Highbury House To Buy Cabal Comms, As Profits Rise 9%

Cabal, which publishes Front, The Real Homes Magazine and Procycling, was set set up in June 1998 by ex-IPC editor in chief, Sally O’Sullivan. Its Front title is ranked fifth out of sixteen in the ABC’s Consumer Magazines – Men’s Lifestyle sector and The Real Homes Magazine is ranked third out of twenty six in the Consumer Magazines – Women’s Interests: Home Interests sector, in terms of newsstand sales.

Highbury says it is in exclusive and advanced talks to acquire Cabal for an initial sum of £8.0 million, followed by a further £2.0 million in H1 2004. The second payment is subject to reduction depending on Cabal’s financial performance for the year ending 30 June 2003.

Highbury House also announced a 9% rise in its own adjusted pre-tax profits for the full year 2002, up to £9.8 million. This is the eighth consecutive year of improvement for the company. Pre-tax profits before being adjusted for amortisation and exceptionals were more or a less flat at £6.8 million (£6.9 million in 2001).

The group has also enjoyed a ‘significant’ increase in its free cash flow, from just £1.9 million in 2001 to £7.3 million by the end of last year.

Outlook Highbury says that it is confident of favourable prospects for 2003, with the proposed acquisition of Cabal Communications expected to further consolidate its position as a top ten UK consumer publisher.

“Trading so far this year is in line with our expectations and ahead of last year. With the benefit of a lower cost base we look forward to good progress in the current year with continued improvement in margins. The proposed acquisition of Cabal together with the expected synergies and opportunities will further enhance our prospects,” said executive chairman, Ian Fletcher.

Shares in Highbury House were up 10.4% to 13.25p by mid-morning following these announcements.