Centaur Media says:
Financial Highlights
Statutory revenues down 4% to £24.1m; underlying revenues down 1%.
- Xeim underlying revenues declined by 4% to £19.7m due to deliberate management actions to close low margin products combined with trading weaknesses at Econsultancy’s US operations and MarketMakers
- The Lawyer increased underlying revenues by 11% to £4.3m
- Strong growth from information Influencer Intelligence data analytics platform and e-learning products
- Adjusted operating loss of £1.3m (2018: £1.8m) includes central overhead costs of supporting four businesses sold during the first half
- Central cost savings resulting from the disposals planned from the second half of 2019
- Group statutory profit after taxation of £6.0m (2018: £0.5m) due to gains on disposal of subsidiaries
- Net cash of £14.4m at 30 June 2018 (2018: £1.8m) after receiving £16.0m of net disposal proceeds in the period
During the half, Centaur successfully sold its businesses in Engineering, Financial Services, Human Resources and Travel and Meetings for gross proceeds of £21.75m. The completion of the disposal programme in July 2019 leaves Centaur a simpler, more focused group with two businesses, Xeim in marketing services and The Lawyer in the legal sector. This will enable elimination of central overheads required to support the disposed businesses and the company intends to reduce annualised costs by at least £5m.
Centaur is today announcing a dividend payment of £5m, equivalent to 3.5p per share, payable on 25 October 2019. This includes a 2p per share special dividend as the first distribution of the proceeds from the recent disposals. Centaur intends to make further returns of cash in 2020 with these payments being subject to, inter alia, satisfactory group performance and ensuring the group has sufficient working capital to continue to invest in its strategy.
In addition, from 1 January 2020, Centaur will adopt a new progressive dividend policy and will target a pay-out ratio of 40% of adjusted earnings, subject to a minimum dividend of 1p per share.
Also, today, Centaur is also announcing its Margin Acceleration Plan 2022 (“MAP22”) with the aim of raising group EBITDA margins to at least 20% by 2022. The plan consists of initiatives to accelerate revenue growth and to secure further cost efficiencies. These include:
Revenue acceleration:
- Increased international sales of key brands
- Cross-selling Xeim’s suite of products to enterprise clients
- Leverage common tech stack to build new content propositions and new product development
- New products to accelerate digital subscription growth in The Lawyer
- Operational improvement initiatives at Econsultancy and MarketMakers
Cost efficiency opportunities:
- Elimination of costs made possible by the creation of a simpler business
- Withdrawal from low margin, low growth products
Outlook:
- Markets continue to be held back by economic and political uncertainty
- Near term outlook is a small profit in H2 which will result in a reduction in the adjusted operating loss for the year
Swag Mukerji, Chief Executive Officer, commented: “Centaur is a simpler business with a portfolio of digital assets, now wholly focused on marketing services and the legal sectors. This will allow us to make a significant reduction in central overheads, reducing annualised costs by at least £5m.
Our Margin Acceleration Plan 2022, announced today, will address the more challenged parts of the group whilst driving revenue growth and further cost efficiencies to lift EBITDA margins to 20% by 2022.
Also, today, we are announcing a new progressive dividend policy from 1 January 2020 under which we will target a payout of 40% of earnings, subject to a minimum dividend of 1p per share. We are making a £5 million dividend payment in October and, subject to satisfactory group performance, intend to make further payments in 2020.”
