts falling due after more
than one year (5,582) (921)
Provisions for liabilities and charges (901) (1,271)
_______ ________
Net assets 2 35,450 33,049
======== =========
Capital and reserves
Called up share capital 3,527 3,527
Share premium account 17,256 17,248
Merger reserve 3,171 3,171
Profit and loss account 11,468 9,075
_______ _______
Equity shareholders' funds 6 35,422 33,021
Equity minority interests 28 28
_______ _______
Shareholders' funds 35,450 33,049
======= =======
CONSOLIDATED CASH FLOW STATEMENT
YEAR ENDED 31ST DECEMBER
1997 1996
Note #000 #000
Net cash inflow from operating
activities
Net cash inflow from continuing operating
activities 7,038 9,119
Cash outflow in respect of prior year
acquisition and reorganisation provisions (442) (757)
____ _____
7 6,596 8,362
_____ _____
Dividends from joint ventures and associated
undertakings 186 83
_____ _____
Returns on investment and servicing of finance
Interest paid (781) (1,077)
Interest received 111 207
______ _____
Net cash outflow from returns on investment and
servicing of finance (670) (870)
_____ _____
Taxation
UK corporation tax paid (981) (519)
Overseas tax paid (302) (129)
______ _____
Tax paid (1,283) (648)
______ _____
Capital expenditure and financial investment
Purchase of tangible fixed assets (1,272) (769)
Purchase of intangible fixed assets - (30)
Proceeds from sale of tangible fixed assets 73 94
______ _____
Net cash outflow from capital expenditure and
financial investment (1,199) (705)
______ _____
Net cash outflow from the acquisition of
subsidiary undertakings - (206)
______ _____
Equity dividends paid (2,363) (2,291)
______ ____
Net cash inflow before financing 1,267 3,725
______ _____
Financing
Issue of ordinary share capital 8 23
Proceeds from new borrowings 5,000 -
Repayment of loans (142) (3,858)
Capital element of finance lease payments (504) (461)
Receipts from new finance leases - 25
______ _____
Net cash inflow/(outflow) from financing 4,362 (4,271)
______ _____
Increase / (decrease) in cash 5,629 (546)
====== ======
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
YEAR ENDED 31ST DECEMBER
1997 1996
Note #000 #000
Increase / (decrease) in cash in the year 5,629 (546)
Cash (inflow)/outflow from (increase)/decrease
in debt and leasing finance (4,354) 4,294
_______ ______
Change in debt resulting from cash flows 1,275 3,748
Other finance lease movements (73) 11
Currency translation differences 186 (4)
_____ _____
Movement in net debt in the year 1,388 3,755
Net debt at 1st January (3,837) (7,592)
_____ _____
Net debt at 31st December 8 (2,449) (3,837)
======= =======
NOTES TO THE PRELIMINARY RESULTS
1. BASIS OF PREPARATION
The figures in this Preliminary Statement represent an abridged
version of the Group's full accounts for the financial year
ended 31st December 1997, upon which the Group's auditors have
given an unqualified report dated 9th March 1998.
The 1997 Annual Report and Accounts will be posted to all
shareholders by 1st April 1998 and both this Statement and the
Annual Report and Accounts will be available on request from
the Company Secretary, Hodder Headline PLC, 338 Euston Road,
London NW1 3BH.
2. SEGMENTAL ANALYSIS
Total Intra- Ext Intra- Ext
Group ernal Total Group ernal
sales sales sales sales sales sales
_____ _____ _____ _____ _____ _____
1997 1997 1997 1996 1996 1996
#000 #000 #000 #000 #000 #000
Turnover - continuing operations
UK Consumer
Publishing 58,869 (5,181) 53,688 53,874 (4,915) 48,959
UK Educational,
Academic, &
Professional
Publishing 20,593 (604) 19,989 19,415 (485) 18,930
Overseas
Operations 17,591 (214) 17,377 22,773 (453) 22,320
UK Distribution 9,790 (7,682) 2,108 9,510 (6,889) 2,621
______ _______ _____ ______ ______ _____
106,843 (13,681) 93,162 105,572 (12,742) 92,830
======= ======== ======= ======= ======= ========
1997 1997 1996 1996
#000 #000 #000 #000
Profits
UK Consumer Publishing
- Group 5,283 3,893
- associated undertakings 40 52
_____ _____
5,323 3,945
UK Educational, Academic
& Professional Publishing 2,628 2,452
Overseas Operations 783 1,480
- Group
- joint ventures 160 138
_____ _____
943 1,618
UK Distribution 4 (546)
_____ _____
Operating profit - continuing
operations 8,898 7,469
Net interest payable and similar
charges (724) (864)
Profit before taxation 8,174 6,605
======= ======
2. SEGMENTAL ANALYSIS continued
1997 1997 1996 1996
#000 #000 #000 #000
Net assets
UK Consumer Publishing
- Group 25,980 23,946
- associated
undertakings 134 178
_______ ______
26,114 24,124
UK Educational, Academic &
Professional Publishing 5,527 4,762
Overseas Operations
- Group 4,602 6,451
- joint ventures 229 195
---- -----
4,831 6,646
UK Distribution 1,427 1,354
_____ _____
Net operating assets 37,899 36,886
Unallocated net assets:
Net borrowings (2,449) (3,837)
_____ _____
35,450 33,049
====== =====
3. TAX ON PROFIT ON ORDINARY ACTIVITIES
1997 1996
#000 #000
United Kingdom
Corporation tax at 31.5% 2,272 1,546
(1996, 33.0%)
Deferred taxation (19) 151
Adjustments in respect of (9) (31)
prior years ____ _____
2,244 1,666
Overseas tax 361 267
____ ____
2,605 1,933
Associated undertakings 11 15
____ ____
2,616 1,948
===== =====
4. DIVIDENDS ON EQUITY SHARES
1997 1997 1996 1996
Pence Pence
per per
share share
(net) #000 (net) #000
Ordinary Shares
of 10p each :
Interim paid 2.20 776 2.00 705
Final proposed 5.00 1,764 4.50 1,587
_____ _____ _____ _____
7.20 2,540 6.50 2,292
===== ===== ===== =====
5. EARNINGS PER SHARE
The calculation of earnings per share is based on the profit
for the financial year of #5,557,000 (1996, #4,672,000).
Earnings per share have been calculated using the weighted
average number of shares in issue during the year of 35,268,649
(1996, 35,249,710).
Fully diluted earnings per share would not be materially
different.
6. RECONCILIATION OF MOVEMENT IN EQUITY SHAREHOLDERS' FUNDS
1997 1996
#000 #000
Profit attributable to members
of the Company 5,557 4,672
Dividends (2,540) (2,292)
______ ______
3,017 2,380
Capital subscribed 8 23
Exchange rate differences (624) (217)
______ ______
Net movement in equity
shareholders' funds 2,401 2,186
Opening equity shareholders' 33,021 30,835
funds ______ ______
Closing equity shareholders'
funds 35,422 33,021
====== ======
7. RECONCILIATION OF OPERATING PROFIT TO NET CASH FLOW FROM
OPERATING ACTIVITIES
1997 1996
#000 #000
Operating profit - before interests 8,698 7,279
in associated undertakings and
joint ventures
Adjustments to operating profit :
Depreciation and amortisation
charges 1,391 1,393
Loss on sale of tangible
fixed assets 39 32
(Increase)/decrease in working capital :
Proceeds from sale of property
held for sale 182 3,458
Stocks (300) 117
Debtors (4,168) (6,709)
Creditors 1,105 3,455
Increase in acquisition and
reorganisation provisions 91 94
______ ______
Net cash inflow from contiuing
operations 7,038 9,119
Cash outflow in respect of prior
year acquisition and reorganisation
provisions (442) (757)
______ _____
Net cash inflow from operating
activities 6,596 8,362
====== ======
8. ANALYSIS OF CHANGES IN NET DEBT DURING THE YEAR
Effect
of
At 1st Net foreign At 31st
January cash Other excha- Decem-
nge ber
1997 flow changes rates 1997
#000 #000 #000 #000 #000
Cash at bank and in 1,341 2,007 - 144 3,492
hand
Bank overdrafts (3,620) 3,622 - (2) -
______ ______ ______ ______ ______
(2,279) 5,629 - 142 3,492
Borrowings due within
one year (142) 142 - - -
Borrowings due after one
year - (5,000) - - (5,000)
Finance leases (1,416) 504 (73) 44 (941)
______ ______ ______ ______ ______
(1,558) (4,354) (73) 44 (5,941)
______ ______ ______ ______ ______
Net debt (3,837) 1,275 (73) 186 (2,449)
====== ====== ====== ====== ======
9. COMPANY INFORMATION
The Annual General Meeting will be held at 338 Euston Road,
London NW1 3BH, at 10.00 a.m. on Wednesday 6th May 1998.
END
FR FCFCNNDKDFNK
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