Centaur Media : Shareholder Document

20 July 2022

Centaur Media Plc

Interim results for the 6 months ended 30 June 2022

Strong revenue and EBITDA growth across Xeim and The Lawyer

Flagship 4 brands driving growth and represent more than two-thirds of overall revenue

On track for strategic objectives set out under Margin Acceleration Plan (MAP23)

Centaur Media, an international provider of market intelligence, learning and specialist consultancy is pleased to present its interim results for the 6 months ended 30 June 2022.

Financial Highlights
	£m	H1 2022	H1 2021	Change
	Revenue	19.8	18.3	8%
	Adjusted1 EBITDA	3.4	2.2	55%
	Adjusted1 EBITDA margin	17%	12%	+5pp
	Adjusted1 operating profit	1.9	0.5	280%
	Group reported profit/(loss) after taxation	0.7	(0.4)	-
	Dividend (pence per share)	0.5	0.5	-
	Net cash2	14.2	11.9	19%

• Revenue grew 8% to £19.8m, with revenue growth across both Xeim (up by 9% to £16.1m) and The Lawyer (up by 6% to £3.7m)
• Flagship 4 brands represent 68% and higher quality revenue streams represent 78% of Group revenue
• Adjusted1 EBITDA increased to £3.4m (H1 2021: £2.2m), an adjusted1 EBITDA margin of 17%
  (2021: 12%), with operational gearing from revenue growth and tight cost controls
• Encouraging progress towards MAP23 targets of 23% adjusted1 EBITDA margin and more than £45m revenue by the end of 2023
• Interim dividend of 0.5 pence per share (H1 2021: 0.5 pence)
• Cash conversion of 125% has led to an enhanced net cash2 position of £14.2m (H1 2021: £11.9m) which together with a £10m undrawn RCF leaves Centaur well-positioned to invest in its Flagship 4 brands and manage macroeconomic uncertainty

Over the first six months of 2022, Centaur has built on the good momentum of 2021. Revenue, adjusted1 EBITDA and adjusted1 EBITDA margin all continued to show growth, as does the Group's retained earnings.

First half reported revenue was up 8% to £19.8m (H1 2021: £18.3m), with combined growth of 11% from the Flagship 4 brands of Econsultancy, Influencer Intelligence and MW Mini MBA (all three of which are in the Xeim business unit) and The Lawyer. In line with Centaur's strategy, the higher quality revenue streams of premium content, marketing services and training and advisory now represent 78% of Group revenue. Our revenues are resilient because our clients are choosing us for

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strategic, long-term spend, in order to future-proof their businesses. Structured customer price rises have been implemented to help mitigate the inflationary environment.

Adjusted1 EBITDA increased by 55% to £3.4m (H1 2021: £2.2m), as a result of revenue growth and

continued tight cost controls, delivering an adjusted1 EBITDA margin increase to 17% (H1 2021: 12%).

The improvement in EBITDA illustrates the operational gearing inherent within Centaur's business model. This underpins management's belief that 23% adjusted1 EBITDA margins can be achieved through an increase in higher margin revenues and continued management of costs, in line with MAP23.

Centaur continues to maintain a heathy net cash2 balance of £14.2m. Cost controls have been maintained through clear operational and financial steps taken to reinforce the resilience of the business, such as strong negotiation with suppliers and flexible reward structures to retain and recruit top talent. This will ensure that the business is best positioned to withstand any wider macroeconomic uncertainty.

The increase in adjusted1 EBITDA has resulted in an adjusted1 operating profit of £1.9m (H1 2021: £0.5m). The Group reported profit after taxation of £0.7m which is an improvement from last year's loss of £0.4m.

Strategic and operational highlights

In January 2021, Centaur updated its Margin Acceleration Plan ("MAP23") with the aim of raising adjusted1 EBITDA margin to 23% and increasing revenue to more than £45m by 2023. Since then, Centaur has focused investment and resource allocation on its Flagship 4 brands, which it considers to be the key drivers of organic growth.

Over the past six months, revenues from the Flagship 4 grew by 11% to £13.5m, which now equates to 68% of total Group revenue:

• Econsultancy benefited from continued strong demand for digital training, supported by the Xeim Engage team creating solutions for the Top 200 companies by marketing spend;
• Influencer Intelligence saw good renewal rates in H1 2022 of 86% (2021 full year: 84%) with an upward trend in new business during H1 2022 and has acquired the first customers for its new consultancy offering;
• MW Mini MBA saw continued growth, with revenue up 16% vs H1 2021 with a focus on sales to repeat corporate customers; and
• The Lawyer delivered double-digit growth in the value of its subscription renewals, assisted by its premium product Signal recording a strong first year of renewals. H1 also saw the launch of the Briefing Room, a digital platform for law firms to connect with the in-house legal community, and the expansion of the Litigation Tracker's international coverage.

Centaur has also seen growth across its suite of Core Brands including an 81% growth in Oystercatchers revenue from an increase in blue-chip customer contracts.

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Going forward, Centaur's aim is to position both its Flagship 4 and Core Brands for further growth, broadening its cross-selling opportunities and enhancing shared capabilities.

Dividend

Centaur's Board has announced an interim dividend for 2022 of 0.5p per share (H1 2021: 0.5p). This is in line with Centaur's dividend policy that aims to distribute 40% of adjusted1 earnings after taxation, subject to a minimum aggregate total of 1p per share per year.

Outlook

Centaur has met the Board's expectations for revenue, adjusted1 EBITDA and adjusted1 EBITDA margin growth over the course of the first half of 2022. It is also trading in line with the Board's expectations for the second half of the year, which historically has a greater weighting of revenue and profit than the first half and will also include the highly successful The Lawyer Awards in July.

Despite macroeconomic headwinds and an uncertain outlook, the Board remains confident in the successful delivery of Centaur's MAP23 revenue and EBITDA margin objectives. Centaur will continue to invest in improving the quality of its offerings across the Flagship 4, while the Group's balance sheet strength will allow for adaptability and investment in future organic growth opportunities.

Swag Mukerji, Chief Executive Officer, commented:

"This has been a good six months for Centaur as we continue to make strategic progress in line with our Margin Acceleration Plan - MAP23 - and it is encouraging to see further growth in revenue, EBITDA and EBITDA margin.

We are positioning Centaur to deliver targeted connectivity with timely and deeper insight and are developing our learning and consultancy expertise in a market consistently characterised by change. These underlying trends and our focus on the Flagship 4 are driving our revenue and give us a platform for growth. Meanwhile, our resilient revenue streams and balance sheet strength will ensure that Centaur is well positioned to withstand any wider macroeconomic uncertainty."

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Adjusted EBITDA is adjusted operating profit before depreciation and amortisation. Adjusted results exclude adjusting items as detailed in note 4 of this Interim Report.

Net cash is the total of cash and cash equivalents and short-term deposits.

Enquiries
Centaur Media plc
Swag Mukerji, Chief Executive Officer	020 7970 4000
Simon Longfield, Chief Financial Officer
Teneo
Zoë Watt / Matthew Thomlinson	07713 157561 / 07785 528363

Note to editors

Centaur is an international provider of market intelligence, learning and specialist consultancy that inspires and enables people to excel at what they do, raising the standard for insight, interaction and impact.

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Overview of Group Performance

Centaur has continued to perform well off the back of the strong growth in 2021. Reported revenue in H1 2022 grew 8% compared to H1 2021 with Xeim reporting a 9% increase and The Lawyer an increase of 6%.

With revenue growth of 11% from the Flagship 4 brands, the higher quality revenue streams of premium content, marketing services, and training and advisory accounted for 78% of Group revenues in H1 2022, an increase of 5 percentage points from H1 2021. The Flagship 4 now account for 68% of Group revenues (2021: 66%), and these have boosted the Group's revenue and profitability in H1 2022:

• Econsultancy revenue growth was 22% in training and 27% in subscriptions;
• Influencer Intelligence renewal rates at 86% are higher than the average for 2021 resulting in a 2% increase in the book of business;
• The MW Mini MBA grew 16% as the result of increased yields from price rises and revenue from bespoke training courses; and
• The Lawyer experienced corporate subscription renewal rates of 113% with excellent renewal rates on Signal in its first year of renewals.

The Group is half-way through its three-year strategy ("MAP23") which is targeting annual revenues of over £45m and EBITDA margins of 23% by 2023. The growth in revenues in H1 2022 along with a stronger EBITDA margin (increasing from 12% in H1 2021 to 17% in H1 2022) underpins our belief that the MAP23 targets are realistic and achievable.

Trading Summary

	Six months	Six months
	ended	ended
Unaudited	30 June 2022	30 June 2021	Movement
Revenue (£m)	19.8	18.3	8%
Adjusted1 EBITDA (£m)	3.4	2.2	55%
Adjusted1 operating profit (£m)	1.9	0.5	280%
Reported operating profit/(loss) (£m)	1.1	(0.3)	-
Group reported profit/(loss) after tax (£m)	0.7	(0.4)	-
Adjusted1 diluted EPS (pence)	0.9	0.2	350%
Adjusted1 operating cash flow2 (£m)	4.2	6.0	(30%)
Cash conversion3	125%	293%	(168)pp

The adjusted1 operating profit of £1.9m (2021: £0.5m) resulted from the increase in revenue compared to H1 2021 dropping through as a higher profit increase due to the Group's operational gearing. As a result, the Group reported a profit for the period of £0.7m (2021: loss of £0.4m).

Adjusted1 diluted earnings per share from continuing operations for the reporting period was 0.9 pence (2021: 0.2 pence). Diluted earnings per share for the period on a reported basis was 0.5 pence (2021: a loss of 0.3 pence).

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Net cash4 increased from £13.1m at the end of 2021 to £14.2m at the end of June 2022. Cash performance was strong in the period mainly due to continued focus on cash collection resulting in a reduction in trade receivables. This, combined with a £2.8m increase in deferred income, but offset by a decrease in creditors and an increase in prepayments and accrued income, resulted in cash conversion3 in the period of 125% (2021: 293%). The Group generated £4.2m of cash from operating activities and paid out £0.7m of dividends and £1.0m of obligations under lease and revolving credit facility arrangements.

	Six months ended	Six months ended
	30 June (unaudited)	30 June (unaudited)
	2022	2021
	£m	£m
Adjusted1 operating profit	1.9	0.5
Depreciation and amortisation	1.5	1.7
Movement in working capital	0.8	3.8
Adjusted1 operating cash flow2	4.2	6.0
Capital expenditure	(0.8)	(0.3)
Repayment of lease obligations and interest	(1.0)	(1.2)
Free cash flow	2.4	4.5
Dividends paid to Company's shareholders	(0.7)	(0.7)
Purchase of own shares	(0.6)	(0.2)
Increase in net cash4	1.1	3.6
Opening net cash4	13.1	8.3
Closing net cash4	14.2	11.9

Segmental Review

Revenue for the six months ended 30 June, together with growth rates across each segment, are set out below.

		The			The
	Xeim	Lawyer	Total	Xeim	Lawyer	Total
	2022	2022	2022	2021	2021	2021
	£m	£m	£m	£m	£m	£m
Revenue
Premium Content	4.9	2.3	7.2	4.3	1.9	6.2
Marketing Services	1.6	-	1.6	1.7	-	1.7
Training and Advisory	6.7	-	6.7	5.5	-	5.5
Events	1.3	0.5	1.8	1.4	0.5	1.9
Marketing Solutions	1.4	0.3	1.7	1.8	0.5	2.3
Recruitment Advertising	0.2	0.6	0.8	0.1	0.6	0.7
Total revenue	16.1	3.7	19.8	14.8	3.5	18.3
Revenue increase (%)	9%	6%	8%

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