RNS Number:1783T
Future Network PLC
19 March 2002
19th March 2002
The Future Network
plc
Preliminary Results for the year ended 31 December 2001
The Future Network plc (LSE:FNET), the international games and specialist
consumer magazine publisher, today announces its Preliminary results for the
year ended 31 December 2001.
Highlights
Financial highlights of the Group balance sheet
Net debt reduced by 89% to £7.8m at year-end
Significant improvement in working capital
Provisions for vacant properties totalling £4.0m
Year-end net assets now £106.0m (2000: £195.6m)
Financial highlights of the Group profit and loss account
Turnover from continuing activities £142.9m (2000 - £151.5m)
Operating profit (EBITA) from continuing activities £10.0m (2000 - £10.8m)
Operating losses (EBITA) from discontinued activities £15.7m (2000 - £13.3m)
Net interest payable £6.5m and refinancing costs £3.8m
Net exceptional gain of £15.4m from sales and closures
Non-cash write-downs of £120.6m of intangible assets
Group loss before tax of £121.0m (2000: £59.3m)
Operational highlights
Board considerably strengthened during year
Smaller, more focused and stronger group, following substantial restructuring
Strong pre-Christmas trading, particularly from Games magazines.
Official PlayStation 2 Magazine sales tracking sales of Sony consoles in the UK
Board encouraged by recent trading performance
Definition
EBITA - operating profit/(loss) before amortisation of goodwill and intangibles
and refinancing costs.
Greg Ingham, Chief Executive of The Future Network commented:
"We have emerged from the most difficult year in Future's history as a more
robust and mature business, with a strong management team determined to restore
our performance. The actions we have taken to reshape the Group and re-base our
capital structure give us a good platform from which to build.
"Trading conditions for our games magazines continue to improve, reflecting the
recovery in the games sector as a whole. In aggregate, our other special
interest magazines have held up reasonably well in what has been a very tough
year for the media sector.
"We will continue to keep a tight rein on costs, and our exposure to risk has
been reduced through the corporate actions of 2001.
"The Board is encouraged by year-on-year growth in Group revenues from
continuing operations for January and February. Our success for 2002 overall
will be determined primarily by our ability to capitalise on the continued
growth of the games market. In the past, Future has shown much stronger trading
in the second half of the year and this trend is expected to apply for 2002.
Overall, Future now has a smaller business, better systems, less debt, a lower
cost base - and none of the wholesale restructuring and attendant issues which
preoccupied it last year. All this leads us to believe that there will be a
good performance in 2002."
For further information:
The Future Network Tel: 0207 357 9477 (19.03.02)
Greg Ingham, Chief Executive Tel: 01225 442 244 (thereafter)
John Bowman, Finance Director
Hogarth Partnership Tel: 0207 357 9477
James Longfield
Georgina Briscoe
Chairman's Statement
During much of the year 2001 the Board of Future found itself preoccupied with
reducing the rising levels of debt and trading losses which threatened the
viability of the Group. So I am delighted to be able to report now that these
problems are behind us. We ended the year with net debt of under £8m and
falling, which is a considerable improvement on the peak debt level of some £78m
we suffered during the year.
Future is now a much smaller and more focused business and, I believe, far
stronger for it. We currently publish 80 specialist magazines and have scaled
back to four operations in the UK, USA, France and Italy. Headcount was reduced
by 51% over the year.
Our results for 2001 show the inevitable losses and write-offs associated with a
fundamental retrenchment, restructuring and refinancing. However, the
continuing business had sales of £142.9m and earned a modest EBITA of £10.0m.
The focus of the management team is now on driving profitability.
Future's unacceptably high level of debt resulted from a period of
over-ambitious investment and expansion. During 2001 Future was variously
affected by the introduction of the new generation of computer games platforms;
adverse technology market trends; the aftermath of the dotcom fall-out; and by
the world-wide reduction in advertising spending. The combination of rising debt
and operational difficulties hit the Company hard.
Apparent opportunities presented by the technology and New Economy boom of 2000
and early 2001 led many companies into becoming over-extended. Future was no
exception. Our balance sheet was weakened and our operational and control
systems struggled to cope. To bring ourselves back to earth we have been
re-focusing on our core strengths. During the year several loss-making magazine
titles and web sites were shut down; under-performing businesses were sold or
closed; substantial office space vacated; and headcount reduced appropriately.
The largest single transaction was the sale of Business 2.0 magazine to AOL Time
Warner for £47.3m in July.
These restructuring measures were concluded in November, when we successfully
completed a Rights Issue to raise £33.5m of new cash to reduce bank debt
further. We are grateful for the high level of support we received from
shareholders in response to our Rights Issue, with a 96% take up of available
rights.
We also strengthened the Board and now have in place an experienced team. Our
Chief Executive, Greg Ingham having experienced both boom and slump, applied his
valuable knowledge in re-focusing the group on profitable areas. We were
delighted to welcome to the Board in January 2001, Colin Morrison, a very well
respected magazine publisher as Chief Operating Officer who has also been
appointed as Managing Director of our UK business. The executive team was
completed by the appointment in November of John Bowman as Group Finance
Director who has a long track record of success in the UK media sector.
I took over as chairman in September from Chris Anderson, Future's founder, who
left the Board in November. I pay tribute to Chris's imagination and creative
talent, without which the company would not have been formed or floated and its
great publishing successes like Business 2.0 would not have happened. During
the year, Patrick Taylor joined as a non-executive director. Patrick has
extensive financial and media experience, and now chairs our Audit Committee.
In addition, I would like, particularly, to thank Michael Penington, one of our
non-executive directors who assumed the role of interim Finance Director when
the effects of the market melt down were at their most intense and whose
professionalism, energy and persistence was a key factor in ensuring the success
of our restructuring and Rights Issue.
Much of 2001 was extremely tough. It was a punishing experience but we have
learnt from it and are now well positioned. Our strategy is to build upon the
Group's proven strengths in specialist magazine publishing.
The Group's survival would not have been secured without the invaluable support
of shareholders late last year. To them and our business partners I offer our
thanks. I equally pay tribute to our dedicated staff, whose enthusiasm and
talent underpins the success of all our magazines.
The Board is encouraged by year-on-year growth in Group revenues from continuing
operations for January and February. Our success for 2002 overall will be
determined primarily by our ability to capitalise on the continued growth of the
games market. In the past, Future has shown much stronger trading in the second
half of the year and this trend is expected to apply for 2002. Overall, Future
now has a smaller business, better systems, less debt, a lower cost base - and
none of the wholesale restructuring and attendant issues which preoccupied it
last year. All this leads us to believe that there will be a good performance
in 2002.
I am optimistic that our shareholders' confidence in Future will prove justified
in the years to come.
Roger Parry
Chairman
19 March 2002
Chief Executive's Review
Overview
We responded vigorously to the difficult market conditions we faced during 2001.
We sold or closed 45 loss-making magazines; discontinued our operations in
Germany and the Netherlands; sold our Polish operation and our US TED conference
business; and restructured the balance of our activities to streamline the
business and reduce operating costs. It was not an easy process for anyone
connected with Future, and I am extremely grateful to all our staff for the
professional way in which they responded to the challenges we faced.
As a result of the actions taken, we ended the year with a more focused, lower
risk business, which as of today, publishes 80 magazines and employs 1,002 staff
in four countries - the UK, US, France and Italy.
This reduced number of overseas subsidiaries was a key element in our strategy
of reducing the risk profile of the business. We have maintained the opportunity
to develop Future's international publishing by focusing on magazine licensing.
Such licensing partnerships will be extended further, as we roll out our
Official PlayStation 2 and Official Xbox magazines.
We also ended the year in a considerably stronger financial position. The
reduction in our net debt has been dramatic, and full details are set out in the
operating and financial review. We achieved a reduction in our net debt to a
more manageable £7.8m at the year-end, down from its June peak of £77.9m. This
happened both by asset disposals during the year, most notably the £47.3m
received from the sale of Business 2.0 magazine to AOL Time Warner, and by our
successful Rights Issue in November, which raised £33.5m. It also happened
despite the costs associated with the restructuring and the impact of
loss-making magazines prior to their closure. These measures ensured that we
enter 2002 with a much improved capital structure for the business, well within
the terms of our five-year bank facility, which currently stands at £29m.
Performance of continuing businesses
The performance of the continuing businesses, on which our recovery is based,
was encouraging given the continuing difficult market conditions for the media
sector during 2001. Revenues of £142.9m were 6% below the £151.5m recorded in
2000, with the success of our newer games titles helping to offset the declining
sales of some older format titles and continuing difficult conditions in the
computing magazine sector.
Operating profits of the continuing business were £10.0m at the EBITA level. For
all the difficulties and corporate preoccupations of 2001, this was just £0.8m
below the equivalent 2000 level. This profit included significant expenditure on
the international rollout of our Official Xbox Magazine, which launched in the
US in November and in Europe in February 2002. The overall 2001 level masks a
better performance from the business in the second half of the year as the
recovery began to take effect.
Our second half improvement was driven primarily by the continued recovery of
the computer games market. As the world's leading publisher of games magazines,
and with increased market shares in the UK and US, Future is well placed to
benefit from the continued, increasing interest in games consoles.
Sales of Sony's PlayStation 2 (PS2) console are running at 200% higher than PS1
at the equivalent stage, with worldwide sales of 24.9m by the end of December
2001. Future has successfully published PlayStation magazines since 1995, and
now produces 10 Official and unofficial titles directly, with a further 12
produced under licence to third parties.
Microsoft's US November launch of its Xbox console reached the top-end
expectation of 1.5 million units sold by the end of 2001. Future holds the
licence for Official Xbox magazines worldwide, except for Japan. Official Xbox
magazines have been launched in the US, UK, France and Italy and under licence
in Spain and Australia.
Computing magazines comprise 37% of continuing revenues. They faced challenging
market conditions in 2001, as advertisers reduced their spending - though
Future's market shares generally held.
Significant headcount reductions and external cost-savings during 2001 will have
a full year effect in 2002.
Overall, the business is in good shape. Though caution prevails on advertising,
circulation is now expected to represent an increasing proportion of revenues
above the current 65%.
UK performance
The UK business is the heart of Future, representing 61% of the Group's
continuing revenues and the clear majority of its profits. It publishes 54
magazines and employs 629 staff. It is also the most diversified business
within the Group, covering Computer Games (11 magazines), Computing (15
magazines), and Entertainment (28 magazines).
Continuing revenue split: 69% circulation, 25% advertising, 6% other (primarily
licensing).
The UK company held profits at £13.3m and increased margins from 14% to 15%
despite a modest fall in revenue on the continuing business. This was due to
significant restructuring measures undertaken during the year.
The business was reorganised in July into three divisions - Games, Computing and
Entertainment (which includes all other specialist titles). Each is run by a
Publishing Director responsible for driving their magazine portfolio who report
to Managing Director Colin Morrison. The new structure is working well.
Revenues from our PlayStation 2 magazines are helping to offset the decline of
the older format titles and the more difficult conditions experienced by our
computing and Internet magazines. We were particularly encouraged by the second
half 2001 ABC figures for our games magazines, which showed an increase in our
share of the UK games market to 55% and confirmed Official PlayStation 2
magazine as the UK's fastest growing monthly consumer magazine, up 54% year on
year. Historically on PS1, there has been a 1:10 relationship between sales of
the Official magazine and the sales of the console in the preceding two years.
The trend has continued for PlayStation 2.
During last year, launch expenditure was concentrated on the Official Xbox
Magazine, with costs expensed in 2001 for the February 2002 launch.
Future has market-leading positions in the UK in a range of magazine sectors
outside of computer games, including music-making, needlecraft, Internet,
mountain biking, creative computing and home computing.
Our strong Computing portfolio faced a more challenging market. Circulations
declined overall, though Future's overall monthly magazine market share grew
fractionally. One notable performance was PC Answers, which was up 10% year on
year. Most recently, we have signed a formal agreement with Microsoft to publish
the Official XP Magazine.
The Entertainment division performed solidly, with 13 out of 19 titles showing
year on year ABC growth. Strong performances from Future's Music titles (where
four out of eight magazines recorded over 10% year on year growth) and a 9th
successive circulation increase from Total Film, helped offset declines in other
parts of the portfolio.
Following the magazine closures and restructuring actions taken during the year
we have achieved gross margin improvements across our continuing magazine
portfolio as a whole, from 32% to 36%.
The UK's advertising was down 20%, like-for-like. In addition to some effect
from the well-documented general advertising malaise in 2001, we were also
affected by specific sector issues, such as in games and computing.
The UK business includes high margin revenues from licensing. In 2001, third
party licensing revenues were £2.3m and intra-group, £1.4m.
US performance
The US business represents 23 per cent of the Group's Continuing revenues,
publishing five magazines and employing 110 staff. The business is concentrated
on the computer games and home computing sectors.
Continuing revenue split: 49% circulation, 49% advertising, 2% other.
Future US was the most extensively restructured part of the Group in 2001. This
involved the closure of 5 early stage launch titles, the purge of Internet
activities, the disposal of Business 2.0, and the loss of 354 jobs in all. The
business was refocused on games and home computing, under the direction of its
President, Jonathan Simpson-Bint who was promoted early in the year. Its
performance since then has been a little above our expectations in a
transitional year.
The difficult market conditions in games and technology sectors in the US
continued for most of the year, although there was a promising recovery in the
games market towards the end of the year.
Significant expenditure was incurred on the October launch of the Group's first
edition of Official Xbox Magazine. Following the strong debut of the magazine,
we have increased its guaranteed circulation ratebase from 250,000 to 325,000.
There was a good performance by our unofficial PlayStation2 magazine PSM, which
is now outselling the Official title.
This means that Future now has the biggest-selling PC games, PlayStation and
Xbox magazines in the US.
Mainland Europe performance
France and Italy are the two Future businesses in Mainland Europe and they
represent 17 per cent of the Group's continuing revenues. They now publish 21
magazines and employ just over 240 staff. Virtually all of the activity is in
the computer games and home computing sectors.
Continuing revenue split: 69% circulation, 31% advertising.
The continuing European business has undergone significant change during the
year, following the first half closure of our German and Dutch businesses and
the sale of our Polish company at the end of the year. Future's European
business now comprises games and computing magazine publishing companies in
France and Italy.
Revenues of the continuing business remained broadly similar to last year,
helped by the performance of the newer games titles, which offset the declines
in computing and Internet titles in France.
The French business has had a significant restructuring, including the closure
of 7 titles and the loss of around 90 people. The much smaller Italian
restructuring was largely related to the disposal of Business 2.0 and the
closure of 2 magazines. New Managing Directors have recently been appointed to
run both of these businesses. A lower cost-base, a rising games market and the
new management will help improve performance in 2002.
Greg Ingham
Chief Executive Officer
19 March 2002
Operating and Financial Review
When I decided to join Future as Group Finance Director it was because I
believed that its financial problems would be resolved and that the core
business was successful. The single most important financial achievement in 2001
has been the 89% reduction in net debt from £68.9m at the beginning of 2001 to
£7.8m at the year-end. I am also pleased that in our core businesses our staff
are focused on publishing good quality magazines. The management of working
capital has improved and a great deal has been done in this regard over the last
year. As at December 2001, the group balance sheet reflects the significantly
reduced size of the group. And in reviewing our business plans for 2002, I have
sought to ensure that our managers take a realistic view of their businesses. I
play my full part in encouraging a more focused risk and control culture in the
running of the business.
Structure and reduced size of the group
By the end of the year under review, the group published 80 specialist magazines
and operated subsidiary companies in three countries. In addition, the group
licensed local editions of its magazines in a further 22 countries. The year
2001 was marked by a number of considerable challenges, of which the most
significant was the financial and capital structure of the group, which is now
stable. Following a number of business disposals, a significant rights issue
and the re-structuring of the group's banking facilities, the group ended the
year smaller, more focused and stronger than at the previous year-end.
The scale of the reduction in the group's activities can be seen from the
following information.
2001 2000 Reduction
Sales for the year £174.1m £254.0m 31%
Magazines 80 120 33%
Overseas subsidiaries 3 5 40%
Internet headcount 17 160 89%
Total headcount 1,002 2,047 51%
Net debt £7.8m £68.9m 89%
In this operating and financial review I review the results for the year, group
cash flows and the group balance sheet, and our approach to certain financial
risks. I also review the financial impact of the rights issue, re-structured
bank facility and other key aspects of the results for the year.
Review of the Group profit and loss account
Group turnover
Group turnover for the year was £174.1m, of which £142.9m or 82% came from
continuing businesses. All of the turnover from continuing business was derived
from the group's principal activity, of publishing specialist magazines serving
the computer games, computing and entertainment sectors.
Source of turnover from continuing businesses
The £142.9m represents a small decrease of 6% compared with the previous year.
A comparison of continuing turnover by territory is shown below:
2001 2000
£m £m
UK 86.7 61% 92.6 61%
US 32.6 23% 33.7 22%
Mainland Europe 25.0 17% 26.1 17%
144.3 152.4
Intra-group (1.4) (1%) (0.9) -
Total 142.9 100% 151.5 100%
The split of continuing group revenue for 2001 was 38% computer games, 37%
computing and 25% entertainment. 65% of continuing group revenue was
circulation revenue with 32% coming from advertising. The top 20 magazine
titles accounted for 58% of group revenues from continuing operations.
Continuing and discontinued businesses by territory
Business has been classified as discontinued if it relates to a business or
magazine sold, or to a magazine or website closed. Each of the territories in
which we continue to operate is reviewed below.
UK
£m 2001 2000
Continuing Discontinued Total Continuing Discontinued Total
Revenues 86.7 3.2 89.9 92.6 18.6 111.2
EBITA 13.3 (3.0) 10.3 13.2 (2.8) 10.4
Turnover for the year amounted to £86.7m from continuing activities.
Approximately 68% of this derives from circulation sales and 25% comes from
advertising income. Continuing operating profit (EBITA) was £13.3m representing
an operating profit margin of 15% from continuing activities. This compares
with 14% in 2000.
In terms of sales, the split of continuing revenue for 2001 and 2000 by division
was as follows:
2001 2000
Computer games 29% 25%
Computing 29% 32%
Entertainment 42% 43%
US
£m 2001 2000
Continuing Discontinued Total Continuing Discontinued Total
Revenues 32.6 16.8 49.4 33.7 65.4 99.1
EBITA 0.4 (8.1) (7.7) 2.2 (1.3) 0.9
The US business publishes five magazines, focused on the computer games sector
with two titles serving the computing sector. Turnover for the year amounted to
£32.6m from continuing activities. Approximately 49% of this derives from
circulation sales and 49% comes from advertising income. Continuing operating
profit (EBITA) was £0.4m which was reduced from the prior year mainly as a
result of launch expenditure relating to the Xbox magazine incurred in 2001.
Mainland Europe
£m 2001 2000
Continuing Discontinued Total Continuing Discontinued Total
Revenues 25.0 11.6 36.6 26.1 18.5 44.6
EBITA (0.6) (4.6) (5.2) (1.0) (9.1) (10.1)
The French business publishes 11 magazines, focused on the computer games and
computing sectors, whilst our Italian business publishes 10 magazines, focused
on the same sectors. Combined turnover from Mainland Europe for continuing
activities amounted to £25.0m. Approximately 68% of this derives from
circulation and 32% derives from advertising. Taken together, these businesses
made a continuing operating loss (EBITA) of £0.6m. After significant
restructuring actions during the last year, notably in France, it is expected
that greater focus on managing these businesses should assist the businesses to
develop further.
Central costs and intra-group adjustments
Total central costs at the operating profit level (excluding refinancing costs)
amounted to £3.1m for the year (2000: £3.0m)
Adjustments at the continuing revenue level in respect of intra-group
transactions amounted to £1.4m (2000: £0.9m).
Re-financing costs
Costs associated with re-financing amounted to £3.8m for the year. This
represented bank facility fees totalling £2.9m, and £0.9m of costs paid to
advisers in connection with the financial restructuring carried out during the
year.
Operating profitability of continuing businesses
After taking account of these central costs, operating profit for the year
(before amortisation and refinancing costs) was £10.0m (2000: £10.8m) on
turnover of £142.9m (2000: £151.5m) representing an operating profit margin of
7% (2000: 7%) from continuing businesses.
Carrying value of continuing businesses
The results reflect non-cash write-downs of goodwill relating to the continuing
business totalling £117.3m for the year, the majority of which was provided at
the half-year stage. The write-downs represent the annual amortisation charge
of £20.9m, together with impairment write-downs of £96.4m. These write-downs
were determined following a thorough review of the carrying value of intangible
assets, as required by Financial Reporting Standard 11, which included
forecasting cash flows from continuing businesses for future years and
discounting these by the Group's estimated Weighted Average Cost of Capital.
The impairment write-downs are made up of £76.0m in respect of the US business;
£16.3m in respect of mainland European businesses (France, £13.9m and Italy
£2.4m); and £4.1m in respect of the UK business.
Operating loss incurred on discontinued operations
The results relating to discontinued operations include operating losses of
£15.7m before amortisation and an amortisation charge of £3.3m. Significant
restructuring occurred in the US and UK. The magazine titles Business 2.0 and a
number of smaller titles were disposed of and a number of other titles were
closed. In Mainland Europe, significant restructuring took place in France and
Italy. The group's businesses in the Netherlands and Germany were closed in
February and April and its subsidiary in Poland was sold in December.
Group operating loss for year
The group's operating loss for the year of £130.1m represents four key elements:
£m
Operating profit (EBITA) on continuing operations 10.0
Refinancing costs (3.8)
Operating losses (EBITA) from discontinued operations (15.7)
Non-cash write-downs of intangible assets (120.6)
Group operating loss for year (130.1)
Associated undertakings
The group's equity share of operating profits from associated undertakings
amounting to £0.7m relates to income from the TED Conferences business, which
was an associated undertaking from 1 January to 24 August 2001. At that point
the Group acquired the remaining 51% interest in the business pursuant to a put
option exercised by the former owner. The business was subsequently sold on 19
November 2001.
Net exceptional gain arising on sale or termination of businesses
The Group realised a net exceptional gain arising on the sale or termination of
businesses amounting to £15.4m, analysed as follows:
£m
Profit on disposal of Business 2.0 Magazine 30.2
Loss on sale or termination of operations (12.3)
Loss on disposal of subsidiaries (2.5)
Net exceptional gain 15.4
Profit on disposal of Business 2.0 Magazine
In July 2001, the group disposed of its US-based magazine, Business 2.0, which
at its peak in 2000 had been very profitable, to eCompany Now, Inc, a subsidiary
of AOL Time Warner, Inc. The initial consideration was £47.3m, together with a
five-year revenue sharing arrangement in the event of revenues exceeding certain
levels. 2002 will be the first year potentially to benefit under the
revenue-sharing arrangement and accordingly no account has been taken of this
factor in the 2001 results.
Loss on sale or termination of operations
The £12.3m of losses on sale or termination of operations can be analysed as
follows:
£m
Redundancy 6.3
Property provisions 4.3
Other 1.7
Total 12.3
Analysed by territory, the analysis is:
£m
United Kingdom 3.1
United States 6.6
Mainland Europe 2.6
Total 12.3
Loss on disposals of subsidiaries
Losses of £2.5m represent the loss on the disposal of the TED Conference
business, acquired earlier during 2001, offset by a small profit on the disposal
of the group's subsidiary in Poland in December.
Net interest payable and similar charges
These totalled £6.5m for the year. Bank borrowings gave rise to interest
payable of £5.5m. In addition, an interest charge on interest swap agreements,
entered into during 1999 and 2000, amounted to £1.4m including an adjustment to
recognise the fair value of the swaps as a liability at the end of the year.
Interest payable on other loans amounted to £0.6m. Foreign exchange gains for
the year totalled £1.0m.
Taxation
The tax charge for the year amounts to £2.3m (2000 - £1.5m). This arose mainly
as a result of the taxable gain arising on the disposal of the Business 2.0
magazine in the US. This gain was offset to a degree by losses crystallising on
the disposals of the TED Conferences business and the simultaneous disposal of
the Group's investment in Balthaser.com in November. At 31 December 2001 there
were significant tax losses being carried forward in Mainland Europe.
Cash flow and funding
Net debt and annual interest cost
The group started the year with net debt of £68.9m. The group's net debt
increased during the year, as a result of continuing operating losses in the
first half year, and the cash impact of significant business restructuring. As
at 30 June 2001 net debt was £77.9m. The two most significant cash movements
during the year were:
a) net amounts realised in cash from business disposals, totalling £47.0m, and
b) the net funds raised by the rights issue, £33.5m.
As at 31 December 2001 net debt had been reduced to £7.8m.
At current interest rates and the margins applicable under the Group's existing
facility the implied annual borrowing cost of this level of net debt is less
than £0.5m.
Hedging policy
In 1999 and 2000 the Group took steps to protect itself from unexpected interest
rate fluctuations. Part of its policy involved contracting certain interest
rate swaps, which mature in December 2002. Based on interest rates prevailing
at 31 December 2001, these swap arrangements are likely to result in cash losses
of £0.8m, of which £0.8m has been provided at December 2001. In light of the
significant reduction in the group's net debt, no significant new hedging
arrangements are likely to be entered into during 2002.
Capital expenditure
Capital expenditure was significantly curtailed during the year. Total group
capital expenditure was held to £0.5m, compared with £5.8m in 2000. For 2002
capital expenditure is not expected to exceed £1.0m.
Rights Issue
On 28 September the Company announced the terms of a fully underwritten rights
issue, in terms of which six new ordinary shares of 1p each were issued for
every five in issue. The Rights Issue raised £33.5m net of expenses and was
completed on 9 November.
Re-structured bank facility
During the year the Company amended and restated its bank facility three times.
The last such amendment and restatement occurred at the time of the Rights Issue
in September. The Company entered into an agreement to amend and restate its
existing multi-currency bank facility, which was conditional upon completion of
the Rights Issue. The new bank facility provided a £33m multi-currency
revolving credit facility, repayable over five years, at an annual borrowing
cost of 2.75% over LIBOR and EURIBOR. As at 19 March 2002 the borrowing
facility had been reduced to £29m (consequent to business disposals) and the
current interest rate payable on sterling debt is 6.75% per annum.
Review of the Group's balance sheet
Most of the amounts on the Group's balance sheet were significantly lower at the
end of 2001 than at the beginning, largely as a consequence of the reduced scale
and size of the Group following the restructuring and disposals effected during
2001.
Intangible fixed assets
Intangible fixed assets at the year-end amounted to £117.9m, compared with
£253.8m at the previous year-end. The most significant movements for the year
arose from business disposals and from the review of the carrying value of
intangible fixed assets described above. The annual charge for the year
amounted to £23.0m while impairment write-downs totalled £96.4m.
Tangible fixed assets
The carrying value of the group's tangible fixed assets at the year-end was
significantly reduced to £4.4m (2000: £9.3m). This reduction reflects modest
capital expenditure of £0.5m, a depreciation charge of £2.8m, and disposals with
a net book value of £2.8m.
Working capital
The group had stocks of paper and other raw materials at the year-end, and
work-in-progress in relation to magazines scheduled for publication in 2002.
The total of these amounts was £3.5m, compared with £8.8m in 2000. This
represented both the downsizing in the group and tighter management of working
capital.
Group debtors at 31 December 2001 amounted to £42.7m (2000: £60.6m) and included
trade debtors of £24.4m (2000: £50.6.m). At group level, trade debtors
represented approximately 48 days debts compared with 75 days for the previous
year.
Net debt
As at 31 December 2001 net debt had been reduced to £7.8m (2000: £68.9m). This
represents bank loans of £18.9m; a shareholder loan of £1.9m; and cash balances
totalling £13.0m. As at 28 February 2002 net debt was estimated not to exceed
£5.0m.
Provisions
The Group balance sheet contains provisions totalling £4.6m (2000: £1.2m) mainly
in respect of onerous property leases and further restructuring in our French
subsidiary.
Share capital and reserves
The nominal value of the Company's share capital as at 31 December 2001 was
£3.2m, representing 319 million ordinary shares of 1p each. Following the
Rights Issue, the amount standing to the credit of the Company's share premium
account increased from £137.8m to £169.6m as at 31 December 2001. Other
reserves as at 31 December 2001 amounted to £130.8m. There was an adverse
balance on the Group's profit and loss account amounting to £197.6m as at 31
December 2001 and the Company had no distributable reserves as at 31 December
2001.
Management of working capital and financial risks
During the year 2001, very significant changes were made to the operation of our
business. As a result, it is now more tightly focused on core operations.
Financially, there has been much greater focus on the management of working
capital and on the assessment of business risk. Today, the Group's net debt is
estimated not to exceed £5m, with an implied annual interest cost of less than
£0.5m. This sum should be covered many times by the operating profit arising
from continuing operations, even if no change from 2001 is assumed. This will
not make the management team in any way complacent. We are committed to prudent
financial management whilst seeking to drive operating profitability.
John Bowman
Group Finance Director
19 March 2002
Group Profit and Loss Account
For the year ended 31 December 2001
2001 2000
Total Total
Note £m £m
Turnover
Continuing operations 142.9 151.5
Discontinued operations 31.2 102.5
1 174.1 254.0
Operating loss
Continuing operations
Profit before 10.0 10.8
refinancing costs and
amortisation and
impairment of intangible
assets
Refinancing costs (3.8) -
Amortisation and (117.3) (37.2)
impairment of intangible
assets 2,9,11
(111.1) (26.4)
Discontinued operations
Loss before mortisation (15.7) (13.3)
and impairment of
intangible assets
Amortisation and (3.3) (9.8)
impairment of intangible
assets 2,9,11
(19.0) (23.1)
Group operating loss 2 (130.1) (49.5)
Share of operating profit/(loss)
from associate 0.7 (0.5)
Total operating loss including (129.4) (50.0)
share of associate
Net exceptional gain arising on 15.4 -
sale or termination of businesses 3
Loss on disposal of fixed asset 11 (0.3) (0.1)
investment
Write down of fixed asset (0.2) (4.5)
investment 11
Loss on ordinary activities (114.5) (54.6)
before interest
Net interest payable and similar 6 (6.5) (4.7)
charges
Loss on ordinary activities (121.0) (59.3)
before tax 1,2
Tax on loss on ordinary (2.3) (1.5)
activities 7
Loss on ordinary activities after (123.3) (60.8)
tax
Loss for the financial year 20 (123.3) (60.8)
Earnings per 1 p Ordinary share
(in pence) Restated
2001 2000
Basic loss per share 8 (69.56) (39.93)
Adjusted basic loss per share 8 (1.48) (9.10)
Diluted continuing loss per share 8 (69.56) (39.93)
Adjusted diluted loss per share 8 (1.48) (9.10)
Statement of Total Recognised Gains and Losses
For the year ended 31 December 2001
2001 2000
Note £m £m
Loss for the financial year (123.3) (60.8)
Exchange adjustments offset in reserves 20 (0.1) (0.1)
Reversion of rights pertaining to investments from departing employees 21 0.3 0.2
Realised (loss)/unrealised gain arising from the provision of 21 (0.1) 0.1
advertising in exchange for warrants to acquire unlisted investments
Total recognised losses relating to the year (123.2) (60.6)
Reconciliation of Movements in Shareholders' Funds
For the year ended 31 December 2001
2001 2000
Group Group
Note £m £m
Loss for the financial year (123.3) (60.8)
Premium on shares issued during the year 19 0.6 1.9
Proceeds from issue of shares as part of the Rights issue 18 1.8 -
Premium on shares issued as part of the Rights Issue 19 32.9 -
Costs of the Rights Issue written off against share premium 19 (1.7) -
Refund of costs on issue of shares previously offset against share 19 - 0.4
premium
Exchange adjustments offset in reserves 20 (0.1) (0.1)
Deferred consideration not settled by issue of shares - (18.0)
Realised loss/unrealised gain arising from the provision of advertising 21 (0.1) 0.1
in exchange for warrants to acquire unlisted investments
Adjustment for shares issued under share option schemes through share
option trust - (0.1)
Reversion of rights pertaining to investments from departing employees 21 0.3 0.2
Net movement in shareholders' funds (89.6) (76.4)
Opening shareholders' funds 195.6 272.0
Shareholders' funds as at 31 December 106.0 195.6
Group Balance Sheet
As at 31 December 2001
Group Group
2001 2000
Note £m £m
Fixed Assets
Intangible assets 9 117.9 253.8
Tangible assets 10 4.4 9.3
Investments 11 - 5.7
122.3 268.8
Current Assets
Stocks 12 3.5 8.8
Debtors 13 42.7 60.6
Cash at bank and in hand 13.0 10.8
59.2 80.2
Creditors: amounts falling due within one year 14 (49.1) (102.3)
Net current assets/(liabilities) 10.1 (22.1)
Total assets less current liabilities 132.4 246.7
Creditors:amounts falling due after more than one year 15 (21.8) (49.9)
Provisions for liabilities and charges 17 (4.6) (1.2)
Net assets 106.0 195.6
Capital and reserves
Called-up share capital 18 3.2 1.4
Share premium account 19 169.6 137.8
Merger reserve 21 109.0 109.0
Other reserves 21 21.8 21.9
Profit and loss account 20 (197.6) (74.5)
Total equity shareholders' funds 106.0 195.6
Group Cash Flow Statement
For the year ended 31 December 2001
2001 2000
Note £m £m
Net cash outflow from operating activities A (6.5) (1.6)
Dividends from associates 0.7 -
Returns on investments and servicing of finance
Interest received 0.4 0.7
Interest paid (7.9) (3.3)
Net cash outflow from returns on investments and servicing
of finance (7.5) (2.6)
Tax paid (6.9) (2.2)
Capital expenditure and financial investment
Purchase of tangible fixed assets (0.4) (5.3)
Purchase of fixed asset investments - (2.8)
Sale of tangible fixed assets 0.1 0.1
Sale of current asset investments 0.6 1.5
Net cash inflow/(outflow) for capital expenditure and
financial investment 0.3 (6.5)
Acquisitions and disposals
Purchase of subsidiary undertakings (4.0) (2.3)
Net cash acquired with subsidiary undertakings 1.2 -
Purchase of associates - (5.4)
Cash proceeds on disposal of associate - 0.4
Cash proceeds on disposal of magazines 45.5 -
Cash proceeds from disposal of subsidiary undertakings 6.0 -
Net cash disposed of with subsidiary undertakings (1.4) -
Purchase of subscription lists (0.1) -
Payment of deferred consideration (0.8) (18.0)
Receipt of deferred consideration 0.6 -
Purchase of businesses - (4.6)
Net cash inflow / (outflow) for acquisitions and disposals 47.0 (29.9)
Net cash inflow/(outflow) before financing 27.1 (42.8)
Financing
Proceeds from issue of ordinary share capital 35.2 0.4
Expenses of share issue (1.7) -
Refund of expenses of share issue - 0.4
Draw down of bank loans 19.4 41.0
Movement on discounted bills (0.6) (0.6)
Repayment of shareholder loan (0.2) (1.0)
Repayment of bank loans (78.3) (6.0)
Net cash (outflow)/inflow from financing (26.2) 34.2
Increase/(decrease) in cash in the year 0.9 (8.6)
Notes to the Group Cash Flow Statement
For the year ended 31 December 2001
A. Cash flow from operating activities
The reconciliation of operating loss to net cash inflow from operating
activities is as follows:
Group Group
2001 2000
£m £m
Group operating loss (130.1) (49.5)
Cash flows on sale or termination of operations (12.3) -
Depreciation charge 2.8 2.7
Goodwill amortisation and impairment 120.6 47.0
Movement in onerous lease provisions 3.5 -
Decrease /(increase) in stocks 4.7 (2.6)
Decrease/(increase) in debtors 20.0 (10.9)
(Decrease)/increase in creditors (15.7) 11.7
Net cash outflow from operating activities (6.5) (1.6)
Included in the net cash outflow from operating activities above is an amount of
£0.1m inflow (2000: £0.7m outflow) in respect of acquisitions during 2001 and an
amount of £0.1m inflow (2000: nil) in respect of disposals.
B. Analysis of net debt
At 1 January Cash inflow Exchange movements Other non cash At 31 December 2001
changes
2001 £m £m £m
£m
£m
Cash at bank and in 10.8 0.9 1.3 - 13.0
hand
Debt due after one year (48.2) 27.6 - (0.1) (20.7)
Debt due within one (31.5) 31.4 - - (0.1)
year
(68.9) 59.9 1.3 (0.1) (7.8)
Other non cash changes are the amortisation of bank finance costs.
C. Reconciliation of movement in net debt
2001 2000
£m £m
Net debt at 1 January (68.9) (26.9)
Increase/(decrease) in cash 0.9 (8.6)
Movement in borrowings 59.0 (33.6)
Amortisation of debt issue costs (0.1) (0.2)
Exchange movements 1.3 0.4
Net debt at 31 December (7.8) (68.9)
Basis of preparation of accounts
The preliminary results for the year ended 31 December 2001 are unaudited and do
not comprise statutory accounts within the meaning of section 240 of the
Companies Act 1985.
The statutory accounts for the year ended 31 December 2001 are expected to be
mailed to shareholders in April and the Company's Annual General Meeting is
expected to be held on 29 May 2002.
Accounting policies
The Group's accounting policies are consistent with those disclosed in the
Company's Annual Report for the period ended 31 December 2000.
FRS18 "Accounting Policies" has been adopted in the current year but this has
not resulted in any required change in the Group's accounting policies. FRS17,
"Retirement Benefits" has also been adopted in the current year, but this has
not resulted in any impact on the Group's accounting policy in respect of the
defined contribution schemes operated.
Segmental reporting
The Group is involved in one class of business, the publication of magazines.
The geographical analyses of turnover, profit/(loss) before tax, and net assets
by origin, and turnover by destination were as follows:
a) Turnover by category
Turnover by category
2001 2000
£m £m
Circulation 105.1 127.8
Advertising 61.8 117.5
Other 7.2 8.7
Total 174.1 254.0
b) Turnover by origin
Continuing operations Discontinued Total Turnover Total Turnover
operations
2001 2001 2001 2000
£m £m £m £m
United Kingdom 86.7 3.2 89.9 111.2
United States 32.6 16.8 49.4 99.1
Mainland Europe 25.0 11.6 36.6 44.6
Turnover between
segments (1.4) (0.4) (1.8) (0.9)
Total 142.9 31.2 174.1 254.0
c) Loss on ordinary activities before tax by origin
Continuing operations Discontinued operations Total Total
Profit/(Loss) Profit/(Loss)
Before tax before tax
2001 2001 2001 2000
£m £m £m £m
United Kingdom 3.9 (2.9) 1.0 2.9
United States (91.0) 6.6 (84.4) (21.8)
Mainland Europe (19.8) (6.9) (26.7) (33.7)
Central costs (7.1) (3.8) (10.9) (6.7)
Total (114.0) (7.0) (121.0) (59.3)
d) Turnover by destination
2001 2000
£m £m
United Kingdom 81.8 100.9
United States 39.9 99.2
Mainland Europe 48.2 42.5
Rest of world 6.0 12.3
Inter-segmental (1.8) (0.9)
Total 174.1 254.0
e) Net assets by origin
Total Total
2001 2000
£m £m
United Kingdom 82.2 107.2
United States 33.6 136.1
Mainland Europe 9.1 31.4
Interest bearing liabilities (18.9) (79.1)
Total 106.0 195.6
2. Group operating loss
2001 2000
Continuing Discontinued Total Continuing Discontinued Total
£m £m £m £m £m £m
Turnover 142.9 31.2 174.1 151.5 102.5 254.0
Cost of sales (90.3) (38.1) (128.4) (99.2) (97.6) (196.8)
Gross profit 52.6 (6.9) 45.7 52.3 4.9 57.2
Distribution (11.4) (0.5) (11.9) (11.4) (4.0) (15.4)
expenses
Administration (31.2) (8.3) (39.5) (30.1) (14.2) (44.3)
expenses
Refinancing costs (3.8) - (3.8) - - -
Amortisation and (117.3) (3.3) (120.6) (37.2) (9.8) (47.0)
impairment of
intangible assets
Total (152.3) (11.6) (163.9) (67.3) (24.0) (91.3)
administration
expenses
Group operating (111.1) (19.0) (130.1) (26.4) (23.1) (49.5)
loss
Actual Actual
2001 2000
£m £m
Loss on ordinary activities before tax is stated after charging/(crediting):
Staff costs (note 5) 53.9 62.3
Depreciation of owned assets (note 10) 2.8 2.7
Amortisation of intangible assets (note 9) 23.0 26.8
Impairment of intangible assets (note 9) 96.4 19.5
Amortisation of associated undertakings goodwill (note 11) 1.2 0.7
Hire of machinery and equipment 0.6 0.9
Other operating lease rentals 5.3 3.6
Net exchange (gain)/loss on foreign currency borrowings less deposits (1.2) 0.1
3. Net exceptional gain arising on sale or termination of businesses
2001 2000
£m £m
Losses on sale or termination of businesses (12.3) -
Profit on disposal of Magazine titles 30.2 -
Losses on disposal of subsidiaries (2.5) -
Net exceptional gain 15.4 -
4. Fees paid to Auditors
2001 2000
£m £m
Statutory audit 0.2 0.2
Reporting accountants work in respect of shareholder circulars 1.2 0.1
Taxation and other services 0.4 0.6
Total 1.8 0.9
5. Employees and Directors
Staff costs 2001 2000
£m £m
Wages and salaries 47.8 52.4
Social security costs 5.5 9.2
Other pension costs 0.6 0.7
53.9 62.3
Redundancy costs included in loss on sale or termination of businesses 6.3 -
60.2 62.3
Average monthly number of people (including executive Directors)
Production 1,022 1,368
Administration 381 460
Total 1,403 1,828
6. Net interest payable and similar charges
2001 2000
£m £m
Interest payable on bank loans and overdrafts 7.1 4.6
Amortisation of issue costs of bank loan 0.1 0.2
Interest payable on other loans 0.4 0.5
Amortisation of discount relating to vacant property provisions 0.2 -
Amortisation of discount arising on fair valuing of deferred
consideration 0.1 0.1
Total interest payable and similar charges 7.9 5.4
Interest receivable (0.4) (0.7)
Exchange gains (1.0) -
Total interest receivable and similar items (1.4) (0.7)
Net interest payable and similar items 6.5 4.7
7. Tax on loss on ordinary activities
2001 2000
£m £m
UK
Current year corporation tax at 30% (2000: 30%) 0.1 1.4
Prior year corporation tax at 30% (0.6) -
Deferred tax (note 17) (1.1) -
Overseas
Current year tax 4.2 -
Deferred tax (note 17) (0.3) 0.1
2.3 1.5
The Group made a loss before tax of £121.0m (2000 : £59.3m) and has a tax charge
of £2.3m (2000 : charge £1.5m) for the year. Eliminating the impact of the
annual goodwill amortisation charge, goodwill impairment and the goodwill
disposed of, which has no impact on taxation, the profit before tax was £22.9m
(2000: loss £12.3m) providing an effective tax rate of 10.0% (2000: negative
effective tax rate of 12.1%).
The principal reasons for the difference between the actual effective rate and
the UK standard rate of 30% in 2001 is relief obtained for previously
unrecognised tax losses arising in the US in earlier years. This has been offset
by tax losses arising in European subsidiaries which cannot be offset against
taxable profits in the UK and the US.
8. Earnings per share
Basic earnings per share are calculated using the weighted average number of
ordinary shares outstanding during the period. This has been adjusted in 2001
and 2000 to take into account the effect of the shares issued as a result of the
Rights Issue in November 2001, which were issued at a discount to the market
price. Diluted earnings per share have been calculated by taking into account
the dilutive effect of shares that would be issued on conversion into ordinary
shares of options held under employee share schemes.
The adjusted loss per share, removes the effect of the amortisation of goodwill
and intangible assets from the calculation as follows:
Adjustments to loss on ordinary activities after tax
2001 2000
£m £m
Loss on ordinary activities after tax (123.3) (60.8)
Add: amortisation and impairment of intangible assets 120.6 47.0
Adjusted loss on ordinary activities after tax (2.7) (13.8)
Restated
2001 2000
Weighted average number of shares outstanding during the period:
- basic 177,146,898 152,177,814
- dilutive effect of share options 4,542,560 8,041,314
- diluted 181,671,458 160,219,128
Basic loss per share (in pence) (69.56) (39.93)
Adjusted basic loss per share (in pence) (1.48) (9.10)
Diluted loss per share (in pence)* (69.56) (39.93)
Adjusted diluted loss per share (in pence)* (1.48) (9.10)
The adjustments to profit have the following effects on EPS:
2001 2000
Basic loss per share (in pence) (69.56) (39.93)
Amortisation and impairment of intangible assets 71.04 30.83
Adjusted basic loss per share (in pence) (1.48) (9.10)
Diluted loss per share (in pence) (69.56) (39.93)
Amortisation and impairment of intangible assets 71.04 30.83
Adjusted diluted loss per share (in pence) (1.48) (9.10)
*The share options do not have a dilutive effect where there is a loss.
9. Intangible fixed assets
Goodwill
Group £m
Cost
At 1 January 2001 321.9
Exchange adjustments (0.6)
Goodwill arising on acquisition of subsidiary 7.7
Acquisition of subscription list 0.1
Disposal of magazine title (18.0)
Disposal of subsidiary undertakings (12.0)
Adjustment to fair value of consideration paid (0.7)
At 31 December 2001 298.4
Amortisation
At 1 January 2001 (68.1)
Exchange differences 0.3
Disposal of magazine title 3.6
Disposal of subsidiary undertakings 3.1
Charge for the year (23.0)
Impairment write down (96.4)
At 31 December 2001 (180.5)
Net book amount at 31 December 2001 117.9
Net book amount at 31 December 2000 253.8
10. Tangible fixed assets
Land and buildings Plant and Equipment, fixtures and
machinery fittings Total
£m £m £m £m
Group
Cost
At 1 January 2001 2.9 7.8 2.8 13.5
Reclassification - (1.8) 1.8 -
Exchange adjustments - - 0.2 0.2
Additions 0.1 0.3 0.1 0.5
Disposals (0.7) (1.3) (2.1) (4.1)
At 31 December 2001 2.3 5.0 2.8 10.1
Depreciation
At 1 January 2001 (0.3) (2.9) (1.0) (4.2)
Reclassification 0.9 (0.9) -
Charge for the year (0.2) (1.8) (0.8) (2.8)
Disposals - 0.6 0.7 1.3
At 31 December 2001 (0.5) (3.2) (2.0) (5.7)
Net book value at 31 December 2001 1.8 1.8 0.8 4.4
Net book value at 31 December 2000 2.6 4.9 1.8 9.3
Analysis of net book value of land and buildings
Group Group
2001 2000
£m £m
Freehold 0.4 0.4
Leasehold:
Over 50 years unexpired 1.4 2.0
Short term lease - 0.2
Total 1.8 2.6
11. Investments
Group
2001 2000
Interests in Associate at cost £m £m
At 1 January net liabilities (0.1) -
goodwill 5.5 -
Additions -net assets - 1.3
-goodwill - 5.5
Adjustment in respect of acquired associate
-net liabilities 0.1 -
-goodwill (5.5) -
Disposals -net assets - (1.4)
At 31 December -net liabilities - (0.1)
-goodwill - 5.5
- 5.4
Amortisation of goodwill
At 1 January (0.8) -
Adjustment in respect of acquired associate 2.0 -
Charge for year (1.2) (0.8)
At 31 December - (0.8)
Net book amount at 31 December
- Net liabilities - (0.1)
- Goodwill - 4.7
- 4.6
Other Investments at cost
At 1 January 1.1 2.4
Exchange differences (0.1) 0.2
Additions in year 0.2 3.0
Disposals (1.0) -
Write down of investments (0.2) (4.5)
At 31 December - 1.1
Total fixed asset investments - 5.7
Company
2001 2000
Shares in Group undertakings £m £m
At 1 January 43.5 43.3
Additions in year 0.1 0.2
Write down of fixed asset investments (22.8) -
At 31 December 20.8 43.5
12. Stocks
Group Group
2001 2000
£m £m
Raw materials 1.3 5.1
Work in progress 1.9 3.2
Finished goods 0.3 0.5
3.5 8.8
13. Debtors
Group Company Group Company
2001 2001 2000 2000
£m £m £m £m
Amounts falling due within one year:
Trade debtors 24.4 - 50.6 -
Amounts owed by Group undertakings - 129.5 - 182.9
Corporation tax recoverable 3.5 - 1.2 -
Other debtors 9.0 0.1 1.7 3.0
Prepayments and accrued income 4.6 - 5.1 -
41.5 129.6 58.6 185.9
Amounts falling due after one year:
Other debtors 1.2 - 2.0 -
42.7 129.6 60.6 185.9
14. Creditors: amounts falling due within one year
Group Company Group Company
2001 2001 2000 2000
£m £m £m £m
Bank and other borrowings 0.1 - 31.5 30.9
Trade creditors 16.6 - 29.1 -
Amounts owed to Group undertakings - 27.3 - -
Corporation tax 0.6 - 1.5 -
Other creditors including taxation and
social security 7.6 - 7.4 -
Accruals and deferred income 23.6 2.1 32.2 2.4
Deferred consideration for acquisitions 0.6 - 0.6 -
49.1 29.4 102.3 33.3
15. Creditors: amounts falling due after more than one year
Group Company Group Company
2001 2001 2000 2000
£m £m £m £m
Bank and other borrowings 18.8 18.8 46.4 46.4
Shareholder loan 1.9 - 1.8 -
Deferred consideration for acquisitions 1.1 - 1.7 -
21.8 18.8 49.9 46.4
16. Bank and other borrowings
i) Due within one year
Group Company Group Company
2001 2001 2000 2000
£m £m £m £m
Bank loans
Secured - - 30.9 30.9
Unsecured 0.1 - 0.6 -
Total 0.1 - 31.5 30.9
ii) Due after more than one year
Group Company Group Company
2001 2001 2000 2000
£m £m £m £m
Bank loans: Secured 18.8 18.8 46.4 46.4
Shareholder loan: Unsecured 1.9 - 1.8 -
Total 20.7 18.8 48.2 46.4
The bank loans are secured by a fixed charge over The Future Network plc, Future
Publishing Holdings Limited, Future Media Italy SpA, Imagine Media, Inc and
Future Publishing Limited's land and buildings, intellectual property and
goodwill and a floating charge over the remainder of their assets.
The Company incurred total issue and facility costs in 1999 of £1,216,000 in
respect of the post flotation bank loans of which facility costs of £687,000
were written off immediately to the profit and loss account in 1999. The
remainder of the costs are being charged to the profit and loss account over the
term of the facilities at a constant rate on the carrying amount. The amounts
are stated net of unamortised issue costs of £0.1m (2000: £0.2m).
17. Provisions for liabilities and charges
Group
Deferred tax Vacant Restructuring Other Total
property
£m £m £m £m £m
At 1 January 2001 0.4 0.3 - 0.5 1.2
Transfer (to)/from profit and (0.4) 4.3 0.6 (0.5) 4.0
loss account in the period
Utilised in year - (0.8) - - (0.8)
Amortisation of discount - 0.2 - - 0.2
At 31 December 2001 - 4.0 0.6 - 4.6
The Company had no provisions for liabilities and charges at 31 December 2001
(2000: £ nil).
Deferred tax
Group Group
Provision for deferred tax comprises: 2001 2000
£m £m
Other - 0.4
At 31 December 2001 a deferred tax asset has been recognised within other
debtors falling due after more than one year as follows:
Group Group
2001 2000
£m £m
Other 1.0 -
The recognised amount relates to short term timing differences at 31 December
2001 which will reverse in the foreseeable future.
The unprovided amounts of deferred taxation assets are as follows:
Group Group
2001 2000
£m £m
Accelerated capital allowances 0.4 0.2
Other 11.9 11.0
Total 12.3 11.2
The Company had no unprovided deferred taxation at 31 December 2001 (2000: Nil)
Other deferred tax assets not provided include £7.5m (2000 : £8.1m) in respect
of overseas tax losses carried forward and the balance is in respect of other
short term timing differences which are considered unlikely to be utilised in
the foreseeable future.
18. Called up share capital
Authorised share capital 2001 2000
£m £m
At 1 January (Ordinary shares of 1p each) 2.5 2.0
Increase in the period 3.5 0.5
At 31 December 6.0 2.5
A resolution was passed at an Extraordinary General Meeting on 15 October 2001
to increase the authorised share capital by 3,500,000 Ordinary shares of 1p each
to give a total of 6,000,000 Ordinary shares of 1p each.
Allotted, issued and fully paid No. of Shares 2001
Ordinary shares of 1p each £m
At 1 January 2001 142,954,916 1.4
Share Options Exercised 1,373,861 -
Other 1,245,650 -
Rights Issue 173,418,015 1.8
At 31 December 2001 318,992,442 3.2
On 9 November 2001 the Company completed a Rights Issue to qualifying
shareholders on the basis of 6 new Ordinary shares for every 5 existing Ordinary
shares at a price of 20p per share. A total of 173,418,015 new shares were
issued.
During the year 1,373,861 ordinary shares were issued by the Company for a cash
commitment of £0.2m pursuant to the exercise of share options granted.
In addition, 195,652 shares were issued to a Director in lieu of a signing on
bonus and 1,049,998 shares were issued to members of the Group's banking
syndicate in lieu of fees payable on the restatement of the Group's Banking
facility in November 2001.
19. Share premium account
2001 2000
Group and Company £m £m
At 1 January 137.8 135.6
Refund of costs on issue of shares on Listing - 0.4
Premium on shares issued during the year 0.6 0.5
Premium on shares issued during Rights Issue 32.9 -
Premium on issue of shares to acquire interest in associated undertaking - 1.3
Write off of costs associated with the Rights Issue (1.7) -
At 31 December 169.6 137.8
20. Profit and loss account
Group Company
£m £m
At 1 January 2001 - deficit (74.5) (11.0)
Net exchange adjustments (0.1) -
Transfer from other reserves 0.3 -
Loss for the financial year (123.3) (78.0)
At 31 December 2001 - deficit (197.6) (89.0)
21. Other reserves
Group Group Group Company
Merger Other reserves Total Other reserves
reserve
£m £m £m £m
At 1 January 2001 109.0 21.9 130.9 21.8
Transfer to profit and loss reserve - (0.3) (0.3) -
Unrealised gain arising from the provision of advertising
in exchange for warrants to acquire unlisted investments - (0.1) (0.1) -
Reversion of rights pertaining to investments from
departing employees - 0.3 0.3 -
At 31 December 2001 109.0 21.8 130.8 21.8
Directors:
Roger Parry, Non Executive Chairman
Greg Ingham, Chief Executive Officer
John Bowman, Group Financial Director
Colin Morrison, Chief Operating Officer & UK Managing Director
Elisabeth Murdoch, Non Executive Director
Michael Penington, Non Executive Director
Patrick Taylor, Non Executive Director
Brendan Clouston, Non Executive Director
--------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
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