FORM 6 - K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the Month of May 2003
CORDIANT COMMUNICATIONS GROUP PLC
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(Translation of registrant's name into English)
121-141 Westbourne Terrace
London W2 6JR
England
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F__X_ Form 40-F____
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes____ No__X_
If "Yes" is marked, indicate below the File Number assigned to the registrant in
connection with Rule 12g3-2(b): _________.
FORWARD LOOKING AND CAUTIONARY STATEMENTS
-----------------------------------------
This report contains certain "forward looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Generally, the
words "believe," "may," "will," "estimate," "continue," "anticipate," "intend,"
"expect" and similar expressions identify forward looking statements. The
Registrant has based these forward looking statements largely on its current
expectations and projections about future events and financial trends affecting
its business. These forward looking statements include statements relating to
trends in the advertising and marketing services industry, particularly with
respect to anticipated advertising expenditures in the world's advertising
markets. Actual advertising expenditures may differ materially from the
estimates contained therein depending on, among other things, regional, national
and international political and economic conditions, technological changes, the
availability of media and regulatory regimes in the world's advertising markets.
Additionally, this report contains a number of "forward looking statements"
relating to the Registrant's performance. The Registrant's actual results could
differ materially from those anticipated, depending on, among other things,
gains to or losses from its client base, the amount of revenue derived from
clients, the Registrant's exposure to changes in the exchange rates of major
currencies against the pound sterling (because a substantial portion of its
revenues are derived and costs incurred outside of the United Kingdom), the
general level of advertising expenditures in the Registrant's markets referred
to above and the overall level of economic activity in the Registrant's major
markets as discussed above. The Registrant's ability to reduce its fixed cost
base in the short term is limited and therefore its trading performance can be
significantly affected by variations in the level of its revenues.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CORDIANT COMMUNICATIONS GROUP PLC
(Registrant)
By: /s/ David Hearn
Title: Director and Chief Executive Officer
Date: May 1, 2003
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Exhibit 1
CORDIANT COMMUNICATIONS GROUP PLC
("Cordiant")
PRELIMINARY AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002
o Revenues down 11.3% on an underlying basis to(pound)532.7 million
(2001:(pound)605.0 million).
o Operating expenses* cut by 12.2% on an underlying basis to(pound)495.7
million (2001:(pound)568.5 million).
o Operating profit* up 1.4% to(pound)37.0 million. Operating margin*
increased to 6.9% from 6.0% in 2001.
o Restructuring plan announced in September 2002 now complete with
annualised cost savings in excess of(pound)45.0 million,(pound)18.0
million ahead of plan.
o Exceptional operating expenses of(pound)45.6 million, exceptional
goodwill impairment of(pound)171.1 million, goodwill amortisation
(pound)28.9 million.
o Reported pre-tax loss of(pound)228.2 million (2001:(pound)270.8
million loss).
o Adjusted headline earnings* per share stable at 3.6p (2001: 3.6p).
o Agreement in principle with lenders on continuing financing
arrangements.
30 April 2003
Enquiries:
Cordiant Tel: +44 207 457 2020
David Hearn
Andy Boland
College Hill Tel: +44 207 457 2020
Alex Sandberg
Adrian Duffield
______________
* Shown pre-goodwill amortisation and impairment and pre-exceptional operating
expenses.
Conference Calls: There will be a telephone conference call with David Hearn,
Chief Executive and Andy Boland, Finance Director at 1000hrs UK time (0500hrs NY
time). To participate please dial the following number +44 (0) 207 162 0182. A
replay facility is in place for 48 hours
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immediately following the conference call. To activate, dial the following
number +44 (0) 208 288 4459 using the PIN number 633442.
Forward-looking statements: This press release contains certain "forward-
looking statements" and information that are based on the current expectations,
estimates and projections of Cordiant's management and information currently
available to Cordiant. These statements are not guarantees of future performance
and involve certain risks and uncertainties that are difficult to predict. In
addition, some forward-looking statements are based upon assumptions as to
future events that may not prove to be accurate. These statements typically
contain words such as "intends", "expects", "projects", "anticipates",
"estimates", "will" and words of similar import and, in this release, include
statements relating to Cordiant's revenues, profitability, debt restructuring,
asset disposals and cost reduction programme. Cordiant's actual performance
could differ materially from that anticipated depending on, among other things,
gains to or losses from its client base, the amount of revenue derived from
clients, the challenges of managing Cordiant's global operations, including
Cordiant's exposure to changes in the exchange rates of major currencies against
the pound sterling, the general level of advertising expenditures in Cordiant's
markets, the overall level of economic activity in Cordiant's major markets, the
restrictions imposed by Cordiant's indebtedness, Cordiant's ability to
restructure its existing indebtedness, employee costs, the loss of key
personnel, future interest rates, changes in tax rates and other regulations
that affect Cordiant's businesses, and other factors discussed from time to time
in Cordiant's public filings with the U.S. Securities and Exchange Commission,
including Cordiant's Annual Report on Form 20-F. Many of the factors named above
are macroeconomic in nature and are, therefore, beyond the control of Cordiant's
management. Should one or more of these risks or uncertainties materialise, or
should underlying assumptions prove incorrect, actual performance may vary
materially from those described herein as anticipated, believed, estimated,
expected, intended, planned or projected. Cordiant does not intend, and does not
assume any obligation, to update the forward- looking statements contained in
this document.
PRELIMINARY STATEMENT
Throughout this narrative review, references to operating expenses, operating
profit, operating margin and earnings have been disclosed before goodwill
amortisation and impairment and before exceptional operating charges, to
highlight the ongoing performance of the Group's operations.
INTRODUCTION
Despite the challenging trading conditions throughout 2002. Group operating
profits increased by 1.4% to (pound)37.0 million as cost savings offset an 11.9%
decrease in reported revenues to (pound)532.7 million. The significant steps
taken to reduce operating expenses fully mitigated the revenue decline,
increasing the Group's operating margin to 6.9% from 6.0% in 2001.
The restructuring plan implemented in the fourth quarter of 2002 has yielded
annualised savings in excess of (pound)45.0 million, the benefit of which will
be realised in 2003.
Cordiant was notified on Friday 25 April 2003 by one of its major clients,
Allied Domecq plc, of its intention to terminate its contract with Cordiant with
effect from October 2003. In the current financial year Cordiant had budgeted
for revenue from this global contract of approximately (pound)18.0 million, some
3.4% of the Group's revenue in 2002. The direct impact of this client loss on
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revenue in 2003 is not expected to be material, although the Group will incur
associated restructuring costs in the current year. However, there will be a
substantial impact on operating profit from 2004 onwards.
Following Allied Domecq's decision, and particularly with the interests of the
Group's clients in mind, the Board of Cordiant is actively investigating
alternative strategic options for the Group, in addition to the disposal
programme previously announced, which is progressing well.
The financial statements have been presented on a going concern basis. However
until the outcome of the Group's evaluation of strategic options, and the
implications of this for the Group's future funding structure are known, there
is considerable uncertainty about the appropriateness of this basis of
presentation. Attention is drawn to Note 1 of this statement which explains the
basis of preparation of the of the financial information and the form of the
auditor's report.
Bates Group established
In order to meet the increasing demand from clients and enhance its competitive
offering, the Bates Group was established through the integration of advertising
network Bates Worldwide, marketing services network 141 Worldwide, branding and
design group Fitch Worldwide and specialist network Healthworld. This
integration has maintained the brands of the individual networks so that
specialist skills can also continue to be accessed by clients on a stand-alone
basis as required.
It is encouraging to note that those companies that comprise the Bates Group
achieved a significant improvement in operating performance in 2002, with
operating profits increasing by 43.7% to (pound)32.9 million from (pound)22.9
million in 2001. Bates Group operating costs were cut by (pound)69.0 million to
(pound)421.3 million in 2002, more than mitigating the significant revenue
decline, as each network benefited from the restructuring action taken in 2001
and the constant focus on tight cost control that was maintained throughout
2002. Almost all of the (pound)45.0 million cost reduction achieved through the
restructuring implemented in the final quarter of 2002 was achieved within the
Bates Group.
The Bates Group's revenue performance reflects the downturn that has impacted
the media sector over the last 24 months, together with the impact of the US
client losses that alone represented 1.7% of the Bates Group's 10.2% underlying
revenue decline in 2002.
New Management team in place
The appointment of Nigel Stapleton as non-Executive Chairman on 1 March 2003
followed the appointments of David Hearn as Group Chief Executive and Andy
Boland as Finance Director on 1 January 2003. This new Board team brings a new
perspective to the business combined with strong relevant experience.
FINANCIAL REVIEW
In the sections that follow the Group's revenue performance has been disclosed
on a reported basis and on an underlying basis, meaning at constant exchange
rates and after comparing revenues generated in the most recent year by acquired
companies, to revenues generated by such companies in the preceding year
assuming that such companies had been owned for an equivalent period in the
preceding year.
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The Group's percentage change in operating expenses has been disclosed on a
reported basis and on an underlying basis as defined above.
Group operating performance
On a reported basis, operating profits increased by 1.4% to (pound)37.0 million
in 2002, despite revenues declining by 11.9% to (pound)532.7 million principally
as a result of the weak trading conditions across the Group's major markets. The
modest operating profit improvement is attributable to a significant reduction
in the Group's operating expenses which declined by 12.8% to (pound)495.7
million in 2002.
Management's action to restructure the Group's cost base successfully countered
the market downturn generating an improved operating margin of 6.9%, up from
6.0% in 2001. On an underlying basis revenues decreased by 11.3% and operating
expenses by 12.2%.
The Group's operating loss after goodwill amortisation, exceptional goodwill
impairment charges and exceptional operating expenses was (pound)208.6 million,
compared to a loss of (pound)260.0 million in 2001.
Business segment analysis
Advertising and Integrated Marketing
Advertising and Integrated Marketing operating expenses were cut by 11.8% on an
underlying basis to counter the 9.0% underlying revenue decline in 2002. The
benefits of the restructuring action are clearly evident as reported operating
profits increased 60.4% to (pound)27.1 million. Operating margins improved to
6.6% from 3.7% in 2001. On a reported basis, revenues declined by 10.5% and
operating expenses were reduced by 13.2%.
Advertising and Integrated Marketing represents the combined results of Bates
Worldwide, 141 Worldwide and Scholz & Friends.
Specialist Communications
Specialist Communications revenues decreased by 18.1% on an underlying basis to
(pound)122.6 million, reflecting reduced activity levels in branding and design,
pricing pressure in healthcare in North America, and the impact of reduced
capital markets activity on project-related assignments in business
communications. Despite the steps taken to reduce operating expenses by 13.8% on
an underlying basis, the significant revenue decline resulted in reported
operating profits decreasing to (pound)9.9 million from (pound)19.6 million in
2001. Operating margins fell to 8.1% from 13.3% in 2001. On a reported basis,
revenues declined by 16.6% and operating expenses declined by 11.5%.
Specialist Communications represents the combined results of Healthworld,
Fitch:Worldwide and FD International.
Geographical analysis
2002 witnessed an unprecedented second year of declining marketing expenditures
in the majority of the world's markets. The industry slowdown is clearly evident
in the revenue decline in each of the Group's geographical regions. However,
significant management action throughout 2002 to restructure the Group's cost
base successfully countered the challenging market conditions and enabled the
Group to report an improvement in operating profit and
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margin. In North America, extensive cost reductions only partially mitigated the
impact of both client losses and the prevailing macroeconomic factors.
United Kingdom
Reported revenues declined by 6.9%, and by 10.5% on an underlying basis, to
(pound)110.4 million, principally due to reduced activity at the Group's
branding, design, business communications and field marketing operations, which
was only partly offset by growth from the advertising and sales promotion
agencies.
Operating expenses decreased by 8.5% to (pound)96.0 million. On an underlying
basis, operating expenses decreased by 11.2%. Operating profits totalled
(pound)14.4 million, with operating margins of 13.0% up from 11.6% in 2001 as a
result of tight cost control.
North America
Reported revenues decreased by 25.0%, and by 21.9% on an underlying basis, to
(pound)142.8 million, primarily as a result of the lower levels of activity in
the Specialist Communications businesses and the impact of client losses in the
advertising business.
Operating expenses fell by 23.7%, and by 20.7% on an underlying basis, to
(pound)135.8 million. Operating profits totalled (pound)7.0 million with
operating margins decreasing to 4.9% from 6.5% in 2001. While margins have
declined in the year, the significant reduction in operating expenses is
expected to improve operating margins in 2003.
Continental Europe
Reported revenues declined by 5.8% to (pound)135.2 million. On an underlying
basis revenues declined by 8.6%, reflecting significant reductions in client
spending in response to the difficult macroeconomic conditions experienced by
the region in 2002.
Operating expenses decreased by 4.8%, and by 7.8% on an underlying basis, to
(pound)131.2 million. Operating profits totalled (pound)4.0 million, with
operating margins decreasing to 3.0% from 4.0% in 2001 principally due to
reduced profitability at Scholz & Friends, and losses in the Group's
Scandinavian operation. As a result, the Group's Scandinavian business was
restructured during the year and operating expenses substantially reduced.
Asia Pacific and Latin America
Reported revenues decreased by 5.4%, and by 1.4% on an underlying basis, to
(pound)144.3 million. Growth in Brazil and many Asian markets has been offset by
reduced spending in Korea and Greater China.
Operating expenses decreased by 10.2% to (pound)132.7 million. On an underlying
basis operating expenses were reduced by 7.4%. Operating profits totalled
(pound)11.6 million, with operating margins up to 8.0% from 3.1% in 2001,
primarily reflecting cost reductions in the Group's Australian and Korean
operations.
Exceptional operating expenses
In September 2002, Cordiant announced a wide-ranging programme to reduce costs
and the formation of the Bates Group. These initiatives have delivered cost
savings through reduced staff costs, the co- location of operations, elimination
of duplicated support functions and the closure or sale of under-performing
operations.
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As a result of the Bates Group integration and other cost reduction actions, the
Group incurred exceptional operating expenses of (pound)45.6 million.
Exceptional operating expenses include (pound)21.6 million of severance costs,
including costs related to senior management changes, (pound)20.5 million
attributable to relocation costs, property provisions, asset write-downs,
disposals and closure costs, and (pound)3.5 million relating to exceptional
financing expenses from the refinancing that was completed in April 2002.
Of the exceptional expense incurred in the year ended 31 December 2002, the
total cash impact is expected to be (pound)41.9 million. The cash outflow with
respect to the 2002 exceptional expense was (pound)12.8 million in 2002, with
(pound)21.1 million expected in 2003 and (pound)8.0 million expected, in total,
in 2004 and subsequent years.
Goodwill amortisation and impairment
The full year goodwill amortisation charge in 2002 was (pound)28.9 million. In
addition to an annual amortisation charge, the Group has conducted a review of
the carrying value of goodwill on its balance sheet. The impact of a second year
of economic slowdown on the marketing communications sector has resulted in the
carrying value of goodwill capitalised in respect of certain acquisitions being
impaired. The exceptional goodwill impairment charge for 2002 was (pound)171.1
million.
The net carrying value of purchased goodwill at 31 December 2002 amounted to
(pound)263.5 million. Purchased goodwill is amortised on a straight- line basis
over its useful economic life of up to twenty years.
Operating costs
The number of staff employed by the Group as at 31 December 2002 was 8,019,
compared to 9,099 at the start of the year, showing a net decrease of 11.9%.
During the year, gross headcount reductions through severance were 894, which
represented 9.8% of opening headcount. Revenue per head was (pound)62,000 in
2002, a decrease of 1.4% at constant exchange rates. Total staff costs per head
(excluding severance) were (pound)39,900 in 2002, a decrease of 3.3% at constant
exchange rates.
The Group's total staff cost to revenue ratio, excluding severance, decreased to
64.4% in 2002, from 65.6% in 2001. Fixed staff costs as a proportion of revenue
decreased to 59.3% in 2002, from 60.3% in 2001. In 2002 variable staff costs as
a proportion of revenue decreased to 5.1% from 5.3% in 2001.
Joint ventures and associates
The Group's share of joint ventures' and associates' operating profits (before
goodwill amortisation of (pound)1.9 million) was (pound)5.3 million in 2002. The
Group's share of Zenith Optimedia's operating profits decreased to (pound)3.8
million from (pound)5.1 million in 2001.
Financial items, taxation and returns attributable to shareholders
Net financing costs totalled (pound)21.4 million, and include the Group's share
of joint venture and associated undertakings interest income, and imputed
interest charged in accordance with FRS 12. The 26.6% increase on 2001 is
primarily due to the increased financing costs arising from the renegotiation of
the Group's banking arrangements in April 2002.
The tax charge for the year was (pound)1.4 million. Equity minority interests
totalled (pound)4.0 million up from (pound)2.3 million in 2001, due to an
improved result in Korea and Brazil.
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The reported loss, after goodwill amortisation, exceptional goodwill impairment
charges and exceptional operating expenses, attributable to Ordinary
shareholders was (pound)233.6 million. Earnings attributable to Ordinary
shareholders before goodwill amortisation, exceptional goodwill impairment
charges, amounts written off investments and tax-effected exceptional operating
expenses were (pound)14.4 million. Adjusted headline earnings per share were
3.6p in 2002, compared to 3.6p in 2001. In accordance with FRS 14 "Earnings per
share", share options and contingent consideration have no dilutive effect as a
result of the basic loss per share.
Cash flow and funding
As at 31 December 2002 the Group had a net debt balance of (pound)151.7 million
and average net debt for the year was (pound)174.2 million. In 2001 average net
debt was (pound)171.0 million. The modest increase in average net debt is
principally due to the exceptional cash operating expenses in the second half of
2002 and an increased investment in working capital following the loss of the
Hyundai media account in the US, partly mitigated by operational cash inflows
and the effect of exchange movements.
Net operating cash inflow for the Group (defined as operating profit
pre-exceptional expenses plus depreciation, goodwill amortisation and
impairment, less returns on investment and servicing of finance and taxation
paid) totalled (pound)25.3 million. Net capital expenditure and financial
investment totalled (pound)5.3 million. Net cash outflow from acquisitions and
disposals was (pound)8.4 million. Utilisation of property provisions totalled
(pound)4.4 million. In 2002, the net cash outflow from exceptional items was
(pound)25.8 million.
Pensions
Cordiant has continued to apply the transitional rules under FRS 17 "Retirement
benefits". There is no material impact on the Group's financial statements.
Financing arrangements
In February 2003 the Group commenced negotiations with its principal lenders
designed to reset the terms of its principal lending facilities consistent with
current trading conditions and the planned disposal programme. Prior to the
agreement of new financing terms with its lenders expected on 29 April 2003,
Allied Domecq plc notified Cordiant of its intention to terminate its contract
with the Group with effect from October 2003.
Following Allied Domecq's decision, Cordiant is now working constructively with
its lenders to amend the financing terms. Discussions with the lenders have
progressed well and Cordiant has reached an agreement in principle, subject to
contract, for continuing financing arrangements to 15 July 2003 whilst the Board
concludes its review of the various strategic options and agrees new financing
terms consistent with the outcome of that process. These financing arrangements
incorporate a waiver of existing financial covenants and continued access to
existing committed undrawn facilities. Cordiant expects to make a further
announcement once documentation has been signed.
Disposals
The Group has embarked on a disposal programme of certain non-core businesses to
focus its business on the core Bates Group. The disposal proceeds will be used
to strengthen the Group's balance sheet by reducing debt.
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The businesses being considered for disposal by the Group as part of this
programme, assuming satisfactory terms can be agreed upon, are a majority stake
in its Australian operations, FD International, and the 77% stake in Scholz &
Friends. The Board intends to exercise its option to sell its 25% stake in the
Zenith Optimedia Group in January 2004.
Dividend
The Group is not in a position to make a dividend payment in respect of 2002.
People
Both 2001 and 2002 have been very difficult years for Cordiant and the sector.
The Group's improved performance in 2002 has been delivered through the
exceptional efforts of staff. The commitment and loyalty of staff during a
difficult period for the industry and the Group is much appreciated by the
Board.
Outlook
The Group's management and staff remain fully committed to delivering a
continuing and further improved service to clients around the world. The
Directors remain focused on building on the benefits of the restructuring
implemented in the final quarter of 2002. It is already evident in the Group's
operating result in the first quarter of the current year that the benefits from
the restructuring are flowing through. Whilst continuing to work constructively
with the Group's lenders, the Directors are actively investigating a range of
strategic options that will provide the best outcome for all the stakeholders in
the business.
CORDIANT COMMUNICATIONS GROUP PLC
CONSOLIDATED PROFIT & LOSS ACCOUNT
2002 2001
Note (pound)m (pound)m
----------- ------------ -----------
Group revenue 2 532.7 605.0
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Operating expenses before goodwill amortisation, exceptional goodwill 2 (495.7) (568.5)
impairment charges and exceptional operating expenses
Goodwill amortisation 11 (28.9) (44.1)
Exceptional goodwill impairment charges 11 (171.1) (224.8)
Exceptional operating expenses 3 (45.6) (27.6)
--------------------------------------------------------------------------------- ----------- ------------ -----------
Total operating expenses (741.3) (865.0)
--------------------------------------------------------------------------------- ----------- ------------ -----------
Group operating profit before goodwill amortisation, exceptional goodwill 37.0 36.5
impairment charges and exceptional operating expenses
Goodwill amortisation, exceptional goodwill impairment charges and exceptional (245.6) (296.5)
operating expenses
--------------------------------------------------------------------------------- ----------- ------------ -----------
Group operating loss (208.6) (260.0)
Share of operating profits:
--------------------------------------------------------------------------------- ----------- ------------ -----------
Joint ventures 3.8 5.1
Associated undertakings 1.5 1.4
Goodwill amortisation on joint ventures (1.9) (0.4)
--------------------------------------------------------------------------------- ----------- ------------ -----------
3.4 6.1
------------ -----------
Loss on ordinary activities before interest and tax (205.2) (253.9)
Net interest payable and similar items 4 (20.8) (16.0)
FRS 12 - finance charge (0.6) (0.9)
Amount written off investments (1.6) -
------------ -----------
Loss on ordinary activities before tax (228.2) (270.8)
Tax on loss on ordinary activities 5 (1.4) (4.5)
------------ -----------
Loss on ordinary activities after tax (229.6) (275.3)
Equity minority interests (4.0) (2.3)
------------ -----------
Retained loss for the financial year (233.6) (277.6)
============ ===========
--------------------------------------------------------------------------------- ----------- ------------ -----------
Basic and diluted loss per Ordinary share 7 (57.6)p (71.3)p
Basic and diluted headline loss per Ordinary share 7 (7.4)p (2.1)p
Adjusted basic and diluted headline earnings per Ordinary share 7 3.6p 3.6p
--------------------------------------------------------------------------------- ----------- ------------ -----------
The results for 2002 and 2001 are all derived from continuing operations.
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CORDIANT COMMUNICATIONS GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT
2002 2001
Note (pound)m (pound)m
--------------------------------------------------------------------------------- ----------- ------------ -----------
Net cash inflow from operating activities 8 20.4 43.4
Dividends from associated undertakings and joint ventures 2.0 5.3
Returns on investments and servicing of finance 9 (23.8) (17.2)
Taxation 9 (4.7) (13.4)
Capital expenditure and financial investment 9 (5.3) (24.7)
Acquisitions and disposals 9 (8.4) (13.6)
Equity dividends paid - (8.1)
------------ -----------
Cash outflow before financing (19.8) (28.3)
------------ -----------
Management of liquid resources 9 0.2 0.6
Issues of ordinary share capital - 4.1
External loans drawn less repaid (4.3) (70.1)
Guaranteed senior notes due after one year - 119.9
Capital element of finance lease payments (0.9) (1.7)
------------ -----------
Net cash (outflow)/ inflow from financing (5.0) 52.8
------------ -----------
(Decrease)/ increase in cash for the year (24.8) 24.5
============ ===========
Reconciliation of net cash flow to movement in net debt
(Decrease)/ increase in cash for the year (24.8) 24.5
Cash outflow/ (inflow) from debt financing 5.2 (48.7)
Cash inflow from cash deposits (0.2) (0.6)
Loans acquired with subsidiaries - (6.8)
Translation difference and non-cash movements 11.1 0.5
------------ -----------
Movement in net debt in the year 10 (8.7) (31.1)
Net debt at beginning of year (143.0) (111.9)
------------ -----------
Net debt at end of year 10 (151.7) (143.0)
============ ===========
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
2002 2001
Note (pound)m (pound)m
--------------------------------------------------------------------------------- ----------- ------------ -----------
Loss attributable to Ordinary shareholders 14 (233.6) (277.6)
Translation adjustment (6.1) 3.7
Unrealised gain on disposal of joint venture and subsidiary undertaking - 44.4
------------ -----------
Total recognised losses relating to the year (239.7) (229.5)
Prior year adjustment recognised in prior year accounts on adoption of - 4.1
FRS 19
Total recognised losses since previous annual report (239.7) (225.4)
============ ===========
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CORDIANT COMMUNICATIONS GROUP PLC
CONSOLIDATED BALANCE SHEET
2002 2001
Note (pound)m (pound)m
--------------------------------------------------------------------------------- ----------- ------------ -----------
Fixed assets
Intangible assets - goodwill 11 263.5 478.3
Tangible assets 41.4 60.6
Investments 15.8 17.9
Investments in joint ventures
--------------------------------------------------------------------------------- ----------- ------------ -----------
Share of gross assets 148.9 152.9
Goodwill 36.8 38.2
Share of gross liabilities (158.7) (164.9)
--------------------------------------------------------------------------------- ----------- ------------ -----------
27.0 26.2
------------ -----------
347.7 583.0
Current assets
Work in progress 24.6 24.8
Debtors - due within one year 338.3 418.3
Debtors - due after one year 22.1 27.4
Investments 0.7 0.9
Cash at bank and in hand 10 96.0 123.5
------------ -----------
481.7 594.9
Creditors - due within one year 12 (454.6) (556.3)
------------ -----------
Net current assets 27.1 38.6
------------ -----------
Total assets less current liabilities 374.8 621.6
Creditors - due after one year 12 (251.8) (264.0)
Provisions for liabilities and charges 13 (42.1) (40.5)
------------ -----------
Net assets 80.9 317.1
============ ===========
Capital and reserves
Called up share capital 14 205.3 200.4
Share premium account 14 174.4 178.4
Other reserves 14 119.9 214.4
Profit and loss account 14 (430.1) (286.4)
------------ -----------
Equity shareholders' funds 69.5 306.8
Equity minority interests 11.4 10.3
------------ -----------
Total capital employed 80.9 317.1
============ ===========
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CORDIANT COMMUNICATIONS GROUP PLC
NOTES
1. Accounting policies and presentation
Basis of preparation
In February 2003 the Group commenced negotiations with its principal lenders
designed to reset the terms of its principal lending facilities consistent with
current trading conditions and the planned disposal programme. Prior to the
expected agreement of new financing terms on 29 April 2003 with its lenders, one
of its major clients, Allied Domecq plc, notified Cordiant of its intention to
terminate its contract with the Group with effect from October 2003. Whilst the
direct impact of this client loss on revenue in 2003 is not expected to be
material, the Group will incur associated restructuring costs in the current
year and there will be a substantial impact on operating profit from 2004
onwards.
Following Allied Domecq's decision, Cordiant is now working with its lenders to
amend the financing terms and in addition, the Board is also actively
investigating its strategic options for the Group which include, amongst other
actions, the realisation of value through disposals, and alternative financing
arrangements to reflect its revised circumstances.
Discussions with the lenders have progressed well and Cordiant has reached an
agreement in principle, subject to contract, for continuing financing
arrangements to 15 July 2003 whilst the Board concludes its review of strategic
options and agrees new financing terms consistent with the outcome of that
process. These financing arrangements incorporate a waiver of existing financial
covenants and continued access to existing committed undrawn facilities.
Cordiant expects to make a further announcement once documentation has been
signed.
The financial information set out in this preliminary announcement has been
presented on a going concern basis. However, until the outcome of the Group's
evaluation of its strategic options and negotiations with its lenders, and the
implications of this for the Group's future funding structure are known, there
is considerable uncertainty about the appropriateness of this basis of
presentation.
The financial information does not reflect any adjustments which would be
required if the going concern assumption was not appropriate. Given the
uncertainty described above it is not currently possible to determine the extent
and quantification of such adjustments but these might include the
reclassification of creditors due in more than one year to less than one year,
the write down of the carrying value of goodwill in the balance sheet to the
best estimate of its net realisable value on disposal, the write down of certain
assets carried on a value in use basis to net realisable value, and the
disclosure of or provision for additional liabilities.
The financial information set out in this preliminary statement does not
constitute the Company's statutory accounts for the years ended 31 December 2002
or 2001.
The financial information for 2002 is derived from the 2002 statutory accounts,
which will be delivered to the Registrar of Companies following Cordiant's
annual general meeting. The auditors have reported under s235 of the Companies
Act 1985 on the 2002 statutory accounts, but their report included the following
explanation of a limitation in the scope of their work:
-14-
"However, as explained above, the Directors are actively investigating
alternative strategic options for the Group in the light of the ongoing
negotiations with its principal lenders and the recently announced loss of
a major client. Since the Directors have not yet brought their
consideration of the various strategic options available to the Group to
the stage where the implications for the Group's future funding structure
and the extent and nature of any disposal programme to be put in place are
sufficiently clear, the evidence available to us was limited and in
consequence we were unable to carry out auditing procedures necessary to
obtain adequate assurance regarding the Directors' assessment of the
appropriateness of preparing the financial statements on a going concern
basis.
Any adjustments to the financial statements that would result from
preparing the financial statements on a basis other than that of a going
concern could have a significant impact on the assets and liabilities of
the company and the Group as at 31 December 2002 and on the results of the
Group for the year then ended."
together with the following disclaimer of opinion:
"Because of the significance of this limitation of evidence available to
us, as described above, we are unable to form an opinion as to whether the
financial statements give a true and fair view of the state of affairs of
the Company and the Group as at 31 December 2002 or of the loss of the
group for the year then ended."
and with the following statement under s237(3) of the Companies Act 1985:
"In respect solely of the limitation on our work relating to the
appropriateness of the going concern basis of preparation we have not
obtained all the information and explanations that we considered necessary
for the purpose of our audit."
The audit report does not contain a statement under s237(2).
The financial information for 2001 is derived from the 2001 statutory accounts,
which have been delivered to the Registrar of Companies. The auditors have
reported on the 2001 accounts and their report was unqualified and did not
contain a statement under s237 (2) or (3) of the Companies Act 1985.
-15-
2. Segmental information
Change
Change Constant Change
Revenue by business segment* 2002 2001 Reported Currency Underlying
(pound)m (pound)m % % %
-------------------------------------------- -------------- -------------- ------------- -------------- --------------
Advertising and Integrated Marketing 410.1 458.0 (10.5) (8.3) (9.0)
Specialist Communications 122.6 147.0 (16.6) (14.8) (18.1)
-------------- -------------- ------------- -------------- --------------
Total 532.7 605.0 (11.9) (9.9) (11.3)
============== ============== ============= ============== ==============
Margin
Operating profit by business segment** 2002 2001 2002 2001
(pound)m (pound)m % %
--------------------------------------------------------------- ------------- ------------- ------------ -------------
Advertising and Integrated Marketing 27.1 16.9 6.6 3.7
Specialist Communications 9.9 19.6 8.1 13.3
------------- ------------- ------------ -------------
Operating profit before goodwill amortisation, exceptional 37.0 36.5 6.9 6.0
goodwill impairment charges and exceptional operating
expenses
Goodwill amortisation and exceptional goodwill impairment (200.0) (268.9)
charges
Exceptional operating expenses (45.6) (27.6)
------------- -------------
Group operating loss (208.6) (260.0)
============= =============
Change
Change Constant Change
Revenue by geographical area* 2002 2001 Reported Currency Underlying
(pound)m (pound)m % % %
-------------------------------------------- -------------- ------------- -------------- -------------- --------------
United Kingdom 110.4 118.6 (6.9) (6.9) (10.5)
North America 142.8 190.3 (25.0) (21.8) (21.9)
Continental Europe 135.2 143.6 (5.8) (6.8) (8.6)
Asia Pacific and Latin America 144.3 152.5 (5.4) (0.4) (1.4)
-------------- ------------- -------------- -------------- --------------
Total 532.7 605.0 (11.9) (9.9) (11.3)
============== ============= ============== ============== ==============
Margin
Operating profit by geographical area** 2002 2001 2002 2001
(pound)m (pound)m % %
--------------------------------------------------------------- ------------- ------------- ------------ -------------
United Kingdom 14.4 13.7 13.0 11.6
North America 7.0 12.3 4.9 6.5
Continental Europe 4.0 5.8 3.0 4.0
Asia Pacific and Latin America 11.6 4.7 8.0 3.1
------------- ------------- ------------ -------------
Operating profit before goodwill amortisation, exceptional 37.0 36.5 6.9 6.0
goodwill impairment charges and exceptional operating
expenses
Goodwill amortisation and exceptional goodwill impairment (200.0) (268.9)
charges
Exceptional operating expenses (45.6) (27.6)
------------- -------------
Group operating loss (208.6) (260.0)
============= =============
-16-
The business segment analysis for 2001 has been restated to reflect the transfer
of certain businesses, including CCG.XM, between Advertising and Integrated
Marketing and Specialist Communications. The effect of this has been to increase
revenues and decrease operating profits for Advertising and Integrated Marketing
in 2001 by (pound)10.1 million and (pound)4.4 million and to decrease revenues
and increase operating profits for Specialist Communications in 2001 by
(pound)10.1 million and (pound)4.4 million respectively.
*Revenue growth in constant currency terms means that the revenues for the year
under review and the preceding year have been translated using the exchange
rates relating to the year under review. Constant currency growth therefore
eliminates the effects of changes in exchange rates. Revenue growth on an
underlying basis is calculated at constant exchange rates and for acquired
companies, revenues generated in the year under review are compared to revenues
generated in the preceding year assuming that such companies had been owned for
an equivalent period of the preceding year.
**Operating profit and operating margins are stated before goodwill
amortisation, exceptional goodwill impairment charges and exceptional operating
expenses.
The Bates Group was established in the final quarter of 2002. The table below
sets out the segmental results of the Group as if the Bates Group structure had
been in place for 2002 and 2001.
Change
Change Constant Change
Revenue by geographical area* 2002 2001 Reported Currency Underlying
(pound)m (pound)m % % %
-------------------------------------------- -------------- ------------- -------------- -------------- --------------
United Kingdom 86.4 88.9 (2.8) (2.8) (7.5)
Americas 145.7 190.4 (23.5) (18.5) (18.6)
Continental Europe 96.3 101.1 (4.7) (5.6) (6.6)
Asia Pacific 125.8 132.8 (5.3) (3.4) (3.4)
-------------- ------------- -------------- -------------- --------------
Bates Group 454.2 513.2 (11.5) (9.1) (10.2)
Other businesses 78.5 91.8 (14.5) (14.1) (17.1)
-------------- ------------- -------------- -------------- --------------
Total 532.7 605.0 (11.9) (9.9) (11.3)
============== ============= ============== ============== ==============
Margin
Operating profit by geographical area** 2002 2001 2002 2001
(pound)m (pound)m % %
--------------------------------------------------------------- ------------- ------------- ------------ -------------
United Kingdom 12.6 6.9 14.6 7.8
Americas 7.9 10.0 5.4 5.2
Continental Europe 2.3 (0.1) 2.4 (0.1)
Asia Pacific 10.1 6.1 8.0 4.6
------------- ------------- ------------ -------------
Bates Group 32.9 22.9 7.2 4.5
Other businesses 4.1 13.6 5.2 14.8
------------- ------------- ------------ -------------
Operating profit before goodwill amortisation, exceptional 37.0 36.5 6.9 6.0
goodwill impairment charges and exceptional operating expenses
Goodwill amortisation and exceptional goodwill (200.0) (268.9)
impairment charges
Exceptional operating expenses (45.6) (27.6)
------------- -------------
Group operating loss (208.6) (260.0)
============= =============
-17-
3. Exceptional operating expenses
2002 2001
(pound)m (pound)m
----------------------------------------------------------------------------------- ----------------- ----------------
Severance 21.6 20.9
Property provisions 8.0 2.9
Asset write-downs- exceptional depreciation 6.0 3.6
Moving and reorganisation costs 4.9 -
Disposals and closure costs 1.6 -
Other - 0.2
----------------- ----------------
42.1 27.6
Financing expenses 3.5 -
----------------- ----------------
Total exceptional operating expenses 45.6 27.6
================= ================
In the first half of 2002, the Group incurred exceptional severance costs of
(pound)2.3 million as a result of the loss of a key client in North America. In
September 2002, Cordiant's management announced a wide-ranging programme to
reduce the Group's cost base. The principal element of this exercise was the
integration of Bates Worldwide, 141 Worldwide, Fitch:Worldwide and Healthworld
to form the Bates Group and involved headcount reductions, property
rationalisation, co-location initiatives and asset write-downs. In addition to
the Bates Group integration, there were other cost reduction initiatives
throughout the Group, which led to changes in senior management, further
reductions in headcount and property costs as well as the disposal, closure or
re-organisation of certain loss making operations. Property provisions are
stated after a credit of (pound)3.3 million (2001: (pound)nil) relating to
excess property provisions established in respect of acquisitions completed
prior to 2001. Moving and reorganisation costs are also stated after a similar
credit of (pound)0.6 million (2001: (pound)nil).
The Group also incurred exceptional financing expenses of (pound)3.5 million in
respect of the legal and professional costs associated with the re-negotiation
of its principal financing arrangements in April 2002.
The tax effect of the exceptional operating expenses is an estimated credit
of(pound)1.1 million (2001:(pound)5.2 million).
4. Net interest payable and similar items
2002 2001
(pound)m (pound)m
------------------------------------------------------------------------------------- ---------------- ---------------
Group 22.3 18.3
Joint ventures (1.5) (2.2)
Associated undertakings - (0.1)
---------------- ---------------
Total 20.8 16.0
================ ===============
5. Taxation
2002 2001
(pound)m (pound)m
------------------------------------------------------------------------------------- ---------------- ---------------
Group (0.9) 1.0
Joint ventures 2.0 3.0
Associated undertakings 0.3 0.5
---------------- ---------------
Total 1.4 4.5
================ ===============
-18-
6. Dividends
The Board does not recommend the payment of a dividend in respect of 2002. No
dividend was paid in respect of the year ended 31 December 2001.
7. Earnings per share
2002 2001
(pound)m (pound)m
-------------------------------------------------------------------------------- ------------------ ------------------
Losses attributable to Ordinary shareholders (233.6) (277.6)
Goodwill amortisation and impairment* 201.9 269.3
Amounts written off investments 1.6 -
------------------ ------------------
Headline losses** (30.1) (8.3)
Exceptional operating items (tax effected) 44.5 22.4
------------------ ------------------
Adjusted earnings*** 14.4 14.1
================== ==================
Shares Shares
m m
-------------------------------------------------------------------------------- ------------------ ------------------
Weighted average number of shares 405.5 389.2
================== ==================
Basic loss per share is calculated using losses attributable to Ordinary
shareholders and the weighted average number of shares.
Basic headline loss per share is calculated using headline losses and the
weighted average number of shares.
In accordance with FRS 14 "Earnings per share", no dilutive effect is shown in
respect of share options and contingent consideration, as a result of the basic
loss per share.
* Includes(pound)1.9 million (2001:(pound)0.4 million) amortisation of goodwill
on the joint venture.
** The definition of headline earnings is given in the Statement of Investment
Practice No.1 published by the United Kingdom Society of Investment
Professionals. Amongst other items, headline earnings excludes items relating to
the amortisation and impairment of goodwill capitalised on the balance sheet,
and has been disclosed to assist the reader's understanding of the Group's
performance.
*** Adjusted earnings per share is based on operating profits before goodwill
charges and exceptional operating items and is presented to show a clearer
representation of the results of the business going forward. Adjusted basic
headline earnings per share is calculated using adjusted earnings and weighted
average number of shares.
-19-
8. Reconciliation of Group operating loss to net cash inflow from operating
activities
2002 2002 2002 2001
Pre-exceptional Exceptional Total
(pound)m (pound)m (pound)m (pound)m
-------------------------------------------------- ------------------ --------------- ----------------- --------------
Group operating profit/ (loss) 8.1 (216.7) (208.6) (260.0)
Depreciation 16.8 6.0 22.8 21.5
Goodwill amortisation and impairment 28.9 171.1 200.0 268.9
(Profit)/ loss on sale of tangible fixed assets (0.1) - (0.1) 0.9
Profit on sale of business - (0.4) (0.4) -
(Increase)/ decrease in work in progress (0.7) - (0.7) 10.6
Decrease in debtors 70.0 - 70.0 51.5
(Decrease)/ increase in creditors (74.4) 16.2 (58.2) (46.7)
Utilisation of property provisions (2.4) (2.0) (4.4) (3.3)
------------------ --------------- ----------------- --------------
Net cash inflow/ (outflow) from operating 46.2 (25.8) 20.4 43.4
activities
================== =============== ================= ==============
9. Analysis of cash flow items
2002 2002
(pound)m (pound)m
------------------------------------------------------------------------------------- ---------------- ---------------
Returns on investments and servicing of finance
Interest received 2.1 2.7
Interest paid (19.9) (16.8)
Interest element of finance lease rental payments (0.1) (0.1)
Bank fees (3.6) (1.5)
Dividends paid to minorities (2.3) (1.5)
---------------- ---------------
Net cash outflow from returns on investments and servicing of finance (23.8) (17.2)
================ ===============
Taxation paid
UK corporation tax repaid / (paid) 1.6 (3.2)
Overseas tax paid (6.3) (10.2)
---------------- ---------------
Net tax paid (4.7) (13.4)
================ ===============
Capital expenditure and financial investment
Purchase of tangible fixed assets (6.6) (21.5)
Sale of tangible fixed assets 1.9 1.5
Purchase of other fixed asset investments (0.7) (4.9)
Sale of other fixed asset investments 0.1 0.2
---------------- ---------------
Net cash outflow from capital expenditure and financial investment (5.3) (24.7)
================ ===============
Acquisitions and disposals
Purchase of subsidiary undertakings (9.4) (23.0)
Sale of subsidiary undertakings 0.6 -
Purchase of joint venture and associated undertakings (0.2) (0.7)
Sale of joint venture and associated undertakings 0.6 (0.6)
Net cash acquired with subsidiaries - 10.7
---------------- ---------------
Net cash outflow from acquisitions and disposals (8.4) (13.6)
================ ===============
Management of liquid resources
Cash deposits 0.2 0.6
---------------- ---------------
Net cash outflow from management of liquid resources 0.2 0.6
================ ===============
-20-
10. Analysis of net debt
Exchange and At 31
At 1 January non-cash December
2002 Cash flows Movements 2002
(pound)m (pound)m (pound)m (pound)m
------------------------------------------------ ----------------- ---------------- ----------------- ----------------
Cash at bank and in hand 123.5 (26.3) (1.2) 96.0
Bank overdrafts (10.4) 1.5 0.9 (8.0)
----------------- ---------------- ----------------- ----------------
113.1 (24.8) (0.3) 88.0
----------------- ---------------- ----------------- ----------------
External debt due within one year (18.9) 12.0 - (6.9)
External debt due after one year (235.3) (7.7) 11.4 (231.6)
Finance leases (2.5) 0.9 - (1.6)
----------------- ---------------- ----------------- ----------------
(256.7) 5.2 11.4 (240.1)
----------------- ---------------- ----------------- ----------------
Cash deposits - current asset investments 0.6 (0.2) - 0.4
----------------- ---------------- ----------------- ----------------
Net debt (143.0) (19.8) 11.1 (151.7)
================= ================ ================= ================
11. Intangible assets - goodwill
2002
(pound)m
------------------------------------------------------------------------------------------------- --------------------
Cost
At beginning of year 743.4
Additions 5.6
Disposals (0.4)
Translation adjustment (51.8)
--------------------
At end of year 696.8
====================
Amortisation
At beginning of year (265.1)
Disposals 0.1
Amortisation (28.9)
Impairment (171.1)
Translation adjustment 31.7
--------------------
At end of year (433.3)
====================
Net book value
At beginning of year 478.3
--------------------
At end of year 263.5
====================
The additions to cost during the year ended 31 December 2002 relate to movements
in contingent consideration.
12. Creditors
Due within one year Due after one year
2002 2001 2002 2001
(pound)m (pound)m (pound)m (pound)m
--------------------------------------------- ------------------ ----------------- ----------------- -----------------
Bank loans, overdrafts and senior notes 14.9 29.3 231.6 235.3
Trade creditors 272.6 325.4 - -
Taxation and social security 33.8 39.2 10.9 18.8
Other creditors 17.6 27.0 4.0 6.2
Accruals and deferred income 115.7 135.4 5.3 3.7
------------------ ----------------- ----------------- -----------------
Total 454.6 556.3 251.8 264.0
================== ================= ================= =================
-21-
In April 2002, the Group completed the re -negotiation of certain terms of its
syndicated (pound)155.9 million credit facility and Guaranteed Senior Notes
totalling $175.0 million. The coupon payable on the Guaranteed Senior Notes was
increased to 9.25% per annum from 7.61%. Interest payable on each advance under
the syndicated credit facility is now LIBOR or EURIBOR plus a margin of 3.25%
per annum. Certain other deferred fees are payable depending on financial
performance. The syndicated credit facility and the Guaranteed Senior Notes are
secured by guarantees from certain subsidiaries, a general debenture over assets
in the United Kingdom and pledges of shares of certain subsidiaries. In
addition, the Group is also subject to certain restrictions on its use of cash
flow, including acquisition payments, capital expenditure, dividends and the use
of disposal proceeds.
The holders of the Guaranteed Senior Notes will be entitled to require the
Company to pre-pay the notes in November 2004 (or upon any refinancing of the
Group's syndicated bank facilities if earlier) with a `make-whole' penalty,
unless the Group meets certain financial tests at that time. The make-whole
penalty, if triggered under certain circumstances, is calculated as the
discounted interest differential on the level of prepaid debt at the applicable
coupon rate and the available market rate on US Treasury Stock at the time of
the redemption plus a margin of 0.5%. In the case of a change of control
situation triggering the make-whole penalty, the coupon rate applicable to the
make -whole calculation is 9.25% per annum. For all other make-whole
calculations the coupon rate is 7.61% per annum. The discount calculation is
calculated on the basis of the redeemed notes and is performed over the
remaining life of such notes. The Guaranteed Senior Notes mature in April 2011
with annual repayments of $35 million payable from April 2007 until maturity.
13. Provisions for liabilities and charges
These include property provisions of(pound)24.6 million (2001:(pound)20.0
million)
14. Movement in shareholders' funds
Share Share Other Profit & Total
Loss
Capital(pound)m Premium(pound)m Reserves(pound)m Account(pound)m (pound)m
------------------------------------------------------ ------------ ------------ ------------ ----------- ------------
At beginning of the year 200.4 178.4 214.4 (286.4) 306.8
Adjustments to contingent consideration 3.8 0.1 (1.5) - 2.4
Exercising of employee share schemes 1.1 0.6 (0.4) (1.3) -
Release of reserves against investment and loan - - (95.1) 95.1 -
provisions
Loss retained for the year - - - (233.6) (233.6)
Realisation of gain on sale of joint venture and - - (2.2) 2.2 -
subsidiary undertaking
Reclassification of reserves - (4.7) 4.7 - -
Translation adjustment - - - (6.1) (6.1)
------------ ------------ ------------ ----------- ------------
At end of the year 205.3 174.4 119.9 (430.1) 69.5
============ ============ ============ =========== ============
Other reserves at 31 December 2002 comprise merger reserve(pound)22.8 million
(2001:(pound)29.8 million), shares to be issued(pound)8.8 million
(2001:(pound)13.1 million), special reserve(pound)25.7 million (2001:(pound)25.7
million), warrant reserve(pound)20.8 million (2001:(pound)20.8 million), an
unrealised gain on the sale of joint venture and subsidiary undertaking
of(pound)41.8 million (2001:(pound)44.0 million) and other reserves of
(pound)nil (2001:(pound)81.0 million).
The reclassification of reserves relates to the issue of shares in respect of
certain earnout payments made in 2001. The share premium account in 2001 was
increased by the excess of the market value over the nominal value of the shares
issued, but this increase should have been taken to the merger reserve.
As at 31 December 2002 the cumulative goodwill written off on acquisitions prior
to 1 January 1998 amounted to (pound)115.5 million (2001: (pound)115.5 million).
-------------------------------------------------------------------------------
Cordiant Communications Group plc is registered in England and Wales (Number
1320869) and its registered office is: 1-5 Midford Place, London, W1T 5BH.
-22-