30th Aug 2011 07:00
UTV Media plc
Interim Results
For the 6 months ended 30 June 2011
Financial highlights on continuing operations *
* Pre-tax profits up by 15% to £10.9m (2010: £9.5m) * Group operating profit up by 4% to £12.8m (2010: £12.3m)
* £14.2 m (18%) reduction in net debt over 12 months to £63.1m (2010: £77.3m)
* Group revenue maintained at £59.1m (2010: £58.8m) post World Cup * Net finance costs down 32% to £1.8m (2010: £2.7m) * Diluted adjusted earnings per share up by 16% to 8.64p (2010: 7.44p) * Proposed interim dividend of 1.5p (2010: 1.00p)
Operational highlights and prospects *
* Strong market outperformance across both Radio and Television
* Revenues maintained in GB Radio despite the tough comparatives of the 2010
World Cup * Irish Radio Revenues down by 4% in difficult market conditions with an associated profit decline of £0.2m in the first six months
* Television advertising revenue up by 4% compared to the ITV Network which
was flat
* Total operating costs largely unchanged from last year with increased GB
Radio content costs offset by reduced World Cup and overhead costs * Continued significant debt reduction created by strong cash management, with 2.0 times Net Debt:EBITDA anticipated by year end
* Third quarter advertising revenue compared to the same period last year is
anticipated to increase by 3 %
* As appropriate, references to profit include associate income but exclude exceptional items
John McCann, Group Chief Executive, UTV Media plc, said:
"These are another robust set of results despite the challenging macro-economicconditions. A 15% uplift in pre-tax profits, an 18% reduction in net debt and asignificant increase in dividend all point to good progress being made inpositioning the company for the upturn."
For further information contact:
Maitland +44 (0) 20 7379 5151Rowan BrownUTV 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
Strong outperformance in subdued advertising markets is the key feature ofthese half year results. Group operating profit was up 4%, even against thetough comparatives of the World Cup last year. With our continued focus on netdebt helping to drive down interest charges, group profit before tax was 15%higher.Results *
Television operating profit more than doubled in the six months, increasing to£3.1m (2010 : £1.4m). Radio and New Media operating profits both slipped to £8.8m (2010 : £9.9m) and £0.9m (2010 : £1.0m) respectively. Strong cashgeneration led to a significant reduction in net debt to £63.1m (2010 : £77.3m)at the end of the six months and contributed to a much lower net interestcharge for the period of £1.8m (2010 : £2.7m). Group profit before tax was £1.4m higher at £10.9m (2010 £9.5m), while diluted adjusted earnings per sharewere up by 16% to 8.6p (2010: 7.4p).
* As appropriate, references to profit include associate income but exclude exceptional items and relate to continuing operations only
Dividend
We recognise that the improving financial performance of your company should bereflected by an improving distribution to shareholders while maintaining aprudent stance during these uncertain macro-economic conditions. Therefore,your Board is declaring an interim dividend of 1.5p (2010: 1.0p), which will bepaid on 14 October 2011 to all shareholders on the Register at the close ofbusiness on 16 September 2011.
Radio
Despite the very positive impact of the World Cup on last year's figures, ourGB Radio division managed to maintain revenue at £25.2m for the six months to30 June 2011. Operating costs were £0.8m higher at £19.4m (2010: £18.6m) withWorld Cup cost savings being more than offset by increased investment inprogramming and presenters at talkSPORT. The benefits of this increasedinvestment, which includes enhanced Premier League coverage and development ofonline activities, are already evident in increased audiences, but revenueimprovement will inevitably lag improvement in both broadcast and onlineaudiences. Radio GB operating profit, therefore, was lower at £5.8m (2010 : £6.7m).The Irish advertising marketplace continued to be very challenging but ourstrong audience delivery was instrumental in maintaining our outperformance ofthe market. Revenue at our Irish radio division in the first six months wasdown by 4% to £11.0m (2010 : £11.5m). With further cost savings of £0.3m, ourIrish Radio operating profit was £0.2m lower at £3.0m (2010 : £3.2m).
Television
Our television advertising revenue was up by 4% in the first six months,comfortably outperforming the ITV network which was flat. This was aparticularly creditable performance, given the comparatives of the World Cuplast year and the drag of a Dublin advertising market which was down by 4%. Ourtotal television revenue was up by 3% to £17.2m (2010 : £16.6m) but withtelevision operating costs 7% lower at £14.1m (2010 : £15.2m) as a result ofWorld Cup and overhead savings, television operating profit climbed by £1.7m to£3.1m (2010 : £1.4m).New MediaNew Media operating profit in the first six months was lower at £0.9m (2010: £1.0m) reflecting the challenging economic environment. The Internet businesssaw a reduction in customer spend on broadband and telephony products while ourweb development and hosting business, Tibus, continued to show steady profitgrowth.Prospects
In the third quarter, total revenue in our GB Radio Division is expected to beup by 9%. Even in the absence of World Cup activity, talkSPORT revenue in thethree months should be up by 14%, while revenue at our local radio stationsshould grow by 2%.
We anticipate that our Irish Radio division will continue to outperform the market but, in the three months to 30 September, our Irish radio advertising revenue is still likely to record a reduction of about 5% reflecting the current macro-economic factors and uncertainties in the Irish market.
Our Television advertising revenue in the third quarter is expected to be down by about 1% in line with the ITV network.
Trading in our New Media division is expected to be in line with the first six months.
It is difficult to be optimistic in the midst of such uncertainty surroundinggrowth in both domestic and global economies. Nevertheless, your companycontinues to make steady progress and operating budgets are being met and oftenexceeded. Robust cash flow management has significantly strengthened thebalance sheet and our expectation is that our net debt/EBITDA ratio at the
yearend will be around 2 times.John B McGuckianChairman30 August 2011Group Income Statement
for the six months ended 30 June 2011
Results Results before before Exceptional Exceptional Exceptional Exceptional Items Items Total Items Items Total 30 30 30 30 30 30 June June June June June June Notes 2011 2011 2011 2010 2010 2010 £000 £000 £000 £000 £000 £000 Continuing operations Revenue 3 59,103 - 59,103 58,829 - 58,829 Operating costs (46,429) - (46,429) (46,686) - (46,686) ---------- ---------- ---------- ---------- ---------- ---------- Operating profit 3 12,674 - 12,674 12,143 - 12,143 from continuing operations before tax and finance costs Share of results 82 - 82 151 - 151 of associates accounted for using the equity method ---------- ---------- ---------- ---------- ---------- ---------- Profit from 12,756 - 12,756 12,294 - 12,294 continuing operations before tax and finance costs Finance revenue 75 - 75 36 - 36 Finance costs (1,896) - (1,896) (2,708) - (2,708) Foreign exchange (83) - (83) (153) - (153) loss ---------- ---------- ---------- ---------- ---------- ---------- Profit from 10,852 - 10,852 9,469 - 9,469 continuing operations before tax Taxation (2,389) 616 (1,773) (2,159) - (2,159) ---------- ---------- ---------- ---------- ---------- ---------- Profit from 8,463 616 9,079 7,310 - 7,310 continuing operations after tax Discontinued operations Loss from 4 (213) - (213) (81) - (81) discontinued operations ---------- ---------- ---------- ---------- ---------- ---------- 8,250 616 8,866 7,229 - 7,229 ----------- ----------- ---------- ----------- ----------- ---------- Attributable to: Equity holders of 8,083 616 8,699 7,070 - 7,070 the parent Minority interests 167 - 167 159 - 159 ---------- ---------- ---------- ---------- ---------- ---------- 8,250 616 8,866 7,229 - 7,229 ----------- ----------- ---------- ----------- ----------- ---------- Note 2011 2010 Earnings per share Continuing operations Basic 8 9.34p 7.50p Diluted 8 9.28p 7.44p Adjusted 8 8.70p 7.50p Diluted adjusted 8 8.64p 7.44p Continuing and discontinued operations Basic 8 9.12p 7.41p Diluted 8 9.06p 7.36p Adjusted 8 8.47p 7.41p Diluted adjusted 8 8.42p 7.36p ---------- -------
Group Statement of Comprehensive Income
for the six months ended 30 June 2011
30 30 June June 2011 2010 £000 £000 Profit for the period 8,866 7,229 ----------- ---------- Other comprehensive income/ (expense) Exchange difference on 4,946 (6,435) translation of foreign operations
Actuarial gain/(loss) on 521 (3,668) defined benefit pension schemes
Cash flow hedges:
- Loss arising during the year (226) (996)
- Less transfers to the income 312 1,116 statement Tax relating to other (104) 1,007 comprehensive income ----------- ---------- Other comprehensive income/ 5,449 (8,976) (expense) for the period, net of tax ----------- ----------
Total comprehensive income/ 14,315 (1,747) (expense) for the period, net
of tax ----------- ---------- Attributable to:
Equity holders of the parent 14,148 (1,906)
Minority interests 167 159 ----------- ---------- 14,315 (1,747) ----------- ----------Group Balance Sheet
for the six months ended 30 June 2011
30 30 31 June June December Notes 2011 2010 2010 £000 £000 £000 ASSETS Non-current assets Property, plant and equipment 5 11,514 10,574 10,695 Intangible assets 228,610 251,634 221,856
Investments accounted for using 254 246 172
the equity method Deferred tax asset 6,444 13,094 9,876 ----------- --------- ----------- 246,822 275,548 242,599 ----------- --------- ----------- Current assets Inventories 644 617 1,741 Trade and other receivables 25,832 30,534 28,180 Cash and short term deposits 9,862 10,434 11,250 ----------- --------- ----------- 36,338 41,585 41,171 ----------- --------- ----------- TOTAL ASSETS 283,160 317,133 283,770 ----------- --------- ----------- 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 (1,258) (1,258) (1,258) Foreign currency reserve 14,445 5,997 9,499 Cash flow hedge reserve (515) (716) (581) Retained earnings 61,019 66,156 54,441 ----------- --------- ----------- 129,298 125,786 117,708 Minority interest 642 656 475 ----------- --------- ----------- TOTAL EQUITY 129,940 126,442 118,183 ----------- --------- ----------- Non-current liabilities Financial liabilities 9 64,519 79,592 74,490
Derivative financial liabilities 337 - 370
Pension liability 10 4,930 13,505 6,800 Provisions 969 992 970 Deferred tax liabilities 37,362 48,597 38,416 ----------- --------- ----------- 108,117 142,686 121,046 ----------- --------- ----------- Current liabilities Trade and other payables 33,771 37,084 32,363 Financial liabilities 9 8,444 8,109 8,254
Derivative financial liabilities 366 969 420
Tax payable 2,094 1,425 3,076 Provisions 428 418 428 ----------- --------- ----------- 45,103 48,005 44,541 ----------- --------- ----------- TOTAL LIABILITIES 153,220 190,691 165,587 ----------- --------- ----------- TOTAL EQUITY AND LIABILITIES 283,160 317,133 283,770 ----------- --------- --------- Group Cash Flow
for the six months ended 30 June 2011
30 30 June June 2011 2010 £000 £000 Operating activities Profit before tax 10,639 9,388 Adjustments to reconcile profit before tax to net cash flows from operating activities Foreign exchange loss 83 153 Net finance costs 1,821 2,672 Share of results of associates (82) (151)
Depreciation of property, plant and 771 832 equipment
Difference between pension contributions (1,349) (1,164) paid and amounts recognised in the income
statement
Decrease/(increase) in inventories 1,097 (285)
Decrease/(increase) in trade and other 2,525 (343) receivables
(Decrease)/increase in trade and other (1,742) 1,448 payables
Decrease in provisions (1) (49) Profit from sale of property, plant and (3) (14) equipment Share based payments 304 231 ---------- -------- Cash generated from operations before 14,063 12,718 exceptional costs Exceptional costs - (397) Tax (paid)/received (1,118) 18 ---------- --------
Net cash inflow from operating activities 12,945 12,339
---------- -------- Investing activities Interest received 75 30
Proceeds on disposal of property, plant 3 25 and equipment
Purchase of property, plant and equipment (1,242) (359)
Payment to acquire investments - (203) ---------- --------
Net cash flows from investing activities (1,164) (507)
---------- -------- Financing activities Borrowing costs (1,916) (2,348)
Dividends paid to equity holders of the (7) (3) parent
Dividends paid to minority shareholders of - (250) subsidiaries Repayment of borrowings (11,308) (7,022) Rights issue costs - (2) ---------- -------- Net cash flows used in financing (13,231) (9,625) activities ---------- --------
Net (decrease)/increase in cash and cash (1,450) 2,207 equivalents
Net foreign exchange differences 62 (207)
Cash and cash equivalents at 1 January 11,250 8,434
---------- --------
Cash and cash equivalents at 30 June 9,862 10,434
---------- --------
Group Statement of Changes in Equity
for the six months ended 30 June 2011
Equity Capital Foreign Cashflow Share share redemption Treasury currency hedge Retained holder Minority capital reserve shares reserve reserve earnings equity interest Total £000 £000 £000 £000 £000 £000 £000 £000 £000
At 1 January 55,557 50 (1,258) 12,432 (821) 63,409 129,369 747 130,116 2010 ------- ---------- --------- --------- ---------
--------- --------- --------- ---------
Profit for - - - - - 7,070 7,070 159 7,229 the period Other - - - (6,435) 105 (2,646) (8,976) - (8,976) comprehensive income/ (expense) in the period ------- ---------- --------- --------- ---------
--------- --------- -------- ---------
Total net - - - (6,435) 105 4,424 (1,906) 159 (1,747) comprehensive income/ (expense) in the period Dividends - - - - - - - (250) (250) payable to minority shareholders Share based - - - - - 231 231 - 231 payment Dividends - - - - - (1,908) (1,908) - (1,908) payable to equity shareholders ------- ---------- --------- --------- ---------
--------- --------- --------- ---------
At 30 June 55,557 50 (1,258) 5,997 (716) 66,156 125,786 656 126,442 2010 -------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Loss for the - - - - - (15,823) (15,823) 258 (15,565) period Other - - - 3,502 135 4,875 8,512 - 8,512 comprehensive income in the period ------- ---------- --------- --------- ---------
--------- --------- --------- ---------
Total net - - - 3,502 135 (10,948) (7,311) 258 (7,053) comprehensive income/ (expense) in the period Share based - - - - - 187 187 - 187 payment Dividends (954) (954) (439) (1,393) payable to equity shareholders ------- ---------- --------- --------- --------- --------- --------- --------- --------- At 31 55,557 50 (1,258) 9,499 (581) 54,441
117,708 475 118,183 December 2010 ------- ---------- --------- --------- ---------
--------- --------- --------- ---------
Profit for - - - - - 8,699 8,699 167 8,866 the period Other - - - 4,946 66 437 5,449 - 5,449 comprehensive income in the period ------- ---------- --------- --------- ---------
--------- --------- --------- ---------
Total net - - - 4,946 66 9,136 14,148 167 14,315 comprehensive income in the period Share based - - - - - 304 304 - 304 payment Dividends - - - - - (2,862) (2,862) - (2,862) payable to equity shareholders ------- ---------- --------- --------- ---------
--------- --------- --------- ---------
At 30 June 55,557 50 (1,258) 14,445 (515) 61,019 129,298 642 129,940 2011 ------- ---------- --------- --------- ---------
--------- --------- --------- ---------
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 theFinance Services Authority.
In addition 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 2010.
These interim financial statements have been prepared on the going concernbasis as the directors, having considered available relevant information, havea reasonable expectation that the Group has adequate resources to continue inoperational existence for the foreseeable future.The interim results are unaudited but have been formally reviewed by theauditors and their report to the Company is set out at the end of this InterimReport. The information shown for the year ended 31 December 2010 does notconstitute statutory accounts within the meaning of Section 434 of theCompanies Act 2006 and has been extracted from the Group's 2010 Annual Report,which has been filed with the Registrar of Companies. The report of theauditors on the accounts contained within the Group's 2010 Annual Report wasunqualified and did not contain a statement under either Section 498(2) orSection 498(3) of the Companies Act 2006 regarding inadequate accountingrecords 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 inIreland, commercial television and new media. These four principal areas ofactivity also form the basis on which the Group is managed and reports areprovided to the Chief Executive and the Board. The following is an analysis ofthe revenue and results for the period, analysed by reportable segment.RevenueSix months ended 30 June 2011 Radio GB Radio Television New Media Total Ireland £000 £000 £000 £000 £000 Sales to third 25,141 10,976 17,158 5,828 59,103 parties Intersegmental sales 384 574 1,314 - 2,272 ----------- ----------- ----------- ----------- --------- Total segment 25,525 11,550 18,472 5,828 61,375 revenue ----------- ----------- ----------- ----------- --------- Six months ended 30 June 2010 Radio GB Radio Television New Media Total Ireland £000 £000 £000 £000 £000 Sales to third 25,114 11,466 16,637 5,612 58,829 parties Intersegmental sales 378 663 1,089 - 2,130 ----------- ----------- ----------- ----------- --------- Total segment 25,492 12,129 17,726 5,612 60,959 revenue ----------- ----------- ----------- ----------- --------- Results Six months ended 30 June 2011 Radio GB Radio Television New Media Total Ireland £000 £000 £000 £000 £000 Segment operating profit before exceptional 5,787 2,960 3,053 874 12,674 costs Share of results of 82 associates Net finance costs (1,821) Foreign exchange (83) loss --------- Profit before tax 10,852 --------- Six months ended 30 June 2010 Radio GB Radio Television New Media Total Ireland £000 £000 £000 £000 £000 Segment operating profit before exceptional 6,493 3,190 1,431 1,029 12,143 costs Share of results of 151 associates Net finance costs (2,672) Foreign exchange (153) loss --------- Profit before tax 9,469 --------- 4. Discontinued operations
Discontinued operations in 2010 and 2011 relate to UTV Interactive Ltd which was closed in February 2011.
5. Property, plant and equipment
During the period the Group spent £1,424,000 on capital additions.
6. Taxation
In the budgets in June 2010 and March 2011, changes in future corporation taxrates in the UK were proposed for the years up to 2014. The exceptional taxcredit of £616,000 (2010: £Nil) arises from the restatement of the deferred taxbalances to reflect the change in the UK corporation tax rate from 27% to 26%with effect from 1 April 2011, as initially approved in 2010.On 5 July 2011, the revision of the UK corporation tax rate to 25% from 1 April2012 was approved. As a result, it is expected that the deferred tax will becalculated at 25% at 31 December 2011 and that a further exceptional deferredtax credit of £616,000 will be recognised in the second half of the year.The further proposed changes in the UK corporation tax rate have not yet beensubstantively enacted. If the proposed corporation tax rate changes were to befully approved and the tax rate reduced to 23% by 2014, the relevant deferredtax assets and liabilities would be restated accordingly resulting in a netexceptional credit of approximately £1,500,000 in future years. 7. Dividends 30 30 June June 2011 2010 £000 £000 Equity dividends on ordinary shares Declared at the AGM during the period Final for 2010: 3.00p 2,862 1,908 (2009: 2.00p) ========== ========= Proposed but not recognised as a liability at 30 June Interim for 2011: 1.5p 1,428 954 (2010: 1.00p) ========== =========
The final dividend for 2010 was paid on 15 July 2011 (2009: 15 July 2010).
8. Earnings per share
Basic earnings per share is calculated based on the profit for the financialperiod attributable to equity holders of the parent and on the weighted averagenumber of shares in issue during the period.Adjusted earnings per share are calculated based on the profit for thefinancial period attributable to equity holders of the parent adjusted for theexceptional items. This calculation uses the weighted average number of sharesin issue during the period.Diluted earnings per share are calculated based on profit for the financialperiod attributable to equity holders of the parent. Diluted adjusted earningsper share are calculated based on profit for the financial period attributableto equity holders of the parent before exceptional items. In each case theweighted average number of shares is adjusted to reflect the dilutive potentialof 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
2011 2010 ---------- ---------- ---------- ---------- ----------
----------
Continuing Discontinued Continuing Discontinued Operations Operations Total Operations Operations Total £000 £000 £000 £000 £000 £000 Net profit 8,912 (213) 8,699 7,151 (81) 7,070 attributable to equity holders Exceptional (616) - (616) - - - items (net of tax) ------- ------- ------ ------- ------ ------ Total 8,296 (213) 8,083 7,151 (81) 7,070 adjusted and diluted profit attributable to equity holders ----------- ----------- ----------- ----------- -----------
-----------
Weighted average number of shares
2011 2010 thousands thousands
Weighted average number of shares for basic and 95,403 95,403 adjusted earnings per share (excluding treasury
shares)
Dilutive potential of the Long Term Incentive 609 672 Schemes
----- -----------
Adjusted weighted average number of ordinary 96,012 96,075 shares for diluted earnings per share
----------- ----------- Earnings per share From continuing and discontinued operations 2011 2010 Basic 9.12p 7.41p ----------- -------- Diluted 9.06p 7.36p ----------- -------- Adjusted 8.47p 7.41p ----------- -------- Diluted adjusted 8.42p 7.36p ----------- -------- From continuing operations 2011 2010 Basic 9.34p 7.50p ----------- ------- Diluted 9.28p 7.44p ----------- -------- Adjusted 8.70p 7.50p ----------- -------- Diluted adjusted 8.64p 7.44p ----------- -------- From discontinued operations 2011 2010 Basic and diluted (0.22)p (0.08)p ----------- ------- Adjusted and diluted adjusted (0.22)p (0.08)p ----------- -------- 8. Financial liabilities 30 30 31 June June December 2011 2010 2010 £000 £000 £000 Current Current instalments due on 8,444 8,109 8,254 bank loans Non-current Non-current instalments due 64,519 79,592 74,490 on bank loans ----------- ----------- ----------- Total 72,963 87,701 82,744 ----------- ----------- -----------
The bank loans at 30 June 2011 are stated net of deferred financing costs amounting to £342,000 (30 June 2010: £496,000; 31 December 2010: £419,000).
9. Pension schemes
The IAS 19 deficit at 30 June 2011 is £4,930,000 (30 June 2010: £13,505,000)compared with a deficit of £6,800,000 at 31 December 2010. The decrease is theresult of actuarial gains both on the assets and liabilities during the periodand employer contributions including £1,181,000 in addition to normal fundingduring the period.
11. Related party transactions
The nature of related parties disclosed in the consolidated financialstatements for the Group as at and for the year ended 31 December 2010 has notchanged. There have been no significant related party transactions in the sixmonth period ended 30 June 2011.
Risks and uncertainties
The 2010 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 2011.
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 duringthe first six months of the financial year and their impact on the condensedset of financial statements, and a description of the principal risks anduncertainties 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 McCannGroup Chief Executive30 August 2011
Independent review report to UTV Media plc
Introduction
We have been engaged by the Company to review the condensed set of financialstatements in the half-yearly financial report for the 6 months ended 30 June2011 which comprises the Group Income Statement, Group Statement ofComprehensive Income, Group Balance Sheet, Group Statement of Changes inEquity, Group Cash Flow Statement and the related notes 1 to 11. We have readthe other information contained in the half yearly financial report andconsidered whether it contains any apparent misstatements or materialinconsistencies with the information in the condensed set of financialstatements.This report is made solely to the company in accordance with guidance containedin ISRE 2410 (UK and Ireland) "Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity" issued by the AuditingPractices Board. To the fullest extent permitted by law, we do not accept orassume responsibility to anyone other than the company, for our work, for thisreport, 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 Services Authority.
As disclosed in note 1, the annual financial statements of the group areprepared in accordance with IFRSs as adopted by the European Union. Thecondensed set of financial statements included in this half-yearly financialreport has been prepared in accordance with International Accounting Standard34, "Interim Financial Reporting", as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensedset of financial statements in the half-yearly financial report based on ourreview.Scope of Review
We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, "Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity" issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof 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 tobelieve that the condensed set of financial statements in the half-yearlyfinancial report for the 6 months ended 30 June 2011 is not prepared, in allmaterial respects, in accordance with International Accounting Standard 34 asadopted by the European Union and the Disclosure and Transparency Rules of theUnited Kingdom's Financial Services Authority.Ernst & Young LLPBelfast30 August 2011
XLONRelated Shares:
WLG.L