TIDMWLG
RNS Number : 7252H
Wireless Group PLC
22 August 2016
22 August 2016
Wireless Group plc
("WLG" or "the Company" or "the Group")
Wireless Group plc today announces interim results for the six
months ended 30 June 2016.
Financial highlights*
-- Disposal of TV business to ITV for a purchase price of GBP100m completed in February 2016
-- Profit on disposal of GBP79.2m and associated return of capital of GBP55.0m
-- Group revenue from continuing operations of GBP38.2m (2015 restated: GBP37.0m)
-- Group operating profit of GBP4.7m (2015 restated: GBP6.1m)
-- Group operating profit includes GBP1.8m start-up losses for D2
-- Pre-tax profits from continuing operations of GBP4.5m (2015 restated: GBP5.0m)
-- Reported profit for the period of GBP82.1m (2015 restated: loss of GBP0.5m)
-- Diluted adjusted earnings per share of 4.4p (2015 restated: 3.6p)
-- Net debt reduced to GBP1.6m (2015: GBP46.9m)
-- Recommended cash offer of 315p per share from News
Corporation ("News Corp"), totalling GBP220m
-- No interim dividend declared in light of News Corp offer
* References to operating profit includes income from associates
and joint ventures but excludes discontinued operations.
Operational highlights
-- Strong performance by talkSPORT assisted by the European Football Championships
-- Three packages won for Premier League live audio rights for next three seasons
-- Advertising slowdown in Q2 in both the UK and Ireland impacted local radio performance
-- Successful launch of three new digital channels on the D2
multiplex, with strong audiences recorded in first RAJAR
results
Richard Huntingford, Chairman, Wireless Group plc, said:
"Wireless Group - and especially talkSPORT - has performed well
in the first six months of the year. After a competitive bidding
process, we were also delighted to be awarded three packages for
Premier League live audio rights which will further underpin the
outlook for talkSPORT going forward.
The recent RAJAR and JNLR figures demonstrate the strength of
the Group's ongoing brands in its key markets as well as the
ability to launch successfully new digital brands that are
attractive to listeners which stands the Group in good stead going
forward.
In our local stations and in Ireland, advertising trends were
softer as we moved towards the referendum in Q2. Whilst it is still
unclear what impact the uncertainty created by Brexit might have on
advertising revenues in the all-important Q4, including in Ireland,
the Group currently anticipates a full year outturn broadly in line
with expectations.
In the meantime, good progress is being made in respect of the
regulatory clearances required in connection with the News Corp
offer."
For further information contact:
Investor Enquiries
Norman McKeown, Group +44 (0) 28 9026
Finance Director 2204
Media Enquiries
Maitland
+44 (0) 20 7379
James Devas 5151
Chairman's Statement
Overview
Following the sale of its television business to ITV, WLG became
a focused radio group operating in the UK and Ireland with highly
attractive assets including talkSPORT and a growing digital
division. It is a profitable business - with a strong balance sheet
- that owns and operates valuable brands that attract loyal
audiences.
On 30 June 2016, the Group announced a recommended cash offer of
315p per share from News Corp, subject to regulatory clearance.
Good progress is being made in respect of the regulatory clearances
and as at 17 August 2016, the first closing date of the offer,
acceptances totalling 92 per cent. had been received from the
Group's shareholders.
Financial results *
Group operating profit from continuing operations was GBP4.7m
(2015 restated: GBP6.1m). After net interest costs of GBP0.6m (2015
restated: GBP1.0m) and foreign exchange gains of GBP0.4m (2015
restated: loss of GBP0.1m), Group profit before tax from continuing
operations was GBP4.5m (2015 restated: GBP5.0m). Group profit after
tax from continuing operations was GBP3.7m (2015 restated:
GBP3.6m). Group profit after tax from continuing and discontinued
operations was GBP82.1m (2015 restated: loss of GBP0.5m).
Group net debt was substantially lower at GBP1.6m (2015:
GBP46.9m) predominantly as a result of the disposal of the TV
assets.
* As appropriate, references to operating profit includes income
from associates and joint ventures but excludes discontinued
operations.
Dividend
Following the offer from News Corp, the Group has agreed not to
declare an interim dividend. Wireless shareholders named on the
register on 20 May 2016 received on 15 July 2016 the previously
announced Special Dividend of 6.15 pence as well as the 2015 Final
Dividend of 7.60 pence - 13.75 pence in total.
Operating review
Revenue Operating
profit
(GBPm) 2016 2015 2016 2015
(restated) (restated)
Radio GB 27.6 25.8 4.8 5.6
Radio Ireland 8.9 8.8 1.2 2.1
Digital services 1.7 2.4 0.1 0.1
38.2 37.0 6.1 7.8
Central Costs (1.6) (1.9)
JV/Associates 0.2 0.2
Total 4.7 6.1
talkSPORT is the UK's premier sports radio station and the
strength of its offering was again demonstrated in the recent Q2
RAJAR results published on 4 August. The channel's weekly reach
increased to 3.3m listeners - the station's second highest ever
result - with four of its key weekday shows breaking listener
records. talkSPORT's reach and audience demographic both remain
attractive propositions for advertisers and while some additional
benefit was always expected from the Euro 2016 tournament,
talkSPORT nevertheless turned in an exceptionally good first half
performance.
talkSPORT was also pleased to be awarded three live UK audio
packages for the Premier League for three seasons from 2016/17 to
2018/19 inclusive, meaning it will have more Premier League
coverage than ever before and become the only national commercial
radio station carrying live Premier League games.
talkSPORT's international broadcasting business, now in its
fifth season, continued to achieve double digit sales and profit
growth in H1. These rights are in place for three further seasons
and there are now partnership agreements in 68 territories.
The Group successfully launched three new national digital radio
services in March - Virgin Radio, a music service which brings the
iconic Virgin Radio brand back to the UK under a 12 year brand
licence agreement with Virgin Group; talkRADIO, a talk-led service
focussed on current affairs and entertainment; and talkSPORT 2, a
complementary service to talkSPORT covering live action across a
broader range of sports.
Early results have been encouraging. Virgin Radio's strong
presenter line-up - led by Edith Bowman's breakfast show - saw the
station post a weekly reach of 409,000 in Q2. talkSPORT 2 has also
proven a popular choice, drawing an initial 285,000 listeners,
attracted by a wider range of sporting coverage backed by a range
of partnerships with leading sports rights holders. talkRADIO -
fronted by a number of strong personalities - has attracted 224,000
weekly listeners with an encouragingly high listening profile of
6.5 hours per week.
Sales in our local radio operations in GB were down on H1 on a
like-for-like basis mainly as a result of reduced demand in the
lead up to the Brexit referendum. Costs were tightly controlled in
this division, largely mitigating the profit decline.
Results for Radio GB overall include start-up losses
attributable to the new digital station totalling GBP1.8m in the
first six months and planned cost savings of GBP0.5m.
The Irish radio advertising market continues to lag the recovery
in the Irish economy, particularly amongst larger advertising
agencies, although currency tailwinds mitigated the impact of this
on Radio Ireland reported revenue. The key factors affecting this
included the continued move towards more measurable digital
campaigns, the uncertainty around the Brexit referendum and a
slower than expected return to marketing investment from some key
market sectors. The recent JNLR audience figures for Q2 have
confirmed the market-leading positions that the Group's stations
enjoy in key urban areas, which alongside the relaunch of our
agency sales operation as Urban Media, with improved digital/social
capabilities, provides confidence for the future. Costs increased
in part due to currency movements, external television advertising
and investment in digital activities.
Profits in the Digital Services division were unchanged but
substantial progress was made in the period in improving the future
profitability of Simply Zesty.
Outlook
talkSPORT is a highly attractive medium for advertisers seeking
male audiences. While a major football tournament typically would
drive a 10% increase in sales over the course of a calendar year,
talkSPORT is experiencing good underlying sales growth and is
increasingly leveraging its brand strength through a growing number
of major sponsorships and partnerships.
The launch and establishment of our three recently-launched
national radio stations on D2 was a key priority for 2016 and
initial results are encouraging. Following the recent RAJAR
results, operating losses at the three stations are still
anticipated to be broadly in line with forecasts, moving to a small
loss in 2017 and growing profitably beyond this. Encouragingly, 70%
of our forecast 2016 revenue for the D2 stations has already been
achieved.
The recent RAJAR and JNLR figures demonstrate the strength of
the Group's ongoing brands in its key markets as well as the
ability to launch successfully new digital brands that are
attractive to listeners which stands the Group in good stead going
forward.
In our local stations and in Ireland, advertising trends were
softer as we moved towards the referendum in Q2. Whilst it is still
unclear what impact the uncertainty created by Brexit might have on
advertising revenues in the all-important Q4, including in Ireland,
the Group currently anticipates a full year outturn broadly in line
with expectations.
Richard Huntingford
Chairman
22 August 2016
Group Income Statement
for the six months ended 30 June 2016
Results Results
before before
Exceptional Exceptional Exceptional Exceptional
Items Items Total Items Items Total
30 30
30 June 30 June June 30 June 30 June June
Notes 2016 2016 2016 2015 2015 2015
(restated) (restated)
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Continuing operations
Revenue 3 38,187 - 38,187 37,064 - 37,064
Operating costs (33,705) - (33,705) (31,185) - (31,185)
------- ------- ------- ------- ------- -------
Operating profit
from continuing
operations before
tax and finance
costs 4,482 - 4,482 5,879 - 5,879
Share of results
of JVs and associates
accounted for using
the equity method 180 - 180 185 - 185
------- ------- ------- ------- ------- -------
Profit from continuing
operations before
tax and finance
costs 3 4,662 - 4,662 6,064 - 6,064
Finance revenue 23 - 23 22 - 22
Finance costs (580) - (580) (994) - (994)
Foreign exchange
gain/(loss) 361 - 361 (128) - (128)
------- ------- ------- ------- ------- -------
Profit from continuing
operations before
tax 3 4,466 - 4,466 4,964 - 4,964
Taxation (737) - (737) (1,403) - (1,403)
------- ------- ------- ------- ------- -------
Profit from continuing
operations after
tax 3,729 - 3,729 3,561 - 3,561
Discontinued
operations
(Loss)/profit from
discontinued
operations 5,6 (802) 79,202 78,400 (4,041) - (4,041)
------- ------- ------- ------- ------- -------
Profit/(loss) for
the period 2,927 79,202 82,129 (480) - (480)
------- ------- ------- ------ ------- ------
Attributable to:
Equity holders of
the parent 2,799 79,202 82,001 (556) - (556)
Non-controlling
interest 128 - 128 76 - 76
------- ------- ------- ------- ------- -------
2,927 79,202 82,129 (480) - (480)
------- ------- ------- ------ ------- ------
Earnings /(Loss)
per share 2016 2015
(restated)
Continuing operations
Basic 8 4.43p 3.64p
Diluted 8 4.39p 3.63p
Adjusted 8 4.43p 3.64p
Diluted adjusted 8 4.40p 3.63p
Continuing and
discontinued
operations
Basic 8 100.82p (0.58)p
Diluted 8 99.94p (0.58)p
Adjusted 8 3.44p (0.55)p
Diluted adjusted 8 3.41p (0.55)p
Group Statement of Comprehensive Income
for the six months ended 30 June 2016
30
30 June June
2016 2015
(restated)
GBP000 GBP000
Profit/(loss) for the period 82,129 (480)
------- -------
Other comprehensive income /(loss)
Items that may be reclassified
subsequently to profit or loss:
Exchange difference on translation
of foreign operations 6,860 (3,316)
Income tax relating to items
that may be reclassified subsequently 46 (22)
------- -------
6,906 (3,338)
------- -------
Items that will not be reclassified
subsequently to profit or loss:
Actuarial loss on defined benefit
pension schemes (16) (9)
Income tax relating to items
that will not be reclassified
subsequently 3 2
------- -------
(13) (7)
------- -------
Other comprehensive profit/(loss)
for the period, net of tax 6,893 (3,345)
------- -------
Other comprehensive loss for
the period from discontinued
operations
Items that may be reclassified
subsequently to profit or loss:
Exchange difference on translation
of foreign operations (293) (558)
Cash flow hedge - 276
Income tax relating to items
that may be reclassified subsequently 50 -
------- -------
(243) (282)
------- -------
Items that will not be reclassified
subsequently to profit or loss:
Actuarial loss on defined benefit
pension schemes (241) (1,771)
------- -------
Other comprehensive (loss) for
the period from discontinued
operations, net of tax (484) (2,053)
------- -------
------- -------
Total comprehensive income/(loss)
for the period, net of tax 88,538 (5,878)
------- -------
Attributable to:
Equity holders of the parent 88,410 (5,954)
Non-controlling interest 128 76
------- -------
88,538 (5,878)
------- -------
Group Balance Sheet
for the six months ended 30 June 2016
30 30 31
June June December
Notes 2016 2015 2015
(restated)
GBP000 GBP000 GBP000
ASSETS
Non-current assets
Property, plant and equipment 9 6,109 17,546 5,701
Intangible assets 175,621 166,047 166,696
Investments accounted
for using the equity
method 1,023 864 1,053
Deferred tax asset 845 1,691 719
------- ------- -------
183,598 186,148 174,169
------- ------- -------
Current assets
Inventories 586 1,591 1,584
Trade and other receivables 14,639 21,567 16,986
Financial assets 11 - 376 -
Cash and short term deposits 3,110 12,832 9,934
------- ------- -------
18,335 36,366 28,504
------- ------- -------
Assets of disposal group - - 23,123
------- ------- -------
TOTAL ASSETS 201,933 222,514 225,796
------- ------- -------
EQUITY AND LIABILITIES
Equity attributable to
equity holders of the
parent
Equity share capital 4,806 55,557 55,557
Capital redemption reserve 50 50 50
Treasury shares - (104) (104)
Foreign currency reserve 7,556 (303) 989
Cash flow hedge reserve - 276 -
Retained earnings 124,612 38,038 51,958
------- ------- -------
137,024 93,514 108,450
Non-controlling interest 96 129 114
------- ------- -------
TOTAL EQUITY 137,120 93,643 108,564
------- ------- -------
Non-current liabilities
Financial liabilities 11 - 56,437 52,322
Pension liability 284 3,229 512
Provisions 398 622 381
Deferred tax liabilities 32,754 32,979 30,853
------- ------- -------
33,436 93,267 84,068
------- ------- -------
Current liabilities
Trade and other payables 15,601 24,561 19,446
Dividends payable 7 9,440 5,205 -
Financial liabilities 11 4,765 3,335 3,422
Tax payable 924 1,829 1,397
Provisions 647 674 665
------- ------- -------
31,377 35,604 24,930
------- ------- -------
Liabilities of disposal
group - - 8,234
------- ------- -------
TOTAL LIABILITIES 64,813 128,871 117,232
------- ------- -------
TOTAL EQUITY AND LIABILITIES 201,933 222,514 225,796
------- ------- -------
Group Cash Flow
for the six months ended 30 June 2016
30
30 June June
2016 2015
Notes GBP000 GBP000
Operating activities
Profit before tax (i) 83,038 980
Adjustments to reconcile
profit before tax to net
cash flows from operating
activities
Exceptional item - Profit
on sale of Television (79,046) -
Foreign exchange (gain)/loss (1,060) 703
Net finance costs 548 999
Share of post tax profits
of associates and joint ventures (180) (185)
Depreciation of property,
plant and equipment 1,025 1,514
Gain on disposal of property,
plant and equipment - (1)
Share based payments 366 171
Difference between pension
contributions paid and amounts
recognised in the income
statement (92) (1,038)
Unrealised currency translation
losses 1,106 -
Working capital adjustments:
Decrease in inventories 1,131 799
Decrease in trade and other
receivables 5,269 1,286
Decrease in trade and other
payables (7,636) (2,830)
Increase/(decrease) in provisions - 115
------- -------
Cash generated from operations 4,469 2,513
Income taxes paid (1,053) (1,241)
------- -------
Net cash flow from operating
activities 3,416 1,272
------- -------
Investing activities
Interest received 21 24
Proceeds on disposal of property,
plant and equipment - 1
Purchase of property, plant
and equipment (1,080) (2,167)
Income received from associates
and joint ventures 210 221
Proceeds from the disposal
of discontinued operations - 175
Net proceeds from the disposal
of a group undertaking 94,945 -
------- -------
Net cash flow from investing
activities 94,096 (1,746)
------- -------
Financing activities
Interest paid (900) (1,084)
Refinancing cost (328) -
Acquisition of treasury shares (11) -
Dividends paid to equity
shareholders (164) (4)
B Share scheme redemption 12 (50,762) -
Dividends paid to non-controlling
interests (146) -
Repayment of borrowings 11 (57,195) (1,939)
Proceeds from new borrowings 11 5,000 3,582
------- -------
Net cash flow used in financing
activities (104,506) 555
------- -------
Net (decrease)/increase in
cash and cash equivalents (6,994) 81
Effect of exchange rates
on cash and cash equivalents 170 (135)
Cash and cash equivalents
at 1 January 9,934 12,886
------- -------
Cash and cash equivalents
at 30 June 3,110 12,832
------- -------
(i) Includes both continuing
and discontinued operations
Group Statement of Changes in Equity
for the six months ended 30 June 2016
Capital Cash Shareholder
Equity redemption Foreign flow equity Non-
share reserve Treasury currency hedge Retained controlling
capital shares reserve reserve earnings interest Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 January
2015 55,557 50 (104) 3,571 - 45,428 104,502 53 104,555
------ ------- ------- ------- ------- ------- ------- ------- -------
Loss/Profit
for the
period - - - - - (556) (556) 76 (480)
Other
comprehensive
loss in
the period - - - (3,316) - (29) (3,345) - (3,345)
Other
comprehensive
(loss)/income
in the period
from
discontinued
operations - - - (558) 276 (1,771) (2053) - (2,053)
------ ------ ------- ------- ------- ------- ------- ------- -------
Total net
comprehensive
(loss)/income
in the period - - - (3,874) 276 (2,356) (5,954) 76 (5,878)
Share based
payment - - - - - 171 171 - 171
Equity
dividends
paid and
payable - - - - - (5,205) (5,205) - (5,205)
------ ------- ------- ------- ------- ------- ------- ------- -------
At 30 June
2015 55,557 50 (104) (303) 276 38,038 93,514 129 93,643
------ ------- ------- ------- ------- ------- ------- ------- -------
Profit for
the period - - - - - 12,662 12,662 121 12,783
Other
comprehensive
income in
the period - - - 737 - 61 798 - 798
Other
comprehensive
income/(loss)
in the period
from
discontinued
operations - - - 555 (276) 2,846 3,125 - 3,125
------ ------ ------- ------- ------- ------- ------- ------- -------
Total net
comprehensive
income/(loss)
in the period - - - 1,292 (276) 15,569 16,585 121 16,706
Share based
payment - - - - - 95 95 - 95
Equity
dividends
paid - - - - - (1,744) (1,744) (136) (1,880)
------ ------- ------- ------- ------- ------- ------- ------- -------
At 31 December
2015 55,557 50 (104) 989 - 51,958 108,450 114 108,564
------ ------- ------- ------- ------- ------- ------- ------- -------
Profit for
the period - - - - - 82,001 82,001 128 82,129
Other
comprehensive
income in
the period - - - 6,860 - 33 6893 - 6893
Other
comprehensive
(loss) in
the period
from
discontinued
operations - - - (293) - (191) (484) - (484)
------ ------- ------- ------- ------- ------- ------- ------- -------
Total net
comprehensive
income in
the period - - - 6,567 - 81,843 88,410 128 88,538
Issue of
new shares 11 - - - - - 11 - 11
Acquisition
of treasury
shares - - (11) - - - (11) - (11)
Treasury
shares issued - - 115 - - (115) - - -
Share based
payment - - - - - 366 366 - 366
B Share
Payment (50,762) - - - - - (50,762) - (50,762)
Equity
dividends
paid and
payable - - - - - (9,440) (9,440) (146) (9,586)
------ ------- ------- ------- ------- ------- ------- ------- -------
At 30 June
2016 4,806 50 - 7,556 - 124,612 137,024 96 137,120
------ ------- ------- ------- ------- ------- ------- ------- -------
Notes to the accounts
1. Basis of preparation
The condensed interim financial statements have been prepared in
accordance with IAS34 "Interim Financial Reporting" and the
Disclosure and Transparency Rules of the Financial Conduct
Authority.
In addition, the interim condensed 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 2015. A number of New European Union endorsed
amendments to existing standards are effective for periods
beginning on or after 1 January 2016. However, none of these have a
material, if any, impact on the annual or condensed interim
financial statements of the Group in 2016.
In October 2015 the Group entered into a conditional agreement
to sell its Television business to ITV Broadcasting Limited. The
sale of this business was completed on 29 February 2016.
Consequently the Group Income Statement reflects the classification
of this business as discontinued operations for both 2016 and 2015,
with the 30 June 2015 figures having been restated to reflect
this.
The Balance Sheet at 31 December 2015 has been restated to
reflect the liability, amounting to GBP512,000, in respect of the
unfunded pension arrangement that was retained as part of the
continuing operations for the Group. In the Report and Accounts for
the year ended 31 December 2015, this liability was erroneously
netted against the defined benefit pension scheme asset included
within the "Assets of disposal group".
These interim statements have been prepared on a going concern
basis as the directors, having considered available relevant
information, have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the
foreseeable future.
The interim results are unaudited but have been formally
reviewed by the auditors and their report to the Company is set out
at the end of this Interim Report. The information shown for the
year ended 31 December 2015 does not constitute statutory accounts
within the meaning of Section 434 of the Companies Act 2006 and has
been extracted from the Group's 2015 Annual Report, which has been
filed with the Registrar of Companies. The report of the auditors
on the accounts contained within the Group's 2015 Annual Report was
unqualified and did not contain a statement under either Section
498(2) or Section 498(3) of the Companies Act 2006 regarding
inadequate accounting records or a failure to obtain necessary
information and explanations.
2. Seasonality and cyclicality
There is no significant seasonality or cyclicality affecting the
interim results of the continuing operations.
3. Segmental information
The Group operates in three principal areas of activity - radio
in GB, radio in Ireland and digital services. These business
segments all form part of the Group's continuing operations and
these form the basis on which the Group is managed and reports are
provided to the Executive Chairman and the Board.
Following the agreement in 2015 to sell the main Television
segment businesses, UTV and UTV Ireland as outlined in note 1, and
the classification of these businesses as discontinued operations,
Tibus and Simply Zesty which were previously included within the
Television segment are now included as a separate segment, renamed
Digital Services.
Revenue
Six months ended 30 June 2016
Radio Radio Digital
GB Ireland Services Total
GBP000 GBP000 GBP000 GBP000
Sales to third parties 27,577 8,877 1,733 38,187
Intersegmental sales 374 572 357 1,303
------- ------- ------- -------
27,951 9,449 2,090 39,490
------- ------- ------- -------
Six months ended 30 June 2015
Radio Radio Digital
GB Ireland Services Total
(restated)
GBP000 GBP000 GBP000 GBP000
Sales to third parties 25,839 8,814 2,411 37,064
Intersegmental sales 344 678 530 1,552
------- ------- ------- -------
26,183 9,492 2,941 38,616
------- ------- ------- -------
Results
Six months ended 30 June 2016
Radio Radio Digital
GB Ireland Services Total
GBP000 GBP000 GBP000 GBP000
Segment operating
profit 4,806 1,186 88 6,080
------- ------- -------
Central costs (1,598)
Income from Joint
Ventures and
Associates 180
-------
Profit before
exceptional items,
tax and finance
costs 4,662
Net finance cost (557)
Foreign exchange
gain 361
-----
Profit before
taxation 4,466
------
Results
Six months ended 30 June 2015
Radio Radio Digital
GB Ireland Services Total
GBP000 GBP000 GBP000 GBP000
(restated)
Segment operating
profit 5,573 2,128 87 7,788
------- ------- -------
Central costs (1,909)
Income from Joint
Ventures and
Associates 185
------
Profit before
exceptional items,
tax and finance
costs 6,064
Net finance cost (972)
Foreign exchange
loss (128)
-------
Profit before
taxation 4,964
-------
4. Taxation
In the budget in March 2016, it was proposed that corporation
tax rates in the UK would be reduced to 17% in 2020. As these have
not yet been substantively enacted, deferred tax has been
calculated at 18% within this Interim Report. If the proposed
corporation tax rate changes were to be fully approved, the
relevant deferred tax assets and liabilities would be restated
accordingly resulting in a net exceptional credit of approximately
GBP1,772,000.
5. Discontinued operations
In October 2015 the Group entered into a conditional agreement
to sell its Television business to ITV. The sale of this business
was completed on 29 February 2016.
The results of the discontinued operations for 2016 and 2015 are
presented below. The figures for the six months ended 30 June 2015
have been restated to re-class the results of the Television
businesses as discontinued last year.
30 June 30 June
2016 2015
(restated)
GBP000 GBP000
Revenue 7,425 21,198
Operating costs (8,606) (24,580)
------- -------
Operating loss (1,181) (3,382)
Interest receivable 9 -
Interest payable - (28)
Foreign exchange gain/(loss) 698 (575)
------- -------
(Loss) before tax from discontinued
operations (474) (3,984)
Current tax charge (328) (56)
------- -------
(Loss) for the year from
discontinued operations (802) (4,041)
Profit on the sale of discontinued 79,202 -
operations (note 6)
------- -------
Total profit from discontinued
operations 78,400 (4,041)
------- -------
6. Exceptional item
On 29 February 2016, Wireless Group plc completed the sale of
the entire issued share capital of UTV Limited and its wholly owned
subsidiary UTV Ireland Limited, to ITV Broadcasting Limited. This
resulted in a profit on disposal before tax of GBP79,202,000.
Profit on disposal of subsidiary
2016
GBP000
Consideration 138,867
-------
Property, plant and equipment 11,344
Deferred tax asset 66
Inventories 1,834
Trade and other receivables 81,008
Cash 3,449
Pension asset 123
Trade and other payables (40,780)
Tax payable (647)
Deferred tax liability (535)
-------
Net assets disposed of 55,862
-------
83,005
Foreign exchange reserve
reclassified on sale (774)
Professional fees (2,407)
Other disposal costs (778)
-------
Profit from disposal of subsidiary 79,046
Taxation 156
-------
Net profit from disposal
of subsidiary 79,202
-------
The consideration received on completion of the sale of UTV
Television was based on an estimated Balance Sheet at 29 February
2016. In line with the Share Purchase Agreement, an adjustment to
the consideration received on Completion would be paid to or
received from ITV Broadcasting Limited based on the subsequently
agreed Balance Sheet at 29 February 2016. This adjustment was
agreed on 9 August 2016 and a refund of GBP930,000 was paid to ITV
Broadcasting Limited on 12 August 2016. This adjustment is included
within the consideration noted above and included within trade and
other payables at 30 June 2016.
7. Dividends
30
June 30 June
2016 2015
GBP000 GBP000
Equity dividends on ordinary shares
Declared at the AGM during the
period
Final for 2015: 7.60p (2014: 5.43p) 5,218 5,205
Special dividend: 6.15p (2015:
Nil) (see note 11) 4,222 -
------- -------
9,440 5,205
------- -------
Proposed but not recognised as
a liability at 30 June
Interim for 2016: Nil (2015: 1.82p) - 1,744
------- -------
The special dividend in 2016 and final dividend for 2015 were
paid on 15 July 2016 (2014: 15 July 2015).
8. Earnings per share
Basic earnings per share are calculated based on the profit for
the financial period attributable to equity holders of the parent
and on the weighted average number of shares in issue during the
period.
Adjusted earnings per share are calculated based on the profit
for the financial period attributable to equity holders of the
parent adjusted for the exceptional items and the impact of net
finance costs under IAS 19 "Employee Benefits (Revised)". This
calculation uses the weighted average number of shares in issue
during the year.
Diluted earnings per share are calculated based on profit for
the financial period attributable to equity holders of the parent.
Diluted adjusted earnings per share are calculated based on profit
for the financial period attributable to equity holders of the
parent before the exceptional items and the impact of net finance
costs under IAS 19 "Employee Benefits (Revised)". In each case the
weighted average number of shares is adjusted to reflect the
dilutive potential of the awards expected to be vested on the Long
Term Incentive Schemes.
The following reflects the income and share data used in the
basic, adjusted, diluted and diluted adjusted earnings per share
calculations:
Net profit attributable to equity holders
30 June 2016 30 June 2015
Continuing Discontinued Continuing Discontinued
Operations Operations Total Operations Operations Total
(restated) (restated)
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Net profit/(loss)
attributable
to equity
holders 3,601 78,400 82,001 3,485 (4,041) (556)
Adjustments
to net financing
costs 6 (9) (3) - 28 28
Exceptional
items - (79,202) (79,202) - - -
------ ------ ------ ------ ------ ------
Total adjusted
and diluted
profit/(loss)
attributable
to equity
holders 3,607 (811) 2,796 3,485 (4,013) (528)
------- ------- ------- ------- ------- -------
Weighted average number of shares
2016 2015
thousands thousands
Weighted average number of shares
for basic and
adjusted earnings per share (excluding
treasury shares) 81,335 95,850
Effect of dilution of the Long
Term Incentive Plan 717 238
------- -------
82,052 96,088
------- -------
Earnings per share
2016 2015
(restated)
From continuing operations
Basic 4.43p 3.64p
------- -------
Diluted 4.39p 3.63p
------- -------
Adjusted 4.43p 3.64p
------- -------
Diluted adjusted 4.40p 3.63p
------- -------
From continuing and discontinued
operations
Basic 100.82p (0.58)p
------- -------
Diluted 99.94p (0.58)p
------- -------
Adjusted 3.44p (0.55)p
------- -------
Diluted adjusted 3.41p (0.55)p
------- -------
From discontinued operations
Basic 96.39p (4.22)p
------- -------
Diluted 95.55p (4.21)p
------- -------
Adjusted (1.00)p (4.19)p
------- -------
Diluted adjusted (0.99)p (4.18)p
------- -------
9. Property, plant and equipment
During the period the Group incurred GBP918,000 (2015:
GBP2,020,000) of capital additions.
At 30 June 2016 the Group had entered into contractual
commitments for the acquisition of property, plant and equipment
amounting to GBPNil (2015: GBP390,000).
10. Net Debt
30 June 30 June 31 December
2016 2015 2015
GBP000 GBP000 GBP000
Cash and short term deposits 3,110 12,832 9,934
Interest bearing loans and
borrowings (4,699) (59,772) (55,744)
------- ------- -------
(1,589) (46,940) (45,810)
------- ------- -------
11. Financial instruments
The Group's principal financial instruments comprise bank loans,
derivative financial instruments and cash and short-term deposits.
The main purpose of these financial instruments is to raise finance
for the Group's operations. The Group has various other financial
assets and liabilities, such as trade receivables and trade
payables, which arise directly from its operations. Contingent
consideration arises in respect of the disposal of businesses.
Set out below is a comparison by category of carrying amounts
and fair values of the Group's financial assets and liabilities,
excluding cash and cash equivalents, trade receivables and
payables, that are carried in the financial statements.
30 June 2016 30 June 2015 31 December
2015
Carrying Fair Carrying Fair Carrying Fair
amount value amount value amount value
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Financial
assets
Contingent
consideration
receivable - - 100 100 - -
Derivative
financial
assets - - 276 276 - -
------ ------ ------ ------ ------ ------
- - 376 376 - -
------- ------- ------- ------- ------- -------
Financial
liabilities
Derivative
financial
liabilities 66 66 - - - -
Interest-bearing
loans and
borrowings 4,699 4,699 59,772 59,772 55,744 55,744
------ ------ ------ ------ ------ ------
4,765 4,765 59,772 59,772 55,744 55,744
------- ------- ------- ------- ------- -------
The Group uses the following hierarchy as set out in IFRS 7
"Financial Instruments: Disclosures" for determining and disclosing
the fair value of financial instruments by valuation technique:
-- Level 1: quoted (unadjusted) prices in active markets for
identical assets or liabilities;
-- Level 2: other techniques for which all inputs which have a
significant effect on the recorded fair value are observable,
either directly or indirectly; and,
-- Level 3: techniques which use inputs which have a significant
effect on the recorded fair value that are not based on observable
market data.
The Group's financial assets and liabilities are considered as
falling within level 2 of this hierarchy, with the exception of the
contingent consideration which existed at 30 June 2015 which was
considered as falling within level 3. For assets and liabilities
that are recognised in the financial statements on a recurring
basis, the Group determines whether transfers have occurred between
levels in the hierarchy by re-assessing categorisation at the end
of each reporting period. There have been no transfers between
level 1, 2 or 3 during the current period or in the previous
years.
Management have assessed that the fair value of cash and cash
equivalents, trade and other receivables and trade and other
payables approximate their carrying amounts largely due to the
short-term maturities of these instruments. The fair value of
interest bearing loans and borrowings are also a close
approximation to their carrying value given that they bear interest
at floating rates based on Libor/Euribor.
The Group's banking facilities were refinanced on 29 February
2016. From the net cash proceeds of the sale of UTV Television the
Group's existing bank facilities of GBP57,195,000 at 29 February
2016 were repaid in full. New bank facilities were put in place
with effect from Completion and comprise a GBP30m dual-currency
Revolving Credit Facility (RCF), and an GBP8m overdraft
Facility.
The bank loans at 30 June 2016 are stated net of deferred
financing costs amounting to GBP301,000
(30 June 2015: GBP397,000; 31 December 2015: GBP345,000).
The fair value of derivative financial assets and liabilities
relating to foreign exchange forward contracts is determined by
calculating the present value of future cash flows, estimated using
forward rates from third party market price quotations.
The Company has entered in to a commitment to sell EUR750,000 on
20 September 2016 and EUR800,000 on 20 January 2017 and buy
sterling at agreed foreign exchange rates. A net financial
liability has been recognised in respect of this commitment
calculated as the difference between the commitment translated at
the agreed exchange rates and at the exchange rate at 30 June 2016.
The range of possible outcomes in respect of these arrangements is
considered by the Directors to not be materially different from
their fair values at 30 June 2016.
The contingent consideration receivable at 30 June 2015 related
to amounts due in respect of the disposal of certain of the Group's
New Media businesses in 2014.
12. Equity share capital
Following completion of the sale of UTV Television, Wireless
Group plc issued a new class of redeemable preference, B Shares.
Shareholders received one B Share for each corresponding existing
Ordinary Share held. Each B Share was then redeemed by the Company
for 52.81 pence on 23 March 2016 and cancelled on redemption.
In conjunction with the B Share Scheme, a Share Capital
Consolidation was also undertaken whereby shareholders received 5
New Ordinary Shares for every 7 Existing Ordinary Shares held. As a
consequence, from 24 March 2016, the issued share capital of the
Company comprised 68,657,787 ordinary shares of 7 pence each.
13. Related party transactions
The nature of related parties disclosed in the consolidated
financial statements for the Group as at and for the year ended 31
December 2015 has not changed. There have been no significant
related party transactions in the six month period ended 30 June
2016.
Risks and uncertainties
The 2015 Annual Report sets out the most significant risk
factors relating to Wireless Group plc's continuing 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
2016.
Statement of directors' responsibilities
The interim report is the responsibility of, and has been
approved by, the directors of Wireless Group plc. Accordingly, the
directors confirm that to the best of their knowledge:
-- the condensed set of financial statements has been prepared
in accordance with IAS 34 "Interim Financial Reporting" as adopted
by the European Union;
-- the interim report includes a fair review of the information
required by the Disclosure and Transparency Rules:
- DTR 4.2.7R, being an indication of important events that have
occurred during the first six months of the financial year and
their impact on the condensed set of financial statements, and a
description of the principal risks and uncertainties for the
remaining six months of the year; and
- DTR 4.2.8R, being related party transactions that have taken
place in the first six months of the current financial year and
that have materially affected the financial position or performance
of the entity during that period, and any changes in the related
party transactions described in the last annual report that could
do so.
By order of the Board:
Richard Huntingford
Chairman
22 August 2016
Independent review report to Wireless Group plc
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
6 months ended 30 June 2016 which comprises the Group Income
Statement, Group Statement of Comprehensive Income, Group Balance
Sheet, Group Statement of Changes in Equity, Group Cash Flow
Statement and the related notes 1 to 13. We have read the other
information contained in the half yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the company in accordance with
guidance contained in ISRE 2410 (UK and Ireland) "Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity" issued by the Auditing Practices Board. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company, for our work, for this report, or
for the conclusions we have formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, "Interim
Financial Reporting", as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the 6 months ended 30 June
2016 is not prepared, in all material respects, in accordance with
International Accounting Standard 34 as adopted by the European
Union and the Disclosure and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
Ernst & Young LLP
Belfast
22 August 2016
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PLMFTMBJBBFF
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August 22, 2016 02:00 ET (06:00 GMT)
Wireless Grp (LSE:WLG)
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