REG - Trinity Mirror PLC - Half Yearly Report <Origin Href="QuoteRef">TNI.L</Origin> - Part 2
03/08/2015 07:01
- Part 2: For the preceding part double click ID:nRSC7896Ua
(3.9)
Repayment of borrowings - (44.2) (44.2)
Purchase of shares for LTIP - (2.2) (2.2)
Net cash used in financing activities (8.7) (48.9) (50.3)
Net increase/(decrease) in cash and cash equivalents 43.2 (3.2) 33.5
Cash and cash equivalents at the beginning of the period 12 49.0 15.5 15.5
Cash and cash equivalents at the end of the period 12 92.2 12.3 49.0
Consolidated statement of changes in equity
for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks
ended 28 December 2014)
Sharecapital£m Share premiumaccount£m Capitalredemptionreserve£m Retained earnings and other reserves£m Total£m
At 28 December 2014 (audited) (25.8) (606.7) (4.4) 42.0 (594.9)
Profit for the period - - - (9.9) (9.9)
Other comprehensive income for the period - - - (2.4) (2.4)
Total comprehensive income for the period - - - (12.3) (12.3)
Credit to equity for equity-settled share-based payments - - - (0.2) (0.2)
Dividends paid - - - 7.5 7.5
At 28 June 2015 (unaudited) (25.8) (606.7) (4.4) 37.0 (599.9)
At 29 December 2013 (audited) (25.8) (1,121.6) (4.3) 580.0 (571.7)
Profit for the period - - - (45.6) (45.6)
Other comprehensive costs for the period - - - 9.8 9.8
Total comprehensive income for the period - - - (35.8) (35.8)
Capital reduction - 514.8 - (514.8) -
Charge to equity for equity-settled share-based payments - - - 3.0 3.0
Purchase of shares for LTIP - - - 2.2 2.2
At 29 June 2014 (unaudited) (25.8) (606.8) (4.3) 34.6 (602.3)
At 29 December 2013 (audited) (25.8) (1,121.6) (4.3) 580.0 (571.7)
Profit for the period - - - (69.8) (69.8)
Other comprehensive costs for the period - - - 42.2 42.2
Total comprehensive income for the period - - - (27.6) (27.6)
Capital reduction - 514.8 - (514.8) -
Charge to equity for equity-settled share-based payments - - - 2.2 2.2
Purchase of shares for LTIP - - - 2.2 2.2
Reclassification - 0.1 (0.1) - -
At 28 December 2014 (audited) (25.8) (606.7) (4.4) 42.0 (594.9)
Consolidated balance sheet
at 28 June 2015 (29 June 2014 and 28 December 2014)
notes 28 June 2015(unaudited)£m 29 June 2014(unaudited)£m 28 December2014(audited)£m
Non-current assets
Goodwill 12.0 12.0 12.0
Other intangible assets 667.8 670.0 668.9
Property, plant and equipment 307.1 330.0 317.7
Investment in associates 23.9 56.1 41.4
Retirement benefit assets 13 17.6 12.9 17.8
Deferred tax assets 59.3 56.9 62.1
Derivative financial instruments 12 1.2 - 3.2
1,088.9 1,137.9 1,123.1
Current assets
Inventories 5.7 6.3 7.0
Trade and other receivables 100.8 110.7 103.3
Cash and cash equivalents 12 92.2 12.3 49.0
198.7 129.3 159.3
Total assets 1,287.6 1,267.2 1,282.4
Non-current liabilities
Borrowings 12 (64.4) (59.9) (65.3)
Retirement benefit obligations 13 (308.4) (285.0) (319.0)
Deferred tax liabilities (177.1) (178.8) (178.0)
Provisions 14 (11.8) (12.5) (6.9)
Derivative financial instruments - (1.5) -
(561.7) (537.7) (569.2)
Current liabilities
Trade and other payables (87.9) (96.9) (83.0)
Current tax liabilities (9.3) (15.2) (12.0)
Provisions 14 (28.8) (15.1) (23.3)
(126.0) (127.2) (118.3)
Total liabilities (687.7) (664.9) (687.5)
Net assets 599.9 602.3 594.9
Equity
Share capital 15 (25.8) (25.8) (25.8)
Share premium account 15 (606.7) (606.8) (606.7)
Capital redemption reserve 15 (4.4) (4.3) (4.4)
Retained earnings and other reserves 15 37.0 34.6 42.0
Total equity attributable to equity holders of the parent (599.9) (602.3) (594.9)
Notes to the consolidated financial statements
for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks
ended 28 December 2014)
1. General information
The financial information in respect of the 52 weeks ended 28 December 2014
does not constitute statutory accounts within the meaning of Section 434 of
the Companies Act 2006. A copy of the statutory accounts for that period has
been delivered to the Registrar of Companies and is available at the Company's
registered office at One Canada Square, Canary Wharf, London E14 5AP and on
the Company's website at www.trinitymirror.com. The auditors reported on those
accounts: their report was unqualified, did not draw attention to any matters
by way of emphasis and did not contain a statement under section 498(2) or (3)
of the Companies Act 2006.
The consolidated financial statements for the 26 weeks ended 28 June 2015 do
not constitute statutory accounts within the meaning of Section 434 of the
Companies Act 2006 and have not been audited. No statutory accounts for the
period have been delivered to the Registrar of Companies. This half-yearly
financial report constitutes a dissemination announcement in accordance with
Section 6.3 of the Disclosure and Transparency Rules.
The auditors have carried out a review of the consolidated financial
statements and their report is set out on page 29.
The consolidated financial statements were approved by the directors on 3
August 2015. This announcement will be made available at the Company's
registered office at One Canada Square, Canary Wharf, London E14 5AP and on
the Company's website at www.trinitymirror.com.
2. Accounting polices
Basis of preparation
The Group's annual consolidated financial statements are prepared in
accordance with IFRS as adopted by the European Union. The consolidated
financial statements included in this financial report have been prepared in
accordance with IAS 34 'Interim Financial Reporting' as adopted by the
European Union.
Going concern
Having considered all the factors impacting the Group's businesses, including
downside sensitivities, the directors are satisfied that the Group will be
able to operate within the terms and conditions of the Group financing
facilities for the foreseeable future.
The directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in preparing the
Group's half-yearly financial report.
Changes in accounting policy
Except as noted below, the same accounting policies, presentation and methods
of computation are followed in the consolidated financial statements as
applied in the Group's latest annual consolidated financial statements.
The Group has adopted the following new interpretations during the current
financial period which had no impact on the Group:
· IFRIC 21 (Issued) 'Levies' - effective for periods starting on or after
17 June 2014
At the date of approval of these consolidated financial statements the
following amended standard, which has not been applied and when adopted will
have no material impact on the Group, were in issue but not yet effective:
· IAS 19 (Amended) 'Employee Benefits' - effective for periods beginning
on or after 1 February 2015
At the date of approval of these consolidated financial statements the
following new and amended standards which have not been applied and when
adopted will have no material impact on the Group, were not yet endorsed by
the EU and have no effective date:
· IFRS 9 (Issued) 'Financial Instruments'
· IFRS 10 (Amended) 'Consolidated Financial Statements'
· IFRS 11 (Amended) 'Joint Arrangements'
· IFRS 12 (Amended) 'Disclosure of Interests in Other Entities'
· IFRS 15 (Issued) 'Revenue from Contracts with Customers'
· IAS 1 (Amended) 'Presentation of Financial Statements'
· IAS 16 (Amended) 'Property, Plant and Equipment'
· IAS 27 (Amended) 'Separate Financial Statements'
· IAS 28 (Amended) 'Investments in Associates and Joint Ventures'
· IAS 38 (Amended) 'Intangible Assets'
Annual Improvements are implemented when effective and will have no material
impact on the Group.
Notes to the consolidated financial statements
for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks
ended 28 December 2014)
2. Accounting polices (continued)
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation
uncertainty that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next financial year,
are discussed below:
Impairment of goodwill and other intangible assets
Determining whether goodwill and other intangible assets are impaired requires
an estimation of the value in use of the cash-generating unit to which these
have been allocated. The value in use calculation requires the Group to
estimate the future cash flows expected to arise from the cash-generating unit
and a suitable discount rate in order to calculate present value.
Retirement benefits
Actuarial assumptions adopted and external factors can significantly vary the
surplus or deficit of defined benefit pension schemes. Advice is sourced from
independent actuaries in selecting suitable assumptions.
Provisions
There is uncertainty as to liabilities arising from the outcome or resolution
of the ongoing historical legal issues.
Critical judgements in applying the Group's accounting policies
No critical judgements in applying the Group's accounting policies have been
identified in the current or preceding year.
3. Operating segments
Operating segments are identified on the basis of internal reports about
components of the Group that are regularly reviewed by the Board and chief
operating decision maker to allocate resources to the segments and to assess
their performance. The Group has four operating segments that are regularly
reviewed by the Board and chief operating decision maker.
The operating segments are: Publishing which includes all of our newspapers
and associated digital publishing; Printing which provides printing services
to the publishing segment and to third parties; Specialist Digital which
includes our acquired digital specialist classified and our digital marketing
services businesses; and Central which includes revenue and costs not
allocated to the operational divisions and our share of results of
associates.
The accounting policies used in the preparation of each segment's revenue and
results are the same as the Group's accounting policies described in note 2.
The Board and chief operating decision maker are not provided with an amount
for total assets by segment. The Group's operations are located in the UK and
the Group is not subject to significant seasonality during the year.
Segment revenue and results
26 weeks ended 28 June 2015 (unaudited) Publishing2015£m Printing 2015£m Specialist Digital 2015£m Central2015£m Total2015£m
Revenue
Segment sales 254.6 79.2 8.2 1.9 343.9
Inter-segment sales - (55.0) (0.4) - (55.4)
Total revenue 254.6 24.2 7.8 1.9 288.5
Segment result 49.5 - 1.3 (2.9) 47.9
Amortisation of other intangible assets (2.5)
Pension administrative expenses (1.0)
Restructuring charges in respect of cost reduction measures (7.3)
Non-recurring items (17.5)
Operating profit 19.6
Investment revenues 0.3
Pension finance charge (5.5)
Finance costs (2.3)
Profit before tax 12.1
Tax charge (2.2)
Profit for the period 9.9
9.9
Notes to the consolidated financial statements
for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks
ended 28 December 2014)
3. Operating segments (continued)
Segment revenue and results (continued)
26 weeks ended 29 June 2014 (unaudited) Publishing2014£m Printing 2014 £m Specialist Digital 2014 £m Central2014£m Total2014£m
Revenue
Segment sales 281.6 98.8 7.8 1.6 389.8
Inter-segment sales - (65.0) (0.6) - (65.6)
Total revenue 281.6 33.8 7.2 1.6 324.2
Segment result 53.7 - 0.8 (4.2) 50.3
Amortisation of other intangible assets (2.5)
Pension administrative expenses (2.1)
Restructuring charges in respect of cost reduction measures (9.3)
Non-recurring items 23.6
Operating profit 60.0
Investment revenues 0.2
Pension finance charge (5.5)
Finance costs (4.2)
Profit before tax 50.5
Tax charge (4.9)
Profit for the period 45.6
45.6
52 weeks ended 28 December 2014 (audited) Publishing2014£m Printing 2014 £m Specialist Digital 2014 £m Central2014£m Total2014£m
Revenue
Segment sales 554.0 188.9 15.8 3.3 762.0
Inter-segment sales - (124.4) (1.3) - (125.7)
Total revenue 554.0 64.5 14.5 3.3 636.3
Segment result 113.5 - 2.0 (10.0) 105.5
Amortisation of other intangible assets (4.9)
Pension administrative expenses (3.2)
Restructuring charges in respect of cost reduction measures (14.0)
Non-recurring items 15.2
Operating profit 98.6
Investment revenues 0.3
Pension finance charge (11.2)
Finance costs (6.1)
Profit before tax 81.6
Tax charge (11.8)
Profit for the period 69.8
69.8
4. Revenue
26 weeks ended 28 June2015 (unaudited)£m 26 weeks ended 29 June2014 (unaudited)£m 52 weeks ended 28 December2014(audited)£m
Circulation 134.3 142.5 279.8
Advertising 106.8 123.8 242.5
Printing 24.2 33.8 64.5
Other 23.2 24.1 49.5
Total revenue 288.5 324.2 636.3
Notes to the consolidated financial statements
for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks
ended 28 December 2014)
4. Revenue (continued)
The Group's operations are located primarily in the UK. The Group's revenue by
location of customers is set out below:
26 weeks ended 28 June2015 (unaudited)£m 26 weeks ended 29 June2014 (unaudited)£m 52 weeks ended 28 December2014(audited)£m
UK and Republic of Ireland 287.1 322.4 632.7
Continental Europe 1.3 1.7 3.5
Rest of World 0.1 0.1 0.1
Total revenue 288.5 324.2 636.3
5. Non-recurring items
26 weeks ended 28 June2015 (unaudited)£m 26 weeks ended 29 June2014 (unaudited)£m 52 weeks ended 28 December2014(audited)£m
Provision for historical legal issues (a) (16.0) (4.0) (12.0)
Closure of print site (b) (1.4) - -
Non-recurring items included in administrative expenses (17.4) (4.0) (12.0)
Non-recurring items included in share of results of associates (c) (0.1) 27.6 27.2
Total non-recurring items (17.5) 23.6 15.2
(a) In the first half of 2015 we made a provision of £16.0 million (26 weeks
ended 29 June 2014: £4.0 million and 52 weeks ended 28 December 2014: £12.0
million) to cover the costs of dealing with historical legal issues in
relation to phone hacking. It remains uncertain as to how these matters will
progress, whether further allegations or claims will be made, and their
financial impact. Due to this uncertainty a contingent liability has been
highlighted in note 17.
(b) Costs associated with the closure of the printing site in Blantyre,
Scotland including the non-cash write off of fixed assets of £1.0 million.
(c) Share of the after tax restructuring costs incurred by PA Group. In the
prior year, the £27.2 million gain comprised our £27.5 million share of the
gain on disposal by PA Group of its weather forecasting business, MeteoGroup,
our £0.4 million share of the profit of MeteoGroup recorded by PA Group up to
the date of completion less our £0.7 million share of restructuring costs
incurred by PA Group and Local World.
6. Investment revenues
26 weeks ended 28 June2015 (unaudited)£m 26 weeks ended 29 June2014 (unaudited)£m 52 weeks ended 28 December2014(audited)£m
Interest income on bank deposits and other interest receipts 0.3 0.2 0.3
7. Finance costs
26 weeks ended 28 June2015 (unaudited)£m 26 weeks ended 29 June2014 (unaudited)£m 52 weeks ended 28 December2014(audited)£m
Interest on bank overdrafts and borrowings (1.2) (2.3) (3.5)
Total interest expense (1.2) (2.3) (3.5)
Fair value loss on derivative financial instruments (2.0) (5.0) (0.3)
Foreign exchange gain/(loss) on retranslation of borrowings 0.9 3.1 (2.3)
Finance costs (2.3) (4.2) (6.1)
Notes to the consolidated financial statements
for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks
ended 28 December 2014)
8. Tax
26 weeks ended 28 June2015 (unaudited)£m 26 weeks ended 29 June2014 (unaudited)£m 52 weeks ended 28 December2014(audited)£m
Current tax
Corporation tax charge for the period (3.0) (7.8) (14.0)
Prior period adjustment 0.4 - 0.2
Current tax charge (2.6) (7.8) (13.8)
Deferred tax
Deferred tax credit for the period 0.7 2.9 2.1
Prior period adjustment (0.3) - (0.1)
Deferred tax credit 0.4 2.9 2.0
Tax charge (2.2) (4.9) (11.8)
% % %
Reconciliation of tax charge
Standard rate of corporation tax (20.3) (21.5) (21.5)
Tax effect of items that are not deductible in determining taxable profit/(loss) (2.0) (0.7) (1.1)
Prior period adjustment 0.8 - 0.1
Tax effect of share of results of associates 3.3 12.5 8.0
Tax charge rate (18.2) (9.7) (14.5)
The standard rate of corporation tax reduced from 21% to 20% on 1 April 2015.
The blended rate for the accounting year is 20.25% being a mix of 21% up to 31
March 2015 and 20% from 1 April 2015 (2014: 21.5% being a mix of 23% up to 31
March 2014 and 21% from 1 April 2014). The current tax liabilities amounted to
£9.3 million (29 June 2014: £15.2 million and 28 December 2014: £12.0 million)
at the reporting date.
The tax on actuarial gains/(losses) on defined benefit pension schemes taken
to the consolidated statement of comprehensive income is a charge of £1.4
million comprising a deferred tax charge of £2.1 million and a current tax
credit of £0.7 million (26 weeks ended 29 June 2014: a credit of £2.5 million
comprising of a deferred tax credit of £2.5 million and 52 weeks ended 28
December 2014: a credit of £10.6 million comprising a deferred tax credit of
£9.8 million and a current tax credit of £0.8 million).
The tax on share-based payments taken to equity is a charge of £0.3 million
(26 weeks ended 29 June 2014: a charge of £3.6 million and 52 weeks ended 28
December 2014: a charge of £3.3 million comprising a deferred tax charge of
£3.7 million and a current tax credit of £0.4 million).
9. Dividends
Dividend approved 2.0 - -
Dividend paid 3.0 - -
Dividend proposed - - 3.0
Dividend proposed
-
-
3.0
The Board has approved an interim dividend for 2015 of 2 pence per share.
On 7 May 2015 the final dividend proposed for 2014 of 3 pence per share was
approved by shareholders at the Annual General Meeting and was paid on 4 June
2015. The total dividend payment amounted to £7.5 million.
Notes to the consolidated financial statements
for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks
ended 28 December 2014)
10. Earnings per share
Profit after tax before adjusted* items 38.0 38.4 81.3
Adjusted* items:
Non-recurring items (after tax) (13.9) 24.4 17.6
Amortisation of other intangibles (after tax) (2.3) (2.3) (4.5)
Finance costs (after tax) (0.9) (1.5) (2.1)
Restructuring charges (after tax) (5.8) (7.3) (11.0)
Pension charges (after tax) (5.2) (6.1) (11.5)
Profit for the period 9.9 45.6 69.8
Profit for the period
9.9
45.6
69.8
* Adjusted items relate to the exclusion of non-recurring items, restructuring
charges in respect of cost reduction measures, the amortisation of intangible
assets, the retranslation of foreign currency borrowings, the impact of fair
value changes on derivative financial instruments, the pension finance charge
and the pension administrative expenses. Set out in note 16 is the
reconciliation between the statutory results and the adjusted results.
Weighted average number of ordinary shares 26 weeks ended 28 June2015 (unaudited)Thousand 26 weeks ended 29 June2014(unaudited)Thousand 52 weeks ended 28 December2014(audited)Thousand
Weighted average number of ordinary shares for basic earnings per share 249,109 247,597 248,108
Effect of potential dilutive ordinary shares in respect of share options 5,288 7,214 6,574
Weighted average number of ordinary shares for diluted earnings per share 254,397 254,811 254,682
Basic earnings per share is calculated by dividing profit for the period
attributable to equity holders of the parent by the weighted average number of
ordinary shares during the period. Diluted earnings per share is calculated by
adjusting the weighted average number of ordinary shares in issue on the
assumption of conversion of all potentially dilutive ordinary shares. The
weighted average number of potentially dilutive ordinary shares not currently
dilutive was 3,067,767 (29 June 2014: 4,312,644 and 28 December 2014:
4,679,307).
Statutory earnings per share Pence Pence Pence
Earnings per share - basic 4.0 18.4 28.1
Earnings per share - diluted 3.9 17.9 27.4
Adjusted* earnings per share Pence Pence Pence
Earnings per share - basic 15.3 15.5 32.8
Earnings per share - diluted 14.9 15.1 32.0
* Adjusted items relate to the exclusion of non-recurring, restructuring
charges in respect of cost reduction measures, the amortisation of intangible
assets, the retranslation of foreign currency borrowings, the impact of fair
value changes on derivative financial instruments, the pension finance charge
and the pension administrative expenses. Set out in note 16 is the
reconciliation between the statutory results and the adjusted results.
The basic earnings per share impact for each non-recurring item disclosed in
note 5 are as follows:
Pence Pence Pence
Provision for historical legal issues in relation to phone hacking (5.1) (1.3) (4.1)
Closure of print site (0.5) - -
Loss per share - non-recurring items included in administrative expenses (5.6) (1.3) (4.1)
Profit per share - non-recurring items included in share of results of associates - 11.1 11.0
(Loss)/Profit per share - total non-recurring items (5.6) 9.8 6.9
Notes to the consolidated financial statements
for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks
ended 28 December 2014)
11. Notes to the consolidated cash flow statement
26 weeks ended 28 June2015 (unaudited)£m 26 weeks ended 29 June2014(unaudited)£m 52 weeks ended 28 December2014(audited)£m
Operating profit 19.6 60.0 98.6
Depreciation of property, plant and equipment 11.7 12.2 24.5
Amortisation of other intangible assets 1.1 1.1 2.2
Share of results of associates (2.0) (29.3) (30.6)
Charge/(credit) for share-based payments 0.6 0.5 (0.4)
Write-off of fixed assets 1.0 - 0.9
Pension administrative expenses 1.0 2.1 3.2
Pension deficit funding payments (9.9) - (18.2)
Operating cash flows before movements in working capital 23.1 46.6 80.2
Decrease in inventories 1.3 2.6 1.9
Decrease/(Increase) in receivables 2.5 (1.1) 6.4
Increase in payables 15.1 10.7 1.6
Cash flows from operating activities 42.0 58.8 90.1
12. Cash and borrowings
The statutory net (debt)/cash for the Group is as follows:
28 December 2014(audited)£m Cash flow£m Derivative financial instruments*£m Foreign exchange*£m 28 June 2015(unaudited)£m
Non-current liabilities
Loan notes (65.3) - - 0.9 (64.4)
(65.3) - - 0.9 (64.4)
Non-current assets
Derivative financial instruments 3.2 - (2.0) - 1.2
3.2 - (2.0) - 1.2
Current assets
Cash and cash equivalents 49.0 43.2 - - 92.2
49.0 43.2 - - 92.2
Net (debt)/cash (13.1) 43.2 (2.0) 0.9 29.0
* The impact on the loan notes of translation into Sterling at the settlement
date or at the reporting date exchange rate and the impact on the derivative
financial instruments of being stated at fair value at the settlement date or
at the reporting date are included in the consolidated income statement within
finance costs as set out in note 7.
The Group has cross-currency interest rate swaps to manage its exposure to
foreign exchange movements and interest rate movements on the private
placement loan notes. Fair value is calculated using discounted cash flows
based upon forward rates available to the Group. The cross-currency interest
rate swaps are classed in level two of the financial instruments hierarchy.
Level two fair value measurements are those derived from inputs other than
quoted prices that are observable for the asset or liability, either directly
or indirectly.
The contracted net (debt)/cash for the Group, assuming that the private
placement loan notes and the cross-currency interest rate swaps are not
terminated prior to maturity, is as follows:
28 December 2014(audited)£m Cash flow£m 28 June 2015(unaudited)£m
Non-current liabilities
Loan notes (68.3) - (68.3)
(68.3) - (68.3)
Current assets
Cash and cash equivalents 49.0 43.2 92.2
49.0 43.2 92.2
Net (debt)/cash (19.3) 43.2 23.9
Notes to the consolidated financial statements
for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks
ended 28 December 2014)
12. Cash and borrowings (continued)
The statutory net cash/(debt) reconciles to the contracted net cash/(debt) as
follows:
28 June 2015(unaudited)£m 28 December 2014(audited)£m
Statutory net cash/(debt) 29.0 (13.1)
Loan notes at period end exchange rate 64.4 65.3
Loan notes at swapped exchange rate (68.3) (68.3)
Cross-currency interest rate swaps (1.2) (3.2)
Contracted net cash/(debt) 23.9 (19.3)
13. Retirement benefit schemes
Defined contribution pension schemes
The Group operates the Trinity Mirror Pension Plan (the 'TMPP Scheme'), which
is a defined contribution pension scheme for qualifying employees. The assets
of the scheme are held separately from those of the Group in funds under the
control of Trustees.
The Group implemented the Auto Enrolment legislation from 1 July 2013. The
TMPP Scheme has three sections, one for members who elected to join prior to 1
May 2013 which is now closed to new members, one for members who elect to join
from 1 May 2013 and one for members from 1 July 2013 who are auto enrolled.
The current service cost charged to the consolidated income statement of £6.6
million (26 weeks ended 29 June 2014: £7.1 million and 52 weeks ended 28
December 2014: £13.9 million) represents contributions payable to the scheme
by the Group at rates specified in the scheme rules. Contributions that were
due have been paid over to the scheme at all reporting dates.
Defined benefit pension schemes
Background
The defined benefit pension schemes operated by the Group were closed to
future accrual in 2010. The Group now has five defined benefit pension schemes
following the securing of members' benefits of the five smaller schemes by way
of a buy-out with insurance companies without further contributions from the
Group. As part of the winding up of these schemes, surplus assets have been
transferred to one of the remaining schemes.
The remaining schemes are the Mirror Group Pension Scheme (the 'Old Scheme'),
the MGN Past Service Pension Scheme (the 'Past Service Scheme'), the MGN
Pension Scheme (the 'MGN Scheme'), the Trinity Retirement Benefit Scheme (the
'Trinity Scheme') and the Midland Independent Newspapers Pension Scheme (the
'MIN Scheme').
The Old Scheme and the Past Service Scheme cover the liabilities for service
up to 13 February 1992 for employees and former employees who worked regularly
on the production and distribution of Mirror Group's newspapers. The Old
Scheme was closed on 13 February 1992 and the Past Service Scheme was
established to meet any liabilities which are not satisfied by payments from
the Old Scheme and the Maxwell Communications Pension Plan. No contributions
have been paid to the Old Scheme since 1992. The disclosures contained in this
note in respect of these two schemes are combined (the 'Old Scheme/Past
Service Scheme').
Characteristics
The defined benefit pension schemes provide pensions to members which are
based on the final salary pension payable normally from age 65 plus surviving
spouses or dependents benefits following a member's death. Benefits increase
both before and after retirement either in line with statutory requirements or
in accordance with the scheme rules. Such increases are either at fixed rates
or in line with retail or consumer prices but subject to upper and lower
limits. All of the schemes are independent of the Group with assets held
independently of the Group. They are governed by Trustees who administer
benefits in accordance with the scheme rules and appropriate UK legislation.
The schemes each have a professional independent trustee as their chairman
with half of the remaining Trustees nominated by the members and half by the
Group.
Maturity profile and cash flow
Across the schemes, the invested assets at the reporting date are expected to
be sufficient to pay the uninsured benefits due up to 2044, based on the
reporting date assumptions. The remaining uninsured benefit payments, payable
from 2045, are due to be funded by a combination of asset outperformance and
the deficit contributions currently scheduled to be paid by 2025. The
liabilities relate 50% to current pensioners and their spouses or dependants
and 50% relate to deferred pensioners. The average term from the reporting
date to payment of the remaining benefits was around 16 years. Uninsured
benefit payments in 2014 were £46 million, projected to rise to an annual peak
in 2039 of £83 million and reducing thereafter.
Notes to the consolidated financial statements
for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks
ended 28 December 2014)
13. Retirement benefit schemes (continued)
Defined benefit pension schemes (continued)
Funding arrangements
The funding of the Group's schemes is subject to UK pension legislation as
well as the guidance and codes of practice issued by the Pensions Regulator.
Funding targets are agreed between the Trustees and the Group and are reviewed
and revised usually every three years. The funding targets must include a
margin for prudence above the expected cost of paying the benefits and so are
different to the liability value for IAS 19 purposes. The funding deficits
revealed by these triennial valuations are removed over time in accordance
with an agreed recovery plan and schedule of contributions for each scheme.
The valuations of the schemes as at 31 December 2013 were completed on 9
December 2014. The valuations showed deficits of £216.0 million for the Old
Scheme/Past Service Scheme, £120.7 million for the MGN Scheme, £31.9 million
for the Trinity Scheme and £26.7 million for the MIN Scheme. The next
valuation date of the schemes is due as at 31 December 2016 with the
valuations required to be completed by 31 March 2018.
Deficit funding contributions have been agreed totalling £36.2 million for
2015, 2016 and 2017. Contributions remain at around £36 million from 2018 to
2023 and then reduce to around £21 million for 2024 and 2025 after which
contributions are due to cease. The combined deficit is expected to be
eradicated by 2027 by a combination of the contributions and asset returns
over assumed investment returns.
In addition, the Group has agreed that in respect of dividend payments in
2015, 2016 and 2017 that additional contributions would be paid at 50% of the
excess if dividends in 2015 were above 5 pence per share. For 2016 and 2017
the threshold increases in line with the increase in dividends capped at 10%
per annum.
During the first half of
- More to follow, for following part double click ID:nRSC7896UcRecent news on Reach
See all newsREG - Reach PLC - Reach plc - Result of AGM
AnnouncementREG - Reach PLC - Total Voting Rights
AnnouncementREG - Reach PLC - Reach plc - Trading Update
AnnouncementREG - Reach PLC - Holdings in Company
AnnouncementREG - Reach PLC - Director/PDMR Shareholding
Announcement