TIDMTNI
RNS Number : 7896U
Trinity Mirror PLC
03 August 2015
3 August 2015
Half-Yearly Financial Report
For the 26 weeks ended 28 June 2015
Key Highlights
Whilst market conditions for print advertising have remained
challenging in the first half, we have seen continued growth in
digital revenue. With tight management of the cost base, including
targeted structural cost savings of GBP20 million, the Board
remains confident that profits for the full year will be in line
with expectations.
-- Continued strong growth in digital audience and revenue
Digital continued to perform strongly during the first half,
with average monthly unique users and average monthly page views
(1) growing by 55% and 59% respectively. Publishing digital revenue
grew by 27% with Publishing digital display advertising revenue
growing by 44%.
-- Adjusted (2) profit before tax down 2.5% to GBP47.0 million
with adjusted earnings per share down 1.3% to 15.3 pence
Despite a decline of 8.7% or GBP27.6 million in underlying (3)
revenue, tight management of the cost base limited the decline in
adjusted profit before tax to only 2.5% or GBP1.2 million with
adjusted earnings per share down marginally by 1.3% to 15.3
pence.
The fall in statutory profit before tax primarily reflects the
non-recurring gain of GBP27.5 million in associates in the first
half of 2014 and the previously announced increase of GBP16.0
million (2014: increase of GBP4 million) in the provision for
historical issues in relation to phone hacking. Excluding the year
on year impact of these two items, statutory profit before tax
increased by GBP1.1 million.
-- Robust balance sheet and financial flexibility with net cash
(4) position of GBP23.9 million
A continued focus on delivering strong cash generation together
with the benefit of GBP16.3 million of dividends from associates
left the Group with a net cash position of GBP23.9 million as at 28
June 2015, compared to net debt of GBP19.3 million at the end of
2014. The strong balance sheet position provides the Group with the
financial flexibility to pay dividends and pursue investment
opportunities alongside appropriately funding pension scheme
liabilities.
-- Board approves an interim dividend of 2 pence per ordinary share
The Board has approved an interim dividend for 2015 of 2 pence
per ordinary share, payable on 30 November 2015.
-- Strategy remains on track
Although the trading environment remains challenging, the Board
remains confident that the strategy will deliver growth over the
medium term.
Results Adjusted results (2) Statutory results
2015 2014 2015 2014
GBPm GBPm GBPm GBPm
Revenue - actual 288.5 324.2 288.5 324.2
Revenue - underlying (3) 288.5 316.1 - -
Operating profit 47.9 50.3 19.6 60.0
Profit before tax 47.0 48.2 12.1 50.5
Earnings per share 15.3p 15.5p 4.0p 18.4p
(1) Average monthly unique users and page views for the
Publishing division across web, mobile and apps for January to June
2015 versus January to June 2014.
(2) 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.
(3) Underlying trends exclude revenues for title closures in the
South and the newsprint supply to the Independent and i which
ceased at the end of 2014. In the full year 2014, the revenue
generated by the titles closed in the South was GBP4.5 million and
from newsprint supply to the Independent and i was GBP11.1 million
and for the half year 2014 was GBP2.3 million and GBP5.8 million
respectively.
(4) On a contracted basis assuming that the private placement
loan notes and related cross-currency interest rate swaps are not
terminated prior to maturity.
Commenting on the interim results for 2015, Simon Fox, Chief
Executive, Trinity Mirror plc, said:
"The print advertising environment has been more challenging
than anticipated in the first half. As a result, whilst continuing
to invest in people and technology to drive the ongoing growth in
digital audience and revenue, we have taken further action to
address our print cost base. The strong cash generative nature of
the business has enabled us to continue to strengthen our balance
sheet, to the extent that the Group had a net cash position for the
first time in its history at the end of the half year. At the same
time we continue to make the agreed pension contributions whilst
paying an interim dividend of 2 pence per share.
I remain confident that our strategy will deliver sustainable
growth in revenue and profit over the medium term despite the
difficult print advertising market conditions. The actions we are
taking in support of both our print and digital products provide
the Board with confidence that profits for 2015 will be in line
with expectations."
Enquiries
Trinity Mirror
Simon Fox, Chief Executive 020 7293 3553
Vijay Vaghela, Group Finance Director 020 7293 3553
Brunswick
Mike Smith, Partner 020 7404 5959
Jon Drage, Director 020 7404 5959
Investor presentation
A presentation for analysts will be held at 9.30am on Monday 3
August 2015. The presentation will be live on our website:
www.trinitymirror.com at 9.30am and a playback will be available
from 2.00pm.
Statutory and adjusted basis
In the Management Report, performance is stated on an adjusted
basis to provide a more meaningful comparison of the Group's
performance. The adjusted results aim to demonstrate the
performance of the Group without the volatility created by
restructuring charges, non-recurring items and non-cash accounting
items. Set out in note 16 is the reconciliation between the
statutory results and the adjusted results.
Forward looking statements
Statements contained in this Half-Yearly Financial Report are
based on the knowledge and information available to the Company's
directors at the date it was prepared and therefore the facts
stated and views expressed may change after that date. By their
nature, the statements concerning the risks and uncertainties
facing the Company in this Half-Yearly Financial Report involve
uncertainty since future events and circumstances can cause results
and developments to differ materially from those anticipated. To
the extent that this Half-Yearly Financial Report contains any
statement dealing with any time after the date of its preparation
such statement is merely predictive and speculative as it relates
to events and circumstances which are yet to occur. The Company
undertakes no obligation to update these forward looking
statements.
Management Report
Operational Performance
The Group performance for the first half reflects a more
challenging print revenue environment. Despite this, continued
progress was made on our strategic initiatives.
Group revenue fell by 11.0% with Publishing revenue falling by
9.6% comprising Publishing print down 11.6% and Publishing digital
up 26.8%. On an underlying basis, Group revenue fell by 8.7% with
Publishing revenue declining by 8.8%, Publishing print declining by
10.9% and Publishing digital growing 26.8%. The Group has
experienced continued pressure in print national advertising
markets with a slowdown in retail spend, in particular
supermarkets, but also reduced spend in telecoms, motors and
entertainment categories.
The benefit of structural cost savings of GBP7 million, the
cessation of newsprint supply to the Independent and i of GBP5.8
million together with cost mitigation actions and lower newsprint
prices have contributed to operating costs falling by GBP32.9
million after increased investment in digital of GBP3 million.
Excluding the change in newsprint supply arrangements to the
Independent and i operating costs fell by GBP27.1 million.
Our share of results of associates increased by GBP0.4 million
to GBP3.5 million with Local World increasing by GBP0.3 million to
GBP3.1 million and PA Group increasing by GBP0.1 million to GBP0.4
million. Dividends of GBP16.3 million from associates were received
during the first half with GBP12.0 million from Local World and
GBP4.3 million from PA Group.
The fall in operating costs reduced the impact of lower revenues
on operating profit to only GBP2.4 million or 4.8% and the fall in
profit before tax to a marginal GBP1.2 million or 2.5%. Earnings
per share benefited from lower interest costs due to reduced
borrowings and from the fall in the rate of corporation tax and
fell marginally by 1.3% to 15.3 pence.
Non-recurring items during the first half totalled a charge of
GBP17.4 million. This comprised an increase of GBP16.0 million in
the provision in relation to phone hacking and a GBP1.4 million
charge related to the closure of our print plant in Blantyre,
Scotland, including GBP1.0 million of non-cash fixed asset write
offs. Restructuring charges in respect of cost reduction measures
of GBP7.3 million were incurred during the first half.
Statutory operating profit fell by GBP40.4 million to GBP19.6
million reflecting the gain of GBP27.5 million in the first half of
2014 arising on the disposal of MeteoGroup by our associate, PA
Group and a net increase of GBP12.0 million (GBP16 million charge
in first half of 2015 compared to a GBP4.0 million charge in the
first half of 2014) in the charge to the income statement for
dealing with historical legal issues in relation to phone hacking.
Excluding the year on year impact of these two items profit before
tax increased by GBP1.1 million.
Financial Flexibility
Continued strong cash flows enabled the Group to move to a net
cash position, the first time in its history. Cash balances of
GBP92.2 million exceed the outstanding private placement loan notes
totalling GBP68.3 million which are not due for repayment until
June 2017. The Group also has no drawings on its GBP60 million bank
facility which is committed until July 2018.
The deficit on the defined benefit pension schemes fell by
GBP10.4 million from GBP301.2 million to GBP290.8 million. Net of
tax the deficit is GBP232.6 million. Following the prepayment of
GBP17.0 million in December 2014, the Group has made contributions
of GBP9.9 million in the first half with payments of GBP10 million
expected in the second half. Thereafter, payments to the pension
schemes will be GBP36 million per annum.
The strong and improving balance sheet position provides the
Group with financial flexibility to pay dividends and pursue
investment opportunities alongside appropriately funding the
deficits in the pension schemes.
Dividends
The final dividend for 2014 of 3 pence per share was paid in
June 2015, being the first dividend paid by the Group since 2008.
The Board has approved an interim dividend for 2015 of 2 pence per
share. This will be paid on 30 November 2015 to shareholders on the
register on 2 October 2015. This is in line with the dividend
policy aligned to the free cash generation of the Group and the
investment required to deliver sustainable growth in revenue and
profit over the medium term.
Historical Legal Issues
Further to our announcement on 4 June 2015, we confirm that our
subsidiary, MGN Limited, is seeking permission to appeal to the
Court of Appeal the judgment handed down by Mr Justice Mann on 21
May 2015 in relation to civil claims relating to phone hacking. As
we have previously indicated, there remains uncertainty as to how
matters will progress. Further updates will be made if there are
any significant developments.
Management Report
Outlook
The revenue environment has remained challenging throughout the
first half. July revenue trends are better than those experienced
during May and June, with total revenue falling by 11% representing
an underlying decline of 9%. Although monthly revenue trends are
expected to remain volatile for the rest of the year the Board
continues to expect profits for the full year to be in line with
expectations.
Despite the difficult trading environment, the Board remains
confident that the strategy will deliver growth over the medium
term. However, in light of this more challenging print advertising
environment, the Group reviewed its cost reduction programme and,
as previously announced, is now targeting structural cost savings
of GBP20 million for the year, an increase on the GBP10 million
target announced in March 2015. This, coupled with ongoing cost
mitigation actions and continued investment to drive digital
revenue, will help underpin profits. The increased targeted cost
savings will result in restructuring costs increasing by some GBP5
million to GBP15 million. We have also reviewed our capital
expenditure programme and now anticipate capital expenditure of
GBP10 million, a reduction of GBP5 million from the previous
guidance of GBP15 million for the year.
Strategic Update
We continue to make progress towards delivering our vision "of
being a dynamic and growing media business that is an essential
part of our customers' daily lives". Our clear goal to deliver
sustainable growth in revenue and profit will be delivered through
four key areas of strategic focus:
-- Protecting and revitalising our core brands in print;
-- Growing our existing brands onto digital delivery channels;
-- Continuing our relentless focus on efficiency and cost management; and
-- Launching, developing, investing in or acquiring new
businesses built around distinctive content or audience.
Key highlights of progress on each area of strategic focus in
the first half of the year were:
Protecting and revitalising our core brands in print
We continue to enhance and adapt our portfolio to support
circulation volumes and optimise revenues and profits.
-- The Daily Mirror outperformed the UK national daily tabloid
market for the first half although volume trends have softened
compared to 2014. The market for our other titles remains
challenging with some individual titles performing well relative to
the market.
-- The Daily Mirror print advertising volume market share in the
UK national daily tabloid market declined from 18.6% to 18.1%,
although the share was up against the UK national daily popular
tabloid market. The Sunday Mirror, Sunday People and Daily Record
all grew advertising volume share while share declined for the
Sunday Mail. Our regional titles continue to experience difficult
advertising markets, particularly national advertising in our
metropolitan titles.
-- The launch of Britain's biggest free weekly newspaper, the
Manchester Weekly News, with a distribution of 265,000 across
Greater Manchester. Launched in April, the title replaced six
titles previously distributed across Manchester. It has a large
proportion of the editorial content and display advertising
editionised to three areas: Salford, South Manchester and
Tameside.
-- The launch of The Visiter, a new free newspaper covering the
entire Sefton region, replacing the Formby Times and the Crosby
Herald. The title is supported by a new region wide website,
www.visiter.co.uk, covering news, sport, local information and
What's On.
-- On 29 June 2015, the Liverpool Echo was re-launched with a
new design and approach to content based on consumer research and a
month long consultation with readers who provided feedback to the
Editor, Ali Machray via the Twitter hashtag #TellAli, the Echo's
website and hundreds of letters. The new design is a significant
change in format and layout compared to traditional newspapers and
reflects the changing media consumption habits of our readers with
less focus on crime, more reporting on things to do in the city and
improved coverage of both football clubs in the region.
-- The Trinity Mirror Solutions team are delivering thought
leadership to our advertising clients in a series of road shows.
The visits include live midday Editorial conferences hosted by
Trinity Mirror Editor-in-Chief Lloyd Embley. A core part of the
road show is to introduce Modal Britain to our advertising clients,
Trinity Mirror's mass-market audience which our brands
represent.
Management Report continued
Strategic Update continued
Growing our existing brands onto digital delivery channels
-- During the first half, average monthly unique users and
average monthly pages views grew by 55% and 59% respectively and
digital display revenue grew by 44%.
-- We have increased our operational investment across our
digital activities during the first half by GBP3 million with a
particular focus on content and product.
-- Mobile continues to be an increasingly important component of
digital revenue growth and we are enhancing our products and
advertising formats to take advantage of the ongoing opportunity in
this area.
-- Building on this momentum, the Mirror has launched a new app
with a completely new interface and user experience, giving users
faster and more personalised access to the Mirror's news stories.
This has been built in-house and marks a step-change in how the
Mirror delivers news to its mobile audience. We are now rolling out
the app for our other core sites.
-- Trinity Mirror Solutions have continued to build capabilities
within their Inventions team to fully benefit from the rising
interest in content marketing from our advertisers. In the period,
they have delivered digital and print creative solutions for
clients including Kellogg's, the NHS and Star Wars Day.
Continuing our relentless focus on efficiency and cost
management
-- A number of initiatives during the first half delivered
structural cost savings of GBP7 million. Key actions in the first
half included editorial and advertising changes to produce greater
efficiency across a number of titles including our national titles,
the closure of our small print plant in Blantyre, Scotland,
consolidation of pre press operations into Liverpool for the
regional titles and rationalisation of the property portfolio
enabling the sublet of space in Glasgow and Cardiff.
-- As previously announced, we have increased our structural
cost savings target for 2015 by GBP10 million to GBP20 million. The
increased targeted cost savings will result in restructuring costs
increasing by some GBP5 million to GBP15 million.
-- We have also reviewed our capital expenditure programme and
now anticipate capital expenditure of GBP10 million, a reduction of
GBP5 million from the previously guided GBP15 million for the
year.
Launching, developing, investing in or acquiring new businesses
built around distinctive content or audience
-- The Group's Sport Media team are the Official Match Day
Programme and Pre-Tournament Magazine Licensee for Rugby World Cup
2015 in England. Sport Media will produce and distribute, in print
and electronic format, all 48 Match Day Programmes, plus the
Official Pre-Tournament Magazine, and will use its reach of leading
regional news brands to assist with promoting and marketing the
tournament, which kicks off on 18 September 2015.
-- We continue to make progress on growing revenue from
Pinpoint, our app-based mobile advertising network. Pinpoint
enables advertisers to reach a geo-targeted audience of
approximately 2 million Trinity Mirror app users through their
mobile devices. After launching in the final quarter of 2014 we
have served over 160 advertisers including many household names
such as Paddy Power, Manchester City Council and Marks and
Spencer.
-- The Group launched two digital only brands during the first
half, 'getreading' and 'Belfast Live'. Both sites are making good
progress on building audience.
The Board is confident that its strategy to grow revenue and
profit over the medium term remains on track despite the difficult
print advertising market conditions. The strong cash position
provides significant flexibility for the Group to continue
investment in support of its strategy for growth whilst meeting its
pension obligations and paying dividends to shareholders.
Management Report
Group Review
Income statement Statutory results Adjusted results
2015 2014 2015 2014
GBPm GBPm GBPm GBPm
-------------------- --------------- -------------- -------------- --------------
Revenue
Publishing 254.6 281.6 254.6 281.6
Print 235.7 266.7 235.7 266.7
Digital 18.9 14.9 18.9 14.9
-------------------- --------------- -------------- -------------- --------------
Printing 24.2 33.8 24.2 33.8
Specialist Digital 7.8 7.2 7.8 7.2
Central 1.9 1.6 1.9 1.6
-------------------- --------------- -------------- -------------- --------------
Revenue 288.5 324.2 288.5 324.2
Costs (270.9) (293.5) (244.1) (277.0)
Associates 2.0 29.3 3.5 3.1
-------------------- --------------- -------------- -------------- --------------
Operating profit 19.6 60.0 47.9 50.3
Financing (7.5) (9.5) (0.9) (2.1)
-------------------- --------------- -------------- -------------- --------------
Profit before tax 12.1 50.5 47.0 48.2
Tax (2.2) (4.9) (9.0) (9.8)
-------------------- --------------- -------------- -------------- --------------
Profit after tax 9.9 45.6 38.0 38.4
-------------------- --------------- -------------- -------------- --------------
Earnings per share 4.0p 18.4p 15.3p 15.5p
-------------------- --------------- -------------- -------------- --------------
The results have been prepared for the 26 weeks ended 28 June
2015 (2015) and the comparative period has been prepared for the 26
weeks ended 29 June 2014 (2014). The results are presented on a
statutory and adjusted basis to provide a more meaningful
comparison of the Group's performance. Set out in note 16 is the
reconciliation between the statutory results and the adjusted
results.
Revenue fell by GBP35.7 million or 11.0% to GBP288.5 million.
Further details on the revenue trends for each division are shown
in the Divisional Review.
Statutory results Adjusted results
2015 2014 2015 2014
GBPm GBPm GBPm GBPm
----------------------------------------- --------------- --------------- -------------- --------------
Labour (96.6) (101.1) (96.6) (101.1)
Newsprint (33.2) (51.9) (33.2) (51.9)
Depreciation (11.7) (12.2) (11.7) (12.2)
Other (129.4) (128.3) (102.6) (111.8)
--------------- --------------- -------------- --------------
Non-recurring items (17.4) (4.0) - -
Amortisation of other intangible assets (1.1) (1.1) - -
Pension administrative expenses (1.0) (2.1) - -
Restructuring charges in respect of
cost reduction measures (7.3) (9.3) - -
Other (102.6) (111.8) (102.6) (111.8)
----------------------------------------- --------------- --------------- -------------- --------------
Costs (270.9) (293.5) (244.1) (277.0)
----------------------------------------- --------------- --------------- -------------- --------------
Statutory costs fell by GBP22.6 million or 7.7% to GBP270.9
million reflecting the reduced adjusted operating costs which
helped offset the more challenging print advertising market. There
was also an increase of GBP16.0 million in the provision (2014:
GBP4.0 million) for dealing with historical legal issues in
relation to phone hacking.
Adjusted operating costs fell by GBP32.9 million or 11.9% to
GBP244.1 million reflecting the benefit of structural cost savings
of GBP7 million, the cessation of newsprint supply to the
Independent and i of GBP5.8 million together with ongoing cost
mitigation actions and the benefit from reduced newsprint prices
which have more than offset increased investment in digital of GBP3
million and inflationary increases in non newsprint costs.
Management Report
Group Review continued
The Group has a 21.5% investment in PA Group and a 20.0%
investment in Local World, accounted for as associated
undertakings.
Statutory results Adjusted results
2015 2014 2015 2014
GBPm GBPm GBPm GBPm
---------------------------------------------- ---------------- --------------- --------------- --------------
Result before amortisation and non-recurring
items 3.5 3.1 3.5 3.1
Amortisation of other intangible assets (1.4) (1.4) - -
Non-recurring items (0.1) 27.6 - -
----------------------------------------------
Share of results of associates 2.0 29.3 3.5 3.1
---------------------------------------------- ---------------- --------------- --------------- --------------
The statutory share of the post tax profits from associates fell
by GBP27.3 million to GBP2.0 million. The 2014 non-recurring items
comprised our GBP27.5 million share of the gain on the disposal by
PA Group of its weather forecasting business, MeteoGroup, our
GBP0.4 million share of the profit of MeteoGroup recorded by PA
Group up to the date of completion less our GBP0.3 million share of
restructuring costs incurred by PA Group and Local World. Adjusted
share of the post tax profit from associates increased by GBP0.4
million to GBP3.5 million.
The fall in statutory operating profit of GBP40.4 million to
GBP19.6 million is driven by our share of the exceptional gain in
the first half of 2014 by PA Group on their disposal of MeteoGroup
and a net increase of GBP12.0 million in the charge to the income
statement for dealing with historical legal issues in relation to
phone hacking. Adjusted operating profit fell by only GBP2.4
million or 4.8% to GBP47.9 million with operating margin pre
associates increasing by 0.8 percentage points from 14.6% to
15.4%.
Statutory results Adjusted results
2015 2014 2015 2014
GBPm GBPm GBPm GBPm
-------------------------------------------- --------------- --------------- --------------- ---------------
Investment revenues 0.3 0.2 0.3 0.2
Pension finance charge (5.5) (5.5) - -
Finance costs (2.3) (4.2) (1.2) (2.3)
Interest on bank overdrafts and borrowings (1.2) (2.3) (1.2) (2.3)
Fair value loss on derivative financial
instruments (2.0) (5.0) - -
Foreign exchange gain on retranslation
of borrowings 0.9 3.1 - -
-------------------------------------------- --------------- --------------- --------------- ---------------
Financing (7.5) (9.5) (0.9) (2.1)
-------------------------------------------- --------------- --------------- --------------- ---------------
Statutory financing costs which include the pension finance
charge, the change in derivative financial instruments and the
foreign exchange changes on retranslation of foreign currency
borrowings fell by GBP2.0 million to GBP7.5 million. Adjusted
financing costs fell by GBP1.2 million to GBP0.9 million reflecting
the benefit of the material fall in long term debt and the
continued benefit of the low interest rate environment.
The statutory tax charge of GBP2.2 million (2014: GBP4.9
million) comprises a current tax charge of GBP2.6 million (2014:
GBP7.8 million) and a deferred tax credit of GBP0.4 million (2014:
GBP2.9 million). The effective tax rate is lower than the standard
rate of corporation tax as the share of results of associates is
post tax. The adjusted tax charge of GBP9.0 million (2014: GBP9.8
million) represents 19.3% (2014: 20.3%) of adjusted profit before
tax and reflects the benefit of the reduction in the rate of
corporation tax from 21.0% to 20.0% on 1 April 2015.
Statutory results Adjusted results
2015 2014 2015 2014
GBPm GBPm GBPm GBPm
----------------------------------- ---------------- --------------- -------------- --------------
Profit after tax 9.9 45.6 38.0 38.4
---------------- --------------- -------------- --------------
Weighted average number of shares
(000's) 249,109 247,597 249,109 247,597
----------------------------------- ---------------- --------------- -------------- --------------
Earnings per share 4.0p 18.4p 15.3p 15.5p
----------------------------------- ---------------- --------------- -------------- --------------
Statutory earnings per share fell by 14.4 pence or 78.3% to 4.0
pence and adjusted earnings per share fell marginally by 0.2 pence
or 1.3% to 15.3 pence. The increase in the weighted average number
of shares year on year reflects the impact of the 2,119,839 share
options exercised during the period and the 3,408,484 share options
exercised during the prior year partially offset by the 1,391,620
of shares acquired by the Trustees of the Trinity Mirror Employee
Benefit Trust in the prior year.
Management Report
Divisional Review
The Group has four operating segments, each of which is a
division, that are regularly reviewed for the purposes of
allocating resources and assessing performance. The divisional
review that follows is presented on an adjusted basis and there is
no difference between the operating profit by division and the
segment result of each operating segment that is shown in note
3.
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
recruitment classified business 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 revenue and adjusted operating profit by operating segment
is presented below:
2015 2014 Variance Variance
GBPm GBPm GBPm %
--------------------------- ------ ------ --------- ---------
Publishing 254.6 281.6 (27.0) (9.6)
Printing 24.2 33.8 (9.6) (28.4)
Specialist Digital 7.8 7.2 0.6 8.3
Central 1.9 1.6 0.3 18.8
Revenue 288.5 324.2 (35.7) (11.0)
--------------------------- ------ ------ --------- ---------
Publishing 49.5 53.7 (4.2) (7.8)
Printing - - - -
Specialist Digital 1.3 0.8 0.5 62.5
Central (2.9) (4.2) 1.3 31.0
Adjusted Operating profit 47.9 50.3 (2.4) (4.8)
--------------------------- ------ ------ --------- ---------
Revenue on an underlying basis is:
2015 2014 Variance Variance
GBPm GBPm GBPm %
-------------------- ------ ------ --------- ---------
Publishing 254.6 279.3 (24.7) (8.8)
Printing 24.2 28.0 (3.8) (13.6)
Specialist Digital 7.8 7.2 0.6 8.3
Central 1.9 1.6 0.3 18.8
Revenue 288.5 316.1 (27.6) (8.7)
-------------------- ------ ------ --------- ---------
The impact on operating profit is immaterial.
Publishing
The revenue and operating profit for the Publishing division is
as follows:
2015 2014 Variance Variance
GBPm GBPm GBPm %
------------------ -------- -------- --------- ---------
Print 235.7 266.7 (31.0) (11.6)
Circulation 134.3 142.5 (8.2) (5.8)
Advertising 87.7 108.3 (20.6) (19.0)
Other 13.7 15.9 (2.2) (13.8)
------------------ -------- -------- --------- ---------
Digital 18.9 14.9 4.0 26.8
Advertising 16.6 13.2 3.4 25.8
Other 2.3 1.7 0.6 35.3
------------------ -------- -------- --------- ---------
Revenue 254.6 281.6 (27.0) (9.6)
------------------ -------- -------- --------- ---------
Costs (205.1) (227.9) 22.8 10.0
------------------ -------- -------- --------- ---------
Operating profit 49.5 53.7 (4.2) (7.8)
------------------ -------- -------- --------- ---------
Operating margin 19.4% 19.1% 0.3% 1.6
------------------ -------- -------- --------- ---------
Revenue fell by 9.6% or GBP27.0 million to GBP254.6 million with
print revenue declining by 11.6% and digital revenue growing by
26.8%. On an underlying basis revenue fell by 8.8% with print
revenue declining by 10.9% and digital revenue growing by
26.8%.
Management Report
Divisional Review continued
Publishing continued
Costs fell by GBP22.8 million or 10.0% to GBP205.1 million. This
includes structural cost savings, title closures, the continued
tight management of the cost base to help mitigate the impact of a
challenging print market and the benefit from a fall in newsprint
prices. The fall in costs is after increased investment of GBP3.0
million in digital resources and product development.
Although revenue fell by GBP27.0 million, operating profit fell
by only GBP4.2 million or 7.8% to GBP49.5 million with operating
margin increasing by 0.3 percentage points from 19.1% to 19.4%.
Print revenue
Circulation revenue fell by 5.8% compared to a decline of 1.2%
in the first half of 2014 reflecting the delayed cover price
increase of the Daily Mirror Monday to Friday edition which took
effect in May whereas this was implemented in January in 2014. In
June, the circulation revenues fell by a reduced 5.0%.
The Daily Mirror outperformed the UK national daily tabloid
market for the first half with a volume decline of 8.3% compared to
an 8.4% decline for the market. The Sunday Mirror and Sunday People
declined by 9.8% and 12.8% respectively in a UK national Sunday
tabloid market that declined by 10.1%. The Daily Record was down
12.2% against an overall Scottish daily tabloid market decline of
10.3% and the Sunday Mail was down 13.4% against an overall
Scottish Sunday tabloid market decline of 11.5%. The market for our
regional titles remains difficult with declines of 12.5% for paid
for dailies, 14.1% for paid for weeklies and 16.8% for paid for
Sundays. Whist we have individual titles performing well relative
to the market, our overall trends remain challenging.
Print advertising fell by 19.0% with display lower by 21.1%,
classified lower by 14.8% and other categories down by 22.2%.
Underlying print advertising fell by 17.5% with display lower by
20.1%, classified lower by 12.2% and other categories down by
22.2%.
The Daily Mirror print advertising volume market share in the UK
national daily tabloid market declined from 18.6% to 18.1%,
although the share was up against the UK national daily popular
tabloid market. The Sunday Mirror and Sunday People have grown
share with the Sunday Mirror growing share from 17.5% to 17.7% and
the Sunday People growing share from 11.0% to 12.6%. The Daily
Record share improved from 15.0% to 15.7% and the Sunday Mail share
declined from 28.1% to 27.3%. Our regional titles continue to
experience difficult advertising markets, particularly national
advertising in our metropolitan titles.
Other print revenue fell by 13.8% driven by continued pressure
on leaflets, lower waste sales due to lower prices and lower reader
offers revenue. Underlying other print revenue fell by 12.9%.
Digital revenue
Digital revenue grew by 26.8% year on year driven by strong
growth in our publishing digital audience with average monthly
unique users increasing 55% to 95.3 million year on year and with
average monthly page views increasing 59% to 698.4 million year on
year. In June, monthly unique users were 96.1 million and monthly
page views were 759.8 million.
Digital advertising revenue increased by 25.8% year on year.
Digital display revenue grew by 44.0% with classified falling
marginally by 2.2%. Digital other revenue increased by 35.3%
benefiting from the growth in audience and new commercial
partnerships.
Printing
The revenue and costs of the Printing division is as
follows:
2015 2014 Variance Variance
GBPm GBPm GBPm %
------------------------------ ------- ------- --------- ---------
Contract printing 17.5 19.5 (2.0) (10.3)
Newsprint supply 5.6 13.0 (7.4) (56.9)
Other revenue 1.1 1.3 (0.2) (15.4)
Revenue 24.2 33.8 (9.6) (28.4)
------------------------------ ------- ------- --------- ---------
External costs (79.2) (98.8) 19.6 19.8
Publishing division recharge 55.0 65.0 (10.0) (15.4)
------------------------------ ------- ------- --------- ---------
Operating result - - - -
------------------------------ ------- ------- --------- ---------
Management Report
Divisional Review continued
Printing continued
Revenue fell by GBP9.6 million or 28.4% to GBP24.2 million. More
than half of the decline has been driven by the ending of a
newsprint supply agreement to the Independent and i at the end of
2014. The change in the newsprint supply agreement has no impact on
profit, but reduces revenue and cost for newsprint supply. In the
first half of 2014, newsprint supply revenue from the Independent
and i amounted to GBP5.8 million with annual revenue in 2014 of
GBP11.1 million. On an underlying basis revenue fell by 13.6%.
Revenues from contract printing fell by GBP2.0 million or 10.3%
to GBP17.5 million. Revenue from newsprint supplied to contract
print customers fell due to lower volumes and lower newsprint
prices.
External costs fell by GBP19.6 million or 19.8% to GBP79.2
million due to cost reduction initiatives, a fall in newsprint
prices, the cessation of the newsprint supply contract to the
Independent and i and reduction in costs associated with falling
contract print revenue. The net cost recharged to the Publishing
division was GBP55.0 million compared to GBP65.0 million in the
prior year. This fall in the recharge reflects the impact of cost
savings, the fall in newsprint prices and reduced circulation
volumes.
Specialist Digital
The revenue and operating profit of the Specialist Digital
division is as follows:
2015 2014 Variance Variance
GBPm GBPm GBPm %
------------------ ------ ------ --------- ---------
Advertising 2.5 2.3 0.2 8.7
Other 5.3 4.9 0.4 8.2
Revenue 7.8 7.2 0.6 8.3
------------------ ------ ------ --------- ---------
Costs (6.5) (6.4) (0.1) (1.6)
------------------ ------ ------ --------- ---------
Operating profit 1.3 0.8 0.5 62.5
------------------ ------ ------ --------- ---------
The Specialist Digital division includes Trinity Mirror Digital
Recruitment, our digital classified recruitment vertical and
Rippleffect and Communicator, our digital marketing services
businesses.
Following the restructuring of the recruitment sites to focus on
the three key brands of GAAPweb, SecsintheCity and TotallyLegal,
our recruitment revenues have grown by 8.7%. Our marketing services
businesses delivered strong revenue growth of 8.2%.
Operating profit increased by 62.5% or GBP0.5 million.
Central
The revenue and operating loss of the Central division is as
follows:
2015 2014 Variance Variance
GBPm GBPm GBPm %
---------------- ------ ------ --------- ---------
Revenue 1.9 1.6 0.3 18.8
Costs (8.3) (8.9) 0.6 6.7
Associates 3.5 3.1 0.4 12.9
Operating loss (2.9) (4.2) 1.3 31.0
---------------- ------ ------ --------- ---------
The Central division includes revenue and costs not allocated to
the operational divisions and the share of results of associates.
The result for the period was a loss of GBP2.9 million compared to
a loss of GBP4.2 million in the first half of 2014.
Revenue primarily relates to rental income from surplus office
space at the Group's main office at Canary Wharf which increased as
more vacant space was leased to third parties.
Costs fell by GBP0.6 million from GBP8.9 million to GBP8.3
million reflecting cost savings.
The increase in the share of results of associates is driven by
Local World increasing by GBP0.3 million to GBP3.1 million and PA
Group increasing by GBP0.1 million to GBP0.4 million.
Management Report
Other Items
Pensions
The Group operates a defined contribution pension scheme with
contributions and associated costs charged to operating profit.
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 buyouts of the five smaller
schemes in 2014 and 2015.
The valuations of the remaining schemes as at 31 December 2013
were completed on 9 December 2014. Deficit funding contributions
were agreed at GBP36.2 million for 2015, 2016 and 2017. In
addition, the Group has agreed that in respect of dividend payments
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.
In December 2014, the Group prepaid contributions for 2015 and
2016 of GBP16.5 million and GBP0.5 million respectively and
therefore payments due in 2015 are GBP19.7 million with GBP9.9
million paid in the first half. The next valuation date of the
schemes is 31 December 2016 and valuations are expected to be
finalised by the end of 2017.
The accounting pension deficit fell during the first half by
GBP10.4 million from GBP301.2 million (GBP241.0 million net of
deferred tax) to GBP290.8 million (GBP232.6 million net of deferred
tax). This fall in the deficit primarily reflects the contributions
paid during the first half with changes in the discount rate,
inflation and other assumptions collectively having a minimal
impact. The decrease in the accounting pension deficit does not
impact the agreed funding commitments.
Cash and borrowings
Cash balances of GBP92.2 million were held at the reporting
date.
Contracted debt, assuming that the private placement loan notes
and related cross-currency interest rate swaps are not terminated
prior to maturity, was GBP68.3 million. After deducting the GBP68.3
million of contracted debt due on the private placement loan notes,
the Group had contracted net cash of GBP23.9 million at the
reporting date. The final repayment on the private placement loan
notes is GBP68.3 million, due in June 2017.
Statutory debt, which includes the US$ denominated private
placement loan notes at the reporting date exchange rate and the
related cross-currency interest rate swaps at fair value, fell by
GBP42.1 million from a net debt of GBP13.1 million to net cash of
GBP29.0 million. The fair value of the Group's cross-currency
interest rate swaps was an asset of GBP1.2 million and the Sterling
amount of the private placement loan notes was GBP64.4 million.
The Group has had no drawings on its GBP60 million bank facility
which remains committed until July 2018.
Related party transactions
There have been no changes in the nature of related party
transactions and no material transactions during the first
half.
Principal risks and uncertainties
The principal risks and uncertainties together with mitigating
actions that affected the Group during the first half and going
forward are described on pages 17 and 18 in the Trinity Mirror plc
2014 Annual Report. The current principal risks and uncertainties
are:
-- Strategy - the overall strategy or elements of the strategy
are inappropriate and the delivery of the strategy is badly
executed;
-- Revenue loss - faster than anticipated loss of revenue from
print and failure to deliver new revenue streams to offset print
decline and drive revenue growth;
-- Historical legal issues - damage to reputation arising from
historical events, direct financial impact from legal claims and
distraction of senior management time from delivering the strategy;
and
-- Pensions - pension deficits grow at such a rate so as to
affect the viability of the Group itself or so that the annual
funding costs consume a disproportionate level of cash flow.
Management Report
Other Items continued
Going concern
In determining whether the Group's half-yearly financial report
can be prepared on a going concern basis, the directors considered
all factors likely to affect its future development, performance
and its financial position, including cash flows, liquidity
position and borrowing facilities and the risks and uncertainties
relating to business activities.
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 Company and
the Group have 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.
Board changes
Donal Smith retired from the Board at the conclusion of the
Annual General Meeting on 7 May 2015.
Statement of directors' responsibilities
The directors are responsible for preparing the half-yearly
financial report in accordance with applicable laws and
regulations.
The directors confirm to the best of their knowledge:
a) the consolidated financial statements have been prepared in
accordance with IAS 34 'Interim Financial Reporting' as adopted by
the European Union; and
b) the half-yearly financial report includes a fair review of
the information required by the Financial Conduct Authority's
Disclosure and Transparency Rules 4.2.7R (indication of important
events during the first six months and description of principal
risks and uncertainties for the remaining six months of the year)
and 4.2.8R (disclosure of related parties transactions and changes
therein).
By order of the Board of directors
Simon Fox Vijay Vaghela
Chief Executive Group Finance Director
Consolidated income statement
for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014
and 52 weeks ended 28 December 2014)
26 weeks 26 weeks 52 weeks
ended ended ended
28 June 29 June 28 December
2015 (unaudited) 2014 (unaudited) 2014
notes GBPm GBPm (audited)
GBPm
------------------------------------------- ------- ------------------ ------------------ -------------
Revenue 3,4 288.5 324.2 636.3
Cost of sales (149.9) (170.4) (329.9)
------------------------------------------- ------- ------------------ ------------------ -------------
Gross profit 138.6 153.8 306.4
Distribution costs (33.3) (33.5) (67.5)
Administrative expenses:
Non-recurring items 5 (17.4) (4.0) (12.0)
Amortisation of other intangible assets (1.1) (1.1) (2.2)
Pension administrative expenses 13 (1.0) (2.1) (3.2)
Restructuring charges in respect of cost
reduction measures (7.3) (9.3) (14.0)
Other administrative expenses (60.9) (73.1) (139.5)
Share of results of associates:
Results before non-recurring items and
amortisation 3.5 3.1 6.1
Non-recurring items 5 (0.1) 27.6 27.2
Amortisation of other intangible assets (1.4) (1.4) (2.7)
Operating profit 3 19.6 60.0 98.6
Investment revenues 6 0.3 0.2 0.3
Pension finance charge 13 (5.5) (5.5) (11.2)
Finance costs 7 (2.3) (4.2) (6.1)
------------------------------------------- ------- ------------------ ------------------ -------------
Profit before tax 12.1 50.5 81.6
Tax charge 8 (2.2) (4.9) (11.8)
------------------------------------------- ------- ------------------ ------------------ -------------
Profit for the period attributable to
equity holders of the parent 9.9 45.6 69.8
Statutory earnings per share 2015 2014 2014
Pence Pence Pence
------------------------------------------- ------- ------------------ ------------------ -------------
Earnings per share - basic 10 4.0 18.4 28.1
Earnings per share - diluted 10 3.9 17.9 27.4
------------------------------------------- ------- ------------------ ------------------ -------------
Adjusted* earnings per share 2015 2014 2014
Pence Pence Pence
------------------------------------------- ------- ------------------ ------------------ -------------
Earnings per share - basic 10 15.3 15.5 32.8
Earnings per share - diluted 10 14.9 15.1 32.0
------------------------------------------- ------- ------------------ ------------------ -------------
* 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.
Consolidated statement of comprehensive income
for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014
and 52 weeks ended 28 December 2014)
26 weeks 26 weeks 52 weeks
ended ended ended
28 June 29 June 28 December
2015 (unaudited) 2014 (unaudited) 2014
notes GBPm GBPm (audited)
GBPm
--------------------------------------------- ------- ------------------ ------------------ -------------
Profit for the period 9.9 45.6 69.8
--------------------------------------------- ------- ------------------ ------------------ -------------
Items that will not be reclassified to
profit and loss:
Actuarial gains/(losses) on defined benefit
pension schemes 13 7.0 (12.3) (52.8)
Tax on actuarial gains/(losses) on defined
benefit pension schemes 8 (1.4) 2.5 10.6
Share of items recognised by associates (3.2) - -
--------------------------------------------- ------- ------------------ ------------------ -------------
Other comprehensive income/(costs) for
the period 2.4 (9.8) (42.2)
Total comprehensive income for the period 12.3 35.8 27.6
--------------------------------------------- ------- ------------------ ------------------ -------------
Consolidated cash flow statement
for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014
and 52 weeks ended 28 December 2014)
26 weeks 26 weeks 52 weeks
ended ended
28 June 29 June ended
2015 (unaudited) 2014 (unaudited) 28 December
notes GBPm GBPm 2014
(audited)
GBPm
------------------------------------------------ ------- ------------------ ------------------ -------------
Cash flows from operating activities
Cash generated from operations 11 42.0 58.8 90.1
Income tax paid (4.6) (9.3) (17.3)
------------------------------------------------ ------- ------------------ ------------------ -------------
Net cash inflow from operating activities 37.4 49.5 72.8
------------------------------------------------ ------- ------------------ ------------------ -------------
Investing activities
Interest received 0.3 0.2 0.3
Dividends received from associates 16.3 - 16.0
Proceeds on disposal of subsidiary undertaking - 0.9 0.9
Proceeds on disposal of property, plant
and equipment - 0.1 0.2
Purchases of property, plant and equipment (2.1) (5.0) (6.4)
Net cash received from/(used in) investing
activities 14.5 (3.8) 11.0
------------------------------------------------ ------- ------------------ ------------------ -------------
Financing activities
Dividends paid (7.5) - -
Interest paid on borrowings (1.2) (2.5) (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)
Retained
Share premium Capital earnings
Share account redemption and other
capital GBPm reserve reserves Total
GBPm GBPm GBPm GBPm
------------------------------------- ---------- ---------------- ------------- ----------- --------
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)
28 June 29 June 28 December
notes 2015 2014 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
--------------------------------------------- ------- ------------- ------------- ------------
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 Publishing
(unaudited) 2015 Specialist
GBPm Printing Digital Central Total
2015 2015 2015 2015
GBPm GBPm GBPm GBPm
---------------------------------- ------------ ----------- ------------- ---------- --------
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
---------------------------------- ------------ ----------- ------------- ---------- --------
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 Publishing Specialist
(unaudited) 2014 Printing Digital Central Total
GBPm 2014 2014 2014 2014
GBPm GBPm GBPm GBPm
---------------------------------- ------------ ----------- ----------- ---------- --------
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
---------------------------------- ------------ ----------- ----------- ---------- --------
52 weeks ended 28 December 2014 Publishing Specialist
(audited) 2014 Printing Digital Central Total
GBPm 2014 2014 2014 2014
GBPm GBPm GBPm GBPm
---------------------------------- ------------ ----------- ----------- ---------- --------
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
---------------------------------- ------------ ----------- ----------- ---------- --------
4. Revenue
26 weeks 26 weeks 52 weeks
ended ended
28 June 29 June ended
2015 (unaudited) 2014 (unaudited) 28 December
GBPm GBPm 2014
(audited)
GBPm
--------------- ------------------ ------------------ -------------
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 26 weeks 52 weeks
ended ended
28 June 29 June ended
2015 (unaudited) 2014 (unaudited) 28 December
GBPm GBPm 2014
(audited)
GBPm
---------------------------- ------------------ ------------------ -------------
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 26 weeks 52 weeks
ended ended
28 June 29 June ended
2015 (unaudited) 2014 (unaudited) 28 December
GBPm GBPm 2014
(audited)
GBPm
-------------------------------------------------- ------------------ ------------------ -------------
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 GBP16.0
million (26 weeks ended 29 June 2014: GBP4.0 million and 52 weeks
ended 28 December 2014: GBP12.0 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 GBP1.0 million.
(c) Share of the after tax restructuring costs incurred by PA
Group. In the prior year, the GBP27.2 million gain comprised our
GBP27.5 million share of the gain on disposal by PA Group of its
weather forecasting business, MeteoGroup, our GBP0.4 million share
of the profit of MeteoGroup recorded by PA Group up to the date of
completion less our GBP0.7 million share of restructuring costs
incurred by PA Group and Local World.
6. Investment revenues
26 weeks 26 weeks 52 weeks
ended ended
28 June 29 June ended
2015 (unaudited) 2014 (unaudited) 28 December
GBPm GBPm 2014
(audited)
GBPm
-------------------------------------------- ------------------ ------------------ -------------
Interest income on bank deposits and other
interest receipts 0.3 0.2 0.3
-------------------------------------------- ------------------ ------------------ -------------
7. Finance costs
26 weeks 26 weeks 52 weeks
ended ended
28 June 29 June ended
2015 (unaudited) 2014 (unaudited) 28 December
GBPm GBPm 2014
(audited)
GBPm
----------------------------------------------------- ------------------ ------------------ -------------
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 26 weeks 52 weeks
ended ended
28 June 29 June ended
2015 (unaudited) 2014 (unaudited) 28 December
GBPm GBPm 2014
(audited)
GBPm
---------------------------------------------- ------------------ ------------------ -------------
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 GBP9.3 million
(29 June 2014: GBP15.2 million and 28 December 2014: GBP12.0
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 GBP1.4 million comprising a deferred tax charge of
GBP2.1 million and a current tax credit of GBP0.7 million (26 weeks
ended 29 June 2014: a credit of GBP2.5 million comprising of a
deferred tax credit of GBP2.5 million and 52 weeks ended 28
December 2014: a credit of GBP10.6 million comprising a deferred
tax credit of GBP9.8 million and a current tax credit of GBP0.8
million).
The tax on share-based payments taken to equity is a charge of
GBP0.3 million (26 weeks ended 29 June 2014: a charge of GBP3.6
million and 52 weeks ended 28 December 2014: a charge of GBP3.3
million comprising a deferred tax charge of GBP3.7 million and a
current tax credit of GBP0.4 million).
9. Dividends
26 weeks 26 weeks 52 weeks
ended ended
28 June ended 28 December
2015 29 June 2014
(unaudited) 2014 (audited)
Pence (unaudited) Pence
Pence
------------------- -------------- -------------- -------------
Dividend approved 2.0 - -
Dividend paid 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 GBP7.5 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
26 weeks 26 weeks 52 weeks
ended ended
28 June 29 June ended
2015 (unaudited) 2014 (unaudited) 28 December
GBPm GBPm 2014
(audited)
GBPm
------------------------------------------------- ------------------ ------------------ -------------
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
------------------------------------------------- ------------------ ------------------ -------------
* 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.
26 weeks 52 weeks
ended ended
26 weeks
ended 29 June 28 December
28 June 2014 2014
2015 (unaudited) (unaudited) (audited)
Weighted average number of ordinary shares Thousand Thousand 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 26 weeks 52 weeks
ended ended ended
28 June 29 June 28 December
2015 (unaudited) 2014 2014
GBPm (unaudited) (audited)
GBPm GBPm
--------------------------------------------------- ----------------- ------------ ------------
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 Derivative 28 June
2014 financial
instruments*
(audited) GBPm Foreign 2015
exchange*
GBPm Cash flow GBPm (unaudited)
GBPm GBPm
---------------------------------- ------------- ----------- --------------- ------------ --------------
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 28 June
2014 2015
(audited) Cash flow (unaudited)
GBPm GBPm GBPm
--------------------------- ------------ ----------- -------------
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 28 December
2014
2015 (audited)
(unaudited) GBPm
GBPm
---------------------------------------- ------------- ------------
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 GBP6.6 million (26 weeks ended 29 June 2014: GBP7.1
million and 52 weeks ended 28 December 2014: GBP13.9 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 GBP46
million, projected to rise to an annual peak in 2039 of GBP83
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
GBP216.0 million for the Old Scheme/Past Service Scheme, GBP120.7
million for the MGN Scheme, GBP31.9 million for the Trinity Scheme
and GBP26.7 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 GBP36.2
million for 2015, 2016 and 2017. Contributions remain at around
GBP36 million from 2018 to 2023 and then reduce to around GBP21
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 2015, contributions paid to the defined
benefit pension schemes were GBP9.9 million (52 weeks ended 28
December 2014: GBP18.2 million). Payments were GBP5.4 million (52
weeks ended 28 December 2014: GBP9.2 million) to the Past Service
Scheme, GBP1.6 million (52 weeks ended 28 December 2014: GBP3.7
million) to the MGN Scheme, GBP1.9 million (52 weeks ended 28
December 2014: GBP2.7 million) to the Trinity Scheme and GBP1.0
million (52 weeks ended 28 December 2014: GBP2.6 million) to the
MIN Scheme. No payments were made in the first half of 2014. In the
second half of 2014, the Group pre-paid deficit funding
contributions of GBP17.0 million (GBP16.5 million in respect of
2015 and GBP0.5 million in respect of 2016) and other contributions
of GBP1.2 million.
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 reporting date the
insured annuity policies covered 20% 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. At the reporting date this amounted to 36% 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 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: to further reduce risk as the schemes,
which are closed to future accrual.
The Group is not exposed to any unusual, entity specific or
scheme specific risks. There were no plan amendments, settlements
or curtailments in the first half of 2015 or during 2014 which
resulted in a pension cost.
Actuarial projections at the 2014 year end showed removal of the
accounting deficit by 2023 due to scheduled contributions and asset
outperformance over assumed investment returns.
Results
For the purposes of the Group's 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 28 June 2015.
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)
The assets and liabilities of the schemes as at the reporting
date are:
Old Scheme/Past
Service Scheme MGN Scheme Trinity Scheme MIN Scheme
GBPm GBPm GBPm GBPm
------------------------------------ --------------- ------------ ---------------- ------------
Present value of uninsured scheme
liabilities (599.3) (488.5) (307.4) (100.7)
Present value of insured scheme
liabilities (180.6) - (78.3) (104.0)
------------------------------------ --------------- ------------ ---------------- ------------
Total present value of scheme
liabilities (779.9) (488.5) (385.7) (204.7)
------------------------------------ --------------- ------------ ---------------- ------------
Invested and cash assets at
fair value 411.4 398.6 325.0 70.1
Value of insurance contracts 180.6 - 78.3 104.0
------------------------------------ --------------- ------------ ---------------- ------------
Total value of scheme assets 592.0 398.6 403.3 174.1
------------------------------------ --------------- ------------ ---------------- ------------
Net scheme (deficit)/surplus (187.9) (89.9) 17.6 (30.6)
------------------------------------ --------------- ------------ ---------------- ------------
Based on actuarial advice, the assumptions used in calculating
the scheme liabilities and the actuarial value of those liabilities
are:
28 June 29 June 28 December
2015 2014 2014
-------------------------------------------------- -------- -------- ------------
Financial assumptions (nominal % pa)
Discount rate 3.80 4.25 3.70
Retail price inflation rate 3.20 3.25 3.05
Consumer price inflation rate 2.00 2.25 1.85
Rate of pension increase in deferment 2.00 2.25 1.85
Rate of pension increases in payment 3.90 3.90 3.85
-------------------------------------------------- -------- -------- ------------
Mortality assumptions - future life expectancies
from age 65 (years)
Male currently aged 65 22.0 22.3 22.0
Female currently aged 65 23.9 24.4 23.9
Male currently aged 55 22.8 23.1 22.8
Female currently aged 55 24.8 25.4 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 on Effect on
liabilities deficit
GBPm GBPm
--------------------------------------------- ------------ ---------
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:
26 weeks 26 weeks 52 weeks
ended ended ended
28 June 29 June 28 December
2015 2014 2014
(unaudited) (unaudited) (audited)
Consolidated income statement GBPm GBPm GBPm
------------------------------------------- -------------- ------------- -------------
Pension scheme administrative expenses (1.0) (2.1) (3.2)
Pension scheme finance charge (5.5) (5.5) (11.2)
------------------------------------------- -------------- ------------- -------------
Defined benefit cost recognised in income
statement (6.5) (7.6) (14.4)
------------------------------------------- -------------- ------------- -------------
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)
26 weeks 26 weeks 52 weeks
ended ended ended
Consolidated statement of comprehensive 28 June 29 June 28 December
income
2015 (unaudited) 2014 2014
GBPm (unaudited) (audited)
GBPm GBPm
Actuarial loss due to liability experience - (0.3) (7.9)
Actuarial loss due to liability assumption
changes (1.1) (22.9) (90.6)
------------------------------------------------- ------------------ ------------- -------------
Total liability actuarial loss (1.1) (23.2) (98.5)
Returns on scheme assets greater than discount
rate 8.1 10.9 45.7
Total gain/(loss) recognised in statement
of comprehensive income 7.0 (12.3) (52.8)
------------------------------------------------- ------------------ ------------- -------------
Consolidated balance sheet 28 June 29 June 28 December
2015 2014 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
----------------------------------------------- -------------- ------------- ------------
Present value of uninsured scheme liabilities (1,495.9) (1,419.8) (1,492.4)
Present value of insured scheme liabilities (362.9) (385.5) (370.8)
----------------------------------------------- -------------- ------------- ------------
Total present value of scheme liabilities (1,858.8) (1,805.3) (1,863.2)
----------------------------------------------- -------------- ------------- ------------
Invested and cash assets at fair value 1,205.1 1,147.7 1,191.2
Value of insurance contracts 362.9 385.5 370.8
----------------------------------------------- -------------- ------------- ------------
Total value of scheme assets 1,568.0 1,533.2 1,562.0
----------------------------------------------- -------------- ------------- ------------
Net scheme deficit (290.8) (272.1) (301.2)
----------------------------------------------- -------------- ------------- ------------
Non-current assets - retirement benefit
assets 17.6 12.9 17.8
Non-current liabilities - retirement benefit
obligations (308.4) (285.0) (319.0)
----------------------------------------------- -------------- ------------- ------------
Net scheme deficit (290.8) (272.1) (301.2)
----------------------------------------------- -------------- ------------- ------------
Net scheme deficit included in consolidated
balance sheet (290.8) (272.1) (301.2)
Deferred tax included in consolidated balance
sheet 58.2 54.4 60.2
----------------------------------------------- -------------- ------------- ------------
Net scheme deficit after deferred tax (232.6) (217.7) (241.0)
----------------------------------------------- -------------- ------------- ------------
Movement in net scheme deficit 28 June 29 June 28 December
2015 2014 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
----------------------------------------- -------------- ------------- ------------
Opening net scheme deficit (301.2) (252.2) (252.2)
Contributions 9.9 - 18.2
Consolidated income statement (6.5) (7.6) (14.4)
Consolidated statement of comprehensive
income 7.0 (12.3) (52.8)
----------------------------------------- -------------- ------------- ------------
Closing net scheme deficit (290.8) (272.1) (301.2)
----------------------------------------- -------------- ------------- ------------
Changes in the present value of scheme liabilities 28 June 29 June 28 December
2015 2014 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
----------------------------------------------------- ------------- ------------ -----------
Opening present value of scheme liabilities (1,863.2) (1,816.1) (1,816.1)
Interest cost (33.8) (38.4) (76.5)
Actuarial loss - experience - (0.3) (7.9)
Actuarial (loss)/gain - change to demographic
assumptions (5.3) - 41.6
Actuarial gain/(loss) - change to financial
assumptions 4.2 (22.9) (132.2)
Benefits paid 39.3 37.2 79.7
Buy-out - 35.2 48.2
Closing present value of scheme liabilities (1,858.8) (1,805.3) (1,863.2)
----------------------------------------------------- ------------- ------------ -----------
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)
28 June 29 June 28 December
2015 2014 2014
(unaudited) (unaudited) (audited)
Changes in the fair value of scheme assets GBPm GBPm GBPm
------------------------------------------------ -------------- ------------- ------------
Opening fair value of scheme assets 1,562.0 1,563.9 1,563.9
Interest income 28.3 32.9 65.3
Actual return on assets greater than discount
rate 8.1 10.9 45.7
Contributions by employer 9.9 - 18.2
Benefits paid (39.3) (37.2) (79.7)
Administrative expenses (1.0) (2.1) (3.2)
Buy-out - (35.2) (48.2)
Closing fair value of scheme assets 1,568.0 1,533.2 1,562.0
------------------------------------------------ -------------- ------------- ------------
Fair value of scheme assets 28 June 29 June 28 December
2015 2014 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
----------------------------------------- ------------- ------------ -----------
UK equities 196.8 220.7 219.6
US equities 192.0 158.2 189.3
Other overseas equities 224.2 242.4 251.2
Property 19.8 29.8 26.8
Corporate bonds 303.8 273.7 248.7
Fixed interest gilts 62.9 55.6 56.3
Index linked gilts 69.4 72.0 79.0
Cash and other 136.2 95.3 120.3
----------------------------------------- ------------- ------------ -----------
Invested and cash assets at fair value 1,205.1 1,147.7 1,191.2
Value of insurance contracts 362.9 385.5 370.8
----------------------------------------- ------------- ------------ -----------
Fair value of scheme assets 1,568.0 1,533.2 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 Property Restructuring Other Total
GBPm GBPm GBPm GBPm GBPm
----------------------------- ------------ ----------- ---------------- -------- --------
At 28 December 2014 (1.4) (9.0) (3.6) (16.2) (30.2)
Charged to income statement - - (7.3) (16.4) (23.7)
Utilisation of provision 0.3 1.6 5.7 5.7 13.3
----------------------------- ------------ ----------- ---------------- -------- --------
At 28 June 2015 (1.1) (7.4) (5.2) (26.9) (40.6)
----------------------------- ------------ ----------- ---------------- -------- --------
The provisions have been analysed between current and
non-current as follows:
28 June 29 June 28 December
2015 2014 2014
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
------------- -------------- ------------- ------------
Current (28.8) (15.1) (23.3)
Non-current (11.8) (12.5) (6.9)
------------- -------------- ------------- ------------
(40.6) (27.6) (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.
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)
15. Share capital and reserves
The share capital comprises 257,690,520 allotted, called-up and
fully paid ordinary shares of 10p each. The share premium account
reflects the premium on issued ordinary shares. The Group obtained
court approval at the end of April 2014 for a reduction in the
share premium account of GBP514.8 million to eliminate the deficit
on the Company's profit and loss account reserve. Profit generated
by the Company after 30 April 2014 is available for distribution to
shareholders.
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 GBP25.9 million (29 June 2014: GBP25.9
million and 28 December 2014: GBP25.9 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 GBP8.6 million (29 June 2014: GBP12.8 million and 28 December
2014: GBP11.4 million). During the prior year the Trust purchased
1,391,550 shares for a cash consideration of GBP2.2 million and
received a payment of GBP2.2 million from the Company to purchase
these shares. During the period, 2,119,839 shares were released to
senior managers relating to grants made in prior years (26 weeks
ended 29 June 2014: 2,271,355 and 52 weeks ended 28 December 2014:
3,408,484).
During the period 665,287 awards were granted to senior managers
on a discretionary basis under the Long Term Incentive Plan (26
weeks ended 29 June 2014 and 52 weeks ended 28 December 2014:
935,709). The exercise price of the granted awards is GBP1 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 893,873 awards were granted to senior managers
on a discretionary basis under the Senior Management Incentive Plan
(26 weeks ending 29 June 2014 and 52 weeks ended 28 December 2014:
nil). The exercise price of the granted awards is GBP1 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 120,543 awards were granted to senior managers
under the Restricted Share Plan (26 weeks ended 29 June 2014 and 52
weeks ended 28 December 2014: 96,245). The awards vest after three
years, subject to the continued employment of the participant.
16. Reconciliation of statutory results to adjusted results
26 weeks Non-recurring
ended items Pension Restructuring Finance
28 June 2015 Statutory (a) Amortisation charges charges costs Adjusted
(unaudited) results GBPm (b) (c) (d) (e) results
GBPm GBPm GBPm GBPm GBPm GBPm
------------- ------------- ---------------- ---------------- ----------- ----------------- --------- ------------
Revenue 288.5 - - - - - 288.5
Operating
profit 19.6 17.5 2.5 1.0 7.3 - 47.9
Profit
before
tax 12.1 17.5 2.5 6.5 7.3 1.1 47.0
Profit after
tax 9.9 13.9 2.3 5.2 5.8 0.9 38.0
Basic EPS
(p) 4.0 5.6 0.9 2.1 2.3 0.4 15.3
------------- ------------- ---------------- ---------------- ----------- ----------------- --------- ------------
26 weeks ended 29 June 2014 (unaudited)
Revenue 324.2 - - - - - 324.2
Operating profit 60.0 (23.6) 2.5 2.1 9.3 - 50.3
Profit before
tax 50.5 (23.6) 2.5 7.6 9.3 1.9 48.2
Profit after
tax 45.6 (24.4) 2.3 6.1 7.3 1.5 38.4
Basic EPS (p) 18.4 (9.8) 0.9 2.5 2.9 0.6 15.5
------------------ -------- --------- ------ ------ ------ ------ --------
52 weeks ended 28 December 2014 (audited)
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 other 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.
(e) Impact of the translation of foreign currency borrowings and
fair value changes on derivative financial instruments as set out
in note 7.
17. 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 28 June 2015 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 17. 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 28 June
2015 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
Chartered Accountants and Statutory Auditor
London, United Kingdom
3 August 2015
This information is provided by RNS
The company news service from the London Stock Exchange
END
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