72% rise in profits at Pearson

February 28, 2012 — Fusion DigiNet

Pearson Plc has reported 2011 Preliminary results.

 

Financial performance

  • Sales up 6% at CER in spite of tough trading conditions in many markets.
  • Adjusted operating profit up 12% to £942m with growth in all businesses.
  • Adjusted EPS up 12% to 86.5p (headline growth).
  • Cash conversion remains strong at 104%; operating cash flow of £983m (£1,057m in 2010, which benefited from an unusually high working capital contribution).
  • Return on invested capital of 9.1%, above Pearson’s cost of capital; ROIC lower than in 2010 largely due to significant acquisition spend and higher cash tax.

Growth markets

Digital revenues up 18% in headline terms to £2bn, now 33% of Pearson’s sales. Substantial digital growth in all parts of Pearson including:

  • Students using digital learning programmes up 23% to 43m.
  • Penguin eBook revenues up 106%; now 12% of total Penguin revenues.
  • FT digital subscriptions up 29% to 267,000; approximately 44% of total paid circulation.

Developing markets revenues up 24% in headline terms to $1bn ($834m in 2010), now 11% of Pearson’s sales.

Other highlights

  •  Operating margins reach 16.1% (up 1.0% points)
  • £896m invested in acquisitions including Schoolnet and Connections Education in North America and Global Education in China.
  • Balance sheet net debt of £499m – approximately £1bn of headroom available for bolt-on acquisitions.
  • Dividend raised 9% to 42.0p, representing Pearson’s 20th consecutive dividend increase.

Outlook

  • Pearson expects to achieve continued sales and operating profit growth in 2012, in spite of tough trading conditions and rapid industry change.
  • Revenues from digital and services businesses expected to exceed revenues from traditional publishing businesses in 2012.

Marjorie Scardino, chief executive, said: “The external environment provides a testing backdrop for these results, and all our industries face some degree of turbulence. But our strategy and long-term planning for change have helped us to another good year to add to our record of persistent out-performance. We believe those qualities, combined with the commitment and innovation of our people, will continue to serve our customers and our shareholders well.”

Financial summary

£ millions

2011

2010

Headline growth

CER growth

Underlying growth
Business performance
Sales

5,862

5,663

4%

6%

1%
Adjusted operating profit*

942

857

10%

12%

7%
Adjusted earnings per share

86.5p

77.5p

12%

Operating cash flow

983

1,057

(7)%

Free cash flow

772

904

(15)%

Free cash flow per share

96.5p

112.8p

(14)%

Return on invested capital

9.1%

10.3%

(1.2)% pts

Net Debt

499

430

(16)%

Statutory results
Sales

5,862

5,663

4%

Operating profit

1,226

743

65%

Profit before tax

1,155

670

72%

Basic earnings per share

119.6p

161.9p

(26)%

Cash generated from operations

1,093

1,169

(7)%

Dividend per share

42.0p

38.7p

9%

* Continuing operations

Divisional analysis

£ millions

2011

2010

Headline growth

CER growth

Underlying growth
Sales
North American Education

2,584

2,640

(2)%

1%

(1)%
International Education

1,424

1,234

15%

15%

4%
Professional

382

333

15%

17%

2%
FT Group

427

403

6%

8%

7%
Penguin

1,045

1,053

(1)%

1%

1%
Total

5,862

5,663

4%

6%

1%
Adjusted operating profit
North American Education

493

469

5%

9%

8%
International Education

196

171

15%

13%

2%
Professional

66

51

29%

31%

10%
FT Group

76

60

27%

22%

17%
Penguin

111

106

5%

8%

8%
Total continuing

942

857

10%

12%

7%

Read the full announcement

UK, London

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Centaur Media acquires Profile Group

February 21, 2012 — Fusion DigiNet

Centaur Media plc, the business information and events group, has acquired Profile Group (UK) Limited, a specialist digital information business for media, PR and marketing professionals, for a total cash consideration of £8m. Profile was founded in 1988 as a print directory business by Robert Barclay.  The management team will be staying with the business.  Revenues in 2011 were £3.1m, with ebitda of £1m, producing a margin of 32%.  The business derives most of its revenues in the UK, but has now launched three of its services in the USA, with encouraging early success.

Centaur has separately secured a £40m four year revolving credit facility in order to fund its acquisition programme.

Profile provides forward planning and contact information to media, PR and marketing professionals to enable them to optimise journalistic workflow and plan future PR and sponsorship campaigns.  Revenues are derived exclusively from subscriptions to a range of digital products which offer complementary services from a single web platform.  Profile’s information brands include Fashion Monitor, Red Pages, Entertainment News, Year Ahead and Foresight News.

Profile will become part of the Business Information Division, alongside digital information and workflow businesses Perfect Information (serving the global corporate adviser market) and VBR (operating in the global clean technology and security sectors).

Profile will benefit from collaboration with Centaur’s existing brands, Marketing Week and Creative Review (serving the marketing and creative agency sectors) and the Headline Group (serving specialist media and PR professionals).

Geoff Wilmot, CEO of Centaur, said, “Profile is a good fit with our core strategic objectives of growing digital subscription revenues in our core markets and expanding our international capabilities. We will accelerate Profile’s growth by: offering an exceptional route to market through our leading brands Marketing Week and Creative Review; the application of the successful Headline Group model to vertical markets served by Profile; and by leverage of Profile’s technology and business model in other parts of the Group. The new revolving credit facility will fund this acquisition and provides us with the necessary resources to support our acquisitions programme.”

UK, London

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Bauer Media Group acquires women’s monthlies “Olivia” and “Naj Magazyn

February 18, 2012 — Fusion DigiNet

The Bauer Media Group has acquired Polish women’s magazines “Olivia” from Marquardt Media and “Naj Magazyn” from Gruner + Jahr. It sees Bauer further strengthen its position as market leader in the women’s segment.

The two monthly magazines together have a joint circulation of 277,125 sold copies per issue (ZKDP Jan-Nov 2011). “Olivia” and “Naj Magazyn” will be available soon in a new look and with new content although the editorial focus will remain on the advice topics of fashion, beauty, cooking, health and psychology.

For Dr Eckart Bollmann, CEO of the Bauer Media Group, the additions to the portfolio in Poland are a further building block in the group’s international expansion strategy: ‟The acquisitions in an important segment for our company strengthen our position on the market. In ‘Olivia’ and ‘Naj Magazyn’ we see strong brands with potential for development. With ‘Świat Kobiety’, ‘Kobieta i Życie’ and ‘Tina’ we have been proving for years that women’s magazines in Poland can achieve long-term success. ’Świat Kobiety’, for example, has notched up the highest number of sold issues in the premium segment of service-oriented women’s magazines for years.”

Germany, Hamburg

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QuinStreet acquires Ziff Davis Enterprise media assets

February 14, 2012 — Fusion DigiNet

Internet marketing and media company QuinStreet has acquired Ziff Davis Enterprise media assets. The assets acquired include websites eWeek.com, CIOInsight.com, Baseline.com, ChannelInsider.com and WebBuyersGuide.com, among others, and one of the largest email and telephone subscriber databases in the business to business (B2B) technology space. These properties support enterprise IT buyers and decision makers in making purchasing decisions. Also, they provide B2B technology vendors with targeted advertising and opportunities to engage with customer prospects online.

“Ziff Davis Enterprise has a rich history in the B2B technology media and marketing space and is synonymous with quality and client service. This acquisition expands QuinStreet’s ability to service our B2B technology clients at scale, with high-quality, targeted, measurable marketing results,” said Doug Valenti, QuinStreet CEO.

The VAR Guy is reporting that Quinstreet paid $17.5 million for the assets. BtoBonline.com is reporting that QuinStreet is planning to cut about 80% of Ziff Davis Enterprise employees. Steve Weitzner, ZDE database CEO, will be leaving the company.

Foster City, CA & New York, NY

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Thomson Reuters full year and fourth quarter results

February 10, 2012 — Fusion DigiNet

Thomson Reuters has reported results for the full year and fourth quarter ended December 31, 2011. Results include a $50 million charge primarily related to a reorganisation of the former Markets division incurred in the fourth quarter. The company also announced it had taken a $3.0 billion non-cash goodwill impairment charge related to its financial services business. This charge is excluded from adjusted earnings, adjusted EBITDA and underlying operating profit.

The company reported full-year revenues from ongoing businesses of $12.9 billion, an increase of 5% before currency from the prior year. Adjusted EBITDA increased 20% from the prior year with the corresponding margin up 280 basis points to 26.4%. Underlying operating profit increased 9% from the prior year with the corresponding margin up 50 basis points to 20.0%. The reorganisation charge had a 40 basis point negative impact on both the full-year adjusted EBITDA and underlying operating profit margins.

“Our results once again proved the resilience of our business,” said James C. Smith, chief executive officer of Thomson Reuters. “The units in the former Professional division continued to perform well and we made significant strides in kick-starting the growth engine in our former Markets division.”

“We have simplified our organization; we have strengthened our management team; and we are making progress toward improving our execution capability,” Mr. Smith said. “We are focused in 2012 on a series of product launches and service improvements across all our key customer groups.”

 

  • Revenues from ongoing businesses were $12.9 billion, a 5% increase before currency. Strong growth across the Professional division, up 9%, and a 2% increase in Markets division revenues drove the overall increase.
  • Adjusted EBITDA increased 20% and the corresponding margin was 26.4% versus 23.6% in the prior year. Excluding the reorganization charge, adjusted EBITDA increased 21% and the corresponding margin increased 320 basis points to 26.8%.
  • Underlying operating profit increased 9% and the corresponding margin was 20.0% versus 19.5% in 2010. Excluding the reorganization charge, underlying operating profit increased 12% and the corresponding margin increased 90 basis points to 20.4%.
  • Adjusted EBITDA growth and underlying operating profit growth across both divisions was due to flow-through from higher revenues, integration savings and the benefit of currency. Adjusted EBITDA also benefited from lower integration expenses. Excluding currency, adjusted EBITDA increased 17% and underlying operating profit increased 7%.
  • Adjusted EPS was $1.98 compared to $1.56 in the prior year. The increase was largely attributable to higher underlying operating profit and lower integration expenses. Adjusted EPS excluding the reorganization charge was $2.03. Currency had a $0.06 favorable impact on adjusted EPS.
  • Free cash flow was $1.6 billion, up 2%. Corporate expenses were $273 million versus $249 million in the prior year.
  • The company incurred a $3.0 billion goodwill impairment charge in the fourth quarter. This non-cash charge was the result of the company’s annual goodwill impairment testing required under IFRS and related to the company’s financial services business. On an IFRS basis, EPS including the goodwill impairment charge was a diluted loss per share of $1.67 for the full year. This non-cash charge will not impact the company’s normal business operations, nor will it affect liquidity, cash flow from operations or financial covenants under the company’s outstanding public debt securities or syndicated credit facility.

Click here for the fourth quarter results and full announcement

USA, New York

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Guardian News & Media sell paidContent to GigaOM

February 8, 2012 — Fusion DigiNet

Guardian News & Media has sold the assets of ContentNext Media, to business and technology media company GigaOM. The deal includes all the properties of ContentNext Media including paidContent.org, mocoNews, contentSutra and paidContent:UK. The terms of the deal have not been disclosed.

Under the terms of the acquisition, GNM will take a minority shareholding in GigaOM. GigaOM has an online audience of more than 4.5 million monthly unique visitors. It also runs events and a market research service and digital community providing expert analysis and research on emerging technology markets. GNM is joining existing investors such as Reed Elsevier Ventures, Alloy Ventures and True Ventures.

Andrew Miller, Chief Executive Officer of Guardian Media Group (parent company of Guardian News & Media), said: “paidContent has a fantastic presence in the tech/media space and the match with GigaOM, itself a really smart and pioneering company, is a good one. We are delighted to become shareholders in GigaOM as part of the deal.

“The Guardian’s focus in the US is on building guardiannews.com, but we look forward to seeing paidContent thrive and grow in its new home and wish its staff all the very best for the future.”

Staci Kramer will remain the editor of paidContent.

USA, New York, NY & UK, London

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UBM sells its Daltons business

February 7, 2012 — Fusion DigiNet

UBM has sold its Daltons business to Innovare Media Limited. Daltons provides a web-based marketplace for the sale and purchase of UK small and medium enterprises. Terms of the deal were not disclosed.

UK, London

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Founders of Briefing Media to acquire UBM’s UK agriculture and medical general practitioner portfolios

February 7, 2012 — Fusion DigiNet

Neil Thackray and Rory Brown, the founders of Briefing Media Ltd, are to acquire UBM‘s UK agriculture and medical general practitioner portfolios – including the Farmers Guardian and Pulse titles – for a total cash consideration of £10 million (subject to a working capital adjustment at completion). The new business will be known as Briefing Media Group. It is funded by GCP Capital Partners, a mid-market private equity fund.

The agriculture portfolio – comprising the Farmers Guardian and Dairy Farmer titles and their associated online offerings – is based primarily in Preston and employs 57 staff.

The London-based general practitioner portfolio employs 33 staff and includes the Pulse and Practical Commissioning magazines and their digital and event products NAPC, the Mental Health Forum, Pulse Seminars, as well as Pulse Learning.

Commenting on the deal, Neil Thackray said, “When we founded Briefing Media we had a vision for creating a vibrant new business to business media company. This acquisition gives us both the scale and market opportunity to accelerate that ambition. We are delighted to be acquiring assets with such excellent pedigrees and reputations in important business markets and to be working with GCP Capital Partners. This will be the first but not the last acquisition we plan to make.”

The transaction is expected to close in the next four to six weeks. In total, these assets generated revenues of £12.1 million in 2011.

UBM has retained ownership of the Cropworld conference and the Chemist & Druggist magazine and data product portfolio.

Briefing Media article – A new chapter begins today for Briefing Media

UK, London

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The Jim Pattison Group acquires magazine distributor Comag Marketing Group

February 3, 2012 — Fusion DigiNet

 The Jim Pattison Group, a privately owned, Vancouver, BC-based conglomerate which owns The News Group, has acquired the national magazine distributor Comag Marketing Group, LLC (CMG) from Hearst Magazines and Condé Nast. Terms were not disclosed. Jay Felts will continue as president of CMG and the firm’s headquarters will remain in Princeton, New Jersey.

CMG U.K. is not part of the transaction and will continue to be owned by National Magazine Company Ltd. and Condé Nast U.K.

Michael Korenberg, deputy chairman of The Jim Pattison Group and a member of its Board of Directors, said, “This transaction will strengthen the newsstand channel and, at the same time, enable Hearst and Condé Nast, as publishers, to focus on their core competencies — editorial development, retail marketing and consumer promotion. We believe that with the strength of its management team and systems, CMG can consolidate and improve publisher services as well as add stability for all stakeholders in the single-copy marketplace.”

Canada, Vancouver, British Columbia & USA, Princeton, New Jersey

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UBM plc and Roularta Media Group form Belgian medical print journal joint venture business

February 3, 2012 — Fusion DigiNet

UBM plc thas contributed its Belgian medical print activities to a joint venture with Roularta Media Group (ROU), the Euronext Brussels-listed media group.

UBM Medica and Roularta have merged their respective Belgian professional medical print businesses into ActuaMedica, a 50:50 joint venture company.  The staff and assets relating to UBM Medica’s print and digital titles (Journal du Medecin / Arksenkrant, Belgium Oncology News and Le Magazine du Pharmacien / Apothekers magazine) and Roularta’s print and digital titles (De Huisarts / Le Generaliste, De Specialisten / Les Specialistes, De Apotheker / Le Pharmacien and De Tandards / Le Denttiste) will be combined.  The Prescription pads business of both companies will also be combined and the joint venture company will retain the rights to publish the Medex directory under licence. It will be headquartered in Roularta’s offices in Brussels.

ActuaMedica will be the market-leading provider of media-based marketing services for Belgian healthcare professionals.  UBM says it remains committed to the Belgium medical market through its continued 100% ownership of its digital data businesses in Belgium (Medibridge and drug information systems), as well as its 50% equity interest in ActuaMedica.

Henry Elkington, CEO of UBM Medica said, “By merging our Belgian media assets with Roularta we are creating the leading marketing services player in the local market and will be able to offer our clients unparalleled access and reach to healthcare professionals.  ActuaMedica is well placed to prosper in both print and digital as the media market evolves.  In parallel we will continue to to build our wholly-owned Belgian data business as part of our UBM Medica EMEA operations.”

Belgium, Brussel

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