RNS Number:2095L
Mice Group PLC
19 May 2003
MICE GROUP PLC
Preliminary Results for the year ended to 28 February 2003
MICE Group Plc, the international marketing support services group, announces
record results for the year ended 28th February 2003.
Highlights:
* Turnover up 33% to #120.3 million (2001: #90.2 million)
* Group profit before tax and exceptionals has grown by 13% to
#7.1 million (2001: #6.3 million)
* Earnings per share, including exceptionals, of 7.38p (2001:7.28p)
* Exceptional property gain of #1.6 million (1.82p per share)
* Net debt of #21.6 million is exactly equal to the value of freehold
property
* Interest is covered 5.6 times by pre-exceptional operating profit
Commenting on the results, Chairman Mike Curley, said:
"This is our eighth successive set of record breaking results and with a #60
million order book this trend should continue."
Enquiries:
MICE Group Plc 020 7466 5000 (today only)
Mike Curley, Chairman
Buchanan Communications 020 7466 5000
Mark Edwards/Bobby Morse
CHAIRMAN'S STATEMENT
REVIEW OF RESULTS
I am very pleased to announce the eighth successive set of
record results since our public listing in December 1994. Previously our annual
figures were prepared on a calendar year basis and therefore for ease of
comparison and to give a clearer understanding of the Group's trading
performance, the figures for year ending 28th February 2003 are compared to the
pro forma figures for the twelve months ended 31st December 2001.
Group turnover for the year ended 28th February 2003 was #120.3 million compared
to #90.2 million for the twelve months to 31st December 2001. Group profit
before tax and exceptionals was #7.1 million compared to #6.3 million, which
represents an increase of 13%.
During the year ended 28th February 2003 there was an exceptional profit of
#1.6 million from the sale and leaseback of property occupied by Marler Haley,
which increased the Group profit before tax to #8.7 million.
Subsequently earnings per share for the year, including exceptionals, are 7.38p
compared to 7.28p for the twelve months to 31st December 2001.
Following these results the Board has recommended a final dividend for the
period of 1.27p which, together with the interim dividend of 0.48p paid in
December 2002, gives a total dividend for the year of 1.75p and maintains the
previous years dividend policy.
These results again show that, despite the background of world recession, your
company continues to grow successfully and has, once more, achieved market
expectations.
REVIEW OF OPERATIONS
The MICE Group Plc growth has been achieved both organically and through a
series of strategic acquisitions. In all there are now 34 operations within the
Group. These enhance our ability to offer an integrated range of services to
all our clients. Such a spread of activities necessitates a highly focused
management structure with clear lines of reporting. To this end your Board
undertook last year a review of the management structure of the Group and agreed
to divide the Group into 3 reporting divisions.
International Division
The International Division incorporates eighteen operating
companies which are individually managed and report to Jim Curley, who is the
Divisional Chief Executive Officer.
The Division provides design services, project management and the organisation
of conferences, road shows, leisure projects, product launches and international
events.
The European operations are based in Germany and Belgium. In 2003 designafairs
exhibition services GmbH was acquired for #1.6m, with a turnover of #11.6
million and pre-tax losses of #1.7 million. The acquisition brings exceptional
client service and professional project management to the Division's continental
European operations.
The International Division achieved enhanced growth during the
year by providing single source solutions and developing global relationships
with multinational clients.
U.K. Division
There are ten operating companies within the U.K. Division which
are individually managed and report to the Divisional board.
The Division works closely with the other divisions of MICE
Group to support the provision of a turnkey range of services, with
approximately ten per cent of the Division's sales being made to fellow Group
companies.
During the year ended 28th February 2003 the Division continued
its strategy of integrating businesses acquired during recent years. As part of
this programme, the operations of Marler Haley were reorganised and a #2.7
million acquisition was integrated in order to provide enhanced capabilities and
further capacity to support the development of the Group. In addition, the
Division is developing a stronger presence by providing services to the health
and education sectors which present significant opportunities for growth.
The U.K. Division also provides design, project management and
installation services for multinational clients wishing to create brand
experiences. Amongst the many projects undertaken during the year were
contracts for Ford, Tesco, Sygnet, WH Smith, Bang & Olufsen, Next and British
Airways.
North American Division
The six operating companies located in the U.S.A. and Canada
work closely together and report to the Divisional Chief Executive Officer, Paul
Mullen.
North American Division (continued)
During the year Paul Mullen and his team opened the headquarters
of MICE North America Inc. in Las Vegas - Nevada and launched MICE Creative in
Hollywood, Los Angeles - California. Both of these supplemented existing
operations in Phoenix - Arizona, San Francisco - California and MICE Kadoke the
leading design and exhibition company in Canada.
In July 2002 the Group acquired Delta Management Services Inc., which is based
in Orlando - Florida, and has a further twenty-six city offices throughout the
U.S.A.
During September 2002 the business of Displayworks Inc. in Irvine - California,
San Francisco - California and Portland - Oregon was acquired at a cost of #4.3
million. During it's financial period before acquisition, Displayworks made a
loss before tax of $1 million. The business offers full service programmes for
the design and fabrication of trade show exhibits and corporate interiors. MICE
have since opened further branches of MICE Displayworks in both Dallas - Texas
and San Diego - California.
The North American Division is now operating profitably and
experiencing growth in both it's enquiry levels and order book. The further
growth of the Division is an essential part of the Group strategy of becoming
the leading provider of below the line marketing support services on a global
scale. The client relationships that are being formed and the prospects for
this new operation are very encouraging.
Within each of these divisions therefore considerable progress has been made in
developing the business as a whole. At the same time, it should also be noted
that along with the growth of the Group there has been a subtle change in the
mix of the so called creative and manufacturing aspects of the business. While
both elements are continuing to grow the creative side is progressively becoming
more significant.
EXPOCENTRIC
The Expocentric operations are now profitable due to the
rationalisation and integration programmes undertaken in relation to this
company. Following acquisitions and re-organisations at a cost of more than #7
million, this business is now established with an efficient overhead structure
and has further developed the provision of on-line delegate registration
services in relation to conferences and exhibitions.
On 19th March 2003 MICE announced the completion of the
acquisition of certain property leases and assets of The Color Co, for a sum of
#2.8 million, including costs, for use by Expocentric as communication centres.
In addition to the existing range of services, these centres will also offer
on-line interactive sale and distribution of exhibition and conference related
products. The Expocentric operation has now been fully integrated into the
International Division.
ORDINARY SHARES BUYBACK
Between September 2001 and 31 August 2002 as per the mandate vested in the Board
7,817,188 shares were purchased and cancelled at an average price of 62.4p. The
company has also purchased 1,080,000 shares at an average price of 68.9p to hold
against an employee share savings scheme which is in place with an option to
convert at 74p per share. The cash cost of this operation totalled #5.6 million.
EMPLOYEES
The Group results and continued growth can only be achieved with the very hard
work, skills and dedication of our employees. The nature of work undertaken by
Group companies often involves absolute deadlines over wide geographic areas.
The Board joins me in thanking all employees for the part each one of them has
played in the continuing expansion of the business.
YOUR BOARD
With the growth and development of the Group we continue to
develop the MICE management teams. The management of the Group is structured to
support strong operational performance and corporate governance.
After 23 years of loyal service Peter Dillon has retired from
the Board and we wish to thank him for the substantial contribution that he has
made over this period to the success of the company. We are pleased to
confirm that Mr. Dillon has agreed to work with us from time to time in the
future on a mutual basis as a consultant.
Sir Richard Needham has resigned his position as non-executive
director in order to pursue other business interests and I would personally like
to add my thanks, to those of the Board, for the valuable contributions he has
made over the last five years.
George Kadoke has also retired from the Board as a non-executive
director having been involved with MICE Group for four years. He was a founder
of our Canadian operations some 42 years ago, and we are pleased to confirm that
Mr. Kadoke has also agreed to work with us from time to time on a mutual basis
as a consultant.
In recognition of the contribution made by Stephen Barclay as senior
non-executive director, he has been appointed Vice Chairman of the Board.
John Moxon has been appointed as a non-executive director. John was a former
main board director of stockbrokers Beeson Gregory, and has many years of
experience in advising quoted companies and liaising with institutional
investors. We look forward to working with him.
YOUR BOARD (continued)
George Dorr of Rochester, New York State, U.S.A., has also been
appointed a non-executive director with particular emphasis in reference to MICE
North America. George's previous major appointments were with the U. S.
Navy, the Xerox Corporation and Giltspur Exhibits.
Paul Mullen has now been formally appointed to the Board with the primary
responsibility of further developing and growing the North American Division.
Shareholders can be reassured that the strength of the Board and
its management team will ensure that the Group continues to achieve its
strategic objectives.
CURRENT TRADING AND OUTLOOK
The performance of the Group and our expansion plans indicate
that we are continuing to develop both in size and by geographic spread of
operations. The Group continues to be committed to achieving its objective of
becoming a global marketing company by consolidating itself within a highly
fragmented market.
Greater returns are being generated for our multinational
clients by broadening and deepening a turnkey range of below the line marketing
support services.
Strategically we are well placed to take advantage of the trend
for marketing budgets to be devoted more towards below the line activities. In
the short term we are obviously experiencing particular delays to projects in
the Middle East and indeed have had various orders deferred because of the Iraqi
war. We have also had an event cancelled that was to have taken place in
Beijing, China, owing to the Sars virus. However, we are anticipating a
reasonable first half year trading performance. We do, currently, have a record
#60 million order book and are making very encouraging progress with the
recently expanded operations in both Europe and North America which should
indicate yet another year of substantial growth.
At the year end our net debt of #21.6 million represented 46% gearing, however,
it is also exactly equal to the value of our freehold properties. The outlook
for the future as a whole, therefore, remains very bright.
We are confident that by pursuing our strategy of strong organic growth and our
consolidation within the fragmented industry of which we are a part that we will
continue to sustain the growth which we have consistently demonstrated.
Michael Curley
Chairman
Group Profit and Loss Account
for the 12 months ended 28 February 2003
Unaudited
12 months Pro-forma 14 months
ended 12 months ended Ended
28 February 31 December 28 February
2003 2001 2002
#000 #000 #000
Turnover - continuing operations 109,771 90,156 100,090
- acquisitions 10,570 - -
- discontinued operations - - 584
120,341 90,156 100,674
Cost of sales (79,784) (59,514) (67,279)
Gross profit 40,557 30,642 33,395
Selling and administrative expenses (31,943) (23,167) (40,517)
Operating profit/ - continuing operations 8,106 7,475 (6,501)
(loss)
- acquisitions 508 - -
- discontinued operations - - (621)
- group operating profit 8,614 7,475 (7,122)
- share of operating (loss)/ profit of (11) 79 79
associate
Total operating profit/(loss) 8,603 7,554 (7,043)
Profit on disposal of fixed assets (note 3) 1,630 - -
Costs of fundamental reorganisations (note 3) - - (618)
Loss on sale or termination of operations (note 3) - - (572)
Profit/ (loss) on ordinary activities before interest 10,233 7,554 (8,233)
Other interest receivable and similar income - group interest 125 - 147
- share of 18 14 14
interest of
associate
143 14 161
Interest payable and similar charges - group interest (1,667) (1,308) (1,731)
Net interest payable (1,524) (1,294) (1,570)
Profit/(loss) on ordinary activities before taxation 8,709 6,260 (9,803)
Taxation (2,155) (1,940) (765)
Profit/(loss) on ordinary activities after taxation 6,554 4,320 (10,568)
Minority interests - equity 36 (43) (83)
Profit/(loss) attributable to ordinary shareholders 6,590 4,277 (10,651)
Dividends (1,610) (1,010) (1,010)
Retained profit/(loss) for the period 4,980 3,267 (11,661)
Basic earnings/(loss) per share (note 4) 7.38p 7.28p (17.15)p
Diluted earnings/(loss) per share (note 4) 7.29p 7.15p (17.15)p
Statement of total recognised gains and losses
Profit/(loss) for the period 6,590 (10,651)
Unrealised surplus on revaluation of properties 2,752 -
Currency translation differences on foreign currency net 198 17
investments
Total recognised gains and losses relating to the period 9,540 (10,634)
Prior year adjustment (note 1) (2,508) -
Total gains and losses recognised since the last report and 7,032 (10,634)
accounts
Group Balance Sheet
As at 28 February
2003 2003 2002 2002
#000 #000 #000 #000
Fixed assets
Intangible fixed assets 42,109 21,979
Tangible fixed assets 38,542 31,104
Investments 808 405
Investment in associate 412 419
81,871 53,907
Current assets
Stocks and work in progress 9,452 4,469
Debtors 23,285 18,907
Cash at bank and in hand 6,419 30,646
39,156 54,022
Creditors
Amounts falling due within one year (39,043) (42,416)
Net current assets 113 11,606
Total assets less current liabilities 81,984 65,513
Creditors
Amounts falling due after more than one year (33,770) (27,393)
Provisions for liabilities and charges
Deferred taxation (976) (46)
Net assets 47,238 38,074
Capital and reserves
Called up share capital 3,758 3,702
Share premium account 18,939 15,571
Merger reserve 24,788 22,912
Capital redemption reserve 312 108
Unissued shares 3,517 1,740
Revaluation reserve 2,752 -
Profit and loss account (6,360) (5,756)
Shareholders' funds 47,706 38,277
Minority interests - equity (468) (203)
47,238 38,074
All shareholders' funds are attributable to equity interests.
Group Cash Flow Statement
for the 12 months ended 28 February 2003
12 months 14 months
ended ended
28 February 28 February
2003 2002
#000 #000
Net cash inflow from operating activities 55 7,562
Cash outflow relating to fundamental reorganisation - (239)
Returns on investments and servicing of finance (1,496) (1,583)
Taxation paid (492) (769)
Capital expenditure and financial investment (5,512) (15,759)
Acquisitions (10,896) 30,217
(18,341) 19,429
Equity dividends paid (1,153) (968)
Net cash (outflow)/inflow before use of liquid resources and financing (19,494) 18,461
Financing
- issue of shares 2,711 10
- purchase of own shares (2,984) (1,894)
- loans and finance leases 3,591 4,771
(Decrease)/increase in cash during the period (16,176) 21,348
Reconciliation of net cash flow to movement in net (debt)/cash
Net cash/(debt) at start of the period 41 (13,165)
(Decrease)/increase in cash during the period (16,176) 21,348
New bank loans (22,865) (13,014)
Repayment of bank loans 17,889 4,645
Inception of hire purchase and finance lease obligations (1,388) (836)
Repayment of hire purchase and finance lease obligations 587 958
Currency translation differences 338 105
Net (debt)/cash at 28th February (21,574) 41
NOTES TO THE PRELIMINARY RESULTS
1. FINANCIAL INFORMATION
The financial information set out in this announcement does not constitute the
Company's statutory financial statements for the year to 28th February 2003.
Statutory financial statements will be delivered to the Registrar of Companies
following the Company's Annual General Meeting. The information contained in
this announcement has been agreed with the Group's auditors.
A pro forma profit and loss account for the twelve months to 31st December 2001
was published in the previous Report and Accounts on the basis of continuing
operations excluding start up operations and impairment review. To make
comparisons easier the Highlights and the Chairman's Statement compare the
Group's trading performance for the year to 28th February 2003 to the pro forma
results for the twelve months to 31st December 2001.
The financial information set out in this announcement is prepared under the
historical cost convention, modified to include the revaluation of freehold
property, and in accordance with applicable accounting standards. Following the
introduction of UITF Abstract 34, Pre-Contract Costs, the balance sheet
comparatives have been restated. This has no effect on either the current year
or comparative period results. In order to give a true and fair view the
financial statements depart from the requirement of companies legislation to
amortise goodwill.
2. COPIES OF THE 2003 REPORT AND ACCOUNTS
Copies of the full financial statements will be sent to shareholders on 19th May
2003 and can be obtained by the public from the Company's registered office at
10 Arley Park, Colliers Way, Spring Hill, Arley, Coventry CV7 8HN.
3. NON-OPERATING EXCEPTIONAL ITEMS
12 months 14 months
ended ended
28 February 28 February
2003 2002
#000 #000
Profit on disposal of fixed assets 1,630 -
Reorganisation of European operations - (239)
Reorganisation of North American operations - (379)
1,630 (618)
Loss on sale or termination of operations - (572)
1,630 (1,190)
The profit on disposal of fixed assets arises from the sale and operating
leaseback of premises, which had a net book value of #1.4 million at the date of
disposal.
The reorganisation costs during the 14 month period to 28th February 2002
principally relate to redundancy costs incurred on the discontinuance of part of
the Group's operations in Europe, together with those incurred in relation to
the reorganisation of the North American operations.
The North American operations of Expocentric were sold on 13th February 2002
which, together with the Swedish operations of Expocentric, realised a loss of
#572,000 during the 14 month period to 28th February 2002.
NOTES TO THE PRELIMINARY RESULTS (continued)
4. EARNINGS/(LOSS) PER SHARE GROUP GROUP GROUP GROUP GROUP GROUP
2003 2003 2003 2002 2002 2002
PENCE PROFIT NUMBER PENCE PROFIT NUMBER
PER SHARE #000 OF SHARES PER SHARE #000 OF SHARES
Earnings/(loss) per share is
calculated as follows:
Net profit/(loss) 6,590 (10,651)
Weighted average number of shares 89,239,051 61,115,407
Basic earnings/(loss) per share 7.38p (17.15)p
Number of shares under option 3,475,367 3,201,566
Number of shares that would be issued (2,371,827) (1,052,441)
at fair value
Diluted earnings/(loss) per share 7.29p 6,590 90,342,591 (17.15)p (10,651) 64,264,532
5. DIVIDENDS
The Directors recommend the payment of a final dividend of 1.27p per share
making a total for the year of 1.75p (2002: 1.75p).
If approved, the final dividend will be paid on 7th July 2003 to shareholders on
the register on 13th June 2003.
END
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