REG - Trinity Mirror PLC - Half-yearly Report <Origin Href="QuoteRef">TNI.L</Origin> - Part 3
31/07/2017 07:07
- Part 3: For the preceding part double click ID:nRSe5378Mb
(0.2) (0.7)
Charge for share-based payments 0.4 0.5 1.5
Profit on disposal of land and buildings (0.2) - (0.2)
Write-off of fixed assets - 0.4 9.6
Pension administrative expenses 1.2 1.0 2.2
Pension deficit funding payments (20.6) (17.9) (40.7)
Operating cash flow before movements in working capital 38.3 50.9 89.7
Decrease in inventories 1.3 0.1 0.4
(Increase)/decrease in receivables (1.3) 16.3 29.7
Decrease in payables (3.5) (0.5) (28.3)
Cash flow from operating activities 34.8 66.8 91.5
12. Net debt
The Group repaid the final private placement loan notes in June 2017. The
associated cross-currency interest rate swap matured on the same date.
The statutory net debt movement for the Group is as follows:
1 January 2017(audited)£m Cashflow£m Derivative financial instruments*£m Foreign exchange*£m Loan repaid£m Loan drawn£m 2 July 2017(unaudited)£m
Current liabilities
Loan notes (81.2) - - 1.9 79.3 - -
Bank facility - - - - - (30.0) (30.0)
(81.2) - - 1.9 79.3 (30.0) (30.0)
Current assets
Derivative financial instruments 14.8 - (3.8) - (11.0) - -
Cash and cash equivalents 37.8 8.1 - - (68.3) 30.0 7.6
52.6 8.1 (3.8) - (79.3) 30.0 7.6
Net debt (28.6) 8.1 (3.8) 1.9 - - (22.4)
* The impact on the loan notes of translation into Sterling at the settlement
date and the impact on the derivative financial instruments of being stated at
fair value at the settlement date are included in the consolidated income
statement within finance costs as set out in note 7.
The Group had a cross-currency interest rate swap to manage its exposure to
foreign exchange movements and interest rate movements on the private
placement loan notes. Fair value was calculated using discounted cash flows
based upon forward rates available to the Group. The cross-currency interest
rate swap was 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 movement for the Group, assuming at 1 January 2017
that the private placement loan notes and the cross-currency interest rate
swaps were not terminated prior to maturity, is as follows:
1 January2017(audited)£m Cashflow£m Loanrepaid£m Loan drawn£m 2 July 2017(unaudited)£m
Current liabilities
Loan notes (68.3) - 68.3 - -
Bank facility - - - (30.0) (30.0)
(68.3) - 68.3 (30.0) (30.0)
Current assets
Cash and cash equivalents 37.8 8.1 (68.3) 30.0 7.6
37.8 8.1 (68.3) 30.0 7.6
Net debt (30.5) 8.1 - - (22.4)
12. Net debt (continued)
The statutory net debt reconciles to the contracted net debt as follows:
2 July 2017(unaudited)£m 1 January 2017(audited)£m
Statutory net debt (22.4) (28.6)
Loan notes at period end exchange rate - 81.2
Loan notes at swapped exchange rate - (68.3)
Cross-currency interest rate swaps - (14.8)
Contracted net debt (22.4) (30.5)
Following repayment of the private placement loan notes and maturity of the
associated cross-currency interest rate swaps on 20 June 2017, net debt is the
same on a statutory and contracted basis.
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 TMPP Scheme are held separately from those of the Group in funds under
the control of Trustees. The Local World Group Personal Pension Plan (the 'LW
Plan'), which was a defined contribution pension scheme for qualifying
employees where employees held a personal pension policy directly with
Scottish Widows was closed to future contribution from 30 June 2017.
The TMPP Scheme has five sections. Three of the sections are closed to new
members: one for members who elected to join prior to 1 May 2013, one for
members who elect to join from 1 May 2013 to 30 June 2017 and one for members
who were previously members of the LW Plan. Two of the sections are open to
new members: one for members who elect to join from 1 July 2017 and one for
members who from 1 July 2013 are auto enrolled. The Group first implemented
the Auto Enrolment legislation from 1 July 2013 and from 1 July 2017 this now
includes Local World.
The current service cost charged to the consolidated income statement of £6.4
million (27 weeks ended 3 July 2016: £6.9 million and 53 weeks ended 1 January
2017: £13.6 million) represents contributions of £5.8 million (27 weeks ended
3 July 2017: £6.2 million and 53 weeks ended 1 January 2017:£12.3 million)
paid to the TMPP Scheme by the Group at rates specified in the scheme rules
and contributions of £0.6 million (27 weeks ended 3 July 2017: £0.7 million
and 53 weeks ended 1 January 2017:£1.3 million) paid into the LW Plan by the
Group at rates specified in the scheme rules. All amounts that were due have
been paid over to the schemes 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 has three defined benefit pension schemes:
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'). On 30 December 2016, the Mirror Group Pension
Scheme and the MGN Past Service Pension Scheme were merged into the MGN
Pension Scheme (collectively referred to as the Mirror Schemes). Following the
merger the bulk annuity policy held by the Mirror Group Pension Scheme was
shattered with individual policies issued to members and both the Mirror Group
Pension Scheme and the MGN Past Service Pension Scheme were wound up.
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 generally half of the remaining Trustees nominated by the members and
half by the Group.
Maturity profile and cash flow
Across the schemes, based on the prior period reporting date assumptions, the
invested assets are expected to be sufficient to pay the uninsured benefits
due up to 2045. The remaining uninsured benefit payments, payable from 2046,
are due to be funded by a combination of asset outperformance and the deficit
contributions currently scheduled to be paid by 2025. The liabilities related
50% to current pensioners and their spouses or dependants and 50% related to
deferred pensioners. The average term from the prior period end to payment of
the remaining uninsured benefits is expected to be around 20 years. Uninsured
pension payments in 2016, excluding lump sums and transfer value payments,
were £41 million, and these are projected to rise to an annual peak in 2039 of
£75 million and reducing thereafter.
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 £336.7 million for the Mirror
Schemes, £31.9 million for the Trinity Scheme and £26.7 million for the MIN
Scheme.
As part of the agreement of the valuations, deficit funding contributions were
agreed at £36.2 million for 2015, 2016 and 2017. Contributions were agreed at
around £36 million from 2018 to 2023 and then reduce to around £21 million for
2024 and 2025 after which contributions were due to cease. The combined
deficit was expected to be eradicated by 2027 by a combination of the
contributions and asset returns. In December 2014, the Group prepaid
contributions for 2015 and 2016 of £16.5 million and £0.5 million
respectively.
In addition, the Group 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.
Payments in the period were £20.6 million (27 weeks ended 3 July 2016: £17.9
million and 53 weeks ended 1 January 2017:£40.7 million) comprising £18.1
million (27 weeks ended 3 July 2016: £17.9 million and 53 weeks ended 1
January 2017:£35.7 million) of deficit funding and £2.5 million (27 weeks
ended 3 July 2016: nil and 53 weeks ended 1 January 2017:£5.0 million) in
connection with the share buyback. Payments were £14.8 million (27 weeks ended
3 July 2016: £13.0 million and 53 weeks ended 1 January 2017:£29.6 million) to
the Mirror Schemes, £3.5 million (27 weeks ended 3 July 2016: £3.1 million and
53 weeks ended 1 January 2017:£7.0 million) to the Trinity Scheme and £2.3
million (27 weeks ended 3 July 2016: £1.8 million and 53 weeks ended 1 January
2017:£4.1 million) to the MIN Scheme.
The future deficit funding commitments are linked to the three-yearly
actuarial valuations. There is no link to the IAS 19 valuations which use
different actuarial assumptions and are updated at each reporting date. The
next funding valuation of the schemes has an effective date of 31 December
2016 and these valuations, which are currently in progress, are required to be
completed by 31 March 2018.
Although the funding commitments do not generally impact the IAS 19 position,
IFRIC 14 guides companies to consider for IAS 19 disclosures whether any
surplus can be recognised as a balance sheet asset and whether any future
funding commitments in excess of the IAS 19 liability should be provisioned
for. Based on the interpretation of the rules for each of the defined benefit
pension schemes, the Group considers that it has an unconditional right to any
potential surplus on the ultimate wind-up of each scheme after all benefits to
members have been paid. Under IFRIC 14 it is therefore appropriate to
recognise any IAS 19 surpluses which may emerge in future, and not to
recognise any potential additional liabilities in respect of future funding
commitments. This conclusion was reconsidered and reconfirmed during 2016
following the issuance of an Exposure Draft of changes to IFRIC14 which
provided more detailed guidance on this area.
Risks
Valuations for funding and accounting purposes are based on assumptions about
future economic and demographic variables. This results in risk of a volatile
valuation deficit and the risk that the ultimate cost of paying benefits is
higher than the current assessed liability value.
The main sources of risk are:
· Investment risk: a reduction in asset returns (or assumed future
asset returns);
· Inflation risk: an increase in benefit increases (or assumed future
increases); and
· Longevity risk: an increase in average life spans (or assumed life
expectancy).
These risks are managed by:
· Investing in insured annuity policies: the income from these
policies exactly matches the benefit payments for the members covered,
removing all of the above risks. At the prior period reporting date the
insured annuity policies covered 17% of total liabilities;
· Investing a proportion of assets in government and corporate bonds:
changes in the values of the bonds broadly match changes in the values of the
uninsured liabilities, reducing the investment risk, however some risk remains
as the durations of the bonds are typically shorter than that of the
liabilities and so the values may still move differently. At the prior period
reporting date this amounted to 47% of assets excluding the insured annuity
policies;
· Investing a proportion in equities: with the aim of achieving
outperformance and so reducing the deficits over the long term. At the prior
period reporting date this amounted to 51% of assets excluding the insured
annuity policies; and
· The gradual sale of equities over time to purchase additional
annuity policies or bonds and investment in liability driven investments: to
further reduce risk as the schemes, which are closed to future accrual,
mature.
Pension scheme accounting deficits are snapshots at moments in time and are
not used by either the Company or Trustees to frame funding policy. The
Company and Trustees are aligned in focusing on the long-term sustainability
of the funding policy which aims to balance the interests of the Company's
shareholders and members of the schemes. The Company and Trustees are also
aligned in reducing pensions risk over the long term and at a pace which is
affordable to the Company.
13. Retirement benefit schemes (continued)
Defined benefit pension schemes (continued)
Risks (continued)
The Group is not exposed to any unusual, entity specific or scheme specific
risks. There were no plan amendments, settlements or curtailments in 2017 or
during 2016 which resulted in a pension cost.
Actuarial projections at the prior year reporting date showed removal of the
accounting deficit by 2024 due to scheduled contributions and asset returns at
the current target rate.
Results
For the purposes of the Group's condensed consolidated financial statements,
valuations have been performed in accordance with the requirements of IAS 19
with scheme liabilities calculated using a consistent projected unit valuation
method and compared to the estimated value of the scheme assets at 2 July
2017.
The assets and liabilities of the schemes as at the reporting date are:
MGN Scheme£m Trinity Scheme£m MIN Scheme £m Total£m
Present value of uninsured scheme liabilities (1,234.6) (375.8) (128.7) (1,739.1)
Present value of insured scheme liabilities - (77.9) (106.9) (184.8)
Total present value of scheme liabilities (1,234.6) (453.7) (235.6) (1,923.9)
Invested and cash assets at fair value 883.0 368.4 80.9 1,332.3
Value of liability matching insurance contracts - 77.9 106.9 184.8
Total fair value of scheme assets 883.0 446.3 187.8 1,517.1
Net scheme deficit (351.6) (7.4) (47.8) (406.8)
Based on actuarial advice, the assumptions used in calculating the scheme
liabilities and the actuarial value of those liabilities are:
2 July 2017 3 July2016 1 January2017
Financial assumptions (nominal % pa)
Discount rate 2.60 2.80 2.65
Retail price inflation rate 3.20 2.75 3.20
Consumer price inflation rate 2.00 1.55 2.00
Rate of pension increase in deferment 2.00 1.55 2.00
Rate of pension increases in payment 3.75 3.75 3.85
Mortality assumptions - future life expectancies from age 65 (years)
Male currently aged 65 21.7 21.8 21.8
Female currently aged 65 23.6 23.8 23.9
Male currently aged 55 22.4 22.6 22.7
Female currently aged 55 24.3 24.7 24.8
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 -173 / +191 -162 / +180
Retail price inflation rate +/- 0.5% pa +29 / -27 +23 / -21
Consumer price inflation rate +/- 0.5% pa +47 / -44 +47 / -44
Life expectancy at age 65 +/- 1 year +110 / -105 +105 / -100
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.
13. Retirement benefit schemes (continued)
Defined benefit pension schemes (continued)
Results (continued)
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 26 weeks ended 2 July2017 (unaudited)£m 27 weeks ended 3 July2016(unaudited)£m 53 weeks ended 1 January2017(audited)£m
Pension administrative expenses (1.2) (1.0) (2.2)
Pension finance charge (5.9) (5.2) (10.4)
Defined benefit cost recognised in income statement (7.1) (6.2) (12.6)
(12.6)
Consolidated statement of comprehensive income 26 weeks ended 2 July2017 (unaudited)£m 27 weeks ended 3 July2016(unaudited)£m 53 weeks ended 1 January2017(audited)£m
Actuarial gain due to liability experience - 0.6 14.0
Actuarial gain/(loss) due to liability assumption changes 11.0 (215.6) (340.7)
Total liability actuarial gain/(loss) 11.0 (215.0) (326.7)
Returns on scheme assets greater than discount rate 34.7 82.5 137.8
Total gain/(loss) recognised in statement of comprehensive income 45.7 (132.5) (188.9)
Consolidated balance sheet 2 July2017 (unaudited)£m 3 July2016(unaudited)£m 1 January2017(audited)£m
Present value of uninsured scheme liabilities (1,739.1) (1,674.4) (1,764.3)
Present value of insured scheme liabilities (184.8) (362.9) (363.3)
Total present value of scheme liabilities (1,923.9) (2,037.3) (2,127.6)
Invested and cash assets at fair value 1,332.3 1,248.4 1,298.3
Value of liability matching insurance contracts 184.8 362.9 363.3
Total fair value of scheme assets 1,517.1 1,611.3 1,661.6
Net scheme deficit (406.8) (426.0) (466.0)
Non-current assets - retirement benefitassets - 9.5 -
Non-currentliabilities - retirement benefit obligations (406.8) (435.5) (466.0)
Net scheme deficit (406.8) (426.0) (466.0)
Net scheme deficit included in consolidated balance sheet (406.8) (426.0) (466.0)
Deferred tax included in consolidated balance sheet 70.7 76.5 80.9
Net scheme deficit after deferred tax (336.1) (349.5) (385.1)
Movement in net scheme deficit 2 July2017 (unaudited)£m 3 July2016(unaudited)£m 1 January2017(audited)£m
Opening net scheme deficit (466.0) (305.2) (305.2)
Contributions 20.6 17.9 40.7
Consolidated income statement (7.1) (6.2) (12.6)
Consolidated statement of comprehensive income 45.7 (132.5) (188.9)
Closing net scheme deficit (406.8) (426.0) (466.0)
13. Retirement benefit schemes (continued)Defined benefit pension schemes (continued)Results (continued)Changes in the present value of scheme liabilities 2 July2017 (unaudited)£m 3 July2016(unaudited)£m 1 January2017(audited)£m
Opening present value of scheme liabilities (2,127.6) (1,833.6) (1,833.6)
Interest cost (26.4) (32.7) (65.3)
Actuarial gain - experience - 0.6 14.0
Actuarial gain - change to demographic assumptions 26.8 28.5 30.0
Actuarial loss - change to financial assumptions (15.8) (244.1) (370.7)
Benefits paid 45.8 44.0 98.0
Bulk transfer due to buy out 173.3 - -
Closing present value of scheme liabilities (1,923.9) (2,037.3) (2,127.6)
Changes in the fair value of scheme assets 2 July2017 (unaudited)£m 3 July2016(unaudited)£m 1 January2017(audited)£m
Opening fair value of scheme assets 1,661.6 1,528.4 1,528.4
Interest income 20.5 27.5 54.9
Actual return on assets greater than discount rate 34.7 82.5 137.8
Contributions by employer 20.6 17.9 40.7
Benefits paid (45.8) (44.0) (98.0)
Administrative expenses (1.2) (1.0) (2.2)
Bulk transfer due to buy out (173.3) - -
Closing fair value of scheme assets 1,517.1 1,611.3 1,661.6
Fair value of scheme assets 2 July2017 (unaudited)£m 3 July2016(unaudited)£m 1 January2017(audited)£m
UK equities 165.0 183.3 208.2
US equities 226.2 206.3 217.2
Other overseas equities 262.8 215.2 235.7
Property 25.6 20.9 26.9
Corporate bonds 227.3 316.7 220.0
Fixed interest gilts 64.8 72.7 77.5
Index linked gilts 28.3 89.5 30.2
Liability driven investment 104.3 4.7 71.2
Cash and other 228.0 139.1 211.4
Invested and cash assets at fair value 1,332.3 1,248.4 1,298.3
Value of insurance contracts 184.8 362.9 363.3
Fair value of scheme assets 1,517.1 1,611.3 1,661.6
On 30 March 2017, the Trustees of the Mirror Schemes converted the insurance
policy held by the Mirror Group Pension Scheme to a buyout policy. This
reduced assets and liabilities by £173.3 million on that date.
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 1 January 2017 (audited) (0.3) (8.1) (3.4) (19.7) (31.5)
Charged to income statement (0.1) - (6.4) (7.8) (14.3)
Utilisation of provision 0.1 1.6 7.9 10.9 20.5
At 2 July 2017 (unaudited) (0.3) (6.5) (1.9) (16.6) (25.3)
(25.3)
The provisions have been analysed between current and non-current as follows:
2 July2017 (unaudited)£m 3 July2016(unaudited)£m 1 January2017(audited)£m
Current (21.9) (39.1) (27.9)
Non-current (3.4) (5.3) (3.6)
(25.3) (44.4) (31.5)
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 expected to be utilised within the next year.
15. Share capital and reserves
The share capital comprises 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 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
(2016: £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 £4.9 million (3 July
2016: £5.6 million and 1 January 2017: £5.5 million). During the period,
447,096 shares were released relating to grants made in prior years (27 weeks
ended 3 July 2016: 60,759 and 53 weeks ended 1 January 2017: 138,634). During
the prior year the Trust purchased 1,600,000 shares for a cash consideration
of £2.0 million and received a payment of £2.0 million from the Company to
purchase these shares.
During the period 1,219,237 awards were granted to Executive Directors on a
discretionary basis under the Long Term Incentive Plan (27 weeks ended 3 July
2016 and 53 weeks ended 1 January 2017: 859,794). 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 period 1,242,316 awards were granted to senior managers on a
discretionary basis under the Senior Management Incentive Plan (27 weeks
ending 3 July 2016: 1,431,028 and 53 weeks ended 1 January 2017: 1,494,019).
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 period 111,792 awards were granted to Executive Directors under the
Restricted Share Plan (27 weeks ended 3 July 2016 and 53 weeks ended 1 January
2017: 82,699). The awards vest after three years.
The Board approved a share buyback programme of up to £10 million which
commenced in August 2016. At the period end the Group had acquired 6,664,544
shares (1 January 2017: 2,505,366) for £6.9 million (1 January 2017: £2.3
million). The shares are held as Treasury shares.
16. Reconciliation of statutory results to adjusted results
26 weeks ended 2 July 2017 (unaudited)
Statutoryresults£m Non-recurring items(a)£m Amortisation(b)£m Pensioncharges(c)£m Restructuring charges (d) £m Finance costs(e)£m Tax items(f)£m Adjustedresults £m
Revenue 320.0 - - - - - - 320.0
Operating profit 47.3 7.4 0.3 1.2 6.4 - - 62.6
Profit before tax 38.2 7.4 0.3 7.1 6.4 1.9 - 61.3
Profit after tax 29.1 7.5 0.3 5.7 5.2 1.5 - 49.3
Basic EPS (p) 10.6 2.7 0.1 2.1 1.9 0.5 - 17.9
27 weeks ended 3 July 2016 (unaudited)
Revenue 374.7 - - - - - - 374.7
Operating profit 53.6 4.1 0.3 1.0 10.1 - - 69.1
Profit before tax 45.2 4.1 0.3 6.2 10.1 1.0 - 66.9
Profit after tax 36.0 3.2 0.3 5.0 8.1 0.8 - 53.4
Basic EPS (p) 12.8 1.2 0.1 1.8 2.9 0.3 - 19.1
53 weeks ended 1 January 2017 (audited)
Revenue 713.0 - - - - - - 713.0
Operating profit 93.5 26.1 0.6 2.2 15.1 - - 137.5
Profit before tax 76.5 26.1 0.6 12.6 15.1 2.3 - 133.2
Profit after tax 69.5 22.0 0.5 10.1 12.1 1.8 (9.8) 106.2
Basic EPS (p) 24.9 8.0 0.2 3.6 4.3 0.6 (3.5) 38.1
(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 as set out in note 8.
17. Like for like revenue
27 weeks ended 3 July2016 (reported)£m (a)£m (b)£m (c)£m 26 weeks ended 3 July2016 (like for like)£m
Publishing Print 305.8 (8.9) (0.1) (7.4) 289.4
Circulation 161.7 (5.8) - (0.4) 155.5
Advertising 127.2 (2.6) - (6.9) 117.7
Other 16.9 (0.5) (0.1) (0.1) 16.2
Publishing Digital 39.7 (0.6) - - 39.1
Display and transactional 28.1 (0.3) - - 27.8
Classified 11.6 (0.3) - - 11.3
Printing 19.5 (0.6) (1.3) - 17.6
Specialist Digital 7.7 - (2.9) - 4.8
Central 2.0 - - - 2.0
Total revenue 374.7 (10.1) (4.3) (7.4) 352.9
(a) Extra week of trading in the first half of 2016
(b) Independent print and distribution contract which ceased in April
2016 and Rippleffect which was sold in August 2016
(c) Metros handed back to DMGT and other portfolio changes
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.
INDEPENDENT REVIEW REPORT TO TRINITY MIRROR PLC
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the 26 weeks ended 2 July
2017 which comprises the consolidated income statement, the consolidated
statement of comprehensive income, the consolidated statement of changes in
equity, the consolidated cash flow statement, the consolidated balance sheet
and related notes 1 to 18. We have read the other information contained in the
half-yearly financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the
condensed set of financial statements.
This report is made solely to the Company in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 'Review of Interim
Financial Information Performed by the Independent Auditor of the Entity'
issued by the Auditing Practices Board. Our work has been undertaken so that
we might state to the Company those matters we are required to state to it in
an independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the Company, for our review work, for this report, or for the conclusions
we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the Disclosure and
Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 2, the annual financial statements of the Group are
prepared in accordance with IFRS as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard
34 'Interim Financial Reporting' as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the 26 weeks ended 2 July 2017 is not prepared, in all
material respects, in accordance with International Accounting Standard 34 as
adopted by the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
Deloitte LLP
Statutory Auditor
London, United Kingdom
31 July 2017
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