Next Fifteen

1
Next Fifteen

• preliminary results
• october 2003

2
summary

• adjusted profits up 30
• adjusted earnings per share up 71
• dividend up 11
• Surplus office costs and other reorganisation
  costs decreasing

• IBM renewal
• new operations in China and Denmark
• merged August.One and JPR
• Fuji Film win
• applied acquisitions

3
financial highlights

• 0.7m increase in underlying profitability
• operating margins up from 5.6 to 6.8
• margin improvement coming from non-staff cost
  savings
• underlying tax rate reduction following
  international tax planning project
• 0.6m cash generated, before loan repayment,
  purchase of own shares and tax on name sale

4
PL highlights

• 2000 2001 2002 2003
• m m m m
• Turnover 36.4 44.8 40.2 39.7
• Net Revenue 30.0 39.6 35.8 35.2
• Operating Profit 2.9 1.5 2.0 2.4
• Operating margin 10.2 4.9 5.6 6.8
• Profit before tax 2.3 0.3 4.1 1.6
• Tax (1.1) (0.3) (1.6) (0.7)
• Retained profit 0.7 (0.1) 2.0 0.5
• Dividend per share 1.0p 0.3p 0.9p 1.0p
• Adjusted Basic EPS 3.95p 1.80p 2.18p 3.73p
• before flotation expenses of 434k
• before reorganisation costs of 982k
• before reorganisation costs of 947k and
  profit on trademark sale of 3,132k
• before reorganisation costs of 794k

5
earnings per share

• Adjusted earnings per share have risen by 71
  from 2.18p to 3.73p
• This increase is driven by 4 factors
• Primarily, the increase in the underlying profit
  before tax
• Secondly, the reduced underlying tax rate
  resulting from the international tax planning
  project
• Also, the additional 2m shares purchased by the
  ESOT, which do not count towards the average
  number of shares under FRS 14. Impact 0.2p
• Last and least, the reduced minority interest
  share of profit as a result of the minority
  interest purchased in the year

6
balance sheet

• 2000 2001 2002 2003
• m m m m
• Fixed Assets
• Intangible assets - - - 0.1
• Tangible assets 3.3 3.8 3.2 2.6
• Investments 1.5 1.5 1.5 2.0
• Net Current Assets 2.8 4.0 4.4 5.0
• Creditors gt 1 year (0.9) (2.4) (0.7) (0.6)
• Net Assets 6.7 6.5 8.4 9.0
• Share capital 1.1 1.1 1.1 1.1
• Reserves 5.5 5.3 7.2 7.8
• Total shareholders funds 6.6 6.4 8.3 8.9
• Minority interests 0.1 0.1 0.1 0.1
• Total 6.7 6.5 8.4 9.0
• Net (debt) /funds (0.6) (1.1) 4.0 3.5

7
cashflow

• 2000 2001 2002 2003
• m m m m
• Operating profit items 3.5 2.3 2.9 3.5
• Working capital items (1.0) 1.2 1.4 -
• Provisions - 0.4 - 0.1
• Net inflow from operations 2.5 3.9 4.3 3.6
• Interest paid (0.2) (0.2) (0.1) -
• Taxation (1.1) (1.4) (0.7) (1.9)
• Net capital expenditure (2.6) (2.2) (0.8) (1.1)
• Trademark disposal - - 3.1 -
• Purchase of own shares (0.1) - - (0.5)
• Acquisitions (0.1)
• Dividends (0.2) (0.4) - (0.6)
• Financing
• - bank loan 0.7 1.4 (2.3) (0.1)
• - Hire purchase (0.1) - (0.4) (0.2)
• - Share issue 1.6 - - -
• Increase/(decrease) in cash 0.5 1.0 3.1 (0.9)

8
business strategy and performance
9
group strategy

• maximise technology PR footprint
• market share
• geography
• sectors
• services
• accelerate non-tech focus

10
revenue by region
11
profit by brand
12
revenue by brand
13
projected revenue by brand
(including revenues from Applied acquisitions)
14
text 100

• china and denmark
• hong kong and cape town
• analytics business
• amsterdam
• team NA, France, Japan, UK
• products

• growth
• asia
• practice areas

15
AUGUST.ONE

• Australia NZ
• Strong financial performance overall
• Continued client and service diversification
• Strong organic growth from existing clients
• Award winning

• Capitalise in UK (and internationally) on JPR
  merger
• Maintain focus and investment on the
  diversification of client base and service
  offering
• Maintain aggressive new business and marketing
  investment
• Client retention and organic growth

16
bite

• current focus
• Manage transition of Applied into Bite US and
  then drive expansion of North American business
• Exploit larger client base for good of existing
  value added services from Bullet and Soundbite
• Explore potential for establishing further new
  offices part of strategic plan to create global
  footprint
• Develop and articulate clear strategy for driving
  business into global presence

17
technology clients
18
non-tech clients
19
summary

• revenue growth opportunities emerging
• continued focus on cost base
• further acquisitions possible