preliminary results presentation 12 months to 31 december 2003

Preliminary Results Presentation12 months to 31 December 2003Preliminary Results Presentation12 months to 31 December 2003

Incisive (in-sy-siv) adj. mentally sharp; acute; clear and effective; cutting; penetrating Incisive (in-sy-siv) adj. mentally sharp; acute; clear and effective; cutting;

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Agenda

• Preliminary results Operational highlights Financial highlights Divisional highlights

• Track record Highlights since flotation 7 year record

• Current trading and outlook The investment case

• Appendix Company history Strategy Revenue and profit bridge Revenue by division and by source


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Operational highlights

• Good performance despite brutal market conditions Robust performance from market leading brands

• Swift integration of Risk Waters

• Leading position in general insurance market reinforced with the acquisition of Insurance Age

• Acquisition of outstanding 50% in DWT Conferences Ltd

• Continued organic growth by launching new titles - Wealth, US Credit and other brand extensions


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Financial highlights

• 46% increase in turnover to £35.37m

• 61% increase in profit before goodwill and tax to £6.65m, after non-recurring rationalisation costs

• Operating margin improved to 23.3% from 18.8%

• 24% improvement in diluted earnings per share to 6.62p

• Final dividend of 1.0p, giving 28% increase in total dividend for the year to 1.60p


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Financial highlightsProfit and loss account - operations

2003 2002£'000 £'000 £'000 %

Turnover - existing 23,223 24,281 (1,058) -4.4% - acquisition 12,142 0 12,142 n/aTotal turnover 35,365 24,281 11,084 45.6%

Operating profit* - existing 5,032 4,570 462 10.1% - acquisition 3,191 0 3,191 n/aTotal operating profit* 8,223 4,570 3,653 79.9%

Operating margin* 23.3% 18.8%

Notes*= before goodwill and exceptional items

Change


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Financial highlightsProfit and loss account - financing

2003 2002£'000 £'000 £'000 %

Total operating profit* 8,223 4,570 3,653 79.9%

Interest (1,573) (437) (1,136) 260.0%Profit before tax* 6,650 4,133 2,517 60.9%

Interest cover 5.23 10.46

Exceptional items 0 (701) 701 -100.0%Goodwill (3,096) (2,047) (1,049) 51.2%Taxation (1,809) (1,230) (579) -47.1%Profit after tax 1,745 155 1,590 n/ a

Average tax rate* 27.2% 29.8%


Change


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Financial HighlightsProfit and loss account – performance per share

2003 2002 Changepence pence %

Earnings per share* - basic 6.72 5.65 18.9% - fully diluted 6.62 5.33 24.2%

Dividend per share 1.60 1.25 28.0%

Dividend cover - basic 4.2 4.5 - fully diluted 4.1 4.3

Shares in issue

Actual at 31 December 82,937,793 50,127,638

Average to 31 December - basic 72,071,983 49,970,363 - fully diluted 73,113,606 52,952,530



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Financial highlightsBalance sheet

2003 2002 Change£'000 £'000 £'000

Fixed assetsGoodwill and other intangible assets 69,754 30,401 39,353Tangible fixed assets 741 281 460

70,495 30,682 39,813

Working capitalStock 306 184 122Debtors 10,470 5,639 4,831Trade creditors, deferred income, accruals andother provisions (13,478) (6,879) (6,599)

(2,702) (1,056) (1,646)

Net debtCash 1,633 2,729 (1,096)Bank debt (23,744) (1,842) (21,902)Loan notes (6,269) (6,000) (269)Deferred consideration (553) (1,408) 855

(28,933) (6,521) (22,412)

Total Assets 38,860 23,105 15,755


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Financial highlightsCash flow

2003 2002 Change£'000 £'000 £'000

OperationsCash from operating activities 5,163 3,966 1,197Cash conversion rate of operating activities 63% 103%Net capital expenditure (405) (74) (331)

Servicing of financeNet interest and financing items (1,907) (492) (1,415)Taxation (786) (1,473) 687Equity dividends paid (873) (499) (374)

Corporate activityAcquisitions (39,334) - (39,334)Issue of share capital 16,228 98 16,130Increase/(decrease) in borrowings 20,818 (1,400) 22,218

Net cash (outflow)/ inflow (1,096) 126 (1,222)

Net debt at 1 January (6,521) (6,322) (199)Net cash (outflow)/inflow (1,096) 126 (1,222)Movement in bank debt, loan notes & def. consid'n (21,316) (325) (20,991)Net debt at 31 December (28,933) (6,521) (22,412)


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Divisional structure Five core divisions

Risk Waters Group

Incisive Media

Retail Retail InvestmentInvestment

Investment WeekInternational InvestmentIFAOnlineBloomberg MoneyMulti ManagerProtected InvestmentsYour MoneyWealth

Risk Risk ManagementManagement

RiskAsia RiskCreditEnergy RiskOperational RiskHedge Funds ReviewUS Credit

InsuranceInsurance

PostReinsuranceProfessional BrokingCoverInsurance AgeInsurance Window

MortgageMortgage

Your MortgageMortgage Edge Mortgage Solutions Your Mortgage.comIncisive Communications

Financial IT/ Financial IT/ Market DataMarket Data

WatersTrading Technology WeekInside Market DataFX WeekHedge Fund ITDWT

Photographic

British Journal of Photography


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Divisional highlights Retail investment (£10.1m 29% of group revenues (2002:46%))Key brands: Investment Week, Multi-Manager, Bloomberg Money

• Revenues for the division declined by 9%

• Despite a fall in advertising of 17%

• Events revenue up 7% Investment Week Nordic European Forum

• Growth opportunities through new brands Launch of Wealth and new research product Incisive Research

• Strengthening of positions in markets


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Divisional highlightsInsurance (£7.4m 21% of group revenues (2002:27%))Key brands: Post, Insurance Age, Professional Broking, Reinsurance

• Like for like revenue improved by 9%, total improvement of 16% Boosted by acquisition of Insurance Age, full benefits to be seen in 2004 Good performance from Post Magazine

• Successful extension of brands through creation of new platforms Like for like event revenue up 27%

• Good progress in other parts of the division Re-launched Reinsurance revenue up 31% Revenues for Professional Broking up 41%


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Divisional highlightsRisk management (£10.9m, 31% of group revenues)Key brands: Risk, Credit, Energy Risk, Hedge Funds Review, US Credit

• Difficult first half, but real recovery in 4th quarter with record advertising revenues for Risk

• EPRM re-launched as Energy Risk - outlook encouraging

• Hedge Funds Review’s revenue up 38% Launched delegate paid conference

• Launched US Credit


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Divisional highlightsMortgage (£4.3m 12% of group revenues (2002:19%))Key brands: Your Mortgage, Mortgage Solutions, Mortgage Edge

• Magazine brands revenue, including events, up 8%

• Total divisional revenue declined by 6% Due to loss of specialist publishing contract

• Strong growth from Mortgage Solutions Publication revenue up 24% Events revenue up 50%


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Divisional highlightsFinancial IT and market data (£1.5m, 4% of group revenues)Key brands: Waters, Inside Market Data, FX Week

• Revenues for IMD and FX Week strong in last quarter

• Encouraging signs of further recovery with Waters return to profitability forecast in 2004

Photographic (£1.1m, 3% of group revenues (2002: 4%))Key brand: British Journal of Photography

• 4% increase in revenues


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Swift integration of Risk Waters Group

• Annualised cost savings of ~£1.5m, higher than anticipated Office move – completed 24th May Production Personnel

• Business fully integrated Merged accounts, marketing, personnel, IT and online departments

• Rationalisation cost approximately £314k (H1 - £100k)

• Full benefits to be seen in 2004


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Highlights since flotation

• Turnover doubled from £16.5m to £35.4m

• Increased diluted earnings per share before goodwill by 85% to 6.62p

• Improved operating margins from 15.7% to 23.3%

• Achieved during a major downturn in the advertising cycle

• The performance is a testament to the quality of our brands and our staff who have implemented the strategy that we adopted at the inception of the group in 1994


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Revenue change by source

45%

23%

29%3%

65%

10%

23%2%

£35,365,000 £16,582,000

2003 2000

Advertising Subs & other publication Events Internet and other revenue


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7 year track record

Turnover (£'000)

05000

10000150002000025000300003500040000

1997 1998 1999 2000 2001 2002 2003

Adjusted earnings per share (pence)

0

1

2

3

4

5

6

7

8

1997 1998 1999 2000 2001 2002 2003

Adjusted profit before tax (£'000)

0

1000

2000

3000

4000

5000

6000

7000

1997 1998 1999 2000 2001 2002 2003


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Current trading and outlook

• Advertising revenue recovery Positive growth in all divisions

• The group is continuing to expand organically Wealth, US Credit, Incisive Research and range of conferences and

events

• Highly geared to recovery

• Will receive the full year benefits of cost savings introduced in 2003

• Well positioned to make more acquisitions


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The investment case

• Superior industry margins of 23% with future growth Each division headed by robust brand leader

• Excellent organic growth track record with a proven business model Launched 16 new magazine brands in 9 years Low risk events model Events are domestic with limited exposure to international travel

• Highly geared to advertising recovery 46% of revenues from sponsorship and advertising ahead of peers

• Well positioned to make more acquisitions Management team has a proven track record of swiftly integrating

acquisitions

• Nine years of unbroken EPS growth

AppendixAppendix


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Corporate history

• City Financial Communications established in 1994

• Company re-branded as Incisive Media in July 2000 following

the acquisition of Timothy Benn Publishing Group

• Incisive Media floated in December 2000

• Matching Hat acquired in August 2001

• Acquired Risk Waters for £35.1million in May 2003

• Acquired Insurance Age for £1.05million in July 2003

• Acquired final 50% of DWT Conferences December 2003


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Incisive Media strategy • To provide the preferred media for companies to

communicate effectively with their target audience through a variety of platforms

• To be the preferred source of information in our chosen markets

• To apply the business model to growth sectors

Apply market focused approach to developing brands “Slice and dice” to deliver key information to defined target audiences Extend brands across a variety of platforms Develop close relationships with both buyers and sellers of products to

maintain preferred channel status

• To respond to new market opportunities and develop valuable brands in those markets

• To make value enhancing acquisitions that will accelerate our growth and complement existing brands


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Acquisitions criteria

• Quality brands and assets with strong market positions

• Serving growing vertical industry sectors

• Robust earnings from the core assets

• Earnings enhancing in the short to medium term


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Future growth strategy• Growth through the application of a proven business model

Extend the brand to a variety of platforms Conferences Forums Awards Exhibitions E-Mail alerts PDF Bulletins Training Research Data and information

sales

• Launch new magazine brands

• Specialist publishing and contract event management

• Cyclical upside from advertising recovery – high operational gearing

• By acquisition Good cash inflow Strong balance sheet Ability to manage acquisitions


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Financial highlightsOperating revenue bridge

REVENUE BRIDGE - 2002 TO 2003£'000

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Financial highlightsOperating profit bridge

Operating profit before goodwill and exceptional items £'000 £'000

Year to 31 December 2002 4,570Profit from Risk Waters Group 3,068Profit from Insurance Age 123

Effect of acquisitions and investments 3,191Joint ventures and associates 159Discontinued activities 45

Effect of discontinued activities and disposals 204Underlying improvement from continuing activities 571Rationalisation costs -313Year to 31 December 2003 8,223


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Divisional highlightsRevenue by source 2002/2003

£'000 % of total £'000 % of total £'000 %

Display advertising 11,152 31.5% 8,758 36.1% 2,394 27.3%Other advertising & sponsorship 5,009 14.2% 3,517 14.5% 1,492 42.4%Other publication revenue 7,966 22.5% 5,150 21.2% 2,816 54.7%Events 10,137 28.7% 5,941 24.5% 4,196 70.6%Internet 1,101 3.1% 915 3.8% 186 20.3%

35,365 100.0% 24,281 100.0% 11,084 45.6%

Change2003 2002Actual Actual


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Divisional highlightsRevenue by division 2002/2003

£'000 % of total £'000 % of total £'000 %

Retail investment 10,092 28.5% 11,646 48.0% -1,554 -13.3%Insurance 7,449 21.1% 6,433 26.5% 1,016 15.8%Risk management 10,890 30.8% 519 2.1% 10,371 1998.3%Mortgage 4,340 12.3% 4,639 19.1% -299 -6.4%Financial IT and market data 1,504 4.3% 0 n/a 1504 n/aPhotographic and other 1,090 3.1% 1,044 4.3% 46 4.4%

35,365 100.0% 24,281 100.0% 11,084 45.6%

2003 2002 ChangeActual Actual

preliminary results presentation 12 months to 31 december 2003

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