RNS Number:0903K
Wireless Group PLC
16 April 2003
THE WIRELESS GROUP PLC ("TWG")
PRELIMINARY UNAUDITED RESULTS FOR THE YEAR ENDED
31 DECEMBER 2002
Financial results
+ *Operating losses before goodwill amortisation, digital development
and one-off costs reduced by 74.8% to #2.3 million (2001: #9.1 million)
+ *Continuing Group turnover increased by 1.7% to #28.5 million (2001:
#28.0 million) despite difficult trading conditions in national market
+ *talkSPORT revenue (excluding contra revenue) up 3.4%
+ *talkSPORT operating loss, before digital development, central,
selling and one-off costs, reduced 61.0% from #3.6 million to #1.4
million
+ *Strong performance by ILRs - operating profit, before digital
development, central, selling and one-off costs, up 83.6% from #2.0
million to #3.7 million
+ *#2.2 million of costs taken out of central and sales costs
Operating achievements
+ *Highest ever ratings achieved for talkSPORT with audience topping 2.4
million per week. Total hours per week, average hours per week and
market share all at record levels (RAJAR Q4 2002)
Outlook
+ *The group has operated profitably in the first quarter of 2003
(before amortisation and interest)
+ *Indications are that April will also be profitable
+ *Advertising revenue for the first four months flat year on year
+ *Cost base has been reduced and the Group is set to exploit any
increases in revenue
+ *With the uncertainty associated with the liberation of Iraq the
visibility of revenue has become even shorter
Kelvin MacKenzie, Chairman and Chief Executive of TWG, said:
"We have delivered yet another set of positive results. I am pleased that we are
on track to deliver the breakeven of the Group on schedule despite some of the
worst markets the industry has ever seen. The Wireless Group has been innovative
and not afraid to embrace new ways of looking at the industry. For example, the
results of the electronic audience measurement research we have commissioned
will start to be published from May. We hope this accurate method of measuring
audience will be adopted by the rest of the industry.
"Even without this development I am still confident about the Group's future."
- ends -
For further information, please contact
Kelvin MacKenzie,
The Wireless Group plc 0207 959 7900
David Rydell/Luke Morton/Robin Tozer
Bell Pottinger Financial 0207 861 3232
Chairman's Statement
Despite the gloom within the media sector, that I reported at the half year,
continuing to the year-end, I am pleased to report we have continued to improve
the Group's performance. Operating losses before exceptionals, and amortisation
of goodwill fell from #10.5 million to #3.8 million, an improvement of 63.8 per
cent. We have stuck to our business plan and have produced results in line with
that plan.
Turnover from continuing activities increased from #28.0 million to #28.5
million an increase of 1.7 per cent. Although this is a positive growth rate, it
does indicate the difficult trading conditions under which the industry has been
operating. The driver for the Group has been cost reduction and this has
benefited the bottom line.
We saw improvement in our operating activities both within talkSPORT and our
ILRs. talkSPORT improved its performance by 61.0 per cent reducing its losses
(including the cost of digital transmission) from #3.6 million to #1.4 million.
We have made a one-off provision against the cost of our football rights of #1.5
million, which has been included in administrative expenses. Therefore without
this provision the Group's results would have shown operating losses, excluding
goodwill amortisation, falling from #10.5 million to #2.3 million, a 78.0 per
cent improvement.
Our local stations have turned in operating profits up from #2.0 million to #3.7
million. With increased revenues and a reduced cost base our local stations
continue to improve.
During the year we increased our holding in two digital multiplexes. Switch
Digital London is now a subsidiary, our holding increasing from 42.5 per cent to
80.5 per cent. Our holding in Switchdigital Scotland was increased from 69 per
cent to 92 per cent. The total cost of both investments was #0.9 million.
As I stated last year we embarked upon a cost reduction programme and we have
seen the full year benefits of that programme during 2002 as predicted. Through
headcount reduction in our sales force we saved #0.9 million, we cut back by
#0.8 million our digital investment by not broadcasting stand alone digital
stations and, further, reduced central costs by #1.3 million. This total saving
of #3.0 million was a significant factor in the Group's improvement.
We announced in February that the first electronic measurement of radio
broadcasting in the UK has been started. The research is carried out by the
international independent research organisation GfK International GmbH who will
publish their results on a monthly basis. This is a tremendous move forward for
the radio industry in measuring its audience accurately. It will give the
advertisers vital information about how their marketing budget is targeted and
spent. It will also allow radio broadcasters to improve their output based on up
to date, relevant information, which can only be good news for listeners and
broadcasters alike. As in other areas it is the Wireless Group that has been
innovative and forward looking in the radio industry.
A resolution is being put to shareholders at the annual general meeting to
increase the limit for the share option scheme from its current 5 per cent to 10
per cent of the issued share capital. Due to the small share capital base the
current scheme has reached its limit and therefore the management are unable to
make awards of share options. The management feel it is important to align
shareholders and staff interests which can, in part, be achieved by an effective
share option scheme.
Outlook
The first four months of 2003 are expected to produce flat advertising revenues
against the first four months of 2002. Excluding contra revenue, advertising
revenues are up 3.6 per cent. Based on our unaudited management accounts, before
interest and amortisation of goodwill, the Group has produced an operating
profit for the quarter ended 31 March 2003. This is an encouraging start for the
Group but as we have seen in previous years the second six months seem to be
tougher than the first. We continue to manage the business within strict cost
controls and look forward to improved markets in the future.
I look forward with confidence to the future performance of The Wireless Group.
Kelvin MacKenzie
Chairman and Chief Executive
16 April 2003
Operational Review
Results
Group turnover for the year ended 31 December 2002, from continuing
activities, increased 1.7 per cent to #28.5 million from #28.0 million.
Including the stations sold in the year ended 31 December 2001 Group
turnover fell 8.3 per cent to #28.5 million from #31.1 million.
The operating loss before goodwill amortisation fell from #10.5 million
for 2001 to #3.8 million for 2002, an improvement of 63.8 per cent. This
includes a one-off provision for football rights of #1.5 million and
therefore excluding this one-off charge the operating loss before
goodwill amortisation for the year ended 31 December 2002 is #2.3
million.
The table below sets out the operating performance for the Group
entities. Before digital development, one-off costs and goodwill
amortisation, operating losses fell from #9.1 million to #2.3 million.
Year ended 31 December 31 December
2002 2001
#m #m
Turnover
talkSPORT 11.2 11.2
ILR - continuing 17.1 16.8
ILR - discontinued - 3.1
Other 0.2 -
-------- --------
Total turnover 28.5 31.1
------ ------
Operating (loss)/profit before goodwill amortisation,
digital development and
one-off costs
talkSPORT (1.4) (3.6)
ILR - continuing 3.7 2.0
ILR - discontinued - (0.7)
Impact - national sales house (1.7) (2.6)
Central costs (2.9) (4.2)
------- --------
Operating loss before goodwill amortisation, (2.3) (9.1)
digital development and one-off costs
Digital development - (0.8)
One-off costs (1.5) (0.6)
--------- ---------
Operating loss before goodwill amortisation (3.8) (10.5)
Goodwill amortisation (15.2) (17.9)
-------- --------
Reported operating loss (19.0) (28.4)
-------- --------
talkSPORT
talkSPORT continues to improve its performance with the losses before
allocation of central and sales costs down from #3.6 million to #1.4
million for the year ended 31 December 2002, a 61.0 per cent reduction
in losses. Achievement of this ongoing improvement has come from the
cost reduction programme we introduced during 2001 and have continued
through 2002.
As in previous years the performance of talkSPORT was in two halves. At
the half-year we reported talkSPORT revenue was up 6.7 per cent, the
second quarter of which had benefited from the football World Cup.
Revenues in this second quarter were up 28.8 per cent. As the world
markets continued to suffer into the second six months revenues became
harder to generate as advertisers reduced their marketing budgets.
However, talkSPORT still managed to produce revenues of #5.2 million
against #5.6 million in the comparable period of 2001.
Airtime revenue increased for the year ended 31 December 2002 by 2.6 per
cent and sponsorship and promotion revenue increased by 5.2 per cent
indicating our ability to generate positive revenue growth.
If contra revenue is excluded, the revenue generated for talkSPORT for
the year ended 31 December 2002 increased by 3.4 per cent against the
industry reporting an increase of 1.0 per cent. In these difficult times
this is an excellent result.
Audience figures produced by RAJAR, the diary based research system, for
talkSPORT continue to show improvement. Quarter four of 2002 showed
total hours increased by 4.9 per cent to 18.4 million hours and market
share growing to 1.7 percent. Our reach remained static at 5 per cent.
The cost reduction initiative has reduced the cost base of talkSPORT so
that before the allocation of central and selling costs the operating
losses have fallen to #1.4 million. A one-off charge has been made for
the provision for football rights, which run into the 2003/2004 season.
This provision has been made to reflect the reduced value in the
football rights market. We estimate our cost reduction programme has
reduced the cost base of talkSPORT by #2.0 million.
GfK have launched their electronic research methodology to measure
accurately radio audiences and will publish their results on a monthly
basis from May 2003. We feel that once this method is adopted by the
industry audience figures streams will be generated and should increase
the overall spend into the radio market.
Regional and local radio (ILRs)
The ILRs have produced an excellent result with operating profits before
the allocation of central and sales costs from continuing operations, up
83.6 per cent at #3.7 million from #2.0 million last year. For all
continuing activities revenue has increased by 1.3 per cent over the
previous year. Costs have been well controlled within the local stations
and we seek to improve the operating margins in the future. Before
allocation of central and selling costs some of the stations have mid 40
per cent operating profit margins and we bench mark our other stations
against this performance to make improvements throughout the Group.
Revenue generation benefited from a push in sponsorship and promotions
for the local stations, which was up 6.2 per cent for the year. The ILRs
suffered along with other radio groups from a fall in national revenue
which was down 15.6 per cent.
The latest RAJAR results were mixed for our local stations. The stations
we operate in the north west all improved their market share, but our
heritage stations elsewhere faced competition from new regional
stations. We have implemented programming training to ensure our
stations offer exactly what their local market place seeks together with
improved training of production and presenters alike.
We acquired a 15 per cent holding in Dee 106.3 Radio Limited based in
Chester. This licence was awarded in April 2002. Part of this investment
was to be held through Town & Country Broadcasting Limited, a company in
which we had a 20 per cent shareholding. It was decided to make a direct
investment in Chester and dispose of our holding in Town & Country
Broadcasting Limited.
We continue to support local radio in the UK through licence
applications and we have announced that we have applied for the West
Midlands regional licence. To increase choice to the residents of the
area we believe that a speech based format is appropriate rather than
another music station.
Digital radio
Our ongoing support of digital radio in the UK has been evidenced
through our purchase of Clear Channel's share holdings in the London II
and Central Scotland digital multiplexes for #0.9 million. We have also
applied for and been successful in winning the multiplex licences for
Bradford and Huddersfield and Stoke on Trent. We operate the Pulse
analogue station in Bradford and Signal analogue station in Stoke and by
putting the services on the multiplexes we obtain an automatic rollover
of the analogue licence.
We shall be making further applications for digital multiplex licences
through a subsidiary in which EMAP has a minority interest.
Unaudited Consolidated Profit and Loss Account
For the year ended 31 December Notes 2002 2001
#'000 #'000
Turnover
Continuing operations 28,470 27,982
Discontinued operations - 3,083
__________ __________
28,470 31,065
__________ __________
Administration expenses
- goodwill amortisation (15,204) (17,887)
- other administration expenses (32,271) (41,569)
__________ __________
(47,475) (59,456)
__________ __________
Operating loss
Continuing operations (19,005) (22,935)
Discontinued operations (including - (5,456)
amortisation of goodwill)
__________ __________
(19,005) (28,391)
Income from interests in associated 87 110
undertakings
Profit on sale of discontinued 1 1,141 22,240
operations
Interest receivable and similar 880 1,029
income
Amounts written of fixed asset 2 (1,760) (849)
investments
Interest payable and similar (1,603) (4,258)
charges
__________ __________
Loss on ordinary activities before (20,260) (10,119)
taxation
Tax on loss on ordinary - -
activities
__________ __________
Loss on ordinary activities after (20,260) (10,119)
taxation
Minority interests - equity (113) (21)
interests
__________ __________
Retained loss for the year (20,373) (10,140)
__________ __________
=========== ============
Basic loss per share:
Loss attributable to each ordinary (0.21) (0.11)
share (#)
__________ __________
============ ============
Loss attributable to each "B" (210.45) (104.75)
ordinary share (#)
__________ __________
=========== ============
Basic loss per share before profit
on sale of discontinued operations:
Loss attributable to each ordinary (0.22) (0.33)
share (#)
__________ __________
=========== ============
Loss attributable to each "B" (222.24) (334.48)
ordinary share (#)
__________ __________
=========== ============
There were no gains or losses during the year or the prior year other than the
losses reported above, accordingly no separate Statement of Total Recognised
Gains and Losses has been prepared.
The diluted loss per share is the same as the basic loss per share because the
share options are not dilutive as they would have the effect of reducing the
loss per share if exercised.
Unaudited Balance Sheet
Group Company
------------- -------------
At 31 Notes 2002 2001 2002 2001
December
#'000 #'000 #'000 #'000
Fixed
assets
Intangible 3 47,368 63,712 - -
assets
Tangible 4 2,584 3,080 61 48
assets
Investments 5 1,726 3,635 7,826 7,757
__________ __________ __________ __________
51,678 70,427 7,887 7,805
__________ __________ __________ __________
Current
assets
Debtors 6 8,241 9,038 33,674 35,179
Loan notes 7 6,000 6,000 - -
receivable
Short term 8 15,449 15,552 - -
deposits
Cash at bank 418 121 12 -
and in hand
__________ __________ __________ __________
30,108 30,711 33,686 35,179
__________ __________ __________ __________
Creditors:
amounts
falling due
within one
year
Bank and 8 (11,287) (7,239) - (68)
other
borrowings
Loan notes 8 (15,449) (15,552) - -
Other 8 (13,082) (13,591) (620) (624)
creditors
__________ __________ __________ __________
(39,818) (36,382) (620) (692)
__________ __________ __________ __________
Net current (9,710) (5,671) 33,066 34,487
liabilities
__________ __________ __________ __________
Total assets 41,968 64,756 40,953 42,292
less current
liabilities
Creditors:
amounts
falling due
after more
than one
year
Bank and 9 (219) (463) - (39)
other
borrowings
Other 9 (10,419) (12,523) - -
creditors
__________ __________ __________ __________
(10,638) (12,986) - (39)
Provisions 10 (158) (213) - -
for
liabilities
and charges
__________ __________ __________ __________
Net assets 31,172 51,557 40,953 42,253
__________ __________ __________ __________
============ ============ ============ ============
Capital and
reserves
Called-up 9,682 9,681 9,682 9,681
share
capital
Share premium 11 35,064 35,064 35,064 35,064
account
Merger 11 81,820 81,820 - -
reserve
Profit and 11 (95,570) (75,003) (3,793) (2,492)
loss
account
__________ __________ __________ __________
Shareholders' 30,996 51,562 40,953 42,253
funds
Equity 12 176 (5) - -
minority
interests
__________ __________ __________ __________
Total capital 31,172 51,557 40,953 42,253
employed
__________ __________ __________ __________
============ =========== ============ ============
Unaudited Consolidated Cash Flow Statement
For the year ended 31 December Notes 2002 2001
#'000 #'000
Net cash outflow from operating 14 (3,656) (7,464)
activities
Dividends from associates 7 -
Return on investments and servicing 15 (716) (3,217)
of finance
Taxation 15 - -
Capital expenditure and financial 15 (382) (930)
investment
Acquisitions 15 271 -
Disposals 15 999 37,055
__________ __________
Cash (outflow)/inflow before management of (3,477) 25,444
liquid resources and financing
Financing 15 3,702 (23,271)
__________ __________
Increase in cash in the year 225 2,173
__________ __________
============ ============
Reconciliation of Movements in Shareholders' Funds
Group
For the year ended 31 December 2002 2001
#'000 #'000
Loss for the financial year (20,373) (10,140)
Elimination of reserves attributable to (194) -
associate on it becoming a subsidiary
Proceeds from issue of new shares 1 -
__________ __________
Net reduction to shareholders' funds (20,566) (10,140)
Opening shareholders' funds 51,562 61,702
__________ __________
Closing shareholders' funds 30,996 51,562
__________ __________
=========== ============
Notes
1. Profit on disposal of discontinued operations
2002 2001
#'000 #'000
Profit on disposal of Big 235 -
licence
Profit on disposal of associate 906 -
- Kingdom FM Limited
Profit on sale of SCOT FM - 22,472
Limited
Loss on disposal of Wave 105 FM - (232)
Limited
________ ________
1,141 22,240
________ ________
========== ==========
On 31 January 2002 the Group disposed of its 24.5% associate undertaking
Kingdom FM limited. The proceeds, after costs, on the disposal were
#999,000, which realised a profit on disposal of #906,000.
On 19 February 2002, 1458 Big AM Limited, a wholly owned subsidiary,
disposed of its Big AM radio licence for #235,000 after costs.
2. Amounts written off fixed assets investments
2002 2001
#'000 #'000
Provision to write down fixed
asset investments to lower of
cost and net realisable value
Investment in own shares (note 5) 24 458
Other investments (note 5) 1,736 391
________ ________
1,760 849
________ ________
========== ==========
3. Intangible fixed assets
Group Goodwill Licence Total
#'000 #'000 #'000
Cost
At 1 January 2002 91,035 15,500 106,535
Additions 514 - 514
Disposals (340) - (340)
________ ________ ________
At 31 December 2002 91,209 15,500 106,709
________ ________ ________
Amortisation
At 1 January 2002 41,500 1,323 42,823
Charge for the year 13,076 1,654 14,730
Charge for impairment 2,128 - 2,128
Disposals (340) - (340)
________ ________ ________
At 31 December 2002 56,364 2,977 59,341
________ ________ ________
Net book value
At 31 December 2001 49,535 14,177 63,712
________ ________ ________
========== ========== ==========
At 31 December 2002 34,845 12,523 47,368
________ ________ ________
========== ========== ==========
The charge for impairment relates to the partial write down of the
carrying value of goodwill relating to QFM Limited.
Company
The Company does not have any intangible fixed assets.
4. Tangible fixed assets
Fixtures,
fittings and
equipment
Land and Studio Motor vehicles
buildings equipment
Transmitters Total
Group #'000 #'000 #'000 #'000 #'000 #'000
Cost
At 1 January 1,857 122 3,245 2,618 177 8,019
2002
Additions 201 1 132 193 100 627
Disposals (82) - (120) (103) (98) (403)
_________ __________ _________ _________ _________ ________
At 31 December 1,976 123 3,257 2,708 179 8,243
2002
_________ __________ _________ _________ _________ ________
Depreciation
At 1 January 757 85 2,401 1,594 102 4,939
2002
Charge for the 150 24 320 419 29 942
year
Disposals (32) - (108) (59) (23) (222)
_________ __________ _________ _________ ________ ________
At 31 December 875 109 2,613 1,954 108 5,659
2002
_________ __________ _________ _________ ________ ________
Net book
value
At 31 December 1,100 37 844 1,024 75 3,080
2001
_________ __________ _________ _________ _________ ________
=========== ============ =========== =========== =========== ==========
At 31 December 1,101 14 644 754 71 2,584
2002
_________ __________ _________ _________ _________ ________
=========== ============ =========== =========== =========== ==========
The net book value of fixed assets includes assets held under finance leases
of #513,700 (2001: #743,900) and the depreciation charge on those assets
during the year was #182,400 (2001: #156,600).
Included in land and buildings are freehold land and buildings with a net
book value of #Nil at 31 December 2002 (2001: #50,000); long leasehold land
and buildings with a net book value of #144,000 at 31 December 2002 (2001:
#151,000); and short leasehold improvements with a net book value of
#957,000 at 31 December 2002 (2001: #899,000).
Motor vehicles Total
Company #'000 #'000
Cost
At 1 January 2002 66 66
Additions 100 100
Disposals (98) (98)
_________ _________
At 31 December 2002 68 68
_________ _________
Depreciation
At 1 January 2002 18 18
Charge for the year 12 12
Disposals (23) (23)
________ ________
At 31 December 2002 7 7
________ ________
Net book value
At 31 December 2001 48 48
________ ________
========= =========
At 31 December 2002 61 61
________ ________
========== ==========
5. Fixed asset investments
Group Company
2002 2001 2002 2001
#'000 #'000 #'000 #'000
Subsidiary - - 7,449 7,449
undertakings
Associated 47 226 - -
undertakings
Investment in 284 308 284 308
own shares
Other 1,395 3,101 93 -
investments
__________ _________ __________ _________
1,726 3,635 7,826 7,757
_________ ________ _________ ________
=========== ========== =========== ==========
Associated undertakings
Group Company
#'000 #'000
Cost and net book value
At 1 January 2002 226 -
Disposal (93) -
Acquisition of additional stake in (194) -
associate to become a subsidiary
Acquired in the year 21 -
Share of retained profit for the year 87 -
__________ __________
At 31 December 2002 47 -
__________ __________
============ ============
Investment in own shares
Group Company
#'000 #'000
Carrying amount
At 1 January 2002 308 308
Provision against carrying value (24) (24)
__________ __________
At 31 December 2002 284 284
__________ __________
============ ============
The investment in own shares is held through an employee share option trust.
On 15 May 2000, the Company established the Wireless Group Employee Benefits
Trust (the "Trust"). The trustee of the Trust is an independent trustee
company resident in the Channel Islands. The Trust is used to manage the
funding and delivery of Ordinary Shares under the Share Option Plans. At 31
December 2002 the cost of investment in own shares is represented by 436,289
ordinary shares acquired at an average cost of #1.75 per ordinary share. The
nominal value of the shares at 31 December 2002 was #43,629 (2001: #43,629).
The market value of the shares at 31 December 2002 based on the prevailing
market price of 65.0 pence per share was #283,588 (2001: #307,583).
In accordance with the Group's accounting policy the investment in own
shares has been written down by #24,000 in the year ended 31 December 2002
(2001: #458,000).
Other investments
Group Company
#'000 #'000
Carrying amount
At 1 January 2002 3,101 -
Additions 60 60
Disposal (30) -
Group transfer - 33
Provision against carrying value (1,736) -
__________ __________
At 31 December 2002 1,395 93
__________ __________
============ ============
Other investments include a 16.1% holding in Forever Broadcasting plc. The
market value of the Group interest in Forever Broadcasting plc as at 31
December 2002 was #1,301,960 (2001: #3,037,905). In accordance with the
Group's accounting policy, the investment is carried at the lower of cost
and net realisable value. This has resulted in a write down of #1,736,000 in
the year ended 31 December 2002 (2001: #391,000).
During the year the Group acquired a 15% direct holding in Dee 106.3 Radio
Limited based in Chester at a cost of #61,000. The Group sold its holding in
Town & Country Broadcasting Limited.
6. Debtors
Group Company
2002 2001 2002 2001
#'000 #'000 #'000 #'000
Amounts falling due
within one year:
Amounts due from - - 33,674 34,908
Group undertakings
Trade debtors 5,827 6,791 - -
Other debtors 457 541 - 140
Prepayments and 1,957 1,706 - 131
accrued income
________ ________ ________ ________
Total debtors 8,241 9,038 33,674 35,179
________ ________ ________ ________
========== ========== ========== ==========
7. Loan notes receivable
The #6,000,000 loan notes were issued by Guardian Media Group plc,
guaranteed by the National Westminster Bank plc, as part of the purchase
consideration on the sale of SCOT FM Limited. The loan notes carry an
interest rate of LIBOR less 0.75%. They were redeemed on 6 January 2003.
8. Creditors: amounts falling due within one year
Group Company
2002 2001 2002 2001
#'000 #'000 #'000 #'000
Bank and other
borrowings
Bank loans 10,000 6,000 - -
Finance leases 206 230 - 13
Bank overdraft 1,081 1,009 - 55
__________ __________ __________ __________
11,287 7,239 - 68
__________ __________ __________ __________
============ ============ ============ ============
Loan notes 15,449 15,552 - -
__________ __________ __________ __________
============ ============ ============ ============
Other
creditors
Trade 2,354 2,974 - -
creditors
Amounts owed to - 233 - -
associates
Corporation tax 267 109 - -
payable
Other taxation 1,138 538 - 59
and social
security
Accruals and 7,048 7,450 526 476
deferred
income
Licence fees 2,104 1,654 - -
Other 171 633 94 89
creditors
__________ __________ __________ __________
13,082 13,591 620 624
__________ __________ __________ __________
============ ============ ============ ============
The loan notes were issued as part consideration for the acquisition of The
Radio Partnership Limited in 1999 and are guaranteed by Barclays Bank PLC in
accordance with an agreement dated 23 July 1999, pursuant to which the
Company has agreed to maintain sufficient funds to cover the outstanding
liability from time to time, and has therefore deposited #15,449,000 (2001:
#15,552,000) as guarantee collateral with Barclays Bank PLC to cover the
liability. Repayment of the loan notes is at the option of the holder with a
final maturity date of 2004. Interest is paid at 0.425% above LIBOR with an
annual guarantee fee of 0.575%.
The bank loans and overdrafts comprise:
+ *An overdraft of #1,081,000 drawn against an overdraft and revolving
credit facility totalling #12.5 million. This borrowing is secured by
the assets of the Group and bears interest at 1.75% above LIBOR.
+ *A loan of #4,000,000 drawn against the revolving credit facility
totalling #12.5 million. This borrowing is secured by the assets of the
Group and bears interest at 1.75% above LIBOR.
+ *A loan of #6,000,000 drawn down against a facility of #6,000,000
secured against the loan notes issued by Guardian Media Group plc for
the acquisition of SCOT FM Limited. The loan bears interest at 0.5%
above LIBOR. This loan was cleared on 6 January 2003 when the loan notes
were redeemed.
9. Creditors: amounts falling due after more than one year
Group Company
2002 2001 2002 2001
#'000 #'000 #'000 #'000
Bank and
other
borrowings
Finance 219 463 - 39
leases
__________ __________ __________ __________
============ ============ ============ ============
Other
creditors
Licence 10,419 12,523 - -
fees
__________ __________ __________ __________
============ ============ ============ ============
10. Provisions for liabilities and charges
Deferred Property Total
taxation provisions
#'000 #'000 #'000
Group
At 1 January 2002 9 204 213
Utilised in the year - (55) (55)
__________ __________ __________
At 31 December 2002 9 149 158
__________ __________ __________
============ ============ ============
The property provisions relate to estimated dilapidation costs and committed
rental costs on currently unoccupied properties. The timing of these
liabilities depends on each individual lease and the possibility of leasing
the relevant properties.
No amounts have been discounted.
11. Reserves
Share Profit
and
loss
Merger Reserve premium account
account
#000 #'000 #'000
Group
At 1 January 2002 81,820 35,064 (75,003)
Elimination of reserves - - (194)
on acquisition of
subsidiary (previously
associate)
Retained loss for the - - (20,373)
year
__________ __________ __________
At 31 December 2002 81,820 35,064 95,570
__________ __________ __________
============ ============ ============
Share Profit
and loss
premium account
account
#'000 #'000
Company
At 1 January 2002 35,064 (2,492)
Retained loss for the year - (1,301)
__________ __________
At 31 December 2002 35,064 (3,793)
__________ __________
============ ============
12. Minority interests - equity interests
#'000
At 1 January 2002 (5)
Acquisition of subsidiary (note 13) 89
Acquisition of minority interest (note 13) (21)
Share of profits on ordinary activities after 113
taxation
__________
At 31 December 2002 176
__________
============
13. Acquisition
Switch Digital (London) Limited
On 17 November 2002 the Group increased it's holding in Switch Digital
(London) Limited. The Group's original share holding was 42.5 per cent which
has now been increased to 80.5 percent. This has changed the way the Group
accounts for Switch Digital London Limited from that of an associate to a
subsidiary.
#'000
Book and fair value of net assets acquired (including 368
#1.0 million of cash)
Goodwill 398
__________
Consideration satisfied by cash 766
__________
===========
Switchdigital (Scotland) Limited
On 17 November 2002 the Group increased it's holding in Switchdigital
(Scotland) Limited from 69% to 92% at a cost of #137,000.
The share of net assets acquired (book and fair value) was #91,000 giving
rise to goodwill of #116,000.
14. Reconciliation of operating loss to net cash outflow from operating
activities
2002 2001
#'000 #'000
Operating loss (19,005) (28,391)
Depreciation charges 942 1,260
(Profit)/loss on disposal of fixed (17) 212
assets
Goodwill amortisation 13,076 17,887
Goodwill impairment 2,128 -
Licence amortisation 1,654 1,323
Disposal of trade investments 30 -
Write down of trade investments - 6
Decrease in debtors 1,052 1,549
Decrease in creditors (3,516) (1,310)
__________ __________
Net cash outflow from operating (3,656) (7,464)
activities
__________ __________
============ ============
15. Analysis of cash flows for headings netted in the cash flow statement
2002 2001
#'000 #'000
Returns on investments and servicing of
finance
Interest received 598 816
Dividends received 78 98
Interest paid (1,392) (4,131)
__________ __________
Net cash outflow (716) (3,217)
__________ __________
============ ============
Capital expenditure and financial
investment
Purchase of tangible fixed assets (596) (893)
Disposal of tangible fixed assets 197 15
Disposal of licence (note 1) 235 -
Purchase of fixed asset investments (81) (30)
(note 5)
Purchase of minority interest (note 13) (137) (22)
__________ __________
Net cash outflow (382) (930)
__________ __________
============ ============
2002 2001
#'000 #'000
Acquisitions and disposals
Acquisitions
Purchase of subsidiary undertakings (766) -
(note 13)
Cash at bank and in hand acquired 1,037 -
__________ __________
Net cash inflow 271 -
__________ __________
============ ============
Disposals
Sale of subsidiary undertakings - 37,000
Sale of associate 999 -
Settlement of subsidiary overdraft - 480
Cash transferred on sale of subsidiary - (2)
Costs of disposal on sale of - (423)
subsidiaries
__________ __________
Net cash inflow 999 37,055
__________ __________
============ ============
2002 2001
#'000 #'000
Financing and management of liquid
resources
Financing
Net increase/(reduction) in borrowings 4,000 (23,000)
Proceeds on exercise of options 1 -
Redemption of loan notes (103) -
Capital element of finance lease rental (299) (271)
payments
__________ __________
3,599 (23,271)
Management of liquid resources
Decrease in short term deposits 103 -
__________ __________
Net cash inflow /(outflow) 3,702 (23,271)
__________ __________
============ ============
16. Reconciliation of movement in net debt
2002 2001
#'000 #'000
Increase in cash in the year 225 2,173
Cash (inflow)/outflow from (increase)/ (3,701) 23,271
decrease in debt and lease financing
__________ __________
Change in net debt resulting from cash (3,476) 25,444
flows
Finance leases (31) (296)
Loans and finance leases disposed of - 102
with subsidiaries
Loan notes received on disposal of - 6,000
subsidiary
__________ __________
(Increase)/Decrease in net debt in (3,507) 31,250
year
Net debt at 1 January (1,581) (32,831)
__________ __________
Net debt at 31 December (5,088) (1,581)
__________ __________
=========== ===========
17. Analysis of net debt
1 January Non-cash 31 December
changes
2002
#'000 Cash #'000 2002
flow
#'000
#'000
Bank (1,009) (72) - (1,081)
overdraft
Cash at bank 121 297 - 418
and in
hand
__________ __________ __________ __________
(888) 225 - (663)
Debt due (6,000) (4,000) - (10,000)
within 1
year
Loan notes 6,000 - - 6,000
receivable
Loan notes (15,552) 103 - (15,449)
Short term 15,552 (103) - 15,449
deposits
Finance (693) 299 (31) (425)
leases
__________ __________ __________ __________
Net debt (1,581) (3,476) (31) (5,088)
__________ __________ __________ __________
============ ============ ============ ============
18. Post balance sheet events
On 6 January 2003 the Group redeemed the #6,000,000 loan notes from Guardian
Media Group issued on the Sale of Scot FM Limited. The proceeds were used to
reduce the Group's debt.
Preliminary results
These unaudited preliminary results do not constitute statutory accounts. The
preliminary results for the year ended 31 December 2002 are extracted from the
unaudited Group's accounts for the year, which will be delivered to the
Registrar of Companies in due course. The results for the year ended 31 December
2001 have been extracted from the accounts for The Wireless Group PLC, which
have been delivered to the Registrar of Companies and on which the auditors gave
an unqualified report that did not contain a statement under Section 237 (2) or
(3) of the Companies Act 1985.
These preliminary results have been prepared on the basis of the accounting
policies set out in the Company's 2001 statutory accounts, which have been
updated for changes in Financial Reporting Standards and UITF Abstracts coming
into force during the year, the impact of which on the financial information has
not been material.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UVUKROURSAAR