TIDMUTV
UTV Media plc
("UTV" or "the Company" or "the Group")
Preliminary Results
for the year ended 31 December 2011
Financial highlights on continuing operations *
* Record pre-tax profits - up by 10% to GBP23.3m (2010: GBP21.3m)
* Group revenue up by 2% to GBP121.6m (2010: GBP118.9m)
* Group operating profit up by 3% to GBP26.8m (2010: GBP26.1m)
* 23% or GBP16.8m reduction in net debt over 12 months to GBP54.7m (2010: GBP71.5m)
* Net debt reduced by 49% over the last 3 years, a reduction of GBP52.9m
* Net finance costs down by 26% to GBP3.5m (2010: GBP4.7m)
* Impairment charge of GBP45.0m recognised on Republic of Ireland intangible
assets with GBP19.0m due to higher Republic of Ireland sovereign debt risk
* Pension deficit of GBP8.6m (2010: GBP6.8m) despite significant movement in
discount rate (2011: 4.80% versus 2010: 5.40%)
* Diluted adjusted earnings per share from continuing operations up by 12% to
18.96p (2010: 16.93p)
* Proposed final dividend of 4.50p (2010: 3.00p) resulting in a full year
dividend up by 50% to 6.00p (2010: 4.00p)
* As appropriate, references to profit include associate income but exclude
exceptional items
Operational highlights
* Continuing strong audience delivery across both Radio and Television
* Revenue growth of 6% in Radio GB despite the tough comparatives of the 2010
World Cup
* Irish Radio Revenues down by 4% - yet still represents significant market
outperformance
* Television revenue up by 1% with net advertising revenue in line with the
ITV Network
* Strong cash management has led to significant debt reduction and a Net
Debt:EBITDA ratio of 1.88 times
John McCann, Group Chief Executive, UTV Media plc, said:
"I'm very pleased with the company's performance against what has remained a
testing economic background. The strength of these numbers firmly reflects
UTV's commitment to deliver innovative programming across platforms, driving
audience share while at the same time effectively managing costs within the
business and paying down our debt facilities. We remain committed to our
strategy of delivering value through the development of a diversified portfolio
of leading media assets. I am confident this foundation will see the business
continue to perform into 2012."
Key Dates
* 17 May 2012 - date of Annual General Meeting
* 25 May 2012 - record date for payment of dividends
* 16 July 2012 - payment of dividends
For further information contact:
Maitland
Tom Buchanan/Rowan Brown +44 (0) 20 7379 5151
UTV Media plc
John McCann Group Chief Executive +44 (0) 28 9026 2202
Norman McKeown Group Finance Director +44 (0) 28 9026 2098
Orla McKibbin Head of Communications +44 (0) 28 9026 2188
Chairman's Statement
Introduction
I am pleased to report that the UTV Group again achieved record pre-tax
profits, pre exceptional items, despite the difficult macro-economic
environment. Strong cashflows continued to drive down net debt which has been
reduced by almost 50% over the last three years. Good progress has been made
toward the appointment of a new Chairman who is expected to provide independent
and expert leadership of the Group, thus ensuring its continued commercial
success. In the interim, it is business as usual for the Board in forging ahead
with our strategy of delivering value through the development of market leading
media assets.
Results *
The Group has performed robustly and remains resilient to the adverse economic
conditions, as is evidenced by the strong performance and financial results of
the Group in 2011.
Operating profit in our radio division was slightly up at GBP18.9m (2010: GBP18.7m)
while television operating profit increased by 18% to GBP6.5m (2010: GBP5.5m). New
media operating profit was GBP0.4m lower at GBP1.5m (2010: GBP1.9m). Group operating
profit, therefore, was up by 3% to GBP26.8m (2010: 26.1m). After charging net
interest of GBP3.5m (2010: GBP4.7m), group profit before tax and exceptional items
was up by 10% to GBP23.3m (2010: GBP21.3m), a record for the business. The
exceptional items after tax of GBP43.9m (2010: GBP24.8m) relate primarily to an
accounting non-cash impairment charge in respect of Irish radio (2010: GB local
radio) assets. Net debt has been reduced during the year by over 23% to GBP54.7m
at 31 December 2011 with the key Net Debt/EBITDA ratio declining substantially
to a healthy 1.88 times.
The financial results in the individual business divisions have demonstrated a
strong performance in the different markets and trading conditions that they
operate in. Over the last seven years, the Group has diversified its operation
from being substantially a television business based in Northern Ireland to its
current position as a leading multi-platform media company which encompasses
television, radio and new media businesses. This is a result of the
considerable expansion across Great Britain, Republic of Ireland and Northern
Ireland. Our radio businesses now account for 70% of operating profit before
exceptional items for the Group.
[* As appropriate, references to operating profit include associate income but
exclude discontinued operations and exceptional items.]
Radio *
Our GB radio division, and particularly talkSPORT, winner of the Sony UK Radio
Station of the Year Award, performed particularly well during the year
delivering an operating profit of GBP12.4m representing a growth of over 6%,
despite the absence of the 2010 Football World Cup. talkSPORT benefitted from
its coverage of major sporting events such as securing the exclusive rights for
the coverage of the IRB Rugby World Cup and the rights to broadcast live
Premier League football action. This high quality sporting content will further
drive audience delivery, and its ability to reach male demographic audiences is
a proven key attraction to advertisers. The commercial trading environment
experienced by our local radio stations remained challenging but they managed
to increase revenue and benefitted from increased synergies.
The commercial trading environment experienced by our Ireland radio businesses
was again extremely difficult due to macro-economic conditions. However, the
ongoing attractiveness and success of our innovative Urban Access advertising
package continued to provide a national advertising capability to major
agencies and helped to offset much of the downturn. Operating profit fell by 8%
to GBP6.4m but this result has significantly out-performed the Irish radio
market. The market leading listenership of our stations provides much
reassurance that the foundations are in place for strong and quick recovery
once economic conditions improve.
Television
Our television business accounted for 24% of operating profit before
exceptional items and delivered another good performance with an increase in
operating profit of 18% to GBP6.5m. The national television advertising market
largely maintained its recovery, benefitting from successful programming by the
ITV network. Additionally, the strength of our local programming content also
produced growth in our local advertising revenues despite the impact of the
weakened Irish economy. This was further boosted by the growth in the online
advertising medium through the UTV Player, (a watch on demand service) which
was up, and traffic to the television website. The increase in operating profit
included the impact of reduced operating costs, as the 2010 results included
the operating costs of the Football World Cup.
New Media
New media is our smallest business division accounting for 6% of operating
profit before exceptional items and is viewed as offering excellent
opportunities for significant expansion through Tibus, our award winning web
development and design company and our classified Portals products as well as
providing additional services to the wider UTV group. During the year, as a
result of the sales increase in these businesses in 2011 and the expectation of
significant growth in 2012, there has been substantial investment in business
development in Tibus and the Portals. This investment resulted in higher costs
which reduced the operating profit to GBP1.5m. However, the increase in business
development has created a firm platform upon which the businesses can swiftly
expand.
Impairment Review
The 2011 impairment review identified a GBP45.0m impairment in Radio Ireland's
intangible assets. This non-cash, charge has arisen from a combination of a
downward revision of growth forecasts for that division together with the use
of a higher country specific discount rate for the Republic of Ireland. This
higher discount rate compared to that used for the UK, reflects a greater
sovereign debt risk and accounts for GBP19.0m of the impairment charge. It has
been used despite the fact that the Group is a UK funded plc. The net
impairment cost of GBP26.0m occurring at this time despite the relative strength
of our Radio Ireland assets which continue to significantly outperform our
competitors and have reported a GBP6.4m operating profit in 2011, is driven by
the longer than expected recovery of the Irish economy.
Pension
The results of the UTV pension scheme's IAS 19 valuation at 31 December 2011
indicate a pension deficit of GBP8.6m (2010: GBP6.8m). A key assumption in arriving
at this is the discount rate. The rate used in 2011 was 4.80%; the comparable
rate in 2010 was 5.40%. Such is the impact of this rate that if the 2010
discount rate had been unchanged, the deficit would have been reduced to
approximately GBP1.0m.
Dividend
Our dividend policy over the past few years has been shaped by the need to be
cautious in difficult times and by our stated objective to reduce debt. While
continuing to drive down debt and remaining prudent during uncertain economic
conditions, our improved profit and debt profile allows us to be in a position
to pay a significantly increased dividend. Accordingly, the Board is
recommending a final dividend of 4.5p making a total for the year of 6.0p,
which represents an increase of 50% from 2010. The final dividend will be paid
on 16 July 2012 to all shareholders on the Register at the close of business on
25 May 2012.
Prospects
The year 2012 has started well for the Group despite the prevailing economic
uncertainty. Overall, we expect revenues in the first four months of 2012 to be
in line with budget. It is expected that the major sporting events during the
summer of 2012, the UEFA Euro championships and the London Olympics, will have
a positive impact in attracting a large volume of both listeners and viewers to
our radio and television output, generating an attractive prospect for
advertisers.
Our GB Radio division revenue is expected to be up by 8% in the first four
months of 2012. This represents outperformance of the UK radio market which is
likely to be up by about 5% in the same period. Three new licenses for local
radio were acquired in February 2012, underlining the Group's commitment to our
local radio business.
A similarly strong outperformance by our Irish radio division, notwithstanding
the depressed Irish market, is expected with radio advertising down by 4% in
the four months to the end of April at the same level as last year against a
radio market sector, which sales agencies are suggesting is likely to be down
by about 10%.
We expect television revenues to be down by 5% in the first four months of 2012
compared with last year, which should be broadly in line with the market. A new
Network Affiliate Agreement (NAA) has been agreed with ITV plc in March 2012
providing greater flexibility for Television to operate more effectively on all
platforms and driving forward its digital strategy. Our digital strategy has
already seen encouraging growth in the online advertising medium and this
success is expected to continue as the year progresses.
Our new media division performance over the first four months is in line with
last year. In March 2012, the Group acquired a leading social media agency,
Simply Zesty, based in the Republic of Ireland. This collaboration is expected
to richly contribute to our strategy to further create a diversified
multi-media business with both domestic and international customers.
Despite this positive outlook, the fragility of consumer confidence and the
slow economic recovery should not be underestimated as these factors can foster
volatility in the advertising markets in which we operate. Nevertheless, the
combination of the solid foundation of the first four months trading, strong
audience delivery in each of our divisions and a continued focus on cost
control and debt management, should provide a measure of confidence to our
shareholders for 2012.
People
Finally, I wish to thank the Board, the Chief Executive and his team, and all
the staff who have made such a significant contribution to the successful
achievements of the Group over the course of 2011. Such success could not be
achieved without the extraordinary skills and creative talents of the people in
the Group, which is sincerely appreciated.
I also wish to thank my predecessor as Chairman, John B McGuckian. John B made
an outstanding contribution to the group over his 40 years as a Director, the
last 20 years as Chairman.
I look forward to 2012 with anticipation and expectation. Once the changes to
the Board structure have been completed this should serve to further strengthen
the team, consolidate our governance and promote effective performance - the
outcome of which will be the overall continued success of the Group.
Helen Kirkpatrick
Interim Chairman
20 March 2012
Group Income Statement
For the year ended 31 December 2011
Notes Results Results
before before
Exceptional Exceptional Exceptional Exceptional
Items Items Total Items Items Total
2011 2011 2011 2010 2010 2010
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Continuing operations
Revenue 2 121,551 - 121,551 118,860 - 118,860
Operating costs (94,841) -(94,841) (93,003) - (93,003)
------- ------- ------- ------- ------- -------
Operating profit from 26,710 - 26,710 25,857 - 25,857
continuing operations
before tax and finance
costs
Impairment of 3 - (45,000) (45,000) - (35,000) (35,000)
intangible assets
Share of results of 136 - 136 216 - 216
associates accounted
for using the equity
method
------- ------- ------- ------- ------- -------
(Loss)/profit from 26,846 (45,000) (18,154) 26,073 (35,000) (8,927)
continuing operations
before tax and finance
costs
Finance revenue 165 - 165 76 - 76
Finance costs (3,653) - (3,653) (4,760) - (4,760)
Foreign exchange loss (15) - (15) (80) - (80)
------- ------- ------- ------- ------- -------
(Loss)/profit from 2 23,343 (45,000) (21,657) 21,309 (35,000) (13,691)
continuing operations
before tax
Taxation 4 (4,743) 1,142 (3,601) (4,666) 10,235 5,569
------- ------- ------- ------- ------- -------
(Loss)/profit from 18,600 (43,858) (25,258) 16,643 (24,765) (8,122)
continuing operations
after tax
Discontinued
operations
Loss from discontinued (213) - (213) (214) - (214)
operations
------- ------- ------- ------- ------- -------
(Loss)/profit for the 18,387 (43,858) (25,471) 16,429 (24,765) (8,336)
year
------- ------- ------ ------- ------- ------
Attributable to:
Equity holders of the 17,972 (43,858) (25,886) 16,012 (24,765) (8,753)
parent
Non-controlling 415 - 415 417 - 417
interest
------- ------- ------- ------- ------- -------
18,387 (43,858) (25,471) 16,429 (24,765) (8,336)
------- ------- ------ ------- ------- ------
Earnings per share 2011 2010
Continuing operations
Basic & diluted 5 (26.94)p (8.95)p
Adjusted 5 19.08p 17.01p
Diluted adjusted 5 18.96p 16.93p
Continuing and
discontinued
operations
Basic & diluted 5 (27.16)p (9.17)p
Adjusted 5 18.86p 16.78p
Diluted adjusted 5 18.74p 16.70p
Group Statement of Comprehensive Income
For the year ended 31 December 2011
2011 2010
GBP000 GBP000
Loss for the year (25,471) (8,336)
------- -------
Other comprehensive income
Exchange difference on translation of foreign (2,328) (2,933)
operations
Actuarial (loss)/gain on defined benefit (3,281) 3,043
pension schemes
Cash flow hedges:
Loss arising during the year (448) (1,167)
Less transfers to the income statement 550 1,471
Tax relating to other comprehensive income 783 (878)
------- -------
Other comprehensive loss for the year, net of (4,724) (464)
tax
------- -------
Total comprehensive loss for the year, net of (30,195) (8,800)
tax
------- -------
Attributable to:
Equity holders of the parent (30,610) (9,217)
Non-controlling interest 415 417
------- -------
(30,195) (8,800)
------- ------
Group Balance Sheet Notes 2011 2010
At 31 December 2011
GBP000 GBP000
ASSETS
Non-current assets
Property, plant and equipment 11,273 10,695
Intangible assets 173,776 221,856
Investments accounted for using the equity 126 172
method
Deferred tax asset 6,511 9,876
------- -------
191,686 242,599
------- -------
Current assets
Inventories 1,533 1,741
Trade and other receivables 25,857 28,180
Cash and short term deposits 8 7,205 11,250
------- -------
34,595 41,171
------- -------
TOTAL ASSETS 226,281 283,770
------- ------
EQUITY AND LIABILITIES
Equity attributable to equity holders of the
parent
Equity share capital 55,557 55,557
Capital redemption reserve 50 50
Treasury shares (1,523) (1,258)
Foreign currency reserve 7,171 9,499
Cash flow hedge reserve (521) (581)
Retained earnings 22,414 54,441
------- -------
83,148 117,708
Non-controlling interest 469 475
------- -------
TOTAL EQUITY 83,617 118,183
------- -------
Non-current liabilities
Financial liabilities 7 53,752 74,490
Derivative financial liabilities 207 370
Pension liability 9 8,569 6,800
Provisions 766 970
Deferred tax liabilities 35,932 38,416
------- -------
99,226 121,046
------- -------
Current liabilities
Trade and other payables 31,948 32,363
Financial liabilities 7 8,167 8,254
Derivative financial liabilities 479 420
Tax payable 2,409 3,076
Provisions 435 428
------- -------
43,438 44,541
------- -------
TOTAL LIABILITIES 142,664 165,587
------- -------
TOTAL EQUITY AND LIABILITIES 226,281 283,770
------- -------
Group Cash Flow Statement
For the year ended 31 December 2011
Note 2011 2010
GBP000 GBP000
Operating activities
Loss before tax (i) (21,870) (13,905)
Adjustments to reconcile loss before tax to
net cash flows from operating activities
Foreign exchange loss 15 80
Net finance costs 3,488 4,684
Share of results of associates (136) (216)
Non-operational exceptional costs 45,000 35,000
Depreciation of property, plant and equipment 1,597 1,636
Profit from sale of property, plant and (31) (21)
equipment
Share based payments 605 418
Difference between pension contributions paid
and
amounts recognised in the income statement (1,512) (1,156)
Decrease/(increase) in inventories 208 (272)
Decrease in trade and other receivables 2,102 3,143
Decrease in trade and other payables (415) (3,584)
Increase/(decrease) in provisions 37 (24)
------- -------
Cash generated from operations before 29,088 25,783
exceptional costs
Exceptional costs (19) (549)
Tax paid (2,288) (226)
------- -------
Net cash inflow from operating activities 26,781 25,008
------- -------
Investing activities
Interest received 165 76
Proceeds on disposal of property, plant and 31 151
equipment
Purchase of property, plant and equipment (2,155) (1,159)
Dividends received from associates 182 181
Outflow on acquisition of subsidiary - (13)
undertaking
Outflow on acquisition of joint ventures - (69)
------- -------
Net cash flows from investing activities (1,777) (833)
------- -------
Financing activities
Borrowing costs (3,032) (3,021)
Swap cost (550) (1,471)
Dividends paid to equity shareholders (4,279) (2,851)
Dividends paid to non-controlling interests (421) (689)
Acquisition of treasury shares (265) -
Repayment of borrowings (20,474) (13,233)
------- -------
Net cash flows used in financing activities (29,021) (21,265)
------- -------
Net (decrease)/increase in cash and cash (4,017) 2,910
equivalents
Net foreign exchange differences (28) (94)
Cash and cash equivalents at 1 January 11,250 8,434
------- -------
Cash and cash equivalents at 31 December 8 7,205 11,250
------- ------
(i) Includes both continuing and discontinued
operations.
Group Statement of Changes in Equity
For the year ended 31 December 2011
Capital
Equity redem Foreign Cashflow Share Non-
share ption Treasury currency hedge Retained holder controlling
capital reserve shares reserve reserve earnings equity interest Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 January
2010 55,557 50 (1,258) 12,432 (821) 63,409 129,369 747 130,116
------ ------ ------- ------- ------- ------- ------ ------- ------
Loss for the - - - - - (8,753) (8,753) 417 (8,336)
year
Other
comprehensive
(loss)/income
in
the year - - - (2,933) 240 2,229 (464) - (464)
------ ----- ------- ------- ------- ------- ------ ------- ------
Total net
comprehensive
(loss)/income
in
the year - - - (2,933) 240 (6,524) (9,217) 417 (8,800)
Share based
payment - - - - - 418 418 - 418
Equity
dividends
paid - - - - - (2,862) (2,862) (689) (3,551)
------ ------- ------- ------- ------- ------- ------ ------- ------
At 31
December
2010 55,557 50 (1,258) 9,499 (581) 54,441 117,708 475 118,183
------ ------- ------- ------- ------- ------- ------ ------- ------
Loss for the - - - - - (25,886) (25,886) 415 (25,471)
year
Other
comprehensive
(loss)/income
in the
year - - - (2,328) 60 (2,456) (4,724) _ (4,724)
------ ------- ------- ------- ------- ------- ------ ------ ------
Total net
comprehensive
(loss)/income
in
the year - - - (2,328) 60 (28,342) (30,610) 415 (30,195)
Share based
payment - - - - - 605 605 - 605
Acquisition
of
treasury - - (265) - - - (265) - (265)
shares
Equity
dividends
paid - - - - - (4,290) (4,290) (421) (4,711)
------ ------- ------- ------- ------- ------- ------- ------- ------
At 31
December
2011 55,557 50 (1,523) 7,171 (521) 22,414 83,148 469 83,617
------ ------- ------- ------- ------- ------- ------- ------- -------
Notes to the accounts
For the year ended 31 December 2011
1. Basis of preparation
The Group's financial statements consolidate those of UTV Media plc, and its
subsidiaries (together referred to as the "Group") and the Group's interest in
associates and jointly controlled entities.
The Group financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the European
Union as they apply to the financial statements of the Group for the year ended
31 December 2011 and applied in accordance with the Companies Act 2006. The
accounts are principally prepared on the historical cost basis except where
other bases are applied under the Group's accounting policies.
The financial information set out in the preliminary announcement does not
constitute statutory accounts within the meaning of Section 435 of the
Companies Act 2006 in respect of the accounts for the year ended 31 December
2011. The statutory accounts for the year ended 31 December 2010, upon which
the Company's auditors have given a report which was unqualified and did not
contain a statement under section 498(2) or (3) of the Companies Act 2006, have
been delivered to the Registrar of Companies. The statutory accounts for the
year ended 31 December 2011 have yet to be signed. They will be finalised on
the basis of the financial information presented by the directors in this
preliminary announcement and will be delivered to the Registrar of Companies in
due course.
2. Revenue and segmental analysis
The Group operates in four principal areas of activity - radio in GB, radio in
Ireland, commercial television and new media. These four principal areas of
activity also form the basis on which the Group is managed and reports are
provided to the Chief Executive and the Board. Discontinued operations relate
to an interactive television business which ceased to trade in February 2011.
Revenue represents the amounts derived from the provision of goods and services
which fall within the Group's ordinary activities, stated net of value added
tax. Revenue from Radio and Television activities is generated from advertising
and sponsorship. Revenue from New Media is generated from the provision of
internet services. The amount of revenue derived from the sale of goods or
other activities is immaterial and therefore has not been separately disclosed.
Transfer prices between business segments are set on an arm's length basis in a
manner similar to transactions with third parties.
The following tables present revenue and segment result information regarding
the Group's business segments for the years ended 31 December 2011 and 2010.
Revenue
Year ended 31 December 2011
Radio GB Radio Television New Media Total
Ireland
GBP000 GBP000 GBP000 GBP000 GBP000
Sales to third parties 52,065 22,514 35,569 11,403 121,551
Intersegmental sales 787 1,250 2,625 - 4,662
------- ------- ------- ------- -------
52,852 23,764 38,194 11,403 126,213
------- ------- ------- ------- -------
Year ended 31 December 2010
Radio GB Radio Television New Media Total
Ireland
GBP000 GBP000 GBP000 GBP000 GBP000
Sales to third parties 48,944 23,359 35,316 11,241 118,860
Intersegmental sales 754 1,388 2,333 - 4,475
------- ------- ------- ------- -------
49,698 24,747 37,649 11,241 123,335
------- ------- ------- ------- -------
Results
Year ended 31 December 2011
Radio GB Radio Television New Media Total
Ireland
GBP000 GBP000 GBP000 GBP000 GBP000
Segment operating profit 12,291 6,438 6,453 1,528 26,710
before exceptional costs
------- ------- ------- -------
Associate income 136
-------
Profit before exceptional 26,846
costs, tax and finance
costs
Exceptional costs (45,000)
-------
(18,154)
Net finance cost (3,488)
Foreign exchange loss (15)
-------
Loss before taxation (21,657)
-------
Year ended 31 December 2010
Radio GB Radio Television New Media Total
Ireland
GBP000 GBP000 GBP000 GBP000 GBP000
Segment operating profit 11,475 6,992 5,470 1,920 25,857
before exceptional costs
------- ------- ------- -------
Associate income 216
-------
Profit before exceptional 26,073
costs, tax and finance
costs
Exceptional costs (35,000)
-------
(8,927)
Net finance cost (4,684)
Foreign exchange loss (80)
-------
Loss before taxation (13,691)
-------
3. Exceptional items
2011 2010
GBP000 GBP000
Impairment of intangible assets (45,000) (35,000)
Taxation 1,142 10,235
------ ------
(43,858) (24,765)
------ ------
Impairment of intangible assets
Despite improving listenership to our Republic of Ireland radio stations and
the significant cost savings and efficiencies achieved over the past 24 months,
the significant impact of the difficulties being experienced by the Republic of
Ireland economy has necessitated a downward revision of our growth forecast in
this market.
While lower costs of financing and more stable equity environment has secured a
reduction in the discount factor applied in valuing our UK operations (a
pre-tax discount rate of 11.5% in 2011 versus 12.8% in 2010), the requirement
to account for sovereign risk has resulted in an increase in the discount rates
to be applied in valuing our Republic of Ireland operations (a pre-tax discount
rate of 12.3% in 2011 versus 11.8% in 2010).
The resultant reduction in the future cash flow forecasts coupled with the
impact of higher discount rates, applied thereto, has resulted in a non-cash
impairment charge of GBP45.0m and hence a reduction in the carrying value of the
intangible assets in the Republic of Ireland. The higher Republic of Ireland
discount rate, compared to that used for the UK, accounted for GBP19.0m of this
impairment charge.
Year ended 31 December 2010
The impairment in 2010 related entirely to Local Radio in GB and reflected the
revision of the cash flow forecasts for this cash generating unit as a result
of a downward estimation of the growth opportunities in this sector coupled
with the impact of an increase in the discount rate (pre-tax discount rate of
12.8% in 2010 versus 11.4% in 2009) applied to the cash flows.
The requirement under IAS36 to treat The Wireless Group acquisition as two cash
generating units, means that the robust performance of talkSPORT, which has
resulted in its value far exceeding our original forecasts, cannot be
considered in conjunction with that of Local Radio. It was noted at this time
that if considered in totality, there would have been no requirement for an
impairment charge against the cost of investment in UTV Radio GB.
Taxation
During the year, the corporation tax rate in the UK was revised from 27% to 25%
(effective from April 2012). Accordingly all the deferred tax assets and
liabilities in respect of the reporting segments subject to UK corporation tax
were restated to recognise the future gains or charges thereon at this rate.
This resulted in a net credit of GBP1,142,000 in the year.
In 2010, the corporation tax rate in the UK was revised from 28% to 27%
(effective from April 2011). Accordingly all the deferred tax assets and
liabilities in respect of the reporting segments subject to UK corporation tax
were restated to recognise the future gains or charges thereon at this rate.
This resulted in a net credit of GBP785,000 in 2010.
In addition, during the year GBPNil (2010: GBP9,450,000) was released from the
deferred tax liability on the recognition of the impairment of intangible
assets.
4. Taxation
Tax on profit on ordinary activities
2011 2010
GBP000 GBP000
Current income tax:
UK corporation tax on profits for the year (949) (922)
Adjustments in respect of previous years (92) (128)
------- -------
(1,041) (1,050)
------- -------
Foreign tax:
ROI corporation tax on profits for the year (594) (539)
Adjustments in respect of previous years 18 (60)
------- -------
(576) (599)
------- -------
Total current tax (1,617) (1,649)
Deferred tax:
Origination and reversal of timing differences (3,761) (3,442)
Adjustments in respect of previous years 635 425
------- -------
Tax charge in the income statement on operating (4,743) (4,666)
activities
Tax credit arising on exceptional costs - 9,450
Exceptional deferred tax credit 1,142 785
------- -------
Total tax (charge)/credit (3,601) 5,569
------- -------
The tax (charge)/credit in the Income Statement is
disclosed as:
Tax (charge)/credit on continuing operations (3,601) 5,569
Tax credit on discontinued operations - -
------- -------
Tax (charge)/credit in the income statement (3,601) 5,569
------- -------
Tax relating to items in the Statement of Comprehensive
Income
Deferred tax:
Actuarial loss/(gain) on pension schemes 820 (821)
Revaluation of cash flow hedges (29) (64)
Valuation of long term incentive plan (8) 7
------- -------
Tax credit/(charge) in the statement of comprehensive 783 (878)
income
------- -------
5. Earnings per share
Basic earnings per share are calculated based on the profit for the financial
year attributable to equity holders of the parent and on the weighted average
number of shares in issue during the period.
Adjusted earnings per share are calculated based on the profit for the
financial year attributable to equity holders of the parent adjusted for the
exceptional items. This calculation uses the weighted average number of shares
in issue during the period.
Diluted adjusted earnings per share are calculated based on profit for the
financial year attributable to equity holders of the parent adjusted for the
exceptional items. The weighted average number of shares is adjusted to reflect
the dilutive potential of the Long Term Incentive Plan.
The following reflects the income and share data used in the basic, adjusted,
diluted and diluted adjusted earnings per share calculations:
Net profit attributable to equity holders
2011 2010
Continuing Discontinued Total Continuing Discontinued Total
Operations Operations Operations Operations
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Net loss
attributable to
equity
holders (25,673) (213) (25,886) (8,539) (214) (8,753)
Exceptional items 43,858 - 43,858 24,765 - 24,765
------ ------ ------ ------ ------ ------
Total adjusted and
diluted
profit attributable
to equity
holders 18,185 (213) 17,972 16,226 (214) 16,012
------- ------- ------- ------- ------- -------
Weighted average number of shares
2011 2010
thousands thousands
Shares in issue 95,903 95,903
Weighted average number of treasury shares (600) (500)
------- -------
Weighted average number of shares for basic and
adjusted earnings per share (excluding treasury shares) 95,303 95,403
Effect of dilution of the Long Term Incentive Plan 609 456
------- -------
95,912 95,859
------- -------
Earnings per share
2011 2010
From continuing and discontinued operations
Basic and diluted (27.16)p (9.17)p
------- -------
Adjusted 18.86p 16.78p
------- -------
Diluted adjusted 18.74p 16.70p
------- -------
From continuing operations
Basic and diluted (26.94)p (8.95)p
------- -------
Adjusted 19.08p 17.01p
------- -------
Diluted adjusted 18.96p 16.93p
------- -------
From discontinued operations
Basic and diluted (0.22)p (0.22)p
------- -------
Adjusted and diluted adjusted (0.22)p (0.22)p
------- -------
6. Dividends
GBP000 GBP000
Equity dividends on ordinary shares
Declared and paid during the year
Final for 2010: 3.00p (2009: 2.00p) 2,862 1,908
Interim for 2011: 1.50p (2010: 1.00p) 1,428 954
------- -------
Dividends paid 4,290 2,862
------- -------
Proposed for approval at Annual General Meeting
(not recognised as a liability at 31 December)
Final dividend for 2011: 4.50p (2010: 3.00p) 4,284 2,862
------- -------
7. Financial liabilities
2011 2010
GBP000 GBP000
Current
Current instalments due on bank loans 8,167 8,254
Non-current
Non-current instalments due on bank loans 53,752 74,490
------ ------
61,919 82,744
------ ------
The financial liabilities at 31 December 2011 are stated net of GBP249,000 (2010:
GBP419,000) of deferred financing costs.
8. Net Debt
2011 2010
GBP000 GBP000
Bank loans (61,919) (82,744)
Cash and short term deposits 7,205 11,250
------ ------
(54,714) (71,494)
------ ------
9. Pension schemes
The IAS 19 deficit at 31 December 2011 is GBP8,569,000 compared with a deficit of
GBP6,800,000 at 31 December 2010. The increase in the deficit was primarily
driven by a decline in the discount rate assumption arising from the reduction
in corporate bond yields which increased the scheme's liabilities.
The Group funded a discretionary amount of GBP1,181,000 towards the actuarial
deficit in 2011 (2010: GBP1,181,000) by means of a cash transfer and has agreed
to make further payments of GBP1,181,000 in each year from 2012 to 2014.
10. Related party transactions
The nature of related parties disclosed in the consolidated financial
statements for the Group as at and for the year ended 31 December 2010 has not
changed. There have been no significant related party transactions in the year
ended 31 December 2011.
This summary has been approved by our Directors for release to the Press today
20 March 2012 and the full printed Annual Report and Accounts will be posted to
Shareholders and Stock Exchanges on 18 April 2012. Copies will be available to
the public at the Company's registered office Ormeau Road, Belfast BT7 1EB from
that date.
END
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