REG - Trinity Mirror PLC - Annual Results for 52 weeks ended 27 December 2015 <Origin Href="QuoteRef">TNI.L</Origin> - Part 3
29/02/2016 07:11
- Part 3: For the preceding part double click ID:nRSc4146Qb
assumptions - future life expectancies from age 65 (years)
Male currently aged 65 22.0 22.0
Female currently aged 65 24.0 23.9
Male currently aged 55 22.9 22.8
Female currently aged 55 24.9 24.8
13. Retirement benefit schemes (continued)
Defined benefit pension schemes (continued)
The estimated impact on the IAS 19 liabilities and on the IAS 19 deficit at
the reporting date, due to a reasonably possible change in key assumptions
over the next year, are set out in the table below:
Effect onliabilities Effect ondeficit
£m £m
Discount rate +/- 0.5% pa -135/+148 -121/+133
Retail price inflation rate +/- 0.5% pa +25/-25 +18/-18
Consumer price inflation rate +/- 0.5% pa +43/-41 +43/-41
Life expectancy at age 65 +/- 1 year +71/-69 +64/-62
The effect on the deficit is usually lower than the effect on the liabilities
due to the matching impact on the value of the insurance contracts held in
respect of some of the liabilities. Each assumption variation represents a
reasonably possible change in the assumption over the next year but might not
represent the actual effect because assumption changes are unlikely to happen
in isolation.
The estimated impact of the assumption variations make no allowance for
changes in the values of invested assets that would arise if market conditions
were to change in order to give rise to the assumption variation. If allowance
were made, the estimated impact would likely be lower as the values of
invested assets would normally change in the same directions as the liability
values.
The amount included in the consolidated income statement, consolidated
statement of comprehensive income and consolidated balance sheet arising from
the Group's obligations in respect of its defined benefit pension schemes is
as follows:
Consolidated income statement 2015£m 2014£m
Pension scheme administrative expenses (2.1) (3.2)
Pension scheme finance charge (10.9) (11.2)
Defined benefit cost recognised in income statement (13.0) (14.4)
(14.4)
Consolidated statement of comprehensive income 2015£m 2014£m
Actuarial gain/(loss) due to liability experience 23.9 (7.9)
Actuarial loss due to liability assumption changes (16.0) (90.6)
Total liability actuarial gain/(loss) 7.9 (98.5)
Returns on scheme assets (less)/greater than discount rate (18.9) 45.7
Total loss recognised in statement of comprehensive income (11.0) (52.8)
Consolidated balance sheet 2015£m 2014£m
Present value of uninsured scheme liabilities (1,481.4) (1,492.4)
Present value of insured scheme liabilities (352.2) (370.8)
Total present value of scheme liabilities (1,833.6) (1,863.2)
Invested and cash assets at fair value 1,176.2 1,191.2
Value of insurance contracts 352.2 370.8
Total value of scheme assets 1,528.4 1,562.0
Net scheme deficit (305.2) (301.2)
Non-current assets - retirement benefitassets 29.4 17.8
Non-currentliabilities - retirement benefit obligations (334.6) (319.0)
Net scheme deficit (305.2) (301.2)
Net scheme deficit included in consolidated balance sheet (305.2) (301.2)
Deferred tax included in consolidated balance sheet 55.0 60.2
Net scheme deficit after deferred tax (250.2) (241.0)
Movement in net scheme deficit 2015£m 2014£m
Opening net scheme deficit (301.2) (252.2)
Contributions 20.0 18.2
Consolidated income statement (13.0) (14.4)
Consolidated statement of comprehensive income (11.0) (52.8)
Closing net scheme deficit (305.2) (301.2)
13. Retirement benefit schemes (continued)
Defined benefit pension schemes (continued)
Changes in the present value of scheme liabilities 2015£m 2014£m
Opening present value of scheme liabilities (1,863.2) (1,816.1)
Interest cost (67.5) (76.5)
Actuarial gain/(loss) - experience 23.9 (7.9)
Actuarial (loss)/gain - change to demographic assumptions (4.5) 41.6
Actuarial loss - change to financial assumptions (11.5) (132.2)
Benefits paid 89.2 79.7
Buy-out - 48.2
Closing present value of scheme liabilities (1,833.6) (1,863.2)
Changes in the fair value of scheme assets 2015£m 2014£m
Opening fair value of scheme assets 1,562.0 1,563.9
Interest income 56.6 65.3
Actual return on assets (less)/greater than discount rate (18.9) 45.7
Contributions by employer 20.0 18.2
Benefits paid (89.2) (79.7)
Administrative expenses (2.1) (3.2)
Buy-out - (48.2)
Closing fair value of scheme assets 1,528.4 1,562.0
Fair value of scheme assets 2015£m 2014£m
UK equities 181.7 219.6
US equities 192.8 189.3
Other overseas equities 210.7 251.2
Property 20.4 26.8
Corporate bonds 308.7 248.7
Fixed interest gilts 70.9 56.3
Index linked gilts 81.2 79.0
Cash and other 109.8 120.3
Invested and cash assets at fair value 1,176.2 1,191.2
Value of insurance contracts 352.2 370.8
Fair value of scheme assets 1,528.4 1,562.0
All of the scheme assets have quoted prices in active markets. Scheme assets
include neither direct investments in the Company's ordinary shares nor any
property assets occupied nor other assets used by the Group.
14. Provisions
Share-based payments£m Property£m Restructuring £m Other£m Total£m
At 28 December 2014 (1.4) (9.0) (3.6) (16.2) (30.2)
Charged to income statement (0.2) (0.1) (15.3) (30.1) (45.7)
Utilisation of provision 1.3 2.4 16.1 9.2 29.0
Acquisition of subsidiary undertaking - (2.9) (0.9) - (3.8)
At 27 December 2015 (0.3) (9.6) (3.7) (37.1) (50.7)
(50.7)
The provisions have been analysed between current and non-current as follows:
2015£m 2014£m
Current (43.5) (23.3)
Non-current (7.2) (6.9)
(50.7) (30.2)
The share-based payments provision relates to National Insurance obligations
attached to the future crystallisation of awards.
The property provision relates to onerous property leases and future committed
costs related to occupied, let and vacant properties. This provision will be
utilised over the remaining term of the leases.
The restructuring provision relates to restructuring charges incurred in the
delivery of cost reduction measures. This provision is expected to be utilised
within the next year.
The other provision relates to legal and other costs relating to historical
litigation and other matters expected to be utilised within the next year.
15. Share capital and reserves
During the year, the Company placed 22,398,041 shares (at 158.0 pence) and
issued 3,371,010 shares (at 174.3 pence) relating to the acquisition of Local
World. The total share capital increased to 283,459,571 allotted, called-up
and fully paid ordinary shares of 10p each. The share premium account reflects
the premium on issued ordinary shares. The merger reserve comprises the
premium on the shares allotted in relation to the acquisition of Local World
net of £0.8 million of issue costs. The Group obtained court approval at the
end of April 2014 for a reduction in the share premium account of £514.8
million to eliminate the deficit on the Company's profit and loss account
reserve.
The capital redemption reserve represents the nominal value of the shares
purchased and subsequently cancelled under share buy-back programmes.
Cumulative goodwill written off to retained earnings and other reserves in
respect of continuing businesses acquired prior to 1998 is £25.9 million
(2014: £25.9 million). On transition to IFRS, the revalued amounts of freehold
properties were deemed to be the cost of the asset and the revaluation reserve
has been transferred to retained earnings and other reserves.
Shares purchased by the Trinity Mirror Employee Benefit Trust (the 'Trust')
are included in retained earnings and other reserves at £3.7 million (2014:
£11.4 million). During the prior year the Trust purchased 1,391,620 shares for
a cash consideration of £2.2 million and received a payment of £2.2 million
from the Company to purchase these shares. During the year, 5,929,939 shares
were released to senior managers relating to grants made in prior years (2014:
3,408,484).
During the year 665,287 awards were granted to Executive Directors on a
discretionary basis under the Long Term Incentive Plan (2014: 935,709). The
exercise price of the granted awards is £1 for each block of awards granted.
The awards vest after three years, subject to the continued employment of the
participant and satisfaction of certain performance conditions and are
required to be held for a further two years. During the year 893,873 awards
were granted to senior managers on a discretionary basis under the Senior
Management Incentive Plan (2014: nil). The exercise price of the granted
awards is £1 for each block of awards granted. The awards vest after three
years, subject to the continued employment of the participant and satisfaction
of certain performance conditions. During the year 120,543 awards were granted
to Executive Directors, including one former Executive Director, under the
Restricted Share Plan (2014: 96,245). The awards vest after three years,
subject to the continued employment of the participant.
16. Acquisition of subsidiary undertaking
On 13 November 2015, the Group acquired the 80.02% of the issued share capital
of Local World Holdings Limited not previously owned. The acquisition is
included in the Publishing segment in continuing operations.
The fair value of the consideration is as follows:
£m
Cash paid to sellers 146.2
Cash settled on behalf of sellers 2.0
Equity issued to sellers 5.9
80.02% equity acquired 154.1
19.98% equity interest 38.5
Fair value of consideration 192.6
192.6
The provisional fair value of net assets acquired and the goodwill arising is
as follows:
Local World Holdings Limited £m
Other intangible assets 132.7
Fixed assets 5.1
Deferred tax (17.2)
Provisions (3.8)
Working Capital (4.8)
Net debt (11.9)
Fair value of net assets 100.1
Goodwill 92.5
Fair Value of consideration 192.6
192.6
There were no provisional fair value adjustments. Other intangible assets
relates to publishing rights and titles. Working capital includes gross
receivables of £34.4 million less provision for doubtful debts of £1.2
million. Goodwill arising on the acquisition is attributed to the anticipated
profitability and synergies.
The acquisition of Local World Holdings Limited contributed £20.6 million of
revenue (external revenue of Local World of £21.2 million less £0.6 million
now being accounted for as internal printing revenue) and £2.7 million of
operating profit post acquisition. The revenue and operating profit of the
Group would have increased by £181.3 million (external revenue of Local World
of £187.0 million less £4.9 million being accounted for as internal printing
revenue and £0.8 million being accounted for as internal commission revenue)
and £28.5 million (operating profit of Local World of £30.2 million less £1.7
million share of results of associates) respectively if the acquisition had
been made at the beginning of the year.
The total consideration for the 80.02% of Local World not previously owned
reconciles to the implied enterprise value for 100% of £220.0 million as
follows:
£m
Enterprise value 220.0
Debt and debt like items assumed at time of acquisition (27.4)
Equity value 192.6
80.02% of equity value 154.1
Actual debt and debt like items 23.3
Transaction costs 5.6
Total consideration 183.0
183.0
16. Acquisition of subsidiary undertaking (continued)
The total consideration for the acquisition has been satisfied as follows:
£m
Proceeds from issue of equity 34.5
Draw down from new £80.0 million term loan 80.0
Utilisation of cash balances 57.4
Consideration paid in 2015 171.9
Net cash payable in 2016 and beyond 5.2
Total cash consideration 177.1
Equity issued as part consideration 5.9
Total consideration 183.0
Consideration for the acquisition totalled £183.0 million and was funded
through £34.5 million raised from placing 22.4 million shares, £5.9 million
from the issue of 3.4 million of shares as part consideration, £80.0 million
from a new five year term loan, £57.4 million paid through cash balances in
2015 with the balancing £5.2 million outstanding at the reporting date.
Net cash payments relating to the acquisition are as follows:
£m
Cash paid to directly to sellers 146.2
Cash settled on behalf of sellers 2.0
148.2
Net debt repaid 11.9
160.1
Transaction costs paid 5.4
Debt like items paid 6.4
Cash payments in 2015 171.9
Proceeds from issue of equity (34.5)
Net cash payments in 2015 137.4
Net cash payable in 2016 and beyond 5.2
Net cash payments 142.6
142.6
17. Reconciliation of statutory results to adjusted results
52 weeks ended 27 December 2015
Statutoryresults£m Non-recurring items(a)£m Amortisation(b)£m Pensioncharges(c)£m Restructuring charges (d) £m Finance costs(e)£m Taxitems(f)£m Adjustedresults £m
Revenue 592.7 - - - - - - 592.7
Operating profit 82.2 5.7 4.3 2.1 15.3 - - 109.6
Profit before tax 67.2 5.7 4.3 13.0 15.3 2.0 - 107.5
Profit after tax 77.0 (1.5) 3.9 10.4 12.2 1.6 (17.2) 86.4
Basic EPS (p) 30.2 (0.6) 1.5 4.1 4.8 0.6 (6.7) 33.9
52 weeks ended 28 December 2014
Statutoryresults£m Non-recurring items(a)£m Amortisation(b)£m Pensioncharges(c)£m Restructuring charges (d) £m Finance costs(e)£m Taxitems(f)£m Adjustedresults £m
Revenue 636.3 - - - - - - 636.3
Operating profit 98.6 (15.2) 4.9 3.2 14.0 - - 105.5
Profit before tax 81.6 (15.2) 4.9 14.4 14.0 2.6 - 102.3
Profit after tax 69.8 (17.6) 4.5 11.5 11.0 2.1 - 81.3
Basic EPS (p) 28.1 (6.9) 1.8 4.6 4.4 0.8 - 32.8
(a) Non-recurring items relate to the items charged or credited to
operating profit as set out in note 5.
(b) Amortisation of the Group's intangible assets and amortisation
included in share of results of associates.
(c) Pension finance charge and pension administrative expenses relating
to the defined benefit pension schemes as set out in note 13.
(d) Restructuring charges in respect of cost reduction measures as set
out in note 14.
(e) Impact of the translation of foreign currency borrowings and fair
value changes on derivative financial instruments as set out in note 7.
(f) Tax items relate to the impact of tax legislation changes due to
the change in the future corporation tax rate on the opening deferred tax
position and prior year tax adjustments included in the taxation credit or
charge as set out in note 8.
18. Contingent liabilities
There is potential for further liabilities to arise from the outcome or
resolution of the ongoing historical legal issues. Due to the present
uncertainty in respect of the nature, timing or measurement of any such
liabilities it is too soon to be able to reliably estimate how these matters
will proceed and their financial impact.
At the 2015 year end, the Group was engaged in the potential disposal of
certain titles to Edward Richard Iliffe for which Heads of Terms were
announced at the time of the acquisition of Local World. In the event the
Group decides not to proceed with the disposal, a break fee of £2.0 million
will become payable.
This information is provided by RNS
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