02 UBM – TODAY
04 FINANCIAL HIGHLIGHTS – 2004
06 MEDIA MARKETING SOLUTIONS
08 CHAIRMAN’S REVIEW
10 CHIEF EXECUTIVE’S REVIEW
12 OPERATING REVIEW
14 FINANCIAL REVIEW
16 BOARD OF DIRECTORS
18 MAJOR UBM PRODUCTS
20 MAGAZINES
22 EVENTS
24 DIRECTORIES
26 ONLINE
28 NEWS DISTRIBUTION
30 MEDIA INTELLIGENCE/NEW PR NEWSWIRE PRODUCTS
32 MARKET RESEARCH
35 ACCOUNTS CONTENTS
36 DIRECTORS’ REMUNERATION REPORT
44 CORPORATE GOVERNANCE STATEMENT
47 INDEPENDENT AUDITORS’ REPOR T TO THE MEMBERS OF
UNITED BUSINESS MEDIA PLC
48 REPORT OF THE DIRECTORS
50 GROUP PROFIT AND LOSS ACCOUNT
51 BALANCE SHEETS
52 GROUP CASH FLOW STATEMENT
53 STATEMENT OF GROUP TOTAL RECOGNISED GAINS AND LOSSES
53 RECONCILIATION OF MOVEMENTS IN GROUP SHAREHOLDERS’
FUNDS
54 GROUP ACCOUNTING POLICIES
57 NOTES TO THE FINANCIAL STATEMENTS
85 PRINCIPAL GROUP SUBSIDIARIES
86 FIVE YEAR FINANCIAL SUMMARY
86 FINANCIAL CALENDAR
87 RECONCILIATION OF DIFFERENCES BETWEEN UK GAAP AND
INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)
IBC SHAREHOLDER INFORMATION
2004 – AN  EXCELLENT PERFORMANCE
INTELLIGENT MEDIA -      INTEGRATED MULTI-PLATFORM MARKETING SOLUTIONS
p.20 p.22 p.24
                                                                                        01
N  EXCELLENT PERFORMANCE
UNITED BUSINESS MEDIA PLC (http://www.unitedbusinessmedia.com) is a leading
provider of business information services to the TECHNOLOGY, HEALTHCARE,
MEDIA, AUTOMOTIVE, FINANCIAL SERVICES AND PROPERTY INDUSTRIES.
2004 SAW UBM BECOME A MORE BALANCED AND PREDICTABLE BUSINESS.
-      INTEGRATED MULTI-PLATFORM MARKETING SOLUTIONS
p.26 p.28 p.30 p.32
OPERATING PROFIT INCREASED BY 33.1 PER CENT
        02
UBM – Today
WHAT
LIVING OUR VA LUES REALLY MEANS…
UBM offers market leading B2B information services to customers across the globe
Revenue Growth by Geography
Pro-Forma
grew 3%
grew 8%
ONLINE
2004:£33m
EUROPE
2004:41%
grew 5% ASIA
PACIFIC
2004:7%
US
2004:52%
PRINT 
2004:£320m
EVENTS
2004:£130m
grew 9%
NEWS
DISTRIBUTION
2004:£83m
PRN New
Products
2004:£11m
(2)%
grew 3%
grew 37%
grew 24%
MARKET
RESEARCH
2004:£223m
grew 5%
Revenue Growth by Media Channel
Underlying
                              03
VA LUES REALLY MEANS…
WE EXPLORE as individuals, teams, businesses 
and as a Group because we:
> pursue creativity, innovation and new opportunities
> seek continuous improvement
> take intelligent risks
> learn from our successes and failures
> listen to constructive feedback – and that’s so important. 
WE EXCEED because as individuals, teams, businesses
and as a Group we:
> anticipate, meet and exceed expectations
> understand our customers’ businesses and create long lasting relationships
> value our employees’ diverse talents and support them to exceed their
own expectations
> treat each other fairly and justly
> recognise that sometimes we have to make difficult decisions, but we
commit to communicating as much as we can, as soon as we can.
YOU EXCEL because:
> success for our customers and our business partners
is success for us
> enabling our employees to excel is central to our
success
> delivering shareholder value is crucial to us
> being a good neighbour and a good business
citizen is a key priority
> we celebrate success – so work hard, work smart
and have fun!
            04
Financial Highlights – 2004
Turnover
£809.6m
Operating Profit *
£132.3m
Earnings per share *
32.6p
Dividend
12.0p
RESULTS
* Before amortisation of goodwill and intangibles and exceptional items.
2004
£809.6m
2003
£746.7m
2004
£132.3m
2003
£99.4m
2004
32.6p
2003
23.9p
2004
12.0p
2003
9.0p
                           Turnover
+8.4%
Operating Profit
+33.1%
Earnings per Share
+36.4%
Dividend
+33.3%
Business Highlights - 2004
05
December – David Levin announced as UBM’s new CEO CMP Media announces it is to publish Chinese
version of “Information Week” PRNewswire announced that over 90 per cent of the
Chinese companies listed on Nasdaq were using Xinhua PR Newswire.
November – CMPMedica moved further online in French Healthcare – JV acquisition of Axilog CMPi
relaunched Safety and Health Practitioner , the UK’s leading health and safety publication
NOP World won three year global mystery shopping programme for Chevron Texaco. CMP
Healthcare Media’s The Journal of Respiratory Diseases Celebrated its 25th Birthday.
October – UBM showcased its healthcare businesses to investors. PR Newswire launches New
Online Media Room Tool. PR Newswire upgraded its premier national newsline service
US1. CMP Information’s CountryView launched Free colour supplement magazine to
accompany Farmer’s Guardian. CMP Asia September jewellery Fair reached new heights
of success - the largest in the Fair’s 22-year history. Eurisko / NOP World invited to take
part in RAJAR (Radio Joint Audience Research Limited) trial of passive portable radio
and TV metering system.
September – CMP Media’s Digital Connect Magazine Launched 4-City Digital Convergence Road Show.
The full day of events included Intel, LG Electronics, Russound, HAI, Microsoft and
Linksys presentations. CMP Media and Micrsoft Corporation launched MSDN Magazine,
to software developers in the Asia-Pacific region. CMP Asia’s All China Leather Exhibition
(ACLE) and China International Footwear Fair (CIFF) concluded with resounding success
at the Shanghai New International Expo Centre, recording an increase of 20 % over 2003.
August – PR Newswire upgraded its Online Media Database - covering more than 475,000
journalists worldwide. 04 XChange Exceeds Expectations. The CMP Media Channel
conference based in Chicago included keynotes and World Premiers from AMD, Intel,
Ingram, Microsoft & IBM. CMP Healthcare Media to Launch Comprehensive Neurology
Publication. UAP’s Daltons Group websites attracted the highest level of traffic of all the
UAP sites. In August the Dalton’s Group achieved 5.3m page impressions. NOP World wins
global market research retail customer study for Shell.
July – PR Newswire was the official newswire of both the Republican and Democratic national
conventions in 2004. UBM completed the acquisition of leading professional healthcare
media business in Europe & Asia, subsequently named CMPMedica. Guangzhou welcomed
Aquaria China 2004: China’s first ever all-aquatic show.
June – CMP Information Ltd announced the launch of London Interiors. UAP launched
Daltonsproperty.com. CMP Media launched TechWeb Network Pipelines – a series of
topically focused websites, providing business technology professionals with critical
news and information.
May – CMPi Safety and Health Practitioner announced the launch of its new website –
SHPonline.co.uk. Best Edition Ever of Asia Pacific Leather Fair Materials, Manufacturing
and Technology. APLF reinforced its position as the most significant annual event for the
leather industry with a record number of attendees.
April – The 2nd China International Gold, Jewellery & Gem Fair at Shenzhen China Hi Tech Fair
Exhibition Centre increased visitors by 8 percent. UAP’s The PA arrived – launch of new
female targeted magazine with a unique mix of lifestyle and business content. CMP
Media launched Electronics Supply & Manufacturing.
March – CMP Asia announced that it had set up a new company, CMP Media Korea Co Ltd, in Korea
to provide the full range of media products for the dynamic Korean market. PR Newswire
celebrated 50 Years as industry pioneer and leader .
February – CMPi relaunched Guitar Player . Now backed by extensive research by focus groups,
surveys amongst readers and subscribers, and married to a stylish redesign by
award-winning Pentagram Design Inc.
January – CMP Media’s TechWeb Network Launches IT Utility Pipeline. Benvenuto a Eurisko – Eurisko
started its first year with UBM –acquisition of the leading market research company in Italy.
                                   06
TRADE NEWSPAPERS
TECHNICAL TRAINING
MEDIA ACCESS TO PANELS OF EXPERTS
PROFESSIONAL EDUCATION MEETINGS
NEWS DISTRIBUTION
MAGAZINES
CUSTOM PUBLISHING
COMMUNITY
eNewsletters
TELECONFERENCES
MARKET RESEARCH
Media Marketing
Solutions
WE PURSUE CREATIVITY AN D INNOVATION TO DELIVER
MARKETING SOL UTIONS ACROSS
MULTI-MEDIA PLATFORMS
– AHEAD OF THE PACK
OUR RANGE OF SERVICES INCLUDES TRADE MAGAZINE AND NEWSPAPER
PUBLISHING, EVENT AND CONFERENCE ORGANISATION, MARKET RESEARCH,
NEWS DISTRIBUTION, EDUCATION AND ON-LINE INFORMATION PRODUCTS.
We are committed to achieving a superior operating
performance, raising the level of investment in products
and providing our services globally.
BRANDING-LEAD GENERATION-ENTRENCHMENT MARKETING-BRANDING-LEAD GENERATION - ENTRENCHMENT MARKETING-BRANDING LEAD GENERATION-ENTRENCHMENT MARKETING
WEBSITES
          07
MEDIA MEASURING AND MONITORING TOOLS
DIRECT MARKETING
MICROSITES
NETSEMINARS
TRADE SHOWS
SALES FORCE EFFECTIVENESS RESEARCH
SALES TRAINING
ONLINE PAVILIONS
AN D INNOVATION TO DELIVER
OL UTIONS ACROSS
IA PLATFORMS
OF THE PACK
 Leading global brands
 Award winning content – breadth and depth
 Multi channel delivery
 Targeted reach to critical audiences
 Integrated solutions
 Client collaboration
 Monitoring and feedback
INDUSTRY SYMPOSIA
MAGAZINE SUPPLEMENTS
DIRECTORIES
N - ENTRENCHMENT MARKETING-BRANDING LEAD GENERATION-ENTRENCHMENT MARKETING
ONLINE PROFESSIONAL NETWORK PIPELINES
CLASSIFIED PUBLICATIONS
                       08
Chairman’s Review
2004 has been a very strong year for UBM. Group operating
profit* increased by 33.1% to £132.3 million (2003: £99.4
million). Earnings per share* increased by 36.4% to 32.6p
(2003: 23.9p). The board is recommending a final dividend
of 8.37p (2003: 5.7p) bringing the total dividend for the
year to 12.0p (2003: 9.0p) an increase of 33.3% reflecting
the strong performance during the year and the directors’
confidence in the outlook for the future.
The Group has intensified its focus on an integrated multi-
media strategy, harnessing technology to give our customers
more responsive feedback on the effectiveness of their spend
and leveraging UBM’s strong online positions across all its
channels to market – an integrated multi-media proposition.
We are continuing to invest significantly in this area and our
organic initiatives have contributed to an underlying revenue
growth for the Group of 3.2%.
During the year we acquired certain MediMedia businesses
(now CMPMedica) which now makes healthcare our largest
sector and gives a more balanced sectoral spread. Since the
year-end we have announced three more acquisitions, all of
which are a strong strategic fit and also meet our exacting
financial criteria. Over the last 2 years all acquisitions have
exceeded their business case. At the end of January 2005,
we announced that we were undertaking a strategic review
of our market research business which includes the
possibility of a sale of these assets.
Our balance sheet is strong helped by a reduction in the tax
creditor from £308.5m to £208.0m.
At the heart of any organisation are its people and the values
they embrace. During the year significant work has been
done to define our values more closely. The Board takes very
seriously adherence to these values because they are so
important to the perception of UBM from customers,
suppliers, potential employees and shareholders. To all our
employees, on behalf of the Board, a sincere thank you for
the tremendous results you have achieved during the year.
I am also pleased to welcome two new non-executive
directors to the Board; Chris Hyman joined in May and
Sandy Leitch in January 2005. Both bring significant
experience to the Board.
2004 was also memorable because at the year-end we
announced that at the beginning of April 2005 David Levin
would succeed Clive Hollick as CEO of UBM. It was always
clear to me, and the rest of the Board, that Clive’s succession
was likely to be one of the most significant items ‘on my
watch’.
Clive has been at the helm of UBM in its various incarnations
for over 30 years – in itself a staggering feat. From the early
roots in Hambro’s in 1974 then Vavasseur the money broking
business was formed in MAI. This was then nurtured, and
significant value returned to shareholders in 1998. He was a
founding director of NOP World in 1989 – his patience,
encouragement and foresight has grown it to its current
form. In 1991 he was a founder of Meridian Broadcasting
which then formed the heart of our developing TV assets
which we sold in 2000 for £1.75billion – returning £1.25
billion to shareholders. Similarly, he has nurtured our stake in
Channel 5 from its foundation in 1995 to the valuable and
growing asset that it is today. These are just a few examples
of the pattern: spot an opportunity, invest, grow and develop
it; be patient, then when and if the timing is right, realise the
value for shareholders. His record is a matter of public record
and one that is extremely difficult to match over such a long
period of time, furthermore, it is still intact. He also
developed a strong internal team such that we had a choice
of several worthy internal successors to consider.
The succession process that we adopted was clear and
rigorous. In the end, the Board concluded that David Levin
was the strongest candidate to succeed Clive – no easy task
by any means. David’s experience includes a successful track
record in publishing with Euromoney, then with Psion and
currently as CEO of Symbian. He has exemplary people skills,
deep knowledge of publishing and technology and extensive
experience in international markets – the Far East, Europe
and USA. He has an impressive operational background with
a strong record of strategic execution. We are all excited
about him joining and heading up UBM.
When I was contemplating joining the Board in 1996,
I thought with Clive at the helm life would not be boring.
I have not been disappointed! Clive, you leave the Group in
tremendous shape, sincere thanks to you from everyone at
UBM – we will miss you but we also have a worthy successor.
Geoff Unwin
Chairman
24 February 2005
      09
“IN THE END, THE BOARD CONCLUDED THAT
DAVID LEVIN WAS THE STRONGEST
CANDIDATE TO SUCCEED CLIVE – NO EASY
TASK BY ANY MEANS. DAVID’S EXPERIENCE
INCLUDES A SUCCESSFUL TRACK RECORD IN
PUBLISHING WITH EUROMONEY, THEN WITH
PSION AND CURRENTLY AS CEO OF SYMBIAN.
HE HAS EXEMPLARY PEOPLE SKILLS, DEEP
KNOWLEDGE OF PUBLISHING AND
TECHNOLOGY AND EXTENSIVE EXPERIENCE
IN INTERNATIONAL MARKETS – THE FAR EAST,
EUROPE AND USA. HE HAS AN IMPRESSIVE
OPERATIONAL BACKGROUND WITH A
STRONG RECORD OF STRATEGIC EXECUTION.
WE ARE ALL EXCITED ABOUT HIM JOINING
AND HEADING UP UBM.”
2004 HAS BEEN A VERY STRONG YEAR FOR UBM. Group operating profit* increased by
33.1% to £132.3 million (2003: £99.4 million). Earnings per share* increased by
36.4% to 32.6p (2003: 23.9p). The board is recommending a final dividend of
8.37p (2003: 5.7p) bringing the total dividend for the year to 12.0p (2003: 9.0p)
an increase of 33.3% reflecting the strong performance during the year and the
directors’ confidence in the outlook for the future.
* Before amortisation of goodwill and exceptional items
“WHEN I WAS CONTEMPLATING JOINING THE
BOARD IN 1996, I THOUGHT WITH CLIVE AT
THE HELM LIFE WOULD NOT BE BORING.
I HAVE NOT BEEN DISAPPOINTED! CLIVE, YOU
LEAVE THE GROUP IN TREMENDOUS SHAPE,
SINCERE THANKS TO YOU FROM EVERYONE
AT UBM – WE WILL MISS YOU BUT WE ALSO
HAVE A WORTHY SUCCESSOR.”
      10
Chief Executive’s Review
By any measure the financial results for 2004 were impressive
– revenues, profits, margins, cash flow and dividends were all
well ahead of the previous year. Strong economic growth in
the US, UK and Asia all helped, but the successful investment
in new products and our push into new markets is delivering
steady, sustainable revenue growth.
The hard work put in over the last few years to improve
productivity across the board, to invest in innovation and to
offer our clients a greater range of products in print, events
or online is boosting our market shares, improving yields and
lifting margins. The increasing investment in both
acquisitions and organics is delivering an excellent return
and providing the group with a more stable and predictable
mix of profits. Technology print revenues are still in modest
decline, but the 30 per cent growth online is an important
pointer to the potential in this sector. Healthcare is now one
of our largest sectors and, with signs of a good recovery in
continuing medical education in the US, is set to be a key
profit driver in the next few years. The growth in our
construction and built environment sector in the UK is a text
book example of driving for operating excellence, and at the
same time investing in and integrating successfully several
key acquisitions. PR Newswire has also made important
productivity gains in its core business, invested well to
launch new products and turned its loss making
international business into profit.
These themes continue into 2005. The year has started well,
order books are healthy and the pursuit of new growth
opportunities through greater investment is being vigorously
pursued. Further offshoring and outsourcing will bring useful
margin gains over the coming years. In all of our businesses
we are seeking to use our financial strength and proven
ability to invest and acquire successfully to pursue growth
through consolidation and greater product and geographic
coverage. Usually this will be pursued within our group, but
sometimes, as in the case of NOP, the most compelling
consolidation and growth opportunity might lie outside the
group and be achieved through a sale on terms which
ensure that our shareholders receive the full measure of
these combination benefits. If we are successful in achieving
this outcome at NOP – a business we have steadily built up
over the last 20 years – our shareholders can expect to
receive a substantial part of the value released through a
return of capital.
Malcolm Wall and I are both bowing out of United after
many hugely enjoyable, challenging and generally successful
years. We are proud of the business we have helped to build
and grateful to our colleagues, customers and shareholders
for their support and encouragement. David Levin joins as
CEO in April with an illustrious record and a fine reputation.
He will lead a fine team, brimful of talent and ideas. The
businesses are in great shape and in 2004 demonstrated
their ability to deliver outstanding results.
I would like to pay a most heartfelt tribute to all of my
colleagues and friends right across the group for your
tremendous achievements, not only in 2004 but, in many
cases, stretching over decades. I have had the privilege of
witnessing at first hand the pride, the determination and the
passion you have brought to your business. I have
experienced the thrill and the fun of working with you to
help to build those businesses. I enjoyed every minute of it
and for that I thank you all.
Clive Hollick
Chief Executive
      11
“I WOULD LIKE TO PAY A MOST
HEARTFELT TRIBUTE TO ALL OF MY
COLLEAGUES AND FRIENDS RIGHT
ACROSS THE GROUP FOR YOUR
TREMENDOUS ACHIEVEMENTS, NOT
ONLY IN 2004 BUT, IN MANY CASES,
STRETCHING OVER DECADES. I HAVE
HAD THE PRIVILEGE OF WITNESSING AT
FIRST HAND THE PRIDE, THE
DETERMINATION AND THE PASSION YOU
HAVE BROUGHT TO YOUR BUSINESS.”
BY ANY MEASURE THE FINANCIAL RESULTS FOR 2004 WERE IMPRESSIVE – revenues, profits,
margins, cash flow and dividends were all well ahead of the previous year. Strong
economic growth in the US, UK and Asia all helped, but the successful
investment in new products and our push into new markets is delivering steady,
sustainable revenue growth.
“I HAVE EXPERIENCED THE THRILL
AND THE FUN of working with you
to help to build those businesses.
I enjoyed every minute of it and for that I
thank you all.”
      12
Group Turnover Group Operating Profit*
Twelve months to 31 December Twelve months to 31 December
(£m) (£m)
2004 2003 Change Underlying 2004 2003 Change Underlying
(%) (%)
#
(%) (%)
#
CMP Media 193.8 210.5 (7.9) (3.2) 23.0 14.8 55.4 52.0
CMPMedica 29.8 – 100.0 – 3.4 – 100.0 –
CMP Asia 50.5 44.4 13.7 9.4 15.0 12.6 19.0 7.5
CMPi 159.3 135.0 18.0 4.1 33.6 25.3 32.8 10.4
UAP 58.5 58.1 0.7 0.0 13.2 14.0 (5.7) (8.0)
Professional Media 491.9 448.0 9.8 0.6 88.2 66.7 32.2 14.8
News Distribution 94.8 94.8 0.0 10.6 24.0 13.4 79.1 103.2
Market Research 222.9 203.9 9.3 5.3 20.1 19.3 4.1 (12.1)
Total 809.6 746.7 8.4 3.2 132.3 99.4 33.1 20.0
# Underlying: adjusted for the estimated effects of acquisitions, foreign exchange, SARS and biennial events
* before amortisation of goodwill and intangible assets and exceptional items
Operating Review
Underlying revenue was up 3.2 per cent – after adjusting for
the effects of acquisitions, foreign exchange, SARS and
biennials. Group revenue in 2004 increased by £90.1m of
revenue from 2004 acquisitions and the full year effect of
acquisitions made during 2003. The weakness of the US
dollar has a direct translation impact – with two thirds of
UBM revenue reported locally in US dollars, group revenue
was reduced by £53.0m as a result of foreign exchange.
The average rate of £:$ exchange in 2004 was 1.83 (1.64),
together with the effects of other currency movements this
reduced operating profit in 2004 by £7m. A 1 cent movement
in the US dollar against sterling is approximately equivalent to
a move in profit of around £300,000 over the full year.
Professional Media
Turnover Operating Profit*
Twelve months to 31 December Twelve months to 31 December
2004 2003 Change 2004 2003 Change
£m £m % £m £m %
CMP Media 193.8 210.5 (7.9) 23.0 14.8 55.4
CMPMedica 29.8 – 100.0 3.4 – 100.0
CMP Asia 50.5 44.4 13.7 15.0 12.6 19.0
CMPi 159.3 135.0 18.0 33.6 25.3 32.8
UAP 58.5 58.1 0.7 13.2 14.0 (5.7)
Total 491.9 448.0 9.8 88.2 66.7 32.2
Profitability at CMP Media has improved significantly. An
increase in operating margins from 7.0 per cent to 11.9 per
cent has boosted operating profits to £23.0m (£14.8m).
Despite tougher comparatives in the second half of 2003,
overall full year underlying technology revenues were only
down 1 per cent – online revenues were strongly up by 29
per cent, events were up 11 per cent, continuing revenues
from traditional print publishing were down 2 per cent. CMP
Media’s online business moved into operating profit. Custom
marketing solutions and integrated multi-media marketing
packages continue to do well, to the overall benefit of CMP
Media’s technology business – this does however dilute
traditional print yields which were down 1.5 per cent.
In 2004 CMP Healthcare Media was 18 per cent of CMP
Media’s total revenue. Last year’s healthcare acquisition (The
Oncology Group and Cliggott Publishing) is fully integrated
and performed ahead of its business case. Underlying
healthcare publishing revenues were up 7.6 per cent.
Revenue from the medical education business was down
31.6 per cent as the regulatory issues of the second quarter
registered in both the third and fourth quarters of 2004.
Further operating efficiencies were achieved across CMP
Media. In addition, organic investment projects delivered
£12m of revenue and £4m of incremental contribution.
CMPMedica, acquired on 30 July 2004, is ahead of plan.
CMPMedica’s underlying revenues are up 6.4 per cent, with
the important French market performing well. CMPMedica’s
subsequent JV acquisition of Axilog is providing it with
greater access to doctors’ desktops in France.
CMP Asia’s profit is now well ahead of pre SARS levels, with
visitor attendance at Hong Kong shows up by around 40 per
cent on 2003, and particular successes from the jewellery
fairs, the beauty fair and the natural health fairs in Japan.
Profits of £15.0m reflected improved strength in the
established business and the effects of the steady flow of
new products launched in recent years.
CMP Information increased exhibition space and – boosted
by the acquisitions and new product launches – grew display
market share in the UK and US to 38 per cent (35 per cent).
Revenues increased by 18.0 per cent and further
                                                                                       13
improvements in margin drove a 32.8 per cent increase in
operating profit. This growth was boosted by the businesses
acquired in 2003 (including The Builder Group and Barbour
Index) which are performing ahead of plan. Increased
product improvements and launches helped to grow
underlying revenue by 4.1 per cent and underlying
operating profit by 10.4 per cent.
UAP’s performance in the second half of 2004 saw a
continuation of the mixed trends in the first half. Overall
revenue was stable, with strong performances from Daltons
Weekly and DaltonsBusiness.com, continued progress at
Auto Exchange, but a decline in revenue at Exchange &
Mart. Margins were down due to the costs of restructuring,
promotions and reinvestment in core brands.
In 2005 UAP is investing in the E&M brand in order to
accelerate the migration online. The acquisition in February
2005 of The Publican and other licensed trade assets
strengthens the breadth and depth of UAP’s range of
specialist titles and offers cross selling opportunities with the
Businesses for Sale section of Daltons Weekly.
MULTIMEDIA STRATEGY DRIVING STRONG GROWTH
“Underlying revenue growth and significantly increased operating margins
delivered an operating profit* of £132.3 m, up 33.1 per cent. Underlying revenue
grew by 3.2 per cent, with underlying operating profit* up 20.0 per cent.”
PR Newswire – News Distribution
Turnover Operating Profit*
Twelve months to 31 December Twelve months to 31 December
2004 2003 Change 2004 2003 Change
£m £m % £m £m %
PR Newswire 94.8 94.8 – 24.0 13.4 79.1
PR Newswire achieved a 103.2 per cent increase in
underlying operating profit, an operating margin increase to
25.3 per cent , up from 14.1 per cent in 2003, and an
underlying 10.6 per cent increase in revenue.
There were three main factors behind PR Newswire’s growth;
improvements in core US wire volumes and yield, the
increasing success of organic product launches, and
significant improvements in the profitability of operations
outside of the Americas.
US wire volumes increased by 3.7 per cent with yields up 6.6
per cent. The core messaging business benefited from the
strength of the Canada Newswire JV which achieved a 15 per
cent increase in revenue and a 14 per cent increase in
operating profit. Video news release and media contacts
database products, both grew revenue by over a third,
generating £10m in revenue and moving into profit. Effective
cost control has succeeded in turning the businesses outside
America from a £2.7m loss in 2003 into a profit in 2004.
Mediamark Research, Allison Fisher, Eurisko and NOP
Research each grew revenue by over 10 per cent, together
they accounted for over 90 per cent of NOP’s total profit.
Additionally there are signs of improvement in the US
healthcare and consumer business. The reorganisation of
NOP along sector lines and the investment in new products,
improved marketing and higher productivity is now boosting
the performance of the custom businesses. Non-recurring
restructuring costs and losses on discontinued businesses
reduced operating profit by £3m.
FIXED ASSET INVESTMENTS
UBM holds investments in five, ITN, SIS, SDN, Paperloop and
The Press Association. Five revenue grew by 11.1per cent to
£288.8m (£259.9m) and increased operating profit to £19.5m
(£8.5m). Audience share increased to 6.7 per cent (6.6 per
cent) and share of advertising revenue increased from 8.1 per
cent to 8.3 per cent. Five’s share of Individual’s viewing on the
Freeview platform has increased to 9.3 per cent .
OFFSHORING AND OUTSOURCING
UBM has stepped up its programme of offshoring and
outsourcing. Projects already offshored or outsourced include
data processing, telephone interviewing, software upgrades,
website conversions and circulation management. New
projects currently being finalised or in planning are not
expected to have a material effect in 2005 but should realise
annualised savings of approximately $20m by 2007.
Malcolm Wall
Chief Operating Officer
24 February 2005
NOP World – Market Research
Turnover Operating Profit*
Twelve month to 31 December Twelve months to 31 December
2004 2003 Change 2004 2003 Change
£m £m % £m £m %
NOP World 222.9 203.9 9.3 20.1 19.3 4.1
                                       14
Financial Review
Cash Flow
Operating cash flow was £135.3 million compared to
operating profit before amortisation of goodwill of
£132.3 million. This represents a cash conversion of 102%.
Given that we achieved 140% in 2002 and 119% in 2003
this represented a strong performance by the business. PRN
once again produced an exceptional performance with cash
conversion of 131%.
Capital expenditure for the year was £8.5 million, this was
again less than our depreciation charge of £12.9 million,
however as we said last year the two are converging.
The performance of five once again improved significantly
with operating profits increasing to £19.5 million from
£8.5 million. We said last year that we expected five to be
cash flow positive and indeed it was; we received around
£15million of cash from five in 2004.
The cash outflow in respect of property was again reduced to
£16.1 million from £23.1 million. We paid tax of £10 million.
Balance Sheet
Our balance sheet remains strong. Despite spending
£191.9 million on acquisitions, our overall year end net debt
position was only £68.8 million.
The performance of our fixed assets investments improved
during the year, not only five but also SDN, SIS and PA.
This performance should have increased their value as we
move towards monetising these assets. In addition, the
group has written down certain fixed asset investments by
£11.7 million to reflect their expected realisable value.
We recognised a net exceptional tax credit during the year
of £121.0 million. This represents the resolution of a number
of tax issues. Overall our tax creditor reduced to
£208.0 million. This represents a prudent assessment of the
potential liability for prior years across different geographies.
This creditor has consistently been classified as short term in
line with our accounting convention. We do not expect the
cash outflow in 2005 in respect of this creditor to exceed
£20 million.
Investment Performance
In 2003 we spent around £130 million on acquisitions, last
year we said that “We expect these acquisitions to produce
at least £13 million of operating profit in 2004”, they
exceeded this. They achieved a pre-tax return on capital
employed at around 13%.
In 2004 we spent £191.9 million on acquisitions –
CMPMedica. We do not expect this acquisition to achieve a
return equal to our cost of capital in its first year. Given its track
record for growth we expect its returns to quickly improve,
enhanced by organic investment and bolt on acquisitions.
The performance of our organics improved in 2004, with
both revenue and operating profit increasing in line with our
expectations. Substantial further investment is planned in
2005 to accelerate revenue growth.
Impairment
We have reviewed the carrying value of our intangible assets
(including goodwill) in light of current trading conditions
and expectations and consider that no additional provision
for impairment is required in the current year.
Pensions
At 31 December 2004 the aggregate deficit had increased to
£95.2 million from £83.9 million largely reflecting an
increase in the inflation assumption.
The FRS 17 interest charge was £3.4 million slightly below
our expectations.
“WE HAVE ACHIEVED EPS GROWTH OF 45% IN 2003 AND 36% IN 2004 - almost
100% in the last 2 years. Cash conversion was over 100% for each of
the last 3 years. Acquisitions are providing returns ahead of cost of
capital, organic investments have moved into profit and both should
continue to further drive earnings growth.”
               15
Funding and Financial Risk Management
The group’s central treasury is principally concerned with
managing internal and external funding requirements, the
monitoring of working capital and management of key
financial market risks. Its activities are carried out in
accordance with policies approved by the board and are
subject to regular review and audit. Contracts are entered into
with approved counter parties and not on a speculative basis.
The group borrows and invests centrally on behalf of its
subsidiaries with the aim of maximising liquidity, security,
flexibility and price competitiveness. At the end of 2004
£449 million of sterling equivalent debt remains in issue
comprising of $400 million of convertible bonds (for details
on redemption and conversion see note 21), $250 million of
US senior notes (for details of repurchases see note 22) and
€198 million drawn from the group’s £500m revolving credit
facility. In 2004 the following debt was repaid from surplus
cash, $125m of 8.04% Private Placement (issued in 1994)
and $250m of 7.25% US senior notes (issued in 1999).
Cash and current asset investments totalling £379m are
mainly short term deposits with relationship banks or
investments in AAA rated money market funds.
Following the acquisition of CMPMedica the group has
moved from a net cash position at the end of 2003 to a net
debt position at the end of 2004. Net debt at the end of
2004 was £68.8 million, however in early January the group
received a settlement payment of £32 million from Granada
in relation to outstanding items following the 2000 disposals.
The group retains a £500m revolving credit facility provided by
a syndicate of relationship banks (maturity August 2006). The
drawn margin on this facility is 45 basis points, the interest
cover covenant (ratio of operating profits to net interest paid)
is 3 times (there are no net assets or gearing covenants). In
2004 the group had net interest income, before pension
scheme financing charges, of £12.5m. At 31 December 2004
the undrawn element of the facility was £360m.
Exposure to interest rates is managed through the use of
interest rates swaps. At the end of 2004 £260 million
(notional sterling equivalent) of interest rates swaps are
outstanding.
Foreign currency transaction exposures are covered as they
arise using forward foreign exchange contracts. There are no
material contacts outstanding at the end of 2004. We do not
hedge profit or balance sheet translation as they are
accounting rather than cash exposures. However, foreign
currency borrowings are used where appropriate to provide
an economic hedge against investment in overseas
territories.
Our long term credit rating remains investment grade with a
Standard & Poor’s rating of BBB and Moody’s Baa2 both
with a stable outlook.
Going Concern
Having reviewed the group’s liquid resources, borrowing
facilities and cash flow forecast, the directors believe that the
group has adequate resources to continue as a going
concern for the foreseeable future.
Nigel Wilson
Chief Financial Officer
24 February 2005
        16
GEOFF UNWIN Chairman - Geoff Unwin was appointed to the board as a non-executive director in 1996, and became chairman in
November 2002. He was previously chief executive officer of Cap Gemini Ernst & Young, one of the largest management and IT consulting firms in
the world, and remains a non-voting member of the board of that company. He is also chairman of Halma plc, a leading safety and environmental
technology group and Liberata plc, a provider of business outsourcing services. He is a member of the advisory boards of Palamon Capital Partners
and Hartwell plc. Aged 62. (3)
CLIVE HOLLICK Group Chief Executive - Clive Hollick was appointed to the board as group chief executive in 1996 following the
merger with MAI plc. Prior to that he was group managing director of MAI plc, having joined the board of that company in 1974. He is a
non-executive director of Diageo plc and Honeywell International Inc. and is also chairman of the South Bank Centre. Previous board
appointments include directorships of Hambros Bank Limited (1973-1996), National Bus Company (1984-1991), Logica plc (1987-1992),
British Aerospace Plc (1992-1997) and TRW Inc (1999-2002). Aged 59.
NIGEL WILSON Chief Financial Officer - Nigel Wilson was appointed to the board as chief financial officer in 2001. Prior to that he was
group finance director of Viridian Group plc from 1996 to 2000, and became managing director of Viridian Capital in 2000. Previous
appointments include group finance director at Waste Management International plc, head of corporate finance and group commercial director
of Dixons Group plc, managing director of Stanhope Properties plc and a consultant at McKinsey. Aged 48.
MALCOLM WALL Chief Operating Officer - Malcolm Wall joined the group in 1992 and subsequently became chief executive of
United Broadcasting and Entertainment, responsible for all the group’s television businesses until their sale in 2000. He became chief
operating officer of UBM in November 2000, with responsibility for overseeing operations across all the group’s businesses, and was
appointed to the board on 1 January 2001. Aged 48.
CHARLES GREGSON Executive Director - Appointed to the board in 1996, Charles Gregson is responsible for PR Newswire as well
as the group’s UK specialist publications business, UAP, and the group’s investments. He joined MAI plc in 1974 as group solicitor and
became a director of that company in 1984. He is chairman of ICAP plc, and deputy chairman of Provident Financial plc. Aged 57.
JOHN BOTTS Non-Executive Director - Appointed to the board in 1997, John Botts is chairman of Botts & Company Limited, a London
based funds management and investment company which concentrates on private equity investing in Europe. Other directorships include
Euromoney Institutional Investor plc and Amerindo Internet Fund plc. He is the senior independent director. Aged 64. (2) (3)
Board of Directors
               17
from left to right top to bottom
GEOFF UNWIN
CLIVE HOLLICK
NIGEL WILSON
MALCOLM WALL
CHARLES GREGSON
JOHN BOTTS
CHRIS POWELL
JONATHAN NEWCOMB
ADAIR TURNER
CHRISTOPHER HYMAN
LORD SANDY LEITCH 
CHRIS POWELL Non-Executive Director - Appointed to the board in 1996, Chris Powell was a non-executive director of MAI plc from 1995. He
has been chief executive and chairman of BMP DDB, one of Britain’s largest advertising agencies, of which he was co-founder, and is a past president of
the Institute of Practitioners in Advertising. He is chairman of Nesta (National Endowment for Science, Technology and the Arts). He is chairman of the
remuneration committee. Aged 61. (1) (3)
JONATHAN NEWCOMB Non-Executive Director - Jonathan Newcomb was appointed to the board in 2001. He was chairman and CEO of
Simon & Schuster, one of the world’s largest book publishers, from 1994 until 2002, having been president and chief operating officer from 1991. From
2002 to 2004 he was a principal with the New York based private equity firm of Leeds Weld & Co. Previous employment included McGraw Hill (where
he was responsible for Standard & Poor’s and Data Resources) and Dun & Bradstreet. He is also a director of HSBC North America. Aged 58. (1) (2)
ADAIR TURNER Non-Executive Director - Appointed to the board in 2000, Adair Turner was previously director general of the Confederation of
British Industry and prior to that a director of McKinsey & Co. He is vice-chairman of Merrill Lynch Europe and a visiting professor at the London
School of Economics. In December 2002 he was appointed by the Government to chair an independent commission on pensions. He is chairman of
the audit committee. Aged 49. (1) (2)
CHRISTOPHER HYMAN Non-Executive Director – Christopher Hyman is chief executive of Serco Group plc, which he joined in 1994 and
where he has served in a number of roles, including company secretary and group finance director, before becoming chief executive in 2002.
Serco is one of the world’s leading outsourcing companies, specialising in managing organisational design and change. It has operations in
Europe, the Middle East, Asia Pacific and North America. Aged 41. (2)
LORD SANDY LEITCH Non-Executive Director – Appointed to the board in January 2005, Sandy currently chairs the National Employment
Panel which advises government on employment issues and has recently been appointed to chair an independent review of skills in the UK. He is
chairman of the Balance Foundation and deputy chair of the Commonwealth Education Fund. He was previously chairman and chief executive of
Zurich Financial Services (UK, Ireland, Southern Africa and Asia Pacific), holding senior positions at Allied Dunbar, Eagle Star and Threadneedle. He
was also chairman of The Association of British Insurers. Aged 57. (1)
(1) Member of the remuneration committee
(2) Member of the audit committee
(3) Member of the nomination committee
“I WOULD LIKE TO EXPRESS THE BOARD’S APPRECIATION
AND GRATITUDE FOR ALL THE HARD WORK CARRIED OUT
BY UBM’S EMPLOYEES DURING 2004. Our employees
have helped sustain and develop our long-term
relationships with our customers.” – GEOFF UNWIN
                18
PR Newswire
MultiVu
MediAtlas
eWatch
Profnet
US1
CMP Asia
Asia Pacific Leather Fair – materials,
manufacturing and technology
Cosmoprof Asia
Health & Beauty America
Seatrade Cruise Shipping
Convention
June Hong Kong Jewellery and
Watch Fair – Fashion Access – April
Health Industry News
Jewellery News Asia
Tokyo International Health
Industry Show
UAP
Exchange & Mart
Auto Exchange
Daltons Weekly
Industrial Exchange & Mart
Trade It
Trader
Opportunities
Private Villas
This Caring Business
ECM
The PA
CMPi
CPHI
Building
Furniture Show
Property Week
Farmer’s Guardian
FIE
Ifsec
Guitar Player
Health & Safety
Pulse
CMP Media
Information Week
CRN
EE Times
Network Computing
VARBusiness
TechWeb
Consultant Magazine
Game Developer Conference
Embedded Systems Conference
Xchange Conferences
CMPMedica
Vidal
Journal du Medecin
Gelbeliste
Vademecum
Medical Observer
Carnets de Sante
MIMS
Kassenarzt
Medex
MedServe
NOP W orld
National Report
Roper Diabetes
Major UBM Products
                 ANTICIPATE, MEET AND EXCEED
CUSTOMER EXPECTATIONS
MAGAZINESEVENTSDIRECTORIESON-LINENEWSDISTRIBUTIONMEDIA INTELLIGENCEMARKETRESEARCH
INTELLIGENT MEDIA - INTEGRATED MULTI-PLATFORM MARKETING SOLUTIONS
              MAGAZINES
“A typical issue of Exchange & Mart offers
almost £50 million worth of cars for sale”
  OVER 160 MAGAZINES
IN OVER 110 COUNTRIES
CONTROLLED CIRCULATION
OF OVER 4M
PROFESSIONALS
OVER 11M PAYING
READERS PER ANNUM
OVER 4,500 CORPORATE
ADVERTISERS
OVER 45,000 CLASSIFIED
ADVERTISERS PER ANNUM
  EVENTS
  OVER 300 EVENTS
OVER 1.3M VISITORS
FROM OVER 120 COUNTRIES
OVER 2,500 EXHIBITORS
“Attendees at the Asia
Pacific Leather Fair fill up
70% of Hong Kong’s hotel
capacity – the equivalent of
75 Boeing 747 aircraft.”
   DIRECTORIES
OVER 50 DIRECTORIES
READ IN OVER 40 COUNTRIES
OVER 35,000 READERS
“CMPMedica’s Vidal directory has
3,000,000 mm of column length!”
  ONLINE
OVER 200 WEBSITES
OVER 22 MILLION PAGE IMPRESSIONS
ONLINE REVENUE GREW BY 37% IN 2004
“informationweek.com visitors spend an
average of $22.9 million annually on IT
products and services.”
   NEWS DISTRIBUT ION
“PR Newswire started operations in March 1954, by 2004,
PR Newswire served more than half of all publicly listed
companies in the US, including nearly 60% of the Fortune 500.”
  OVER 50 YEARS IN THE BUSINESS
REACHING TARGETED AUDIENCES
OVER 40,000 CUSTOMERS
OUTLETS IN 135 COUNTRIES
TRANSLATES DOCUMENTS INTO
MORE THAN 150 LANGUAGES
OVER 180,000 MESSAGES IN 2004
UT ION
  DISTRIBUTION, TARGETING, MEASURING AND
MONITORING OVER 78.000 JOURNALISTS REGISTERED
CONTACT DETAILS ON OVER 460,000
JOURNALISTS AROUND THE GLOBE 
VIDEO NEWS RELEASES PITCHED TO 20 TARGETED
TELEVISION MARKETS MONITORS MORE THEN 66,000
USENET NEWS GROUPS MONITORS MESSAGE BOARDS
WITH OVER 25 MILLION USERS
MEDIA
  INTELLIGENCE
NEW PR NEWSWIRE PRODUCTS
“This suite of services will allow us to speak directly
to thousands of journalists and the American public
in ways never before possible, with the help of a
known, trusted and respected provider.” NASA
  MARKET RESEARCH
NOP WORLD IS A TOP-TEN MARKET
RESEARCH POWER, UNITING SOME
OF THE MOST RENOWNED U.S. AND
EUROPEAN RESEARCH FIRMS INTO
A SINGLE GLOBAL ORGANISATION. 
Industry
Sector
Centre of
Excellence
Increased
Communication
   ET RESEARCH
People
Knowledge
Opinion Poll
Research
Analysis
Geographic
Coverage
Studies
and
attitudes
Consumer
Trends
“One American in ten tells the
other nine how to vote, where
to eat and what to buy. They
are “The Influential’s” Widely
applauded “influential” book
written by Ed Keller, CEO of
NOP World Consumer and
Jon Berry, Vice President
NOP Opportunity Centre
of Excellence.
    DEVON REIMER
Devon Reimer and Cheers at the Devon
Horse Show, in Devon, PA.
JON HAMPSON
At work as a volunteer firefighter at a
‘live burn’ training exercise.
JOSEPH LOVELL
A NOP worker leaves the warmth of the
the offices at Ludgate House as the
Christmas nights draw in.
STEVEN V AUSE
The big catch!
JOSEPH LOVELL
The 2004 graduate scheme comes to an
end and the new talent are treated to a
Pizza Express meal on the South Bank
THERESA EVESON
‘Ooh! Suits you sir’
Some of our favourite entries from a recent UBM staff photographic competition
- further evidence of the level of talent and ideas within UBM
              35
36 DIRECTORS’ REMUNERATION REPORT
44 CORPORATE GOVERNANCE STATEMENT
47 INDEPENDENT AUDITORS’ REPOR T TO THE
MEMBERS OF UNITED BUSINESS MEDIA PLC
48 REPORT OF THE DIRECTORS
50 GROUP PROFIT AND LOSS ACCOUNT
51 BALANCE SHEETS
52 GROUP CASH FLOW STATEMENT
53 STATEMENT OF GROUP TOTAL RECOGNISED
GAINS AND LOSSES
53 RECONCILIATION OF MOVEMENTS IN
GROUP SHAREHOLDERS’ FUNDS
54 GROUP ACCOUNTING POLICIES
57 NOTES TO THE FINANCIAL STATEMENTS
85 PRINCIPAL GROUP SUBSIDIARIES
86 FIVE YEAR FINANCIAL SUMMARY
86 FINANCIAL CALENDAR
87 RECONCILIATION OF DIFFERENCES BETWEEN
UK GAAP AND INTERNATIONAL FINANCIAL
REPORTING STANDARDS (IFRS)
IBC SHAREHOLDERS’ INFORMATION
Accounts Contents This report sets out the policy and disclosures on directors’ remuneration in accordance with the requirements of the Companies Act 1985 (the “Act”) as
amended by the Directors’ Remuneration Report Regulations 2002. Disclosure relating to individual directors’ remuneration on page 38, pensions information
on page 39 and directors’ interests in share options and other long term incentive schemes on pages 41 to 43 has been audited by Ernst & Young LLP.
Remuneration committee
Responsibility for formulating and recommending policy on executive remuneration has been delegated to the remuneration committee by the board.
Within the terms of the agreed policy, the committee approves the specific components of remuneration packages of all executive directors and the
chairman. It also reviews the general remuneration framework for senior executives and makes awards under the company’s option and incentive plans.
The committee is composed entirely of non-executive directors; further information regarding the independence of directors can be found in the corporate
governance statement on page 45. Members of the committee during 2004 were Chris Powell (chairman), Jonathan Newcomb and Adair Turner.
The company’s chairman Geoff Unwin is not a member of the committee but attends meetings by invitation, except when matters relating to his own
remuneration are discussed. Sandy Leitch, who joined the board as an independent non-executive director on 11 January 2005, has also been appointed as
a member of the remuneration committee. Chris Powell, the committee’s chairman, will retire at this year’s annual general meeting in accordance with the
company’s articles and a resolution will be proposed for his re-election.
The committee met formally on six occasions during 2004. Details of individual directors’ attendance are set out in the corporate governance statement on
page 44. In addition to its usual schedule of issues for consideration, during 2004 the committee dealt with matters relating to Clive Hollick’s forthcoming
retirement and the formulation of a remuneration package for David Levin, who will join the group as chief executive in April 2005.
External assistance was provided to the committee by Kepler Associates, who were appointed by the committee in July 2004, and by New Bridge Street
Consultants LLP. Kepler Associates have no other connection with the company. New Bridge Street Consultants LLP also provided advice to the company
during the year on specific aspects of performance related remuneration. The committee received assistance internally from the acting HR director, Sue
Brader, the employee and benefits manager, Jane Allen and the company secretary, Anne Siddell, who is secretary to the committee. The chief executive
Clive Hollick assists the committee in formulating performance conditions for executives reporting to him and attends meetings by invitation except where
matters relating to his own remuneration are discussed.
The committee’s terms of reference comply with the new Combined Code on corporate governance and may be viewed on the group’s website. Copies
may also be obtained from the company secretary.
Performance graph
The graph above shows UBM’s total shareholder return performance over the last five years since 31 December 1999 as compared to the FTSE Media Index,
which has been chosen as UBM is a constituent of that Index. The graph reflects the return of a £1.25 billion special dividend to shareholders in April 2001
following the disposal of UBM’s three ITV licences to Granada Media for £1.75 billion. In accordance with the requirements of the Act, the “UBM” line
assumes that the benefits received by shareholders from this event were reinvested in UBM’s shares; it shows a 30.1 percent decline in shareholder return
compared to a 42.7 percent decline in the FTSE Media Index. The “UBM/return on deposit” line reflects the return on deposit from the special dividend and
shows a decline of 15.8 percent.
36 Directors’ Remuneration Report
60
90
120
30
FTSE Media UBM/Return on Deposit UBM
31 Dec 99
31 Dec 00
31 Dec 01
31 Dec 02
31 Dec 03
31 Dec 04
%
0 37
Remuneration policy
Non-executive directors’ remuneration
The board’s policy on non-executive directors’ remuneration for 2005 is to pay fees which reflect the non-executive directors’ responsibilities, are
competitive with those of other FTSE 250 companies, and which align directors’ interests with those of shareholders. The board as a whole considers and
approves the fees of the non-executive directors, with the exception of the chairman whose fees are approved by the remuneration committee.
Pursuant to the policy outlined above, non-executive directors receive a proportion of their fees in the form of shares with the balance payable in cash.
Ordinary shares in the company are provisionally awarded and are included in the directors’ share interests table on page 43. The directors will become
entitled to receive these shares when they leave the board, subject to certain conditions. The remuneration table on page 38 shows the fees paid to
non-executive directors and the cash value of shares as at the date they were provisionally awarded. During the year the non-executive directors’ fees
were benchmarked against market practice and with effect from 1 November 2004 the cash fee was increased from £25,000 to £30,000 per annum.
The directors’ fees include membership of board committees; an additional payment of £10,000 per annum is made to the chairmen of the remuneration
and audit committees respectively and to the senior independent director, John Botts.
The chairman, Geoff Unwin receives a fee of £100,000 per annum paid in cash as well as a provisional allocation of ordinary shares as described above.
These fees have remained unchanged since his appointment in November 2002.
In recognition of the significant additional time commitment and workload undertaken by the chairman and all non-executive directors in 2004 during the
process of recruiting a new chief executive, the board approved the payment of additional non-recurring fees of £10,000 each for Geoff Unwin, John Botts
and Chris Powell, and of £5,000 each for Jonathan Newcomb, Christopher Hyman and Adair Turner. These fees will be paid in March 2005 and are included
in the directors’ remuneration table on page 38.
Executive directors’ remuneration
For 2005, it continues to be the committee’s policy that each executive director’s remuneration package includes a significant element which is linked to
key measures of corporate and personal performance and encourages investment in the company’s shares. Base salary is expected to comprise less than
50 percent of the total remuneration that may be earned.
The committee will undertake a detailed review of remuneration policy during 2005, with particular reference to the balance of fixed and performance-
related remuneration and the structure of long term incentive arrangements.
Executive directors’ remuneration packages
Executive directors’ remuneration packages comprise base salary and benefits; an annual bonus based on a combination of personal and corporate annual
performance measures; long term incentive arrangements; and pension provision.
Salary
Base salary for each director is determined annually with effect from 1 January. The company regularly benchmarks executive remuneration packages against
the market to measure the competitiveness of base salaries, as well as other aspects of remuneration. Factors such as inflation, the individual’s
responsibilities, the company’s performance and the salary policy throughout the group as a whole are taken into account when determining base salary
levels. Base salaries for executive directors were increased by 3.5 percent with effect from 1 January 2005.
Bonuses
Executive directors are eligible for an annual bonus dependent on the achievement of stretching performance measures which customarily include a
combination of factors recognising both relevant company performance and individual objectives. These measures are reviewed annually and new objectives set
by the committee for each director at the start of the financial year. Specific weightings are attached to each objective. Part of the bonus is payable in the form
of a deferred share award known as the Medium Term Incentive Plan (“MTIP”) which is described in more detail below. Awards under the MTIP are based on
the same corporate performance targets as for the cash element of the bonus but require more stretching performance to achieve the maximum award.
The maximum bonus payable for 2004 if all corporate and individual performance targets are substantially exceeded is 110 percent of salary, with
60 percent of salary payable in cash and 50 percent of salary in the form of shares under the MTIP. Previously the maximum bonus payable was 100 percent
of salary, of which 60 percent of salary was payable in cash and 40 percent of salary under the MTIP. The committee’s view is that the increase in the
element of bonus payable in the form of shares is appropriate to ensure that remuneration packages remain competitive. Individual directors may also be
invited to invest all or part of their cash bonus in the company’s Senior Executive Equity Participation Plan (“SEEPP”), details of which can be found below.
Awards made under the MTIP are in the form of nil cost options over the company’s shares, the number to be calculated using the average share price for
the month preceding the start of the relevant financial year. Thus the company’s results for 2004 will form the basis for awards to be made in 2005, with
the number of options granted being calculated by reference to the average share price during December 2003. Awards made in 2005 will vest as to
50 percent in January 2007 and the balance in January 2008, provided the director remains in the group’s employment. Awards will also vest if employment
ceases due to redundancy, disability, injury, death, retirement at or after contractual retirement age, or in other circumstances at the discretion of the
remuneration committee. Only purchased shares may be used to fulfil awards under the MTIP.
Details of awards previously made to individual directors under the MTIP are set out in the table on page 43; the directors’ remuneration table on page 38
shows the cash value of bonuses earned under the MTIP in respect of 2004.
Clive Hollick will be eligible for a cash bonus and MTIP award in respect of 2005, dependent upon the company achieving pre set financial targets; the
amount of bonus payable will be pro rated by reference to his leaving date. The company also proposes to pay Clive Hollick a bonus of £250,000 following
his departure in May 2005, based on achievement of a successful handover to the new group chief executive, David Levin.
Directors’ Remuneration Report
  Table of Individual Directors’ Remuneration
Employer’s
pension
conts
Allocated Total for Total for (Money
Basic salary Fees Benefits Bonus Shares MTIP 2004 2003 Purchase)
Directors ££ ££ £££ £
Clive Hollick 688,420 17,850 390,128 344,210 1,440,608 1,312,814
Charles Gregson 304,223 13,633 147,309
(3)
198,920 664,085 622,991
Malcolm Wall 334,750 18,891 90,808
(5)
167,375 611,824 544,929 143,847
(5)
Nigel Wilson 319,300 23,592 185,194 159,650 687,736 633,480 54,082
Geoff Unwin 110,000 99,393 209,393 200,000
John Botts 45,833 9,938 55,771 43,750
Christopher Hyman 22,051 3,936 25,987 –
Jonathan Newcomb 30,833 9,938 40,771 35,000
Chris Powell 45,833 9,938 55,771 39,167
Adair Turner 40,833 9,938 50,771 43,750
Directors who retired during the year
Fields Wicker-Miurin 9,183 5,050 14,233 35,000
Total emoluments 1,646,693 304,566 73,966 893,439 148,131 870,155 3,816,950 3,510,881 197,929
Notes to directors’ remuneration table
1. Non-executive directors’ fees include an element which is payable in the form of ordinary shares, as described on page 37. The allocated shares column
reflects the cash value of shares on the date on which they were provisionally allocated, ie 1 April (499 pence) and 1 October (483 pence).
2. The cash element of Chris Powell’s fee is paid to BMP DDP Limited, while that of John Botts is paid to Botts & Company Limited.
3. Charles Gregson’s cash bonus figure includes the sum of £20,000 being an additional non-pensionable payment in respect of overseas duties.
4. Benefits are non pensionable car and cash allowances. Benefits for Malcolm Wall and Nigel Wilson include allowances paid in relation to pension
commitments.
5. Before its award, Malcolm Wall sacrificed a cash bonus of £100,000. This amount is included in the employer’s pension contribution column and will
be paid to the United Group Pension Scheme to secure additional pension benefits.
6. Directors may be invited to sacrifice part or all of their cash bonus to the United SEEPP.
7. The MTIP column shows the cash value of bonuses earned under the deferred bonus plan in respect of 2004. These cash values have been converted
into ordinary shares at a price of 493.98 pence, which was the average market value of these shares during December 2003, and executive directors will
be awarded nil cost options over these shares in 2005.
8. The company receives a contribution of £93,617 from ICAP Plc in consideration for making available the services of Charles Gregson as chairman of that
company. Charles Gregson’s remuneration shown above is net of that contribution.
Long Term Incentive Plans
The company’s long term incentive plans are designed to incentivise management and to align their interests with those of shareholders by supporting the
company’s commitment to long term growth. Long term incentives currently comprise the executive share option scheme and SEEPP, which are summarised
below.
Executive Share Options
The company operates a shareholder approved executive share option scheme (the “2000 Scheme”) under which options are awarded to senior employees
(including executive directors) to reward past performance and to incentivise future performance. Options are granted at market value and awards are generally
made on a phased basis. The committee determines the appropriate level of each grant having regard to corporate objectives, market forces and individual
circumstances. In each of the last two years, option awards made to executive directors had an aggregate acquisition price, based on the market value of the
company’s shares at the time of grant, of less than one times salary. Options are subject to a performance condition which requires growth in earnings per share
to exceed the increase in the UK retail price index by an average of at least 3 percent per annum over the period of three years from the date of grant. If this
condition is met, options with a face value equal to 0.75 times salary will vest. In order for the whole award to vest, growth in earnings per share must exceed
the increase in RPI by an average of 5 percent per annum over the measurement period. A sliding scale applies between these two figures.
The committee considers that a performance condition based on long term growth in earnings per share is in line with shareholders’ expectations and that
the targeted growth levels of 3 percent to 5 percent above inflation are appropriately stretching. The committee determines whether the performance
conditions have been met, using calculations which have been reviewed by the group’s auditors. Options granted prior to 2004 may be re-tested up to six
years from the date of grant from a fixed base. No re-testing is permitted of options granted after February 2004.
Further details of options held by executive directors, including those granted during 2004, are set out in the table on page 41.
38 Directors’ Remuneration Report
  39
Senior Executive Equity Participation Plan (“SEEPP”)
The SEEPP offers selected senior executives (including executive directors) the opportunity to waive part or all of their annual bonus and receive an interest
in shares in the company (“bonus shares”) to the equivalent value. The executive may also be granted a right to acquire further shares (“matching shares”)
in the company equal in value to the gross amount of the bonus foregone. Invitations to participate in the SEEPP are issued by the remuneration committee,
which reviews prospective participants annually; there is no automatic entitlement to participate.
Matching share awards will vest on the fourth anniversary of grant but may be exercised only to the extent that the attached bonus shares are still held on
that date. Matching share awards are also subject to a performance condition which is measured over the four year vesting period. One third of the award
may only be exercised if growth in earnings per share during that period exceeds inflation by an average of 3 percent per annum; a further one third
requires such growth to exceed inflation by an average of 5 percent per annum; the remaining one third requires no performance condition. No re-testing
of performance conditions is permitted.
Further details of outstanding awards held by executive directors under the SEEPP, including awards made in 2004, are set out in the table on page 42.
During 2005 the committee will consider the implications of IFRS for the performance conditions relating to the group’s long term incentive schemes.
Sharesave
Executive directors are also entitled to participate in the sharesave scheme, under which eligible employees around the group may acquire options over
ordinary shares of the company at a discount of up to 20 percent of their market price, using the proceeds of a related SAYE contract.
Pensions
The company contributes to personal pension plans for Malcolm Wall and Nigel Wilson. During 2004, both directors joined the defined contribution section
of the United Group Pension Scheme and contributions are now paid to that scheme. The table below shows the total pension contributions paid by the
company during the year on behalf of both directors; payments in excess of Inland Revenue maximum limits are paid as benefits in kind and shown as such
in the directors’ remuneration table on page 38.
Company
pension
contribution
Normal during
retirement Pension the year
Name age contribution £000
Malcolm Wall 60 15% of basic salary 50
Nigel Wilson 60 20% of basic salary 64
Clive Hollick and Charles Gregson are members of the United Pension Plan which is an approved defined benefit scheme. The company met the full cost of
the benefits until July 2004, from which date, as part of the company’s policy on employee contributions, both directors commenced contributions at a rate
of 2 percent of salary. For Charles Gregson, this contribution rate will increase to 6 percent by 2006. Normal retirement age is 60. Charles Gregson’s pension
entitlement is two thirds of final pensionable salary, which is calculated as the average of the highest three consecutive pensionable salaries in the ten years
prior to retirement. Pensions in payment are increased by 5 percent per annum or RPI, if less. The widow’s pension is two-thirds of the individual’s pension.
Under the terms of Charles Gregson’s service contract, the definition of pensionable salary includes annual bonus up to 50 percent of base salary; this is a
long standing term of his service contract. If Charles Gregson’s service were terminated by the company without his consent he would be entitled to an
immediate pension calculated as a proportion of his pension entitlement at age 60, based on his final pensionable salary at the date of termination.
Under Clive Hollick’s service contract, bonuses ceased to be pensionable in 2001, at which date his maximum pension entitlement (assuming he remains in
office until his normal retirement date) had been earned and was fixed at £726,000 per annum. Clive Hollick will retire from the company in May 2005,
when he reaches his 60th birthday. In accordance with his contractual entitlement he has requested that a transfer value be paid by the United Pension Plan
prior to his departure to secure the payment of his pension benefits by a self administered scheme. A transfer value of £14.73 million has been calculated by
the plan’s actuaries and will be paid on or about 31 March 2005; this will relieve the United Pension Plan of any liability for pension provision to Clive
Hollick or his dependants.
In accordance with the regulations, the table below shows accrued pension benefits at 31 December 2004 for Clive Hollick and Charles Gregson as well as
the increase in accrued benefits during the year, the transfer value at the beginning and end of the year and the change in transfer value during the year.
The table also shows the change in accrued benefit net of inflation and the transfer value of that change, as required by the Listing Rules.
Following actuarial advice, the trustees of the plan amended the basis for calculating transfer values during the year which led to an increase in transfer
values for all members of the plan.
Increase in
accrued pension
Increase in during year Transfer value
accrued pension Increase in ended at 31.12.2004
Accrued during the transfer value 31.12.2004 of increase
pension year ended Transfer value for year ended in excess in excess
Current 31.12.2004 31.12.2004 31.12.2003 31.12.2004 31.12.2004 of inflation of inflation
Name age £000 pa £000 pa £000 £000 £000 £000 pa £000
Clive Hollick 59 711 39 11,244 14,489 3,238 16 300
Charles Gregson 57 359 – 5,335 6,459 1,118 (12) (226)
Directors’ Remuneration Report
  External appointments of executive directors
The company considers that by permitting executive directors to hold office as a non-executive director of another company, they will increase their
knowledge and experience thereby benefiting the company. The policy allows executive directors to accept not more than two outside corporate
directorships, subject to board approval which may be given or withheld at the board’s discretion.
Clive Hollick, Charles Gregson and Nigel Wilson each hold external directorships and are entitled to retain the fees earned. During 2004, Clive Hollick
earned £59,885 from Diageo plc and $97,500 plus deferred stock and dividends with a value of $62,250 in Honeywell International Inc in respect of his
directorships of these companies; Charles Gregson earned £40,000 in respect of his directorship of Provident Financial Plc and Nigel Wilson earned £25,026
in respect of his directorship of Halfords Plc.
Policy on executive directors service contracts and termination payments
It is the company’s policy that all executive directors should have service contracts that are terminable on no more than one year’s notice and that contracts
should not have a fixed term. Contracts provide for automatic termination at age 60. In accordance with this policy, Clive Hollick’s contract will terminate
on 19 May 2005. He has agreed to provide consultancy services to the company for a period of up to 12 months after his retirement in consideration for a
fee of £100,000.
If Clive Hollick or Charles Gregson’s employment were terminated other than for cause (summary dismissal), they would be entitled to a payment,
calculated by reference to their unexpired period of notice, of up to one year’s salary, benefits and 50 percent of average bonus over the preceding three
years (excluding any special bonus). Under Malcolm Wall and Nigel Wilson’s contracts, any payment on early termination by the company would be by
reference to the unexpired period of notice, subject to a duty to mitigate. In accordance with the committee’s policy, David Levin’s service contract, which
will commence on 5 April 2005, is terminable by either party on not less than twelve months’ notice; any payment on early termination by the company
would be subject to the same considerations as apply in respect of Malcolm Wall and Nigel Wilson’s contracts.
The dates on which each executive director’s current service contract commenced are as follows:-
Clive Hollick 31 October 2001
Charles Gregson 31 December 2001
Malcolm Wall 24 November 2000
Nigel Wilson 06 July 2001
Policy on non-executive directors’ contracts
The chairman, Geoff Unwin, has a contract which was entered into on 5 November 2002 and which is terminable by either party on not less than twelve
months’ notice. He was last re-elected to the board in 2003. His contract contains no provision for payment of compensation on early termination.
Other non-executive directors do not have a service contract with the company but are engaged under a letter of appointment. John Botts, Adair Turner
and Chris Powell have notice periods of six months while Jonathan Newcomb, Christopher Hyman and Sandy Leitch have notice periods of three months.
None of the non-executive directors’ terms of appointment contain any provision for payment of compensation on early termination. Non-executive
directors are not entitled to participate in the company’s share option or pension schemes. Each director’s appointment (including that of the chairman)
is reviewed every three years. Set out below are the dates on which each non-executive director was first appointed to the board and the year in which
he was last re-elected by shareholders.
Director Date of appointment Date of last re-election
John Botts 8 July 1997 2004
Christopher Hyman 7 May 2004 N/A
Sandy Leitch 11 January 2005 N/A
Jonathan Newcomb 27 September 2001 2002
Chris Powell 04 April 1996 2002
Adair Turner 01 January 2000 2003
40 Directors’ Remuneration Report
  41
Directors’ interests in share options
Exercised/ Market price
Date Options held lapsed Options held Exercise period Exercise at date of Total gain
of grant at 1.1.04 during 2004 at 31.12.04 from to price (p) exercise (p) on exercise
Clive Hollick
MAI Executive Schemes 13.10.94 44,800 44,800 0 13.10.97 13.10.04 374.219 473.25 £44,365
1994 Executive Scheme 16.09.96 153,455 – 153,455 16.09.99 16.09.06 686.000
2000 Scheme 18.12.00 152,500 – 152,500 18.12.03 18.12.10 843.000
18.12.00 152,500 – 152,500 18.12.04 18.12.10 843.000
08.05.01 152,500 – 152,500 08.05.04 08.05.11 724.800
08.05.01 152,500 – 152,500 08.05.05 08.05.11 724.800
19.12.01 150,000 – 150,000 19.12.04 19.12.11 529.000
19.12.01 150,000 – 150,000 19.12.05 19.12.11 529.000
22.08.02 250,000 – 250,000 22.08.05 22.08.12 277.200
22.08.02 250,000 – 250,000 22.08.06 22.08.12 277.200
09.04.03 120,000 – 120,000 09.04.06 09.04.13 247.250
United SAYE Scheme 01.11.96 1,464 1,464 0 01.02.04 01.08.04 532.600
31.10.97 616 – 616 01.02.05 01.08.05 632.700
10.04.03 5,880 – 5,880 01.06.06 01.12.06 160.480
Charles Gregson
MAI Executive Schemes 13.10.94 44,800 44,800 0 13.10.97 13.10.04 374.219 490.11 £51,919
1994 Executive Scheme 16.09.96 69,252 – 69,252 16.09.99 16.09.06 686.000
2000 Scheme 18.12.00 52,500 – 52,500 18.12.03 18.12.10 843.000
18.12.00 52,500 – 52,500 18.12.04 18.12.10 843.000
08.05.01 52,500 – 52,500 08.05.04 08.05.11 724.800
08.05.01 52,500 – 52,500 08.05.05 08.05.11 724.800
19.12.01 75,000 – 75,000 19.12.04 19.12.11 529.000
19.12.01 75,000 – 75,000 19.12.05 19.12.11 529.000
22.08.02 125,000 – 125,000 22.08.05 22.08.12 277.200
22.08.02 125,000 – 125,000 22.08.06 22.08.12 277.200
09.04.03 120,000 – 120,000 09.04.06 09.04.13 247.250
05.04.04 – – 65,000 05.04.07 05.04.14 500.670
United SAYE Scheme 15.12.98 655 655 0 01.02.04 01.08.04 514.800
10.04.03 8,187 – 8,187 01.06.08 01.12.08 160.480
08.04.04 – – 793 01.06.09 30.11.09 412.270
Malcolm Wall
2000 Scheme 18.12.00 76,000 – 76,000 18.12.03 18.12.10 843.000
18.12.00 76,000 – 76,000 18.12.04 18.12.10 843.000
08.05.01 76,000 – 76,000 08.05.04 08.05.11 724.800
08.05.01 76,000 – 76,000 08.05.05 08.05.11 724.800
19.12.01 75,000 – 75,000 19.12.04 19.12.11 529.000
19.12.01 75,000 – 75,000 19.12.05 19.12.11 529.000
22.08.02 125,000 – 125,000 22.08.05 22.08.12 277.200
22.08.02 125,000 – 125,000 22.08.06 22.08.12 277.200
09.04.03 120,000 – 120,000 09.04.06 09.04.13 247.250
05.04.04 – – 65,000 05.04.07 05.04.14 500.670
United SAYE Scheme 20.04.01 1,587 1,587 0 01.06.04 01.12.04 488.300
08.04.04 – – 457 01.06.07 30.11.07 412.270
Nigel Wilson
2000 Scheme 08.08.01 104,000 – 104,000 08.08.04 08.08.11 595.700
08.08.01 104,000 – 104,000 08.08.05 08.08.11 595.700
19.12.01 75,000 – 75,000 19.12.04 19.12.11 529.000
19.12.01 75,000 – 75,000 19.12.05 19.12.11 529.000
22.08.02 125,000 – 125,000 22.08.05 22.08.12 277.200
22.08.02 125,000 – 125,000 22.08.06 22.08.12 277.200
09.04.03 120,000 – 120,000 09.04.06 09.04.13 247.250
05.04.04 – – 65,000 05.04.07 05.04.14 500.670
United SAYE Scheme 10.04.03 11,060 – 11,060 01.06.10 01.12.10 160.480
Directors’ Remuneration Report
  Directors’ interests in share options
Options granted in the 2000 Scheme are subject to the performance conditions described on page 38. Options granted to Clive Hollick and Charles
Gregson under the United 1994 Executive Scheme are subject to a performance condition which requires EPS growth to exceed the increase in UK Retail
Price Index by an average of 2 percent per annum over a three year period. At the time of setting up the 1994 Executive Scheme this performance measure
was in line with existing market practice. The performance condition has been met in respect of all outstanding options held by these executive directors
under United 1994 Executive Scheme, which are consequently fully vested. All options were granted at market value and for no consideration.
Options granted to Clive Hollick and Charles Gregson under the MAI Executive Schemes are not subject to any performance conditions; at the time these
schemes were established it was not customary to require performance conditions. All options were granted at market value of the corresponding MAI
shares at the date of grant and were converted into options over shares in the company upon the merger of the company and MAI in 1996. No
consideration was payable for the grant of options under these schemes.
Options granted under the United SAYE scheme are not subject to performance conditions as these are all-employee schemes.
During 2004 the committee reviewed its policy on re-testing of performance conditions and removed the re-testing provisions for option grants made under
the 2000 Scheme after February 2004. There have been no other variations in the terms and conditions of scheme interests during the year.
Senior Executive Equity Participation Plan
Ordinary
Ordinary B shares/ shares/
Ordinary shares/ options options Ordinary
B shares/ shares/ options exercised exercised B shares/ shares/
options at options at granted or lapsed or lapsed options at options at Exercisable Expiry Market Gain on
01.01.04+ 01.01.04+ in 2004 in 2004 in 2004 31.12.04+ 31.12.04+ from date value† exercise
Clive Hollick 20,117 26,516* – 20,117 26,516** 0 0 17.03.01 29.06.07 n/a £122,670
34,038 44,868* – 0 0 34,038 44,868 18.03.02 29.06.07 £191,076 n/a
33,354 43,966* – 33,354‡ 43,966‡ 0 0 n/a n/a n/a £61,786
Charles Gregson 4,994 6,582* – 4,994 6,582** 0 0 17.03.01 29.06.07 n/a £30,451
15,152 19,972* – 0 0 15,152 19,972 18.03.02 29.06.07 £85,055 n/a
9,398 12,388* – 0 0 9,398 12,388 08.03.03 29.06.07 £52,756 n/a
2,335 3,076* – 1,557‡ 1,026‡ 778 2,050 03.03.04 29.06.10 £4,364 n/a
– 23,850* – – 0 – 23,850 08.05.05 08.05.11 £57,240 n/a
– 5,500* – – 0 – 5,500 16.04.06 16.04.12 £13,200 n/a
– 121,836* – – 0 – 121,836 11.04.07 11.04.13 £292,406 n/a
– – 80,924* – 0 – 80,924 24.03.08 24.03.14 £194,218 n/a
Nigel Wilson – 59,796 – – 0 – 59,796 11.04.07 11.04.13 £143,510 n/a
– – 66,248 – 0 – 66,248 24.03.08 24.03.14 £158,995 n/a
Malcolm Wall – – 28,598 – 0 – 28,598 24.03.08 24.03.14 £68,635 n/a
Awards becoming exercisable on or after 3 March 2004 were granted under the 2000 SEEPP, which is described on page 39. Awards becoming exercisable
prior to 3 March 2004 were granted under the 1996 SEEPP, which operates in a similar manner to the 2000 SEEPP, except that the matching awards are
subject to a longer vesting period (up to 7 years) but no performance conditions are attached. At the time the 1996 SEEPP was established, it was not
customary to attach performance conditions to matching awards.
Notes:
* The directors gave up cash bonuses that would otherwise have been receivable by them in order to receive awards under the SEEPP. For Clive Hollick
and Charles Gregson, the bonus was paid to each individual’s Funded Unapproved Retirement Benefit Scheme (“FURBS”) and used by the FURBS
Trustees to purchase shares from the SEEPP Trustees at full market value. A matching award was granted over an equal number of shares. The table
shows the total bonus shares and matching awards. The bonus shares are included in the directors’ beneficial interest in shares shown on page 43.
The amount used to purchase the bonus shares was included in the director’s reported remuneration for the year in which the award was made.
** Following exercise of the matching awards, the bonus shares cease to have any restrictions attached to them and are no longer considered to form part
of the director’s SEEPP interests.
+ The SEEPP bonus shares/options and matching awards were adjusted to reflect the capital reorganisation which took place on 23 April 2001, whereby
every shareholder received 44 B shares and 29 new ordinary shares in place of every 44 ordinary shares previously held.
‡ The performance condition was not met for awards made in 2000 and consequently two thirds of the matching options under these awards lapsed during
2004.
† The market value of the matching awards is calculated at 480 pence per share, the closing mid market price on 31 December 2004, and 245 pence per
B share.
42 Directors’ Remuneration Report
  43
Medium Term Incentive Plan
Exercised/
Date of Options held lapsed during Options held Exercisable Expiry Market Gain on
Grant at 01.01.04 2004 at 31.12.04 from date value exercise
Clive Hollick 25.03.04 – – 91,935 01.01.06 25.03.11 £441,288 n/a
Charles Gregson 25.03.04 – – 42,503 01.01.06 25.03.11 £204,014 n/a
Malcolm Wall 25.03.04 – – 18,329 01.01.06 25.03.11 £87,979 n/a
Nigel Wilson 25.03.04 – – 42,641 01.01.06 25.03.11 £204,677 n/a
The MTIP is described on page 37. The market value of MTIP options is calculated at 480 pence per share, the closing mid market price on 31 December 2004.
Directors’ interests in shares
The interests of the directors in ordinary shares (all of which are beneficial) are shown as at 1 January 2004 (or date of appointment if later), and at
31 December 2004.
Ordinary shares Ordinary shares SEEPP Bonus shares SEEPP Bonus shares
Director at 01.01.04 at 31.12.04 at 1.1.2004 at 31.12.2004
Clive Hollick 703,794 785,434 – –
Charles Gregson 420,694 425,622 – –
Malcolm Wall 12,427 14,014 0 14,299
Nigel Wilson 19,449 19,449 29,898 63,022
John Botts 10,637* 12,661* – –
Christopher Hyman 0 815* – –
Jonathan Newcomb 6,532* 8,556* – –
Chris Powell 11,317* 13,341* – –
Adair Turner 8,660* 10,684* – –
Geoff Unwin 39,789* 60,032* – –
* Interests of non-executive directors include provisional allocations of shares by way of remuneration as described on page 37.
As at 31 December 2004 the Trustees of the United Business Media ESOP Trust and the Qualifying Employee Share Trust held 2,066,589 ordinary shares
(2003: 1,194,044) and 279,484 B shares (2003: 329,484) and options over 728,463 ordinary shares (2003: 623,593) and 140,960 B shares (2003:
397,094). Under paragraph 2 of schedule 13 to the Companies Act 1985 the executive directors are deemed to be interested in these shares and options.
The minimum price of ordinary shares during the year was 408.5 pence and the maximum price was 574.5 pence.
Changes in directors’ interests since 31 December 2004
There have been no changes to the interests of directors in UBM shares nor in options over UBM shares between 31 December 2004 and 24 February 2005.
This report was approved by the board and signed on its behalf by Chris Powell.
24 February 2005
Directors’ Remuneration Report
  Introduction
Following publication of the Higgs Report in January 2003, the Financial Services Authority introduced a new Combined Code on corporate governance
which came into effect for financial periods commencing on or after 1 November 2003. This report explains the manner in which the company has applied
the principles of the Combined Code, as set out in more detail below.
The Board
The board has overall responsibility to shareholders for the management of the group. The primary function of the board is to set the group’s strategy and
to oversee the effective implementation of that strategy. A formal schedule of matters to be considered by the board is in place and is reviewed annually.
The board is responsible for matters such as the annual budget (including capital expenditure), major acquisitions and disposals, succession planning,
investment strategy, dividend policy, substantial property transactions, and the group’s system of internal controls. Decisions on operational matters are
delegated to the executive directors. There is an established agenda of items to be considered at board meetings which provides regular updates on the
group’s finances, operations, strategy and development. The board also receives presentations from executive directors and from divisional management
and other senior executives on specific issues. The chairman meets separately with the chief executive on a regular basis and other informal meetings and
discussions take place between directors as appropriate. The board receives monthly written reports from the chief executive, chief financial officer and chief
operating officer as well as management accounts and other financial information. The board met formally on seven occasions during 2004; details of
individual attendance by directors at board and committee meetings are set out in the table below.
Board Audit Remuneration Nomination
Committee Committee Committee
(attendance is shown only for committee members)
Geoff Unwin 74
Clive Hollick 7
Charles Gregson 7
Malcolm Wall 7
Nigel Wilson 7
John Botts 7 4 4
Christopher Hyman 3 (of 5) 0 (of 2)
Jonathan Newcomb 7 2 (of 4) 5
Chris Powell 7 6 4
Adair Turner 74 6
Fields Wicker-Miurin 2 (of 2) 2 (of 2)
Board committees
The board is assisted in fulfilling its responsibilities by three principal committees, the audit, remuneration and nomination committees. Details of the
activities of the audit committee are set out in a separate report on page 46 while those of the remuneration committee are set out in the remuneration
report on pages 36 to 43.
The terms of reference for all committees were reviewed and updated during the year. These may be viewed on the company’s website and copies can be
obtained from the company secretary, who acts as secretary to all three committees.
Nomination committee
The nomination committee is chaired by Geoff Unwin and its other members are John Botts and Chris Powell. The committee meets as required to review
the structure, size and composition of the board and to oversee the recruitment of new board members, both executive and non-executive. During 2004
the committee undertook a considerable workload in respect of succession planning for the role of chief executive as well as recruiting new non-executive
directors. In addition to its four formal meetings, committee members undertook numerous other meetings and telephone discussions as well as
interviewing prospective candidates.
The process of recruiting a new chief executive was initiated by the committee which drafted and agreed a specification for the role. Following consideration
of a number of firms, external consultants were then selected to assist in the recruitment process. A large number of external and internal candidates were
interviewed by the consultants and by the committee before selecting a shortlist of candidates who were interviewed by all non-executive directors.
A similar process was followed in respect of the recruitment of non-executive directors, where external consultants were engaged to identify suitable
candidates in line with a specification produced by the committee. Potential candidates were then interviewed by the committee. The process has resulted
in the appointment of two new independent non-executive directors, Christopher Hyman in May 2004 and Sandy Leitch in January 2005.
44 Corporate Governance Statement
  45
Board balance and independence
During 2004 there were ten board members in total, comprising the chairman (part-time), chief executive, three other executives and five non-executive
directors. That number has increased to eleven with the appointment of a sixth non-executive director, Sandy Leitch, in January 2005. John Botts is the
senior independent non-executive director. The board believes that a strong presence of non-executive directors is a key aspect of effective corporate
governance. The board assesses and periodically reviews the independence of its non-executive directors; in doing so it has regard to the personal qualities
demonstrated by each director, particularly the nature and effectiveness of his contribution to debate at board and committee meetings. The board has
taken particular note of those factors which are listed in the Combined Code as possibly affecting the independence of directors, which are relevant to two
directors. In both cases the board has concluded that these factors do not affect the independence of the individual director concerned. Adair Turner is a
vice-chairman of Merrill Lynch Europe; this role is unconnected with the services provided by Merrill Lynch as one of the company’s brokers. Chris Powell
will have served as a director of the company for nine years in April; the board wishes to retain his services both as board member and as chairman of the
remuneration committee in order to provide continuity following the arrival of the new group chief executive, and accordingly he will be proposed for re-
election at the forthcoming annual general meeting and annually thereafter if appropriate. Biographies of all the directors currently in office are set out on
pages 16 and 17 and illustrate their range of experience.
Under the company’s articles of association, at each annual general meeting any director then in office who has been appointed by the board since the
previous annual general meeting and any director who at the date of the notice convening the meeting had held office for more than thirty months since
he was last appointed or re-appointed by the company in general meeting shall retire from office but is eligible for re-appointment. Non-executive directors’
appointments are reviewed every three years.
The roles of chairman and chief executive are separate, and a summary of their respective responsibilities is set out in writing and has been approved by the
board.
The chairman is responsible for overseeing the operation of the board but takes no part in the day to day running of the business. Prior to his appointment
as chairman, Geoff Unwin was an independent non-executive director of the company. He is also chairman of Halma plc and Liberata plc, is a member of
the advisory board of Hartwell plc and a non-voting director on the board of Cap Gemini. He was previously chairman of Trigenix Limited but relinquished
this role during 2004.
Board evaluation
Evaluations of the performance of the board, its committees and individual directors were undertaken in 2004 by the following means:-
• The chairman’s performance was evaluated by the non-executive directors in a meeting led by the senior independent director.
• Executive directors were evaluated by the chief executive as part of the annual appraisal process in place for all employees; the chief executive’s appraisal was
conducted by the chairman.
• Performance reviews in respect of those non-executive directors proposed for re-election at the 2004 annual general meeting were conducted by the
chairman in “one-to-one” discussions with other board members. For those directors subject to re-election at this year’s annual general meeting, a
written assessment has been completed by all directors and the results collated and reported back to the board by the chairman.
• To enable the board to evaluate its own performance and that of its committees, all directors completed a detailed questionnaire and commentary on a
confidential basis, the results being collated and reported back to the board by the company secretary.
Information and professional development
A procedure exists whereby directors may seek independent professional advice if they consider it appropriate to do so in the furtherance of their duties.
All directors have access to the advice and services of the company secretary, who has primary responsibility for keeping directors updated and informed of
general developments which may be of relevance to their responsibilities. The company secretary is not a board director. All directors are offered the
opportunity to further their professional development by means of attendance at seminars and briefings. An induction process is in place for all directors on
appointment; this includes discussions with the chairman and chief executive as well as briefings from other directors and senior management on matters
relating to the group’s businesses and procedures. Non-executive directors are encouraged to meet with members of senior management on an individual
basis and to visit the group’s operations.
All board members also participate in the group’s annual management conference which is attended by senior divisional and head office executives and
affords a valuable opportunity for discussion of the group’s strategy and its businesses.
Relations with shareholders
The company’s shareholders are kept informed about the activities and progress of the group primarily by means of the annual and interim reports, and by
the publication of updated trading information prior to the start of each close period and at the annual general meeting. Other performance indicators for
specific businesses are also published periodically. Financial and other information about the company is published on its website, which has links to the
websites of other businesses in the group.
The company maintains an ongoing dialogue with its major institutional shareholders by means of meetings and presentations as appropriate. These are
generally undertaken by the chief executive, chief financial officer, chief operating officer and director of communications and may be attended if
appropriate by the chairman or senior independent director. The chairman is responsible for ensuring that the views of shareholders are communicated to
other directors. Feedback from investor meetings is provided to all directors, as are analysts’ and brokers’ reports. An independent survey of investors is also
carried out periodically by the company’s external IR consultants and the results presented by them to the board.
Consultation is undertaken with bodies representing shareholders’ interests on matters which the company considers appropriate. All shareholders are
welcome at the annual general meeting where they have the opportunity to ask questions of all the directors, including the chairman, as well as the
chairmen of the audit and remuneration committees.
Corporate Governance Statement
  Internal control
The board is responsible for maintaining the effectiveness of the group’s system of internal controls and for reviewing the effectiveness of such systems.
The system is intended to enable the group to identify and manage the risks inherent in its business and accordingly can provide only reasonable and not
absolute assurance against material mis-statement or loss.
A formal process is in place for identifying, evaluating and managing the key financial, operating and compliance risks faced by the group. This risk
mapping process, which was in place throughout 2004 and continues in force, accords with the Turnbull guidance issued in September 1999 and is
reviewed annually by the board. The process, which is undertaken at a divisional level, aims to identify and evaluate risks which are specific to each of the
group’s businesses. The results are co-ordinated by the internal audit department, reviewed centrally by senior management, and considered by the audit
committee, which in turn reports to the board. The process established for the group includes the following:-
• All staff are required to comply with a formal system of delegated authorities which is in place for all divisions and head office.
• Further guidance on group policies and procedures is set out in various manuals including the financial policies and procedures manual, group policy
manual and employee handbooks.
• An anti malpractice policy is in place throughout the group which provides a mechanism for confidential reporting by staff of possible concerns about
financial or other matters.
• Treasury operations and taxation matters are considered by the finance committee, a management committee which operates within specified
delegated authorities and reports to the board. Meetings are customarily attended by the chief executive, chief financial officer, deputy CFO, company
secretary, head of taxation and head of treasury.
• The group has a comprehensive financial reporting system, with the annual budget being approved by the board and monthly trading results, balance
sheets and cashflow summaries recorded against corresponding figures for the budget and the previous year.
• The chief executive and chief financial officer are responsible for certifying the company’s annual financial statements, which process is supported by
certification for the individual businesses from divisional CEOs and finance directors. This process is supported by a disclosure committee, chaired by the
company secretary, which reviews the information contained in the company’s financial statements and results presentations, and the method by which
such information is gathered and evaluated by senior management.
• Established procedures are in place for the evaluation of potential acquisitions and their integration into the group, including the provision of detailed
business plans and monitoring of post acquisition performance against such plans.
• The internal audit department undertakes periodic reviews of individual businesses to assess their control status and makes recommendations to the audit
committee. The work of the internal audit department is prioritised to concentrate on the areas of greatest risk as identified through the group risk
management process. The head of internal audit attends meetings of the audit committee, which oversees the role and structure of the internal audit
department and makes recommendations to management.
Compliance with Combined Code
The foregoing statement sets out the manner in which the company has applied the principles of the Combined Code. The company considers that it
complies with the provisions of section 1 of the Combined Code, save in relation to the requirement for non-executive directors (and specifically the senior
independent director) to meet major shareholders. The board considers that it is appropriate to have in place a clearly defined process for communication
with its shareholders as outlined above. During the year no requests were received from shareholders to meet with non-executive directors and no such
meetings were offered. The board’s views on the independence of non-executive directors are also set out on page 45.
THE AUDIT COMMITTEE
The audit committee is chaired by Adair Turner and its other members are John Botts, Jonathan Newcomb and Christopher Hyman, all of whom are
independent non-executive directors. Fields Wicker-Miurin, also an independent non-executive director, was a member of the committee until her
retirement from the board in May 2004. The committee meets at least four times a year; it met four times during 2004 and details of individual attendance
are set out in the table on page 44. Members of the committee have broad financial experience which has been gained in a variety of disciplines, and which
the board considers appropriate to enable the committee to carry out its responsibilities. The company secretary is secretary to the committee and others
invited to attend committee meetings include the chief financial officer, deputy CFO, head of internal audit, head of taxation and the external auditors.
The committee chairman also meets at least once a year with external auditors without management present.
The committee operates within written terms of reference. Its responsibilities include the following:-
• Review of the interim and annual financial statements and other formal announcements relating to financial performance.
• Review of the adequacy of the group’s internal central and risk management processes, and of the company’s disclosure on internal controls and procedures.
• The appointment, remuneration and oversight of the external auditor, including monitoring the auditor’s independence and objectivity and the
effectiveness of the audit process.
• Review of the internal audit programme, ensuring that the internal audit function is adequately resourced and has appropriate standing within the
company and generally monitoring its effectiveness.
• Ensuring that procedures are in place to deal with complaints regarding accounting or audit matters.
To assist in ensuring auditor objectivity and independence, the audit committee has established a formal procedure regarding the undertaking of non-audit
services by the external auditor, which identifies a number of categories of work where the auditors will not normally be employed, including financial due
diligence on potential acquisitions and financial systems consultancy. Appointment of the external auditor for other non-audit services may only be made
with the prior approval of the audit committee. Approval for projects with anticipated fees not exceeding specified limits is delegated to the chief financial
officer or deputy CFO and is reported to the committee.
A review of auditor effectiveness and independence has also been conducted by executive management, following the guidelines established by the ICAEW
and ICAS, and considered by the committee.
46 Corporate Governance Statement
  47
We have audited the group financial statements for the year ended 31 December 2004 which comprise the Profit and Loss Account, the Balance Sheets of the
group and company, the group Cash Flow Statement, the Statement of Group Total Recognised Gains and Losses, the Reconciliation of Movements in Group
Shareholders’ Funds and the related notes 1 to 34. These financial statements have been prepared on the basis of the accounting policies set out therein.
We have also audited the information in the Directors’ Remuneration Report that is described as having being audited.
This report is made solely to the company’s members, as a body, in accordance with Section 235 of the Companies Act 1985. Our audit work has been
undertaken so that we might state to the company’s members those matters we are required to state to them in an auditors’ report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members
as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
The directors’ responsibilities for preparing the Annual Report, the Directors’ Remuneration Report and the financial statements in accordance with
applicable United Kingdom law and accounting standards are set out in the Statement of Directors’ Responsibilities.
Our responsibility is to audit the financial statements and the part of the Directors’ Remuneration Report to be audited in accordance with relevant legal and
regulatory requirements, United Kingdom Auditing Standards and the Listing Rules of the Financial Services Authority.
We report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements and the part of the
Directors’ Remuneration Report to be audited have been properly prepared in accordance with the Companies Act 1985. We also report to you if, in our
opinion, the Directors’ Report is not consistent with the financial statements, if the company has not kept proper accounting records, if we have not
received all the information and explanations we require for our audit, or if information specified by law or the Listing Rules regarding directors’
remuneration and transactions with the group is not disclosed.
We review whether the Corporate Governance Statement reflects the company’s compliance with the nine provisions of the 2003 FRC Code specified for our
review by the Listing Rules of the Financial Services Authority, and we report if it does not. We are not required to consider whether the board’s statements
on internal control cover all risks and controls, or form an opinion on the effectiveness of the group’s corporate governance procedures or its risk and
control procedures.
We read other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. This other
information comprises the Report of the Directors, the unaudited part of the Directors’ Remuneration Report, the Chairman’s Statement, Chief Executive’s
Review, Operating Review, Financial Review, Board of directors, Five Year Financial Summary, Financial Calendar, Shareholder Information and Corporate
Governance Statement. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the
financial statements. Our responsibilities do not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with United Kingdom Auditing Standards issued by the Auditing Practices Board. An audit includes examination,
on a test basis, of evidence relevant to the amounts and disclosures in the financial statements and the part of the Directors’ Remuneration Report to be
audited. It also includes an assessment of the significant estimates and judgments made by the directors in the preparation of the financial statements,
and of whether the accounting policies are appropriate to the group’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements and the
part of the Directors’ Remunerations Report to be audited.
Opinion
In our opinion
• the financial statements give a true and fair view of the state of affairs of the company and of the group as at 31 December 2004 and of the profit of
the group for the year then ended; and
• the financial statements and the part of the Directors’ Remuneration Report to be audited have been properly prepared in accordance with the
Companies Act 1985.
The maintenance and integrity of the UBM plc web site is the responsibility of the directors; the work carried out by the auditors does not involve
consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements
since they were initially presented on the web site.
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Ernst & Young LLP
Registered Auditor
London
Independent Auditors’ Report to the Members of United Business Media plc The directors present their report and the audited financial statements for the year ended 31 December 2004.
Activities, business review and development
During 2004 the group’s principal activities were in the areas of market research, news distribution and professional media, as illustrated on pages 18 to 33.
The operating review on pages 12 and 13 and the financial review on pages 14 and 15 contain details of the performance of the group and its divisions
during the year and give an indication of future developments.
Results for the year and dividends
The results for the year are set out in the group profit and loss account on page 50. After accounting for dividends totalling £40.6 million (including the proposed
dividend of £40.2 million and an accrued LIBOR related B share dividend of £0.4 million), the balance to be transferred to reserves is £70.7 million. The directors
recommend a final dividend of 8.37 pence per share for the year ended 31 December 2004 to be paid on 26 May 2005 to those shareholders on the register on
29 March 2005. An interim dividend of 3.63 pence per share was paid on 21 October 2004, making a total for the year of 12.0 pence (2003 : 9.00 pence).
A dividend of 8 pence per B share will be paid on 25 April 2005 to holders of B shares on the register on 29 March 2005.
Directors and their interests
Biographical details of the directors in office as at 24 February 2005 are set out on pages 16 and 17. The following directors held office during the year:
Geoff Unwin, Clive Hollick, John Botts, Charles Gregson, Christopher Hyman, Jonathan Newcomb, Chris Powell, Adair Turner, Malcolm Wall, Nigel Wilson
and Fields Wicker-Miurin. Sandy Leitch was appointed as a non-executive director on 11 January 2005.
Jonathan Newcomb and Chris Powell will retire from the board in accordance with the company’s articles of association at the annual general meeting and,
being eligible to do so, will stand for re-election. Christopher Hyman and Sandy Leitch, both of whom have been appointed to the board since the last
annual general meeting, will be proposed for election. None of the aforementioned directors standing for election or re-election has a service contract and
all are considered by the company to be independent.
The interests of the directors in office at 31 December 2004 in the shares of the company and its subsidiary undertakings are set out in the remuneration
report on page 43.
No director had a material interest in any contract other than a service contract with the company or any subsidiary at any time during the year.
On 16 December 2004 the company announced that David Levin would be appointed to the board as chief executive on 5 April 2005 to succeed Clive Hollick,
who is due to retire from the board in May 2005. In accordance with the company’s articles David Levin will stand for election to the board at the forthcoming
annual general meeting. His service contract is terminable by either party on 12 months’ notice; biographical information is included in the notice of meeting.
Changes in share capital
The issued share capital of the company at 1 January 2004 was 335,826,153 ordinary shares of 25 pence each, and 6,212,819 B shares of 8 23/44th pence
each. The ordinary shares and B shares are listed on the London Stock Exchange.
During the year 293,712 ordinary shares were issued in connection with the exercise of options under the company’s share option schemes. 55,791
ordinary shares were issued to Clive Hollick in respect of his sale of shares in Meridian Broadcasting Limited and a further 9,672 ordinary shares were issued
to Fields Wicker-Miurin on her retirement from the board. The company also repurchased 766,030 B shares with a nominal value of £0.07 million for
consideration of £1.9 million and cancelled them under the provisions of the Companies Act.
The issued share capital of the company at 31 December 2004 was 336,185,328 ordinary shares of 25 pence each and 5,446,789 B shares of 8 23/44th
pence each.
At the annual general meeting held on 6 May 2004, shareholders authorised the company to purchase up to 33,582,615 ordinary shares and up to
6,212,819 B shares. These authorities were still valid at 31 December 2004 and will expire at the conclusion of the annual general meeting to be held on
12 May 2005. Resolutions to renew them will be put to shareholders at that meeting.
American Depositary Receipts
The company’s ordinary shares are traded in the USA on the NASDAQ in the form of American Depositary Receipts (“ADRs”). One ordinary share represents
one ADR. Less than 0.2 percent of the company’s issued ordinary share capital is held in the form of ADRS. In December 2004 the company gave notice to
its ADR holders of its intention to terminate the ADR programme and to cancel its listing on NASDAQ. These events will take effect on 22 March 2005,
following which ADR holders will have a period of sixty days in which to exchange their ADRs for ordinary shares. In respect of those ADRs still outstanding
at 20 May 2005, the underlying shares will be sold in the market and the net proceeds returned to the relevant holders.
Employee involvement
Communication with employees is maintained through various means, including annual appraisals, divisional intranets, newsletters, staff surveys and meetings.
2004 saw the launch of a group-wide process to develop and formalise the group’s corporate values. Staff from UBM subsidiary companies participated in a
series of focus groups. These meetings facilitated discussion of a range of views on the principles by which UBM operates and the values by which the group
wishes to be recognised.
A steering group consisting of senior managers representing all group businesses reviewed this feedback, and from it developed a set of corporate values
which have been communicated to all staff worldwide. Task forces have been established to co-ordinate the ongoing communication of the group’s values
by various means, including newsletters and a dedicated website.
Employee turnover across all parts of the group was closely monitored over the course of the year to ensure continuing recruitment of employees with
relevant skills and experience. Selection of new and promoted employees is determined on their aptitude, skills and ability to do the job. The group remains
committed to the principles of allowing employees to work flexibly to meet their personal circumstances where at all possible and this has been a powerful
tool in recruitment and retention of staff. In the case of employees becoming disabled during employment, every effort is made to enable them to continue
in employment, including retraining if appropriate.
The company continues to work with the Work Foundation, which it joined as a corporate partner during 2003, and other relevant organisations such as
Opportunity Now and the Corporate Leadership Council. Membership of these organisations affords employees the opportunity to attend training
workshops and take part in projects which broaden their knowledge base, as well as enabling the company to share ideas and to develop effective networks
with other employers.
48 Report of the Directors
  49
The importance of developing and retaining a diverse workforce, and providing leadership development opportunities and management skills training
continued to be given priority in 2004 at subsidiary level. During 2005, the company also plans to launch a leadership development event. This programme
has been developed using feedback from the successful UBM High Potential staff training previously run in 2001/2. It will be targeted towards 16 of UBM’s
high potential executives who are viewed to be capable of being future UBM business leaders.
Corporate Social Responsibility
The importance of corporate social responsibility is recognised at all levels throughout the group. UBM aims to treat all stakeholders fairly and is committed
to pursuing responsible employment policies and to supporting the community.
The group continues to review how best to co-ordinate and develop its reporting of issues regarding corporate social responsibility, particularly given the
diverse nature of its businesses. The group-wide values initiative which is described in more detail on page 48 has now been launched across the group and
will provide the basis for developing awareness of social, ethical and environmental issues.
The board takes account of such issues via the operational reports which it receives from the group’s businesses and the group risk mapping process
described on page 46 is the principal mechanism by which it identifies and assesses risks to value which may arise from these issues.
The company is a member of the Media CSR Forum, a group of leading media organisations which aims to raise the standards of corporate social
responsibility within the sector and to define the particular impacts and responsibilities of media companies. The Forum published its key issues document in
February 2004, which was followed by a more detailed consultation with stakeholders. Through its membership of the Forum, the company aims to develop
with stakeholders the issues raised in that consultation.
Community involvement is encouraged at group and divisional level through payroll giving and matched funding schemes which were actively promoted, in
conjunction with the Charities Aid Foundation, during 2004. Staff are encouraged to lend support to projects which benefit the communities in which the
group’s businesses operate.
The group’s principal environmental impact arises from energy consumption, which is monitored and reduction targets set where practicable. A “switch-off”
campaign has achieved savings in electricity costs. Recycling initiatives for paper, cardboard, batteries and plastics have enabled further cost savings to be
made and have developed staff awareness of recycling issues.
Statement of directors’ responsibilities for the financial statements
The directors are required by the Companies Act to prepare financial statements for each financial year that give a true and fair view of the state of affairs of
the company and the group as at the end of the financial year and of the profit or loss of the group for that period.
The directors confirm that in preparing the financial statements for the year ended 31 December 2004 the group has used appropriate accounting policies,
consistently applied and supported by reasonable and prudent judgements and estimates, and that all applicable accounting standards have been followed.
The directors are responsible for keeping proper accounting records, for safeguarding the assets of the company and of the group and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The financial statements are also published on the United Business Media website; the maintenance and integrity of the website is the responsibility of the
directors. Legislation in the United Kingdom governing the preparation and the dissemination of financial statements may differ from legislation in other
jurisdictions.
Donations
In 2004 the group donated £503,700 to charitable organisations (2003: £204,000). The group made no political donations during 2004 (2003 : nil). At the
annual general meeting held on 6 May 2004 shareholders approved a resolution allowing the company to make EU political donations and expenditure as
defined in the Companies Act totalling in aggregate up to £100,000. No such expenditure or donations were made during the year. A resolution to renew
this authority will be proposed at this year’s annual general meeting.
Substantial shareholdings
As at 24 February 2005 the company had been notified of the following interests of 3 percent or more in its issued ordinary share capital:-
Aviva plc 4.18 Deutsche Bank AG 4.08 Schroders PLC 10.20
AXA S.A. 4.36 Fidelity/FMR Corp 11.29 Scottish Widows 5.41
Barclays PLC 3.99 Legal and General 5.08
Creditor payment policy
In view of the diversity of its businesses the group does not offer or operate a uniform timetable for payment of suppliers. Each operating company is
responsible for agreeing with its own suppliers the terms and conditions on which it will transact business with them, including payment terms. The group’s
policy is to pay suppliers in accordance with these agreed terms. The company has no trade creditors.
Annual general meeting
The annual general meeting of the company will be held on 12 May 2005. The notice of meeting and a description of the business to be transacted is
contained in the accompanying document.
Auditors
Ernst & Young LLP have indicated their willingness to continue in office and a resolution for their re-appointment and on their remuneration will be
proposed at the annual general meeting.
By order of the board
Registered office:
Anne Siddell Ludgate House
Secretary 245 Blackfriars Road
London
24 February 2005 SE1 9UY
Report of the Directors
  Before Exceptional Before Exceptional
exceptional items exceptional items
items (note 6) Total items (note 6) Total
2004 2004 2004 2003 2003 2003
Notes £m £m £m £m £m £m
Turnover – group and share of joint ventures
Continuing operations 803.8 – 803.8 770.3 – 770.3
1 Less: share of joint ventures’ turnover (24.0) – (24.0) (23.6) – (23.6)
779.8 – 779.8 746.7 – 746.7
Acquisitions 29.8 – 29.8 –––
1 Group turnover 809.6 – 809.6 746.7 – 746.7
Group operating profit/(loss)
Continuing operations 1.7 – 1.7 (29.1) – (29.1)
Acquisitions (5.1) – (5.1) – ––
Group operating loss (3.4) – (3.4) (29.1) – (29.1)
5 Share of operating profit in joint ventures and associates
Continuing operations 3.7 – 3.7 2.9 – 2.9
Acquisitions – –– – ––
3.7 – 3.7 2.9 – 2.9
4 Income from other fixed asset investments 6.0 – 6.0 3.9 – 3.9
1 Total operating profit/(loss) 6.3 – 6.3 (22.3) – (22.3)
6 Additional profit on prior year disposals – 18.9 18.9 –––
6 Amounts written off investments – (11.7) (11.7) – ––
Profit/(loss) on ordinary activities before interest 6.3 7.2 13.5 (22.3) – (22.3)
7 Net interest income 12.5 – 12.5 9.4 – 9.4
31 Other finance expense (3.4) – (3.4) (5.5) – (5.5)
2 Profit/(loss) on ordinary activities before tax 15.4 7.2 22.6 (18.4) – (18.4)
8 Tax on profit/(loss) on ordinary activities (30.8) – (30.8) (22.7) – (22.7)
6 Exceptional taxation credit – 121.0 121.0 –––
Profit/(Loss) on ordinary activities after tax (15.4) 128.2 112.8 (41.1) – (41.1)
Equity minority interests (1.5) – (1.5) (0.3) – (0.3)
Profit/(loss) for the financial year (16.9) 128.2 111.3 (41.4) – (41.4)
10 Dividends – equity (40.2) (30.2)
– non-equity (0.4) (0.4)
(40.6) (30.6)
25 Retained profit/(loss) for the financial year 70.7 (72.0)
Earnings/(loss) per share
11 – adjusted 32.6p 23.9p
11 – basic 33.2p (12.5)p
11 – diluted 29.6p (12.5)p
50 Group profit and loss account
for the year ended 31 December 2004 51
As restated
Group Group Company Company
2004 2003 2004 2003
Notes £m £m £m £m
Fixed assets
12 Intangible assets 495.8 430.8 – –
13 Tangible assets 50.1 54.5 – –
14 Investments in subsidiary undertakings – – 3,349.8 3,373.4
Investments in joint ventures:
– share of gross assets 16.6 16.7 – –
– share of gross liabilities (7.8) (5.5) – –
14 Investments in joint ventures 8.8 11.2 – –
14 Investments in associated undertakings 1.9 0.2 – –
14 Other investments 146.8 168.9 – –
703.4 665.6 3,349.8 3,373.4
Current assets
15 Stocks and work in progress 22.8 20.4 – –
16 Debtors 198.0 158.5 141.9 118.3
17 Short term liquid funds 234.2 425.2 – –
Cash at bank and in hand 144.6 185.9 0.3 0.2
599.6 790.0 142.2 118.5
18 Creditors: amounts falling due within one year (668.1) (1,076.6) (34.2) (246.6)
Net current (liabilities)/assets (68.5) (286.6) 108.0 (128.1)
Total assets less current liabilities 634.9 379.0 3,457.8 3,245.3
Creditors: amounts falling due after more than one year
19 Bank and other loans (96.1) (101.9) (130.2) (138.2)
20 Other creditors (4.6) (5.4) (1,999.4) (1,680.1)
21 Convertible debt (208.7) – – –
(309.4) (107.3) (2,129.6) (1,818.3)
23 Provisions for liabilities and charges (50.0) (63.1) – –
Net assets excluding pension liability 275.5 208.6 1,328.2 1,427.0
31 Pension liability (95.2) (83.9) – –
Net assets including pension liability 180.3 124.7 1,328.2 1,427.0
Capital and reserves
24 Called up share capital 84.5 84.5 84.5 84.5
25 Share premium account 310.8 309.4 310.8 309.4
25 Merger reserve 31.3 31.3 – –
25 Other reserves 156.0 160.1 126.2 126.2
25 Profit and loss account (404.5) (461.6) 806.7 906.9
Shareholders’ funds (including non-equity interests) 178.1 123.7 1,328.2 1,427.0
Equity minority interests 2.2 1.0 – –
Capital employed 180.3 124.7 1,328.2 1,427.0
Equity shareholders’ funds 177.6 123.2 1,327.7 1,426.5
Non-equity shareholders’ funds 0.5 0.5 0.5 0.5
Shareholders’ funds 178.1 123.7 1,328.2 1,427.0
These financial statements were approved by a duly appointed and authorised committee of the Board of Directors on 24 February 2005 and were signed
on its behalf by:
Geoff Unwin Director
Clive Hollick Director
Balance sheets
at 31 December 2004 2004 2003
Notes £m £m
27 Net cash inflow from operating activities 107.1 84.6
Dividends received from joint ventures and associated undertakings 4.0 2.1
Returns on investments and servicing of finance
Interest received 27.4 20.5
Interest paid (19.6) (18.2)
Dividends paid to minority shareholders – (1.3)
Dividends paid to non-equity shareholders (0.4) (0.6)
Income from other fixed asset investments 5.6 5.4
Net cash inflow from returns on investments and servicing of finance 13.0 5.8
Taxation
UK corporation tax received 1.0 8.9
Overseas tax paid (11.0) (0.5)
Taxation (paid)/received (10.0) 8.4
Capital expenditure and financial investment
Purchase of tangible fixed assets (8.5) (6.9)
Proceeds from sale of tangible fixed assets 1.9 –
Proceeds from sale of investments 3.0 10.3
Increase in investments – (5.4)
Investment in own shares – ESOP (4.1) –
Net cash outflow from capital expenditure and financial investment (7.7) (2.0)
Acquisitions and disposals
Purchase of subsidiary undertakings and businesses (199.9) (138.3)
Net cash acquired with subsidiary undertakings and businesses 9.7 8.4
Investments in joint ventures and associated undertakings (1.7) –
Net cash outflow from acquisitions and disposals (191.9) (129.9)
Equity dividends paid to shareholders (31.2) (24.4)
Net cash outflow before use of liquid resources and financing (116.7) (55.4)
Management of liquid resources
Sale of current asset investments 176.6 134.9
Decrease/(increase) in short term deposits 169.5 (103.3)
Net cash inflow from management of liquid resources 346.1 31.6
Financing
Proceeds from issue of ordinary share capital 1.5 1.0
Return of capital to shareholders (including costs) (1.9) (3.6)
(Decrease)/increase in bank loans (98.9) 21.1
Repayment of loan notes – (1.2)
Net cash (outflow)/inflow from financing (99.3) 17.3
Increase/(decrease) in cash in the year 130.1 (6.5)
2004 2003
Reconciliation of net cash flow to movement in net cash/(debt) £m £m
(Decrease)/increase in cash in the year 130.1 (6.5)
Cash outflow/(inflow) from debt 98.9 (19.9)
Cash inflow from decrease in liquid resources (346.1) (31.6)
Changes in net cash/(debt) resulting from cash flows (117.1) (58.0)
Other non-cash movements (1.0) (2.0)
Translation difference 2.8 13.0
Movement in net cash/(debt) in year (115.3) (47.0)
Opening net cash 46.5 93.5
Closing net (debt)/cash (68.8) 46.5
Liquid resources include term deposits and government and corporate securities.
52 Group cash flow statement
for the year ended 31 December 2004 53
2004 2003
£m £m
Profit/(loss) for the financial year 111.3 (41.4)
Currency translation differences on foreign currency net investments:
Group 3.6 (20.4)
Joint ventures (0.5) (0.1)
Actuarial (loss)/gain recognised in the pension schemes (14.9) 11.6
Other recognised losses for the year (11.8) (8.9)
Total recognised gains/(losses) for the year 99.5 (50.3)
Adjustment for investment in own shares (see note 14) 3.7 –
Total recognised gains/(losses) since last annual report 103.2 (50.3)
The historical cost result is not materially different from the reported profit/(loss) in either year.
Reconciliation of movements in group shareholders’ funds
for the year ended 31 December 2004
As restated
2004 2003
£m £m
Opening shareholders’ funds as reported 123.7 211.3
Adjustment for investment in own shares (see note 14) – (4.1)
Opening shareholders’ funds – restated 123.7 207.2
Profit/(loss) for the financial year 111.3 (41.4)
Equity dividends (40.2) (30.2)
Non-equity dividends on B shares (see note 10) (0.4) (0.4)
194.4 135.2
Other recognised losses relating to the year (11.8) (8.9)
New share capital subscribed 1.5 1.0
Own share capital purchased – ESOP (4.1) –
Return of capital to shareholders (see note 24 and 25) (1.9) (3.6)
Closing shareholders’ funds 178.1 123.7
Statement of group total recognised gains and losses
for the year ended 31 December 2004 Basis of accounting
The financial statements have been prepared under the historical cost convention, in accordance with applicable Accounting Standards in the United
Kingdom. The financial statements have been prepared on a basis consistent with prior years, except for the adoption of UITF 38 ‘Accounting for ESOP
trusts’ (see note 14).
Consolidation
The financial statements include the financial statements of the company and all its subsidiaries, made up to 31 December, or within one week of that date,
together with the group’s share of the results for the year and of the book values of the net assets and attributable goodwill of joint ventures and associates.
The results of subsidiaries and joint ventures and associates acquired or sold during the year are included from or to the effective date of acquisition or
disposal.
Turnover
Turnover, which is stated net of trade discounts, VAT and other sales related taxes, is recognised as follows:
Publishing: advertising revenue is recognised on issue of the publication. Revenue from online subscriptions is recognised over the life of the subscription.
Exhibitions: revenue is recognised when the show has been completed. Deposits received in advance are recorded as deferred income in the balance sheet.
Directories: revenue is recognised on the issue of the directory.
Market research: revenue is recognised on a completed contract or completion of agreed milestone basis. Work in progress amounts are recorded in the
balance sheet at cost. Syndicated revenues are recognised on completion and any subsequent sales are recognised as they arise.
News distribution: revenue is recognised on message delivery. Revenue from subscriptions is recognised over the life of the subscription.
Goodwill and intangible fixed assets
Purchased goodwill is capitalised as an intangible asset and amortised on a straight-line basis over its estimated useful life, which the directors view as being
a period generally between six and twenty years based on the nature, age and stability of the industry in which the business operates. Where a business is
sold, or where goodwill is considered to have been impaired, the net book value of goodwill or the amount of impaired goodwill, as applicable, is charged
through the profit and loss account as part of the profit or loss on disposal or through operating profit in the year of impairment.
Impairment reviews are carried out at the end of the first full financial year after acquisition and on the occurrence of any event or change in circumstances
indicating that there may have been a decline in the carrying value or change in useful life.
Other intangible assets are stated at cost and comprise certain product rights including licences and related costs, which are amortised over the shorter of
their useful lives or the licence period; publishing rights and titles and purchased internet domain names and websites, which are amortised on a straight
line basis over their estimated useful lives, not exceeding two years.
Software costs are written off as incurred, except for purchases from third parties in respect of major systems. In such cases, the costs are written off over
the expected useful life of the asset, not exceeding five years from the date of implementation of the software.
Tangible fixed assets and depreciation
Tangible fixed assets are stated at cost. Depreciation is provided on all tangible fixed assets except freehold land. Depreciation rates are calculated so that
assets are written down to residual value in equal annual instalments over their expected useful lives, which are as follows:
Freehold buildings and long leasehold property 10-70 years
Short leasehold property Term of lease
General plant, machinery and equipment 5-20 years
Computer equipment 3 years
Motor vehicles 3-5 years
Stocks
Stocks and work in progress are valued on the first in first out basis at the lower of cost and net realisable value. Cost comprises materials, direct labour and
a proportion of attributable production and other overheads.
Operating leases
Operating lease rentals are charged to the profit and loss account on a straight line basis over the lease term.
54 Group accounting policies
  55
Investments
Listed and unlisted investments are stated at the lower of cost and market value or directors’ valuation. Investments in subsidiaries included in the company’s
balance sheet are stated at cost or nominal value of shares issued where merger relief is taken, less any provision for impairment. Investments in companies
where the group both has a participating interest and exercises significant influence over the entity’s financial and operating policies (through board
representation and participation in financial and operating policy decisions) are included as associates under the equity method of accounting. Similarly,
investments in companies where the group holds a long-term interest that arises as a result of a contractual arrangement and is jointly controlled by the
group and other ventures are included as joint ventures under the gross equity method of accounting. The figures included in the financial statements are
based on audited accounts, adjusted where necessary by reference to management accounts for the period up to 31 December. Where the accounting
policies of associates and/or joint ventures do not conform in all material respects to those of the group, adjustments are made on consolidation.
Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events
have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more, tax, with the following exceptions:
• provision is made for taxable gains arising from the revaluation (and similar fair value adjustments) of fixed assets that have been rolled over into
replacement assets, only to the extent that there is a binding agreement to dispose of the assets concerned. However, no provision is made where, on
the basis of all available evidence at the balance sheet date, it is more likely than not that the taxable gain will be rolled over into replacement assets
and charged to tax only where the replacement assets are sold;
• provision is made for deferred tax that would arise on remittance of the retained earnings of overseas subsidiaries, associates and joint ventures only to
the extent that, at the balance sheet date, dividends have been accrued as receivable; and
• deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not that there will be suitable taxable profits
from which the future reversal of the underlying timing differences can be deducted.
Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the period on which timing differences reverse, based on
tax rates and laws enacted or substantively enacted at the balance sheet date.
Foreign currencies
Assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the date of the balance sheet. The
trading results of foreign subsidiary undertakings are translated into sterling at an average of the exchange rates ruling for the year. Differences arising on
the retranslation of investments, including goodwill, in foreign subsidiary undertakings and related net foreign currency borrowings, and from the
translation of the results of those undertakings at average rate, are taken to reserves, and are reported in the statement of total recognised gains and losses.
All other exchange differences are taken to the profit and loss account.
Pension costs
The group sponsors a number of defined benefit schemes and defined contribution schemes. The group adopted FRS17 “Retirement Benefits” in the
financial statements for the year ended 31 December 2002. For the defined contribution schemes, the profit and loss charge represents the contributions
payable to the scheme during the accounting period. The assets of the defined benefit pension schemes are measured at their market value at the balance
sheet date and the liabilities of those schemes are measured using the projected unit method. The discount rate used is the current rate of return on a AA
corporate bond of equivalent term and currency to the liabilities. The extent to which the schemes’ assets exceed/fall short of their liabilities is shown as a
surplus/deficit in the balance sheet to the extent that a surplus is recoverable by the group or that a deficit represents an obligation of the group.
The following is charged to operating profit:
• the increase in the present value of pension scheme liabilities arising from employee service in the current period;
• the increase in the present value of pension scheme liabilities as a result of benefit improvements over the period during which such improvements vest;
and
• gains and losses arising on settlements/curtailments.
A credit in respect of the expected return on the schemes’ assets and a charge in respect of the increase during the period in the present value of the
schemes’ liabilities because the benefits are one period closer to settlement are included in other finance income. Actuarial gains and losses are recognised
in the statement of total recognised gains and losses.
Group accounting policies
  Financial instruments
Interest differentials under interest rate swaps, forward rate agreements, caps and collars are recognised by adjustment of the underlying interest receivable
or payable over the term of the agreement and as such are accrued to the profit and loss account on a time apportioned basis. Any gains or losses arising
on forward foreign exchange contracts taken out to hedge currency transaction risks on monetary assets and liabilities and forecast trading flows are
deferred and recognised in operating profit or as adjustments to carrying amount when the hedged transaction has itself been reflected in the group’s
financial statements upon maturity of the contract. The forward premium or discount for these contracts is not accounted for as interest but as part of the
hedge achieved. If underlying forecast flows do not materialise as envisaged, the hedges are either reversed or swapped forward to a future financing
period. The adjusting hedges are then accounted for through the profit and loss account to match the revised underlying exposure being hedged. Currency
options are accounted for in the same manner as the forward foreign exchange contracts above except that the premium paid is deferred to the point of
exercise or lapse of the option.
International Financial Reporting Standards
The Council of the European Union announced in June 2002 that listed companies would adopt International Financial Reporting Standards (IFRS), formerly
known as International Accounting Standards, from 1 January 2005. The adoption of IFRS will be first reflected in the group’s financial statements for the
half year ending 30 June 2005 and the year ending 31 December 2005.
In 2003 we commenced the process of investigating the differences between UK GAAP and IFRS in order to assess the impact the conversion to IFRS will
have on our financial position, results of operations and cash flows, our internal and external financial reporting, our accounting systems and procedures,
treasury issues (such as debt covenants and risk management), our day-to-day business, and the training and education of our workforce. This assessment
has resulted in a plan for conversion. We have substantially finalised the conversion during 2004 to ensure the group will be ready to meet the conversion
deadline and have included on page 87 of this annual report, unaudited reconciliations of our 2004 result under IFRS, and of the groups’ 1 January 2004
and 31 December 2004 shareholders’ funds in order to present clearly the effects of this transition.
56 Group accounting policies
  57
Group share Group share
of joint of joint
Group ventures Group ventures
2004 2004 2003 2003
1. Business analysis £m £m £m £m
Turnover by division
Continuing operations:
CMP Media 193.8 8.8 210.5 8.2
CMP Asia 50.5 4.5 44.4 3.5
CMP Information 159.3 – 135.0 1.6
United Advertising Publications 58.5 – 58.1 –
Professional media 462.1 13.3 448.0 13.3
News distribution 94.8 10.7 94.8 10.3
Market research 222.9 – 203.9 –
Continuing operations 779.8 24.0 746.7 23.6
Acquisitions:
CMPMedica 29.8 – ––
809.6 24.0 746.7 23.6
Turnover by geographic market
United Kingdom 249.6 – 225.7 1.6
North America 424.1 18.5 450.1 17.7
Europe and Middle East 78.1 1.0 31.5 0.8
Pacific 57.8 4.5 39.4 3.5
809.6 24.0 746.7 23.6
Turnover analysis is based on turnover by origin. Turnover by destination would not be materially different.
As restated
2004 2003
Net operating assets/(liabilities) by division £m £m
CMP Media 118.7 144.6
CMPMedica 150.9 –
CMP Asia (7.0) (4.0)
CMP Information 65.6 78.9
United Advertising Publications 7.3 6.5
Professional media 335.5 226.0
News distribution 4.8 12.1
Market research 80.2 69.0
420.5 307.1
by geographic market
United Kingdom 92.8 70.0
North America 176.9 226.3
Europe and Middle East 159.0 16.4
Pacific (8.2) (5.6)
420.5 307.1
Reconciliation of net operating assets to net assets
Net operating assets 420.5 307.1
Investments 391.7 605.5
Corporation tax (208.0) (308.5)
Net borrowings (300.2) (376.0)
Proposed dividend (28.5) (19.5)
Pension liability (95.2) (83.9)
Net assets 180.3 124.7
Notes to the financial statements 58 Notes to the financial statements
Group share
of joint
Group ventures Total
2004 2004 2004
1. Business analysis (continued) £m £m £m
*Operating profit before amortisation of intangible assets by division
Continuing operations:
CMP Media 21.8 1.2 23.0
CMP Asia 14.5 0.5 15.0
CMP Information 33.6 – 33.6
United Advertising Publications 13.2 – 13.2
Professional media 83.1 1.7 84.8
News distribution 20.5 3.5 24.0
Market research 20.1 – 20.1
Continuing operations 123.7 5.2 128.9
Acquisitions:
CMPMedica 3.4 – 3.4
*Operating profit before amortisation of intangible assets 127.1 5.2 132.3
Amortisation of intangible assets (124.5) (1.5) (126.0)
*Operating profit/(loss) by division
Continuing operations:
CMP Media (38.7) 0.7 (38.0)
CMP Asia 10.9 0.5 11.4
CMP Information (3.7) – (3.7)
United Advertising Publications 12.3 – 12.3
Professional media (19.2) 1.2 (18.0)
News distribution 19.1 2.5 21.6
Market research 7.9 – 7.9
Continuing operations 7.8 3.7 11.5
Acquisitions:
CMPMedica (5.2) – (5.2)
*Operating profit 2.6 3.7 6.3
Non-operating exceptional items and amounts written off investments 7.2
Net interest and other financial income 9.1
Profit on ordinary activities before tax 22.6
*Operating profit/(loss) by geographic market
United Kingdom (7.4) – (7.4)
North America (6.6) 3.6 (3.0)
Europe and Middle East 3.4 (0.4) 3.0
Pacific 13.2 0.5 13.7
*Operating profit 2.6 3.7 6.3
Non-operating exceptional items and amounts written off investments 7.2
Net interest and other financial income 9.1
Profit on ordinary activities before tax 22.6
*Includes income from other fixed asset investments of £6.0 million. 59
Group share
of joint
Group ventures Total
2003 2003 2003
1. Business analysis (continued) £m £m £m
* Operating profit before amortisation of intangible assets by division
Continuing operations:
CMP Media 14.1 0.7 14.8
CMP Asia 12.1 0.5 12.6
CMP Information 25.2 0.1 25.3
United Advertising Publications 14.0 – 14.0
Professional media 65.4 1.3 66.7
News distribution 10.2 3.2 13.4
Market research 19.3 – 19.3
*Operating profit before amortisation of intangible assets 94.9 4.5 99.4
Amortisation of intangible assets (120.1) (1.6) (121.7)
*Operating (loss)/profit by division
Continuing operations:
CMP Media (38.4) 0.1 (38.3)
CMP Asia (1.4) 0.5 (0.9)
CMP Information (4.3) 0.1 (4.2)
United Advertising Publications 13.3 – 13.3
Professional media (30.8) 0.7 (30.1)
News distribution 0.7 2.2 2.9
Market research 4.9 – 4.9
*Operating (loss)/profit (25.2) 2.9 (22.3)
Non-operating exceptional items –
Net interest and other financial income 3.9
Loss on ordinary activities before tax (18.4)
*Operating (loss)/profit by geographic market
United Kingdom (6.1) 0.6 (5.5)
North America (25.7) 2.8 (22.9)
Europe and Middle East 9.8 (0.9) 8.9
Pacific (3.2) 0.4 (2.8)
*Operating (loss)/profit (25.2) 2.9 (22.3)
Non-operating exceptional items –
Net interest and other financial income 3.9
Loss on ordinary activities before tax (18.4)
*Includes income from other fixed asset investments of £3.9m
2004 2003
2. Reconciliation of operating profit before amortisation and exceptionals to profit/(loss) before tax £m £m
Operating profit before amortisation of intangible assets and exceptional items 132.3 99.4
Amortisation of intangible assets:
– Group (124.5) (120.1)
– Joint ventures and associates (1.5) (1.6)
Total operating profit/(loss) 6.3 (22.3)
Net interest income 12.5 9.4
Other finance expense (3.4) (5.5)
Exceptional items and amounts written off investments charged to profit/(loss) before tax (see note 6) 7.2 –
Profit/(loss) before tax 22.6 (18.4)
Notes to the financial statements Continuing Acquisitions Total
2004 2004 2004
3. Cost of sales and operating expenses £m £m £m
Cost of sales (304.2) (16.9) (321.1)
Distribution costs (136.1) (2.3) (138.4)
Administrative expenses (346.9) (15.7) (362.6)
Other operating income 9.1 – 9.1
(778.1) (34.9) (813.0)
Total
2003
£m
Cost of sales (279.9)
Distribution costs (163.1)
Administrative expenses (344.4)
Other operating income 11.6
(775.8)
Continuing Acquisitions Total
2004 2004 2004
£m £m £m
Included within operating profit:
Operating lease charges
– hire of plant, machinery and vehicles (1.3) (0.1) (1.4)
– property (22.3) (0.5) (22.8)
Total
2003
£m
Included within operating profit:
Operating lease charges
– hire of plant, machinery and vehicles (1.5)
– property (24.8)
2004 2003
Included within operating profit: £m £m
Audit services:
– Statutory audit (Company £10,000) 1.0 0.6
– Audit related regulatory reporting 0.2 0.2
Further assurance services 0.3 0.1
Tax services:
– Compliance services – –
– Advisory services 0.1 0.2
Total 1.6 1.1
The Audit Committee has established policy guidelines on the nature of non-audit work which may be undertaken by the auditors. These guidelines identify
a number of categories of work where the auditors will not normally be employed, including financial due diligence assignments on potential acquisitions
and financial systems consultancy. The Audit Committee has also put in place procedures for the pre-approval of any fees payable to the auditors for those
non-audit services which fall within the policy guidelines.
Professional firms are selected to provide advisory services on the basis of their relevant experience and expertise. For major projects, it is the group’s policy
to undertake a competitive tendering process. In certain circumstances, for example reasons of confidentiality or knowledge of the group’s businesses and
structures, it is appropriate to employ the group’s auditors to provide such services without a competitive tender being undertaken.
60 Notes to the financial statements 61
2004 2003
4. Income from other fixed asset investments £m £m
Income from unlisted investments 6.0 3.9
2004 2003
5. Share of operating profit in joint ventures and associates £m £m
Joint ventures and associates within continuing operations 5.2 4.5
Amortisation of goodwill (1.5) (1.6)
3.7 2.9
2004 2003
6. Exceptional items and amounts written off investments £m £m
Additional profit relating to prior year disposals (a) 18.9 –
Amounts written off investments (b) (11.7) –
Total charged to loss on ordinary activities before tax 7.2 –
Exceptional taxation credit (c) 121.0 –
(a) In December 2004, United agreed a settlement of £32 million from Granada in respect of outstanding items relating to the 2000 disposals. The
additional profit on disposal represents this receipt, after deduction of interest, costs, and the offset of recorded receivables.
(b) The group has written down the carrying value of certain fixed asset investments to reflect their expected realisable value. It is the group’s intention to
exit these investments.
(c) The group has resolved a number of outstanding items as a consequence of which there is a net exceptional tax credit of £121.0 million.
2004 2003
7. Net interest income/(expense) £m £m
Interest receivable 26.6 25.8
Interest payable – on bank loans and overdrafts (2.3) (1.0)
– other (11.8) (15.4)
12.5 9.4
Interest receivable includes £9.8 million (2003: £8.9 million) of interest receivable from Channel 5 Television Group Limited in respect of shareholder loans.
Notes to the financial statements 2004 2003
8. Tax on profit/(loss) on ordinary activities £m £m
a) Analysis of tax charge for the year:
UK corporation tax at 30.0% (2003: 30.0%) 16.9 15.9
Overseas corporation tax 12.3 5.4
Tax relating to share of profit of joint ventures 1.2 1.4
Total current tax 30.4 22.7
Overseas deferred tax 0.4 –
30.8 22.7
2004 2003
£m £m
b) Factors affecting tax charge for the year:
Profit/(loss) on ordinary activities before tax 22.6 (18.4)
Profit/(loss) on ordinary activities before tax multiplied by standard rate of corporation tax in the UK of 30% 6.8 (5.5)
Effect of:
Expenses not deductible for tax purposes (primarily goodwill amortisation) 43.1 35.2
Tax effect of items not recognised in consolidated financial statements (19.0) (5.4)
Reversal of timing differences 2.4 0.5
Higher tax rates on overseas earnings 4.3 0.4
Additional profit relating to prior year disposals not taxable (5.7) –
Other (1.5) (2.5)
Total current tax 30.4 22.7
c) Factors that may affect future tax:
No deferred tax has been recognised on the retained profits and reserves of overseas subsidiaries or joint ventures or associated undertakings as there is
currently no intention to remit such amounts to the UK.
Deferred tax assets have not been recognised, having given consideration to the likelihood of recovery of the balance.
9. Profit/(loss) for the financial year of the company
As permitted by Section 230 of the Companies Act 1985, the company’s profit and loss account has not been presented. A loss for the financial year of
£(98.4) million (2003: profit of £632.5 million) has been included within the group results and dealt with in the financial statements of the company.
2004 2003
10. Dividends £m £m
Equity dividends
Ordinary shares:
Interim of 3.63p (2003: 3.3p) 12.1 11.0
Proposed final of 8.37p (2003: 5.7p) 28.1 19.2
Non-equity dividends – B shares (see note 24) 0.4 0.4
40.6 30.6
Non-equity dividends relate to the accrual for the LIBOR linked dividend on 5,446,789 (2003: 6,212,819) B shares remaining in issue (see note 24).
62 Notes to the financial statements 63
2004 2004 2004 2003 2003 2003
Weighted Weighted
average Earnings/ average Earnings/
Earnings/ number (loss) per Earnings/ number of (loss) per
(loss) of shares share (loss) shares share
11. Earnings/(loss) per share £m million pence £m million pence
109.1 334.4 32.7 80.3 334.2 24.0
Adjustment in respect of B share dividends (0.4) – (0.1) (0.4) – (0.1)
Adjusted earnings per share 108.7 334.4 32.6 79.9 334.2 23.9
Adjustment in respect of amortisation of intangible assets (126.0) – (37.7) (121.7) – (36.4)
Adjustment in respect of exceptional items 128.2 – 38.3 –––
Basic profit/(loss) per share 110.9 334.4 33.2 (41.8) 334.2 (12.5)
Dilution 3.5 52.4 (3.6) –––
Diluted profit/(loss) per share 114.4 386.8 29.6 (41.8) 334.2 (12.5)
Adjusted earnings per share is presented as the directors consider that this is a meaningful measure of the performance of the group. For diluted earnings
per share, the weighted average number of shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. The group has two
categories of dilutive potential ordinary shares: those share options granted to employees where the exercise price is less than the average market price of
the company’s ordinary shares during the year and shares attributable to convertible debt. No adjustment has been made for the dilutive impact in 2003 as
this would decrease reported loss per share. The impact of dilutive securities in 2004 would be to increase the profit by £3.5 million for convertible debt
(2003: £3.7 million) and to increase weighted average shares by 4.6 million shares for employee share options (2003: 2.6 million) and 47.8 million shares
for convertible debt (2003: 47.8 million).
The weighted average number of shares excludes ordinary shares held by the ESOP and the QUEST (see note 25).
Other
intangible
Goodwill assets Total
12. Intangible fixed assets £m £m £m
Cost
At 1 January 2004 1,644.6 16.8 1,661.4
Currency translation (50.2) (0.1) (50.3)
Additions 190.7 – 190.7
Transfers from joint ventures 0.3 – 0.3
At 31 December 2004 1,785.4 16.7 1,802.1
Amortisation
At 1 January 2004 1,213.8 16.8 1,230.6
Currency translation (48.7) (0.1) (48.8)
Charge for the year 124.5 – 124.5
Transfers from joint ventures –––
At 31 December 2004 1,289.6 16.7 1,306.3
Net book amount
At 31 December 2004 495.8 – 495.8
At 31 December 2003 430.8 – 430.8
Notes to the financial statements Plant,
Land and machinery
buildings and vehicles Total
13. Tangible fixed assets £m £m £m
Group
Cost
At 1 January 2004 71.0 128.6 199.6
Currency translation (1.0) (4.0) (5.0)
On acquisition of subsidiary undertakings and businesses 0.4 1.5 1.9
Additions 1.2 7.3 8.5
Disposals (1.3) (11.2) (12.5)
At 31 December 2004 70.3 122.2 192.5
Depreciation
At 1 January 2004 31.0 114.1 145.1
Currency translation (1.0) (4.0) (5.0)
Charge for the year 2.7 10.2 12.9
Disposals (0.6) (10.0) (10.6)
At 31 December 2004 32.1 110.3 142.4
Net book amount
At 31 December 2004 38.0 12.1 50.1
At 31 December 2003 40.0 14.5 54.5
2004 2003
£m £m
Land and buildings at net book amount comprise:
Freehold 20.9 20.4
Long leasehold 0.5 0.5
Short leasehold 16.6 19.1
38.0 40.0
Unlisted Goodwill Total
14. Fixed asset investments £m £m £m
Group
(a) Joint ventures
Cost
At 1 January 2004 4.5 11.7 16.2
Currency translation (0.3) (0.4) (0.7)
Additions –––
Transfers to subsidiaries (0.3) – (0.3)
Disposals –––
Dividends (4.0) – (4.0)
Share of profits less losses 4.0 – 4.0
At 31 December 2004 3.9 11.3 15.2
Amortisation
At 1 January 2004 – 5.0 5.0
Currency translation – (0.1) (0.1)
Transfers to subsidiaries – – –
Charge for the year – 1.5 1.5
At 31 December 2004 – 6.4 6.4
Net book amount
At 31 December 2004 3.9 4.9 8.8
At 31 December 2003 4.5 6.7 11.2
64 Notes to the financial statements 65
Unlisted Goodwill Total
14. Fixed asset investments (continued) £m £m £m
Group
(b) Associated undertakings
Cost
At 1 January 2004 0.2 – 0.2
Currency translation –––
Additions 1.7 – 1.7
At 31 December 2004 1.9 – 1.9
Net book amount
At 31 December 2004 1.9 – 1.9
At 31 December 2003 0.2 – 0.2
There are no listed joint ventures or associates.
Listed Loans to Unlisted
investments unlisted investments Total
£m £m £m £m
(c) Investments: other
At 1 January 2004 (as restated) 0.2 218.0 (49.3) 168.9
Currency translation – – 0.1 0.1
Additions ––––
Additional loans and accrued interest – 16.5 – 16.5
Return of investment ––––
Transfer from unlisted to listed due to IPO 1.0 – (1.0) –
Disposals – – (0.4) (0.4)
Repayments – (26.6) – (26.6)
Amounts written off investments (note 6) – (1.0) (10.7) (11.7)
At 31 December 2004 1.2 206.9 (61.3) 146.8
Additions to loans to unlisted investments include additional shareholder loans to Channel 5 Television Group Limited.
One of the group’s investments completed an Initial Public Offering (IPO) on 28 October 2004 and has been reclassified from unlisted to listed
investments.
The market value of other listed investments at 31 December 2004 was £2.1million (2003: £1.1 million).
Certain of the group’s investments which were previously classified as associated undertakings and joint ventures were reclassified as fixed asset
investments during the years ended 31 December 2000 and 31 December 2001 as the level of influence exerted by United over these businesses is not
considered sufficient to meet the requirements of FRS 9. The investments comprise Channel 5 Television Group Limited, Independent Television News
Limited, SDN Limited, Satellite Information Services (Holdings) Ltd and Paperloop.com, Inc. UBM does not consider that these investments are core to
its ongoing activities.
Country of Class
Type of incorporation/ of shares Shareholding/ Accounting
business registration held interest % year end
Principal fixed asset investments are as follows:
Joint ventures:
Canada Newswire Limited News distribution Canada Ordinary 50.0% 31 December
ANP Pers Support BV News distribution Netherlands Ordinary 50.0% 31 December
EMedia Asia Limited Exhibitions and publications Barbados Ordinary 39.9% 31 December
Associates:
Axilog S.A. Publications France Ordinary 25.1% 31 December
Other fixed asset investments:
Channel 5 Television Group Limited Broadcasting Great Britain Ordinary 35.37% 31 December
Paperloop.com, Inc. Internet business USA Ordinary 37.2% 31 December
The Press Association News distribution Great Britain Ordinary 17.01% 31 December
SDN Limited Multiplex Operator Great Britain Ordinary 33.05% 31 December
Satellite Information Services (Holdings) Ltd News distribution Great Britain Ordinary 20.0% 31 March
Independent Television News Limited Broadcasting Great Britain Ordinary 20.0% 31 December
Notes to the financial statements 14. Fixed asset investments (continued)
Significant investments
The unaudited financial statements of Channel 5 Television Group Limited for the year ended 31 December 2004 show aggregate capital and reserves of
£(512.3) million (2003: £(509.1) million) and a loss for the financial year of £(5.2) million (2003: £(13.9) million).
Investment in own shares
The group also holds investments in own shares through the ESOP and QUEST. The group has adopted UITF 38 ‘Accounting for ESOP trusts’ in these
financial statements. This Abstract requires that any investment in own shares through an ESOP trust is deducted from shareholders’ funds. As required by
the Abstract, the comparative information at 31 December 2003 has been restated, with other investments being reduced by £4.1m, other reserves being
reduced by £7.8m and the profit and loss reserve being increased by £3.7m to reverse provisions made against these shares in prior years. Details of the
ESOP and Quest schemes are included in note 25.
Shares Loans
in group to group
companies companies Total
£m £m £m
Company
Investments: subsidiary undertakings
Cost
At 1 January 2004 3,004.9 1,030.0 4,034.9
Movement in loans – (23.6) (23.6)
At 31 December 2004 3,004.9 1,006.4 4,011.3
Provision against investments
At 1 January 2004 (661.5) – (661.5)
Charged for the year –––
At 31 December 2004 (661.5) – (661.5)
Net book amount
At 31 December 2004 2,343.4 1,006.4 3,349.8
At 31 December 2003 2,343.4 1,030.0 3,373.4
2004 2003
15. Stocks and work in progress £m £m
Group
Raw materials and consumables – paper stocks 2.6 1.1
Work in progress:
– short term market research contracts 14.1 17.6
– other 4.2 –
Finished goods and goods for resale 1.9 1.7
22.8 20.4
Group Group Company Company
2004 2003 2004 2003
16. Debtors £m £m £m £m
Amounts falling due within one year:
Trade debtors 128.0 115.0 – –
Other debtors 38.4 11.4 – –
Prepayments and accrued income 30.0 29.8 1.4 1.5
Group relief receivable – – 140.5 116.8
Pension prepayments – defined contribution schemes 1.6 2.3 – –
198.0 158.5 141.9 118.3
There are no amounts falling due after more than one year.
66 Notes to the financial statements 67
Group Group Company Company
2004 2003 2004 2003
17. Short term liquid funds £m £m £m £m
Listed investments 234.2 425.2 – –
Group Group Company Company
2004 2003 2004 2003
18. Creditors: amounts falling due within one year £m £m £m £m
Unsecured bank overdrafts 2.8 2.7 – –
Bank and other loans 140.0 238.9 – 213.9
2.375% senior convertible bonds (see note 21) – 221.1 – –
Trade creditors 59.7 47.3 – –
Other creditors 26.6 41.1 – –
Deferred consideration 4.8 5.4 – –
Corporation tax 208.0 308.5 – –
Other taxes and social security 13.1 13.4 – –
Accruals and deferred income 184.6 178.7 5.7 13.2
Proposed dividends – group 28.5 19.5 28.5 19.5
668.1 1,076.6 34.2 246.6
Bank and Other Loans
Bank and other loans for 2004 are £140 million of borrowing under the group’s £500 million syndicated bank facility (2003: £21.1 million) – see below.
Bank and other loans for 2003 included US dollar fixed rate private placements of £69.8 million, which were repaid in September 2004, and US dollar fixed
rate senior unsecured notes of £133.4 million (stated net of repurchases of £6.0 million and issue costs), which were repaid in July 2004. The notes
repurchased were held by a wholly owned subsidiary and were not cancelled. Accordingly, these were shown as amounts owing in the company balance
sheet.
Borrowing facilities
The group has a five year stand-by £500 million syndicated bank credit facility which has a maturity of August 2006. All conditions precedent to the
committed borrowing facilities were met at 31 December 2004.
Group Group Company Company
2004 2003 2004 2003
19. Bank and other loans due after more than one year £m £m £m £m
Other loans 96.1 101.9 130.2 138.2
Bank and other loans due after more than one year
Bank and other loans include US dollar fixed rate senior unsecured notes of £96.1 million (2003: £101.9 million) (stated net of repurchases of £34.2 million
(2003: £36.3 million) and issue costs). The notes repurchased are held by a wholly owned subsidiary and have not been cancelled. Accordingly, these
continue to be shown as amounts owing in the company balance sheet.
Group Group Company Company
2004 2003 2004 2003
20. Other creditors due after more than one year £m £m £m £m
Amounts owed to group companies – – 1,999.4 1,680.1
Other creditors 4.6 5.4 – –
4.6 5.4 1,999.4 1,680.1
Notes to the financial statements Group Group Company Company
2004 2003 2004 2003
21. Convertible debt £m £m £m £m
2.375% senior convertible bonds (see below) 208.7 – – –
United Business Media (Jersey) Limited, a wholly owned subsidiary of the company, has in issue a five year $400 million 2.375% fixed convertible bond with
a coupon payable semi-annually. The bonds are convertible into Preference Shares of United Business Media (Jersey) Limited at any time up to the seventh
calendar day before the date fixed for redemption, 19 December 2006. The Preference Shares will, in turn, be exchangeable immediately for a total of 47.8
million Ordinary Shares in the company.
United Business Media (Jersey) Limited may redeem all of the $400 million bonds at their principal amount, together with accrued interest:
a) at any time after 19 December 2004 if the market price per Ordinary Share on each of the dealing days in any period of 30 days ending not earlier than
14 days prior to the giving of the notice of redemption has been at least 130 per cent of the Sterling Exchange Price on such dealing day; or
b) at any time if 85 per cent or more of the aggregate principal amount of the bonds originally issued shall have been previously purchased and cancelled,
redeemed or converted.
Convertible bondholders had a one time option to put the bond back to United Business Media (Jersey) Limited for par on 19 December 2004.
No options in relation to puts or calls have been exercised and subsequently all bonds remain outstanding.
In line with accounting convention, the convertible debt was classified in creditors falling due within one year (£221.1 million) at 31 December 2003 on the
grounds that the earliest possible date for redemption was 19 December 2004. As this date has now passed, the convertible debt has been reclassified to
creditors falling due in more than one year (£208.7 million) at 31 December 2004.
22. Financial instruments
Objectives, policies and procedures
The group’s funding, liquidity and exposure to currency and interest rate risk is managed by the group’s treasury department. Treasury operations are
conducted within a framework of policies and guidelines authorised by the board and are subject to internal control procedures. The objective of the
framework is to provide flexibility whilst minimising risk and prohibiting speculative transactions or positions to be taken. Further detail on policies for
managing funding requirements, investment of surplus funds and management of risks can be found in the Financial Review.
(a) Financial liabilities
The interest rate risk profile of the group’s financial liabilities at 31 December was:
Fixed rate
Financial Fixed rate liabilities
Floating Fixed liabilities on liabilities Weighted
rate rate which no Weighted average period
financial financial interest is average for which
Total liabilities liabilities paid interest rate rate is fixed
2004 2004 2004 2004 2004 2004
Currency £m £m £m £m % Years
Sterling 26.7 – – 26.7 – –
US dollar 332.2 23.6 281.1 27.5 3.8 2.6
Euro 142.9 142.8 0.1 – 5.7 3.5
Other currencies –––– ––
Total 501.8 166.4 281.2 54.2
Fixed rate
Financial Fixed rate liabilities
Floating Fixed liabilities on liabilities Weighted
rate rate which no Weighted average period
Financial financial interest is average for which
Total liabilities liabilities paid interest rate rate is fixed
2003 2003 2003 2003 2003 2003
Currency £m £m £m £m % Years
Sterling 46.4 7.3 7.6 31.5 5.0 3.0
US dollar 563.9 82.2 444.7 37.0 5.1 2.9
Euro 22.8 22.8 – – – –
Other currencies – – – – – –
Total 633.1 112.3 452.3 68.5
68 Notes to the financial statements 69
22. Financial instruments (continued)
The maturity profile of the carrying amount of the group’s financial liabilities at 31 December was:
Other
financial
Debt liabilities Total
Maturity 2004 2004 2004
Group £m £m £m
Within one year, or on demand 142.8 14.3 157.1
Between one and two years 208.7 7.4 216.1
Between two and five years 96.1 13.8 109.9
Over five years – 18.8 18.8
Total 447.6 54.3 501.9
Finance charges allocated to future periods
Unamortised issue costs 2.7 – 2.7
Other
financial
Debt liabilities Total
Maturity 2003 2003 2003
Group £m £m £m
Within one year, or on demand 462.7 22.3 485.0
Between one and two years – 11.8 11.8
Between two and five years – 20.7 20.7
Over five years 101.9 13.7 115.6
Total 564.6 68.5 633.1
Finance charges allocated to future periods
Unamortised issue costs 4.1 – 4.1
Non-equity B shares of £0.5 million (2003: £0.5 million) have been excluded from the above tables as they have no fixed maturity date.
At 31 December 2004, the effect of the group’s dollar interest rate swaps is to classify as floating rate in the above table £23.6 million of the outstanding
£96.1 million 2009 US dollar fixed rate senior unsecured notes. This debt has been swapped into six month US dollar LIBOR plus 2.7% to the maturity date of
the debt.
Other floating rate financial liabilities comprise of borrowings which bear interest at rates based on the LIBOR plus a margin for each relevant currency for
periods between one and six months.
Other financial liabilities include £4.6 million of other creditors falling due after more than one year (2003: £5.4 million) and £48.6 million of provisions (2003:
£63.1 million) with an average maturity of 4.4 years.
Notes to the financial statements 22. Financial instruments (continued)
(b) Financial assets
The interest rate risk profile of the group’s financial assets at 31 December was:
Cash at Other Non interest
bank and financial Floating Fixed bearing
Total deposits assets rate rate Total
2004 2004 2004 2004 2004 2004
Currency £m £m £m £m £m £m
Sterling 304.3 50.2 254.1 89.1 70.0 145.2
US dollar 196.4 69.0 127.4 156.5 29.9 10.0
Euro 18.1 17.7 0.4 16.6 – 1.5
Other currencies 7.8 7.7 0.1 6.6 – 1.2
Total 526.6 144.6 382.0 268.8 99.9 157.9
Cash at Other Non interest
bank and financial Floating Fixed bearing
Total deposits assets rate rate Total
2003 2003 2003 2003 2003 2003
Currency £m £m £m £m £m £m
Sterling 339.9 82.4 257.5 20.2 170.0 149.6
US dollar 431.0 98.9 332.1 346.7 68.1 16.2
Euro 2.8 2.8 – 2.1 – 0.7
Other currencies 2.2 1.8 0.4 1.1 – 1.2
Total 775.9 185.9 590.0 370.1 238.1 167.7
The group’s two US dollar senior unsecured loan notes carry interest rates that are significantly in excess of market rates. As stated in the Financial
Review, the group has redeemed $75 million of these bonds early in order to reduce the group’s net interest exposure. Additionally, to achieve a higher
level of redemption without making a significant early redemption payment, the group has entered into the following transactions that have a similar
economic effect to redeeming the bonds.
At 31 December 2004, the group holds $160 million (2003: $205 million) of credit linked notes from a number of counterparties, these notes having
similar maturities to the US dollar loan notes. The notes pay interest at an average rate of LIBOR plus 266 basis points per annum.
In return for paying interest on the credit linked notes at rates in excess of LIBOR the final redemption to be received by the company is determined by
certain circumstances related to the credit risk of the company. These circumstances arise if there has been a “credit event” as defined in the terms of
the note, in which case the counterparties may redeem the notes at less than par value. A credit event arises in the event of any of the following
circumstances:
a bankruptcy of the company;
if the group is required by any of its lenders to accelerate repayment of borrowings;
if the group fails to make payment under any of its borrowings;
if the group restructures any of its borrowings in order to avoid default;
if any of its borrowings are repudiated, disaffirmed or rejected or subject to any moratorium.
If a credit event should take place, the credit linked note may not necessarily be redeemed for cash. The company may receive its own bonds or debt
obligations with a par value equivalent to the amount of the credit linked notes from the counterparties in settlement of redemption of the note.
Fixed rate financial assets have the following weighted average interest rates and periods for which that rate is fixed:
Fixed rate financial assets Fixed rate financial assets
Weighted average Weighted average
interest rate period for which rate is fixed
2004 2003 2004 2003
Currency % % Years Years
Sterling 4.0 4.0 0.1 0.6
US dollar 6.8 7.4 0.1 3.1
Euro – – – –
The effect of the group’s swaps was to classify £70 million of floating rate cash in the above tables as fixed rate however these swaps matured in January
2005.
Non-interest bearing financial assets comprise mainly other fixed asset investments for which there is no maturity.
70 Notes to the financial statements 71
22. Financial instruments (continued)
(c) Fair values of financial assets and financial liabilities
The following tables provide a comparison by category of the carrying amounts and the fair values of the group’s financial assets and financial liabilities
at 31 December 2004 and 31 December 2003. The fair value of US dollar private placements (included in long-term borrowings) was calculated by
discounting expected future cash flows at risk adjusted interest rates. Market values obtained from third parties have been used to determine the fair
value of interest rate swaps, credit linked notes, forward foreign exchange contracts, the fixed rate convertible bonds and the US dollar senior loan. The
fair value of cash at bank and deposits approximates to their book value due to their short maturity. Listed investments are valued at market value. For
all other financial assets and liabilities the carrying amount has been used.
Book value Fair value
2004 2004
£m £m
Primary financial instruments held or issued to finance the group’s operations:
Financial liabilities:
– Short-term borrowings (up to two years) (351.5) (390.4)
– Long-term borrowings (over two years) (96.1) (109.2)
– Other financial liabilities (54.3) (54.3)
Financial assets:
– Cash at bank and deposits 144.6 144.6
– Other financial assets 382.0 385.8
Derivative financial instruments held to manage the interest rate profile:
Interest rate swaps
– assets – 1.9
– liabilities – (3.3)
Derivative financial instruments held or issued to hedge the currency exposure on expected future sales:
Forward foreign currency contracts
– assets – 0.1
– liabilities ––
Book value Fair value
2003 2003
£m £m
Primary financial instruments held or issued to finance the group’s operations:
Financial liabilities:
– Short-term borrowings (up to two years) (462.7) (519.1)
– Long-term borrowings (over two years) (101.9) (119.0)
– Other financial liabilities (68.5) (68.5)
Financial assets:
– Cash at bank and deposits 185.9 185.9
– Other financial assets 594.1 601.5
Derivative financial instruments held to manage the interest rate profile:
Interest rate swaps
– assets – 7.9
– liabilities – (0.5)
Notes to the financial statements 22. Financial instruments (continued)
(d) Hedges
The group’s policy is to hedge interest rate risk using fixed rate borrowings and financial instruments such as interest rate swaps. Net foreign transaction
risks are hedged as they arise, generally using forward foreign exchange contracts, whilst foreign currency borrowings are used to provide an economic
hedge against investments in overseas territories. The group’s policy for accounting for hedges can be found in the “Group Accounting Policies” section
of this report.
The tables below show the extent to which the group has unrecognised gains and losses in respect of financial instruments used as hedges at the
beginning and end of the year. All the gains and losses on the hedging instruments are expected to be matched by losses and gains on the hedged
transactions or positions.
Unrecognised Unrecognised Total
gains losses net gains
£m £m £m
Unrecognised gains and losses on hedges at 1 January 2004 7.9 (0.5) 7.4
Arising in previous years included in 2004 income 6.9 (0.5) 6.4
Gains and losses not included in 2004 income
Arising before 1 January 2004 1.0 – 1.0
Arising in 2004 1.0 (3.3) (2.3)
Gains and losses on hedges at 31 December 2004 2.0 (3.3) (1.3)
Of which
Gains and losses expected to be included in 2005 income 1.4 (1.8) (0.4)
Gains and losses expected to be included in 2006 income or later 0.6 (1.5) (0.9)
Unrecognised Unrecognised Total
gains losses net gains
£m £m £m
Unrecognised gains and losses on hedges at 1 January 2003 10.6 – 10.6
Arising in previous years included in 2003 income 10.0 – 10.0
Gains and losses not included in 2003 income
Arising before 1 January 2003 0.6 – 0.6
Arising in 2003 7.3 (0.5) 6.8
Gains and losses on hedges at 31 December 2003 7.9 (0.5) 7.4
Of which
Gains and losses expected to be included in 2004 income 3.0 (0.5) 2.5
Gains and losses expected to be included in 2005 income or later 4.9 – 4.9
Currency exposures
As outlined in the Financial Review, the group policy is to hedge, where possible, in all material respects exposures on monetary assets and liabilities.
The table below shows the extent to which group companies have monetary assets and liabilities in currencies other than their functional currency.
Net foreign currency monetary assets/(liabilities)
31 December 2004 Sterling US dollar Euro Other Total
Functional currency of group operation £m £m £m £m £m
Sterling – 49.5 (143.2) 1.4 (92.3)
US dollar – – 0.3 2.7 3.0
Euro 0.1 2.0 – 3.6 5.7
Other currencies –––– –
Total 0.1 51.5 (142.9) 7.7 (83.6)
Net foreign currency monetary assets/(liabilities)
31 December 2003 Sterling US dollar Euro Other Total
Functional currency of group operation £m £m £m £m £m
Sterling – 68.3 (18.6) (1.3) 48.4
US dollar 0.2 – (0.1) (0.7) (0.6)
Euro (0.2) 0.1 0.4 – 0.3
Other currencies –––– –
Total – 68.4 (18.3) (2.0) 48.1
72 Notes to the financial statements 73
Former Deferred
financial Tax
Property services Total Total
23. Other provisions for liabilities and charges £m £m £m £m
Group
At 1 January 2004 60.5 2.6 – 63.1
On acquisitions of subsidiary undertakings and businesses – – 1.0 1.0
Transfer 1.4 (1.4) – –
(Utilised)/provided in the year (14.2) (0.3) 0.4 (14.1)
At 31 December 2004 47.7 0.9 1.4 50.0
Liabilities on property
The group has lease obligations in respect of the continuing costs of vacant property, the quantification of which depends upon the ability to exit the leases
early or sublet the properties, and for dilapidations on certain leasehold properties which are dependent principally on actual reinstatement costs on expiry
of the leases. The provision in respect of these obligations at 31 December 2004 has been determined following external professional advice and will be
utilised over the period of the leases in question, which range from 1 to 13 years.
Liabilities arising from former financial services activities
A subsidiary of the group was formerly engaged in the selling of personal pensions prior to 1996. As a result of the industry-wide review into pension
misselling by the Personal Investment Authority, the group is exposed to actual and potential future claims by investors in respect of policies found to have
been missold. Although work continues to progress with respect to the identification and review of all pension policies sold, the number and amount of
such claims can not be finally determined until all potential compensation costs have been agreed. The amount of the provisions at 31 December 2004 has
been determined on the basis of independent financial advice.
Deferred tax
The amount of provided and unprovided deferred tax liabilities/(assets) is as follows:
2004 2004 2003 2003
Provided Unprovided Provided Unprovided
£m £m £m £m
Group
Accelerated capital allowances – (3.5) – (4.4)
Other timing differences 1.4 (78.2) – (79.7)
1.4 (81.7) – (84.1)
These deferred tax assets have not been recognised, having given consideration to the likelihood of recovery of the balance.
The above tables do not include any tax on the distribution of retained profits and reserves by overseas subsidiaries or joint ventures or associated
undertakings as there is currently no intention to remit such amounts to the UK. Additionally, deferred tax has not been included in respect of the FRS 17
pensions deficit (see note 31).
Notes to the financial statements 2004 2003
24. Called up share capital £m £m
Authorised
486,851,630 (2003: 486,851,630) Ordinary shares of 25 pence each 121.7 121.7
375,417,690 (2003: 375,417,690) B shares of 8 and 23/44 pence each 32.0 32.0
153.7 153.7
Ordinary
shares B shares
Number Number
Allotted and fully paid
In issue at 1 January 2004 335,826,153 6,212,819
B shares purchased by the company – (766,030)
Allotted in respect of share option schemes and other entitlements 359,175 –
In issue at 31 December 2004 336,185,328 5,446,789
Ordinary
shares B shares Total
£m £m £m
Allotted and fully paid
In issue at 1 January 2004 84.0 0.5 84.5
B shares purchased by the company – (0.1) (0.1)
Allotted in respect of share option schemes and other entitlements 0.1 – 0.1
In issue at 31 December 2004 84.1 0.4 84.5
The return of capital to shareholders, undertaken in 2001, took the form of a subdivision and consolidation of the existing United ordinary shares. On
23 April 2001, each of the existing 507,901,885 ordinary shares of 25 pence then in issue were sub-divided into one share of 8 23/44 pence (B Shares)
and one share of 16 21/44 pence and immediately following such sub-division every issued share of 16 21/44 pence was sub-divided into 29 shares of
25/44 pence. Every 44 shares of 25/44 pence each resulting from such sub-division were then consolidated into one ordinary share of 25 pence. The
subdivision created a class of B shares with a total value of approximately £1.25 billion. UK shareholders had the option to sell these shares for 245 pence
per share, to receive a single dividend of 245 pence per share, or to retain the B shares and receive a continuing dividend linked to LIBOR. During the year
ended 31 December 2004, 766,030 B shares were purchased by the company for consideration of £1.8 million. Cumulatively to 31 December 2004,
369,970,901 B shares have been purchased by the company for consideration of £906.4 million. At 31 December 2004, 5,446,789 B shares remain in issue.
The B shares are irredeemable however, the company has the authority to convert, at its option, all remaining B shares in issue after 23 April 2011, if the
number is less than 125 million. The conversion into ordinary shares will be based on the market price of ordinary shares at the time of the conversion.
B Shares
B shareholders are entitled to a non-cumulative preference dividend based on the principal of 245 pence per share. The dividend is the lower of 25 per cent
per annum or 75 per cent of the 12 month LIBOR rate. On winding up, the B shareholders are entitled to 245 pence per share and the relevant proportion
of the dividends outstanding. B shareholders do not have any voting entitlements except in a resolution relating to a winding up of the company or if the B
share dividend has been outstanding for more than six months. B shares are therefore regarded as non-equity shares.
74 Notes to the financial statements 75
Share Capital Profit
premium Merger redemption Other and loss
account reserve reserve reserves account Total
25. Share premium account and reserves £m £m £m £m £m £m
Group
At 31 December 2003 as reported 309.4 31.3 42.9 125.0 (465.3) 43.3
Adjustment for investment in own shares (note 14) – – – (7.8) 3.7 (4.1)
At 1 January 2004 309.4 31.3 42.9 117.2 (461.6) 39.2
Retained profit for the year – – – – 70.7 70.7
Actuarial loss on pension scheme – – – – (14.9) (14.9)
Premium on shares issued, net of costs 1.4 – – – – 1.4
Purchase of own shares – ESOP – – – (4.1) – (4.1)
B shares purchased by the company – – – – (1.8) (1.8)
Currency translation – – – – 3.1 3.1
At 31 December 2004 310.8 31.3 42.9 113.1 (404.5) 93.6
The total group reserves at 31 December 2004 include £9.4 million (2003: £5.7 million) in respect of joint ventures and £(28.9) million (2003: £(28.9)
million) in respect of associated undertakings, of which £(8.0) million (2003: £(12.0) million) has been dealt with in the profit and loss account and £(11.5)
million (2003: £(11.2) million) of exchange has been dealt with in reserves, in line with SSAP 20.
Investment in own shares of £11.9 million (2003: £7.8 million) are held, at cost, reducing other reserves.
The profit and loss account reserves excluding the pension liability (see note 31) totalled £(309.1) million at 31 December 2004 (£(381.4) million at 31
December 2003).
Share Capital Profit
premium redemption Other and loss
account reserve reserves account Total
£m £m £m £m £m
Company
At 1 January 2004 309.4 42.9 83.3 906.9 1,342.5
Retained loss for the year – – – (98.4) (98.4)
Premium on shares issued 1.4 ––– 1.4
Return of capital to shareholders – – – (1.8) (1.8)
At 31 December 2004 310.8 42.9 83.3 806.7 1,243.7
Non-distributable 310.8 42.9 83.3 – 437.0
Distributable – – – 806.7 806.7
The company received £1.4 million (2003: £1.0 million) on the issue of shares in respect of the exercise of options awarded under various share option plans,
of which £1.4 million (2003: £1.0 million) is payable by employees to the group for the issue of these shares.
The net amount of foreign currency losses on foreign exchange borrowings less deposits offset in the reserves of the group was a gain of £2.8 million
(2003: gain of £13.0 million) and in the company was £nil (2003: £nil) respectively.
The market value of own shares held in the ESOP and QUEST at 31 December 2004 was £10.9 million (2003: £6.7 million) and the nominal value was
£0.6 million (2003: £0.3 million).
Employee Share Ownership Plan
An Employee Share Ownership Plan (the “United ESOP”) was established by the company on 24 June 1996. MAI previously had an Employee Share
Ownership Plan established in 1989 (the “MAIESOP”). The United ESOP has purchased in the open market, or has received from the MAIESOP, or has been
granted options over, United shares which are held on trust for employees participating in the plans listed below. The purchase of shares in the open market
is financed through bonuses sacrificed by senior executives under the terms of the Senior Executive Equity Participation Plan (“SEEPP”) and contributions in
cash by the company to finance the acquisition of the matching element of such bonuses.
Dividends on the shares held by the United ESOP have been waived. The costs of running these schemes have been included in the profit and loss account.
Qualifying Employee Share Trust
In January 1998 a Qualifying Employee Share Trust (“the QUEST”) was established for the purpose of satisfying exercises of options under the MAI Sharesave
Scheme and the United SAYE Share Option Scheme. A new company, United QUEST Trustee Limited, was incorporated for the purposes of administering the
QUEST. On 28 January 1998, the company issued 3,579,947 shares to the QUEST for a total consideration of £25,732,629, equal to 719p per share, the
mid-market price at the close of business on 28 January 1998.
On 17 March 2000, the company issued 500,185 shares to the QUEST for a total consideration of £4,321,600 equal to 869p per share, the mid-market
price at the close of business on 17 March 2000. On 18 May 2001, the company issued 100,000 shares to the QUEST for a total consideration of £727,000
equal to 727p per share, the mid-market price at the close of business on 18 May 2001. On 20 March 2002, the company issued 300,000 shares to the
QUEST for a total consideration of £1,752,000 equal to 584p per share, the mid-market price at the close of business on 20 March 2002.
Notes to the financial statements 25. Share premium account and reserves
The dividends on the shares held by the QUEST have been waived.
Options over Options over Number of Number of
United United United United
shares shares shares shares
2004 2003 2004 2003
At 31 December the holdings of the United ESOP and the QUEST were as follows:
United ESOP – Ordinary shares 728,643 623,593 2,066,589 953,322
– B shares 140,960 397,094 279,484 329,484
QUEST – Ordinary shares – – 205,060 240,722
The market value of United shares at 31 December 2004 was 480.0p (2003 491.5p) per share.
The group has taken advantage of the exemption in UITF 17 (revised) and has not applied the Abstract to its SAYE and equivalent overseas schemes.
Number of shares over which
options were outstanding
2004 2003
As at 31 December the maximum aggregate liabilities of the United ESOP and the QUEST were as follows:
SEEPP – bonus options – Ordinary shares 318,436 255,762
– B shares 34,663 125,841
SEEPP – matching options – Ordinary shares 410,207 357,588
– B shares 106,297 255,710
Harlow Butler Share Bonus Plan 6,743 6,743
Senior executive allocations 6,000 12,000
United SAYE Scheme 2,258,498 2,398,812
26. Commitments and contingent liabilities
At 31 December the group is committed to make payments during the following year under non-cancellable operating leases as follows:
Land and Land and
buildings buildings Other Other
2004 2003 2004 2003
Group £m £m £m £m
Operating leases which expire
Within one year 1.6 1.4 0.3 0.5
Two to five years 12.6 9.8 0.6 0.2
After five years 20.1 21.2 – –
34.3 32.4 0.9 0.7
At 31 December the company is committed to make payments during the following year under non-cancellable operating leases as follows:
Land and Land and
buildings buildings Other Other
2004 2003 2004 2003
Company £m £m £m £m
Operating leases which expire
After five years 4.9 4.9 – –
Capital expenditure contracted for but not provided in the financial statements amounts to £1.2 million (2003: £0.2 million).
The company acts as guarantor over a net overdraft facility of £60 million and a foreign exchange line of £50 million that are available to subsidiary
undertakings. The company also acts as guarantor over the fixed interest payable on interest rate swaps taken out by a subsidiary undertaking. The
company also acts as guarantor over the convertible bonds disclosed in note 21.
76 Notes to the financial statements 77
Total Total
2004 2003
27. Reconciliation of operating profit/(loss) to cash inflow from operating activities £m £m
Operating profit/(loss) 6.3 (22.3)
Depreciation charges 12.9 25.3
Amortisation of intangible assets – group 124.5 120.1
Share of results of joint ventures (2.5) (2.9)
Income from fixed asset investments (6.0) (3.9)
Profit on sale of fixed asset investments – (4.3)
Loss on sale of tangible fixed assets – 0.3
Payments against provisions (16.1) (23.1)
Decrease/(increase) in stocks 2.8 (1.4)
(Increase)/decrease in debtors (2.8) 12.3
Decrease in creditors (3.3) (11.9)
Other non-cash items including movements on provisions (8.7) (3.6)
Cash inflow from operating activities 107.1 84.6
The effect of exceptional items on cash inflow from operating activities was £nil (2003: £nil).
At Other At
1 January Cash non-cash Exchange 31 December
2004 flow movements movements 2004
28. Analysis of movement in net cash/(debt) £m £m £m £m £m
Cash at bank and in hand 185.9 144.6
Overdrafts (2.7) (2.8)
183.2 141.8
Less deposits treated as liquid resources (169.5) –
13.7 130.1 – (2.0) 141.8
Debt due after one year (101.9) (212.7) (1.1) 10.9 (304.8)
Debt due within one year (460.0) 311.7 – 8.3 (140.0)
(548.2) 229.1 (1.1) 17.2 (303.0)
Deposits included in cash 169.5 (169.5) –– –
Current asset investments 425.2 (176.6) – (14.4) 234.2
Total 46.5 (117.0) (1.1) 2.8 (68.8)
Cash deposits held in respect of letters of credit included in cash above amounted to £5.6 million.
Notes to the financial statements 2004
Total
29. Purchase of subsidiary undertakings and businesses £m
Gross cost of acquisitions in the year 204.3
Cash at acquisition (9.7)
Cost of acquisitions 194.6
Adjustments to goodwill in respect of prior year acquisitions (4.4)
Cash paid in the year net of cash acquired (including £nil relating to joint ventures) 190.2
Gross cost of acquisition represents:
Goodwill 190.7
Fixed assets 1.6
Net current assets 13.5
Provisions for liabilities and charges (0.9)
Pension liability (0.6)
204.3
On 30 July 2004, certain businesses owned by MediMedia were acquired for €299.9 million in cash including €2.8 million of costs. These comprised
MediMedia’s drug information businesses in Continental Europe and Asia, and all of its trade press, patient education and pharma-marketing solutions
businesses in Germany, Benelux and in Asia-Pacific.
This purchase has been accounted for as an acquisition and goodwill is being amortised over ten years.
Adjustments to goodwill in respect of prior year acquisitions include an adjustment for deferred consideration for the 2001 acquisition of Allison-Fisher
International, Inc. Under the earn out arrangement, if certain profit targets over the period from acquisition until 30 June 2004 are met, additional
consideration of up to $33.0 million may be payable. The amount provided of $17.5 million reflects the amount which has been paid in February 2005.
The following table sets out the book values of the identifiable assets and liabilities acquired and their fair value to the group in respect of the acquisition of
businesses from MediMedia:
Fair value
Book value of Alignment of of assets/
net assets accounting (liabilities)
on acquisition policies acquired
£m £m £m
Acquisitions:
Fixed assets 4.3 (2.5) 1.8
Current assets/(liabilities):
– Cash 9.7 – 9.7
– Stocks 1.1 2.6 3.7
– Debtors and other current assets 19.7 (0.9) 18.8
– Creditors falling due within one year (18.9) (0.2) (19.1)
Creditors falling due after more than one year – – –
Provisions for liabilities and charges (0.6) – (0.6)
Pension liability (0.6) – (0.6)
14.7 (1.0) 13.7
The adjustments for accounting policies are principally to align capitalisation, amortisation and revenue recognition policies with those of the group.
The group have made small adjustments to the fair values of assets acquired through 2003 acquisitions. These adjustments are not material and relate to
capitalisation of additional fees on the acquisition of Eurisko and a £0.2 million revaluation of a property acquired as part of the Aprovia acquisition.
The proforma financial statements of the businesses acquired from Medimedia for the year ended 31 December 2003 show a profit after tax of €2.1 million.
Profit after tax for the period from 1 January 2004 to the date of acquisition was €14.9 million.
78 Notes to the financial statements 79
2004 2003
30. Particulars of employees Number Number
The average number of persons employed in the group, including directors, during the year was as follows:
Location
United Kingdom 2,638 2,431
North America 2,883 2,933
Europe and Middle East 415 80
Pacific 565 327
6,501 5,771
Category
CMP Media 1,352 1,434
CMPMedica 372 –
CMP Asia 339 332
CMP Information 1,212 879
United Advertising Publications 718 731
Professional media 3,993 3,376
News distribution 774 854
Market research 1,734 1,541
6,501 5,771
2004 2003
£m £m
Staff costs, including directors’ emoluments, were:
Wages and salaries 242.6 231.8
Social security costs 29.4 28.3
Other pension costs 15.4 11.3
287.4 271.4
2004 2003
£m £m
Directors’ emoluments
Fees 0.3 0.4
Remuneration and benefits in kind 1.7 1.7
Compensation for loss of office – –
Bonuses 0.9 0.8
MTIP 0.8 0.6
Contributions to defined contribution pension schemes 0.1 0.1
3.8 3.6
Details of executive and non-executive directors’ emoluments and their interest in shares and options of the company are shown within the directors’
remuneration report in the sections “Directors’ Remuneration: pension entitlement”, “Table of individual directors’ remuneration”, “Directors’ interests in
shares” and “Directors’ interests in share options”.
Notes to the financial statements 31. Pensions
The group operates a number of defined benefit pension schemes in the UK and overseas. The most recent actuarial valuations were carried out at various
dates between 5 April 2002 and 5 April 2003 and updated to 31 December 2004 by independent qualified actuaries using the projected unit method.
The financial assumptions used to calculate the present value of scheme liabilities under FRS17 are:
UK Schemes Non-UK Schemes
2004 2003 2002 2004 2003 2002
% % % % % %
Discount rate 5.40 5.50 5.60 5.71 6.25 6.75
Inflation assumption 2.75 2.50 2.50 2.44 2.50 2.50
Rate of increase in salaries 4.25 4.00 4.00 3.97 4.00 4.00
Rate of increase in pensions in payment on post April 1997 pension 2.75 2.50 2.50 n/a n/a n/a
The assets in the scheme and expected return on assets were:
Expected Expected Expected
return on return on return on
2004 assets 2003 assets 2002 assets
UK Schemes £m % £m % £m %
Equities 179.2 7.50 168.5 6.3 151.4 6.0
Bonds 179.6 4.86 167.2 5.0 131.1 4.7
Insurance policies 5.8 5.40 5.7 5.5 5.0 5.6
Cash 1.4 4.75 0.9 3.75 2.5 4.0
Total 366.0 342.3 290.0
Expected Expected Expected
return on return on return on
2004 assets 2003 assets 2002 assets
Non-UK Schemes £m % £m %£m %
Equities 14.0 8.75 12.6 8.75 8.5 8.0
Bonds 9.0 5.63 8.1 6.08 5.8 6.8
Insurance policies – n/a – n/a – n/a
Cash – n/a – n/a – n/a
Total 23.0 20.7 14.3
The following amounts at 31 December 2004 were measured in accordance with the requirements of FRS 17:
UK Schemes Non-UK Schemes
2004 2003 2002 2004 2003 2002
£m £m £m £m £m £m
Total market value of assets 366.0 342.3 290.0 23.0 20.7 14.3
Present value of scheme liabilities (450.0) (415.4) (370.6) (29.8) (27.0) (24.6)
Deficit in the scheme (84.0) (73.1) (80.6) (6.8) (6.3) (10.3)
Irrecoverable surplus (4.4) (4.5) – – – –
Deficit (88.4) (77.6) (80.6) (6.8) (6.3) (10.3)
Related deferred tax liability/(asset)* – – – – – –
Net pension liability (88.4) (77.6) (80.6) (6.8) (6.3) (10.3)
* The related deferred tax asset has not been recognised, having given consideration to the likelihood of recovery of the balance.
UK Schemes Non-UK Schemes
2004 2003 2004 2003
Analysis of amount charged to operating loss in respect of defined benefit schemes £m £m £m £m
Current service cost 3.1 3.0 2.3 2.6
Total operating charge 3.1 3.0 2.3 2.6
80 Notes to the financial statements 81
31. Pensions (continued)
UK Schemes Non-UK Schemes
2004 2002 2004 2002
Movement in deficit during the year £m £m £m £m
Deficit in the scheme at beginning of the year (73.1) (80.6) (6.3) (10.3)
Movement in year:
Acquisition – (3.2) (0.6) –
Current service cost (3.1) (3.0) (2.3) (2.6)
Contributions 9.5 4.4 3.0 5.3
Past service costs – – – –
Settlement/curtailments – – – –
Other finance expense (3.4) (5.1) – (0.4)
Actuarial gain/(loss) before deduction of irrecoverable surplus (13.9) 14.4 (1.1) 1.7
Effect of currency translation – – 0.5 –
Deficit in scheme at end of year (84.0) (73.1) (6.8) (6.3)
The pension deficit at 31 December 2004, as shown on the consolidated balance sheet, includes an amount in respect of irrecoverable surpluses of £4.4 million
(2003: £4.5 million).
UK Schemes Non-UK Schemes
2004 2003 2004 2003
Analysis of amount charged to other finance expense £m £m £m £m
Expected return on pension scheme assets 18.9 16.1 1.5 1.3
Interest on pension scheme liabilities (22.3) (21.2) (1.5) (1.7)
Net return (3.4) (5.1) – (0.4)
UK Schemes Non-UK Schemes
2004 2003 2004 2003
Analysis of amount recognised in statement of total recognised gains and losses (STRGL) £m £m £m £m
Actual return less expected return on pension scheme assets 12.6 24.7 0.4 2.6
Experience gains and losses arising on the scheme liabilities (4.5) 1.9 – (0.2)
Changes in assumptions underlying the present value of the scheme liabilities (21.9) (16.7) (1.5) (0.7)
Amount recognised in the STRGL (13.8) 9.9 (1.1) 1.7
UK Schemes Non-UK Schemes
2004 2003 2002 2004 2003 2002
History of experience gains and losses £m £m £m £m £m £m
Difference between the expected and actual return on scheme assets:
Amount 12.6 24.7 (48.4) 0.4 2.6 (2.6)
Percentage of scheme assets at period end 3% 7% (17%) 2% 13% (18%)
Experience gains and losses of scheme liabilities:
Amount (4.5) 1.9 9.8 – (0.2) –
Percentage of the present value of the scheme liabilities at period end 1% n/a (3%) – 1% n/a
Total amount recognised in statement of total recognised gains and losses:
Amount (13.8) 9.9 (48.4) (1.1) 1.7 (2.2)
Percentage of the present value of the scheme liabilities at period end 3% 2% 13% 4% (6%) (9%)
In 2004, the pension schemes included in the FRS 17 calculations were the United Pension Plan, the United Magazines Final Salary Scheme, the defined
benefit section of the United Group Pension Scheme, The Builder Group Pension Scheme, the CMP Media LLC Cash Balance Retirement Plan, the United
News Executive Pension Scheme, the Audits and Surveys Worldwide Account Balance Plan and the CMP Post Retirement Medical Plan. Two of these plans
were included for the first time in 2004 – these are CMPMedica schemes in Australia and France. These schemes have a combined deficit of £0.6 million.
The UK schemes are closed to new members, hence under the projected unit method, the current service cost (expressed as a percentage of salary) will
increase as the members of the scheme approach retirement.
The group is making additional contributions to reduce the deficit in the UK. Contributions in the UK defined benefit schemes are expected to be 
£16.0 million (2004: £11.8 million) in 2005. Contributions to the US defined benefit plan are expected to be £3.4 million in 2005 (2004: £4.0 million).
Notes to the financial statements 31. Pensions (continued)
The pension cost for the defined contribution schemes for the year ended 31 December 2003 is as follows:
2004 2003
Defined contribution schemes £m £m
– UK 2.0 2.6
– US 3.3 3.1
Total for the year 5.3 5.7
32. Related party transactions
The group entered into the following transactions with related parties during the year:
Balances Balances
(owed by)/ (owed by)/
due to due to
the group at Value of the group at Value of
31 December transactions 31 December transactions
Transactions with Nature of Nature of 2004 2004 2003 2003
related parties relationship transactions £m £m £m £m
Asia Pacific Leather Fair Subsidiary < 90% Loans and Management fees (0.9) 1.7 1.4 1.5
Canada Newswire Ltd Joint Venture Newswire Service – 0.4 0.7 1.5
Channel 5 Television Group Limited Fixed Asset Investment Loans and interest receivable 198.8 9.8 204.0 8.8
SDN Limited Fixed Asset Investment Loans and interest receivable 3.9 2.7 13.3 0.1
Merrill Lynch are one of the company’s stockbrokers and also provides treasury services. Adair Turner, a non-executive director of UBM, is vice-chairman of
Merrill Lynch Europe plc. For additional information refer to the Corporate Governance Statement.
82 Notes to the financial statements 83
33. Share options
At 31 December 2004 options granted over the company’s ordinary shares of 25 pence under employee share option schemes were outstanding as detailed
below. At 31 December 2004 the market price of the company’s ordinary shares was 480.0p.
Number of Exercise Exercise dates
Date of grant shares price (p) From To
United UK Executive Schemes
24/09/1996 4,300 692.5 24/09/1999 24/09/2006
26/03/1997 15,600 754.5 26/03/2000 26/03/2007
25/09/1997 7,894 760.0 25/09/2000 25/09/2007
14/12/1998 70,440 511.0 14/12/2001 14/12/2008
16/09/1999 4,940 607.0 16/09/2002 16/09/2009
03/03/2000 105,638 867.2 03/03/2003 03/03/2010
08/05/2001 115,757 724.8 08/05/2004 08/05/2011
08/08/2001 10,072 595.7 08/08/2004 08/08/2011
08/03/2002 135,876 574.0 08/03/2005 08/03/2012
09/04/2003 243,498 247.3 09/04/2006 09/04/2013
05/04/2004 264,193 500.7 05/04/2007 05/04/2014
16/08/2004 13,352 449.3 16/08/2007 16/08/2014
United International Executive Schemes
04/04/1995 10,000 482.5 04/04/1998 04/04/2005
19/04/1996 35,000 658.5 19/04/1999 19/04/2006
05/06/1996 54,928 702.5 05/06/1999 05/06/2006
16/09/1996 222,707 686.0 16/09/1999 16/09/2006
24/09/1996 195,700 669.5 24/09/1999 24/09/2006
26/03/1997 32,200 731.5 26/03/2000 26/03/2007
25/09/1997 22,106 742.0 25/09/2000 25/09/2007
14/12/1998 849,560 511.0 14/12/2001 14/12/2008
16/09/1999 19,060 607.0 16/09/2002 16/09/2009
03/03/2000 584,673 867.2 03/03/2003 03/03/2010
09/05/2000 24,760 753.0 09/05/2003 09/05/2010
18/12/2000 1,524,100 843.0 18/12/2003 18/12/2010
18/12/2000 381,000 843.0 18/12/2004 18/12/2010
08/05/2001 1,422,043 724.8 08/05/2004 08/05/2011
08/05/2001 621,000 724.8 08/05/2004 08/05/2011
08/08/2001 103,928 595.7 08/08/2004 08/08/2011
08/08/2001 104,000 595.7 08/08/2005 08/08/2011
19/12/2001 1,090,000 529.0 19/12/2004 19/12/2011
19/12/2001 1,090,000 529.0 19/12/2005 19/12/2011
08/03/2002 2,174,124 574.0 08/03/2005 08/03/2012
22/08/2002 1,485,000 277.2 22/08/2005 22/08/2012
22/08/2002 1,485,000 277.2 22/08/2006 22/08/2012
09/04/2003 2,540,502 247.3 09/04/2006 09/04/2013
05/04/2004 3,395,807 500.7 05/04/2007 05/04/2014
16/08/2004 371,648 449.3 16/08/2007 16/08/2014
MAI 1991 Executive Scheme
18/10/1995 47,360 490.6 18/10/1998 18/10/2005
United SAYE Schemes
31/10/1997 1,416 632.7 01/02/2001 01/08/2005
15/12/1998 9,099 514.8 01/02/2002 01/08/2006
17/09/1999 17,198 497.0 01/12/2002 01/06/2007
20/04/2001 33,439 488.3 01/12/2004 01/12/2008
15/04/2002 60,662 480.6 01/06/2005 01/12/2009
10/04/2003 1,907,441 160.5 01/06/2006 01/12/2010
08/04/2004 229,243 412.3 01/06/2007 01/06/2011
United International Sharesave Plan *
30/09/1999 5,119 497.0* 01/12/2002 01/06/2005
20/04/2001 24,172 488.3* 01/12/2004 01/12/2004
26/04/2002 57,819 480.6* 01/06/2005 01/12/2007
10/04/2003 856,831 160.5* 01/06/2006 01/06/2008
08/04/2004 96,047 412.3* 01/06/2007 01/06/2009
*The option price is quoted in each country in the local currency, and has been translated at the exchange rate on the date of grant.
Notes to the financial statements United UK United MAI United
Executive SAYE Executive International
33 Share options (continued) Schemes* Schemes Schemes Schemes
The movement in shares under option during the year was as follows:
Shares under option at 1 January 2004 18,909,663 2,398,812 180,480 1,196,852
Granted during the year 4,065,000 246,160 – 97,647
Exercised during the year (136,000) (35,662) (133,120) (24,592)
Expired, cancelled or lapsed (2,008,257) (350,812) (229,919)
Balance at 31 December 2004 20,830,406 2,258,498 47,360 1,039,988
34. Post balance sheet events
On 18 January 2005, CMPMedica submitted a binding offer to acquire medical trade press and other professional healthcare business information services in
France, currently owned by MediMedia, for €36 million in cash. In 2004 the business generated approximately €60 million of turnover and €6 million of
profit before tax.
As announced on 28 January 2005, the group has appointed its financial advisors to conduct a strategic review of NOP World. The strategic review will
examine a number of alternatives to maximise the value of NOP World for UBM shareholders including developing NOP World further, expanding NOP
World through strategic alliances or a sale.
On 1 February 2005, CMP Asia announced the acquisition of the Tissue World events and publication from Paperloop for $4.5 million, being in part subject
to the outcome of a forthcoming exhibition. The three Tissue World events are held in biennial sequence with an annualised turnover of approximately $2.5
million. Paperloop is a leading news and information provider for the pulp, paper and allied industries. UBM has a 37.2% stake in Paperloop.
On 7 February 2005, United Advertising Publications (UAP) acquired the licensed trade sector publishing events assets of Quantum Business Media,
including the leading title in the licensed trade – ‘The Publican’, for £21 million in cash. In 2004 the business generated turnover of £6.8 million and £2.2
million profit before tax.
84 Notes to the financial statements 85
The directors consider that to give full particulars of all subsidiary undertakings would lead to a statement of excessive length. The following information relates to
those subsidiary undertakings the results or financial position of which, in the opinion of the directors, principally affect the figures of the group.
Country of Percentage
incorporation interest at
and operation 31 December 2004
Professional Media
CMP Asia Ltd Hong Kong 100
CMP Europe Ltd Great Britain 100
CMP Information Ltd Great Britain 100
CMPi Group Ltd (formerly Aprovia (UK) Ltd) Great Britain 100
CMP Media, LLC USA 100
VIDAL (OYP) S.A. France 100
Medizinische Medien Information GmbH Germany 100
CMPMedica Asia Pte Ltd Singapore 100
Expoconsult B.V. Netherlands 100
United Advertising Publications plc Great Britain 100
CMP Information, Inc. USA 100
News Distribution
PR Newswire Association, Inc. USA 100
PR Newswire Europe Ltd Great Britain 100
Market Research
Allison-Fisher International LLC USA 100
Eurisko NOP World S.r.L. Italy 100
Market Measures/Cozint L.P USA 100
Mediamark Research, Inc. USA 100
NOP Research Group Ltd Great Britain 100
NOP World Strategic Marketing L.P USA 100
RoperASW LLC USA 100
Head Office
United Business Media Finance, Inc. USA 100
United Business Media Group Ltd Great Britain 100
United Business Media (Jersey) Ltd Jersey 100
United Finance Ltd Great Britain 100
All companies stated as being incorporated in Great Britain are registered in England and Wales. None of the above subsidiaries are held directly by the company,
with the exception of United Business Media (Jersey) Ltd.
A full list of group subsidiaries will be appended to the next annual return.
Principal group subsidiaries
  86
2004 2003 2002 2001 2000
£m £m £m £m £m
Profit and loss account
Turnover 809.6 746.7 793.4 932.5 1,975.0
Profit* after interest 141.4 103.3 72.9 95.9 195.7
Amortisation of intangible assets (126.0) (121.7) (135.9) (137.6) (186.6)
Profit/(loss) before tax 22.6 (18.4) (221.2) (537.2) 2,093.2
Earnings/(loss) per share
Adjusted 32.6p 23.9p 16.3p 17.7p 27.4p
Basic 33.2p (12.5)p (71.8)p (146.5)p 365.7p
Ordinary dividends 12.0p 9.0p 7.0p 12.0p 22.2p
* Before amortisation of intangible assets and exceptional items
Financial calendar 2005
Record date for 2004 final dividend 29 March
Annual General Meeting 12 May
Final dividend payment date 26 May
Announcement of interim results 27 July
Interim dividend payment date October
Five year financial summary
  87
In accordance with European Union regulations, United is required to prepare its financial statements for the year ending 31 December 2005 in accordance
with International Financial Reporting Standards (“IFRS”). The group is also required to present comparative information for the year ended 31 December
2004 in accordance with IFRS.
To assist shareholders in understanding this change in the basis of preparation of the group’s financial statements, the tables below set out reconciliations
from UK GAAP to IFRS for profit attributable to members for the year ended 31 December 2004, together with a reconciliation of shareholders’ funds from
UK GAAP to IFRS as at 1 January 2004 and as at 31 December 2004. These reconciliations set out all significant differences which are expected to result
from the conversion from UK GAAP to IFRS.
The reconciliations are unaudited: they do not form part of the audited financial statements for the year ended 31 December 2004 and are included for
guidance purposes only. It should be noted that the actual IFRS profit and shareholders’ equity which will be presented as part of the comparative
information to be shown in the financial statements for the year ending 31 December 2005 may differ from the amounts shown below as a result of further
implementation guidance or industry interpretations. It should also be noted that the format of the published financial statements will change as a result of
the adoption of IFRS.
The IFRS restatement may also be amended as a result of future rulings by the US Securities and Exchange Commission, who may require foreign registrants
to file two years of comparative information under IFRS in the 20-F filing for the year ending 31 December 2005. This would require the group to adopt
IFRS with effect from 1 January 2003; the information presented below is based on a transition date of 1 January 2004.
United is taking advantage of the exemption not to apply IFRS 32 and IFRS 39 until 1 January 2005, and as such no adjustments relating to these Standards
have been included.
Group profit and loss account
2004
Note £m
Profit for the financial year attributable to members of the parent company as reported in accordance with UK GAAP 111.3
Adjustments:
Amortisation of goodwill 1 126.0
Amortisation of intangible assets 2 (3.1)
Share-based payments 3 (1.5)
Investments accounted for using the equity method 4 1.7
WIP overheads 5 0.4
Pensions 6 0.1
Taxation 7 0.9
Profit in accordance with IFRS 235.8
Group balance sheet
31 December 1 January
2004 2004
Note £m £m
Shareholders funds as reported in accordance with UK GAAP 180.3 124.7
Adjustments:
Goodwill 1 126.0 –
Intangible assets 2 (3.1) –
Investments accounted for using the equity method 4 1.7 –
WIP overheads 5 (0.9) (1.3)
Dividend creditor 8 28.5 19.5
Pension liability 6 (0.8) (0.9)
Deferred taxation 7 0.9 –
Total equity in accordance with IFRS 332.6 142.0
Unaudited Reconciliation of differences between UK GAAP and International
Financial Reporting Standards (IFRS)
  88
1. Goodwill
Under IFRS, goodwill on acquisitions is no longer amortised, but is held at its UK GAAP carrying value at the transition date and is then subject to an annual
impairment review. The adjustment made reflects the reversal of amortisation under UK GAAP during 2004.
2. Amortisation of intangible assets
IFRS requires separable intangible assets that are acquired as part of a business acquisition to be identified separately from goodwill. These assets are
amortised over their useful lives. United has taken advantage of the transition exemption which allows the identification of intangible assets to be applied
only to those acquisitions which have taken place since the transition date. The adjustment represents an initial estimate of the amortisation charge in
respect of the intangible assets acquired as part of the group’s 2004 acquisitions.
3. Share-based payments
Under IFRS 2, the fair value of share options and other share-based payments is recognised as an expense through the profit and loss account over the
expected period through to the expected date of exercise. The Standard requires recognition of the fair value of all share-based payments granted from
November 2002 onwards. In determining the impact on the profit and loss account for 2004, the cost as calculated under IFRS 2 has been partially offset by
existing charges made in respect of the group’s MTIP and SEEPP arrangements.
4. Investments accounted for using equity method
Certain investments, which have been accounted for by the group as fixed asset investments under UK GAAP since 2001, will be equity accounted under IFRS.
5. Work in progress valuation
Under UK GAAP, it is acceptable for the valuation of work in progress to include attributable overheads. Under IFRS, the valuation of work in progress is
restricted to direct costs incurred.
6. Pension liability
There are differences between the methodologies for the valuation of pension scheme assets under IFRS compared to FRS 17; under IFRS, equity investments
are valued on a bid value basis, whereas FRS 17 uses the mid-point valuation.
7. Deferred Taxation
Under IFRS, a deferred tax liability is recognised on the difference between the balance sheet amount of intangible assets acquired as part of the group’s
2004 acquisitions and the tax base of the intangible assets. Goodwill is grossed up by an equivalent amount and there is therefore no adjustment to net
assets on recognition. The adjustment represents the reversal of this deferred tax liability due to the amortisation of the intangible assets during 2004.
8. Dividend creditor not accrued under IFRS
Under IFRS, the liability for dividends is not recognised until a formal obligation arises. As a result, the final dividend in respect of a particular year will not
normally be recognised under IFRS until the following year.
Unaudited Reconciliation of differences between UK GAAP and International
Financial Reporting Standards (IFRS)
  Registered office and registered number
Ludgate House
245 Blackfriars Road
London
SE1 9UY
Registered Number 152298
Registrars
All enquiries regarding shareholder administration including dividends, lost share certificates or changes of address should be communicated in writing, quoting
United Business Media’s company reference number 0239 to the following address:-
Lloyds TSB Registrars
The Causeway
Worthing
West Sussex
BN99 6DA
Tel: 0870 600 3970
Shareholders can also view their shareholdings online by registering at www.shareview.co.uk.
Investor relations and general enquiries
For all investor relations and general enquiries about the company, please contact our group communications department at the registered office as shown above
or telephone 020 7921 5000.
Requests for further copies of our annual report and accounts can be made via our website www.unitedbusinessmedia.com - or by telephoning the company
secretary’s office on the number given above.
Capital Gains Tax
The market value of United Business Media plc’s shares on 31 March 1982 was 165 pence. The adjusted market value for shares acquired prior to 31 March 1982 which
participated in the rights issues of November 1983 and June 1993 is 232.5 pence. The market quotations of the company’s ordinary shares and ICAP plc (previously
Garban plc) ordinary shares for 17 November 1998, being the first day of dealing following ICAP’s demerger from the company were as follows:-
United Business Media plc ordinary shares of 25 pence – 638 pence
ICAP plc ordinary shares of 50 pence – 217 pence
The market values of United Business Media plc’s ordinary shares of 25 pence and B shares on 23 April 2001 following the capital reorganisation were as follows:-
Ordinary shares of 25 pence – 693 pence
B shares – 245 pence
Share Listings
The ordinary and B shares are listed on The London Stock Exchange. The symbols are, respectively UBM and UBMb.
Shareholder profile as at 31 December 2004
Holdings No. of holders Percentage of holders No. of shares Percentage of issued capital
1 – 1,000 8,623 70.46 3,052,398 0.91
1,001 – 5,000 2,587 21.14 5,230,695 1.56
5,001 – 50,000 600 4.90 9,966,410 2.96
50,001 – 1,000,000 366 2.99 94,948,528 28.24
Over 1,000,000 62 0.51 222,987,297 66.33
12,238 100.00 336,185,328 100.00
Shareholder Information
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