TNS Interim Results, NFO Included

TNS has released interim results for the first half of 2004, showing the effect of the acquisition of NFO. Turnover (including joint ventures) is up 46.1% on the first half of 2003, to £446.0m, while operating profit rises 58.7% to £40.9m.

The company reports that underlying revenue is up almost 5% as 'markets improve across the world', and the integration of NFO is almost complete with subsequent synergies already showing in the figures. The interim dividend has been raised by 16%, profit before tax is £13.8m (unchanged) and basic earnings per share are down from 1.7p to 1.3p. Integration costs incurred in the first half were £5.7m, including a £2.2m charge related to the retirement of Bill Lipner from the board at this year's AGM.

CEO Mike Kirkham says the worldwide market for market information is expected to grow by three to four per cent in 2004, and that 'the group is on track to achieve underlying turnover growth in line with the market for the year as a whole. Looking further ahead, we believe that market developments will increasingly favour the major players such as TNS. Our focus is on ensuring that we take full advantage of our global network to gain the maximum benefits offered by these developments'.

The market for syndicated and continuous services continues to grow steadily in all three of the Group's regions, according to Kirkham. On the custom side there is more regional variation: demand in Asia Pacific remains generally buoyant; in the Americas and Europe the pace of change varies although economic conditions and overall performance have improved.

Integration of the custom businesses of TNS and NFO in France and the UK has been largely completed during the period, with Germany one of the main focuses for the remainder of the year. 'At the beginning of the year we increased our expectations for operating cost synergies to £15 million, and we remain on track to deliver this figure in 2004, rising to £20 million, on an annualised basis, in 2005' says Kirkham, noting meanwhile that 'our geographic scale and extended sector expertise is enabling us to win contracts that we would not have won previously'.

Syndicated services like Worldpanel, Media Intelligence and TV and Radio Audience Measurement are said to be progressing well, with the French consumer panel in particular being extended from 8,000 to 12,000 households, operational by 2005.

* restated as explained in Note 1 to the financial statements - see TNS site for details

* restated as explained in Note 1 to the financial statements - see TNS site for details

Some slowdown is expected in the second half in the rate of growth for IT / Telecoms and Healthcare, the latter having enjoyed a strong second half last year.

NB Given the size of the NFO acquisition, the group has changed the method of calculating underlying growth to one that allows a meaningful understanding of the enlarged group's performance. Underlying growth has been calculated by taking the increase in 2004 turnover, including turnover from acquisitions, over 2003 pro forma turnover, at constant exchange rates. The 2003 pro forma turnover assumes that any acquisitions and discontinued operations were owned for the comparable period in the prior year and therefore includes pre-acquisition turnover for 2003.

The group's web site is at www.tns-global.com

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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