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Chairman
Padraic Fallon
Managing Director
Richard Ensor
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Leading the way in annual branded events
Annual repeat events such as the
Euromoney Bond Investors Congress, the Euromoney Global Borrowers
& Investors Forum and the Coaltrans conference have proved
to be robust revenue streams. |
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Adjusted operating profits of
Euromoney Institutional Investor, the separately listed international
publishing, conference and training group of which the Group holds
71%, increased 3.5% to £29.1 million. These results have been achieved
against a background of some of the worst trading conditions ever.
Revenues for the year fell 12% to £180 million driven by the worldwide
downturn in markets and corporate activity; the huge marketing spend
and headcount reductions implemented by the global investment banks;
the loss of investor confidence following the high profile accounting
scandals in the US; and continued fears since 11th September of
terrorist activity and possible war which have badly affected air
travel.
Euromoney derives approximately two thirds of its revenues from
the financial sector. As a result the financial publishing and training
businesses were hit hardest by the downturn. Advertising revenues
fell 11% to £66 million and advertising into the group's financial
titles fell 20%. Institutional Investor, with its heavy dependence
on Wall Street, suffered a 30% fall in advertising. Euromoney magazine,
which is more dependent on emerging markets, fell 22%. Training
revenues were down 20% to £22 million. In sharp contrast, advertising
into business titles increased by 2% to £27 million, helped by the
full year inclusion of Gulf Publishing acquired in August 2001.
The group's continued focus on subscription products, such as ISI's
emerging markets information service, is highlighted by the fact
that subscription revenues (excluding titles closed at the beginning
of the year) fell by just 1%. Event sponsorship was the strongest
revenue stream, increasing 5% to £13 million. The increase in profits
was achieved largely as a result of strategic initiatives taken
by management at the end of 2001 and continued with a rigorous cost
reduction programme implemented during the first half. The closure
of certain loss-making businesses at the end of last year, the restructuring
of under-performing businesses and the elimination of loss-making
and low margin products, particularly anything internet related,
contributed savings of £2.7million. ISI achieved its target of moving
into profit by the end of the year, contributing a saving of £3.7
million. Headcount was reduced from 1,684 at the beginning of the
year to 1,358 at the end of September, giving rise to one-off costs
of nearly £1 million. Most of this 20% reduction in headcount was
completed during the first half. Space commitments were cut and
other costs were reduced through re-negotiation of rates. 
Euromoney's operating margin improved from 13.7% to 16.2%. Profits
from financial publishing fell from £20.1million to £13.8 million
due to the fall in financial advertising. But even in these tough
conditions, titles such as Euroweek, Global Investor and Project
Finance managed to grow their profits.
Business Publishing, which mainly covers the legal, energy, pharmaceutical
and travel sectors, performed much better. Profits increased 6%
to £6.3 million. Both Legal Publishing and Engel Publishing, our
pharmaceutical marketing business, increased second half profits
after a difficult start to the year. Gulf Publishing contributed
a profit of £200,000 after a first half loss. The Business Traveller
group of titles recovered well after the impact of 11th September
and also increased profits.
Training businesses are very sensitive to delegate numbers. Travel
concerns, budget cuts and headcount reductions badly affected course
numbers at both our financial and audit and IT security training
businesses. As a result, Training profits fell £2.3 million to £4.4
million. Conferences and seminars were the best performing part
of the business. Profits increased £2.4 million to £8.4 million,
most of the improvement coming in the first half when the group
runs four of its five largest events including Vinisud, the biennial
wine exhibition in France. Many of our conferences follow the sponsorship
model rather than relying on paying delegates. Sponsorship has proved
to be a surprisingly robust revenue stream, reflecting in part the
quality of large annual repeat events such as the Euromoney Bond
Investors Congress, the Euromoney Global Borrowers & Investors Forum
and the Coaltrans annual coal conference. During the last couple
of years we have invested in two new event streams, business meetings
and awards dinners, and both these achieved strong revenue growth.
Databases and information services contributed a profit of £1.8
million after a loss last year of £2.7 million. Most of the improvement
came from ISI, the emerging markets information provider, which
broke into profit at the end of the year as forecast. ISI suffered
during the year from high cancellations from financial institutions
but still managed to increase its subscription revenues by 8%. The
performance in the second half was much stronger than the first.
Government agencies and corporates have been the main source of
growth and financial customers now only account for 45% of the total.
The cost base of ISI is relatively fixed and the infrastructure
is in place to develop quickly and cheaply new revenue streams from
industry and sector products. Other database products, particularly
the capital market databases run through the joint venture with
Dealogic, continued to grow.
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