REG - Future PLC - Final Results <Origin Href="QuoteRef">FUTR.L</Origin> - Part 2
24/11/2017 07:41
- Part 2: For the preceding part double click ID:nRSX4115Xa
during the year. Diluted earnings per share have
been calculated by taking into account the dilutive effect of shares that
would be issued on conversion into Ordinary shares of awards held under
employee share schemes.
On 2 February 2017, the Company issued one new Ordinary share of 15 pence for
each 15 existing Ordinary shares following completion of a share
consolidation. The weighted average number of shares in issue for all periods
has been adjusted for the share consolidation.
Adjusted earnings per share remove the effect of share based payments,
exceptional items, amortisation of intangible assets arising on acquisitions,
impairment of intangible assets, exchange losses included in finance costs and
any related tax effects from the calculation.
Total Group 2017 Restated2016
Adjustments to profit/(loss) after tax:
Profit/(loss) after tax (£m) 1.6 (14.2)
Share based payments (including social security costs) (£m) 2.1 0.5
Exceptional items (£m) 3.7 3.2
Amortisation of intangible assets arising on acquisitions (£m) 2.3 -
Impairment of intangible assets (£m) - 13.0
Exchange losses included in finance costs (£m) - 0.2
Tax effect of the above adjustments (£m) (1.1) (0.5)
Adjusted profit after tax (£m) 8.6 2.2
Weighted average number of shares in issue during the year:
- Basic 37,093,344 24,165,768
- Dilutive effect of share options 3,878,185 871,639
- Diluted 40,971,529 25,037,407
Basic earnings/(loss) per share (in pence) 4.3 (58.8)
Adjusted basic earnings per share (in pence) 23.2 9.1
Diluted earnings/(loss) per share (in pence) 3.9 (58.8)
Adjusted diluted earnings per share (in pence) 21.0 8.8
The adjustments to profit/(loss) after tax have the following effect:
Basic earnings/(loss) per share (pence) 4.3 (58.8)
Share based payments (including social security costs) (pence) 5.7 2.1
Exceptional items (pence) 10.0 13.3
Amortisation of intangible assets arising on acquisitions (pence) 6.2 -
Impairment of intangible assets (pence) - 53.8
Exchange losses included in finance costs (pence) - 0.8
Tax effect of the above adjustments (pence) (3.0) (2.1)
Adjusted basic earnings per share (pence) 23.2 9.1
Diluted earnings/(loss) per share (pence) 3.9 (58.8)
Share based payments (including social security costs) (pence) 5.2 2.1
Exceptional items (pence) 9.0 13.3
Amortisation of intangible assets arising on acquisitions (pence) 5.6 -
Impairment of intangible assets (pence) - 53.4
Exchange losses included in finance costs (pence) - 0.8
Tax effect of the above adjustments (pence) (2.7) (2.0)
Adjusted diluted earnings per share (pence) 21.0 8.8
Continuing operations 2017 Restated2016
Adjustments to profit/(loss) after tax:
Profit/(loss) after tax (£m) 1.6 (14.4)
Share based payments (including social security costs ) (£m) 2.1 0.5
Exceptional items (£m) 3.7 3.5
Amortisation of intangible assets arising on acquisitions (£m) 2.3 -
Impairment of intangible assets (£m) - 13.0
Exchange losses included in finance costs (£m) - 0.2
Tax effect of the above adjustments (£m) (1.1) (0.5)
Adjusted profit after tax (£m) 8.6 2.3
Weighted average number of shares in issue during the year:
- Basic 37,093,344 24,165,768
- Dilutive effect of share options 3,878,185 871,639
- Diluted 40,971,529 25,037,407
Basic earnings/(loss) per share (in pence) 4.3 (59.6)
Adjusted basic earnings per share (in pence) 23.2 9.5
Diluted earnings/(loss) per share (in pence) 3.9 (59.6)
Adjusted diluted earnings per share (in pence) 21.0 9.2
The adjustments to profit/(loss) after tax have the following effect:
Basic earnings/(loss) per share (pence) 4.3 (59.6)
Share based payments (including social security costs) (pence) 5.7 2.1
Exceptional items (pence) 10.0 14.5
Amortisation of intangible assets arising on acquisitions (pence) 6.2 -
Impairment of intangible assets (pence) - 53.8
Exchange losses included in finance costs (pence) - 0.8
Tax effect of the above adjustments (pence) (3.0) (2.1)
Adjusted basic earnings per share (pence) 23.2 9.5
Diluted earnings/(loss) per share (pence) 3.9 (59.6)
Share based payments (including social security costs) (pence) 5.2 2.1
Exceptional items (pence) 9.0 14.5
Amortisation of intangible assets arising on acquisitions (pence) 5.6 -
Impairment of intangible assets (pence) - 53.4
Exchange losses included in finance costs (pence) - 0.8
Tax effect of the above adjustments (pence) (2.7) (2.0)
Adjusted diluted earnings per share (pence) 21.0 9.2
8. Intangible assets
Goodwill Magazine and website Other Total
£m £m £m £m
Cost
At 1 October 2015 287.5 12.4 14.8 314.7
Additions through business combinations 1.5 1.1 - 2.6
Other additions - - 1.7 1.7
Disposals - (0.2) (0.2) (0.4)
Exchange adjustments 4.9 1.0 1.2 7.1
At 30 September 2016 293.9 14.3 17.5 325.7
Additions through business combinations 36.6 25.5 0.1 62.2
Other additions - - 1.5 1.5
Adjustments to fair value on prior year acquisitions (0.2) - - (0.2)
Disposals - (1.4) - (1.4)
Exchange adjustments (1.1) (0.2) (0.3) (1.6)
At 30 September 2017 329.2 38.2 18.8 386.2
Accumulated amortisation
At 1 October 2015 (246.6) (12.4) (11.9) (270.9)
Charge for the year - - (2.0) (2.0)
Impairment (13.0) - - (13.0)
Disposals - 0.2 0.2 0.4
Exchange adjustments (4.8) (1.0) (1.2) (7.0)
At 30 September 2016 (264.4) (13.2) (14.9) (292.5)
Charge for the year - (2.3) (1.8) (4.1)
Disposals - 1.1 - 1.1
Exchange adjustments 1.0 0.2 0.4 1.6
At 30 September 2017 (263.4) (14.2) (16.3) (293.9)
Net book value at 30 September 2017 65.8 24.0 2.5 92.3
Net book value at 30 September 2016 29.5 1.1 2.6 33.2
Net book value at 1 October 2015 40.9 - 2.9 43.8
Impairment assessment for goodwill
The net book value of goodwill at both 30 September 2017 and 30 September 2016
relates to the UK.
At 30 September 2017 the Group performed its annual impairment assessment of
goodwill and concluded that no impairment of goodwill was required.
Impairment
At 30 September 2016 an impairment charge of £13.0m was taken against the
carrying value of the UK business. This reflected a shift in the underlying
profitability and cash flows of the UK and the continued decline of print.
9. Cash and cash equivalents
2017 2016
£m £m
Cash at bank and in hand 10.1 2.9
Cash and cash equivalents 10.1 2.9
10. Financial liabilities - loans and borrowings
Non-current liabilities
Interest rate at 30 September Interest rate at 30 September 2017 2016
2017 2016 £m £m
Sterling term loan 2.8% - 10.0 -
Sterling revolving loan 2.8% - 6.9 -
Obligations under finance leases - 9.6% - 0.1
Total 16.9 0.1
Current liabilities
Interest rate at 30 September Interest rate at 30 September 2017 2016
2017 2016 £m £m
Sterling term loan 2.8% - 1.8 -
Sterling revolving loan 2.8% 2.5% 1.3 2.3
3.1 2.3
Obligations under finance leases 0.0% - 0.1 -
Total 3.2 2.3
The interest-bearing loans and borrowings are repayable as follows:
2017 2016
£m £m
Within one year 3.2 2.3
Between one and two years 3.3 0.1
Between two and five years 13.6 -
Total 20.1 2.4
On 21 October 2016, following the acquisition of Imagine, the Group negotiated
a new bank facility with HSBC Bank plc to replace its previous facility with
Santander plc. This new facility was subsequently amended and restated in
August 2017 following the Home Interest acquisition. The total multicurrency
revolving and overdraft facility available to the Group at 30 September 2017
amounted to £25.4m, comprising a £12.0m term loan, a total of £11.4m revolving
credit facilities and a £2.0m uncommitted overdraft facility. The new
facilities run to 23 June 2021. Repayments required in respect of the
facilities are as follows:
Repayment date Repayment amount
30 September 2017* £600,000
30 September 2018 £2,600,000
30 September 2019 £3,400,000
30 September 2020 £4,850,000
23 June 2021 £14,550,000
*£0.6m was due to be repaid on 30 September 2017 however this was not taken by
the bank until October 2017.
The Group has granted security to the bank and the availability of the
facility is subject to certain covenants.
Total fees relating to the new facility amounted to £0.7m and these are being
amortised over the term of the facility. The bank borrowings and interest are
guaranteed by Future plc, Future Holdings 2002 Limited, Future Publishing
Limited, Future US, Inc, Future Publishing (Overseas) Limited and Next
Commerce Pty Ltd.
Interest payable under the current credit facility is calculated as the cost
of one-month LIBOR (currently approximately 0.5%) plus an interest margin of
between 2.0% and 2.5%, dependent on the level of Bank EBITDA.
The Group has covenants in respect of net debt/bank EBITDA and bank
EBITDA/interest, both of which were met at 30 September 2017. For covenant
purposes, net debt is exclusive of non-current tax and other payables and Bank
EBITDA is not materially different to statutory EBITDA.
11. Provisions
Property
£m
At 1 October 2016 1.5
On acquisition 0.1
Charged in the year 1.4
Released in the year (0.1)
Utilised in the year (0.3)
At 30 September 2017 2.6
The provision for property relates to dilapidations and obligations under
short leasehold agreements on vacant property. The vacant property provision
is expected to be utilised over the next ten years.
12. Related party transactions
The Group had no material transactions with related parties in 2017 or 2016
which might reasonably be expected to influence decisions made by users of
these financial statements.
13. Acquisitions
Acquisition of Miura (Holdings) Limited
On 21 October 2016, Future plc acquired 100% of the share capital of Miura
(Holdings) Limited, the holding company and ultimate parent company of Imagine
Publishing Limited, for total consideration of 11,971,189 new shares in the
Company which, at the closing price of 129p on 21 October 2016, represents
consideration of £15.4m.
The impact of the acquisition on the consolidated balance sheet was:
Provisionalfair value£m
Intangible assets:
- Publishing rights 6.8
- Brands 2.0
- Other intangibles 0.1
Tangible assets 0.1
Inventories 0.3
Trade and other receivables 2.7
Cash and cash equivalents 1.7
Trade and other payables (6.3)
Corporation tax (0.1)
Deferred tax (1.5)
Loans and borrowings (6.9)
Net liabilities acquired (1.1)
Goodwill 16.6
Consideration:
Equity shares 15.4
Cash 0.1
Total consideration 15.5
The goodwill is attributable to the synergies expected to arise in integrating
the magazines into the wider Future group and through combining production and
back office functions. The publishing rights and brands will be amortised over
periods of five and ten years respectively.
Acquisition of Ascent Publishing Limited and Centaur Consumer Exhibitions
Limited ("Home Interest")
On 1 August 2017, Future plc acquired 100% of the share capital of both Ascent
Publishing Limited and Centaur Consumer Exhibitions Limited for total
consideration of £32.8m.
The impact of the acquisition on the consolidated balance sheet was:
Provisionalfair value£m
Intangible assets:
- Publishing rights 3.9
- Brands 4.7
- Customer lists 6.9
Inventories 0.1
Trade and other receivables 4.6
Trade and other payables (4.5)
Deferred tax (2.6)
Provisions (0.1)
Net assets acquired 13.0
Goodwill 19.8
Consideration:
Cash 32.8
Total consideration 32.8
The goodwill is attributable to the synergies expected to arise in integrating
the magazines and events into the wider Future group. The publishing rights,
brands and customer lists will be amortised over periods of five, ten and
eight years respectively.
Acquisition of Team Rock
On 6 January 2017, Future Publishing Limited acquired certain assets from Team
Rock Limited for cash consideration of £0.8m.
The impact of the acquisition on the consolidated balance sheet was:
Provisionalfair value£m
Intangible assets:
- Publishing rights 1.2
Trade and other payables (0.4)
Deferred tax (0.2)
Net assets acquired 0.6
Goodwill 0.2
Consideration:
Cash 0.8
Total consideration 0.8
The goodwill is attributable to the synergies expected to arise in integrating
the magazines and websites into the wider Future group. The publishing rights
will be amortised over a period of five years.
Acquisition of Next Commerce Pty Ltd
On 15 August 2016, Future Publishing (Overseas) Limited acquired 100% of the
share capital of Next Commerce Pty Ltd. The consideration payable included
deferred consideration of up to £0.6m, in the form of shares in Future plc,
payable by 24 January 2017 based on revenue performance. At 30 September 2016
the provisional fair value of deferred consideration was measured at £0.6m. In
January 2017, Future Publishing (Overseas) Limited agreed with the sellers to
pay deferred consideration of £0.7m in cash instead of shares in Future plc.
As this change to deferred consideration occurred within one year of the date
of acquisition, the provisional fair value of goodwill recognised at 30
September 2016 has been adjusted, as detailed below:
Provisional fair value at 30 September 2016£m Fair value adjustment£m Fair value at 30 September 2017£m
Goodwill 0.6 0.1 0.7
Acquisition of Blaze Publishing
On 12 May 2016, Future Publishing Limited acquired certain assets from Blaze
Publishing Limited for cash consideration of £0.4m. The consideration payable
included deferred consideration of up to £0.3m payable by 12 May 2017 based on
gross contribution targets. At 30 September 2016 the provisional fair value of
deferred consideration was measured at £0.3m. During the year ended 30
September 2017 it was determined that no deferred consideration was payable.
As a result, the provisional fair value of goodwill recognised at 30 September
2016 has been adjusted, as detailed below:
Provisional fair value at 30 September 2016£m Fair value adjustment£m Fair value at 30 September 2017£m
Goodwill 0.6 (0.3) 0.3
Acquisition of Noble House Media Limited
On 5 April 2016, Future Publishing Limited acquired 100% of the share capital
of Noble House Media Limited for cash consideration of £0.1m.
This information is provided by RNS
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