20th Mar 2012 07:00
UTV Media plc ("UTV" or "the Company" or "the Group")
Preliminary Results
for the year ended 31 December 2011
Financial highlights on continuing operations *
* Record pre-tax profits - up by 10% to £23.3m (2010: £21.3m) * Group revenue up by 2% to £121.6m (2010: £118.9m) * Group operating profit up by 3% to £26.8m (2010: £26.1m)
* 23% or £16.8m reduction in net debt over 12 months to £54.7m (2010: £71.5m)
* Net debt reduced by 49% over the last 3 years, a reduction of £52.9m * Net finance costs down by 26% to £3.5m (2010: £4.7m)
* Impairment charge of £45.0m recognised on Republic of Ireland intangible
assets with £19.0m due to higher Republic of Ireland sovereign debt risk
* Pension deficit of £8.6m (2010: £6.8m) despite significant movement in
discount rate (2011: 4.80% versus 2010: 5.40%)
* Diluted adjusted earnings per share from continuing operations up by 12% to
18.96p (2010: 16.93p)
* Proposed final dividend of 4.50p (2010: 3.00p) resulting in a full year
dividend up by 50% to 6.00p (2010: 4.00p)
* As appropriate, references to profit include associate income but exclude exceptional items
Operational highlights
* Continuing strong audience delivery across both Radio and Television
* Revenue growth of 6% in Radio GB despite the tough comparatives of the 2010
World Cup
* Irish Radio Revenues down by 4% - yet still represents significant market
outperformance
* Television revenue up by 1% with net advertising revenue in line with the
ITV Network * Strong cash management has led to significant debt reduction and a Net Debt:EBITDA ratio of 1.88 times
John McCann, Group Chief Executive, UTV Media plc, said:
"I'm very pleased with the company's performance against what has remained atesting economic background. The strength of these numbers firmly reflectsUTV's commitment to deliver innovative programming across platforms, drivingaudience share while at the same time effectively managing costs within thebusiness and paying down our debt facilities. We remain committed to ourstrategy of delivering value through the development of a diversified portfolioof leading media assets. I am confident this foundation will see the businesscontinue to perform into 2012."
Key Dates
* 17 May 2012 - date of Annual General Meeting * 25 May 2012 - record date for payment of dividends * 16 July 2012 - payment of dividends
For further information contact:
Maitland
Tom Buchanan/Rowan Brown +44 (0) 20 7379 5151
UTV Media plc
John McCann Group Chief Executive +44 (0) 28 9026 2202
Norman McKeown Group Finance Director +44 (0) 28 9026 2098
Orla McKibbin Head of Communications +44 (0) 28 9026 2188
Chairman's Statement
Introduction
I am pleased to report that the UTV Group again achieved record pre-taxprofits, pre exceptional items, despite the difficult macro-economicenvironment. Strong cashflows continued to drive down net debt which has beenreduced by almost 50% over the last three years. Good progress has been madetoward the appointment of a new Chairman who is expected to provide independentand expert leadership of the Group, thus ensuring its continued commercialsuccess. In the interim, it is business as usual for the Board in forging aheadwith our strategy of delivering value through the development of market leadingmedia assets.Results *The Group has performed robustly and remains resilient to the adverse economicconditions, as is evidenced by the strong performance and financial results ofthe Group in 2011.Operating profit in our radio division was slightly up at £18.9m (2010: £18.7m)while television operating profit increased by 18% to £6.5m (2010: £5.5m). Newmedia operating profit was £0.4m lower at £1.5m (2010: £1.9m). Group operatingprofit, therefore, was up by 3% to £26.8m (2010: 26.1m). After charging netinterest of £3.5m (2010: £4.7m), group profit before tax and exceptional itemswas up by 10% to £23.3m (2010: £21.3m), a record for the business. Theexceptional items after tax of £43.9m (2010: £24.8m) relate primarily to anaccounting non-cash impairment charge in respect of Irish radio (2010: GB localradio) assets. Net debt has been reduced during the year by over 23% to £54.7mat 31 December 2011 with the key Net Debt/EBITDA ratio declining substantiallyto a healthy 1.88 times.The financial results in the individual business divisions have demonstrated astrong performance in the different markets and trading conditions that theyoperate in. Over the last seven years, the Group has diversified its operationfrom being substantially a television business based in Northern Ireland to itscurrent position as a leading multi-platform media company which encompassestelevision, radio and new media businesses. This is a result of theconsiderable expansion across Great Britain, Republic of Ireland and NorthernIreland. Our radio businesses now account for 70% of operating profit beforeexceptional items for the Group.
[* As appropriate, references to operating profit include associate income but exclude discontinued operations and exceptional items.]
Radio *
Our GB radio division, and particularly talkSPORT, winner of the Sony UK RadioStation of the Year Award, performed particularly well during the yeardelivering an operating profit of £12.4m representing a growth of over 6%,despite the absence of the 2010 Football World Cup. talkSPORT benefitted fromits coverage of major sporting events such as securing the exclusive rights forthe coverage of the IRB Rugby World Cup and the rights to broadcast livePremier League football action. This high quality sporting content will furtherdrive audience delivery, and its ability to reach male demographic audiences isa proven key attraction to advertisers. The commercial trading environmentexperienced by our local radio stations remained challenging but they managedto increase revenue and benefitted from increased synergies.The commercial trading environment experienced by our Ireland radio businesseswas again extremely difficult due to macro-economic conditions. However, theongoing attractiveness and success of our innovative Urban Access advertisingpackage continued to provide a national advertising capability to majoragencies and helped to offset much of the downturn. Operating profit fell by 8%to £6.4m but this result has significantly out-performed the Irish radiomarket. The market leading listenership of our stations provides muchreassurance that the foundations are in place for strong and quick recoveryonce economic conditions improve.
Television
Our television business accounted for 24% of operating profit beforeexceptional items and delivered another good performance with an increase inoperating profit of 18% to £6.5m. The national television advertising marketlargely maintained its recovery, benefitting from successful programming by theITV network. Additionally, the strength of our local programming content alsoproduced growth in our local advertising revenues despite the impact of theweakened Irish economy. This was further boosted by the growth in the onlineadvertising medium through the UTV Player, (a watch on demand service) whichwas up, and traffic to the television website. The increase in operating profitincluded the impact of reduced operating costs, as the 2010 results includedthe operating costs of the Football World Cup.
New Media
New media is our smallest business division accounting for 6% of operatingprofit before exceptional items and is viewed as offering excellentopportunities for significant expansion through Tibus, our award winning webdevelopment and design company and our classified Portals products as well asproviding additional services to the wider UTV group. During the year, as aresult of the sales increase in these businesses in 2011 and the expectation ofsignificant growth in 2012, there has been substantial investment in businessdevelopment in Tibus and the Portals. This investment resulted in higher costswhich reduced the operating profit to £1.5m. However, the increase in businessdevelopment has created a firm platform upon which the businesses can swiftlyexpand.Impairment ReviewThe 2011 impairment review identified a £45.0m impairment in Radio Ireland'sintangible assets. This non-cash, charge has arisen from a combination of adownward revision of growth forecasts for that division together with the useof a higher country specific discount rate for the Republic of Ireland. Thishigher discount rate compared to that used for the UK, reflects a greatersovereign debt risk and accounts for £19.0m of the impairment charge. It hasbeen used despite the fact that the Group is a UK funded plc. The netimpairment cost of £26.0m occurring at this time despite the relative strengthof our Radio Ireland assets which continue to significantly outperform ourcompetitors and have reported a £6.4m operating profit in 2011, is driven bythe longer than expected recovery of the Irish economy.
Pension
The results of the UTV pension scheme's IAS 19 valuation at 31 December 2011indicate a pension deficit of £8.6m (2010: £6.8m). A key assumption in arrivingat this is the discount rate. The rate used in 2011 was 4.80%; the comparablerate in 2010 was 5.40%. Such is the impact of this rate that if the 2010discount rate had been unchanged, the deficit would have been reduced toapproximately £1.0m.
Dividend
Our dividend policy over the past few years has been shaped by the need to becautious in difficult times and by our stated objective to reduce debt. Whilecontinuing to drive down debt and remaining prudent during uncertain economicconditions, our improved profit and debt profile allows us to be in a positionto pay a significantly increased dividend. Accordingly, the Board isrecommending a final dividend of 4.5p making a total for the year of 6.0p,which represents an increase of 50% from 2010. The final dividend will be paidon 16 July 2012 to all shareholders on the Register at the close of business on25 May 2012.ProspectsThe year 2012 has started well for the Group despite the prevailing economicuncertainty. Overall, we expect revenues in the first four months of 2012 to bein line with budget. It is expected that the major sporting events during thesummer of 2012, the UEFA Euro championships and the London Olympics, will havea positive impact in attracting a large volume of both listeners and viewers toour radio and television output, generating an attractive prospect foradvertisers.Our GB Radio division revenue is expected to be up by 8% in the first fourmonths of 2012. This represents outperformance of the UK radio market which islikely to be up by about 5% in the same period. Three new licenses for localradio were acquired in February 2012, underlining the Group's commitment to ourlocal radio business.A similarly strong outperformance by our Irish radio division, notwithstandingthe depressed Irish market, is expected with radio advertising down by 4% inthe four months to the end of April at the same level as last year against aradio market sector, which sales agencies are suggesting is likely to be downby about 10%.We expect television revenues to be down by 5% in the first four months of 2012compared with last year, which should be broadly in line with the market. A newNetwork Affiliate Agreement (NAA) has been agreed with ITV plc in March 2012providing greater flexibility for Television to operate more effectively on allplatforms and driving forward its digital strategy. Our digital strategy hasalready seen encouraging growth in the online advertising medium and thissuccess is expected to continue as the year progresses.Our new media division performance over the first four months is in line withlast year. In March 2012, the Group acquired a leading social media agency,Simply Zesty, based in the Republic of Ireland. This collaboration is expectedto richly contribute to our strategy to further create a diversifiedmulti-media business with both domestic and international customers.Despite this positive outlook, the fragility of consumer confidence and theslow economic recovery should not be underestimated as these factors can fostervolatility in the advertising markets in which we operate. Nevertheless, thecombination of the solid foundation of the first four months trading, strongaudience delivery in each of our divisions and a continued focus on costcontrol and debt management, should provide a measure of confidence to ourshareholders for 2012.
People
Finally, I wish to thank the Board, the Chief Executive and his team, and allthe staff who have made such a significant contribution to the successfulachievements of the Group over the course of 2011. Such success could not beachieved without the extraordinary skills and creative talents of the people inthe Group, which is sincerely appreciated.I also wish to thank my predecessor as Chairman, John B McGuckian. John B madean outstanding contribution to the group over his 40 years as a Director, thelast 20 years as Chairman.I look forward to 2012 with anticipation and expectation. Once the changes tothe Board structure have been completed this should serve to further strengthenthe team, consolidate our governance and promote effective performance - theoutcome of which will be the overall continued success of the Group.Helen KirkpatrickInterim Chairman20 March 2012Group Income Statement
For the year ended 31 December 2011
Notes Results Results before before Exceptional Exceptional Exceptional Exceptional Items Items Total Items Items Total 2011 2011 2011 2010 2010 2010 £000 £000 £000 £000 £000 £000 Continuing operations Revenue 2 121,551 - 121,551 118,860 - 118,860 Operating costs (94,841) -(94,841) (93,003) - (93,003) ------- ------- ------- ------- ------- ------- Operating profit from 26,710 - 26,710 25,857 - 25,857continuing operations before tax and finance costs Impairment of 3 - (45,000) (45,000) - (35,000) (35,000)intangible assets Share of results of 136 - 136 216 - 216associates accounted for using the equity method ------- ------- ------- ------- ------- ------- (Loss)/profit from 26,846 (45,000) (18,154) 26,073 (35,000) (8,927)continuing operations before tax and finance costs Finance revenue 165 - 165 76 - 76 Finance costs (3,653) - (3,653) (4,760) - (4,760) Foreign exchange loss (15) - (15) (80) - (80) ------- ------- ------- ------- ------- ------- (Loss)/profit from 2 23,343 (45,000) (21,657) 21,309 (35,000) (13,691)continuing operations before tax Taxation 4 (4,743) 1,142 (3,601) (4,666) 10,235 5,569 ------- ------- ------- ------- ------- ------- (Loss)/profit from 18,600 (43,858) (25,258) 16,643 (24,765) (8,122)continuing operations after tax Discontinued operations Loss from discontinued (213) - (213) (214) - (214)operations ------- ------- ------- ------- ------- ------- (Loss)/profit for the 18,387 (43,858) (25,471) 16,429 (24,765) (8,336)year ------- ------- ------ ------- ------- ------ Attributable to: Equity holders of the 17,972 (43,858) (25,886) 16,012 (24,765) (8,753)parent Non-controlling 415 - 415 417 - 417interest ------- ------- ------- ------- ------- ------- 18,387 (43,858) (25,471) 16,429 (24,765) (8,336) ------- ------- ------ ------- ------- ------ Earnings per share 2011 2010 Continuing operations Basic & diluted 5 (26.94)p (8.95)p Adjusted 5 19.08p 17.01p Diluted adjusted 5 18.96p 16.93p Continuing and discontinued operations Basic & diluted 5 (27.16)p (9.17)p Adjusted 5 18.86p 16.78p Diluted adjusted 5 18.74p 16.70p
Group Statement of Comprehensive Income
For the year ended 31 December 2011
2011 2010 £000 £000 Loss for the year (25,471) (8,336) ------- ------- Other comprehensive income
Exchange difference on translation of foreign (2,328) (2,933)operations Actuarial (loss)/gain on defined benefit (3,281) 3,043
pension schemes Cash flow hedges: Loss arising during the year (448) (1,167)
Less transfers to the income statement 550 1,471 Tax relating to other comprehensive income 783 (878) ------- ------- Other comprehensive loss for the year, net of (4,724) (464)tax ------- ------- Total comprehensive loss for the year, net of (30,195) (8,800)
tax ------- ------- Attributable to: Equity holders of the parent (30,610) (9,217) Non-controlling interest 415 417 ------- ------- (30,195) (8,800) ------- ------ Group Balance Sheet Notes 2011 2010 At 31 December 2011 £000 £000 ASSETS Non-current assets Property, plant and equipment 11,273 10,695 Intangible assets 173,776 221,856
Investments accounted for using the equity 126
172method Deferred tax asset 6,511 9,876 ------- ------- 191,686 242,599 ------- ------- Current assets Inventories 1,533 1,741 Trade and other receivables 25,857
28,180
Cash and short term deposits 8 7,205 11,250 ------- ------- 34,595 41,171 ------- ------- TOTAL ASSETS 226,281 283,770 ------- ------ EQUITY AND LIABILITIES
Equity attributable to equity holders of the
parent Equity share capital 55,557 55,557 Capital redemption reserve 50 50 Treasury shares (1,523) (1,258) Foreign currency reserve 7,171 9,499 Cash flow hedge reserve (521) (581) Retained earnings 22,414 54,441 ------- ------- 83,148 117,708 Non-controlling interest 469 475 ------- ------- TOTAL EQUITY 83,617 118,183 ------- ------- Non-current liabilities Financial liabilities 7 53,752 74,490
Derivative financial liabilities 207
370 Pension liability 9 8,569 6,800 Provisions 766 970 Deferred tax liabilities 35,932 38,416 ------- ------- 99,226 121,046 ------- ------- Current liabilities Trade and other payables 31,948 32,363 Financial liabilities 7 8,167 8,254
Derivative financial liabilities 479
420 Tax payable 2,409 3,076 Provisions 435 428 ------- ------- 43,438 44,541 ------- ------- TOTAL LIABILITIES 142,664 165,587 ------- ------- TOTAL EQUITY AND LIABILITIES 226,281 283,770 ------- -------Group Cash Flow Statement
For the year ended 31 December 2011
Note 2011 2010 £000 £000 Operating activities Loss before tax (i) (21,870) (13,905)
Adjustments to reconcile loss before tax to net cash flows from operating activities
Foreign exchange loss 15 80 Net finance costs 3,488 4,684 Share of results of associates (136)
(216)
Non-operational exceptional costs 45,000
35,000
Depreciation of property, plant and equipment 1,597
1,636
Profit from sale of property, plant and (31) (21)equipment Share based payments 605 418
Difference between pension contributions paid and amounts recognised in the income statement (1,512)
(1,156)
Decrease/(increase) in inventories 208
(272)
Decrease in trade and other receivables 2,102
3,143
Decrease in trade and other payables (415)
(3,584)
Increase/(decrease) in provisions 37 (24) ------- ------- Cash generated from operations before 29,088 25,783exceptional costs Exceptional costs (19) (549) Tax paid (2,288) (226) ------- ------- Net cash inflow from operating activities 26,781 25,008 ------- ------- Investing activities Interest received 165 76 Proceeds on disposal of property, plant and 31 151equipment Purchase of property, plant and equipment (2,155)
(1,159)
Dividends received from associates 182
181
Outflow on acquisition of subsidiary - (13)undertaking Outflow on acquisition of joint ventures - (69) ------- ------- Net cash flows from investing activities (1,777) (833) ------- ------- Financing activities Borrowing costs (3,032) (3,021) Swap cost (550) (1,471) Dividends paid to equity shareholders (4,279)
(2,851)
Dividends paid to non-controlling interests (421)
(689)
Acquisition of treasury shares (265)
- Repayment of borrowings (20,474) (13,233) ------- ------- Net cash flows used in financing activities (29,021) (21,265) ------- ------- Net (decrease)/increase in cash and cash (4,017) 2,910equivalents Net foreign exchange differences (28)
(94)
Cash and cash equivalents at 1 January 11,250 8,434 ------- ------- Cash and cash equivalents at 31 December 8 7,205 11,250 ------- ------
(i) Includes both continuing and discontinued operations.
Group Statement of Changes in Equity
For the year ended 31 December 2011
Capital Equity redem Foreign Cashflow Share Non- share ption Treasury currency hedge Retained holder
controlling
capital reserve shares reserve reserve earnings equity interest Total £000 £000 £000 £000 £000 £000 £000 £000 £000 At 1 January 2010 55,557 50 (1,258) 12,432 (821) 63,409 129,369 747 130,116 ------ ------ ------- ------- ------- ------- ------ ------- ------ Loss for the - - - - - (8,753) (8,753) 417 (8,336)year Other comprehensive (loss)/income in the year - - - (2,933) 240 2,229 (464) - (464) ------ ----- ------- ------- ------- ------- ------ ------- ------ Total net comprehensive (loss)/income in the year - - - (2,933) 240 (6,524) (9,217) 417 (8,800) Share based payment - - - - - 418 418 - 418 Equity dividends paid - - - - - (2,862) (2,862) (689) (3,551) ------ ------- ------- ------- ------- ------- ------ ------- ------ At 31 December 2010 55,557 50 (1,258) 9,499 (581) 54,441 117,708 475 118,183 ------ ------- ------- ------- ------- ------- ------ ------- ------ Loss for the - - - - - (25,886) (25,886) 415 (25,471)year Other comprehensive (loss)/income in the year - - - (2,328) 60 (2,456) (4,724) _ (4,724) ------ ------- ------- ------- ------- ------- ------ ------ ------ Total net comprehensive (loss)/income in the year - - - (2,328) 60 (28,342) (30,610) 415 (30,195) Share based payment - - - - - 605 605 - 605 Acquisition of treasury - - (265) - - - (265) - (265)shares Equity dividends paid - - - - - (4,290) (4,290) (421) (4,711) ------ ------- ------- ------- ------- ------- ------- ------- ------ At 31 December 2011 55,557 50 (1,523) 7,171 (521) 22,414 83,148 469 83,617 ------ ------- ------- ------- ------- ------- ------- ------- ------- Notes to the accounts
For the year ended 31 December 2011
1. Basis of preparation
The Group's financial statements consolidate those of UTV Media plc, and 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 2011 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 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 December2011. The statutory accounts for the year ended 31 December 2010, 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 2011 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
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. Discontinued operations relateto an interactive television business which ceased to trade in February 2011.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 from Radio and Television activities is generated from advertisingand sponsorship. Revenue from New Media is generated from the provision ofinternet services. The amount of revenue derived from the sale of goods orother activities is immaterial and therefore has not been separately disclosed.Transfer prices between business segments are set on an arm's length basis in amanner similar to transactions with third parties.
The following tables present revenue and segment result information regarding the Group's business segments for the years ended 31 December 2011 and 2010.
RevenueYear ended 31 December 2011 Radio GB Radio Television New Media Total Ireland £000 £000 £000 £000 £000 Sales to third parties 52,065 22,514 35,569 11,403 121,551 Intersegmental sales 787 1,250 2,625 - 4,662 ------- ------- ------- ------- ------- 52,852 23,764 38,194 11,403 126,213 ------- ------- ------- ------- -------
Year ended 31 December 2010
Radio GB Radio Television New Media Total Ireland £000 £000 £000 £000 £000 Sales to third parties 48,944 23,359 35,316 11,241 118,860 Intersegmental sales 754 1,388 2,333 - 4,475 ------- ------- ------- ------- ------- 49,698 24,747 37,649 11,241 123,335 ------- ------- ------- ------- -------ResultsYear ended 31 December 2011 Radio GB Radio Television New Media Total Ireland £000 £000 £000 £000 £000 Segment operating profit 12,291 6,438 6,453 1,528 26,710before exceptional costs ------- ------- ------- ------- Associate income 136 ------- Profit before exceptional 26,846costs, tax and finance costs Exceptional costs (45,000) ------- (18,154) Net finance cost (3,488) Foreign exchange loss (15) ------- Loss before taxation (21,657) -------Year ended 31 December 2010 Radio GB Radio Television New Media Total Ireland £000 £000 £000 £000 £000 Segment operating profit 11,475 6,992 5,470 1,920 25,857before exceptional costs ------- ------- ------- ------- Associate income 216 ------- Profit before exceptional 26,073costs, tax and finance costs Exceptional costs (35,000) ------- (8,927) Net finance cost (4,684) Foreign exchange loss (80) ------- Loss before taxation (13,691) -------3. Exceptional items 2011 2010 £000 £000 Impairment of intangible assets (45,000) (35,000) Taxation 1,142 10,235 ------ ------ (43,858) (24,765) ------ ------
Impairment of intangible assets
Despite improving listenership to our Republic of Ireland radio stations andthe significant cost savings and efficiencies achieved over the past 24 months,the significant impact of the difficulties being experienced by the Republic ofIreland economy has necessitated a downward revision of our growth forecast inthis market.While lower costs of financing and more stable equity environment has secured areduction in the discount factor applied in valuing our UK operations (apre-tax discount rate of 11.5% in 2011 versus 12.8% in 2010), the requirementto account for sovereign risk has resulted in an increase in the discount ratesto be applied in valuing our Republic of Ireland operations (a pre-tax discountrate of 12.3% in 2011 versus 11.8% in 2010).The resultant reduction in the future cash flow forecasts coupled with theimpact of higher discount rates, applied thereto, has resulted in a non-cashimpairment charge of £45.0m and hence a reduction in the carrying value of theintangible assets in the Republic of Ireland. The higher Republic of Irelanddiscount rate, compared to that used for the UK, accounted for £19.0m of thisimpairment charge.Year ended 31 December 2010
The impairment in 2010 related entirely to Local Radio in GB and reflected therevision of the cash flow forecasts for this cash generating unit as a resultof a downward estimation of the growth opportunities in this sector coupledwith the impact of an increase in the discount rate (pre-tax discount rate of12.8% in 2010 versus 11.4% in 2009) applied to the cash flows.The requirement under IAS36 to treat The Wireless Group acquisition as two cashgenerating units, means that the robust performance of talkSPORT, which hasresulted in its value far exceeding our original forecasts, cannot beconsidered in conjunction with that of Local Radio. It was noted at this timethat if considered in totality, there would have been no requirement for animpairment charge against the cost of investment in UTV Radio GB.
Taxation
During the year, the corporation tax rate in the UK was revised from 27% to 25%(effective from April 2012). Accordingly all the deferred tax assets 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 £1,142,000 in the year.In 2010, the corporation tax rate in the UK was revised from 28% to 27%(effective from April 2011). Accordingly all the deferred tax assets 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 £785,000 in 2010.
In addition, during the year £Nil (2010: £9,450,000) was released from the deferred tax liability on the recognition of the impairment of intangible assets.
4. Taxation
Tax on profit on ordinary activities
2011 2010 £000 £000 Current income tax: UK corporation tax on profits for the year (949)
(922)
Adjustments in respect of previous years (92) (128) ------- ------- (1,041) (1,050) ------- ------- Foreign tax: ROI corporation tax on profits for the year (594)
(539)
Adjustments in respect of previous years 18 (60) ------- ------- (576) (599) ------- ------- Total current tax (1,617) (1,649) Deferred tax: Origination and reversal of timing differences (3,761)
(3,442)
Adjustments in respect of previous years 635
425 ------- ------- Tax charge in the income statement on operating (4,743) (4,666)activities Tax credit arising on exceptional costs -
9,450
Exceptional deferred tax credit 1,142
785 ------- ------- Total tax (charge)/credit (3,601) 5,569 ------- -------
The tax (charge)/credit in the Income Statement is
disclosed as: Tax (charge)/credit on continuing operations (3,601)
5,569
Tax credit on discontinued operations -
- ------- ------- Tax (charge)/credit in the income statement (3,601) 5,569 ------- -------
Tax relating to items in the Statement of Comprehensive
Income Deferred tax: Actuarial loss/(gain) on pension schemes 820
(821)
Revaluation of cash flow hedges (29)
(64)
Valuation of long term incentive plan (8)
7 ------- ------- Tax credit/(charge) in the statement of comprehensive 783 (878)income ------- -------5. Earnings per shareBasic 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 period.Adjusted earnings per share are calculated based on the profit for thefinancial year 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 adjusted earnings per share are calculated based on profit for thefinancial year attributable to equity holders of the parent adjusted for theexceptional items. The weighted average number of shares is adjusted to reflectthe dilutive potential of the Long Term Incentive Plan.
The following reflects the income and share data used in the basic, adjusted, diluted and diluted adjusted earnings per share calculations:
Net profit attributable to equity holders
2011 2010 Continuing Discontinued Total Continuing Discontinued Total Operations Operations Operations Operations £000 £000 £000 £000 £000 £000 Net loss attributable to equity holders (25,673) (213) (25,886) (8,539) (214) (8,753) Exceptional items 43,858 - 43,858 24,765 - 24,765 ------ ------ ------ ------ ------ ------ Total adjusted and diluted profit attributable to equity holders 18,185 (213) 17,972 16,226 (214) 16,012 ------- ------- ------- ------- ------- -------
Weighted average number of shares
2011 2010 thousands thousands Shares in issue 95,903 95,903 Weighted average number of treasury shares (600) (500) ------- -------
Weighted average number of shares for basic and
adjusted earnings per share (excluding treasury shares) 95,303 95,403
Effect of dilution of the Long Term Incentive Plan 609
456 ------- ------- 95,912 95,859 ------- -------Earnings per share 2011 2010
From continuing and discontinued operations
Basic and diluted (27.16)p (9.17)p ------- ------- Adjusted 18.86p 16.78p ------- ------- Diluted adjusted 18.74p 16.70p ------- -------From continuing operations Basic and diluted (26.94)p (8.95)p ------- ------- Adjusted 19.08p 17.01p ------- ------- Diluted adjusted 18.96p 16.93p ------- ------- From discontinued operations Basic and diluted (0.22)p (0.22)p ------- ------- Adjusted and diluted adjusted (0.22)p (0.22)p ------- -------6. Dividends £000 £000
Equity dividends on ordinary shares Declared and paid during the year Final for 2010: 3.00p (2009: 2.00p) 2,862
1,908
Interim for 2011: 1.50p (2010: 1.00p) 1,428 954 ------- ------- Dividends paid 4,290 2,862 ------- -------
Proposed for approval at Annual General Meeting (not recognised as a liability at 31 December) Final dividend for 2011: 4.50p (2010: 3.00p) 4,284 2,862 ------- -------7. Financial liabilities 2011 2010 £000 £000 Current Current instalments due on bank loans 8,167 8,254 Non-current Non-current instalments due on bank loans 53,752 74,490 ------ ------ 61,919 82,744 ------ ------
The financial liabilities at 31 December 2011 are stated net of £249,000 (2010: £419,000) of deferred financing costs.
8. Net Debt 2011 2010 £000 £000 Bank loans (61,919) (82,744) Cash and short term deposits 7,205 11,250 ------ ------ (54,714) (71,494) ------ ------ 9. Pension schemes The IAS 19 deficit at 31 December 2011 is £8,569,000 compared with a deficit of£6,800,000 at 31 December 2010. The increase in the deficit was primarilydriven by a decline in the discount rate assumption arising from the reductionin corporate bond yields which increased the scheme's liabilities.The Group funded a discretionary amount of £1,181,000 towards the actuarialdeficit in 2011 (2010: £1,181,000) by means of a cash transfer and has agreedto make further payments of £1,181,000 in each year from 2012 to 2014.
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 2010 has notchanged. There have been no significant related party transactions in the yearended 31 December 2011.This summary has been approved by our Directors for release to the Press today 20 March 2012 and the full printed Annual Report and Accounts will be posted toShareholders and Stock Exchanges on 18 April 2012. Copies will be available tothe public at the Company's registered office Ormeau Road, Belfast BT7 1EB fromthat date.
XLONRelated Shares:
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