TIDMUTV
UTV Media plc
("UTV" or "the Group")
Interim Results
for the six months ended 30 June 2013
Financial highlights *
- Group revenue of GBP55.2m (2012: GBP61.6m)
- Pre-tax profits of GBP6.1m (2012: GBP10.7m)
- Group operating profit of GBP7.8m (2012: GBP12.4m)
- Net debt of GBP50.2m (June 2012: GBP50.0m)
- Net finance costs of GBP1.6m (2012: GBP1.8m)
- Pension deficit of GBP6.0m (2012: GBP12.4m)
- Diluted adjusted earnings per share of 5.18p (2012: 8.78p)
- Proposed interim dividend of 1.75p (2012: 1.75p)
Operational highlights and prospects
- Clear signs of return to revenue growth in all our business units
- talkSPORT achieved highest audience in the station's history
- talkSPORT successfully renewed exclusive national audio
broadcasting rights for two Premier League packages for the next three
football seasons
- talkSPORT extended its global audio rights agreement with the
Premier League to offer exclusive live audio commentary of Barclays Premier
League matches across Europe. The service now broadcasts in nine languages
- Absence of a major sporting event and decline in the UK radio
market impacted Radio GB in H1 but prospects for strong talkSPORT revenue
growth from the World Cup in 2014
- Radio Ireland assets continued to outperform the market with
strong audience delivery
- Television division again outperformed the network in audience
delivery achieving the highest peak-time audience in three years
- Merger of Simply Zesty and Tibus Digital Agency businesses to
form one of Ireland's largest full service digital agencies
- New Media restructuring will deliver improved offering and
profitability
- Broadcast assets well placed to benefit from the improving
macro-economic conditions
- Strong cash generation remains a key feature of our business
- Robust balance sheet with significant net debt reduction over the
past five years
* As appropriate, references to profit include associate income
John McCann, Group Chief Executive, UTV Media plc, said:
"As expected the first half of the year has been challenging for
the Group. However, we remain confident about the prospects for growth in the
second half and as we move into the 2014 World Cup year."
For further information contact:
Investor Enquiries www.utvmedia.com/investors
John McCann, Group CEO +44 (0) 28 9032 8122
Norman McKeown, Group Finance +44 (0) 28 9032 8122
Director
Media Enquiries
Orla McKibbin, Head of +44 (0) 28 9026 2188 / +44 (0) 7879
Communications 666 427
Maitland
James Devas +44 (0) 20 7379 5151
Chairman's Statement
Introduction
In my Chairman's Statement for 2012, I borrowed football parlance
from pundits on talkSPORT to characterise the different fortunes of the early
and latter parts of that year as a "game of two halves". That phrase might
again be applied to 2013, as a slow first half starts to give way to an
improving performance in the second half of the year.
In particular, talkSPORT's revenue, which was impacted in the first
six months by poor market conditions and the absence of a major sporting
event, is forecast to grow in the post summer months, contributing to an
overall improvement in GB Radio's performance. Similarly, Television
advertising revenue, which was down in the first half, has bounced back into
positive territory in the third quarter with strong growth being achieved in
the previously soft Republic of Ireland market. That Republic of Ireland
market has also been difficult for our Irish Radio division in the first six
months, but growth is expected to return to that division in September. The
previously flagged restructuring of our New Media division is continuing as we
seek to improve profitability in this area.
Results and Dividend *
Group revenue was GBP55.2m (2012: GBP61.6m) and Group operating profit
was GBP7.8m (2012: GBP12.4m) net of central group costs of GBP1.0m (2012: GBP2.2m).
After a net interest charge of GBP1.6m (2012: GBP1.8m) and foreign exchange loss
of GBP0.1m (2012: gain of GBP0.1m), Group profit before tax was GBP6.1m (2012:
GBP10.7m). Diluted adjusted earnings per share were 5.18p (2012: 8.78p).
Even with reduced operating profit and some one-off significant
cash outflows in the period, the Group continues to be highly cash generative.
Our expectation is for a stronger second half of the year and for further
growth in 2014. Accordingly, your Board considers that the interim dividend
should be maintained at 1.75p (2012: 1.75p). This will be paid on 15 October
2013 to all shareholders on the Register at the close of business on 13
September 2013.
Radio *
The positive impact of Euro 2012 in the first half last year was
always going to present a tough comparator for talkSPORT. This, and a 9%
reduction in the UK radio national advertising market, are the main factors
behind a GBP3.4m fall in talkSPORT's UK advertising revenue. With our local
radio revenue lower at GBP10.3m (2012: GBP10.7m), GB Radio's total revenue was
down by 14% to GBP24.1m (2012: GBP27.9m). With costs GBP0.4m higher at GBP21.6m, due
primarily to investment in talkSPORT International, GB Radio's operating
profit fell to GBP2.5m (2012: GBP6.7m).
Good progress has been made in extending the talkSPORT brand and
content beyond the UK, on the back of our 2012 agreement to become Global
Audio Partner of the Premier League. By the end of June 2013 we had secured
new syndication partners in multiple markets including China, Malaysia and
Vietnam. In addition to these, more recently we announced agreements in
Singapore and with the USA's Dial Global. We have also successfully extended
our agreement with the Premier League to include radio commentary inside
Europe (excluding the UK and Ireland) for the first time.
In Ireland, the radio advertising market continued to be difficult
throughout the first six months of 2013. Over the last few years, our very
strong audience delivery in the key urban areas has enabled us to consistently
outperform the market, which is estimated to be down by as much as 15% in the
six months to 30 June 2013. We again outperformed the market, with our Irish
Radio revenue down by 12% in local currency and by 10% in sterling to GBP9.8m
(2012: GBP10.8m). With costs held at last year's level, operating profit in our
Irish Radio division was GBP2.1m (2012: GBP3.1m).
* As appropriate, references to profit include associate income
Television
Our Television advertising revenue in the first quarter was
negatively impacted by the poor trading conditions in Ireland, offsetting a
good performance in our revenue derived from London. This position was
reversed in the second quarter with a soft market in GB detracting from a
stronger performance in Ireland. Encouragingly, as noted above, Television
advertising revenue performance is much stronger in both Ireland and GB in the
third quarter. Overall, Television advertising revenue in the first half was
down by 8% with total Television turnover at GBP15.3m (2012: GBP16.9m). With
Television operating costs reduced by 6%, Television operating profit in the 6
months to 30 June 2013 was GBP3.3m (2012: GBP4.2m).
New Media
The restructured Tibus Digital Infrastructure business delivered
revenues of GBP0.9m (2012: GBP1.0m) and continued to develop digital assets for
key projects within the Group, including talkSPORT International's live
streaming services and ongoing development of the UTV Player. Simply Zesty
continued to evolve from a specialist social media marketing agency,
post-acquisition, into a full service digital agency following the merger with
Tibus Digital Agency, with revenue in the first six months up 19% to GBP1.4m
(2012: GBP1.2m). Overall turnover in New Media for the first half was in line
with the previous year at GBP6.0m (2012: GBP6.0m), with operating profit at GBP0.9m
(2012: GBP0.6m).
Outlook
The trading challenges of the first half have eased in the second
half of the year. We are encouraged that industry commentators continue to be
positive about the remainder of 2013 and it does appear that the last months
of the year will make up much of the lost ground of the early months.
In GB Radio, July advertising revenue was lower than last year but
expected growth in the post summer months augurs well for the rest of the
year, with talkSPORT forecast to be up by 5% and 10% year on year in August
and September respectively. The prospect of additional international
partnerships and the build-up of interest in the FIFA World Cup, starting with
the draw at the end of this year, should provide further revenue
opportunities.
Irish Radio revenue slipped further in August but September is
forecast to move into healthy growth and, after adjusting for FX, our revenue
is expected to be up by 5% in the third quarter. Television advertising
revenue is growing strongly in both GB and Ireland and is expected to be up by
11% in the third quarter. In New Media, we expect operating profit to be up on
the same period for the previous year.
Advertising revenue is strongly influenced by the broader economic
environment and consumer confidence. Recent macroeconomic data suggests that
we are heading towards recovery which should see advertising enjoy renewed
growth. The recent growth experienced in television revenues, with their
longer lead times, provides encouragement for a similar trend to be seen in
our radio revenues. As we look towards 2014, the prospects for strong revenue
generation for talkSPORT also appear promising. Nevertheless, the volatility
in our advertising revenue over the last eighteen months confirms that the
road to recovery is not necessarily a smooth one and we will continue,
therefore, to be prudent in managing the affairs of the Group.
Richard Huntingford
Chairman
27 August 2013
Group Income Statement
for the six months ended 30 June 2013
Results Results
before before
Exceptional Exceptional Exceptional Exceptional
Items Items Total Items Items Total
30 June 30 June 30 June 30 June 30 June 30 June
Notes 2013 2013 2013 2012 2012 2012
(restated) (restated) (restated)
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue 3 55,176 - 55,176 61,551 - 61,551
Operating costs (47,398) - (47,398) (49,219) - (49,219)
------- ------- ------- ------- ------- -------
Operating profit before tax and
finance costs 7,778 - 7,778 12,332 - 12,332
Share of results of associates
accounted
for using the equity method 62 - 62 90 - 90
------- ------- ------- ------- ------- -------
Profit before tax and finance
costs 3 7,840 - 7,840 12,422 - 12,422
Finance revenue 34 - 34 53 - 53
Finance costs (1,648) - (1,648) (1,850) - (1,850)
Foreign exchange (loss)/gain (172) - (172) 66 - 66
------- ------- ------- ------- ------- -------
Profit before tax 3 6,054 - 6,054 10,691 - 10,691
Taxation (1,211) (1,425) (2,636) (2,296) (1,684) (3,980)
------- ------- ------- ------- ------- -------
Profit for the year 4,843 (1,425) 3,418 8,395 (1,684) 6,711
------- ------- ------ ------- ------- ------
Attributable to:
Equity holders of the parent 4,704 (1,425) 3,279 8,210 (1,684) 6,526
Non-controlling interest 139 - 139 185 - 185
------- ------- ------- ------- ------- -------
4,843 (1,425) 3,418 8,395 (1,684) 6,711
------- ------- ------ ------- ------- ------
Earnings per share 2013 2012
(restated)
Basic 6 3.44p 6.85p
Diluted 6 3.42p 6.81p
Adjusted 6 5.21p 8.83p
Diluted adjusted 6 5.18p 8.78p
All operations of the Group are
continuing.
Group Statement of Comprehensive Income
for the six months ended 30 June 2013
30 June 30 June
2013 2012
(restated)
GBP000 GBP000
Profit for the period 3,418 6,711
------- -------
Other comprehensive income/(loss)
Items that will not be reclassified subsequently
to profit or loss:
Actuarial gain/(loss) on defined benefit pension
schemes 3,325 (3,301)
Income tax relating to items that will not be
reclassified subsequently (765) 734
------- -------
2,560 (2,567)
------- -------
Items that may be reclassified subsequently to
profit or loss:
Cash flow hedges:
Loss arising during the year (1) (134)
Less transfers to the income statement 328 247
Exchange difference on translation of foreign
operations 2,488 (1,290)
Income tax relating to items that may be
reclassified (21) 31
------- -------
2,794 (1,146)
------- -------
Other comprehensive income/(loss) for the year,
net of tax 5,354 (3,713)
------- -------
Total comprehensive income for the year, net of
tax 8,772 2,998
------- -------
Attributable to:
Equity holders of the parent 8,633 2,813
Non-controlling interest 139 185
------- -------
8,772 2,998
------- ------
Group Balance Sheet
for the six months ended 30 June 2013
30 30 31
June June December
Notes 2013 2012 2012
(restated)
GBP000 GBP000 GBP000
ASSETS
Non-current assets
Property, plant and equipment 7 12,109 11,566 11,910
Intangible assets 180,209 176,133 176,589
Investments accounted for using the
equity method 166 216 104
Deferred tax asset 2,501 5,623 4,250
------- ------- -------
194,985 193,538 192,853
------- ------- -------
Current assets
Inventories 317 352 1,643
Trade and other receivables 22,617 26,033 25,163
Cash and short term deposits 9,066 14,606 10,958
------- ------- -------
32,000 40,991 37,764
------- ------- -------
TOTAL ASSETS 226,985 234,529 230,617
------- ------- -------
EQUITY AND LIABILITIES
Equity attributable to equity holders
of the parent
Equity share capital 55,557 55,557 55,557
Capital redemption reserve 50 50 50
Treasury shares (123) (1,523) (1,523)
Foreign currency reserve 8,506 5,881 6,018
Cash flow hedge reserve - (444) (251)
Retained earnings 28,277 22,439 28,680
------- ------- -------
92,267 81,960 88,531
Non-controlling interest 619 510 480
------- ------- -------
TOTAL EQUITY 92,886 82,470 89,011
------- ------- -------
Non-current liabilities
Financial liabilities 8 56,343 62,967 58,948
Pension liability 10 6,041 11,170 12,409
Provisions 387 744 800
Deferred tax liabilities 37,964 36,937 36,154
------- ------- -------
100,735 111,818 108,311
------- ------- -------
Current liabilities
Trade and other payables 26,175 31,769 26,033
Financial liabilities 8 4,388 4,526 4,292
Derivative financial liabilities - 570 324
Tax payable 2,016 2,944 2,275
Provisions 785 432 371
------- ------- -------
33,364 40,241 33,295
------- ------- -------
TOTAL LIABILITIES 134,099 152,059 141,606
------- ------- -------
TOTAL EQUITY AND LIABILITIES 226,985 234,529 230,617
------- ------- -------
Group Cash Flow
for the six months ended 30 June 2013
30 June 30 June
2013 2012
(restated)
GBP000 GBP000
Operating activities
Profit before tax 6,054 10,691
Adjustments to reconcile profit before tax
to
net cash flows from operating activities
Foreign exchange loss/(gain) 172 (66)
Net finance costs 1,614 1,797
Share of results of associates (62) (90)
Depreciation of property, plant and
equipment 945 834
Amortisation of intangible assets 188 -
Non cash decrease in contingent
consideration (1,369) -
Loss/(profit) from sale of property, plant
and equipment 5 (194)
Share based payments 225 283
Difference between pension contributions
paid and amounts
recognised in the income statement (3,043) (963)
Decrease in inventories 1,325 1,181
Decrease in trade and other receivables 3,139 4
Decrease in trade and other payables (5,952) (4,829)
Decrease in provisions 1 (25)
------- -------
Cash generated from operations 3,242 8,623
Tax paid (672) (178)
------- -------
Net cash inflow from operating activities 2,570 8,445
------- -------
Investing activities
Interest received 36 64
Proceeds on disposal of property, plant and
equipment 6 263
Purchase of property, plant and equipment (1,059) (1,184)
Outflow on acquisition of subsidiary
undertaking (200) (1,670)
Outflow on acquisition of radio licences - (180)
------- -------
Net cash flows from investing activities (1,217) (2,707)
------- -------
Financing activities
Borrowing costs (884) (1,137)
Swap cost (328) (247)
Refinancing cost - (936)
Dividends paid to equity shareholders (18) (8)
Dividends paid to non-controlling interests - (144)
Repayment of borrowings (2,139) (61,416)
Proceeds from borrowings - 65,595
------- -------
Net cash flows used in financing activities (3,369) 1,707
------- -------
Net (decrease)/increase in cash and cash
equivalents (2,016) 7,445
Net foreign exchange differences 124 (44)
Cash and cash equivalents at 1 January 10,958 7,205
------- -------
Cash and cash equivalents at 30 June 9,066 14,606
------- ------
Group Statement of Changes in Equity
for the six months ended 30 June 2013
Equity Capital Foreign Cashflow Share Non-
share redemption Treasury currency hedge Retained holder controlling
capital reserve shares reserve reserve earnings equity interest Total
(restated) (restated) (restated)
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 January 2012 55,557 50 (1,523) 7,171 (521) 22,414 83,148 469 83,617
------ ------- ------- ------- ------- ------- ------- ------- -------
Profit for the -
period - - - - 6,526 6,526 185 6,711
Other
comprehensive
(loss)/income in
the period - - - (1,290) 77 (2,500) (3,713) - (3,713)
------ ------ ------- ------- ------- ------- ------- ------- -------
Total net
comprehensive
(loss)/income in
the period - - - (1,290) 77 4,026 2,813 185 2,998
Share based
payment - - - - - 283 283 - 283
Equity dividends
paid and
payable - - - - - (4,284) (4,284) (144) (4,428)
------ ------- ------- ------- ------- ------- ------- ------- -------
At 30 June 2012 55,557 50 (1,523) 5,881 (444) 22,439 81,960 510 82,470
------ ------- ------- ------- ------- ------- ------- ------- -------
Profit for the -
period - - - - 8,351 8,351 172 8,523
Other
comprehensive
income/(loss) in
the
period - - - 137 193 (717) (387) - (387)
------ ------ ------- ------- ------- ------- ------- ------- -------
Total net
comprehensive
income in the
period 137 193 7,634 7,964 172 8,136
Share based
payment - - - - - 273 273 - 273
Equity dividends -
paid - - - - (1,666) (1,666) (202) (1,868)
------ ------- ------- ------- ------- ------- ------- ------- -------
At 31 December 50 (251) 88,531
2012 55,557 (1,523) 6,018 28,680 480 89,011
------ ------- ------- ------- ------- ------- ------- ------- -------
Profit for the -
period - - - - 3,279 3,279 139 3,418
Other
comprehensive
income in the
period - - - 2,488 251 2,615 5,354 - 5,354
------ ------- ------- ------- ------- ------- ------- ------- -------
Total net
comprehensive
income in the year - - 2,488 251 5,894 8,633 139 8,772
Treasury shares
issued - - 1,400 - - (1,521) (121) - (121)
Share based
payment - - - - - 225 225 - 225
Equity dividends
paid and
payable - - - - - (5,001) (5,001) - (5,001)
------ ------- ------- ------- ------- ------- ------- ------- -------
At 30 June 2013 55,557 50 (123) 8,506 - 28,277 92,267 619 92,886
------ ------- ------- ------- ------- ------- ------- ------- -------
Notes to the accounts
1. Basis of preparation
The interim financial statements have been prepared in accordance with IAS34
"Interim Financial Reporting" and the Disclosure and Transparency Rules of the
Financial Conduct Authority.
In addition, except for the adoption of new standards effective from 1 January
2013 as noted below, the interim financial statements have been prepared on a
basis consistent with the accounting policies set out in the Group's annual
Report and Accounts for the year ended 31 December 2012.
The Group Income Statement, the Group Statement of Comprehensive Income,
the Group Statement of Changes in Equity and affected notes have been
restated for the 6 months ended 30 June 2012 and the year ended 31
December 2012, to reflect changes in the calculation of pension costs in
accordance with IAS19 "Employee Benefits (Revised)". The net charge to the
Income Statement for the 6 months ended 30 June 2012 increased by
GBP263,000, on a pre tax basis, with a tax impact of GBP60,000, following the
introduction of the concept of recognising net interest on the net defined
benefit obligation in place of the interest on the defined benefit
obligation and the expected return on plan assets recognised under the
original standard. In conjunction with this change the directors have also
reclassified from operating costs to other finance costs the net finance
cost arising on defined benefit obligations. The net effect of these
changes has been to increase operating costs and reduce operating profit
by GBP64,000 and increase other finance costs by GBP199,000. The corresponding
impact for the year ended 31 December 2012 was an increased charge of
GBP525,000 pre tax, with a tax impact of GBP121,000. The restatements were
reflected in the Group Statement of Comprehensive Income. There was no
impact on the disclosed defined benefit obligation at either period end.
The amendments to IAS 1 introduce a grouping of items presented in other
comprehensive income (OCI). Items that could be reclassified (or recycled)
to profit or loss at a future point in time now have to be presented
separately from items that will never be reclassified. The amendment
affected presentation only and had no impact on the Group's financial
position or performance.
IFRS 13 establishes a single source of guidance under IFRS for all fair
value measurements. IFRS 13 does not change when an entity is required to
use fair value, but rather provides guidance on how to measure fair value
under IFRS when fair value is required or permitted. The application of
IFRS 13 has not materially impacted the fair value measurements carried
out by the Group. IFRS 13 also requires specific disclosures on fair
values, some of which replace existing disclosure requirements in other
standards, including IFRS 7 Financial Instruments: Disclosures. Some of
these disclosures are specifically required for financial instruments by
IAS 34 and thereby affect the interim condensed consolidated financial
statements period. The relevant disclosures are reflected in note 9.
The balance sheet at 30 June 2012 has been restated to reclassify the
contingent consideration from trade and other payables to financial
liabilities in line with the classification in the financial statements
for the year ended 31 December 2012. The relevant amounts are reflected in
note 8.
The exceptional items for the period ended 30 June 2012
have been restated to remove international start-up costs and the
associated tax credit which, in the financial statements for the year
ended 31 December 2012, were not deemed to be exceptional due to
materiality and were therefore included within operating costs within the
Radio GB operating segment.
These interim financial statements have been prepared on the going concern
basis as the directors, having considered available relevant information,
have a reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future.
The interim results are unaudited but have been formally reviewed by the
auditors and their report to the Company is set out at the end of this
Interim Report. The information shown for the year ended 31 December 2012
does not constitute statutory accounts within the meaning of Section 434
of the Companies Act 2006 and has been extracted from the Group's 2012
Annual Report, which has been filed with the Registrar of Companies. The
report of the auditors on the accounts contained within the Group's 2012
Annual Report was unqualified and did not contain a statement under either
Section 498(2) or Section 498(3) of the Companies Act 2006 regarding
inadequate accounting records or a failure to obtain necessary information
and explanations
2. Seasonality and cyclicality
There is no significant seasonality or cyclicality affecting the
interim results of the operations.
3. Segmental information
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. The following is an analysis of
the revenue and results for the period, analysed by reportable segment.
Central costs, which had previously been included within the Television
segment, are now reported separately to the Chief Executive and the Board and
are therefore now analysed separately below. The Television segment operating
profit for 30 June 2012 has been restated for this and for the impact of IAS
19 "Employee Benefits (Revised)" as outlined in note 1. Radio GB segment
operating profit for the six months ended 30 June 2012 has been restated as
detailed in note 1.
Revenue
Six months ended 30 June 2013
Radio
Radio GB Ireland Television New Media Total
GBP000 GBP000 GBP000 GBP000 GBP000
Sales to third parties 24,028 9,770 15,318 6,060 55,176
Intersegmental sales 372 630 1,016 91 2,109
------- ------- ------- ------- -------
24,400 10,400 16,334 6,151 57,285
------- ------- ------- ------- -------
Six months ended 30 June 2012
Radio
Radio GB Ireland Television New Media Total
GBP000 GBP000 GBP000 GBP000 GBP000
Sales to third parties 27,862 10,821 16,878 5,990 61,551
Intersegmental sales 406 642 1,455 69 2,572
------- ------- ------- ------- -------
28,268 11,463 18,333 6,059 64,123
------- ------- ------- ------- -------
3. Segmental information (continued)
Results
Six months ended 30 June 2013
Radio
Radio GB Ireland Television New Media Total
GBP000 GBP000 GBP000 GBP000 GBP000
Segment operating
profit 2,398 2,074 3,384 923 8,779
------- ------- ------- -------
Central costs (1,001)
Associate income 62
-------
Profit before tax and
finance
costs 7,840
Net finance cost (1,614)
Foreign exchange loss (172)
-------
Profit before taxation 6,054
-------
Results
Six months ended 30 June 2012
Radio
Radio GB Ireland Television New Media Total
(restated) (restated) (restated)
GBP000 GBP000 GBP000 GBP000 GBP000
Segment operating
profit 6,639 3,107 4,210 575 14,531
------- ------- ------- -------
Central costs (2,199)
Associate income 90
-------
Profit before tax and
finance
costs 12,422
Net finance cost (1,797)
Foreign exchange gain 66
-------
Profit before taxation 10,691
-------
4. Exceptional tax charge
30 June 30 June
2013 2012
(restated)
GBP000 GBP000
Exceptional tax credit (i) - 751
Exceptional tax charge (ii) (1,425) (2,435)
------- -------
(1,425) (1,684)
------- -------
(i) In the budget on 21 March 2012, the Autumn
Statement on 5 December 2012 and the budget on 20 March 2013, tax changes were
announced for the UK which have an impact on the Group's current and future
tax position.
The exceptional tax credit of GBP751,000 in 2012
arose from the restatement of the relevant deferred tax balances to reflect
the change in the UK corporation tax rate from 25% to 24% with effect from 1
April 2012, which was substantially enacted on 26 March 2012.
As at 31 December 2012, the revision of the
corporation tax from 24% to 23% from April 2013 had been substantially
enacted. Accordingly all the deferred tax balances subject to UK corporation
tax were calculated at 23% at 31 December 2012 resulting in a further
exceptional deferred tax credit of GBP748,000 in the second half of 2012.
On 3 July 2013, the revision of the UK
corporation tax rate to 21% from 1 April 2014 and to 20% from 1 April 2015 was
substantially enacted. As a result, it is expected that the deferred tax will
be calculated at 20% at 31 December 2013 and that an exceptional deferred tax
credit of GBP2,620,000 will be recognised in the second half of the year.
(ii) In the finance bill published on 13 February
2013, the rate of corporate capital gains in the Republic of Ireland was
increased from 30% to 33%. The exceptional tax charge of GBP1,425,000 in 2013
arises from the restatement of the relevant deferred tax assets and
liabilities to reflect this.
In the finance bill published on 8 February 2012
and passed into law on 2 April 2012, the rate of capital gains tax in the
Republic of Ireland was increased from 25% to 30%. The exceptional tax charge
of GBP2,435,000 in 2012 arises from the restatement of the relevant deferred tax
assets and liabilities to reflect this.
5. Dividends
30 June 30 June
2013 2012
GBP000 GBP000
Equity dividends on ordinary shares
Declared at the AGM during the period
Final for 2012: 5.25p (2011: 4.50p) 5,001 4,284
------- -------
Proposed but not recognised as a liability at 30 June
Interim for 2013: 1.75p (2012: 1.75p) 1,677 1,666
------- -------
The final dividend for 2012 was paid on 15 July 2013 (2011:
16 July 2012).
6. Earnings per share
Basic earnings per share is calculated based on the profit for the
financial period 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 period attributable to equity holders of the parent adjusted for
the exceptional items and the impact of net finance costs under IAS 19
"Employee Benefits (Revised)". This calculation uses the weighted average
number of shares in issue during the period.
Diluted earnings per share are calculated based on profit for the
financial period attributable to equity holders of the parent. Diluted
adjusted earnings per share are calculated based on profit for the financial
period attributable to equity holders of the parent before exceptional items
and the impact of net finance costs under IAS 19 "Employee Benefits
(Revised)". In each case the weighted average number of shares is adjusted to
reflect the dilutive potential of the awards expected to be vested on the Long
Term Incentive Schemes.
Earnings per share for the period ended 30 June 2012 has been
restated to reflect the impact on profit of changes in the calculation of
pension costs in accordance with IAS19 "Employee Benefits (Revised)" as
explained in note 1.
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
30 June 30 June
2013 2012
(restated)
GBP000 GBP000
Net profit
attributable to equity
holders 3,279 6,526
Exceptional items 1,425 1,684
Adjustments to net
financing
costs 258 199
------ ------
Total adjusted and
diluted profit
attributable to equity
holders 4,962 8,409
------- -------
Weighted average number of shares
2013 2012
thousands thousands
Shares in issue 95,903 95,903
Weighted average number of treasury shares (593) (700)
------- -------
Weighted average number of shares for basic and
adjusted earnings per share (excluding treasury
shares) 95,310 95,203
Effect of dilution of the Long Term Incentive Plan 536 609
------- -------
95,846 95,812
------- -------
6. Earnings per share (continued)
Earnings per share
2013 2012
(restated)
Basic 3.44p 6.85p
------- -------
Diluted 3.42p 6.81p
------- -------
Adjusted 5.21p 8.83p
------- -------
Diluted adjusted 5.18p 8.78p
------- -------
7. Property, plant and equipment
During the period the Group spent GBP1,009,000 (2012: GBP1,271,000) on
capital additions.
8. Financial liabilities
30 30 31
June June December
2013 2012 2012
GBP000 GBP000 GBP000
Current
Current instalments due on bank loans 4,063 3,985 3,852
Current instalment due on contingent 325 541
consideration 440
Non-current
Non-current instalments due on bank loans 55,208 60,622 56,500
Non-current instalment due on contingent 1,135 2,345
consideration 2,448
------ ------ ------
60,731 67,493 63,240
------ ------ ------
The bank loans at 30 June 2013 are stated net of deferred financing
costs amounting to GBP842,000 (30 June 2012: GBP1,042,000; 31 December 2012:
GBP939,000).
The Group's bank facilities comprise a GBP65m Revolving Credit
Facility and a EUR25m Term Loan Facility which mature in May 2017. The Term Loan
Facility has bi-annual repayments of EUR2.5m in June and December of each year.
9. Derivatives and other financial instruments
The Group's principal financial instruments comprise bank loans and
cash and short-term deposits. The main purpose of these financial instruments
is to raise finance for the Group's operations. The Group has various other
financial assets and liabilities, such as trade receivables and trade
payables, which arise directly from its operations.
Set out below is a comparison by category of carrying amounts and
fair values of the Group's financial assets and liabilities, excluding trade
receivables and payables, that are carried in the financial statements.
Carrying Fair
amount value
30 June 30 June
2013 2013
GBP000 GBP000
Financial assets
Cash and short term deposits 9,066 9,066
------ ------
Financial liabilities
Interest-bearing loans and borrowings 59,271 59,271
Contingent consideration 1,460 1,460
------ ------
60,731 60,731
------ ------
The fair value of contingent consideration, which arose on the
acquisition of Simply Zesty Limited in March 2012, is measured using the
present value of the probability-weighted average of pay out associated with
each possible outcome of EBITDA achieved under the related earn out agreement.
The Group uses the following hierarchy as set out in IFRS 7
"Financial Instruments: Disclosures" and IFRS 13 "Fair Value measurement" for
determining and disclosing the fair value of financial instruments by
valuation technique:
- Level 1: quoted (unadjusted) prices in active markets for
identical assets or liabilities;
- Level 2: other techniques for which all inputs which have a
significant effect on the recorded fair value are observable, either directly
or indirectly; and,
- Level 3: techniques which use inputs which have a significant
effect on the recorded fair value that are not based on observable market
data.
The fair value of contingent consideration is considered by the
Directors to fall within the level 3 fair value hierarchy. There have been no
transfers between level 1, 2 or 3 of the hierarchy during the current and
previous years.
In January 2013 the Group entered into an agreement with a previous
corporate shareholder of Simply Zesty Limited to pay cash consideration of
GBP200,000 in settlement of their rights in relation to contingent consideration
with an estimated fair value of GBP1,031,000. At this stage the Group also
announced the merger of its two digital marketing agencies Simply Zesty and
Tibus Digital. The resultant restructuring coupled with finance costs of
GBP25,000 due to unwind of the discounts and foreign exchange losses of
GBP116,000, have led to a further reduction in the fair value of the contingent
consideration amounting to GBP397,000 from 31 December 2012.
As part of a restructuring in the Group, subsequent to 30 June 2013
the outstanding contingent consideration was settled with consequent full
release.
10. Pension schemes
The IAS 19 deficit at 30 June 2013 is GBP6,041,000 (30 June 2012:
GBP11,170,000) compared with a deficit of GBP12,409,000 at 31 December 2012. The
decrease is predominately due to a strong return on equities resulting in an
increase in the scheme's assets and a discretionary employer contribution of
GBP1,209,000.
11. 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 2012 has not
changed. There have been no significant related party transactions in the six
month period ended 30 June 2013.
Risks and uncertainties
The 2012 Annual Report sets out the most significant risk factors
relating to UTV Media plc's operations in the Company's judgement at the time
of that report. The Company does not consider that these principal risks and
uncertainties have changed. However additional risks and uncertainties not
currently known to the Company or that the Company does not currently deem
material may also have an adverse effect on its business.
With respect to the risks and uncertainties identified within the
Annual Report, the Chairman's statement highlights those risks and
uncertainties that will have significant impact throughout 2013.
Statement of directors' responsibilities
The interim report is the responsibility of, and has been approved
by, the directors of UTV Media plc. Accordingly, the directors confirm that to
the best of their knowledge:
- the condensed set of financial statements has been prepared in
accordance with IAS 34 "Interim Financial Reporting" as adopted by the
European Union;
- the interim report includes a fair review of the information
required by the Disclosure and Transparency Rules:
- DTR 4.2.7R, being an indication of important events that have
occurred during the first six months of the financial year and their impact on
the condensed set of financial statements, and a description of the principal
risks and uncertainties for the remaining six months of the year; and
- DTR 4.2.8R, being related party transactions that have taken
place in the first six months of the current financial year and that have
materially affected the financial position or performance of the entity during
that period, and any changes in the related party transactions described in
the last annual report that could do so.
By order of the Board:
John McCann
Group Chief Executive
27 August 2013
Independent review report to UTV Media plc
Introduction
We have been engaged by the Company to review the condensed set of
financial statements in the half-yearly financial report for the 6 months
ended 30 June 2013 which comprises the Group Income Statement, Group Statement
of Comprehensive Income, Group Balance Sheet, Group Statement of Changes in
Equity, Group Cash Flow Statement and the related notes 1 to 11. We have read
the other information contained in the half yearly financial report and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
This report is made solely to the company in accordance with
guidance contained in ISRE 2410 (UK and Ireland) "Review of Interim Financial
Information Performed by the Independent Auditor of the Entity" issued by the
Auditing Practices Board. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company, for our
work, for this report, or for the conclusions we have formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and has
been approved by, the directors. The directors are responsible for preparing
the half-yearly financial report in accordance with the Disclosure and
Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the European Union.
The condensed set of financial statements included in this half-yearly
financial report has been prepared in accordance with International Accounting
Standard 34, "Interim Financial Reporting", as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the
condensed set of financial statements in the half-yearly financial report
based on our review.
Scope of Review
We conducted our review in accordance with International Standard
on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial
Information Performed by the Independent Auditor of the Entity" issued by the
Auditing Practices Board for use in the United Kingdom. A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK and
Ireland) and consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes
us to believe that the condensed set of financial statements in the
half-yearly financial report for the 6 months ended 30 June 2013 is not
prepared, in all material respects, in accordance with International
Accounting Standard 34 as adopted by the European Union and the Disclosure and
Transparency Rules of the United Kingdom's Financial Conduct Authority.
Ernst & Young LLP
Belfast
27 August 2013
END
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