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Title: DJ Incisive Media/1H -2: OperMargins 21.4% >U.INM
Feature: Press Coverage
Date: 11 September 2003

The defensive strengths of the company's leading brands in each market sector, the pace of integration of the acquired businesses, and a strong focus on cost savings, have enabled the company to improve operating margins by five percentage points to 21.4%.

Total revenues increased to GBP14.25 million including the two month period post the acquisition of Risk Waters. The group has benefited from the fact that May and June represent strong and profitable trading months in Risk Waters Group's annual cycle.

Underlying revenues from the existing business fell 8% to GBP10.69 million in difficult trading conditions, particularly within the Retail Investment division.

Net interest payable has increased to GBP0.50 million (2002: GBP0.31 million), which follows the increase in senior bank debt of GBP22.5 million to part fund the acquisition of Risk Waters. At June 30 net debt was GBP27.97 million (December 31: GBP6.52 million). The balance of the acquisition was funded by an equity issue.

The most important achievement during the period was the acquisition and integration of the Risk Waters Group, which represents an excellent strategic fit. With its subscription base and delegate led conference model, Risk Waters provides a further diversification of revenue streams for the group. It is also a global business with significant revenues outside of the U.K., and thus brings Incisive Media a low risk platform for entry into international markets, and especially into the U.S. and Hong Kong.

Incisive has reorganized into six divisions, each focused on a single market. The integration of Risk Waters into this new structure has been swift and decisive. Cost synergies expected have all been delivered, including therelocation of Incisive Media's head office to Haymarket House. The full benefits of these will be seen in 2004.

In July Incisive also successfully completed the acquisition of Insurance Age, which has been successfully integrated into the Insurance division.

The Retail Investment Division is headed up by the Investment Week brand, but includes all other titles focused on the retail investment market. This division has been severely affected by the continuing difficult conditions in this sector.

Divisional revenues were down 14% compared mainly due to reduced advertising revenues. Event revenues were largely unchanged.

After two difficult years for the company's insurance assets, which include Post Magazine, stability is now being achieved. Revenues for the division have increased marginally compared to 2002 and there are some encouraging signs of further recovery looking forward.

During the period Post Magazine itself increased revenues by 9%. Subsequent to the period end, Insurance Age was acquired and successfully integrated into this division.

The Risk Management and Capital Market division largely includes titles that were acquired with Risk Waters and is dominated by the Risk brand, but also includes Energy Power Risk Management, Credit and Hedge Funds Review, which previously sat within the investment division, as well as three newsletters including the weekly FX Week.

With the exception of EPRM, these titles performed in line with last year, on a like-for-like, pre-acquisition basis.

The energy market, following the demise of Enron, has been considerably more difficult, but EPRM is the market leader in that sector.

Total revenues within the Mortgage division, which includes Your Mortgage, are down 7% to GBP1.70 million, but this is almost entirely a result of the loss of one publishing contract. Excluding this event, divisional revenues would have been up compared to 2002.

Business-to-business title Mortgage Solutions increased revenues by more than 10%.

The Financial IT and Market Data Division represents the smaller division acquired with Risk Waters and includes Waters magazine, a number of newsletters and some reference products.

The company has amalgamated Incisive Media's existing technical newsletters into this division.

Market Data Products, which includes the newsletter Inside Market Data, have been performing well but the technology titles continue to operate in a difficult space, though the company believes this market has reached the bottom of its cycle and shows potential for growth in the future.

In the Photographic Division, the British Journal of Photography has maintained its revenues in the first half of the year.

Source: Dow Jones World Equities Report UK

© Incisive Media Ltd. 2009
Incisive Media Limited, Haymarket House, 28-29 Haymarket, London SW1Y 4RX, is a company registered in the United Kingdom with company registration number 04038503