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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Hibu | LSE:HIBU | London | Ordinary Share | GB0031718066 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.17 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMHIBU
RNS Number : 9457Q
hibu plc
13 November 2012
For Immediate Release 13 November 2012
hibu plc
("hibu" or the "Group")
Interim results for the six months ended 30 September 2012
Financial headlines([1])
-- Group revenue of GBP660m decreased by 15%
- Digital services revenues grew by 38% to GBP82m
- Digital directories revenue fell by 15% to GBP134m
- Print and other directory revenues fell by 22% to GBP444m
-- EBITDA([2]) of GBP150m was down GBP80m -- Free cash flow of GBP87m decreased GBP70m -- Profit before tax of GBP7m fell by GBP62m -- Profit after tax fell by GBP66m to a loss after tax of GBP18m
Operational headlines
-- Total digital revenue has increased from 30% to 33% of revenue -- Digital services
- Customers increased by 6% to 383,000
- Annual digital services revenue per advertiser was GBP415
- Live customer websites increased by 12% to 347,000
-- Digital directories
- Customers fell by 3% to 857,000
- Annual digital directory revenue per advertiser was GBP330
- Digital directories visitors declined 13% to 37.3m in September
- Mobile directories visitors increased 63% to 5.2m in September
-- Yellow Pages
- Yellow Pages advertisers reduced by 12% to 474,000
- Yellow Pages revenue per advertiser decreased by 7% to GBP827 ([1]) Results are for the half year, unaudited and compared with the same period in the prior year. The changes in revenue, revenue per advertiser and EBITDA before page 6 are stated at constant currency. Revenue percentage changes are also adjusted for rescheduling, changes in bundled revenue allocation in the US and acquisitions.
([2]) EBITDA is profit before interest, tax, depreciation, amortisation and exceptional items.
Mike Pocock, Chief Executive Officer, said:
"During the first half, the Group has continued to make significant progress on its four year strategy to build a material new digital business. In June we acquired Moonfruit, an innovative digital company, in order to provide new web site products early next year. Following successful pilots in the US, we began to expand our community magazine (formerly Newsletter) initiative, which is now delivering new orders in excess of GBP500k per week and rising. We signed partnership agreements with Vantiv in the US and Global Payments in the UK, to support our new Payments product which went to pilot in both markets in early September. We also moved into pilot with our new on-line channel, which will provide a modern, lower cost alternative route to market for our products from early 2013 and we began the first pilots of eMarketplace in Oxford and Chicago.
We have also been working hard to sustain our directories business in the face of very difficult market trends that have not improved. Our supply chain and product offers have been further enhanced, driving for example higher consumer use of our online directory products outside the US. The Group also continues to focus on cost management and over the last 18 months has reduced costs by in excess of GBP200m, independent of the decline in revenue.
In May we announced that the Group had begun the process of putting in place a new capital structure. This is a complicated exercise that will take some months as we ensure that the interests of all of our stakeholders are properly addressed. I remain confident however that the Group will emerge from that process with a much stronger balance sheet that is appropriate to our future business."
Strategic Update
Since the announcement in July 2011 of the new four year programme to transform the Group, hibu's strategy has been endorsed by various independent third parties as being compelling and well differentiated. Since the initial announcement, the Group has continued to develop and refine the strategy, which has resulted in decisions to launch some new business activities in sequence rather than in parallel.
The Group is in the process of implementing the transformational new strategy necessary to replace its declining legacy directories business with material new digital businesses. Much has been achieved to make that new future a reality.
-- Open to Export, the digital export service, went live in a beta trial in June with a full launch announced in October. The service aims to assist UK based small and medium-sized enterprises to trade internationally by providing access to the guidance and in-depth information they need to take their business overseas. The initiative is a venture launched in conjunction with UK Trade and Investment (UKTI).
-- Following the acquisition of Moonfruit in June, the Group intends to implement a new range of websites with additional functionality and a build-it-yourself capability.
-- hibu commenced payments pilots with Vantiv in the US and Global Payments in the UK. Both partnerships enable hibu to provide local businesses with the ability to accept card payments from consumers for their goods and services.
-- In the US, hibu has entered into a partnership with American Express to launch a six month pilot to offer SMEs the Business Gold Rewards Card. The card is uniquely suited to hibu's clients because of the double Membership Rewards points that can be earned by spending on advertising, including purchases at Yellowbook.
-- The eMarketplace trials in Oxford (market.hibu.co.uk/oxford) and Chicago (market.hibu.com/chicago) continue to inform future product decisions with more marketplaces expected to be launched before year end.
-- As part of extending the life of the directories business, hibu has launched local community magazines (formerly newsletters) in various US markets. This has been a very successful product with over 300 editions published so far. hibu is now rolling out the product among the communities serviced by Yellowbook in the US and has started trialling the product in the UK and Spain.
-- A US Hispanic telesales and field sales team has also been created and deployed to capitalise on this growing market.
This strategy involves not only complementary revenue streams but also looking at different ways to manage the Group's cost base. Over the last 18 months, the Group has reduced costs by in excess of GBP200m, independent of the decline in revenue and is continuing to identify areas to improve efficiency. The Group is rationalising its technology platforms and property portfolio, consolidating its suppliers and more effectively managing its marketing spend. At the same time, significant focus is being given to more efficiently leveraging the sales force through changes in compensation and channel mix. A key aspect of this is the launch of the online hibu business store that allows customers to buy directly from hibu for the first time.
Capital structure
The majority of hibu's debt matures in April 2014. The Group therefore announced in July 2012 that it was seeking to form a co-ordinating committee of the lenders (the "CoCom") under its facilities agreement dated 30 November 2009 (as amended) to represent the interests of those lenders during the process of determining an appropriate new capital structure. The Group has already taken substantive actions toward that end with the support of the CoCom. The Group remains in active and constructive dialogue with the CoCom.
The substantive actions already taken and the risks associated with successfully addressing the Group's capital structure are discussed on pages 13 and 14. hibu, working together with the CoCom, aims to present a restructuring proposal to its lenders by the end of January 2013 and to complete a successful restructuring of its debt obligations before the end of the first half of calendar 2013. A number of capital structure options are being considered and these are likely to result in little or no value being attributed to the Group's ordinary shares.
Group results
Half year print and other directory revenue declined 21.6% over the prior year([1]) with the second quarter declining at a similar rate (22.1% down). Within this, Yellow Pages was down 20.6%, due to a reduction in both customers and average value as advertisers move all or part of their spend to alternative forms of advertising. The print product team is focused on maintaining the life of the print product by enhancing and improving its value but also introducing new, growing products such as direct mail and community magazines. Other revenue declined 28.1%, largely due to the cessation of the White Pages contract in Spain (which is largely EBITDA neutral) and the continued decline of the directory enquiries product.
Digital directory usage increased in all geographies other than the US. 37m unique users used the Group's digital directories to search for local businesses in September with an additional 5m users on mobile devices. Nevertheless, digital directories revenue declined 15.4%([2]) over the first 6 months with the trend in the second quarter similar at 14.3%.
Digital services revenues grew 38.3%([2]) to GBP81.9m at the half year, primarily from online search and the 347,000 websites the Group has built. The revenue from the new product trials has not significantly contributed to first half revenue.
Total digital revenue now represents 33% of the Group's revenues. The decline in digital directories more than offset the growth in digital services revenue, to leave total digital revenue down 0.9%. This was primarily driven by digital directory customers reducing their spend due to the highly competitive nature of the market.
The relatively fixed nature of the Group's cost base means that the decline in print and digital directory revenue has a very significant effect on the Group's earnings. Despite reducing total costs further, EBITDA is down GBP80m on the prior year at GBP150m.
Profit before tax of GBP7m is down GBP62m on the prior year, largely as a result of the lower EBITDA, partially offset by reduced interest charges primarily due to lower net debt. The writing off of tax assets, due to changes in Spanish tax law and expectations over future performance, results in a net loss after tax.
Free cash flow of GBP87m is GBP70m lower than last year, reflecting the lower EBITDA and lower levels of working capital release, being partially offset by lower interest costs, due to the reduced net debt and a tax refund in the UK.
Net debt was reduced by 5% or GBP110m to GBP2,090m. The Group had GBP112m of cash after debt repayments during the half year.
The Board concluded that adoption of the going concern basis in preparing the financial statements is appropriate, because the Group is cash generative and the directors believe that the lenders will achieve a higher recovery on their loans by letting the business continue to operate as a going concern rather than by any other course of action. Therefore, the financial information contained herein has been prepared on a going concern basis. Nevertheless, the directors are making full disclosure to indicate the existence of a material uncertainty, which may cast significant doubt about the Group's ability to continue as a going concern.
The auditors' report on the Group's half-yearly financial information for the six months ended 30 September 2012 includes an emphasis of matter in respect of going concern and the carrying value of assets along with an unmodified opinion on the preparation of the financial information.
[1] Half year print and other directory revenue percentage changes are adjusted to exclude a GBP13m benefit related to the revenue associated with directories delayed into FY13 in Argentina and other rescheduling. Other directory revenue consists of White Pages, Magazines, direct mail and directory enquiries.
([2]) Half year digital directory and digital services revenue percentages are adjusted to exclude GBP11m and GBP8m of reductions respectively related to the timing effect on revenue recognition of changes in bundle allocation in the US.
Outlook
In September 2012, the Group indicated that it expected to be below published market expectations for the current financial year. There has been no material change to the trading outlook for the current financial year since that announcement.
Forward looking statements
This news release contains forward-looking statements regarding hibu's intentions, beliefs or current expectations concerning, among other things, hibu's results of operations, revenue, financial condition, liquidity, prospects, growth, strategies, new products, the level of new directory launches and the markets in which hibu operates. Readers are cautioned that any such forward-looking statement is not a guarantee of future performance and involves risks and uncertainties, and that actual results may differ materially from those in the forward-looking statement as a result of various factors. These factors include any adverse change in regulations, unforeseen operational or technical problems, the nature of the competition that hibu will encounter, wider economic conditions including economic downturns, the final outcome of addressing hibu's capital structure and changes in financial and equity markets. Readers are advised to read pages 22 to 29, page 116 and notes 1 and 16 to the financial statements included in Yell Group plc's 2012 annual report (Yell Group plc changed its name to hibu plc on 27 July 2012). hibu undertakes no obligation publicly to update or revise any forward-looking statements, except as may be required by law.
About hibu
hibu helps communities thrive by facilitating millions of connections each year between consumers who want to find products and services locally and the merchants who provide them.
hibu helps consumers find local businesses and shop in new, innovative ways. Its dedicated online hibu markets provide comprehensive, convenient access to local goods and services. hibu helps merchants compete in the digital world with a broad range of marketing and commerce solutions delivered online and through hibu's direct sales teams. Building on its heritage as a premier directories provider, hibu continues to offer a full range of print- and distribution-based marketing services.
hibu operates in the UK, US, Spain, Argentina, Chile, Peru and US Hispanic markets. In the year ended 31 March 2012, hibu had 1.2m SME customers and total revenues of GBP1.6 billion.
For further information about hibu, visit hibu.com.
Enquiries
hibu - Investors RLM Finsbury
Andrew Clatworthy Andrew Dowler or Charles Chichester
Tel: +44 (0) 118 358 2838 Tel: +44 (0) 207 251 3801
hibu - Media
Jon Salmon
Tel: +44 (0) 118 358 2656
Key operational metrics for hibu plc
Hot Features
Premium
Six months ended 30 September
US UK Spain Latin America Total
2012 2011 2012 2011 2012 2011 2012 2011 2012 2011
------------------------ ------- ----- ------- ----- ------- ----- -------- ----- -------- ------------
Digital Directories
revenue (GBPm) 42.1 62.8 59.3 71.2 22.5 28.1 9.8 10.6 133.7 172.7
Growth (%)([1]) (16.9) (16.7) (12.3) (6.3) (15.4)
Unique live
advertisers
at period end
(thousands)([2]) 384 363 186 190 152 176 135 155 857 884
Average annualised
digital directories
revenue per
advertiser (GBP)([3]) 242 697 765 286 325 138 149 330
Growth (%)([3]) (8.9) (7.2) (6.8)
Unique visitors
for
month of period
end (millions)([4]) 15.5 23.5 9.2 8.0 7.6 6.6 5.0 4.8 37.3 42.9
Unique mobile
visitors
for month of
period
end (millions) 1.2 1.0 2.6 1.7 1.3 0.5 0.1 - 5.2 3.2
Digital Services
revenue (GBPm) 45.9 33.9 29.0 25.6 4.5 3.3 2.5 0.8 81.9 63.6
Growth (%)([1]) 55.9 8.1 53.8 207.8 38.3
Unique live
customers
at period end
(thousands)([5]) 230 234 85 63 45 43 23 23 383 363
Average annualised
digital services
revenue per
customer (GBP)([3]) 359 721 775 231 169 240 73 415
Growth (%)([3]) (7.0) 44.6 239.5
Websites live
at period end
(thousands)([6]) 230 234 52 32 46 37 19 8 347 311
Total Digital
revenue (GBPm) 88.0 96.7 88.3 96.8 27.0 31.4 12.3 11.4 215.6 236.3
Growth (%)([1]) 8.5 (10.1) (5.4) 9.4 (0.9)
Unique live
customers
at period end
(thousands)([7]) 401 375 207 205 154 177 142 149 904 906
Average annualised
digital media
revenue per
customer (GBP)([3]) 448 892 927 341 354 164 159 483
Growth (%)([3]) (3.8) 1.4 5.3
([1]) Revenue growth rates are at constant currency and are also adjusted for the change to the bundle allocation in the US in fiscal year 2012 and acquisitions.
([2]) US digital customer data is under review and subject to change.
([3]) Where blank, data is currently unavailable.
([4]) Excludes mobile visitors. US figures include visitors to the Yellowbook.com network. ([5]) US digital services customers are assumed to equal US website figure. US digital customer data is under review and subject to change. ([6]) Excludes non revenue generating sites. Prior year US and Latin America numbers have been restated. ([7]) US digital customer data is under review and subject to change. The prior year US digital customer figure has been restated.
Six months ended 30 September
US UK Spain Latin America Total
2012 2011 2012 2011 2012 2011 2012 2011 2012 2011
-------------------- ------- ------ ------- ------ ------- ----- ------- ----- --------- -------------
Printed Yellow Pages
Revenue (GBPm) 257.4 300.1 87.2 122.7 24.5 41.1 22.8 16.4 391.9 480.3
Growth (%)([1]) (16.7) (28.5) (34.9) (5.3) (20.6)
Unique advertisers
(thousands) 215 249 102 128 78 100 79 64 474 541
Print revenue
per unique
advertiser
(GBP) 1,199 1,237 852 959 312 412 290 254 827 888
Growth (%) (2.9) (11.1) (16.8) 18.9 (7.5)
Unique advertiser
retention rate
(%) 73 73 70 72 74 78 68 72
Directory editions
published 455 451 56 56 30 37 51 36
White Pages and other directories (including enquiry services and direct
mail)
Revenue (GBPm) 8.4 7.4 4.7 13.5 22.8 37.7 16.5 12.0 52.4 70.6
Growth (%)([1]) 12.0 (70.9) (34.2) 1.0 (28.1)
([1]) Revenue growth rates are at constant currency and are also adjusted for rescheduling.
Financial information for hibu plc and subsidiaries
All of the following financial information is unaudited except the comparative information for 31 March 2012 which was presented in the Yell Group 31 March 2012 Annual Report.
Group income statement
Six months ended 30 September
------------------------------------ ------ ------------------
GBPm, unless noted otherwise Notes 2012 2011
------------------------------------ ------ -------- --------
Revenue 2 659.9 787.2
Cost of sales([1]) (310.4) (340.1)
-------- --------
Gross profit 349.5 447.1
Distribution costs([1]) (26.1) (27.5)
Administrative expenses([1]) (251.4) (271.3)
-------- --------
Operating profit 3 72.0 148.3
-------- --------
Finance costs([2]) (68.4) (82.6)
Finance income([2]) 3.4 3.5
-------- --------
Net finance costs (65.0) (79.1)
-------- --------
Profit before taxation 7.0 69.2
Taxation 4 (25.1) (21.3)
-------- --------
(Loss) profit for the six months (18.1) 47.9
======== ========
Basic earnings per share (pence) 5 (0.8) 2.1
Diluted earnings per share (pence) 5 (0.8) 2.0
([1]) Prior year numbers have been reclassified to move GBP3.1m out of distribution and GBP4.4m out of administrative costs into cost of sales to ensure consistency with the current year presentation. There is no change to operating profit.
([2]) Prior year numbers have been reclassified to move GBP2.2m receivable out of finance costs into finance income to ensure consistency with the current year presentation. There is no change to net finance costs.
Group statement of comprehensive income
Six months ended 30 September
--------------------------------------- ------ ----------------
GBPm Notes 2012 2011
--------------------------------------- ------ ------- -------
(Loss) profit for the six months (18.1) 47.9
------- -------
Exchange (loss) gain on
translation of foreign operations (4.1) 7.4
Actuarial loss on
defined benefit pension schemes 16 (7.6) (15.1)
Unwinding the reserve for fair value
of
financial instruments used as hedges 12.5 4.1
Tax effect of net losses not
recognised in the income statement 4 0.9 2.8
------- -------
Comprehensive income (loss) not
recognised in the income statement 1.7 (0.8)
------- -------
Total comprehensive (loss) income
for the six months (16.4) 47.1
======= =======
See notes to the financial information for additional details.
Group statement of cash flows
Six months ended 30 September
-------------------------------------------- ------ -------- --------
GBPm Notes 2012 2011
-------------------------------------------- ------ -------- --------
Net cash generated from operating
activities
Cash generated from operations 169.0 273.3
Interest paid (46.4) (69.5)
Interest received 1.0 1.3
Net corporate income tax refunded
(paid) 5.1 (7.9)
-------- --------
Net cash generated from operating
activities 128.7 197.2
-------- --------
Cash flows from investing activities
Purchase of software, property,
plant and equipment 7 (24.2) (28.3)
Purchase of subsidiary undertakings,
net of cash acquired 8 (17.6) (12.3)
Net cash used in investing activities (41.8) (40.6)
-------- --------
Free cash flow 86.9 156.6
-------- --------
Cash flows from financing activities
Financing fees paid (1.9) -
Repayment of borrowings at par (106.2) (159.8)
Net cash used in financing activities (108.1) (159.8)
-------- --------
Net decrease in cash and cash equivalents (21.2) (3.2)
Cash and cash equivalents at beginning
of the period 134.6 200.5
Exchange (loss) gain on cash and cash
equivalents (1.1) 3.7
-------- --------
Cash and cash equivalents at period
end 112.3 201.0
======== ========
Cash generated from operations
(Loss) profit for the six months (18.1) 47.9
Adjustments for:
Tax 25.1 21.3
Finance income([1]) (3.4) (3.5)
Finance costs([1]) 68.4 82.6
Depreciation of property, plant and
equipment and amortisation of software 38.8 33.6
Amortisation of other acquired intangibles 34.6 45.6
Changes in working capital:
Inventories and directories in development (1.7) (4.9)
Trade and other receivables 65.7 103.5
Trade and other payables (44.2) (62.4)
Share based payments and other 3.8 9.6
-------- --------
Cash generated from operations 169.0 273.3
======== ========
([1]) Prior year numbers have been reclassified to move GBP2.2m receivable out of finance costs into finance income to ensure consistency with the current year presentation. There is no change to net finance costs.
See notes to the financial information for additional details.
Group balance sheet
At 30 September and 31 March
2012
------------------------------------ ------ ---------- ----------
GBPm Notes September March
------------------------------------ ------ ---------- ----------
Non-current assets
Goodwill 9 1,905.2 1,909.9
Other intangible assets 10 582.5 637.7
Property, plant and equipment 11 80.1 86.5
Deferred tax assets 12 45.3 48.0
Retirement benefit surplus 16 11.7 9.4
Investment and other assets 12.5 9.1
Total non-current assets 2,637.3 2,700.6
---------- ----------
Current assets
Inventory 10.4 11.7
Trade and other receivables 13 492.3 598.3
Cash and cash equivalents 14 112.3 134.6
---------- ----------
Total current assets 615.0 744.6
---------- ----------
Current liabilities
Financial liabilities - loans
and other borrowings 14 (86.9) (169.8)
Financial liabilities - derivative
financial instruments - (4.0)
UK corporation and foreign income
tax (128.9) (126.9)
Trade and other payables 15 (348.8) (395.7)
---------- ----------
Total current liabilities (564.6) (696.4)
---------- ----------
Net current assets 50.4 48.2
---------- ----------
Non-current liabilities
Financial liabilities - loans
and other borrowings 14 (2,115.8) (2,165.2)
Deferred tax liabilities 12 (273.4) (271.6)
Trade and other payables 15 (13.5) (14.4)
---------- ----------
Total non-current liabilities (2,402.7) (2,451.2)
---------- ----------
Net assets 285.0 297.6
========== ==========
Capital and reserves attributable
to owners
Share capital 1,870.0 1,870.0
Other reserves 197.2 191.7
Accumulated deficit (1,782.2) (1,764.1)
---------- ----------
Total equity 285.0 297.6
========== ==========
See notes to the financial information for additional details.
Group statement of changes in equity
Six months ended 30 September
2012
------------------------------------ ---------------------------------------- -------
Attributable to owners
-------------------------------------------------
Share Accumulated
GBPm capital Other reserves(1) deficit Total
------------------------------------ -------- ----------------- ----------- -------
Balance at 31 March 2012 1,870.0 191.7 (1,764.1) 297.6
-------- ----------------- ----------- -------
Loss on ordinary activities
after taxation - - (18.1) (18.1)
Comprehensive income not
recognised in the income statement - 1.7 - 1.7
-------- ----------------- ----------- -------
Total comprehensive income
(loss) for the six months - 1.7 (18.1) (16.4)
Value of services provided
in return for share based
payments - 3.8 - 3.8
- 5.5 (18.1) (12.6)
-------- ----------------- ----------- -------
Balance at 30 September 2012 1,870.0 197.2 (1782.2) 285.0
======== ================= =========== =======
Six months ended 30 September
2011
------------------------------------ ------------------------------------------ -------
Attributable to owners
---------------------------------------------------
Share Accumulated
GBPm capital Other reserves([1]) deficit Total
------------------------------------ -------- ------------------- ----------- -------
Balance at 31 March 2011 1,858.2 229.1 (573.8) 1,513.5
-------- ------------------- ----------- -------
Profit on ordinary activities
after taxation - - 47.9 47.9
Comprehensive loss not
recognised in the income statement - (0.8) - (0.8)
-------- ------------------- ----------- -------
Total comprehensive (loss)
income for the six months - (0.8) 47.9 47.1
Value of services provided
in return for share based
payments - 9.6 - 9.6
- 8.8 47.9 56.7
-------- ------------------- ----------- -------
Balance at 30 September 2011 1,858.2 237.9 (525.9) 1,570.2
======== =================== =========== =======
([1]) Cumulative foreign currency gains attributable to owners at 30 September 2012 are GBP298.9m (31 March 2012 - GBP303.0m gain).
See notes to the financial information for additional details.
Notes to the financial information
1. Statutory disclosures
Basis of preparation and consolidation
hibu operates in the US, UK, Spain, Argentina, Chile, Peru and US Hispanic markets helping communities thrive by facilitating millions of connections each year between consumers who want to find products and services locally and the merchants who provide them. The principal activity of hibu plc and its subsidiaries is helping consumers find local businesses and shop in new, innovative ways. Its dedicated online hibu markets provide comprehensive, convenient access to local goods and services. hibu helps merchants compete in the digital world with a broad range of marketing and commerce solutions delivered online and through hibu's direct sales teams. Building on its heritage as a premier directories provider, hibu continues to offer a full range of print- and distribution-based marketing services.
This unaudited condensed set of financial statements for the six months ended 30 September 2012 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34, 'Interim financial reporting', as adopted by the European Union.
The unaudited financial information contained herein does not constitute statutory financial statements within the meaning of section 434 of the Companies Act 2006.
The preparation of the consolidated financial information requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial information and the reported amounts of income and expenditure during the period. Actual results could differ from those estimates. Estimates are used principally when accounting for doubtful debts, depreciation, retirement benefits, acquisitions, impairment testing and taxation.
Where change at constant currency is stated in this document it states the change in the current period compared with the previous period as if the current period results were translated at the same exchange rates as those used to translate the results for the previous period. Figures reported at constant exchange rates are stated at the same exchange rates as those used to translate the comparative figures for the previous period. Exchange impact is the difference between the results reported at constant exchange rates and the results reported using current period exchange rates. The average effective exchange rates for the six months ended 30 September 2012 were $1.58: GBP1.00 and EUR1.25: GBP1.00 as compared to $1.62: GBP1.00 and EUR1.14: GBP1.00 for the same period last year.
In the opinion of management, the financial information included herein includes all adjustments necessary for a fair presentation of the consolidated results, financial position and cash flows for each period presented.
The financial statements for the year ending 31 March 2013 are not expected to be materially affected by implementation of new standards, amendments to standards, or interpretations.
Risk Statement
hibu's risks and uncertainties include strategic and operational risks faced by hibu's businesses; debt and financing risks faced in funding Group operations and the financial reporting and related risks faced in reporting hibu's results. Readers are advised to read pages 22 to 29, page 116 and notes 1 and 16 to the financial statements included in Yell Group plc's 2012 annual report for the financial year ended 31 March 2012, a copy of which is available on hibu's website at http://www.hibu.com.
The audit opinion on the statutory accounts for the year ended 31 March 2012 was unqualified and unmodified, and included an emphasis of matter concerning the ability of the company to continue as a going concern. The financial information herein should be read in conjunction with Yell Group plc's 2012 annual report published in June 2012, which was prepared in accordance with the International Financial Reporting Standards as adopted by the European Union, IFRIC Interpretations and the Companies Act 2006.
The financial information contained herein has been prepared on a going concern basis. The majority of hibu's debt matures in April 2014. The Group therefore announced in July 2012 that it was seeking to form a co-ordinating committee of the lenders (the "CoCom") under its facilities agreement dated 30 November 2009 (as amended) to represent the interests of those lenders during the process of determining an appropriate new capital structure. The CoCom was formed, and with its support, the Group obtained certain waivers in August and September from its lenders to enable, among other things, substantive discussions to take place around a balance sheet restructuring. The Group remains in active and constructive dialogue with the CoCom.
The Group received a waiver on 28 September 2012 deferring the financial debt covenant tests from 30 September 2012 to 30 November 2012 whilst it is consulting with its lenders. On 25 October 2012 the Group announced that it would be suspending all further payments of principal and interest to lenders until such time as a restructuring of its balance sheet can be concluded. This decision affects only the lenders to the Group and in no way affects payments to employees, partners, suppliers, trade or other creditors or any other counterparty. As can be seen in the accompanying financial information, the Group retains a healthy cash balance and therefore this decision is driven by a desire to treat all lenders fairly and equitably, rather than by any liquidity concerns
On 26 October 2012 hibu requested a number of waivers, consents and amendments to credit facilities from its lenders under the 2009 credit facilities agreement to allow the Group to proceed with the restructuring. The CoCom has unanimously agreed, subject to credit committee approval, to support the waivers being sought.
In addition to seeking a series of waivers, consents and amendments from lenders to the 2009 facilities agreement, the Group also sought approval from lenders under the 2006 facilities agreement. The original deadline for the 2006 lenders to vote on the requested waiver and amendments was 9 November 2012. The Group has decided to extend the period of voting for the 2006 lenders until 23 November 2012 to enable time for all 2006 lenders to vote. In the meantime, the Group is formulating a Scheme of Arrangement under part 26 of the Companies Act 2006 which is likely to be launched in November.
At the present time there is no intention to extend the voting deadline for lenders under the 2009 facilities agreement which therefore remains as 21 November 2012.
If the Group were not able to obtain the waivers from its lenders, the lenders' facility agent may, and must if directed by two-thirds of lenders (by reference to debt held) demand immediate repayment of all amounts due to them. The Group is cash generative and the directors believe that the lenders will receive a higher recovery on their loans by letting the business continue to operate as a going concern rather than by any other course of action. The Board therefore concluded that adoption of the going concern basis in preparing the financial statements is appropriate, and the financial information contained herein has been prepared on that basis. Nevertheless, the directors are making full disclosure to indicate the existence of a material uncertainty in regard to the Group's ability to continue as a going concern. The financial information does not include the adjustments that would result if the Group were unable to continue as a going concern.
A number of capital structure options are being considered. The Group confirms that the options being considered are likely to result in little or no value being attributed to the Group's ordinary shares. The Group net assets of GBP285m include goodwill and other intangible assets totalling GBP2,488m which is supported by the Group's strategic plans. It is clear that the Group faces challenges and material uncertainties which may affect the carrying value of these intangible assets.
The auditors' report on the Group's half-yearly financial information for the six months ended 30 September 2012 includes an emphasis of matter in respect of going concern and the carrying value of assets along with an unmodified opinion on the preparation of the financial information.
Related Parties
There are no related party transactions in the six months ended 30 September 2012 except compensation for key management. Key management compensation for the financial year ended 31 March 2012 is detailed in note 26 on page 106 of Yell Group plc's 2012 Annual Report. A copy of Yell Group plc's Annual Report is available on hibu's website at http://www.hibu.com.
2. Revenue
Six months ended 30 September
----------------------------------- ------------ --------------------
Change
--------------------
Reporting Constant
GBPm, unless noted otherwise 2012 2011 currency currency
----------------------------------- ----- ----- --------- ---------
% %
US 353.8 404.2 (12.5) (14.5)
UK 180.2 233.0 (22.7) (22.7)
Spain 74.3 110.2 (32.6) (26.0)
Latin America 51.6 39.8 29.6 35.4
----- -----
Group revenue 659.9 787.2 (16.2) (16.0)
===== =====
Print and other directory services 444.3 550.9 (19.4) (19.3)
Digital directories 133.7 172.7 (22.6) (21.8)
Other digital services 81.9 63.6 28.8 27.8
----- -----
Group revenue 659.9 787.2 (16.2) (16.0)
===== =====
3. EBITDA and operating profit([1])
Six months ended 30 September
------------------------------ ------------ --------------------
Change
--------------------
Reporting Constant
GBPm, unless noted otherwise 2012 2011 currency currency
------------------------------ ----- ----- --------- ---------
% %
US 79.9 111.6 (28.4) (30.0)
UK 40.6 76.1 (46.6) (47.4)
Spain 26.6 37.2 (28.5) (21.5)
Latin America 3.0 6.5 (53.8) (43.1)
----- -----
Group EBITDA 150.1 231.4 (35.1) (34.7)
===== =====
([1]) EBITDA and operating profit are presented on the basis of where revenues and costs are managed and may not reflect the legal location of revenue and costs. This presentation may not be indicative of the presentation for the full year.
Reconciliation of operating profit to EBITDA([1])
Six months ended 30 September
------------------------------------------ ------------
GBPm, unless noted otherwise 2012 2011
------------------------------------------ ----- -----
US operating profit 51.5 89.1
Depreciation and amortisation 28.4 22.5
US EBITDA 79.9 111.6
US EBITDA margin 22.6% 27.6%
Exchange impact (1.8) -
----- -----
US EBITDA at constant exchange rate 78.1 111.6
===== =====
UK operating profit(2) 25.9 59.2
Depreciation and amortisation 12.5 12.3
Exceptional items 2.2 4.6
----- -----
UK EBITDA(2) 40.6 76.1
UK EBITDA margin 22.5% 32.7%
Exchange impact (0.6) -
----- -----
UK EBITDA(2) at constant exchange rate 40.0 76.1
===== =====
Spain operating (loss) profit (1.4) 0.4
Depreciation and amortisation 25.9 37.5
Exceptional items 2.1 (0.7)
----- -----
Spain EBITDA 26.6 37.2
Spain EBITDA margin 35.8% 33.8%
Exchange impact 2.6 -
----- -----
Spain EBITDA at constant exchange rate 29.2 37.2
Latin America operating loss (4.0) (0.4)
Depreciation and amortisation 6.6 6.9
Exceptional items 0.4 -
----- -----
Latin America EBITDA 3.0 6.5
Latin America EBITDA margin 5.8% 16.3%
Exchange impact 0.7 -
----- -----
Latin America EBITDA at constant exchange
rate 3.7 6.5
Group operating profit 72.0 148.3
Depreciation and amortisation 73.4 79.2
Exceptional items 4.7 3.9
Group EBITDA 150.1 231.4
Group EBITDA margin 22.7% 29.4%
Exchange impact 0.9 -
----- -----
Group EBITDA at constant exchange rates 151.0 231.4
([1]) EBITDA and operating profit are presented on the basis of where revenues and costs are managed and may not reflect the legal location of revenue and costs. This presentation may not be indicative of the presentation for the full year.
([2]) The UK amounts include centrally managed costs, including the cost centres in India and the Philippines.
4. Taxation
The tax charge for the six month period is different from the standard rate of corporation tax in the United Kingdom of 24% (2011 - 26%). The differences are explained below:
Six months ended 30 September
-------------------------------------------- ---------------
GBPm 2012 2011
-------------------------------------------- ------- ------
Profit before tax 7.0 69.2
------- ------
Profit before tax multiplied by the
standard rate of corporation tax in
the United Kingdom 1.7 18.0
Effects of:
Adjustments in respect of prior years([1]) 24.8 -
Deferred tax assets not recognised 2.0 0.3
Differing tax rates on foreign earnings 0.3 1.5
Exceptional deferred tax effect of
tax rate changes (0.1) 0.4
Other (3.6) 1.1
Tax charge on profit before tax 25.1 21.3
======= ======
Effective tax rate on profit before
tax 358.6% 30.8%
======= ======
([1]) The prior year adjustments mainly comprise tax assets in Spain, which are no longer considered recoverable due to recent changes in tax law and economic expectations.
The tax on the Group's profit before tax is analysed as follows:
Six months ended 30 September
------------------------------------------ -------------
GBPm 2012 2011
------------------------------------------ ------ -----
Current year total tax charge 0.3 21.3
Total adjustments in respect of prior
years 24.8 -
------ -----
Tax charge on profit before tax 25.1 21.3
====== =====
Current tax:
Current year corporate income tax charge 5.7 19.6
Adjustments in respect of prior years 10.2 -
------ -----
15.9 19.6
Deferred tax:
Deferred tax (credit) charge (5.3) 1.3
Adjustments in respect of prior years 14.6 -
Deferred tax (credit) charge from tax
rate changes (0.1) 0.4
------ -----
Tax charge on profit before tax 25.1 21.3
====== =====
Taxation credited (charged) directly to equity is as follows:
Six months ended 30 September
--------------------------------------- --------------
GBPm 2012 2011
--------------------------------------- ------ ------
Current tax on actuarial losses 1.7 1.8
Deferred tax on actuarial losses 0.1 2.4
Deferred tax on fair valuations of
financial instruments used as hedges (0.9) (1.4)
Total taxation recorded in equity 0.9 2.8
====== ======
5. Earnings per share
The calculation of basic and diluted earnings per share is based on the profit for the relevant financial period and on the weighted average share capital during the period.
Exceptional
GBPm unless noted otherwise Statutory items(1) Other items(2) Adjusted
------------------------------------ ------------ -------------- --------------- ---------
Six months ended 30 September
2012
Operating profit 72.0 4.7 - 76.7
Amortisation of acquired
intangibles - - 34.6 34.6
Net finance costs (65.0) - - (65.0)
Group profit before tax 7.0 4.7 34.6 46.3
Taxation (25.1) (1.4) (11.4) (37.9)
------------ -------------- --------------- ---------
Group profit after tax (18.1) 3.3 23.2 8.4
============== ===============
Weighted average number of
issued ordinary shares (millions) 2,351.5 2,351.5
------------ ---------
Basic earnings per share
(pence) (0.8) 0.4
Effect of share options (pence) - -
------------ ---------
Diluted earnings per share
(pence) (0.8) 0.4
============ =========
Exceptional
GBPm unless noted otherwise Statutory items(1) Other items(2) Adjusted
------------------------------------ ---------- ------------ --------------- ---------
Six months ended 30 September
2011
Operating profit 148.3 3.9 - 152.2
Amortisation of acquired
intangibles - - 45.6 45.6
Net finance costs (79.1) - 1.0 (78.1)
Group profit before tax 69.2 3.9 46.6 119.7
Taxation (21.3) (0.6) (15.0) (36.9)
---------- ------------ --------------- ---------
Group profit after tax 47.9 3.3 31.6 82.8
============ ===============
Weighted average number of
issued ordinary shares (millions) 2,316.3 2,316.3
---------- ---------
Basic earnings per share
(pence) 2.1 3.6
Effect of share options (pence) (0.1) (0.1)
---------- ---------
Diluted earnings per share
(pence) 2.0 3.5
========== =========
(1) Details of exceptional items are set out in note 6.
(2) Other items include amortisation of acquired intangibles and the fair valuation charge for the time value of interest rate caps taken directly to the Income Statement.
6. Exceptional items
Exceptional items are transactions which, by virtue of their incidence, size or a combination of both, are disclosed separately. Exceptional items comprise the following:
Six months ended 30 September
------------------------------------------------ ------------
GBPm 2012 2011
------------------------------------------------ ----- -----
Costs of restructuring and implementing new
strategy 4.7 3.9
Net exceptional expenses in Group profit before
tax 4.7 3.9
Net tax credit on items above (1.3) (1.0)
Deferred tax impact of tax rate changes (0.1) 0.4
Net exceptional expenses in Group profit after
tax 3.3 3.3
===== =====
7. Capital expenditure
Six months ended 30 September
--------------------------------------------------- -----------
GBPm 2012 2011
--------------------------------------------------- ----- ----
Capital expenditure on software, other intangible
assets,
property, plant and equipment 25.0 24.6
(Increase) decrease in accrued capital expenditure (0.8) 3.7
Cash paid for capital expenditure 24.2 28.3
===== ====
Proceeds on the sale of property, plant and equipment were GBPnil in the six months ended 30 September 2012 and 2011. Capital expenditure committed at 30 September 2012 was GBP4.4m (2011 - GBP7.1m).
8. Acquisitions and disposals
In the six months to 30 September 2012, hibu paid GBP18m for Moonfruit in the UK with recorded net assets of GBP0.1m. Total costs were provisionally allocated to the acquired assets and liabilities as follows:
Provisional
fair
GBPm value
------------------------------- ------------
Non current assets
Other intangible assets 9.5
Property, plant and equipment 0.1
Deferred tax asset 0.4
Total non current assets 10.0
------------
Current assets
Trade and other receivables 2.0
Cash and cash equivalents 0.4
Total current assets 2.4
------------
Current liabilities
Trade and other payables (2.8)
------------
Total current liabilities (2.8)
------------
Non current liabilities
Deferred tax (2.2)
------------
Total non current liabilities (2.2)
------------
Identifiable net assets 7.4
Goodwill(1) 10.6
------------
Total cost 18.0
============
(1) Goodwill of GBP10.6m was attributable to the expected future synergies, the workforces acquired and the expected future growth of the businesses.
In the six months ended 30 September 2011, hibu paid $19.4m (GBP12.1m) for Znode in the US with recorded net assets of GBP0.6m. Goodwill of GBP4.4m was attributable to the expected future synergies, the workforces acquired and the expected future growth of the businesses.
Cash flow
A reconciliation of cash paid on acquisitions, including deferred payments for prior year acquisitions, to the cash flow on page 9 is as follows:
Six months ended 30 September
-------------------------------------------------- -------- -------
GBPm 2012 2011
-------------------------------------------------- -------- -------
Cost of acquisitions in the six months, net
of cash acquired 17.6 11.9
- 0.4
Payments in period for amounts
deferred on prior period acquisitions
Net cash outflow in period 17.6 12.3
======== =======
hibu did not make any disposals in any of the periods presented in this financial information.
9. Goodwill
At 30 September and 31 March 2012
-------------------------------------------- ---------- ----------
GBPm September March
-------------------------------------------- ---------- ----------
Opening net book value at 1 April 2012 and
2011 1,909.9 3,123.9
Impairment - (1,209.2)
Acquisitions (note 8) 10.6 4.4
Currency movements (15.3) (9.2)
Net book value at period end 1,905.2 1,909.9
========== ==========
Goodwill is not amortised but is tested, at least annually, for impairment. The impairment analysis is based on certain assumptions, including future revenue and profit growth, that can change the conclusion on whether goodwill is impaired.
No impairment charges have been required in the periods presented in this financial information, because the assumptions used in valuing the assets at 31 March 2012 have not materially changed. Goodwill intangibles are supported by the Group's current strategy. This however is in its early stages requiring growth, and uncertainty exists about the future outcomes of the strategic plans. If the expected benefits in the strategic plan, including significantly higher revenues than the Group has historically achieved, either run later or in aggregate deliver less new value than currently expected, then the directors may need to include further impairment charges. However at this stage it is uncertain and cannot be quantified. The value of goodwill is also dependent on the Group's refinancing and the current strategy may require change which could impact materially on the carrying value of goodwill. See the Risk Statement on pages 13 and 14.
10. Other intangible assets
At 30 September and 31 March 2012
-------------------------------------------- ---------- --------
GBPm September March
-------------------------------------------- ---------- --------
Opening net book value at 1 April 2012 and
2011 637.7 1,157.0
Impairment - (379.5)
Acquisitions (note 8) 9.5 11.6
Additions 18.1 33.8
Disposals and writeoffs - (0.6)
Amortisation (63.3) (134.8)
Currency movements (19.5) (49.8)
---------- --------
Net book value at period end 582.5 637.7
========== ========
11. Property, plant and equipment
At 30 September and 31 March 2012
-------------------------------------------- ---------- -------
GBPm September March
-------------------------------------------- ---------- -------
Opening net book value at 1 April 2012 and
2011 86.5 100.5
Additions 6.9 13.6
Acquisitions (note 8) 0.1 0.1
Disposals and writeoffs (1.2) -
Depreciation (10.1) (26.2)
Currency movements (2.1) (1.5)
Net book value at period end 80.1 86.5
========== =======
12. Deferred tax assets and liabilities
The elements of deferred tax assets recognised in the financial statements were as follows:
At 30 September and 31 March 2012
----------------------------------------- ---------- ------
GBPm September March
----------------------------------------- ---------- ------
Tax effect of timing differences due to:
Recognised tax net operating losses 25.2 26.4
Depreciation 7.7 5.4
Bad debt provisions 6.5 6.2
Other allowances and accrued expenses 1.9 1.9
Financial instruments - 1.2
Other 4.0 6.9
---------- ------
Recognised deferred tax assets 45.3 48.0
========== ======
Deferred income tax assets are recognised to the extent that the realisation of the related tax benefit through future taxable profit is probable. The Group has unrecognised deferred income tax assets of GBP590.7m at 30 September 2012 (31 March 2012: GBP461.4m).
The elements of deferred tax liabilities recognised in the financial statements were as follows:
At 30 September and 31 March 2012
------------------------------------------ ---------- ------
GBPm September March
------------------------------------------ ---------- ------
Tax effect of timing differences due to:
Intangible assets 236.5 237.8
Unremitted earnings 11.2 12.4
Defined benefit pension scheme 2.7 2.3
Other 23.0 19.1
---------- ------
Recognised deferred tax liabilities 273.4 271.6
========== ======
13. Trade and other receivables
At 30 September and 31 March 2012
----------------------------------- ---------- ------
GBPm September March
----------------------------------- ---------- ------
Net trade receivables (1) 394.3 464.1
Net accrued income (1) 58.8 68.2
Corporate income tax recoverable 10.5 29.4
Prepayments 18.4 18.9
Other receivables 10.3 17.7
Total trade and other receivables 492.3 598.3
========== ======
(1) The Group's trade receivables and accrued income are stated after deducting a provision of GBP140.1m (March 2012 - GBP149.8m) for bad and doubtful debts.
14. Loans and other borrowings, net debt
At 30 September and 31 March 2012
--------------------------------------------- ---------- -------
GBPm September March
--------------------------------------------- ---------- -------
Amounts falling due within one year
Term loans under senior credit facilities(1) 84.4 167.1
Net obligations under finance
leases and other short term borrowings 2.5 2.7
Total amounts falling due within one year 86.9 169.8
Amounts falling due after more than one
year
Term loans under senior credit facilities(1) 2,115.8 2,165.2
---------- -------
Net loans and other borrowings 2,202.7 2,335.0
Cash and cash equivalents (112.3) (134.6)
----------
Net debt at period end 2,090.4 2,200.4
========== =======
(1) Balances are shown net of deferred financing fees of GBP48.1m (March 2012 - GBP62.0m).
On 25 October 2012 the Group cancelled the revolving credit facility and announced that it would be suspending all further payments of principal and interest to lenders until such time as a restructuring of its balance sheet can be concluded. As a result, the amounts due for payment on 29 October under the old 2006 lending facility were not paid. This was an event of default and gave rise to a cross default on the extended 2009 lending facilities. All amounts due under both the old 2006 and extended 2009 lending facilities became and are subsequently presented as current from that date.
hibu requested a number of waivers, consents and amendments to the credit facilities to allow the Group to proceed with the restructuring. See the Risk Statement on pages 13 and 14.
The movement in net debt for the six months ended 30 September 2012 and 2011 arose as follows:
Six months ended 30 September
------------------------------- ------- -------
GBPm 2012 2011
------------------------------- ------- -------
At 31 March 2012 and 2011 2,200.4 2,765.1
Free cash flow (86.9) (156.6)
Currency movements (38.0) 15.1
Amortisation of financing fees 14.9 10.4
At period end 2,090.4 2,634.0
======= =======
Amounts outstanding under the old 2006 and extended 2009 debt facilities at 30 September 2012 were as follows:
At 30 September A tranches B tranches
----------------- -------------------------------- ----------------------------- --------- ---------
Extended Extended
Old facilities facilities Old facilities facilities Other Total
----------------- ---------------- -------------- --------------- ------------ --------- ---------
GBPm
Pounds sterling - 553.4 - - - 553.4
US dollars (1) - 438.4 27.7 680.1 2.4 1,148.6
Euro (1) - 295.7 36.0 217.0 0.1 548.8
----------------- ---------------- -------------- --------------- ------------ --------- ---------
Total principal - 1,287.5 63.7 897.1 2.5 2,250.8
================= ================ ============== =============== ============ =========
Deferred financing fees (48.1)
Cash and cash equivalents (112.3)
---------
Net debt at period end 2,090.4
=========
(1) The closing rate for the US dollar at 30 September 2012 was $1.62 to GBP1.00 and for the Euro was EUR1.26 to GBP1.00.
The extended 2009 facilities contain covenants over net cash interest cover and debt cover. The net cash interest cover covenant requires that the ratio of EBITDA (adjusted for exceptional items and acquisitions during the period) for the latest twelve month period to net cash interest payable for the latest twelve month period does not fall below specific threshold ratios at specific test dates. The debt cover covenant requires that the ratio of net debt, excluding deferred financing fees and restated at the calculated average exchange rate for the relevant EBITDA, at the testing date to EBITDA for the latest twelve month period should not exceed specific threshold ratios at specific test dates. hibu received a waiver on 28 September 2012 deferring the financial debt covenant tests from 30 September 2012 to 30 November 2012 whilst it is consulting with its lenders on restructuring the Group's capital structure. On 26 October 2012 hibu requested a waiver to allow the Group to proceed with the restructuring by allowing for the default that occurred on 29 October 2012 and potential breaches of the 30 November and 31 December debt cover ratio tests. The CoCom has unanimously agreed to support the waivers being sought, subject to credit committee approval. The risks associated with restructuring hibu's balance sheet are explained in Note 1.
The existing threshold ratios at 30 November 2012 and for each test date until 30 June 2014 are as set out in the table below.
Cash interest Debt
Test date cover ratio cover ratio
------------------- --------------- -------------
30 November 2012 2.32 : 1 5.79 : 1
31 December 2012 2.40 : 1 5.54 : 1
31 March 2013 2.49 : 1 5.29 : 1
30 June 2013 2.55 : 1 5.04 : 1
30 September 2013 2.63 : 1 4.79 : 1
31 December 2013 2.73 : 1 4.54 : 1
31 March 2014 2.84 : 1 4.29 : 1
30 June 2014 2.91 : 1 4.04 : 1
hibu operated within its debt covenants for all periods presented in this financial information.
15. Trade and other payables
At 30 September and 31 March 2012
--------------------------------------- ---------- ------
GBPm September March
--------------------------------------- ---------- ------
Amounts falling due within one year
Trade payables 29.6 64.3
Other taxation and social security 10.9 6.9
Accruals and other payables 159.3 180.3
Deferred income 149.0 144.2
Trade and other payables
falling due within one year 348.8 395.7
---------- ------
Amounts falling due after more than
one year
Accruals and other payables 13.5 14.4
---------- ------
Trade and other payables
falling due after more than one year 13.5 14.4
---------- ------
Total trade and other payables 362.3 410.1
========== ======
16. Retirement benefits
At 30 September and 31 March 2012
--------------------------------------- ---------- -------
GBPm September March
--------------------------------------- ---------- -------
Net retirement benefits surplus at
1 April 2012 and 2011 9.4 37.3
---------- -------
Net actuarial loss on defined benefit
pension schemes (7.6) (47.9)
Contributions in excess of charges 9.9 20.0
---------- -------
Net movement in retirement benefits
surplus 2.3 (27.9)
Net retirement benefits surplus at
period end 11.7 9.4
========== =======
The net actuarial loss in the six months ended 30 September 2012 was largely the result of the unwinding discount rate being larger than the return on assets in the period as real interest rates did not change. The reasons for the net actuarial loss in the six months ended 30 September 2011 were a 10 basis point decrease in real interest rates, thus increasing estimated liabilities, and a decrease in the value of assets held.
The Group is required to agree its contributions to the pension plan with the trustees based on actuarial advice. Such agreement must be reached in a way that complies with the UK Pension Regulator's "Scheme Specific Funding" guidance. Any failure to agree would result in the intervention of the Pensions Regulator and, possibly, an imposed settlement. The full funding valuation that has an effective date of 5 April 2011 has not been agreed at the date of this earnings release.
17. Financial commitments, litigation and contingent liabilities
At 30 September 2012, hibu has no material unrecorded litigation settlement obligations.
hibu has GBP13.8m of restructuring provisions expensed but not yet paid at 30 September 2012 as the best estimate of the remaining amounts to be settled.
There are no contingent liabilities or guarantees other than those referred to above and those arising in the ordinary course of the Group's business. No material losses are anticipated on liabilities arising in the ordinary course of business.
Independent review report to hibu plc
Introduction
We have been engaged by the company to review the financial information in the half-yearly financial report for the six months ended 30 September 2012 which comprises the Group Statement of Financial Position, the Group Statement of Comprehensive Income, the Group Statement of Cash Flow, the Group Statement of Changes in Equity and related notes. 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.
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 Services Authority.
As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs 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.
The maintenance and integrity of the hibu plc website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
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. This report, including the conclusion, has been prepared for and only for the company for the purpose of the Disclosure and Transparency Rules of the Financial Services Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
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 enquiries, 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 six months ended 30 September 2012 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 Services Authority.
Emphasis of matter - Going concern and carrying value of goodwill and intangibles
In forming our conclusion on the condensed consolidated financial information, which is not modified, we have considered the adequacy of the disclosures made in note 1 to the financial information concerning the ability of the Group and Company to continue as a going concern. The Group has announced that it is suspending all further payments of principal and interest to lenders until such time as a restructuring of its balance sheet can be concluded. As explained in note 14 the Group is in breach of 2006 and 2009 facility agreements. The Group has requested from its lenders under the 2006 and 2009 credit facilities agreements a number of waivers, consents and amendments to credit facilities to allow the Group to proceed with the restructuring and also requested a waiver of these breaches. If the Group were not able to obtain the waivers from its lenders, the 2009 lenders' facility agent may, and must if directed by two-thirds of lenders (by reference to debt held) demand immediate repayment of all amounts due to them. The 2006 lenders individually can demand immediate repayment of the amounts due to them. This right, together with other remedies available to the lenders, creates doubt about the future funding of the Group. These conditions, along with the other matters explained in note 1 to the financial statements, indicate the existence of a material uncertainty which may cast significant doubt about the Group's and Company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the company was unable to continue as a going concern. In particular no adjustment has been made to the carrying value of goodwill and intangibles. As explained in note 9, the carrying value of the Group's goodwill and intangibles of GBP2.488m is dependent on the Group's strategic plan. There is a material uncertainty regarding this carrying value, because if the strategic plan is significantly changed as a consequence of Group's refinancing or the expected benefits in aggregate deliver less value than currently expected then the directors may need to include an impairment charge in the future.
PricewaterhouseCoopers LLP
Chartered Accountants
13 November 2012
Thames Valley Office,
9 Greyfriars Road,
Reading
RG1 1JG
Statement of Directors' Responsibilities
The directors confirm that to the best of their knowledge the condensed consolidated financial statements in the half-yearly financial report have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, as adopted by the European Union, and that the interim results herein include a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R of the Disclosure and Transparency Rules, namely:
-- an indication of important events that have occurred during the first six months of the financial year and their effect on the condensed set of financial statements and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
-- material related party transactions in the first six months of the financial year and any material changes in the related-party transactions described in the last annual report.
The directors of hibu plc are listed on pages 34 through 36 of Yell Group plc's annual report for the financial year ended 31 March 2012. There have been no changes to the directors since that report.
By order of the Board
Mike Pocock Tony Bates Chief Executive Officer Chief Financial Officer
This information is provided by RNS
The company news service from the London Stock Exchange
END
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