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Top Right nearly doubled pre-tax profits in 2011

Category : Business

Published gain largely due to reduction in exceptional costs for company formerly known as Emap

Top Right, formerly known as Emap, almost doubled pre-tax profits to £52.4m in 2011, thanks largely to a reduction in exceptional costs.

The company’s trade magazine publishing and data divisions reported year-on-year declines in pre-tax profits, of 35% and 10% respectively; while its conference and events division grew pre-tax profit by just over 15%.

Top Right, which owns businesses including Retail Week and Drapers, as well as events such as World Retail Congress and trend analysis firm WGSN, said total revenue rose by just over 3% year-on-year to £249.4m.

The company’s accounts, published on Tuesday, show that the main reason for the boost in pre-tax profits between 2010 and 2011 was a drop in the amount of exceptional items hitting the bottom line.

In 2011 Top Right had exceptional costs of £25.5m, made up of items including finance costs and restructuring charges, compared to £55.7m the year before.

In 2010 exceptional costs grew because of a one-off £17.9m loss on the sale of Professional Beauty magazine and show.

When these exceptional items are stripped out the pre-tax profits for Top Right’s core business actually dropped 5.2% year-on-year to £77.9m.

The worst performing part of Top Right was its magazine publishing arm. Emap Publishing, which includes titles such as Architects’ Journal and Construction News, reported a 35% year-on-year fall in pre-tax profits to £9.4m. Revenues fell 7% to £49.5m.

Top Right, which has indicated that it might consider selling off some of its 19 trade magazines, said that its public sector titles were hit by a drop in government and public sector spending.

4C, Top Right’s data and insight division which includes WGSN, Brad and Planet Retail, reported a 10% year-on-year fall in pre-tax profits to £29.6m. Revenues grew by 2.6% to £82.3m.

Top Right’s results were buoyed by an exceptionally strong performance by its conference and events division.

I2i, which includes the Cannes International Festival of Creativity and World Retail Congress, grew pre-tax profits by 15.6% year-on-year to £33.9m. Revenues rose by almost 14% to £88.5m.

“Despite challenging external market conditions in 2011, the underlying strength of the group’s brands delivered growth in revenue and profitability,” the company said.

Earnings before interest, tax, depreciation and amortisation – a measure keenly watched by potential buyers as it provides a measure of underlying profitability – rose slightly to £86m.

Operating profit decreased slightly from £61.2m in 2010 to £59.6m.

Top Right said that it made £69.5m in net cash – up from £52.7m in 2010 – before financing costs of £7.2m, down on £16.8m in finance expenses in 2010.

“The group operated within its covenant limits at all times during the year under review,” the company said.

Staff costs remained flat at £66.3m as the number of staff grew by more than 100 to 1,461. The company paid out £2.4m in termination payments to three directors during the year.

Departures in 2011 included chief executive David Gilbertson, who left in May and was replaced by Duncan Painter in October, and finance chief Martyn Hindley, who left in December.

An ordinary dividend of £23.5m was paid during the year, and £12.5m in dividends on preference shares.

Guardian Media Group, which also publishes MediaGuardian, and private equity firm Apax bought Emap, as it then was, in December 2007 for about £1bn, with both companies subsequently forced to write down the value of the investment.

Apax owns just over 70% of Emap with GMG owning the rest. Apax also acquired a 49.9% stake in Trader Media Group from GMG in 2007.

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