The McGraw-Hill Companies reports record 2nd quarter

July 30, 2012 — Fusion DigiNet

The McGraw-Hill Companies has reported revenue of $1,547 million in the second quarter, a decrease of 1% compared to the same period last year, as a result of a 5% increase at McGraw-Hill Financial and a 12% decline at McGraw-Hill Education. Net income from continuing operations increased 2% to $216 million and diluted earnings per share increased 11% to $0.76.

Excluding the impact of one-time costs related to the Growth and Value Plan, adjusted net income from continuing operations increased 15% to $243 million and adjusted diluted earnings per share increased 25% to a second quarter record of $0.85. This increase, similar to the first quarter, was primarily due to strong growth at Commodities & Commercial and S&P Capital IQ / S&P Indices.

“We are pleased by the continuing progress of our Growth and Value Plan in establishing two powerful companies, McGraw-Hill Financial and McGraw-Hill Education, by the end of the year,” said Harold McGraw III, chairman, president, and chief executive officer of The McGraw-Hill Companies. “Our employees are to be applauded for delivering stellar results while simultaneously advancing the separation and implementing major cost reductions. We are delivering record adjusted earnings despite the challenging global macro-economic environment, including both the impact of the European debt crisis on global debt issuance and reduced state budgets on textbook spending.”

“We now expect to be near the high end of our previous 2012 adjusted diluted earnings per share guidance of $3.25 to $3.35,” said Mr. McGraw. “We will revisit our guidance again after we report the third quarter, traditionally the largest of the year.

McGraw-Hill Financial: Businesses that make up what will be the new McGraw-Hill Financial reported revenue of $1,073 million and adjusted operating profit of $394 million, an increase of 5% and 9%, respectively, compared to the same period a year ago. McGraw-Hill Financial will include the following lines of business:

– Standard & Poor’s Ratings Services: Revenue increased 1% to $483 million and operating profit decreased 2% to $208 million in the second quarter compared to 2Q 2011—the strongest quarter of 2011 for this segment. Operating profit margins in the quarter were 43%.

– S&P Capital IQ / S&P Indices:  Revenue increased 10% to $366 million and adjusted operating profit increased 17% to $115 million.

Credit Market Analysis Limited (CMA) was acquired from the CME Group at the end of the second quarter. The business will become part of S&P Capital IQ — broadening its existing pricing and data businesses and bolstering its asset-class coverage of OTC securities.

– Commodities & Commercial:  Revenue increased 9% to $241 million and operating profit grew by 45% to $71 million in the second quarter, compared to the same period last year.

Platts continued its record performance resulting in 19% revenue growth at Commodities to $121 million for the period. Excluding the acquisition of Steel Business Briefing Group, which was not included in second quarter 2011 results, Commodities’ revenue grew 15% to $117 million.

Commercial’s revenue was down 1% as gains by J.D. Power and Associates, which is on track to record its best year ever, were offset by modest declines at McGraw-Hill Construction and Aviation Week.

McGraw-Hill Education:  Revenue for the segment declined 12% to $474 million while operating profit improved by 36% to $57 million in the second quarter, compared to the same period last year. The improvement in operating income was primarily the result of restructuring actions and ongoing tight expense management.

– Higher Education, Professional and International Group (HPI):  Revenue decreased 2% to $241 million in the second quarter compared to the same period last year.

– School Education Group (SEG):  Revenue decreased 20% to $233 million for the quarter.

Read the full announcement here

USA, New York, NY

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Tarsus Group – results for the six months ended 30 June 2012

July 26, 2012 — Fusion DigiNet

Tarsus Group plc, the business-to-business media group, has announced its results for the six months ended 30 June 2012.

Financial highlights

  • Like-for-like revenue up 14% on 2011 as adjusted for biennials
  • Interim dividend up 5% to 2.2p (2011: 2.1p)
  • Net debt £19.6 million (2011: £17.3 million)
  • Forward bookings currently stand at 80% of anticipated full year revenues (2011: 74%)
  • Heads of terms agreed for new five year £45m bank facility

 M&A News

  • Life Media (Turkey) acquisition completed in March 2012
  • Acquisition of GZ Auto (China) expected to complete in the next few months

Douglas Emslie, Group Managing Director, said, “Our significant progress in the first half has been driven by excellent performances in the US from our Medical and Off Price products and in the Emerging Markets by very strong growth in the Turkish and Chinese businesses. Turkey is now a key component in our portfolio as a result of our acquisitions of Life Media and IFO.

Our position in China will be significantly enhanced with the addition of GZ Auto, the leading automotive aftermarket show. With our 2012 forward bookings currently standing at 80% and the strong performance in the first half, we have increased the interim dividend by 5%.

We are increasingly confident that our quality portfolio addressing high growth sectors and markets in transition together with our focus on driving visitors and growing exhibition volumes will quicken the pace of our future earnings and dividend growth”.

UK, London

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Euromoney Institutional Investor PLC – Interim Management Statement for the period from April 1 to July 24, 2012.

July 26, 2012 — Fusion DigiNet

Euromoney Institutional Investor PLC, the international publishing, events and electronic information group, has announced its Interim Management Statement for the period from April 1 to July 24, 2012.

Highlights

  • Total revenues for the quarter to June 30, 2012 increased by 9% to £111.0 million, driven by continued growth from the group’s research and data businesses.  Underlying group revenues, excluding the impact of last year’s acquisition of Ned Davis Research, increased by 3% (and by 1% at constant exchange rates).
  • Underlying subscription revenues increased by 6% (and by 5% at constant exchange rates). Subscription growth continues to be generated by the group’s premium electronic information services such as BCA Research, the independent macro economic research house, and CEIC Data, the emerging markets data provider. Headline subscription revenues, including NDR, increased by 21%.  Advertising revenues followed a similar trend to the second quarter – advertising from global financial institutions remained weak but this was offset by growth from the energy sector and emerging markets.
  • The third quarter is the most important of the year for the event businesses, with many of the group’s largest events held during this period.  While the bigger events put in a robust performance, markets became more challenging as the quarter progressed, particularly for smaller events.  As a result, sponsorship revenues for the quarter fell by 7% while delegate revenues remained steady.
  • The group generates nearly two thirds of its revenues in US dollars and movements in the sterling-dollar rate can have a significant impact on reported revenues.  However, the average sterling-dollar rate for the third quarter was $1.60, against $1.64 a year ago, and the impact of exchange rates on revenues in the third quarter was not significant.

The following table summarises the year-on-year revenue changes for the third quarter at both headline rates and at constant exchange rates:

 

Financial Position

Net debt at June 30 was £51.3 million, a reduction of £37.2 million since March 31, reflecting the group’s strong operating cash flows in the period.  The third quarter is traditionally the strongest of the year because of the importance of the cash flows of the event businesses.  In addition there were no significant non-operating cash flows in the period and movements in the US dollar exchange rate had no significant effect on net debt levels.

UK, London

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Informa plc – Half Year Results

July 26, 2012 — Fusion DigiNet

Informa has announced its half year results for the Six Months Ended 30 June 2012

Financial Highlights

  • Adjusted operating profit growth of 0.6% to £160.1m; 0.3% on an organic basis
  • Improved margin – adjusted operating margin 25.8% (H1 2011: 25.1%)
  • Strong cash flow – cash conversion rate increased to 76% (H1 2011: 56%)
  • Revenue decline of 2.4% (organic decline of 1.2%) – proactive reduction in marginal product.
  • Statutory loss before tax of £27.4m (H1 2011: £66.5m profit) – reflecting impairment charge of £80.0m and losses on disposal of £24.4m relating to European Conference businesses.
  • Earnings increased – adjusted diluted earnings per share growth of 3.4% to 18.3p (H1 2011: 17.7p)
  • Dividend increased – interim dividend increased to 6.0p (H1 2011: 5.0p)
  • Net debt/EBITDA ratio of 2.3 times (H1 2011: 2.5 times)

Operational Highlights 

  • Academic – organic revenue growth of 3.7%
  • Total cost savings delivered at PCI of £12m
  • 9 new large events run in H1
  • Forward bookings on leading events remains strong
  • Restructure of conference portfolio to reflect prevailing market conditions in Europe
  • 20% of revenue from emerging markets (H1 2011: 19%)

 

 

 

 

Commenting on the first half results and future prospects, Peter Rigby, Chief Executive, said, “Overall, we have made a solid start to the year and are pleased with our performance to date. With our flat structure, experienced local management and focus on operating profit we continue to deliver good financial performance and earnings growth. In addition, high cash flow conversion continues to support our progressive dividend policy. Global economic conditions show no signs of sustained improvement. We have become used to operating in this environment and are actively managing the portfolio to concentrate on our areas of strategic focus. The business is in better shape as a result and we are well positioned for growth when an economic recovery occurs.  We are encouraged by the product launches coming in the second half of the year as well as our recent Canadian acquisition. We are making good progress on a number of growth initiatives including geographic expansion, across Informa which gives the Board confidence in meeting its expectations for the full year and the Group’s future prospects.”

UK, London

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DMGT – Q3 results

July 26, 2012 — Fusion DigiNet

DMGT has announced results for the third quarter of their financial year to 1st July 2012 .

Highlights

  • Revenue for the third quarter of £509 million, up 3% on last year on a reported basis and up 4% on an underlying basis
  • Continued good underlying growth from our B2B businesses
  • Return to underlying growth at Associated Newspapers
  • Net debt reduced by £9 million to £800 million
  • Outlook for the year remains unchanged

Business to Business (B2B) – third quarter performance

RMS reported revenues were £42 million, with continued growth driven by core modelling performance as well as new product areas. The difference between underlying and reported revenue growth rates reflects the sale of RMSI in the fourth quarter of the prior year.

The reported revenues of dmg information grew strongly to £63 million, driven by Education (Hobsons) and Property (Landmark and EDR) businesses.

dmg events’ reported revenues increased to £29 million, reflecting a strong performance from the biennnial Global Petroleum Show in June.

Continued good performance from Euromoney Institutional Investor, with reported revenues of £111 million.

Consumer – third quarter performance  

Associated: reported revenues were £210 million, with circulation revenues up 4% and continued market share improvement (Daily Mail 21.6% compared to 21.0% last year and The Mail on Sunday 20.1% compared to 19.8% last year)*. Total underlying advertising revenues were up 2%; comprising newspapers down 5%, newspaper websites (mainly Mail Online) up 69% (when combined these two revenue streams were broadly in line with last year), and other digital advertising (primarily Evenbase) up 15%. For the first three weeks of July, total underlying advertising revenues were 3% ahead of last year.

Headcount reduced by a further 105 (3%) during the quarter to 3,809, 533 (12%) lower than at the start of the financial year.

Northcliffe: reported revenues were £54 million, with circulation revenues up 2% on an underlying basis, reflecting the benefit of recent cover price increases.  Total underlying advertising revenues were down 7% in a difficult market.  There is a continued focus on efficiency with costs reduced by 14%. For the first three weeks of July, total underlying advertising revenues were 7% below last year.

Headcount reduced by a further 86 (4%) during the quarter to 2,280, 251 (10%) lower than at the start of the financial year.

Net debt / financing

Net debt at 1st July, 2012 was £800 million, down from £809 million at 1st April, 2012.  The Group continues to generate strong cash flows and these were primarily used to fund further acquisitions in the quarter.  Acquisitions have now used £82 million of cash year to date (notably Jobrapido, Intelliworks, Xcelligent, Global Grain and Euromoney shares) with proceeds from disposals totalling £16 million year to date (notably the final instalment from the GLM disposal).  Further debt reduction is expected in the fourth quarter.

UK, London

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Progressive Digital Media Group Plc – interim report for the six months ended 30 June 2012

July 26, 2012 — Fusion DigiNet

Progressive Digital Media Group, a content driven media company producing premium business information, has announced it results for the six months ended 30 June 2012.

Highlights

  • Adjusted EBITDA(note 1) increased by 10.3% to £4.3m (2011: £3.9m)
  • Adjusted EBITDA Margin (note 1) increased to 16.6% (2011: 15.5%)
  • Group revenue increased by 2.8% to £25.9m (2011: £25.2m) with Business Intelligence revenues up by 12.5% to £13.5m (2011: £12.0m)
  • Business Intelligence revenues account for 52.1% of Group revenue (2011: 47.6%)
    • Business Intelligence at +12.5%
    • Events and Marketing at -5.3%
  • Reported profit before tax of £2.0m (2011: £1.2m)
  • Successful completion of a £20m share placing to fund acquisitions.
  • Acquisition of Kable, one of the UK’s leading providers of technology expenditure intelligence. Kable provides business information, tactical intelligence, research, analysis and consultancy to a number of the UK’s leading blue chip companies. See the DigiNet article on the Kable acquisition.
  • Exit from the consumer email marketing sector.
  • Full year results likely to be in line with market estimates.

Mike Danson, Chairman of Progressive Digital Media Group Plc, commented, “Our first half results demonstrate that we have made good progress across a number of key metrics delivering increased revenues, margin and earnings against the prior year comparatives. We continue to focus on those areas which present the best opportunities for growth such as Business Intelligence, which pleasingly now accounts for over half of Group revenues.  Our results, together with the fundraising and acquisition of Kable form not only a good platform for future growth but also have allowed the Group to exit from the less profitable consumer email marketing sector.  Moreover, the launch of the new intelligence centres and the performance of our Business Intelligence division as a whole have positioned us well to develop the business rapidly from now on.”

Note 1: Adjusted EBITDA: Earnings before interest, tax, depreciation, amortisation, impairment, and share based payments, and adjusted for costs associated with derivatives, acquisitions, integration and restructure of the Group. Adjusted EBITDA Margin is defined as Adjusted EBITDA as a percentage of Revenue.

Note 2:  EBITDA: Earnings before interest, tax, depreciation, amortisation and impairment. Includes a charge of £0.5 million for share based payments (2011: £0.4 million).

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Yell Group Plc – results for the three months ended 30 June 2012

July 25, 2012 — Fusion DigiNet

Yell Group Plc has announced its results for the three months to 30 June 2012

Financial Highlights

  • Group revenue of £331m decreased by 15%
  • Digital services revenues grew by 40% to £38m
  • Digital directories revenue fell by 16% to £68m
  • Print and other directory revenues fell by 21% to £225m
  • EBITDA of £71m was down £40m
  • Free cash flow of £39m decreased £34m
  • Net debt of £2,181m decreased by £19m from March

Operational Highlights

  • Total digital revenue declined by 2%, and represents 32% of revenue
  • Total digital customers decreased by 0.2% to 925,000
  • Annual digital revenue per advertiser fell by 10% to £478
  • Live customer websites increased by 17% to 408,000
  • Digital directories visitors increased 13% to 44m in June
  • Mobile directories visitors increased 71% to 4.8m in June
  • Print advertisers reduced by 9% to 253,000
  • Print revenue per advertiser decreased by 7% to £780

Mike Pocock, Chief Executive Officer, said, “During the last quarter, we continued to transform the Group, capitalising on our unique position in the SME community. We continued our trials of new digital products, progressed new partnerships, introduced our new corporate brand and enhanced our digital capability through the acquisition of Moonfruit. Whilst we continue to deliver cost savings through our global operating model, the decline in our legacy product revenue continues to negatively affect EBITDA. The Group continued to generate significant amounts of cash and pay down debt. Looking ahead, we remain confident in our four year strategy to transform Yell.”

UK, London

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WorldOne acquires Sermo – an online community of U.S. physicians

July 23, 2012 — Fusion DigiNet

Healthcare insights and intelligence company WorldOne has acquired Sermo, an online community of U.S. physicians. In the six years since its launch, Sermo amassed a membership of 130,000 physicians and hundreds of clients, including eight of the top ten pharmaceutical companies in the world.

With the acquisition of Sermo and its leading discussion and crowdsourcing platform for physicians, WorldOne considerably expands its interactive and digital engagement capabilities. WorldOne already boasts a global network of 1.7 million healthcare professionals, including over 1 million verified physicians across 80 countries; adding Sermo’s membership will further increase reach, allow for unprecedented client list match rates, expand research opportunities, and serve as a catalyst for increased physician discussion, insights and collaboration.

“Sermo fits in perfectly with our strategy to extend our digital footprint across healthcare market research and enhance our growing portfolio of innovative engagement solutions,” said Peter Kirk, CEO of WorldOne. “Sermo has proven that sustaining an active, engaged community can result in higher interest in and response to market research as well as new promotional opportunities. Combining Sermo’s technology and social media expertise with WorldOne’s global scale enables us to rapidly accelerate our growth while offering the most enriching, collaborative online environment for physicians anywhere in the world.”

USa, New York, NY & Cambridge, MA

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SAY Media secures $27 Million in funding led by New Enterprise Associates

July 19, 2012 — Fusion DigiNet

SAY Media has secured $27 million in funding led by new investors New Enterprise Associates (NEA), Shea Ventures and Correlation Ventures, as well as participation from existing investors. The new funding will be used to help the company further develop its publishing platform, grow its portfolio of media properties and fund strategic acquisitions.

With this round of capital, NEA’s Paul Hsiao will be joining SAY’s board of directors. The appointment of Hsiao, a recognized leader in venture capital who led investments in companies like Evernote and Gaikai, follows the recent announcement that Kim Kelleher, currently publisher at TIME Magazine, will join SAY Media as its new president in September.

“The intersection of Madison Avenue and Silicon Valley is really where we see the future of media and we are well-positioned to lead the publishing industry into a digital world,” said Matt Sanchez, CEO, SAY Media. “This funding round is a validation of our strategy and I’m delighted to have NEA as a partner to support continued investment in the strategy and the right acquisitions.”

In addition to the appointment of Kelleher, SAY strengthened its executive team, adding Christina Cranley, former senior vice president at Martha Stewart and publisher of “Everyday Food and Whole Living,” as its vice president of sales for eastern U.S., CBS’s Sam Parker as chief operating officer and David Richter as chief strategy officer. Former Condé Nast executive Kourosh Karimkhany also joined the leadership team as head of integration. SAY currently has 400 employees working in offices across the United States, Canada, the United Kingdom and Australia.

Over the past several months, SAY acquired ReadWriteWeb and Remodelista. The company owns and operates six properties and has 13 exclusive partnerships with sites including Fashionista, Gear Patrol and Food52. The company now represents 500 sites and reaches a global audience of 400 million.

USA, San Francisco, CA

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Pearson to acquire Author Solutions for £116M

July 19, 2012 — Fusion DigiNet

Pearson has acquired Author Solutions from Bertram Capital for $116 million in cash.

Formed in 2007, ASI is a leading provider of professional self-publishing services. It has enabled 150,000 authors to publish, market and distribute more than 190,000 books in print and electronic formats and benefits from several powerful growth trends including user-generated content, eBooks and digital publishing and marketing technologies.

Self-publishing is a rapidly growing segment of the consumer books market. According to Bowker, 211,000 titles were self-published in 2011 in either print or digital form, an increase of almost 60% on 2010. The self-publishing sector has also become an important source of talent and content for the publishing industry, producing several bestselling authors including Lisa Genova, John Locke, Darcie Chan, Amanda Hocking, Bronnie Ware and E.L. James.

The acquisition gives Penguin a leading position in this fast-growing segment of the publishing industry and brings significant opportunity for the two companies to collaborate. Penguin will gain access to ASI’s expertise in online marketing, consumer analytics, professional services and user-generated content. ASI will benefit from Penguin’s design, editorial and sales skills, and its strong international presence as it looks to expand outside the US.

Penguin’s chief executive John Makinson said: “Self-publishing has moved into the mainstream of our industry over the past three years. It has provided new outlets for professional writers, a huge increase in the range of books available to readers and an exciting source of content for publishers such as Penguin. No-one has captured this opportunity as successfully as Author Solutions, which has rapidly built a position of world leadership on a platform of outstanding customer support and tailor-made publishing services. This acquisition will allow Penguin to participate fully in perhaps the fastest-growing area of the publishing economy and gain skills in customer acquisition and data analytics that will be vital to our future.”

In 2011 Author Solutions generated revenues of approximately $100m, growing at an average annual rate of 12% over the past three years. Its business is split broadly evenly across three key areas: publishing, marketing and distribution services, with revenues generated primarily from services to authors.

The company has approximately 1,600 employees, located primarily in Bloomington, Indiana and Cebu City, the Philippines. Pearson will be expensing integration costs relating to Author Solutions in 2012 and expects the acquisition to enhance adjusted earnings per share and to generate a return on invested capital above Pearson’s weighted average cost of capital from 2013, its first full year. Author Solutions will be integrated into Penguin’s back office and technology infrastructure but will continue to be run as a separate business.

UK, London & USA, Bloomington, IN and The Philippines, Cebu City

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