Turnover

Group turnover (including share of joint ventures) for the year of £439.9 million increased by 4.6% on last year after adjusting for the sale of the Group's share of GMG Endemol Entertainment plc. Advertising revenue (excluding joint venture operations) increased by 8.7% to £252.7 million. Newspaper revenue in National Newspaper and Regional Newspaper divisions recorded a decline of 3.2% and 7.5% respectively.

Profits

The significant event in the financial year ended 1st April 2001 occurred in May 2000, when Hurst Publishing Group Limited acquired Auto Trader Holdings Limited from the Group. The consideration for this transaction comprised a 48% interest in Hurst Publishing Group Limited, which is now trading as Trader Media Group Limited.

Prior to the sale of Auto Trader Holdings Limited to Hurst Publishing Group Limited, the Group held its Auto Trader operations through subsidiaries, joint ventures and associates. The Group's holding in Trader Media Group is now accounted for as a joint venture. The impact of this change of accounting is set out in the table below:

Underlying these results is a significant revenue investment of over £34.0 million (2000 £7.0 million) in further development of the Group's internet activities.

The Group generated a net profit of £26.1 million (2000 £16.0 million) on the sale/closure of operations, principally arising from the proceeds of the sale of the Group's share of GMG Endemol Entertainment plc. Income from investments and net interest receivable totalled £11.8 million (2000 £10.1 million), giving an overall Group profit before taxation of £67.3 million (2000 £73.5 million).

Taxation

The Group taxation charge of £25.2 million (2000 £22.3 million) represents a 37% charge on Group profits. The sale of Auto Trader Holdings Limited and the financing of Trader Media Group Limited have resulted in a structural increase in the tax charge.

Treasury policy

Funds are deposited with a number of leading UK and international banks. Interest rates on deposits are fixed for the term of the deposits. The Group's international activities and foreign exchange exposure are limited. As at 1st April 2001, the Group had no debt other than £7.4 million of finance leases (2000 £7.7 million) of which only £0.3 million is repayable within one year, and funds on deposit of £178.0 million (2000 £165.0 million). Interest rates on the majority of leases are at floating rates.

Cash flow

The Group generated £18.2 million of cash in the year (2000 £39.0 million). Net cash inflow from continuing operating activities amounted to £19.9 million (2000 £57.8 million). Cash inflows also included net interest and dividends of £20.2 million (2000 £9.5 million) and net proceeds from acquisitions and disposals of £19.7 million (2000 £8.7 million outflow). Cash outflows comprised mainly tax of £16.7 million (2000 £23.4 million), and net capital expenditure of £18.5 million (2000 £13.8 million). Major capital projects in the year included the installation of a new press for the Regional Newspaper Division at Reading which will be completed during 2001/2002. In summary, cash inflow, before management of liquid resources and financing, amounted to £18.2 million (2000 £39.0 million).

Balance sheet

As at 1st April 2001, the Group had net assets of £327.6 million, an increase of £42.6 million on last year. Working capital showed a net decrease of £3.4 million. The Group continues to be in a strong financial position, with net funds of £193.5 million, an increase of £18.0 million over the previous year.

Nick Castro