Operating profit before goodwill amortization increased 6% to £14 million on turnover up 20% to £101 million. Both of these were the best ever. Adjusted diluted earnings a share were 9.16p, against 8.14p. The interim payout is unchanged at 5p, in line with the longer-term target of increasing the dividend cover.
The group increased its investment in new businesses, mostly in electronic publishing, from £4 million to £5.5 million. After charging this, and goodwill amortization, pretax profits were £8.1 million, against £8.6 million. Excluding this investment in new businesses, underlying operating profit before goodwill amortization increased by 13%. The new businesses contributed nearly £3 million of new revenues. The group’s underlying operating margin was 21%, against 22% last year.
The strong revenue growth achieved in the second half of 2000 continued into the first half, helped by the strength of the US dollar. Most of this growth came from the financial publishing businesses. Advertising revenues increased 19%, with Euromoney and Institutional Investor performing particularly well. The emerging markets titles, Asiamoney and Latin Finance, recovered from difficult markets in 2000. The group was not a major beneficiary from the increase in internet-related advertising last year, and has suffered little from the sudden reverse in this market.
In contrast to the strength of the financial publishing businesses, the downturn in the world economy, particularly in the US, hit business publishing revenues. The office products and business travel sectors suffered a fall in revenues while the strong growth achieved by last year’s two best performing sectors, pharmaceuticals and technology, was not sustained.
All the training businesses had a good first half. MIS, the Boston-based information audit and security business, continued to grow. Its annual InfoSec World conference was a big success, and is now the group’s largest single event.
The first half performance of Internet Securities, the group’s emerging market information service, was very encouraging. Subscription revenues increased 31% to $6.8 million in the first six months and are now running at an annual rate of more than $14 million, against $9.7 million when the group acquired 80% of the company in January 1999. The service was expanded to cover new areas and more data providers were added, which contributed to further growth in the subscriber retention rate as well as increased use of the service. Capital DATA, our capital markets information joint venture, also achieved strong growth in subscription revenues from its database products.
Net debt at March 31 was £77.5 million, an increase of £4 million since year end. In the first half the group increased its investments in Engel Publications, Mondiale and World Link and acquired the outstanding minority in The Petroleum Economist. It also completed two acquisitions; the Business Traveller Asia title and TechMedia, a small technology newsletter publisher. The cost of these investments was £3.2 million, of which £2.8 million was paid in the period.
