Final Results

Wireless Group plc

("WLG" or "the Company" or "the Group")

Belfast, London & Dublin - 31 March 2016: Wireless Group plc today announces preliminary results for the year ended 31 December 2015

Financial highlights

Continuing operations*

§ Group revenue of £75.1m (2014 restated: £82.4m)

§ Group operating profit of £13.0m (2014 restated: £14.1m)

§ Pre-tax profits of £10.7m (2014 restated: £11.9m)

§ Exceptional profit of £6.9m from sale of Juice FM

§ Diluted adjusted earnings per share from continuing operations of 8.65p (2014 restated: 9.43p)

§ Proposed final dividend of 7.60p post share consolidation

* As appropriate, references to profit include income from associates and joint venture but exclude discontinued operations and exceptional items

Discontinued operations

§ Sale of Television assets, including defined benefit pension scheme, for £100m

§ Return of capital to shareholders of £55m

§ Loss after tax on discontinued operations of £5.3m (2014 restated: profit after tax of £4.6m)

Prospects highlights

§ Radio GB growth from UEFA Euro Football championships

§ D2 stations successfully launched in March 2016 capitalising on listener demand for radio on digital platforms

§ 50% of 2016 forecast revenue for D2 stations already booked

§ Strong market positions in Ireland leave us well placed to benefit from growing economy

§ New £30m multi-currency revolving credit facility in place to February 2020 - targeted net debt/EBITDA over the period is less than 2:1

§ Richard Huntingford appointed as Executive Chairman, John McCann, Group Chief Executive retiring in May 2016

Richard Huntingford, Chairman, Wireless Group plc, said:

"The new Wireless Group has a very exciting future as a focused radio business with market leading assets, a robust balance sheet and a strong management team. We are targeting double digit profit growth over the medium term which should deliver both significant income and capital growth for shareholders over the coming years."

Key dates

§ 12 May 2016 - Annual General Meeting

§ 20 May 2016 - Record date for payment of dividends

§ 15 July 2016 - Payment of dividends

§ 22 August 2016 - Interim Results Announcement

For further information contact:

Overview

In an eventful year, your Company launched UTV Ireland, was part of the consortium that won the licence to operate the second national digital multiplex D2, sold Juice FM in Liverpool to Global Radio for £10m and agreed to sell its television business to ITV for £100m. With completion of the sale of the television business taking place on 29 February 2016, your Company, with its new name, is now a focused radio group with highly attractive assets, strong cash generation, a robust balance sheet and the potential to deliver double digit growth over the medium term.

Results and dividends for the year*

Group operating profit from continuing operations was £13.0m (2014 restated: £14.1m) reflecting the World Cup comparative, adverse foreign exchange movements and increased competitive pressures in Ireland. After net interest costs of £2.2m (2014 restated: £2.2m) and foreign exchange losses, group profit before taxation and exceptional items was £10.7m (2014 restated: £11.9m). Exceptional items arose during the year as a result of the profit on the sale of Juice FM of £6.9m plus an exceptional tax credit of £2.2m largely due to the impact of a change in the rate of UK corporation tax on deferred tax balances. This resulted in a Group profit from continuing operations after tax and exceptional items of £17.6m (2014 restated: £9.2m).

Losses after tax of £5.3m on discontinued operations, reflecting the results of the television business, were incurred in the year (2014 restated: profit after tax £4.6m).

Group net debt was lower at £45.8m (2014: £46.2m).

Dividends amounting to £6.9m (2014: £6.8m) were paid during the year, representing a final ordinary dividend for 2014 of 5.43p per share and an interim ordinary dividend for 2015 of 1.82p per share as shown in note 7.

A final dividend of £5.2m representing 7.60p per share (post share consolidation) is proposed for approval at the Annual General Meeting. If approved, warrants in respect of it will be despatched on 15 July 2016 to shareholders on the register at the close of business on 20 May 2016.

Review of activities

UTV Ireland launched on 1 January 2015, having secured transmission on all major distribution platforms and rights to a broad range of popular programming, including all production of ITV Studios. Consumer confusion around both re-tuning of digital receivers and also programming inconsistencies with the long established UTV Northern Ireland was gradually addressed and UTV Ireland quickly established itself as the second most watched channel in Ireland in weekday peaktime. However, this performance was not matched at the weekend where the absence of consistently popular programming undermined overall audience delivery and therefore advertising revenue projections, leading to revisions of profit expectations. With the path to profitability extended, your Board considered a £100m cash offer from ITV for our television business as an opportunity to release immediate value for our shareholders while substantially improving our risk profile. That risk profile was further enhanced by the transfer to ITV of our pension obligations under the defined benefit scheme. The completion of the sale to ITV was conditional upon clearances from the Broadcasting Authority of Ireland, the Competition and Consumer Protection Commission and the Minister for Communications, Energy and Natural Resources. These clearances were duly received and completion of the sale took place on 29 February 2016. Of the £98m net cash proceeds, £50.8m was returned to shareholders through the issue and redemption of B shares on 25 March 2016, while a further £4.2m will be distributed by way of special dividend on 15 July 2016.

The Group's banking facilities were fully repaid on 29 February 2016 with new facilities put in place on this date comprising a £30m dual-currency Revolving Credit Facility and overdraft facility for 4 years. Targeted net debt/EBITDA over this period is less than 2.00:1.

In March 2015, our Radio GB division was awarded the UK's second national DAB multiplex licence, D2, along with its two Sound Digital consortium partners, Bauer Media and Arqiva. Since then, extensive preparations have taken place which culminated in the successful launch of 3 new national radio services in March 2016. These are talkRADIO, a talk-led service focussed on current affairs and entertainment; Virgin Radio, a music service which brings the famous Virgin Radio brand back to the UK under a 12 year brand licence agreement with Virgin Group; and talkSPORT 2, a complementary service to talkSPORT covering live action across a broader range of sports.

In a post World Cup year, talkSPORT, with its focus on football, continued to provide an essential service to loyal fans, recording on average more than three million listeners every week. With strong demand for the younger, generally affluent male demographics of those listeners, advertisers were receptive to a significant increase in our spot advertising rates. It's worth noting that more than 10% of talkSPORT's revenue now comes from its digital inventory. talkSPORT's international broadcasting business, now in its fourth season, continues to achieve double digit sales and profit growth with rights in place for three further seasons.

We confirmed on 9 January 2015 that our local radio stations in GB were subject to a strategic review. This review was wide ranging and thorough and was intended to determine whether greater value could be derived from disposals or from driving further profits from these stations. Despite receiving a number of attractive offers for those radio assets, we concluded, with one exception, that the latter option was the correct choice. The one exception was our only youth orientated station, Juice FM in Liverpool, where we accepted Global Radio's £10m offer.

The Irish radio advertising market has been severely impacted by the years of deep recession in Ireland, falling by an estimated 50% from peak to trough. Recovery in Irish domestic consumer demand has lagged the very strong turnaround in the overall Irish economy but 2015 saw the Irish consumer gain confidence and Irish domestic consumption started to record good growth. Surprisingly, this confidence was not reflected in the Irish radio advertising market which moved only slowly out of the trough. A feature of 2015 was the increasingly competitive nature of the radio market. Anticipating a return to strong advertising growth, radio station owners became more aggressive in terms of marketing and investment in talent, and discounted pricing remained prevalent.

Board changes

After twenty-three years' service on the Board, including sixteen as Chief Executive, John McCann (62) decided in March 2016 that the sale of the Company's television business marked a very natural time for him to retire. John joined UTV as Financial Controller in 1983, becoming Director and General Manager in 1990 and Chief Executive in 1999. Under John's leadership, UTV was transformed from its ITV regional licensee origins into one of the most successful media companies in the UK and Ireland, with market leading radio, television and digital media assets. John will retire at the time of the AGM in May 2016.

On behalf of all shareholders and employees of the Company, I would like to thank John for his outstanding leadership, professionalism and passionate commitment to the Company over so many years. He leaves the Company in a very healthy state and with our fondest best wishes.

Coline McConville, who joined the Board in 2012, will also retire at the AGM in May 2016 and I would like to thank her for the very valuable contribution that she has made during her time on the Board.

At the same time I would like to thank my other colleagues on the Board, our management and staff for all their hard work and determination during what has been an eventful and transforming year for the Group.

Having considered the nature of the continuing Group and the experienced existing management team, the Board has asked me to become Executive Chairman and to lead the Company's growth strategy as a focused radio group. I look forward to using my extensive experience of the radio industry and existing knowledge of the Company's businesses to ensure that the Company continues to focus all its efforts on delivering long-term value for shareholders.

Prospects

The launch and establishment of our three new recently launched national radio stations on D2 is a key priority for 2016. talkSPORT 2 and talkRADIO will leverage talkSPORT's brand heritage while Virgin Radio will have instant brand recognition. All three stations will be supported by existing infrastructure and will benefit from cross promotion, thereby helping to keep costs as low as possible. Our low cost model for these digital stations envisages breakeven being achieved at modest audience delivery levels. Operating losses at the three stations are anticipated to be circa £3.6m in 2016, moving to a small loss in 2017 and growing profitably beyond this. 50% of our forecast 2016 revenue for the D2 stations has already been achieved.

talkSPORT has a commanding position in the UK radio market as the premier sports radio station and will benefit from the summer Euro 2016 tournament. Both the size and the profile of its audience makes it an attractive medium for advertisers seeking male audiences. While a major football tournament typically would drive a 10% increase in sales over the course of a calendar year, talkSPORT is experiencing good underlying sales growth in addition to the positive effect of the Euros which augurs well for 2016. Our local radio stations are expected to perform broadly in line with the UK radio market for the year as a whole.

The Irish economy is forecast to grow strongly in 2016 and beyond. Consumer expenditure is also forecast to grow. This growth should translate into increased advertising expenditure and Irish advertising agencies appear to be cautiously optimistic despite the backdrop of the slowing global economy. Our radio stations in Ireland continue to enjoy market leading positions in key urban areas across the country which should leave them well placed to avail of market growth. At this stage, we expect single digit Irish radio advertising growth in 2016 with the first quarter softer due to a very strong comparative in January.

Conclusion

The new Wireless Group has a very exciting future. As a focused radio business with market-leading assets and a strong management track record of growing audiences and revenues, I am confident that we can target double digit profit growth over the medium term. Our robust balance sheet and strong cash generation will support a progressive dividend policy allowing shareholders to look forward to both significant income and capital growth from the Company over the coming years.

Richard Huntingford

Chairman

31 March 2016

Group Income Statement

For the year ended 31 December 2015

Group Statement of Comprehensive Income

For the year ended 31 December 2015

Group Balance Sheet

At 31 December 2015

Group Cash Flow Statement

For the year ended 31 December 2015

(i) Includes both continuing and discontinued operations.

Group Statement of Changes in Equity

For the year ended 31 December 2015

Notes to the accounts

For the year ended 31 December 2015

1. Basis of preparation

The Group's financial statements consolidate those of Wireless Group 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 2015 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 Group has adopted the following new standards that are relevant for the preparation of the financial statements for the year ended 31 December 2015: Amendment to IAS 19: Employee Contributions, IFRS Improvements 2010 - 2012 Cycle and IFRS Improvements 2011 - 2013 Cycle. The application of these new standards effective from 1 January 2015 has not had an impact on the Group's financial statements.

In October 2015 the Group entered into a conditional agreement to sell its Television business to ITV. The sale of this business was completed on 29 February 2016. Consequently the Group Income Statement reflects the classification of this business as discontinued operations for both 2015 and 2014.

The Group and Company financial statements are presented in sterling and all values are rounded to the nearest thousand (£000) except when otherwise indicated.

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 2015. The statutory accounts for the year ended 31 December 2014, 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 2015 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

(a) Operating segments

The tables below present revenue and segment result information regarding the Group's operating segments for the years ended 31 December 2015 and 2014. These business segments all operate as part of the Group's continuing operations.

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 is principally generated from advertising and sponsorship. Transfer prices between business segments are set on an arm's length basis in a manner similar to transactions with third parties.

Following the agreement in 2015 to sell the main Television segment businesses, UTV and UTV Ireland as outlined in note 5, and the classification of these businesses as discontinued operations, Tibus and Simply Zesty which were previously included within the Television segment are now included as a separate segment, renamed Digital Services.

The following tables present revenue, profit before tax and business segment information regarding the Group's business segments for the years ended 31 December 2015 and 2014. The figures for the year ended 31 December 2014 have been restated to reflect the change in segments noted above.

Revenue

Year ended 31 December 2015

Year ended 31 December 2014

(a) Operating segments (continued)

Results

Year ended 31 December 2015

Year ended 31 December 2014

3. Exceptional item

On 8 October 2015 the Group completed the sale of Juice Holdco Limited, trading as Juice FM, to Global Radio Holdings Ltd, a subsidiary of This is Global Ltd. This resulted in a profit on disposal before tax of £6,871,000.

Profit on disposal of subsidiary

The exceptional tax credit reflects £334,000 arising from the release of the deferred tax liability in respect of the radio licence disposed of with the sale of Juice Holdco Limited plus an additional deferred tax credit of £1,833,000 (2014: £Nil) due to the change in the UK deferred tax rate from 20% to 18%.

4. Taxation

Tax on profit on ordinary activities

5. Assets held for disposal

In October 2015 the Group entered into a conditional agreement for the sale of UTV Limited and UTV Ireland Limited, to ITV Broadcasting Limited for a cash consideration of £100million on a cash-free debt-free basis. On 1 December 2015 the shareholders of the Company approved the plan to sell these companies. The sale was completed on 29 February 2016. At 31 December 2015 the Television business was classified as a disposal group held for sale and as discontinued operations. With UTV Limited and UTV Ireland Limited being classified as discontinued operations the Television segment in the segmental analysis in note 2 has been renamed, Digital Services, reflecting the two businesses within this segment which remain within the Group.

6. 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 year.

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 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 year.

Diluted earnings per share are calculated based on profit for the financial year attributable to equity holders of the parent. Diluted adjusted earnings per share are calculated based on profit for the financial year 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.

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

Weighted average number of shares

6. Earnings per share (continued)

7. Dividends

The proposed final dividend for 2015 has been based on the issued share capital at the record date, following the share consolidation.

8. Financial asset

Contingent consideration receivable in 2014 relates to amounts due in respect of the disposal of certain of the Group's New Media businesses during the year.

9. Financial liabilities

The borrowings at 31 December 2015 are stated net of £345,000 (2014: £509,000) of deferred financing costs.

10. Net debt

11. Pension schemes

The IAS 19 surplus at 31 December 2015 is £54,000 compared with a deficit of £1,971,000 at 31 December 2014. The reduction in the deficit was primarily driven by adjustments realised following the actuarial review in the year.

The Group funded a discretionary amount of £1,209,000 towards the actuarial deficit in 2015 (2014: £1,209,000) by means of a cash transfer.

The defined benefit pension scheme is operated within UTV Limited and this transferred to ITV Broadcasting Limited from 29 February 2016 on completion of the sale of this company.

12. 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 2014 has not changed. There have been no significant related party transactions in the year ended 31 December 2015.

This summary has been approved by our Directors for release to the Press today 31 March 2016 and the full printed Annual Report and Accounts will be posted to Shareholders and Stock Exchanges on 12 April 2016. Copies will be available to the public at the Company's registered office Ormeau Road, Belfast, BT7 1EB from that date.