Preliminary Announcement

UTV Media plc ("UTV" or "the Company" or "the Group") Belfast, London & Dublin - 18 March 2014: UTV Media plc today announcespreliminary results for the year ended 31 December 2013 Financial highlights on continuing operations* * Group revenue of £107.8m (2012: £112.3m) - down 11% in the first half of the year and up 3% in the second half * Pre-tax profits of £16.9m (2012: £20.1m) * Group operating profit of £20.1m (2012: £23.4m) - down 36% in the first half of the year and up 10% in the second half * Net debt £49.1m (2012: £49.4m) * Diluted adjusted earnings per share from continuing operations of 14.27p (2012: 16.63p) * Proposed final dividend of 5.25p maintaining full year dividend of 7.00p (2012: 7.00p) * As appropriate, references to profit include associate income but excludediscontinued operations Operational highlights * Difficult market conditions in the first half of the year with improving macro-economic environment leading to growth in the second half * Strong audience shares across Radio and Television * Cost savings realised from Group restructuring coupled with Simply Zesty reorganisation * Radio and television broadcasting focus - divesting of New Media businesses (exceptional charge of £1.2m) * Plans to launch a new television channel in Ireland following agreement with ITV Global Entertainment for the exclusive rights, from January 2015, for ITV Studios programmes in the Republic of Ireland * talkSPORT successfully renewed exclusive national audio broadcasting rights for Premier League packages to 2016 Prospects highlights * Continued growth in the first three months of 2014 * Radio Ireland revenue (local currency) up 9%, Radio GB revenue up 7% and Television revenue up 5% * April is expected to show strong growth as anticipated * Further growth is expected in Radio GB in the second quarter in the run up to the World Cup * Ongoing expansion in talkSPORT International * Irish television licence awarded - station build commencing John McCann, Group Chief Executive, UTV Media plc, said: "The contrasting performances of the first and second halves of the year areevident in these results, with Group operating profit down 36% in the firsthalf of the year and up 10% in the second half. The improvement in marketconditions continues into the current year, with all of our divisions recordinggood growth in the first quarter of 2014." Key dates * 15 May 2014 - Annual General Meeting & Interim Management Statement * 30 May 2014 - Record date for payment of dividends * 15 July 2014 - Payment of dividends * 26 August 2014 - Interim Results Announcement * 13 November 2014 - Interim Management Statement For further information contact: MaitlandJames Devas +44 (0) 20 7379 5151 UTV Media plcJohn McCann, Group Chief Executive +44 (0) 28 9032 8122Norman McKeown, Group Finance +44 (0) 28 9032 8122DirectorOrla McKibbin, Head of +44 (0) 28 9026 2188Communications Investor Enquiries www.utvmedia.com/investorsUTV Media plc Chairman's Statement Overview The tough trading conditions of the first half gradually gave way to morebenign conditions in the second half as advertising markets started to respondto the improving macroeconomic environment. This was particularly the case inIreland where, after five years of decline, television advertising recordedgrowth of 11% in the second half while radio advertising also moved intogrowth. Weak demand in the GB radio advertising market was compounded by theabsence of a major sporting event in talkSPORT's calendar, but here againmarket conditions improved as the year progressed. Having been down by 11% inthe first half of the year, total Group turnover (excluding discontinuedoperations) was up by 3% in the second half, giving a 4% reduction for the fullyear at £107.8m (2012: £112.3m). Group operating profit* matched this profile,being down 36% in the first half and up 10% in the second half recording a 14%reduction for the year as a whole at £20.1m (2012:£23.4m). * As appropriate, references to operating profit include associate income butexclude discontinued operations Results and dividends for the year The Group profit after taxation before exceptional items for the year, amountedto £13.7m (2012 restated: £16.2m) as detailed in the Group Income Statement.Exceptional items arose during the year as a result of a £1.2m write down ofassets on operations classified as discontinued plus an exceptional tax creditof £1.2m due to the changes in the rates of UK corporation tax and ROI capitalgains tax (2012: exceptional tax charge of £1.0m). This created a Group profitfor the year of £13.7m (2012: £15.2m). There was a small reduction in net debt to £49.1m at the year end (2012: £49.4m). Dividends amounting to £6.7m were paid during the year representing a finalordinary dividend for 2012 of 5.25p per share and an interim ordinary dividendfor 2013 of 1.75p per share as shown in note 6. A final dividend of £5.0m representing 5.25p per share is proposed for approvalat the Annual General Meeting. If approved, warrants in respect of it will bedespatched on 15 July 2014 to shareholders on the register at the close ofbusiness on 30 May 2014. Developments towards a broadcasting focused strategy In 2013 management made good progress in transitioning the business to befocused predominately on broadcasting, in line with the Board strategy. The most significant of these was the agreement we entered into with ITV GlobalEntertainment to acquire the rights in the Republic of Ireland to ITV Studiosprogramming from 1 January 2015. In conjunction with this, we applied for andwere recently granted, a programme content licence from the BroadcastingAuthority of Ireland to operate a new television channel in the Republic ofIreland for a ten year term beginning 1 January 2015. With ITV programming atthe heart of the schedule, our objective is to provide a service similar tothat which we offer in Northern Ireland but customised to meet the needs andpreferences of viewers in the Republic of Ireland. Much of the programmingwhich we will be offering will already be familiar to Irish viewers and we areconfident that we will be able to establish a strong viewership base in ourfirst full year of operation. In a further positive development for our television division, Ofcom has nowconfirmed that our licence to operate our television service in NorthernIreland has been extended by a ten year period to expire on 31 December 2024.Ofcom has set our licence fee during this term at £10k per annum. Our newaffiliate arrangement with ITV will operate for the same period and willprovide, inter alia, stability around our network programme costs, subject tocapped inflationary increases. Refining our strategy to focus more on broadcasting, we decided to exit fromnon-core activities. Our three portals, Propertypal, UTV Drive and Recruit NI,have been sold or are held for sale and we are in the process of divesting ofUTV Connect. The remaining parts, Tibus and Simply Zesty, of what had been ourNew Media division provide support for our broadcast businesses and have beensubsumed into our Television division. We also restructured Simply Zesty undernew management to focus its activities on an all-Ireland basis and at the sametime implemented an efficiency savings plan throughout the Group. Review of activities Our activities now comprise three broadcast divisions, Television, RadioIreland and GB Radio. All three divisions continue to perform strongly indelivering sizeable audiences in their respective markets. Our televisionstation continues to be the most watched channel in Northern Ireland, aposition it has maintained for many years. Our Irish radio stations also enjoymarket leading positions in each of the urban areas in which they operate,including Ireland's three largest cities. In GB Radio the audience fortalkSPORT has steadily grown over the last eight years and this national radiostation now regularly reaches more than three million listeners every week. TheGroup has demonstrated its ability to consistently deliver strong audiences andthis remains the key to unlocking advertising and sponsorship revenues. Prospects Whilst the advertising market in the Republic of Ireland has been particularlychallenging over the last few years, there is optimism that a corner is slowlybeing turned. Growth in our Irish television advertising revenue in the secondhalf of 2013 has continued into the first quarter of 2014, which is expected tobe up by 11%, helping to increase our total Television revenues for the quarterby 5% and 10% in April. Growth is also being recorded in our Irish radio advertising revenue, which isforecast to be up by 9% in local currency terms in the first three months ofthis year and to show further single digit growth in April. It is too early toknow if this growth in Irish revenue can be sustained for the rest of the year,and indeed into 2015, but the trend so far is clearly encouraging, particularlyin light of our expanding television interests in Ireland. After an unexpectedly difficult year for the industry in 2013, the radio marketin GB is also improving. Our GB Radio revenues are expected to be up by 7% inthe first quarter of 2014 and by 17% in April, with talkSPORT's revenueforecast to grow by 12% and at least 25% in these respective periods. talkSPORThas non-exclusive radio rights to the FIFA World Cup in the early summer, whichwill provide a welcome boost to radio revenues in the first half of this year. Conclusion In conclusion, I am happy to report a year of significant progress. We now havea clear strategic focus to the Group with exciting growth platforms for thefuture. In addition, as we see a return to good levels of top-line growth inour core market places, we can look forward to seeing the benefits of theoperational gearing inherent in our business model reflected in our futureresults. Finally, I would like to pay tribute to our management and staff throughout theGroup who have worked so hard during the year, in particularly challengingcircumstances, to position the Group for future growth. Richard Huntingford Chairman 18 March 2014 Group Income Statement For the year ended 31 December 2013 Results Results before before Exceptional Exceptional Exceptional Exceptional Items Items Total Items Items Total Notes 2013 2013 2013 2012 2012 2012 (restated) (restated) £000 £000 £000 £000 £000 £000 Continuing operations Revenue 2 107,771 - 107,771 112,258 - 112,258 Operating costs (87,849) - (87,849) (88,998) - (88,998) ------- ------- ------- ------- ------- ------- Operating profit from 19,922 - 19,922 23,260 - 23,260continuing operationsbefore tax and financecosts Share of results of 130 - 130 129 - 129associates accounted forusing the equity method ------- ------- ------- ------- ------- ------- Profit from continuing 20,052 - 20,052 23,389 - 23,389operations before tax andfinance costs Finance revenue 49 - 49 98 - 98 Finance costs (3,012) - (3,012) (3,517) - (3,517) Foreign exchange (loss)/ (188) - (188) 146 - 146gain ------- ------- ------- ------- ------- ------- Profit from continuing 2 16,901 - 16,901 20,116 - 20,116operations before tax Taxation 3 (3,379) 1,215 (2,164) (4,215) (936) (5,151) ------- ------- ------- ------- ------- ------- Profit/(loss) from 13,522 1,215 14,737 15,901 (936) 14,965continuing operationsafter tax Discontinued operations Profit/(loss) from 4 161 (1,157) (996) 269 - 269discontinued operations ------- ------- ------- ------- ------- ------- Profit/(loss) for the 13,683 58 13,741 16,170 (936) 15,234year ------- ------- ------ ------- ------- ------ Attributable to: Equity holders of the 13,415 58 13,473 15,813 (936) 14,877parent Non-controlling interest 268 - 268 357 - 357 ------- ------- ------- ------- ------- ------- 13,683 58 13,741 16,170 (936) 15,234 ------- ------- ------ ------- ------- ------ Earnings per share 2013 2012 (restated) Continuing operations Basic 5 15.14p 15.34p Diluted 5 14.99p 15.24p Adjusted 5 14.41p 16.75p Diluted adjusted 5 14.27p 16.63p Continuing anddiscontinued operations Basic 5 14.10p 15.62p Diluted 5 13.96p 15.52p Adjusted 5 14.58p 17.03p Diluted adjusted 5 14.44p 16.91p Group Statement of Comprehensive Income For the year ended 31 December 2013 2013 2012 (restated) £000 £000 Profit for the year 13,741 15,234 ------- ------- Other comprehensive income Items that will not be reclassified subsequentlyto profit or loss: Actuarial gain/(loss) on defined benefit pension 5,111 (4,043)schemes Income tax relating to items that will not be (1,325) 809reclassified subsequently ------- ------- 3,786 (3,234) ------- ------- Items that may be reclassified subsequently toprofit or loss: Cash flow hedges: Loss arising during the year (4) (188) Less transfers to the income statement 321 551 Exchange gain/(loss) on translation of foreign 932 (1,153)operations Income tax relating to items that may be 78 (76)reclassified ------- ------- 1,327 (866) ------- ------- Other comprehensive profit/(loss) for the year, 5,113 (4,100)net of tax ------- ------- Total comprehensive profit for the year, net of 18,854 11,134tax ------- ------- Attributable to: Equity holders of the parent 18,586 10,777 Non-controlling interest 268 357 ------- ------- 18,854 11,134 ------- ------- Group Balance Sheet For the year ended 31 December 2013 Notes 2013 2012 £000 £000 ASSETS Non-current assets Property, plant and equipment 11,887 11,910 Intangible assets 177,576 176,589 Investments accounted for using the equity 114 104method Deferred tax asset 1,952 4,250 ------- ------- 191,529 192,853 ------- ------- Current assets Inventories 1,758 1,643 Trade and other receivables 23,565 25,163 Cash and short term deposits 8 10,691 10,958 ------- ------- 36,014 37,764 ------- ------- TOTAL ASSETS 227,543 230,617 ------- ------- EQUITY AND LIABILITIES Equity attributable to equity holders of theparent Equity share capital 55,557 55,557 Capital redemption reserve 50 50 Treasury shares (123) (1,523) Foreign currency reserve 6,950 6,018 Cash flow hedge reserve - (251) Retained earnings 38,531 28,680 ------- ------- 100,965 88,531 Non-controlling interest 106 480 ------- ------- TOTAL EQUITY 101,071 89,011 ------- ------- Non-current liabilities Financial liabilities 7 55,866 58,948 Pension liability 9 4,598 12,409 Provisions 411 800 Deferred tax liabilities 35,066 36,154 ------- ------- 95,941 108,311 ------- ------- Current liabilities Trade and other payables 24,165 26,033 Financial liabilities 7 3,939 4,292 Derivative financial liabilities - 324 Tax payable 1,727 2,275 Provisions 700 371 ------- ------- 30,531 33,295 ------- ------- TOTAL LIABILITIES 126,472 141,606 ------- ------- TOTAL EQUITY AND LIABILITIES 227,543 230,617 ------- ------- Group Cash Flow Statement For the year ended 31 December 2013 Notes 2013 2012 (restated) £000 £000 Operating activities Profit before tax (i) 17,062 20,456 Adjustments to reconcile profit before tax to net cash flows from operating activities Foreign exchange loss/(gain) 189 (151) Net finance costs 2,963 3,419 Share of results of associates (130) (129) Amortisation and impairment of intangible 188 71assets Non cash decrease in contingent consideration (2,859) - Depreciation of property, plant and equipment 1,929 1,758 Profit from sale of property, plant and (4) (191)equipment Share based payments 419 556 Difference between pension contributions paid (3,224) (601)and amounts recognised in the income statement Increase in inventories (115) (110) Decrease in trade and other receivables 1,357 956 Decrease in trade and other payables (2,999) (6,806) Decrease in provisions (60) (30) ------- ------- Cash generated from operations before 14,716 19,198exceptional costs Exceptional costs (227) - Tax paid (2,460) (1,237) ------- ------- Net cash inflow from operating activities 12,029 17,961 ------- ------- Investing activities Interest received 58 85 Proceeds on disposal of property, plant and 16 272equipment Purchase of property, plant and equipment (1,777) (2,436) Dividends received from associates 120 151 Outflow on acquisition of subsidiary (200) (1,670)undertaking Outflow on acquisition of radio licences - (180) ------- ------- Net cash flows from investing activities (1,783) (3,778) ------- ------- Financing activities Borrowing costs (1,891) (2,200) Refinancing costs - (1,059) Swap cost (321) (551) Dividends paid to equity shareholders (6,677) (5,934) Dividends paid to non-controlling interests (460) (300) Repayment of borrowings (4,216) (65,948) Proceeds from borrowings 3,000 65,595 ------- ------- Net cash flows used in financing activities (10,565) (10,397) ------- ------- Net (decrease)/increase in cash and cash (319) 3,786equivalents Net foreign exchange differences 52 (33) Cash and cash equivalents at 1 January 10,958 7,205 ------- ------- Cash and cash equivalents at 31 December 8 10,691 10,958 ------- ------- i. Includes both continuing and discontinued operations. Group Statement of Changes in Equity For the year ended 31 December 2013 Equity Capital Foreign Cashflow Share Non- share redemption Treasury currency hedge Retained holder controlling capital reserve shares reserve reserve earnings equity interest Total £000 £000 £000 £000 £000 £000 £000 £000 £000 At 1 January 55,557 50 (1,523) 7,171 (521) 22,414 83,148 469 83,6172012 ------ ------- ------- ------- ------- ------- ------- ------- ------- Profit for the - - - - - 14,877 14,877 357 15,234year Other - - - (1,153) 270 (3,217) (4,100) - (4,100)comprehensive(loss)/incomein the year ------ ------- ------- ------- ------- ------- ------- ------- ------- Total net - - - (1,153) 270 11,660 10,777 357 11,134comprehensive(loss)/incomein the year Share based - - - - - 556 556 - 556payment Equity - - - - - (5,950) (5,950) (346) (6,296)dividends paid ------ ------- ------- ------- ------- ------- ------- ------- ------- At 31 December 55,557 50 (1,523) 6,018 (251) 28,680 88,531 480 89,0112012 ------ ------- ------- ------- ------- ------- ------- ------- ------- Profit for the - - - - - 13,473 13,473 268 13,741year Other - - - 932 251 3,930 5,113 - 5,113comprehensive(loss)/incomein the year ------ ------- ------- ------- ------- ------- ------- ------- ------- Total net - - - 932 251 17,403 18,586 268 18,854comprehensive(loss)/incomein the year Treasury shares - - 1,400 - - (1,521) (121) - (121)issued Share based - - - - - 419 419 - 419payment Acquisition of - - - - - 228 228 (228) -non-controllinginterests Equity - - - - - (6,678) (6,678) (414) (7,092)dividends paid ------ ------- ------- ------- ------- ------- ------- ------- ------- At 31 December 55,557 50 (123) 6,950 - 38,531 100,965 106 101,0712013 ------ ------- ------- ------- ------- ------- ------- ------- ------- Notes to the accounts For the year ended 31 December 2013 1. Basis of preparation The Group's financial statements consolidate those of UTV Media plc, and itssubsidiaries (together referred to as the "Group") and the Group's interest inassociates and jointly controlled entities. The Group financial statements have been prepared in accordance withInternational Financial Reporting Standards (IFRSs) as adopted by the EuropeanUnion as they apply to the financial statements of the Group for the year ended31 December 2013 and applied in accordance with the Companies Act 2006. Theaccounts are principally prepared on the historical cost basis except whereother bases are applied under the Group's accounting policies. The Group has adopted the following new standards that are relevant for thepreparation of the financial statements for the year ended 31 December 2013: * The Group Income Statement, the Group Statement of Comprehensive Income, the Group Statement of Changes in Equity and affected notes for the year ended 31 December 2012 have been restated to reflect changes in the calculation of pension costs in accordance with IAS19 "Employee Benefits (Revised)". This introduced 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 for the year ended 31 December 2012 has been to increase operating costs and reduce operating profit by £127,000, increase other finance costs by £398,000 and recognise a tax credit on these of £121,000. 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. The financial information set out in the preliminary announcement does notconstitute statutory accounts within the meaning of Section 435 of theCompanies Act 2006 in respect of the accounts for the year ended 31 December2013. The statutory accounts for the year ended 31 December 2012, upon whichthe Company's auditors have given a report which was unqualified and did notcontain a statement under section 498(2) or (3) of the Companies Act 2006, havebeen delivered to the Registrar of Companies. The statutory accounts for theyear ended 31 December 2013 have yet to be signed. They will be finalised onthe basis of the financial information presented by the directors in thispreliminary announcement and will be delivered to the Registrar of Companies indue course. 2. Revenue and segmental analysis During 2013 the Group operated in four principal areas of activity - radio inGB, radio in Ireland, commercial television and new media. These four principalareas of activity also formed the basis on which the Group was managed andreports were provided to the Chief Executive and the Board during the year. Good progress has been made in transitioning the business to be focusedpredominately on broadcasting, in line with the Board strategy. In 2013 UTVConnect and the portals, UTV Drive, Recruit NI and PropertyPal, were identifiedas being non-core to the future strategy of the Group and significant stepshave been taken to exit from these activities. Consequently, these businesses,which operated within the New Media business segment, have been classified asdiscontinued operations in the 2013 accounts. Tibus and Simply Zesty, which also operated within the New Media businesssegment, will be incorporated within the Television operating segment goingforward. As a consequence from 2014 the Group will be managed and reportsprovided to the Chief Executive and the Board on the basis of three operatingsegments, being Radio GB, Radio Ireland and Television. The tables below present revenue and segment result information regarding theGroup's operating segments for the years ended 31 December 2013 and 2012 on thebasis of how the Group was managed during 2013. Revenue represents the amounts derived from the provision of goods and serviceswhich fall within the Group's ordinary activities, stated net of value addedtax. Revenue is principally generated from advertising and sponsorship. Theamount of revenue derived from the sale of goods or other activities isimmaterial and therefore has not been separately disclosed. Transfer pricesbetween business segments are set on an arm's length basis in a manner similarto transactions with third parties. Central costs, which had previously been included within the Televisionsegment, are now reported separately to the Chief Executive and the Board andare therefore now analysed separately below. The Television segment operatingprofit for the year ended 31 December 2012 has been restated for this and forthe impact of IAS 19 "Employee Benefits (Revised)" as outlined in note 1. Revenue Year ended 31 December 2013 Radio Radio New GB Ireland Television Media Total £000 £000 £000 £000 £000 Sales to third parties 50,471 20,767 31,892 4,641 107,771 Intersegmental sales 749 1,219 2,186 647 4,801 ------- ------- ------- ------- ------- 51,220 21,986 34,078 5,288 112,572 ------- ------- ------- ------- ------- Year ended 31 December 2012 Radio Radio New GB Ireland Television Media Total £000 £000 £000 £000 £000 Sales to third parties 54,407 20,943 32,484 4,424 112,258 Intersegmental sales 787 1,294 2,628 295 5,004 ------- ------- ------- ------- ------- 55,194 22,237 35,112 4,719 117,262 ------- ------- ------- ------- ------- Results Year ended 31 December 2013 Radio Radio New GB Ireland Television Media Total £000 £000 £000 £000 £000 Segment operating profit 7,900 5,139 7,356 2,292 22,687 ------- ------- ------- ------- Central costs (2,765) Associate income 130 ------- Profit before tax and 20,052finance costs Net finance cost (2,963) Foreign exchange loss (188) ------- Profit before taxation 16,901 ------- Year ended 31 December 2012 Radio Radio New GB Ireland Television Media Total (restated) (restated) £000 £000 £000 £000 £000 Segment operating profit 12,898 5,987 7,470 601 26,956 ------- ------- ------- ------- Central costs (3,696) Associate income 129 ------- Profit before tax and 23,389finance costs Net finance cost (3,419) Foreign exchange gain 146 ------- Profit before taxation 20,116 ------- To facilitate the Group's re-focused strategy on broadcasting, a restructuringwas undertaken during the year. While there were substantial costs associatedwith this restructuring, it also involved the buyout of the contingentconsideration from certain stakeholders within Simply Zesty which resulted in acredit on the release of the remaining fair value of this financial liability.While the overall net impact on the Group's results for the year was notmaterial and costs associated with the restructuring are spread across alloperating segments, the credit arising on the buyout of the contingentconsideration is totally reflected within the results of the New Media businesssegment. This, coupled with the credit arising from the acquisition of thecontingent consideration rights from the previous corporate shareholder inJanuary 2013, has impacted on the increase in operating profit recorded withinthis operating segment in the year. 3. Taxation (a) Tax on profit on ordinary activities 2013 2012 £000 £000 Current income tax: UK corporation tax on profits for the year (2,453) (1,053) Adjustments in respect of previous years 248 55 ------- ------- (2,205) (998) ------- ------- Foreign tax: ROI corporation tax on profits for the year (346) (527) Adjustments in respect of previous years 16 - ------- ------- (330) (527) ------- ------- Total current tax (2,535) (1,525) Deferred tax: Origination and reversal of timing differences (684) (2,937) Adjustments in respect of previous years (160) 176 ------- ------- Tax charge in the income statement on operating (3,379) (4,286)activities Exceptional deferred tax credit/(charge) 1,215 (936) ------- ------- Total tax charge (2,164) (5,222) ------- ------- The tax charge in the Income Statement is disclosed as: Tax charge on continuing operations (2,164) (5,151) Tax charge on discontinued operations - (71) ------- ------- Tax charge in the income statement (2,164) (5,222) ------- ------- Tax relating to items in the Statement of ComprehensiveIncome Deferred tax: Actuarial (gain)/loss on pension schemes (1,022) 930 Revaluation of cash flow hedges (61) (81) Valuation of long term incentive plan 139 5 Exceptional deferred tax charge (303) (121) ------- ------- Tax (charge)/credit in the statement of comprehensive (1,247) 733income ------- ------- (b) Exceptional (charge)/credit 2013 2012 £000 £000 Exceptional tax credit 2,640 1,499 Exceptional tax charge (1,425) (2,435) ------- ------- 1,215 (936) ------- ------- During the year, the corporation tax rate in the UK was revised from 23% to 20%(effective from April 2015). Accordingly all the deferred tax assets andliabilities in respect of the reporting segments subject to UK corporation taxwere restated to recognise the future gains or charges thereon at this rate.This resulted in a net credit of £2,640,000 in the year. In 2012, the corporation tax rate in the UK was revised from 25% to 23%(effective from April 2013). Accordingly all the deferred tax assets andliabilities in respect of the reporting segments subject to UK corporation taxwere restated to recognise the future gains or charges thereon at this rateresulting in a net credit of £1,499,000 in 2012. In the Finance Bill published on 13 February 2013 and passed into law on 27March 2013, the rate of corporate capital gains in the Republic of Ireland wasincreased from 30% to 33%. The exceptional tax charge of £1,425,000 in the yeararises from the restatement of the relevant deferred tax assets and liabilitiesto reflect this. In the Finance Bill published on 8 February 2012 and passed into law on 2 April2012, the rate of corporate capital gains in the Republic of Ireland wasincreased from 25% to 30%. The exceptional tax charge of £2,435,000 in 2012arises from the restatement of the relevant deferred tax assets and liabilitiesto reflect this. 4. Discontinued operations As disclosed in note 2, UTV Connect and the portals, UTV Drive, Recruit NI andPropertyPal, have been identified as being non-core to the future strategy ofthe Group and significant steps have been taken to exit from these activities.Consequently, these businesses, which operated within the New Media businesssegment, have been classified as discontinued operations in the 2013 accounts. The resultant gains or losses on these disposals are expected to be recognisedwithin discontinued operations in the Income Statement in 2014. The results of these companies for 2012 and 2013 are presented below: 2013 2012 £000 £000 Revenue 7,014 7,852 Operating cost (6,852) (7,517) ------- ------- Operating profit 162 335 Foreign exchange (loss)/gain (1) 5 ------- ------- Profit before tax from discontinued operations 161 340 Current tax charge - (71) ------- ------- Profit for the year from discontinued operations 161 269 ------- ------- Exceptional Costs- discontinued operations 2013 2012 £000 £000 Restructuring costs (227) - Impairment of assets (1,055) - ------- ------- Loss for the year from discontinued operations (1,282) - Tax credit on the above items 125 - ------- ------- Loss for the year from discontinued operations (1,157) - ------- ------- 5. Earnings per share Basic earnings per share are calculated based on the profit for the financialyear attributable to equity holders of the parent and on the weighted averagenumber of shares in issue during the year. Adjusted earnings per share are calculated based on the profit for thefinancial year attributable to equity holders of the parent adjusted for theexceptional items and the impact of net finance costs under IAS 19 "EmployeeBenefits (Revised)". This calculation uses the weighted average number ofshares in issue during the year. Diluted earnings per share are calculated based on profit for the financialyear attributable to equity holders of the parent. Diluted adjusted earningsper share are calculated based on profit for the financial year attributable toequity holders of the parent before exceptional items and the impact of netfinance costs under IAS 19 "Employee Benefits (Revised)". 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. Earnings per share for the year ended 31 December 2012 has been restated toreflect the impact on profit of changes in the calculation of pension costs inaccordance with IAS19 "Employee Benefits (Revised)" as explained in "Basis ofpreparation and statement of compliance with IFRSs" in note 2. 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 2013 2012 Continuing Discontinued Continuing Discontinued Operations Operations Total Operations Operations Total (restated) (restated) (restated) £000 £000 £000 £000 £000 £000 Net profit/(loss) 14,469 (996) 13,473 14,608 269 14,877attributable toequity holders Adjustments to net 523 - 523 398 - 398financing costs Exceptional items (1,215) 1,157 (58) 936 - 936 ------ ------ ------ ------ ------ ------ Total adjusted and 13,777 161 13,938 15,942 269 16,211diluted profitattributable toequity holders ------- ------- ------- ------- ------- ------- Weighted average number of shares 2013 2012 thousands thousands Shares in issue 95,903 95,903 Weighted average number of treasury shares (325) (700) ------- ------- Weighted average number of shares for basic and 95,578 95,203 adjusted earnings per share (excluding treasury shares) Effect of dilution of the Long Term Incentive Plan 959 649 ------- ------- 96,537 95,852 ------- ------- Earnings per share 2013 2012 (restated) From continuing operations Basic 15.14p 15.34p ------- ------- Diluted 14.99p 15.24p ------- ------- Adjusted 14.41p 16.75p ------- ------- Diluted adjusted 14.27p 16.63p ------- ------- From continuing and discontinued operations Basic 14.10p 15.62p ------- ------- Diluted 13.96p 15.52p ------- ------- Adjusted 14.58p 17.03p ------- ------- Diluted adjusted 14.44p 16.91p ------- ------- From discontinued operations Basic (1.04)p 0.28p ------- ------- Diluted (1.03)p 0.28p ------- ------- Adjusted 0.17p 0.28p ------- ------- Diluted adjusted 0.17p 0.28p ------- ------- 6. Dividends 2013 2012Equity dividends on ordinary shares £000 £000 Declared and paid during the year Final for 2012: 5.25p (2011: 4.50p) 5,001 4,284 Interim for 2013: 1.75p (2012: 1.75p) 1,677 1,666 ------- ------- Dividends paid 6,678 5,950 ------- ------- Proposed for approval at Annual General Meeting (notrecognised as a liability at 31 December) Final dividend for 2013: 5.25p (2012: 5.25p) 5,032 4,998 ------- ------- 7. Financial liabilities 2013 2012 £000 £000 Current Current instalments due on bank loans 3,939 3,852 Current instalment due on contingent consideration - 440 ------ ------ 3,939 4,292 ------ ------ Non-current Non-current instalments due on bank loans 55,866 56,500 Non-current instalment due on contingent consideration - 2,448 ------ ------ 55,866 58,948 ------ ------ 59,805 63,240 ------ ------ The bank loans at 31 December 2013 are stated net of £730,000 (2012: £939,000)of deferred financing costs. The contingent consideration at 31 December 2012 was in respect of theacquisition of Simply Zesty Limited. 8. Net Debt 2013 2012 £000 £000 Bank loans (59,805) (60,352) Cash and short term deposits 10,691 10,958 ------ ------ (49,114) (49,394) ------ ------ 9. Pension schemes The IAS 19 deficit at 31 December 2013 is £4,598,000 compared with a deficit of£12,409,000 at 31 December 2012. The reduction in the deficit was primarilydriven by the strong return on the equity investments plus the increasedfunding by the company. The assets generated higher than expected return duringthe year resulting in an actuarial gain of £8,283,000 in contrast to an overallactuarial loss on the liabilities of £3,172,000. The Group funded a discretionary amount of £1,209,000 towards the actuarialdeficit in 2013 (2012: £1,181,000) by means of a cash transfer and has agreedto make further payments of £1,209,000 each year to 2015 in addition to normalcontributions. 10. 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 2012 has notchanged. There have been no significant related party transactions in the yearended 31 December 2013. This summary has been approved by our Directors for release to the Press today18 March 2014 and the full printed Annual Report and Accounts will be posted toShareholders and Stock Exchanges on 16 April 2014. Copies will be available tothe public at the Company's registered office Ormeau Road, Belfast BT7 1EB fromthat date.