Keith Sadler

SPG Media Group plc

0207 915 9600

Ken Appiah

SPG Media Group plc

0207 915 9600

Mike Coe

Blue Oar Securities Plc

0117 933 0020

Keith Sadler

SPG Media Group plc

0207 915 9600

Ken Appiah

SPG Media Group plc

0207 915 9600

Mike Coe

Blue Oar Securities Plc

0117 933 0020

Keith Sadler

SPG Media Group plc

0207 915 9600

Ken Appiah

SPG Media Group plc

0207 915 9600

Mike Coe

Blue Oar Securities Plc

0117 933 0020

Keith Sadler

SPG Media Group plc

0207 915 9600

Ken Appiah

SPG Media Group plc

0207 915 9600

Mike Coe

Blue Oar Securities Plc

0117 933 0020

Preliminary Results for the year ended 31 March 2008

Financial highlights

Stephen Davidson, Chairman:

"Although we are in threatening economic times our strategy of investing in our products and people is delivering and we will continue with this strategy to generate revenue growth and in due course increased profitability. Our orders brought forward are up on the previous year by 21% and our current order intake is up 30% for the first eleven weeks of the year on the same time last year. I am confident we are on track.

The Group finished the period with net funds of £3.6 million."

Contact:

Chairman's Statement

Trading results
I have pleasure in presenting our results for the year ended 31 March 2008. I said in my statement for the previous year that we now had a realistic plan to deliver revenue growth and I am pleased to announce that this has been achieved. Our ongoing investment in our people and products continues to produce positive results.

The results for the year ended 31 March 2008 show revenue increased to £17.2 million (2007: £16.6 million) up 3.5% on the previous year. Excluding revenue generated from our operation in India (£0.6 million), which was disposed of at the beginning of the year, revenue increased by 7.1%.

Operating profit, before exceptional items and website amortisation, was £0.6 million (2007: £0.7 million) and profit before taxation remained at £0.4 million (2007: £0.4 million).

Net funds
The Group produced net cash flow from operating activities of £0.7 million (2007: £1.0 million) and made capital expenditure of some £0.2 million (2007: £0.3 million). We funded the Employee Benefit Trust ("EBT") to acquire a further 956,448 shares at a total cost of £81,950. The EBT now holds 2,170,843 shares or 2.5% of the issued share capital of the company. The Group finished the period with net funds of £3.6 million (2007: £3.0 million). This increase reflects the earnings before interest, tax, depreciation and amortisation and indicates healthy cash conversion.

Employees and customers
I would like to thank my Board colleagues, the staff and management of the Group for their hard work and commitment throughout the year. Also my thanks to all our customers and clients who have placed their marketing needs with us and supported us through this year.

Outlook
Although we are in threatening economic times our strategy of investing in our products and people is delivering and we will continue with this strategy to generate revenue growth and in due course increased profitability. Our orders brought forward are up on the previous year by 21% and our current order intake is up 30% for the first eleven weeks of the year on the same time last year. I am confident we are on track.

Stephen Davidson
Chairman
25 June 2008

Business Review

Strategy
Our aim is to grow the Group from its current base by developing the current portfolio of products, to increase the revenue from each product through investment in content, people and ideas. The result of this investment will drive response for our clients ensuring they achieve a return on their investment with us. 

SPG Media Group plc's activities are focussed in three areas, in print, online and in person. We aim to offer measurable marketing/advertising solutions to our customers through these three channels. To achieve long term growth for the business and increase shareholder value we need to continue investment in our product portfolio which will lead to increased revenue and, over time, improvement in the operating profit of the Group.

The key driver for the business is the demand for advertising and marketing services from a broad spectrum of industries. We are investing in our products to ensure we can provide services for our clients even in the cyclical nature of marketing and advertising. We have increased the budget for content on our websites and introduced e-newsletters and job boards. All of our websites have gone through a complete redesign and we have invested in a new platform for our content management system. Editorial and design form an important part of our magazines where we now invest in compelling content through the editorial team writing and commissioning specific articles for the magazines. In our events division we are introducing more opportunities for our clients to meet their potential clients through the addition of exhibition stands, meeting chalets and establishing networking areas. We have also initiated a comprehensive marketing review of our own products to ensure we promote our brands in the market place.

Principal risks and uncertainties facing the Group would be a failure to respond to the competitive landscape and establishing marketing and product initiatives to ensure we remain competitive. Continuing the investment in our products in the future will be imperative if we are to achieve and maintain a profitable Group. The Group is reliant on its sales force and critical to its success is the recruitment and retention of skilled sales personnel.  

Key performance indicators

The Board use a wide range of financial indicators to assess performance within the Group. These key performance indicators are reviewed regularly by the Board and senior management to ensure we comply with our aims.

Order intake and product order intake reflects the increase or decrease in orders generated during the financial year compared with the previous year.

Sales revenue recognition compares orders generated in the year against revenues recognised in the year. A percentage below 100% indicates orders are being carried forward to future periods. A percentage above 100% indicates orders brought forward are greater than orders carried forward.

Orders per sales person is the increase or decrease in orders generated by the average sales person.

Group Results
Revenue for the Group increased from £16.6 million to £17.2 million. On reported revenue, print revenue was £4.0 million compared to £4.1 million for the previous year, online was £6.6 million compared to £6.5 million and events £6.6 million compared to £5.9 million.  Each of our divisions showed increases in revenue (excluding revenue from our India operation and contra revenue), the first time this has been achieved for a number of years. On a like for like basis, excluding revenue from India and contra revenue, revenue increased as follows:

Events showed growth in our conference area where we increased revenues by £0.6 million.

The gross profit margin, as predicted, has fallen from 54% to 50% as result of the investment we are making in staff by way of an increase in headcount. Gross profit of £8.6 million was achieved compared to £9.0 million for the previous year. 

Distribution costs have been controlled and are slightly below last year even though we have produced more editions of our magazines.

For consistency we have identified redundancy costs as exceptional and disclosed these separately on the face of the profit and loss account. We incurred £122,000 of redundancy costs. 

The Administrative expenses were reduced from £7.9 million to £7.6 million. This reduction is primarily due to a reduction in the depreciation charge and the reduced charge for bad debts. As in the prior year we have released a further credit balance from the balance sheet of £0.4 million (2007: £0.4 million). We expect that the remaining balance of £0.4 million will be cleared from the balance sheet by the end of 31 March 2009.

The Group reported an operating profit before website amortisation and exceptional items of £0.6 million (2007: £0.7 million). Group operating profit is £0.4 million (2007: £0.4 million).

Net finance income of £76,000 (2007: charge £34,000) includes a charge of £58,000 (2007: £114,000) for the discount applied on the property provision at the time the initial provision was calculated. This is a non-cash item and increases the property provision by this amount. As stated last year this charge reduces as the provision is reduced over time. We have generated £164,000 (2007: £82,000) of interest from the Group's cash balances.

As a result of the increase in retained earnings the earnings per share increased to 0.51 pence from 0.42 pence in 2007.

The Group was a positive cash generator with £0.6 million added to the balance at the previous year-end making a total of £3.6 million of cash balances held at 31 March 2008.  

Online
We operate web sites where we offer a listing service to clients with a 600 word profile and five image package. These web sites are aimed at businesses who are looking to search for the procurement of goods and services for their own businesses. We now have 28 web sites which cover a number of industries. The full list of our current websites are as follows:

Revenues from our internet business increased by 1.1% from £6.5 million to £6.6 million in the year ended 31 March 2008. Excluding the India operations generation of online revenues of £0.4 million and contra revenues the growth rate is 6.9%. 

During the second six months of the year we initiated a whole scale redesign of our websites together with an up to date content management system, which will improve our functionality and flexibility. This project will be completed by the end of June 2008. This will have been the first overhaul of our online offering. As well as the redesign we have signed a contract with Thompson/Reuters to supply a news feed to our websites, which re-enforces our goal of providing compelling content on our products. This is on top of the increase in editorial personnel to commission and write articles for our websites thereby ensuring the sites become the hubs for search and information in their particular sectors. The launch of our job boards and e-newsletters have added to the overall product offering, ensuring our products develop and are an attractive marketing proposition for our clients. 

We have seen an increase in order intake, up 21% for the first eleven weeks of the current financial year, based on the improvements we have made and with the new initiatives we should see this improvement solidified or improved.

Events
Our "in person" side of the business comprises executive Forums and Conferences. The Forums consist of supplier and buyer delegates attending meetings at which suppliers have an opportunity to make presentations to potential clients. An important element for the success of the Forum is the seminar and conference programme for all delegates. Separate to this is our conference programme where we produce and sell delegate places to attendees. For both of these areas we also attempt to generate sponsorship revenues. What we believe differentiates us is our exceptional execution of both our Forums and Conferences. 

We ran 16 forums (2007: 13), 2 business breakfasts (2007: 2) and 31 conferences (2007: 35) through the year. The total revenue generated was £6.6 million up from the £6.0 million produced the previous year. Excluding revenue from India and contra revenue the increase is 16.8%, £5.5 million to £6.5 million. This increase in revenue was from our conference events which increased revenue from £1.6 million to £2.0 million. Our average revenue per conference increased from £44,000 to £64,000. This reflects the investment we made during the year in the number of producers, sales and marketing personnel. 

Three new forums were produced during the year which produced an extra £0.6 million of revenue. These were spin-off forums from existing events. Based on our strategy to produce high quality events which produce effective results for our attendees we have taken the decision to consolidate our forum events around nine key events for the forthcoming year and to consolidate the revenue we generate from these events. 

We have increased the programme for our conferences to take the number we produce from the 31 for the year to 31 March 2008 to 55 conferences. By undertaking this increase we will also be able to spread our activities throughout the year rather than the focus on quarter four. Order intake for the first eleven weeks of the current year is up 28% for the whole of the events division.

Print
Our refreshed Print team have turned the corner for our magazines and delivered an increase in revenues (excluding the India revenues and contra revenues). After a period of change we established the print division under a single head of sales. We have also improved the quality of the magazines under the direction of our Editor in Chief. Our aim is to have compelling content within the magazines giving our advertisers and contributors a value added product. Our publications during the year were as follows:

The revenue from our print division was £4.0 million compared to £4.1 million. The revenue generated, excluding India and contra revenue, shows an increase of 2.8%. This is a turnaround from the continued revenue decline within our print division and is based on improving the product offering to our clients and ensuring that we offer value across all our media platforms.

We continue to review our portfolio of publications and this includes the possibility of launching new titles and increasing the frequency of existing titles. We have a strong order book which is up 32% as at week eleven of the current financial year.

Unaudited Consolidated income statement

For the year ended 31 March

All of the activities are continuing.

There are no material differences between the profits on ordinary activities before taxation and the retained profit as stated above and their historical cost equivalents.

Unaudited Consolidated Balance Sheet
As at 31 March 2008

Unaudited Consolidated statement of recognised income and expense
For the year ended 31 March 2008

Unaudited Consolidated cash flow statement
For the year ended 31 March 2008

Notes to the accounts

1) Segmental reporting analysis

The turnover and operating profit is derived from international business to business communications and originates in the UK and India. Revenue generated out of India was £0.1 million (2007: £0.7 million).

Primary reporting format - Business analysis: