Key points
For the year to 31 December 2004, turnover more than trebled to approximately £14.4 million (2003: £4.6 million)
Pre-tax profits more than doubled to approximately £2.4 million (2003: £1.2 million) but this is below current market expectations
Earnings per share expected to grow by approximately 10%
Political division showing strong organic growth with like for like revenue growth of 13% in the UK.
The figures are based on management accounts and remain subject to audit.
John van Kuffeler, Chairman of Huveaux PLC, commented:
“We are delighted that 2004 was a year of considerable growth for Huveaux, both organically and through acquisition. Sales, profits and earnings per share have all substantially improved.
We have invested in new offices in London to bring our UK Political Division under one roof and this will generate significant benefits going forward. Overall, the business has been transformed under a strengthened senior management team and is in excellent shape. The outlook for 2005 is for another year of growth.”
For further information, please contact:
John van Kuffeler, Huveaux PLC 020 7245 0270
Ann-marie Wilkinson/Geoff Callow, Bell Pottinger 020 7861 3232
HUVEAUX PLC
TRADING UPDATE
Huveaux PLC is today giving a trading up-date in respect of the year ended 31 December 2004 based on management accounts, which remain subject to audit.
Sales in 2004 more than trebled to approximately £14.4 million (2003: £4.6 million), of which £ 6.8 million related to the three acquisitions made during the year. In addition, further cash sales of our new Eurosource publication totalling approximately £ 250,000 were achieved, but deferred to 2005 as a result of the European Parliament delaying the appointment of the EU Commission.
Pre-tax profits in 2004 doubled to approximately £ 2.4 million (2003: £1.2 million) before the exceptional charge reported in the Interim Results related to the acquisition of Parliamentary Communications Limited. This is below current market expectations.
The Political division showed strong organic growth with like for like revenue growth of 13 per cent in the UK.
Due to Huveaux’s advantageous tax position in France and the benefits of certain allowances in the UK, Huveaux’s tax rate is likely to be around 17 per cent on its 2004 results giving expected normalised EPS growth of approximately 10 per cent.
The performance of the main operating units is commented on below.
The UK Political Division ( called “Dod’s Parliamentary Communications” ) is the largest operating unit and consists of 5 magazines ( including The House ); 3 websites (including the two market leaders EPolitix.com and DodOnline); a political monitoring business; a conference and seminar business holding over 100 conferences a year; the Electus public affairs recruitment business; and the Dod’s database and reference business (including Dod’s Parliamentary Companion) consisting of 7 titles. The sales totalled approximately £ 6.7 million in 2004, up from £ 1.5 million in 2003, with a large proportion of the increase from the acquisitions made during the year. Nevertheless, this Division is showing strong organic growth and sales revenues grew 13 per cent in 2004 on a like-for-like basis. The costs in 2004 include the full costs of moving from 4 separate office buildings to the new integrated office in Westminster Tower (including the costs of the remainder of the old leases). The pre-tax profit of this division after these costs amounted to approximately £ 1.24 million. The outlook for 2005 is for continued good growth in sales with the cost and operational benefits of the new building flowing through. Our budgets for 2005 are based upon a May General Election, but an autumn poll date could have an influence on the Division’s results for 2005.
The European Political Division, based in Paris and Brussels, had sales of approximately £ 2.2 million in 2004, a like-for-like increase of 6 per cent over 2003. It consists of Le Trombinoscope (two reference books, a newsletter, a subscription website and the prestigious ‘Prix du Trombinoscope’ political awards) which had sales growth of 14 per cent in 2004; the Parliament Magazine which achieved a phenomenal 46 per cent sales growth over the equivalent period last year; EUPolitix.com which has seen stable revenues since being acquired by Huveaux, and has turned a £ 364,000 annual loss pre-acquisition into a small pre-tax profit; and ATP Egora (which consists of 4 quarterly magazines and a website) which similarly saw stable revenues but saw increased profits under our ownership with a contribution of approximately €70,000 (£48,000) in the four months post – acquisition. Overall, the European Political Division achieved pre-tax profits of approximately £317,000 in 2004.
Our operations in Paris, comprising the separate businesses of Le Trombinoscope and ATP Egora, have recently moved into new premises together, enabling further operational benefits to accrue.
Eurosource, which is the title for the new database and reference books and subscription website on the EU Parliament and the EU Commission (which combines the former Dod’s and Trombinoscope databases) achieved sales of approximately £ 250,000 in 2004, all of which were deferred to 2005 pending the delivery to customers of Volume II. This postponement arose as a direct result of the EU Parliament rejecting the proposed EU Commission in October. Sales in 2004 were therefore £ nil as compared to £ 178,000 on a like-for-like basis in 2003.
Despite the Eurosource postponement, our EU Political Division achieved underlying revenue growth in 2004 of 46 per cent in the Parliament Magazine and 40 per cent in Eurosource and prospects for the Division in 2005 are excellent.
The Education & Training Division consists of Fenman and Lonsdale.
Fenman had sales of approximately £ 2.8 million in 2004 as compared to £ 0.7 million in 2003 (part year only), but on a like-for-like basis, sales were 2 per cent lower. Pre-tax profits were approximately £460,000 (2003 – £184,000 part year only). This was a disappointing result reflecting a slowing of manual and video sales (down 13 per cent) counterbalanced by 8 per cent growth in Training Journal revenues and a 57 per cent growth in seminar revenues. Immediate action has been taken to address these points:-
Production of the Training Journal is being moved to London to be produced alongside our other magazine titles with consequent cost savings and the benefit of a large advertising sales department.
The Fenman seminars business will be given the added expertise of our large London political conference and training unit and further expansion of this high growth business is planned for 2005.
The manual and video business will reduce its heavy direct marketing spend which will be replaced by a small sales unit targeting high value customers, particularly the larger Government departments.
The outlook for 2005 for Fenman is therefore for a resumption of modest sales growth.
Lonsdale achieved sales of approximately £ 2.66 million in 2004, as compared to £ 2.50 million on a like-for-like basis in 2003, representing sales growth of 6 per cent. Pre-tax profits were approximately £1.18 million, which represents a pre-tax profit margin of 44 per cent. A number of new titles were published during the year, including six new maths titles published in November, and sales have started strongly in 2005.
Group
Head Office costs were £ 803,000 net of interest income which was in line with expectations.
Huveaux ended the year with a strong balance sheet with no borrowings and approximately £ 3.1 million cash in the bank. Cash generation was strong with 92 per cent of pre-tax profits being converted into cash during the year, excluding deferred payments in respect of the Fenman and Lonsdale acquisitions.
To this must be added the benefits of Kevin Hand, Gerry Murray and Jean-Marie Simon joining our Board in 2004. Five of our eight directors are highly experienced publishers and three have served on FTSE100 company boards.
2004 has been an active year, involving 3 acquisitions and significant reorganisation and restructuring of the operations under our strengthened senior management team. Gerry Murray now has responsibility for all our UK operations, and Jean-Marie Simon heads our European political activities. Both have actively integrated our acquisitions and positioned the businesses for growth. The benefits of the actions taken this year are expected to flow through for years to come.
Overall, the outlook for 2005 is for continued significant growth. The Board is continuing actively to evaluate and negotiate acquisitions which meet its strict criteria of enhancing profits, being highly cash generative, with strong market positions in growing markets and selling important information to end users. All must be capable of providing strong long-term growth.
The above trading statement is subject to the audit being completed and it is the Board’s intention to release the audited results for the year ended 31 December 2004 and announcement regarding the dividend on 7 March, 2005.
Huveaux is today giving analysts and institutions a tour of its new UK Political offices at 10 AM this morning. This will include a presentation on the benefits achieved by the move to Westminster Tower and a review of the Company’s political publications and services.