REG - ITV PLC - Half Yearly Report <Origin Href="QuoteRef">ITV.L</Origin> - Part 2
06/09/2014 22:34
- Part 2: For the preceding part double click ID:nRSd6632Na
EBITA will
be about £6-8m.
Our UK Production revenues were up 1%, with internal revenues down 4%. The
broadcast of the FIFA World Cup on ITV has impacted the level of drama and
entertainment spend from ITV Studios. Off-ITV revenues in the UK grew 27% in
the first half. UK revenue was driven by programmes including Mr Selfridge,
Amazing Greys, Ant & Dec's Saturday Night Takeaway, Job Lot and The Chase for
ITV; Shetland, The Graham Norton Show, The Guess List and Rev for the BBC; and
Come Dine With Me, Youngers and Friday Night Dinner for Channel 4.
International Production revenues were up 9%, driven by the acquisitions we
have made. Following the acquisition of Leftfield Entertainment, which did not
have a material impact on the first half results, we are now the largest
independent producer of unscripted programmes in the US with a portfolio of
programmes which include Duck Dynasty, Hell's Kitchen, Cake Boss and Kitchen
Nightmares. We are also beginning to build a global scripted business, which
will benefit our growth in future years. Three US dramas have already been
commissioned, including Aquarius and Texas Rangers for delivery in 2015, as
well as a number of UK dramas with international appeal, including Jekyll and
Hyde and Jambusters, as well as the launch of Thunderbirds Are Go. As a result
of this £45-50m additional investment in scripted content, where we fund
productions in advance of delivery, profit to cash conversion for the full
year is expected to be down at 80-85%.
From our other international production bases we have seen good growth from
Germany and France. Our production bases in Australia, Germany, France and the
Nordics have had success with programmes such as Ich Bin Ein Star, The Chase
and Hell's Kitchen in Germany, Keeping the Nation Alive and Night Patrol in
Norway, Four Weddings and Party Wars in France and Come Dine with Me in Sweden
and Australia.
The good growth in our UK and international production businesses is starting
to feed our Global Distribution business with programmes such as Mr Selfridge,
Lewis and Hell's Kitchen US selling to over 150 countries. In addition, 11 of
our formats are now produced in three or more countries including The Chase,
Keeping the Nation Alive, Surprise Surprise, Saturday Night Takeaway and
Hell's Kitchen. In the first half Global Entertainment revenue was down 12%,
impacted by reduced drama, including Marple and Poirot, and currency
movements. In 2015 we expect to see good growth in our distribution revenues
from our strong creative pipeline and our investment in scripted content both
from ITV Studios and third parties.
Looking forward we expect good growth in ITV Studios in 2014, driven by our
acquisitions. In 2015 we will see further growth from these acquisitions and
we will return to good organic growth helped by our investment in global
scripted content.
Acquisitions
In 2014 we acquired three content businesses. These have been made against
strict strategic and financial criteria. Financially we look at ownership of
intellectual property, return on capital employed and discounted cash flows.
Strategically we look at the talent, creative pipeline and type of content to
ensure it has the potential to return and travel. We have structured the
deals, with earnouts or put and call options, to base a significant part of
the consideration, which is capped, on future performance and therefore align
incentives and lock in creative talent. We closely monitor the forecast
performance for each acquisition and where there has been a change in
expectations, we adjust our view of potential future commitments through net
financing costs.
To date our portfolio of acquisitions has performed as expected.
In February we acquired 100% of United Production, a Danish producer of
entertainment and reality programmes and a 51% controlling interest in DiGa
Vision, a US independent producer of reality and scripted programming. There
is a put and call option to buy the remainder of DiGa over three to six years,
with the total amount payable linked to the performance of the company over
that period.
In May we made the significant acquisition of 80% of Leftfield Entertainment,
a fast growing and high margin US production company. We made an initial cash
payment of $360m for 80% of Leftfield, with further potential payments
dependent upon Leftfield's continued delivery of significant profit growth.
There are put and call options in place to buy the remaining 20% of Leftfield
over three to five years. The total maximum consideration for 100% of
Leftfield is $800m, including the initial payment. This would only be paid if
Leftfield delivers average EBITDA of at least $130m per annum between years
three and five.
The acquisition of Leftfield makes ITV Studios the largest independent
unscripted producer in the US and represents a major step forward in ITV's
strategy of building a strong international content business. These
acquisitions are important additions to the Group's growing portfolio of
production companies. They follow ITV's acquisition in the last 18 months of
Gurney Productions, High Noon Entertainment and Thinkfactory Media in the US
as well as UK producers The Garden and Big Talk.
The total initial payment for the acquisitions made in the first half of 2014
is £220m with a further total expected consideration payable of £53m
(undiscounted) which is based upon our current view of their future
performance.
The total maximum consideration across all acquisitions made from 2012 to 2014
is £808m (undiscounted contingent consideration of £480m and initial
consideration of £328m) and is only payable on delivery of continued strong
growth. The total consideration we expect to pay (including initial
consideration) is £445m based upon our current forecasts.
2014
United Denmark Factual and entertainment 1 4 5 2018
DiGa Vision US Reality and scripted 5 9 30 2020
Leftfield US Reality 214 260 479 2019
Total for 2014 220 273 514
Total for 2013 66 103 196 2017-2021
Total for 2012 42 69 98 2016-2018
Total 328 445 808
98
2016-2018
Total
328
445
808
* Undiscounted and including the initial cash consideration. All payments are
performance related.
Net financing costs
Net adjusted financing costs of £4m are £10m lower than last year as a result
of the benefit of redeeming the convertible in 2013 and repurchasing the
remaining tranche of the 2019 bilateral loan in January 2014.
The £30m of losses on buybacks relate to the exceptional loss on the £62m
(nominal) of 2019 debt we repurchased in January, saving £44m of future
adjusted financing costs.
Six months to 30 June 2014£m 2013£m
Financing costs directly attributable to loans and bonds (4) (9)
Cash-related net financing income/(costs) 1 (1)
Cash-related financing costs (3) (10)
Amortisation of bonds (1) (4)
Adjusted financing costs (4) (14)
Mark-to-market on swaps and foreign exchange (4) (6)
Imputed pension interest (9) (10)
Losses on buybacks (30) (44)
Other net financing income/(costs) 9 (1)
Net financing costs (38) (75)
Tax
The effective tax rate on adjusted profit before tax of 21% is largely in line
with the standard tax rate of 21.5% (2013: the adjusted tax rate of 23% was
largely in line with the standard tax rate of 23.25%). The total reported tax
charge is £53m (2013: £44m). Cash tax paid of £35m (2013: £32m) arises as a
result of making payments for taxable profits partially offset by losses and
the tax treatment of allowable pension contributions.
The effective tax rate is lower than previously guided following the tax
credits recognised on goodwill arising from US acquired businesses.
Profit before tax 250 179
Exceptional items (net) 4 5
Amortisation and impairment of intangible assets* 24 25
Adjustments to net financing costs 34 61
Adjusted profit before tax 312 270
Adjusted profit before tax
312
270
* In respect of intangible assets arising from business combinations.
Six months to 30 June 2014£m 2013£m
Tax charge (53) (44)
Net (charge)/credit for exceptional items (1) 1
Charge in respect of amortisation and impairment of intangible assets* (5) (6)
Charge in respect of adjustments to net financing costs (7) (14)
Other tax adjustments 2 -
Adjusted tax charge (64) (63)
Effective tax rate on adjusted profits 21% 23%
* In respect of intangible assets arising from business combinations.
Dividend
In reinstating the dividend in 2011 the Board committed to a progressive
dividend that balanced the need to invest in the business with increasing
returns to shareholders. As ITV enters the next phase of the plan the Board
believes it is just as important that we maintain capital discipline and the
flexibility to invest at the same time as delivering a more normal payout
ratio for shareholders. To that end the Board expects the ordinary dividend to
have a normal level of payout with cover of between 2.0 and 2.5 times adjusted
earnings per share and for this to be achieved over the next three years.
In this intervening period, and, reflecting the Board's confidence in the
ongoing growth and cash generation of the business, the Board is committed to
the full year ordinary dividend growing at least 20% per annum over the next
three years, starting this year. In line with this new policy and three-year
commitment, the Board has declared an interim dividend of 1.4p (2013: 1.1p),
with the interim dividend expected to be roughly a third of the full year
dividend.
Earnings per share
Adjusted earnings per share is 6.1p (2013: 5.3p). Earnings per share is 4.9p
(2013: 3.4p).
The main differences between reported and adjusted earnings per share are
exceptional items which include acquisition related costs (professional fees,
primarily due diligence, and contingent payments), impairment of intangible
assets, amortisation of intangible assets acquired through business
combinations, net financing cost adjustments and other tax adjustments.
The adjustments shown below remove the impact of those items that in
management's view do not show the performance of the business in a consistent
manner and do not reflect how the business is managed and measured on a
day-to-day basis.
Six months to 30 June 2014 Reported£m Adjustments£m Adjusted£m
EBITA before exceptional items 322 - 322
Exceptional items (operating) (5) 5 -
Amortisation and impairment of intangible assets (30) 24 (6)
Net financing costs (38) 34 (4)
Gain on sale and impairment of subsidiaries and investments (non-operating exceptional items) 1 (1) -
Profit before tax 250 62 312
Tax (53) (11) (64)
Profit after tax 197 51 248
Non-controlling interests (2) - (2)
Earnings 195 51 246
Shares (million), weighted average 4,003 4,003
Earnings per share (pence) 4.9 6.1
Amortisation and impairment of intangible assets acquired through business
combinations is not included within adjusted earnings. Amortisation of
software licences and development is included as management considers these
assets to be core to supporting the day-to-day operation of the business.
Operational exceptional items are mainly acquisition related expenses,
including professional fees, primarily due diligence, and performance based
employment linked contingent payments. There are no restructuring costs in the
first half of 2014.
The weighted average number of shares increased by over 100m or 3% to 4,003m
over the comparative period, largely due to the redemption of the convertible
bond in 2013 where 94m shares were issued.
Cash flow, working capital management and free cash flow
Cash flow and working capital management
Six months to 30 June 2014£m 2013£m
EBITA before exceptional items ('profit') 322 291
(Increase)/decrease in programme rights and other inventory distribution rights 64 25
(Increase)/decrease in receivables 2 19
Increase/(decrease) in payables (71) (47)
Working capital movement (5) (3)
Depreciation 13 12
Share-based compensation and pension service costs 8 13
Cash flow generated from operations before exceptional items 338 313
Acquisition of property, plant and equipment and intangible assets* (19) (21)
Adjusted cash flow 319 292
'Profit to cash' ratio six months to 30 June 99% 100%
'Profit to cash' ratio 12 months rolling 97% 96%
* 2013 numbers exclude the purchase of the head office building.
Our focus on cash remains a priority and we generated £319m of cash from EBITA
before exceptional items after capital expenditure. This performance is
largely due to the continued tight management of working capital. Our six
month profit to cash conversion ratio was 99% and our 12 month rolling profit
to cash conversion ratio was 97%. Profit to cash conversion for the full year
is expected to be 80-85%, as a result of the increased investment in scripted
content.
Free cash flow
Six months to 30 June 2014£m 2013£m
Adjusted cash flow 319 292
Net interest paid (10) (16)
Cash tax (35) (32)
Pension funding (91) (80)
Free cash flow 183 164
Except where disclosed, management views the acquisition of operating
property, plant and equipment and intangibles as necessary ongoing investment
in the business.
Free cash flow reflects our underlying cash generation and our strong free
cash flow generation gives us flexibility to invest in the business and reward
our shareholders. This is a key strength of ITV today.
Free cash flow before dividends, acquisitions and debt repayments remains
strong and is up over £19m (12%) year on year, in line with the growth in
profits.
Net debt, liquidity risk and funding
Net debt at 30 June 2014 was £201m, compared to net cash of £164m at the end
of 2013 and net debt of £52m at
30 June 2013.
Adjusted net debt
Net (debt)/cash (201) 164
Expected contingent payments on acquisitions (117) (97)
Pension deficit (IAS 19R) (362) (445)
Operating leases (398) (414)
Adjusted net debt (1,078) (792)
Adjusted net debt to EBITDA 1.6 1.2
Adjusted net debt to EBITDA
1.6
1.2
Net debt/net cash is one measure of the strength of our financial position.
However, we believe it is appropriate to look at all our financial commitments
and have developed an adjusted net debt measure, similar to how credit rating
agencies could look at our balance sheet.
As can be seen from the table, adjusted net debt includes the undiscounted
estimate of the contingent payments in relation to all the acquisitions we
have made since 2012, the pension deficit on an IAS 19 basis, and our
operating lease commitments (undiscounted) which are mainly for broadcast
transmission contracts and property.
The ratio of adjusted net debt to EBITDA before exceptional items is 1.6x.
This is higher than previous years and reflects the the acquisition of
Leftfield.
Debt structure and liquidity
In 2014 we have again bought back debt to further improve our balance sheet
efficiency. On 16 January 2014 we agreed to repay the remaining £62m (nominal)
of the 2019 bilateral loan. This repayment will save around £44m in adjusted
financing costs over the remainder of the loan - around £8m on an annualised
basis, and has led to an exceptional loss of £30m for 2014. The repayment was
satisfied by a one-off cash payment of £95m. Given that we have bought back
more than £1.1bn of debt over the last few years we do not expect to be able
to make any further material debt buybacks.
We have further improved our financial flexibility with a number of new
financing facilities. In April we obtained a committed £525m Revolving Credit
Facility provided by a number of core relationship banks. The facility has a
five year maturity and contains leverage and interest cover financial
covenants as is normal for a facility of this nature. This replaces the
previous £250m facility. At 30 June £210m of this facility had been drawn
down.
In April we also entered into a new £175m bilateral financing facility. This
facility, which is free of financial covenants, is available until 30 June
2021.
We have also agreed a new £75m invoice discounting facility which has a three
year maturity to 30 April 2017 and is also free of financial covenants. This
replaces the previous £125m facility.
Financing
We are financed using debt instruments with a range of maturities. The 2014
Eurobond matured in June and we bought back the 2019 bilateral loan in
January. The next bond repayment is in October 2015. Borrowings at 30 June
2014 are repayable as follows:
Amount repayable £m Repayable in
£525 million Revolving Credit Facility 210 2014*
£78 million Eurobond 78 Oct 2015
£161 million Eurobond 161 Jan 2017
Finance leases 20 Various
Total debt repayable on maturity 469
* Drawings under the facility may be for periods of between one and six months
and each drawdown may be rolled or repayed at maturity, at our discretion.
Ratings
We are rated investment grade by two ratings agencies. The factors that are
taken into account in assessing our credit rating include our degree of
operational gearing, exposure to the economic cycle, and business and
geographical diversity. Continuing to execute our strategy will strengthen our
position against all these metrics.
Pensions
IAS 19
The aggregate IAS 19 deficit on defined benefit schemes at 30 June 2014 was
£362 million (31 December 2013:
£445 million). An increase in the liabilities has been offset by asset
outperformance, a slight lowering of market expectations for long-term
inflation and £91m of pension funding contributions paid in March and April.
Actuarial valuations
The Trustees of the Scheme are currently undertaking full actuarial valuations
of all three sections as at 1 January 2014 with the results expected in 2015.
The previous valuation was undertaken as at 1 January 2011 and on the bases
adopted by the Trustee, the combined deficits amounted to £587m.
Deficit funding contributions
As a result of a funding agreement with the Trustee the Group has agreed that
the level of contributions to the Section A of the ITV Pension Scheme will be
a combination of fixed and performance related payments.
The fixed payments to Section A of the scheme will be as follows:
2014: £40 million
2015 to 2019: £48 million rising by £0.5 million per annum to £50 million in 2019
2020 to 2025: £50 million per annum but reduced by performance criteria set out below.
The performance related payments to the main section of the scheme will be as
follows:
During the period to 2020 if our reported EBITA before exceptional items
exceed £300 million, the Group will contribute an amount representing 10% of
EBITA before exceptional items over the threshold level, subject to an annual
cap for total contributions which averages to £70 million per annum over the
period 2015-2020. If the additional profit-related contributions are paid at
the expected rate then the £50 million per annum fixed contributions scheduled
to be paid between 2021 and 2025 (inclusive) would not be required.
In addition to the agreed deficit funding contributions above, the SDN pension
funding partnership (PFP) established in 2010 provides an annual distribution
of £11 million to this section of the Scheme to 2022.
As a result of the London Television Centre (LTC) pension funding partnership
established in March 2014, the Scheme received an initial payment of £2m (paid
on 31 March 2014) and will receive a further 24 annual distributions, starting
in April 2015 until 2038, which will increase at the rate of 5% per annum.
Section B and C
The Group has agreed with the Trustee to pay deficit funding contributions of
£5.5 million per annum in order to eliminate the deficits in these sections by
31 March 2021.
During the first half of 2014 we have paid the entire pension deficit
contribution to the Scheme which totals £91 million including annual
distributions from the SDN PFP (£11m) and the LTC PFP (£2m).
Ian Griffiths
Finance Director
Risks & Uncertainties
Risks and Uncertainties
ITV continues to apply the risk management framework outlined in the 2013
Annual Report and Accounts (pages 52-55). When preparing the Interim results
the three core risk groups, High Impact Low Likelihood (HILL) risks, Strategic
risks and Process level risks, were reviewed to ensure they remained
appropriate and adequate. No significant new risks were identified but some of
the strategic risks have been clarified with revised descriptions as set out
below.
High Impact, Low Likelihood Risks (HILL)
HILL risks are of low inherent likelihood but there would be major consequence
were the risk to materialise. They are categorised according to risk theme.
Risk Theme HILL Risks Mitigating Factors
Financial ITV loses its credit status or lines of funding with existing lenders or there is a collapse of a major bank impacting financial arrangements/availability of credit. · The business is cash generative and working capital management remains a key focus.· ITV has £250m of undrawn, financial covenant free facilities in addition to
a £525m revolving credit facility (RCF) with a number of core relationship banks. As at 30 June 2014 ITV had drawings of £210m under the RCF.· The low gross debt
levels that ITV now has would enable the Company to obtain debt from the marketplace if needed.· We are rated investment grade by two ratings agencies.
There is a major collapse in investment values leading to a material impact on the pension scheme deficit. · There is regular communication between ITV and the pension trustees.· The pension scheme's assets are invested in a diversified portfolio, with a significant
amount of the fund held in bonds.· ITV has worked with the pension trustees to limit the potential deficit by a series of asset backed arrangements and taken risk out
of the scheme with a longevity swap.
Operational A significant event removes a number of the key management team from the business on a long-term or permanent basis. · There is a business resilience plan in place which includes succession plans or nominated replacements for all key positions within the Company.
Reputation An event with public interest that causes significant reputational and brand damage. · There is a Company-wide Code of Conduct in place which employees should follow.
There is a major health and safety incident that results in a significant loss of human life. · ITV has a central Health & Safety team and Health & Safety policies and procedures are in place, with appropriate training for employees where required.·
Regular inspections are undertaken at all sites, which are run alongside a programme of Health & Safety audits.
A major incident results in ITV being unable to continue with scheduled broadcasting for a sustained period. · A risk register of broadcast operations including key outsourced functions is in place and reviewed on a regular basis.· An end-to-end review of the broadcast
cycle is regularly undertaken.· An incident management process has been agreed and disaster recovery plans are in place.
There is a significant or unexpected change in regulation or legislation. · ITV regularly communicates with legislative groups, legal panels and Ofcom to monitor potential policy and regulatory developments.
1 Maximise audience and revenue share from free-to-air broadcast and VOD
business
2 Grow international content business
3 Build a global pay and distribution business
Strategic Risks
Strategic risks are those that would impact the successful execution of the
strategy. They have been re-mapped to the renewed strategic priorities of the
strategy and categorised by risk theme.
Risk Theme Strategic Risks Mitigating Factors Strategic Priorities
The Market There is a major decline in advertising revenues and ITV does not build sufficient non-NAR revenue streams to offset the financial impact of this decline. · Growing non-advertising revenues, in areas such as ITV Studios and Online, Pay & Interactive, remains a key part of the 1 2 3
strategy.· ITV continues to focus on cash and costs, ensuring the Company has an adequate financial liquidity and balance
sheet flexibility.
The television market moves significantly towards pay television as a preferred model, negatively impacting ITV's free-to-air revenues. · ITV continues to support free platforms, including YouView, to keep free-to-air strong.· ITV looks at and evaluates the opportunities for expanding its existing pay services and other pay offerings.· ITV explores other platforms to understand viewing habits and what people are prepared to pay for. 1 3
A faster than expected shift to Video on Demand (VOD) or other new technologies causes a sustained loss of advertising revenue. · The business continues to develop ITV Player VOD services, maximise the distribution of ITV Player and grow its VOD advertising business.· ITV monitors the market for new technology and where appropriate explores how ITV can participate. 1 2 3
People ITV fails to evolve its organisational structure and culture to ensure that it is capable of delivering continued growth from the new businesses or revenue streams and fails to attract, develop and retain key creative, commercial and management talent with the skills required for the ongoing business. · ITV constantly reassesses the business to create a fit-for-purpose organisation.· Strategic focus on working across 1 2 3
the business to embed and strengthen the culture of 'One ITV' way of working.· ITV invests in training and development for
all key colleagues in the business.· Succession plans are in place for all key positions within the Company.
Technology / Broadcast A significant high profile incident or series of events such as transmission incidents or a major regulatory breach causes significant reputational damage. · ITV has ongoing modernisation projects to ensure transmission and distribution technologies are fit-for-purpose.· 1 2 3
There are disaster recovery and incident management plans in place in high risk areas of the business to help deliver a rapid
and flexible response.· ITV proactively manages its broadcast chain partners and suppliers to ensure the risk of incidents
and regulatory breach is minimised.
Organisation, Structure and Processes There is significant loss of programme rights or ITV fails to identify and obtain the optimal rights packages. · ITV is focused on both protecting and exploiting existing rights and ensuring that future rights generated accrue 1 2 3
to ITV.· ITV has a detailed model to evaluate the value of third party rights to ensure it only buys rights that make
economic sense.
ITV fails to create and own a sufficient number of hit programmes/formats. · ITV maximises opportunities for ITV Studios to create successful shows by investing in the creative pipeline and focusing 1 2 3
on programmes and genres that can return and travel internationally, i.e. drama, entertainment and factual entertainment, as
evidenced by our increased investment in scripted content.· ITV is focused on hiring and retaining the right key creative
talent.
ITV fails to properly resource, financially, creatively and operationally, the new growth businesses, in particular online and international content. · Talent management plans have been developed and reviewed to ensure adequate succession planning 2 3
across ITV. · ITV continues to embed and strengthen the culture of 'One ITV' way of working.· Lessons from recent
investments are captured through post acquisition reviews.
ITV loses a significant volume of personal or sensitive data. · A management board sponsored Information Security Steering Group is in place to ensure the appropriate management of 1 2 3
information security.· Mandatory online training modules, awareness campaigns and simplified information security policies
for employees. · Monitoring of information sharing outside of ITV.
Organisation, Structure and Processes ITV remains heavily reliant on legacy systems, which could potentially restrict the ability to grow the business. These systems and processes may not be appropriate for non-advertising revenues or international growth. · System requirements are kept under review with business growth and system modernisation projects implemented as 1 2 3
appropriate.· A replacement plan is in place for the legacy systems which remains under constant review and development to
ensure technology systems meet the needs of the business.
Technology ITV fails to ensure appropriate business continuity planning and resilience within its core systems, processes, platforms and technology infrastructure. · Disaster recovery plans are in place with tests conducted annually on business critical systems. · Internal Audit 1 2 3
review the disaster recovery plans and the test results as appropriate.
There is a sustained cyber/viral attack causing prolonged system denial or major reputational damage, for example the ability to broadcast our channels or the availability of ITV Player. · We continue to improve our ability to monitor, detect and respond to cyber threats internally and through partnerships 1 3
with specialist security organisations.· Mandatory online training modules, awareness campaigns and simplified information
security policies for employees.· There are disaster recovery and incident management plans in place for high risk areas of
the business to help deliver a rapid and flexible response.· A management board sponsored Information Security Steering
Group is in place to ensure the appropriate management of information security.
Condensed Consolidated Interim Financial Statements
In this section . . .
In preparing these condensed consolidated interim financial statements we
continue to adopt the same style as the 2013 year end accounts. Our objective
is to make ITV's financial statements less complex, more relevant to
shareholders and provide readers with a clearer understanding of what drives
financial performance of the Group. We have grouped notes under five key
headings: 'Basis of Preparation', 'Results for the Period', 'Operating Assets
and Liabilities', 'Capital Structure and Financing Costs' and 'Other Notes'.
The aim of the text in boxes is to provide commentary on each section, or
note, in plain English.
Condensed Consolidated Income Statement
For the six month period to 30 June Note 2014£m 2013£m
Revenue 2.1 1,225 1,144
Operating costs (938) (889)
Operating profit 287 255
Presented as:
Earnings before interest, tax, amortisation (EBITA) and exceptional items 2.1 322 291
Operating exceptional items (5) (5)
Amortisation of intangible assets (30) (31)
Operating profit 287 255
Financing income 78 62
Financing costs (116) (137)
Net financing costs (38) (75)
Share of losses of joint ventures and associated undertakings - (1)
Gain on sale and impairment of subsidiaries and investments (exceptional items) 1 -
Profit before tax 250 179
Taxation (53) (44)
Profit for the period 197 135
Profit attributable to:
Owners of the Company 195 134
Non-controlling interests 2 1
Profit for the period 197 135
Earnings per share
Basic earnings per share 2.2 4.9p 3.4p
Diluted earnings per share 2.2 4.8p 3.3p
Condensed Consolidated Statement of Comprehensive Income
For the six month period to 30 June 2014£m 2013(restated)(a)£m
Profit for the period 197 135
Other comprehensive income/(cost):
Items that are or may be reclassified to profit or loss
Exchange differences on translation of foreign operations (7) 1
Items that will never be reclassified to profit or loss
Remeasurement gains on defined benefit pension schemes - 114
Income tax charge on items that will never be reclassified (4) (22)
Other comprehensive (cost)/income for the period, net of income tax (11) 93
Total comprehensive income for the period 186 228
Total comprehensive income attributable to:
Owners of the Company 184 227
Non-controlling interests 2 1
Total comprehensive income for the period 186 228
See Basis of Preparation section for a discussion of the prior period
restatement.
Condensed Consolidated Statement of Financial Position
Note 30 June2014£m 31 December2013£m 30 June2013(restated)£m
Non-current assets
Property, plant and equipment 253 259 240
Intangible assets 3.1 1,173 954 990
Investments in joint ventures and associated undertakings 6 4 2
Available for sale financial assets - - 4
Derivative financial instruments 4.3 29 41 52
Distribution rights 11 10 12
Net deferred tax asset 34 52 45
1,506 1,320 1,345
Current assets
Programme rights and other inventory 266 322 229
Trade and other receivables due within one year 406 388 370
Trade receivables due after more than one year 12 14 12
Trade and other receivables 418 402 382
Derivative financial instruments 4.3 -- 32 39
Cash and cash equivalents 4.1 268 518 401
Assets held for sale -- - 4
952 1,274 1,055
Current liabilities
Borrowings 4.1 (218) (62) (63)
Derivative financial instruments
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