Cordiant Communications Group plc - `CCG'; Preliminary Audited Results for the Year Ended 31 December 1999.
Business Editors
LONDON--(BUSINESS WIRE)--March 8, 2000--Cordiant Communications
Group plc ("CCG") (NYSE:CDA) is a global creative communications group
with 180 offices in over 74 countries and 7,965 employees (including
affiliates). The Group comprises; Bates Worldwide, one of the largest
advertising and integrated communications networks in the world;
Scholz & Friends, the largest multi-national advertising network
headquartered in Germany; HP:ICM, specialising in live communications;
a 30% shareholding in the Facilities Group, a pre-production agency;
and a 50% shareholding in Zenith Media Worldwide, the global
specialist media services and planning agency.
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-- Net new business wins of over $420 million in annualised billings,
making a total of over $1 billion over the last two years;
momentum continued into 2000 with over $100 million of wins in the
first two months of the year.
-- Revenues increased well ahead of the market, up by 10% at constant
exchange rates to(pound)335.8 million (1998:(pound)301.8 million).
-- Operating margins (excluding equity income) up to 10.0% (1998:
8.6%) and on track to deliver margins ahead of 11% target for
2000.
-- Operating profit (excluding equity income) increased by 28.4% at
constant exchange rates to (pound)33.5 million (1998:(pound)26.0
million).
-- Pre tax profits up 32% at constant exchange rates to(pound)32.3
million (1998:(pound)24.7 million).
-- Headline earnings per ordinary share up to 8.2p (ADS 66.4c) from
6.3p (ADS 51.9c), up 30.2% (ADS 27.9%) as restated for FRS12 in
1998.
-- Proposed dividend of 1.8p per Ordinary share, an increase of 28.6%
on 1998.
*T
Michael Bungey, Chief Executive of CCG, commented: "These are the
best results we have achieved to date. Two years ago, as a new Group,
we set ourselves some demanding targets: not only have we met them but
we are now able to set ourselves new, even more demanding ones. The
Group is now increasingly leveraging the benefits of being a global
business. The opportunities of the digital age are a major strategic
focus for the next stage of our growth."
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CORDIANT COMMUNICATIONS GROUP PLC
PRELIMINARY STATEMENT
Introduction
1999 was an excellent year for CCG. The Group continued to win
major new assignments from clients around the world and delivered on
its financial targets, central to which was the attainment of a 10%
operating margin. CCG also announced two major acquisitions in 1999
that are expected to accelerate the achievement of its strategic
objectives and enhance its future growth prospects.
New Business
The Group recorded net new business gains of over $420 million in
1999 in annualised billings. The Group's new business momentum has
continued into 2000 with net new business of $100 in the first two
months of the year.
Strategic Objectives
The Group has made significant progress against each of its
strategic objectives during the year. By the end of 2000, CCG aims to
have grown;
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-- Multinational clients to 40% of total revenues,
-- North America to 30% of total revenues, and
-- Marketing services to 30% of total revenues.
In 1999 (pro forma for the acquisition of Healthworld and
Diamond) multinational clients increased to 38%, North America to 27%
and marketing services to 32% of total revenues respectively. The
Group is firmly on track to achieve its strategic objectives for 2000
and has already exceeded the target set for the revenue contribution
from marketing services.
The Group's strategic objectives for 2000 are intermediate steps
towards developing a business profile that will match its best
performing competitors in terms of profitability and growth. To that
end, CCG has set itself new three-year strategic objectives to have
grown, by 2003;
-- Multinational clients to 45% of total revenues,
-- North America to 40% of total revenues, and
-- Marketing services to 50% of total revenues.
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Over the same three-year period, the Group intends to continue to
grow revenues ahead of the market and to achieve a margin of 14%
during 2003.
Financials
Financial Performance
Group revenues increased by 10% to (pound)335.8 million ($544.0
million) at constant exchange rates and by 7.8% excluding
acquisitions, on the same basis. Operating profits increased by 28.4%
at constant exchange rates to (pound)33.5 million ($54.3 million). The
Group achieved its operating margin target of 10.0% for 1999, up from
8.6% in 1998.
The Regions
North America (24.7% of Group revenue)
North American revenues increased by 12.8% on a constant currency
basis to(pound)83.1 million ($134.6 million). Operating profits for
1999 totalled (pound)10.9 million ($17.7 million) with operating
margins improving to 13.1% from 11.4% in 1998. Record new business and
increased spending from existing clients have combined to make North
America the Group's best performing region in 1999. New business
momentum remains very positive in North America, particularly from
internet based clients establishing their brands.
United Kingdom (12.0% of Group revenue)
Revenues increased by 1.0% to (pound)40.2 million ($65.1
million). Operating profits were down fractionally to (pound)4.4
million ($7.1 million) from (pound)4.5 million ($7.5 million) in 1998
with operating margins falling to 10.9% from 11.3% last year. The
restructuring of Bates UK as an integrated agency held back revenue
growth and margin improvement in the United Kingdom. A new senior
management team was appointed towards the end of the year at Bates UK
and improved performance is expected in 2000.
Continental Europe (36.3% of Group revenue)
For the region as a whole, revenues increased 14.8% on a constant
currency basis to (pound)121.9 million ($197.5 million). Operating
profits increased to (pound)12.5 million ($20.3 million) with
operating margins up to 10.3% from 9.3% in 1998.
Revenues at Bates Europe increased by 13.1% at constant exchange
rates with operating margins advancing to 8.6% from 7.6% in 1998.
Scholz & Friends performed strongly with revenue growth of 18.3% in
1999 at constant exchange rates and operating margins of 13.3%
compared to 13.0% in 1998. Continental Europe remains CCG's largest
region and the Group is well positioned to take advantage of the
strong growth in advertising expenditures expected in 2000.
Asia Pacific and Latin America (27.0% of Group revenue)
Asia Pacific and Latin American revenues increased by 5.6% on a
constant currency basis to (pound)90.6 million ($146.8 million).
Reported operating profits totalled (pound)5.7 million ($9.2 million),
an increase of 79.2% at constant exchange rates with operating margins
up to 6.3% from 3.9% in 1998.
Australian revenues decreased by 2.1% at constant exchange rates
with operating margins decreasing to 6.9% from 9.9% in 1998. The
weaker than expected performance in the second half of 1999 was due to
reduced spending by major clients and investment costs in its
interactive business. Improved performance is expected in 2000.
Revenues in Asia increased by 8.9% at constant exchange rates as
economic growth resumed in the region. Operating margins increased to
7.6% from losses in 1998. Continued revenue growth and further
improvements in profitability are expected in 2000. With the
acquisition of Diamond, CCG now has the second largest Western agency
network in Asia Pacific and is extremely well placed for the future.
Operating costs
The average number of staff employed by the Group rose by 5.1% to
5,153 from 4,904 in 1998. Revenue per head was (pound)65,000 in 1999,
an increase on 1998 of 5% at constant exchange rates, staff costs per
head were (pound)36,000, an increase of 5% on the same basis. The
Group's staff cost to revenue ratio (including temporary staff and
freelancers) fell in 1999 to 58% from 59% in 1998. We will continue to
target further improvements in the staff cost to revenue ratio as a
key driver of profitability.
Joint venture & associates
The Group's share of operating profits, primarily from Zenith,
Newcomm Brazil and The Facilities Group, increased to (pound)4.9
million ($7.9 million), up 88.5% on 1998. Zenith continues to perform
well, with revenue growth of 16% during the year and continued
improvement in profitability. CCG, along with its joint venture
partners, continues to evaluate strategic opportunities for the
development of Zenith.
Financial items, taxation and returns attributable to shareholders
Net interest payable and similar items totalled (pound)6.1
million ($9.9 million) which includes the Group's share of Zenith's
interest income, the write-off of fees associated with refinancing the
Group's syndicated bank facilities during the year of (pound)1 million
($1.6 million), and imputed interest charged in accordance with FRS12
of (pound)1.3 million ($2.1 million). The 1998 figures have been
restated for the implementation of FRS12.
The tax charge for the year of (pound)10.6 million ($17.2
million) represents an effective tax rate of 32.8% down from 35.5% in
1998 before restatement for FRS12. The Group expects this effective
tax rate to be sustainable in the medium term. Equity minority
interests totalled (pound)3.1 million ($5.0 million), an increase of
82% on last year, mainly due to the strong performance of Scholz &
Friends.
Earnings attributable to Ordinary shareholders totalled
(pound)18.6 million ($30.1 million), an increase of 36.8% at constant
exchange rates. Headline earnings per share were 8.2p (ADS 66.4c)
compared to 6.3p (ADS 51.9c) in 1998 as restated for FRS12,
representing a reported increase of 30.2% (ADS 27.9%) for the year and
32.5% on a constant currency basis.
Dividend
The Board proposes the payment of a dividend of 1.8p per Ordinary
share, an increase of 28.6% on 1998. The Board has set the dividend in
light of the financial results for the year, the Group's ongoing
growth prospects and opportunities to invest in value-enhancing
acquisitions. The final dividend is expected to be paid on 30 June
2000 to shareholders on the register at 5 June 2000.
Cash flow
As at 31 December 1999 the Group had a net cash balance of
(pound)2.4 million ($3.9 million) and average net debt for the year
was (pound)2.4 million ($3.9 million). Net operating cash flow for the
Group (defined as operating profit plus depreciation, less returns on
investment and servicing of finance and taxation paid) totalled
(pound)30.2 million ($48.6 million). Capital expenditure totalled
(pound)18.6 million ($29.9 million) which included one-off expenditure
of (pound)10.2 million ($16.4 million) in respect of property
refurbishment in the United States. Net cash outflows from
acquisitions and disposals were (pound)22.2 million ($35.7 million).
Utilisation of property provisions totalled (pound)4.8 million ($7.7
million).
During the year the Group refinanced its core debt with new $250
million ((pound)155 million) committed bank facilities. These
facilities include a $125 million ((pound)77.5 million) five-year
working capital facility and a $125 million ((pound)77.5 million)
one-year facility (with further one-year option). The initial rate on
these new facilities was LIBOR plus 1%. It is the Board's policy to
maintain financial ratios consistent with an investment grade credit.
Acquisitions
Healthworld
CCG recently completed the acquisition of Healthworld
Corporation, the world's third largest specialist healthcare marketing
group for consideration of $209.0 million ((pound)130.7 million) in
new CCG shares. The acquisition of Healthworld significantly increases
the Group's exposure to the rapidly growing healthcare sector and it
is CCG's intention to develop Healthworld into a global healthcare
marketing network.
The acquisition of Healthworld was approved on 1 March 2000 by
CCG shareholders and CCG issued 39.4 million new Ordinary shares on 3
March 2000 to Healthworld shareholders as consideration. Immediately
after completion, Healthworld employees also held immediately
exercisable options over approximately 5.5 million CCG shares.
Diamond
In December 1999, CCG acquired 80% of Diamond Ad Limited the
third largest advertising agency in Korea, from Hyundai Group for
initial cash consideration of KRW 27 billion ((pound)15 million) with
further payments depending on financial performance to December 2001.
The acquisition will enable CCG to capitalise on Diamond's strong
position in the Korean market, the tenth largest in the world and
consolidate its position with Hyundai, now the Group's largest
multinational client.
Other
During 1999, CCG also acquired Interactive Edge, an industry
leader in trade and channel marketing communications via the internet,
headquartered in New York. The Group made a number of in-fill
acquisitions during the year acquiring agencies in Sweden, Spain,
Belgium, India and the Middle East.
Consideration in respect of these acquisitions, paid during the
year, totalled (pound)23.6 million ($38.0 million) in cash and
(pound)4.1 million ($6.6 million) in shares.
Outlook
1999 proved to be an excellent year for CCG, with a strong
financial performance being matched by real progress against each of
its strategic objectives. New business momentum has continued in CCG's
core advertising networks and its newly acquired companies are
expected to perform well in 2000.
CCG continues to evaluate acquisition opportunities that support
its strategic objectives and fit its demanding financial criteria.
While acquisitions are expected to play an important part in the
future of the Group, strong growth from its existing businesses will
continue to be key in building operating margins to match those of its
best performing competitors.
The digital age affords our industry a new dimension for growth.
As an increasingly diversified marketing services group, CCG is
ideally placed to profit in this new sector. To that end, we have
grouped our interactive businesses around the world into a new company
with its own branding, which we shall be launching shortly. To ensure
that we capitalise to the fullest extent on the opportunities in
interactive media, a task force has been appointed to implement an
increasing focus on new media Group-wide.
The Group reaffirms its financial targets for 2000, of revenue
growth ahead of the market and an operating margin of 11% and has set
a new target of achieving a 14% operating margin during 2003. CCG's
new strategic objectives demonstrate its ambition to become one of the
world's leading communications groups. The Board believes that the
prospects for the Group are excellent and views the future with
considerable optimism.
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CORDIANT COMMUNICATIONS GROUP PLC
CONSOLIDATED PROFIT & LOSS ACCOUNTS
Year ended 31 December
1999 1998
(restated)
(see note 1)
Notes (pound) m (pound) m
Group revenue 2 335.8 301.8
Net operating expenses (302.3) (275.8)
Group operating profit 3 33.5 26.0
Share of operating profits
of joint ventures and
associated undertakings 4 4.9 2.6
Profit on ordinary
activities before interest
and taxation 38.4 28.6
Net interest payable and
similar items - other 5 (3.8) (2.7)
FRS 4 - write off of bank
fees (1.0) --
FRS 12 - finance charge 1 (1.3) (1.2)
(6.1) (3.9)
Profit on ordinary
activities before taxation 32.3 24.7
Tax on ordinary activities 6 (10.6) (9.2)
Profit on ordinary
activities after taxation 21.7 15.5
Equity minority interests (3.1) (1.7)
Profit attributable to
Ordinary shareholders 18.6 13.8
Dividends 7 (5.1) (3.1)
Retained profit for the
financial year 14 13.5 10.7
Basic earnings per
Ordinary share 8 8.2p 6.2p
Diluted earnings per
Ordinary share 8 7.8p 6.2p
Basic headline earnings per
Ordinary share 8 8.6p 6.3p
Diluted headline earnings
per Ordinary share 8 8.2p 6.3p
Ordinary dividend per share 7 1.8p 1.4p
CORDIANT COMMUNICATIONS GROUP PLC
CONSOLIDATED PROFIT & LOSS ACCOUNTS
Year ended 31 December
1999 1998
(restated)
(see note 1)
(Figures in US$)* US$ m US$ m
Group revenue 544.0 501.0
Net operating expenses (489.7) (457.8)
Group operating profit 54.3 43.2
Share of operating profits
of joint ventures and
associated undertakings 7.9 4.3
Profit on ordinary
activities before interest
and taxation 62.2 47.5
Net interest payable and
similar items - other (6.2) (4.5)
FRS 4 - write off of bank
fees (1.6) --
FRS 12 - finance charge (2.1) (2.0)
(9.9) (6.5)
Profit on ordinary
activities before taxation 52.3 41.0
Tax on ordinary activities (17.1) (15.3)
Profit on ordinary
activities after taxation 35.2 25.7
Equity minority interests (5.1) (2.8)
Profit attributable to
Ordinary shareholders 30.1 22.9
Dividends (8.2) (5.1)
Retained profit for the
financial year 21.9 17.8
Basic earnings per ADS** 66.6c 51.5c
Diluted earnings per ADS 63.0c 51.3c
Basic headline earnings per
ADS 70.2c 52.2c
Diluted headline earnings
per ADS 66.4c 51.9c
Ordinary dividend per ADS 14.6c 11.6c
Rate of exchange 1.62 1.66
* The US$ figures are presented for convenience purposes only,
according to UK GAAP, and are translated at the rates shown above.
** One American Depository Share (ADS) is equivalent to five Ordinary
shares.
CORDIANT COMMUNICATIONS GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT
Year ended 31 December
1999 1998
Note (pound) m (pound) m
Net cash inflow from
operating activities 9 50.0 19.8
Net cash outflow arising
from external demerger
costs -- (8.2)
Dividends from associated
undertakings 0.8 0.2
Dividends from joint
ventures 0.9 --
Returns on investment and
servicing of finance 10 (7.0) (4.9)
Taxation paid 10 (6.7) (8.3)
Capital expenditure and
financial investment 10 (18.6) (7.4)
Acquisitions and disposals 10 (22.2) (7.4)
Equity dividends paid (3.2) (2.7)
Cash outflow before
financing (6.0) (18.9)
Issue of ordinary share
capital 1.9 0.5
External loans drawn less
repaid 43.7 8.6
Other movements (0.1) (0.2)
Net cash inflow from
financing 45.5 8.9
Increase/(decrease) in cash
and overdrafts for the year 39.5 (10.0)
Reconciliation of net cash
flow to movement in net
funds:
Increase/(decrease) in cash
and overdrafts for the year 39.5 (10.0)
Cash inflow from debt financing (30.5) (8.4)
Other movements -acquisitions (11.9) 0.6
Translation difference and
non-cash movements 0.7 (2.3)
Movement in net funds in
the year (2.2) (20.1)
Net funds at beginning of
year 4.6 24.7
Net funds at end of year 11 2.4 4.6
CONSOLIDATED STATEMENT OF TOTAL
RECOGNISED GAINS AND LOSSES
Year ended 31 December
1999 1998
(restated)
(see note 1)
Note (pound) m (pound) m
Profit attributable to
Ordinary shareholders 18.6 13.8
Translation adjustment 14 (1.0) (1.7)
Total recognised gains
relating to the year 17.6 12.1
Prior year adjustment
(as explained in note 1) (1.2) -
Total recognised gains
since last annual report 16.4 12.1
CORDIANT COMMUNICATIONS GROUP PLC
CONSOLIDATED BALANCE SHEET
As at 31 December
1999 1998
(restated)
(see note 1)
Notes (pound) m (pound) m
Fixed assets
Intangible asset - goodwill 79.2 16.2
Tangible assets 33.7 22.7
Investments 12.4 4.0
125.3 42.9
Current assets
Work in progress 20.7 15.4
Debtors - due within one year 336.0 246.3
Debtors - due after one year 20.1 18.3
Investments 7.5 1.5
Cash at bank and in hand 80.0 62.3
464.3 343.8
Creditors - amounts falling
due within one year 12 (450.4) (313.7)
Net current assets 13.9 30.1
Total assets less current
liabilities 139.2 73.0
Creditors - amounts falling
due after more than one year 12 (123.2) (73.8)
Provision for joint venture
deficit
Share of gross assets 86.1 83.6
Share of gross liabilities (100.5) (98.3)
(14.4) (14.7)
Provisions for liabilities
and charges 13 (41.8) (45.8)
Net liabilities (40.2) (61.3)
Capital and reserves
Called up share capital 14 114.4 112.7
Share premium account 14 3.2 2.3
Merger reserve 14 3.4 -
Shares to be issued 14 1.4 1.3
Special reserve 14 25.7 25.7
Profit and loss account 14 (193.9) (205.9)
Equity shareholders' deficit 14 (45.8) (63.9)
Equity minority interests 5.6 2.6
Total capital employed (40.2) (61.3)
CORDIANT COMMUNICATIONS GROUP PLC
NOTES
1. Accounting policies and presentation
The financial information set out above and in these notes does
not constitute the statutory accounts of the Company within the
meaning of section 240 of the Companies Act 1985 for the years ended
31 December 1999 or 1998. The Group financial information for 1998 is
derived from the statutory accounts for 1998, which have been
delivered to the registrar of companies. The auditors have reported on
the 1998 accounts; their report was unqualified and did not contain a
statement under section 237(2) or (3) of the Companies Act 1985. The
statutory accounts for 1999 will be finalised on the basis of the
financial information presented by the directors in this preliminary
announcement and will be delivered to the registrar of companies.
The preliminary consolidated financial statements comply with
applicable accounting standards (UK GAAP) and have been prepared on
the basis of accounting policies set out on pages 58 to 59 of CCG's
1998 Report and Accounts. During 1999 the Group has adopted FRS 12
(Provisions, Contingent Liabilities and Contingent Assets), FRS 13
(Derivatives and Other Financial Instruments), and FRS 15 (Tangible
Fixed Assets).
In accordance with FRS 12, the Group's property provisions have
been discounted to the present value of future net lease obligations.
The recognition of this change on the brought forward provision has
been treated as a restatement of opening reserves as at 1 January 1998
of (pound)8.8 million. The periodic unwinding of the discount is
treated as an imputed interest charge and is disclosed under net
financial items. The charge in 1999 is (pound)1.3 million (1998:
(pound)1.2 million).
Owing to the timing of the acquisitions in the year ended 31
December 1999, their results did not have a material impact on the
Group's turnover and operating profit for the year and they have
consequently not been disclosed separately on the face of the
consolidated profit and loss.
2. Revenues by region
Year ended 31 December Change Change
Reported Constant
1999 1998 currency
(pound) m (pound) m % %
United Kingdom 40.2 39.8 1.0 1.0
North America 83.1 71.8 15.7 12.8
Continental Europe 121.9 108.4 12.5 14.8
Asia Pacific and
Latin America 90.6 81.8 10.8 5.6
Total 335.8 301.8 11.3 10.0
3. Operating profit and operating margin by region
Year ended 31 December 1999 1998
Operating Operating
1999 1998 Margin Margin
(pound) m (pound) m % %
United Kingdom 4.4 4.5 10.9 11.3
North America 10.9 8.2 13.1 11.4
Continental Europe 12.5 10.1 10.3 9.3
Asia Pacific and
Latin America 5.7 3.2 6.3 3.9
Total 33.5 26.0 10.0 8.6
4. Joint ventures and associated undertakings
Year ended 31 December
1999 1998
(pound) m (pound) m
Group share of revenue*
- Joint ventures* 15.5 14.2
Group share of operating
profit
- Joint ventures 2.9 1.4
- Associated undertakings 2.0 1.2
Total 4.9 2.6
* The Group's share of joint venture revenue is not included in
the Group revenues disclosed in the consolidated profit and loss
account.
5. Net interest payable and similar items
Year ended 31 December
1999 1998
(pound) m (pound) m
Group (4.4) (2.9)
Joint ventures 0.5 0.1
Associated undertakings 0.1 0.1
Total (3.8) (2.7)
6. Taxation
Year ended 31 December
1999 1998
(pound) m (pound) m
Group 8.8 8.3
Joint ventures 1.1 0.5
Associated undertakings 0.7 0.4
Total 10.6 9.2
7. Dividends
The Board has recommended a final dividend of 1.8p per Ordinary
share (1998: 1.4p). The final dividend is expected to be paid on 30
June 2000 to shareholders on the register at 5 June 2000.
8. Earnings per share : basis of calculation
Basic EPS Year ended 31 December
1999 1998
(restated)
Profits attributable to
Ordinary shareholders (pound)18.6m (pound)13.8m
Weighted average no. of shares 226.6m 222.4m
Basic EPS 8.2p 6.2p
Diluted EPS
Profits attributable to
Ordinary shareholders (pound)18.6m (pound)13.8m
Weighted average no. of shares 226.6m 222.4m
Dilutive effect of options 13.0m 0.9m
Diluted weighted average no.
of shares 239.6m 223.3m
Diluted EPS 7.8p 6.2p
Basic headline EPS*
Profits attributable to
Ordinary shareholders (pound)18.6m (pound)13.8m
Adjustments:
Goodwill written off - (pound)0.2m
FRS 4 - write off
of bank fees (pound)1.0m -
Headline earnings (pound)19.6m (pound)14.0m
Weighted average no.
of shares 226.6m 222.4m
Basic headline EPS 8.6p 6.3p
Diluted headline EPS *
Headline earnings (pound)19.6m (pound)14.0m
Diluted weighted average
no. of shares 239.6m 223.3m
Diluted headline EPS 8.2p 6.3p
* The definition of Headline earnings is given in the Statement of
Investment Practice No.1 published by the Institute of Investment
Management and Research (IIMR). Amongst other items Headline
earnings excludes items relating to goodwill and writing off the
unamortised element of bank facility fees on the re-financing of
the Group's long-term debt.
9. Reconciliation of Group operating profit to net cash inflow
from operating activities
Year ended 31 December
1999 1998
(pound)m (pound)m
Group operating profit 33.5 26.0
Depreciation 10.4 9.7
Loss/(gain) on sale of
tangible fixed assets 0.1 (0.1)
(Increase)/decrease in
work in progress (4.7) 2.0
Increase in debtors (30.0) (1.4)
Increase/(decrease)
in creditors 45.5 (9.6)
Utilisation of property
provisions (4.8) (7.0)
Non cash item -
goodwill write off - 0.2
Net cash inflow from
operating activities 50.0 19.8
10. Analysis of cash flow items
Year ended 31 December
1999 1998
(pound)m (pound)m
Returns on investment and
servicing of finance
Interest received 1.5 1.9
Interest paid (5.7) (3.8)
Interest element of finance
leases rental
payments (0.1) (0.1)
Bank fees (1.7) (0.4)
Dividends paid to minorities (1.0) (2.5)
Net cash outflow from
returns on investments
and servicing finance (7.0) (4.9)
Taxation paid
UK corporation tax paid (0.3) (0.7)
Overseas tax paid (6.4) (7.6)
Net tax paid (6.7) (8.3)
Capital expenditure and
financial investment
Purchase of tangible
fixed assets (19.4) (8.7)
Sale of tangible fixed assets 1.1 1.2
Purchase of other fixed
asset investments (0.5) -
Sale of other fixed
asset investments 0.2 0.1
Net cash outflow from
capital expenditure
and financial investment (18.6) (7.4)
Acquisitions and disposals
Purchase of subsidiary
undertakings (23.6) (7.5)
Purchase of associated
undertakings (2.4) (0.2)
Cash acquired with
subsidiaries 3.8 0.7
Cash in business sold - (0.4)
Net cash outflow from
acquisitions and
disposals (22.2) (7.4)
11. Analysis of net funds
At Acquisitions Exchange At
1 Jan. & & 31 Dec.
1999 Cashflows disposals* non-cash 1999
(pound) m (pound) m (pound) m (pound) m (pound) m
Cash at bank
and in hand 62.3 16.0 - 1.7 80.0
Cash deposits 0.8 5.5 - 0.1 6.4
Bank overdrafts (21.2) 18.0 - - (3.2)
Cash 41.9 39.5 - 1.8 83.2
External debt
due within one
year (0.5) (2.0) (1.7) (0.1) (4.3)
External debt
due after one
year (36.4) (28.2) (10.2) (1.0) (75.8)
Finance leases (0.4) (0.3) - - (0.7)
Financing (37.3) (30.5) (11.9) (1.1) (80.8)
Net funds 4.6 9.0 (11.9) 0.7 2.4
* Excluding cash and overdrafts.
12. Creditors
Due within one year Due after one year
1999 1998 1999 1998
(pound) m (pound) m (pound) m (pound) m
Loans and overdrafts 7.5 21.7 75.8 36.4
Trade creditors 293.2 185.0 - -
Taxation and social
security 25.6 24.0 22.8 23.9
Other creditors 28.1 25.3 24.6 12.8
Accruals and deferred
income 96.0 57.7 - 0.7
Total 450.4 313.7 123.2 73.8
13. Provisions for liabilities and charges
These include property provisions of(pound)22.3m (1998:(pound)25.6m).
14. Movement in shareholders' deficit
Share Share Merger Shares to
capital premium reserve be issued
(pound) m (pound) m (pound) m (pound) m
At 1 January 1999
- as previously
stated 112.7 2.3 - 1.3
Prior year
adjustment - - - -
At 1 January 1999 -
as restated 112.7 2.3 - 1.3
Issues of Ordinary
shares net of
expenses 1.7 0.9 3.4 -
Option payments for
employee share
scheme - - - 0.1
Goodwill arising on
acquisitions made in
previous periods - - - -
Profit retained for the
year - - - -
Reversal of imputed
employee share scheme
cost - - - -
Translation adjustment - - - -
At 31 December 1999 114.4 3.2 3.4 1.4
Profit
Special & Loss
reserve Account Total
(pound) m (pound) m (pound) m
At 1 January 1999
- as previously
stated 25.7 (213.5) (71.5)
Prior year
adjustment - 7.6 7.6
At 1 January 1999 -
as restated 25.7 (205.9) (63.9)
Issues of Ordinary
shares net of
expenses - - 6.0
Option payments for
employee share
scheme - - 0.1
Goodwill arising on
acquisitions made in
previous periods - (3.1) (3.1)
Profit retained for the
year - 13.5 13.5
Reversal of imputed
employee share scheme
cost - 2.6 2.6
Translation adjustment - (1.0) (1.0)
At 31 December 1999 25.7 (193.9) (45.8)
The creation of the merger reserve arose following the acquisition,
by issue of the Company's shares, of the Group's 100% interest in
Interactive Edge LLC in the United States.
15. Post balance sheet events
There have been no material subsequent events, except as
disclosed below:
-- As at 31 December 1999, one of the joint venture partners, had
sold its 31% interest in SSBY Japan. However, at the date of
signing CCG's accounts, the Group was still negotiating with the
remaining joint venture partner, as to the final ownership
structure. Consequently, CCG's accounting for this company has
not been changed, and will be finalised once negotiations with
the remaining joint venture partner have been concluded.
-- On the 1 January 2000, the Group acquired the remaining 10% in
Scholz & Friends Hamburg, for a total consideration of DEM9.0
million ((pound)2.9 million).
-- On the 1 March 2000, the acquisition of 100% of Healthworld
Corporation for consideration of US$209.0 million ((pound)130.7
million), which was approved by CCG shareholders and CCG issued
39.4 million new Ordinary shares on 2 March 2000 to Healthworld
shareholders. Immediately after completion, Healthworld employees
also held immediately exercisable options over approximately 5.5
million CCG shares.
Cordiant Communications Group plc is registered in England and
Wales (Number 1320869) and its registered office is: 121 - 141
Westbourne Terrace, London, W2 6JR.
TICKER NO: NYSE CDA
*T
--30--crd/sf*
CONTACT: CCG
Michael Bungey, Chief Executive Officer
Tel: +44 171 457 2020
Art D'Angelo, Chief Financial Officer
Tel: +1 212 297 7000
Andy Boland, Investor Relations
Tel: +44 171 262 4343
or
College Hill
Alex Sandberg or Dick Millard,
Tel: +44 171 457 2020
KEYWORD: INTERNATIONAL EUROPE
INDUSTRY KEYWORD: BANKING TELECOMMUNICATIONS EARNINGS
COPYRIGHT 2000 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2000, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.
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