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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Manx Telecom | LSE:MANX | London | Ordinary Share | IM00BHY3RF70 | ORD 0.2P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 215.50 | 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
TIDMMANX
RNS Number : 0292Z
Manx Telecom PLC
15 September 2015
15 September 2015
Manx Telecom Plc
Results for the six months ended 30 June 2015
Manx Telecom Plc (AIM:MANX), ("Manx Telecom" or the "Company") the leading communication solutions provider on the Isle of Man, announces its results for the six months ended 30 June 2015.
Financial Highlights
- Results in line with the Board's expectations - Revenues up 0.8% to GBP39.8m
-- Fixed Line, Broadband and Data revenues grew 1.5% driven by good take-up of high speed broadband
-- Mobile revenues increased by 12% boosted by 4G adoption and encouraging levels of inbound roaming revenue
-- Strong growth in Data Centre revenues (up 30%), aided by equipment sales
-- As expected, Global Solutions revenues declined by 25% due to the anticipated reduction in termination revenue, however, this was partly offset by good growth in Machine-to-Machine (M2M) and Strongest Signal Mobile (branded Chameleon) revenue
- EBITDA increased 0.7% to GBP13.8m - Underlying diluted EPS up 6.1% to 7.50p - Dividend policy: -- Interim dividend of 3.5p (H1 2014 : 3.3p) declared, to be paid on 9 November 2015 -- Progressive dividend policy reiterated - Renegotiated GBP80m credit facility on improved terms and the term extended to June 2020 - Performance underpins the Board's confidence in the Company's prospects
Results
Hot Features
Premium
Unaudited Unaudited
6 months 6 months
to to
30 June
30 June 15 14 Change
GBPm GBPm
Results:
Revenue 39.8 39.5 0.8%
EBITDA 13.8 13.7 0.7%
Margin 34.7% 34.7%
Operating Profit 9.4 9.7 -4.1%
Margin 23.5% 24.5%
Cash generated from operations 11.0 11.2 -2.2%
Capital Expenditure (excl
intangibles) 4.4 4.5
Free cashflow 6.1 5.2
Profit before and after
tax* 8.5 7.0 ** 21.4%
Diluted earnings per
share* 7.50p 7.07p **
Interim dividend per
share 3.5p 3.3p 6.1%
* before IPO costs and previously capitalised
loan transaction costs
** partially against the pre IPO capital structure
Reported results:
Profit /(loss) before
and after Tax 8.5 (5.1)
Basic earnings/(loss)
per share 7.56p (5.13)p
Operational Highlights
- 4G launched to pay as you go customers and adoption rates growing steadily
- Superfast broadband product "Ultima Plus" launched, offering customers download speeds of up to 80 Mbps and upload speeds of up to 10 Mbps
- Renewal of 5 year Isle of Man government contract
Post period events
- Poker Stars secured as anchor tenant for Greenhill Data Centre phase 2 (GDC 2)
Gary Lamb, Chief Executive Officer, said,
"I am pleased to report a solid performance for the half year, as we continue to make good progress towards achieving our strategic goals and delivering a full year result in line with the Board's expectations. The highly cash generative core business continues to perform strongly, with revenue growth driven by good take up of our new high speed broadband product and an increase in the number of mobile customers returning to Manx Telecom. In the past six months we have also seen the take up of 4G extend to a wider customer base and secured an anchor tenant for phase 2 of our new data centre. These developments have contributed to a six month performance that continues to underpin our confidence for the Company's prospects."
For further enquiries, please contact:
+44 (0) 1624
Manx Telecom 636400
Gary Lamb, CEO
Paul Tierney, Interim CFO
Liberum Capital (Nominated Adviser and Corporate +44 (0)20 3100
Broker) 2000
Steve Pearce / Steve Tredget
+44 (0) 20 7766
Oakley Capital (Financial Adviser) 6900
Christian Maher / Chris Godsmark
+44 (0) 20 7250
Powerscourt Group (Public Relations) 1446
Juliet Callaghan / Simon Compton / Hattie O'Reilly
About Manx Telecom Plc ("Manx Telecom")
-- Manx Telecom is the leading communication solutions provider on the Isle of Man, offering a wide range of fixed line, broadband, mobile, and data centre services to businesses, consumers and the public sector on the Isle of Man as well as a growing portfolio of innovative solutions to offshore customers.
-- Manx Telecom has a record of innovation, being the first European operator to launch a 3G mobile service and the first in the world to launch a 3.5G mobile service. 4G services were launched in the summer of 2014, while the Company's high speed FTTC broadband service (Ultima / Ultima Plus) is available to over 90 per cent of homes on the Island.
-- The Company has two Tier 3 data centres and international connectivity and its operations are business-critical to the economic strategy of the Isle of Man.
-- One of the largest employers on the Island, Manx Telecom employs over 280 people. The Company plays a major role in the wider community through a range of activities, including charitable donations, sponsorships, and corporate social responsibility initiatives.
-- The Isle of Man has a resilient and growing economy which has experienced 29 years of unbroken GDP growth. Unemployment is low at approximately 1.7 per cent and there is a zero per cent corporate tax rate which applies to the vast majority of Manx Telecom's business and means that the Group currently pays no corporation tax on its annual profits.
-- Manx Telecom trades on the Alternative Investment Market of the London Stock Exchange with the ticker MANX.
Chairman's Statement
Introduction
I am pleased to report a good set of results for the first half of 2015 in line with the Board's expectations. Whilst Global Solutions revenue declined as anticipated, the highly cash generative core business continues to perform well.
Results
Revenue grew by 0.8% in the first half of the year to GBP39.8m and EBITDA was slightly higher than the same period last year at GBP13.8m. Cash generation from operating activities remained strong at GBP11.0m, whilst we continue to make significant investment to support future growth.
Profit before tax, was GBP8.5m (2014: GBP7.0m). As an Isle of Man company, no tax is payable on these profits and the underlying diluted earnings per share increased by 6.1% to 7.5p.
Trading Performance
We had a busy first half of the year operationally introducing a number of new products and signing contracts with some of our strategically important customers. At the beginning of the year we launched a superfast broadband product, "Ultima Plus", offering customers broadband with download speeds of up to 80mbps and upload speeds of 10mbps. We also launched our 4G pay as you go service, which offers speeds of up to 10 times faster than the previous 3G network service. Both product launches have seen adoption rates growing steadily.
We were delighted to announce in February 2015 the renewal of a contract with our biggest customer, the Isle of Man Government, for mobile, local area network, wide area network, fixed line, internet and network services for five years. We also announced that the Isle of Man Government would be the anchor tenant for Greenhill Data Centre 1 (GDC 1), the new hosting facility opened last year. These contract wins demonstrate how integral Manx Telecom is to the Isle of Man through our government partnership.
More recently we were also delighted to announce Poker Stars as the anchor tenant for the next phase of the GDC 2, which will be complete and occupied in Q4 this year.
Our People
The solid performance for the first half of 2015, is once again a testament to the excellent customer service that our experienced and professional workforce at Manx Telecom provides. During the period we wished our former Chief Executive Officer, Mike Dee, a happy retirement after 32 years' service and, following a careful selection process, welcomed Gary Lamb, our former Finance Director, into the Chief Executive role. I am pleased we were able to appoint an internal candidate of Gary's calibre. We appointed Paul Tierney as interim Chief Financial Officer soon after Gary's appointment and we are actively looking for a permanent Chief Financial Officer.
Dividend
In line with the Company's progressive dividend policy, the Board has declared an interim dividend of 3.5p per share payable on 9 November 2015. The shares will trade ex-dividend on 15 October 2015 and will have a record date of 16 October 2015.
The final dividend will be proposed with the full year results and it is the Board's intention to continue with a progressive dividend policy.
Outlook
Current trading remains on course to deliver a result for the full year in line with the Board's expectations.
(MORE TO FOLLOW) Dow Jones Newswires
September 15, 2015 02:01 ET (06:01 GMT)
The core domestic business (fixed line, broadband and mobile services) continues to perform well and we expect this to continue in the second half of the year.
The data centre business is performing in line with our expectations with regard to occupancy. Revenue is up 30% on last year, which has been aided by a high proportion of lower margin equipment sales. The completion of phase 2 of the Greenhill Data Centre will help to enable continued revenue growth by providing additional hosting capacity for the Company.
We will continue to follow our dual strategy of strengthening our significant on island presence through high quality customer service and value for money, whilst seeking off island opportunities to exploit our data centre capacity and leverage our mobile technology platform.
Our first half performance continues to underpin our confidence in the Company's prospects. This, combined with the continued strong cash generation within the business, gives us confidence that we will remain in a position to maintain our progressive dividend policy.
CEO Review
Overview
I was delighted to be appointed Chief Executive Officer on 1st July 2015 and to be reporting on activities during the first six months of 2015. It has been another busy six months with a number of achievements to report during the period.
The Company continues to provide a wide range of telecommunications services to consumers, businesses and the public sector on the Island, priding ourselves on our excellent customer service. Our core domestic telecom services performed solidly during the period, with growth of fixed, broadband and data services, and mobile revenues. Following the launch of our 4G mobile network in 2014 we have seen an increase in the number of customers returning to Manx Telecom, high customer satisfaction levels and a resultant increase in mobile revenue for the period.
The Data Centre business has seen strong revenue growth during the period partly reflecting a higher than usual level of equipment sales as customers moved into the first phase of the Greenhill Data Centre (GDC 1). We were also pleased to have recently announced Poker Stars as our anchor tenant for the next phase of Greenhill Data Centre (GDC 2) which will be complete by October 2015 and leave GDC 2 more than 50% utilised.
The Global Solutions business has seen good growth in its core products, M2M, Strongest Signal Mobile (branded Chameleon) and international traveler market sim, which helped to partially offset a decline in our SMS termination business.
The renewal of our long-term contract with the Isle of Man Government for mobile, local area network, wide area network, fixed line, internet and network services and the securing of Poker Stars as an anchor tenant in the next phase of our data centre development are a testament to the hard work of our work force and strong business partnerships on the Isle of Man.
The Isle of Man economy continues to perform well with unemployment at 1.7% and with solid levels of economic growth forecast to continue. Our relationship with the Isle of Man Government remains very positive. Our telecommunications infrastructure and the services we provide form an important part of the reason for the Island's ongoing success.
The company is pleased to have renegotiated its GBP80m credit facility on improved terms and extended the term to June 2020.
Results Overview
The Company's performance for the period was in line with the Board's expectations. Revenue grew by 0.8% to GBP39.8m, driven by increases in Fixed, Broadband and Data, Mobile and Data Centre services, offset by a decline in Global Solutions revenues.
EBITDA was 0.7% higher than last year at GBP13.8m and the margin was maintained at 34.7%. A reduction in the lower margin Global Solutions business was partly offset by a high level of equipment sales and increases in the higher margin broadband and mobile business.
Cash generation has remained robust with cash generated from operations of GBP11.0m (2014: GBP11.2m) and so helping to facilitate continued investment in the Isle of Man and our commitment to a progressive dividend policy.
Profit before tax increased by 21% to GBP8.5m (2014: GBP7.0m) primarily due to lower interest costs and an unrealised gain on our interest rate swap. This translates into a 6.1% increase in underlying diluted earnings per share to 7.5p (2014: 7.07p).
We continue to invest in capital projects on the Isle of Man and have spent GBP4.4m (2014: GBP4.5m) in the first 6 months of the year. This includes the development of the second phase of the Greenhill Data Centre (GDC 2) and the upgrade of our CRM, billing, online and charging platform which is due for completion in Q4 2015 and which will enhance our consumer offering on the Island.
Revenue
Revenue 6 months % 6 months % %
2015 Total 2014 Total YonY
GBP'000 Revenue GBP'000 Revenue
---------------------- --------- --------- --------- --------- ------
Fixed, Broadband and
Data 15,825 39.7 15,595 39.4 1.5
---------------------- --------- --------- --------- --------- ------
Core Mobile 10,051 25.2 8,979 22.7 11.9
---------------------- --------- --------- --------- --------- ------
Data Centre 4,062 10.2 3,128 7.9 29.9
---------------------- --------- --------- --------- --------- ------
Global Solutions 6,214 15.6 8,250 20.9 -24.7
---------------------- --------- --------- --------- --------- ------
Other 3,684 9.2 3,582 9.1 2.8
---------------------- --------- --------- --------- --------- ------
Total Revenue 39,836 39,534 0.8
---------------------- --------- --------- --------- --------- ------
Fixed, Broadband and Data Services
Fixed, Broadband and Data Services provide fixed line voice, broadband and connectivity services for customers, connecting approximately 37k homes and 4k businesses on the Island. Fixed, Broadband and Data is our largest business representing 40% of all Company revenues. For the first 6 months of 2015 revenue increased by 1.5% to GBP15.8m (2014: GBP15.6m).
On 1 September 2015 we opened up our fixed network, providing a wholesale fixed line product to our competitors. As part of this process, we re-balanced our tariffs, with fixed line tariffs increasing and VDSL broadband tariffs reducing. This has brought a competitive fixed line product to the market and a further incentive for customers to move to our higher speed broadband products. Fixed line revenues decreased 1.3% in the period driven by a decline in fixed line usage partially offset by annual line rental increases.
We continue to roll out high speed VDSL broadband services (up to 40mbps download) across the Island and now reach 90% of households, with take up rates of almost 25%. Earlier this year we launched "VDSL plus" superfast broadband - Ultima Plus - which delivers download speeds of up to 80 mbps and upload speeds of 10 mbps. This has further stimulated take up of the super fast broadband service. The sale of Ultima and Ultima Plus has helped Broadband revenues to increase by 4% to GBP4.3m.
Mobile
Our 4G network, which provides 99% population coverage at speeds of up to 10 times faster than 3G services, is now available to contract and pay as you go customers who have a 4G compatible handset. Launched in 2014, it continues to achieve high levels of customer satisfaction with adoption rates growing steadily across both the pay as you go and contract bases.
Mobile revenues account for 25% of the Company's revenue and for the period increased by 12% to GBP10.1m (2014: GBP9.0m).
At June 2015, we had approximately 35.7k pre-paid customers (2014: 36.8k) and 29.0k post-paid customers (2014: 28.4k). The introduction of 4G and general up-selling of data packages has contributed to an 11.7% increase in post-paid Average Revenue Per User (ARPU) and 8.6% increase in prepaid ARPU over the past 12 months.
Data Centre
The data centre business offers co-location, managed hosting, cloud and disaster recovery services to an international and local corporate client base. These services are supplied by three data centres at Douglas North, Douglas Central and Greenhill Data Centre (GDC). The data centres at GDC and Douglas North are ranked as Tier III data centres (according to Telecommunications Industry Association standards). This provides high standards of data security, resilience, and expandable hosting capacity, including business continuity and distributed denial of service protection (DDoS).
The first phase of the Greenhill Data Centre is now over 50% utilised and we are developing the second phase of the data centre following the recent announcement that Poker Stars will place 48 data hosting racks in the facility on a 3 year contract. Building work is progressing well and we expect completion and customer occupancy in Q4.
Data centre revenues are 30% higher than this time last year at GBP4.1m (2014: GBP3.1m) and include a significant proportion of lower margin equipment sales as customers occupy GDC 1. When the anchor tenant occupies GDC 2, the facility will be in excess of 50% utilised.
Global Solutions
The Global Solutions business generates revenue from services which run on our domestic mobile technology platform and utilise our international roaming agreements. This enables us to offer a variety of products to the UK and international partners who use our Global Solutions sim cards. There are four key revenue areas: wholesale SMS and voice, international traveller market, M2M and strongest signal mobile (branded Chameleon).
(MORE TO FOLLOW) Dow Jones Newswires
September 15, 2015 02:01 ET (06:01 GMT)
Revenues have declined by 25% to GBP6.2m (2014: GBP8.3m) driven by the anticipated decline in SMS termination revenue. The higher margin core product revenue has increased by 15% during the period, helping to offset some of the decline and supporting the positive long term outlook for Global Solutions.
Our strategy to address the revenue decline is to increase the focus on our core products which help meet the demand for connected devices in M2M, Internet of Things (IoT) and Strongest Signal Mobile (SSM) markets.
Other Revenues
Other revenues include the advertising revenue from our telephone directory, hardware equipment sales, interconnection fees and managed services.
Other revenue increased by 2.8% in the period to GBP3.7m (2014: GBP3.6m). Growth was driven by an increase in equipment sales of 69% which offset a reduction in directory revenue of 10%, which continues to decline in line with industry trends.
Financial Review
Revenue grew by 0.8% to GBP39.8m (2014: GBP39.5m) with a 1.5% increase in the Fixed, Broadband and Data services supplemented by strong growth in Mobile of 12% and Data Centre of 30%, offset by a reduction of 25% in Global Solutions revenue.
Fixed Line, Broadband and Data revenue was up 1.5% at GBP15.8m (2014: GBP15.6m). Mobile revenues performed strongly with growth of 11.9% to GBP10.1m (2014: GBP9.0m) with good results from roaming and contract subscriptions revenue. Data Centre revenue increased by 30% to GBP4.1m (2014: GBP3.1m) due mainly to a significant amount of equipment sales. Other revenues were marginally ahead at GBP3.7m (2014: GBP3.6m). Global Solutions revenues fell 25% to GBP6.2m (2014: GBP8.3m) due to the anticipated reduction in termination revenue, though this has been partly offset by M2M and Strongest Signal Mobile (branded Chameleon) services revenue.
The Group generated EBITDA of GBP13.8m (2014: GBP13.7m), marginally up on last year with the EBITDA margin remaining consistent with last year at 34.7% (2014: 34.7%).
Depreciation was GBP4.5m (2014: GBP4.1m) which includes charges for network infrastructure (fixed network, broadband network and 2G/3G mobile networks) as well as IT equipment and office equipment. The increase was mainly driven by the completion of the significant 4G investment in July 2014 and the Greenhill Data Centre.
Operating profit reduced by 3.1% to GBP9.4m (2014: GBP9.7m) due mainly to increased depreciation. This resulted in a moderate reduction in the operating margin to 23.5% (2014: 24.5%).
Profit before tax increased by 21% to GBP8.5m (2014: GBP7.0m) primarily due to lower interest charges following the reduced level of debt post IPO.
Underlying diluted EPS was 7.50p (2014: 7.07p), in line with expectations.
The Company paid a final dividend relating to last year of 6.6p in June 2015.
Costs
Overall costs (excluding costs associated with the IPO in H1 2014 and finance costs) increased by 2.1%, or GBP0.6m, for the half year. The main component of costs is staff, which increased by 1.3% in the period.
Roaming costs reduced by 24% in the half-year, mainly due to the reduction in Global Solutions revenue. Energy costs were 8% higher than last half-year due to increased utilisation at the data centres and a 2.2% energy rate increase. Mobile handset costs were 18% higher than the same period last year driven primarily by the take up of 4G products. Maintenance charges increased 5.1% due to our Next Generation Network ('NGN') completing its warranty period.
Net Finance Costs
Net finance costs were GBP1.4m (2014: GBP6.9m) including interest payments on bank facilities of GBP1.2m (2014: GBP1.8m). Interest payable on shareholder loan notes was reduced to nil (2014: GBP0.3m).
Amortisation of loan transaction costs on the change in banking facilities during the half-year were GBP0.2m (2014: GBP0.1m).
The realised loss on interest rate swaps in the period was nil (2014: GBP0.3m), however, there is an unrealised gain of GBP0.3m, having hedged GBP50m of our GBP70m gross IPO debt through its maturity in June 2018 at an all-in rate of 3.7% per annum.
Cash flow
Cash generated from operating activities reduced by 2.2% to GBP11.0m (2014: GBP11.2m). This represents an EBITDA cash conversion of 79.3% (2014: 80.6%). The Company reported a working capital outflow of GBP3.2m (2014: GBP3.2m) for the half year.
Our free cash flow after investing activities was 25% higher at GBP6.5m (2014: GBP5.2m), out of which we serviced our borrowings and paid our dividend to shareholders.
Capital Expenditure
Capital additions were GBP2.2m (2014: GBP4.5m), which was mainly on projects relating to our Fixed Voice and Mobile networks and Phase 2 of our new Greenhill Data Centre. Expenditure is lower than expected for the first 6 months due to some project rephasing, but this is expected to catch up in the second half of the year.
Phase 2 of our new Greenhill Data Centre is due to become operational in October 2015 at a total cost of GBP2.6m, of which GBP0.5m was spent in the first half of the year.
The Fixed Voice Network Replacement project is due to complete in 2015 costing GBP1.2m while investment in our mobile network project will cost GBP1.0m in 2015.
The remaining capital expenditure was spread across a number of business areas including network enhancements, IT and customer projects.
Balance Sheet
Property, plant and equipment reduced during the first half by GBP2.2m to GBP62.9m as capital expenditure of GBP2.2m was exceeded by depreciation of GBP4.4m.
We retain goodwill of GBP84.3m on the balance sheet arising from the purchase of Manx Telecom from Telefonica in 2010, which is supported robustly by current valuations.
Current assets increased to GBP32.9m (H1 2014: GBP27.9m) due to an increase in cash held and increased level of trade receivables, mainly roaming debtors and accrued roaming income.
Current liabilities increased by 15.7% to GBP25.0m (H1 2014: GBP21.7m) primarily due to an increase in trade payables to roaming creditors.
Non-current liabilities reduced significantly from GBP75.0m down to GBP68.7m primarily due to the reorganisation of the Combined Pension scheme in August 2014 releasing the accrued liability of GBP6.6m. The Borrowings and interest payable increased slightly to GBP68.7m (H1 2014: GBP68.4m).
Net debt ended the period at GBP56.2m up from GBP53.7m at the end of 2014. In June 2015, the group negotiated amended lending facilities, reducing the interest rate by 0.5% and extending the loan by a further 2 years to June 2020. There is an interest rate swap covering GBP50m of the banking debt.
Condensed Interim Consolidated Statement of Comprehensive Income
Unaudited Unaudited
Note 6 months 6 months
to 30 June to 30 June
2015 2014
GBP'000 GBP'000
----------------------------------------------- ------- ------------ ------------
Revenue 6 39,836 39,534
Cost of sales (15,869) (16,821)
----------------------------------------------- ------- ------------ ------------
Gross profit 23,967 22,713
----------------------------------------------- ------- ------------ ------------
Administrative expenses (14,610) (13,044)
----------------------------------------------- ------- ------------ ------------
Operating profit 9,357 9,669
----------------------------------------------- ------- ------------ ------------
EBITDA 13,820 13,734
Depreciation and amortisation (4,463) (4,065)
Operating profit 9,357 9,669
----------------------------------------------- ------- ------------ ------------
Other income 145 -
Financial income 8 99 34
Finance costs 8 (1,380) (6,915)
Listing expenses 7 - (7,566)
Net profit/(loss) on interest rate swaps 314 (294)
----------------------------------------------- ------- ------------ ------------
Profit/(loss) before tax 8,535 (5,072)
----------------------------------------------- ------- ------------ ------------
Taxation - -
----------------------------------------------- ------- ------------ ------------
Profit/(loss) for the period attributable
to the owners of the Group 8,535 (5,072)
----------------------------------------------- ------- ------------ ------------
Profit before Tax 8,535 7,040
Listing expenses 7 - (7,566)
Release of capitalised loan transaction
costs 8 - (4,546)
Profit/(loss) before tax 8,535 (5,072)
----------------------------------------------- ------- ------------ ------------
Other comprehensive income - Items that
will never be reclassified to profit
or loss
Actuarial losses on defined benefit
pension scheme 14 (3,800) (600)
Total comprehensive profit/(loss) for
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the period attributable to the owners of the Group 4,735 (5,672) ----------------------------------------------- ------- ------------ ------------ Earnings per share from continuing operations attributable to the owners of the Group during the period (expressed in pence per share) Basic earnings/(loss) per share 13 7.56p (5.13)p Diluted earnings/(loss) per share 13 7.50p (5.10)p Underlying basic earnings per share 13 7.56p 7.12p Underlying diluted earnings per share 13 7.50p 7.07p ----------------------------------------------- ------- ------------ ------------
The accompanying notes form an integral part of these condensed interim financial statements.
Condensed Interim Consolidated Statement of Financial Position
Unaudited Unaudited Audited
Note 30 June 2015 30 June 2014 31 December
2014
GBP'000 GBP'000 GBP'000
--------------------------------- ------ -------------- -------------- -------------
Non-current assets
Property, plant and equipment 9 62,900 63,153 65,098
Goodwill 10 84,277 84,277 84,277
Intangible assets 462 480 516
Retirement benefit asset 14 - - 2,200
--------------------------------- ------ -------------- -------------- -------------
147,639 147,910 152,091
--------------------------------- ------ -------------- -------------- -------------
Current assets
Inventories 702 758 794
Trade and other receivables 19,654 16,732 16,708
Cash and cash equivalents 12,548 10,387 15,156
--------------------------------- ------ -------------- -------------- -------------
32,904 27,877 32,658
--------------------------------- ------ -------------- -------------- -------------
Current liabilities
Interest-bearing loans and
borrowings 12 - (338) -
Trade and other payables (24,346) (21,321) (26,475)
Interest rate swaps (694) - (1,008)
--------------------------------- ------ -------------- -------------- -------------
(25,040) (21,659) (27,483)
--------------------------------- ------ -------------- -------------- -------------
Net current assets/(liabilities) 7,864 6,218 5,175
--------------------------------- ------ -------------- -------------- -------------
Non-current liabilities
Interest-bearing loans and
borrowings 12 (68,659) (68,353) (68,948)
Retirement benefit liability 14 (950) (6,600) -
--------------------------------- ------ -------------- -------------- -------------
(69,609) (74,953) (68,948)
--------------------------------- ------ -------------- -------------- -------------
Net assets 85,894 79,175 88,318
--------------------------------- ------ -------------- -------------- -------------
Equity attributable to the
owners of the Group
Share capital 11 226 226 226
Share premium 11 84,343 84,343 84,343
Retained earnings/(deficit) 1,325 (5,394) 3,749
--------------------------------- ------ -------------- -------------- -------------
Total equity 85,894 79,175 88,318
--------------------------------- ------ -------------- -------------- -------------
The accompanying notes form an integral part of these condensed interim financial statements.
Condensed Interim Consolidated Statement of Changes in Equity
Share Share Retained Total
Capital Premium earnings equity
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------ -------- -------- --------- --------
Balance at 1 January 2014 100 - 225 325
Total comprehensive income for the period
Loss for the period - - (5,072) (5,072)
Other comprehensive income - - (600) (600)
------------------------------------------ -------- -------- --------- --------
Total comprehensive loss for the period - - (5,672) (5,672)
------------------------------------------ -------- -------- --------- --------
Transactions with owners of the Group,
recorded directly in equity
Issue of shares 126 89,226 - 89,352
Share-based payment transactions - - 53 53
Dividend paid - - - -
Listing costs recognised in equity (notes
7,11) - (4,883) - (4,883)
------------------------------------------ -------- -------- --------- --------
Total contributions by and distributions
to the owners of the Group 126 84,343 53 84,522
------------------------------------------ -------- -------- --------- --------
Balance at 30 June 2014 226 84,343 (5,394) 79,175
------------------------------------------ -------- -------- --------- --------
Balance at 1 January 2014 100 - 225 325
Total comprehensive income for the period
Profit for the period - - 5,716 5,716
Other comprehensive income - - 800 800
------------------------------------------ -------- -------- --------- --------
Total comprehensive profit for the period - - 6,516 6,516
------------------------------------------ -------- -------- --------- --------
Transactions with owners of the Group,
recorded directly in equity
Share-based payment transactions - - 731 731
Issue of shares 126 89,226 - 89,352
Own shares acquired in the period - - - -
Listing costs recognised in equity - (4,883) - (4,883)
Dividend paid - - (3,723) (3,723)
------------------------------------------ -------- -------- --------- --------
Total contributions by and distributions
to the owners of the Group 126 84,343 (2,992) 81,477
------------------------------------------ -------- -------- --------- --------
Balance at 31 December 2014 226 84,343 3,749 88,318
------------------------------------------ -------- -------- --------- --------
Balance at 1 January 2015 226 84,343 3,749 88,318
Total comprehensive income for the period
Profit for the period - - 8,535 8,535
Other comprehensive income - - (3,800) (3,800)
------------------------------------------ -------- -------- --------- --------
Total comprehensive profit for the period - - 4,735 4,735
------------------------------------------ -------- -------- --------- --------
Transactions with owners of the Group,
recorded directly in equity
Share based payment - - 296 296
Dividend paid - - (7,455) (7,455)
Total contributions by and distributions
to the owners of the Group - - (7,159) (7,159)
------------------------------------------ -------- -------- --------- --------
Balance at 30 June 2015 226 84,343 1,325 85,894
------------------------------------------ -------- -------- --------- --------
The accompanying notes form an integral part of these condensed interim financial statements.
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September 15, 2015 02:01 ET (06:01 GMT)
Condensed Interim Consolidated Statement of Cash Flows
Unaudited 6
months to 30 Unaudited 6 months
Note June 2015 to 30 June 2014
GBP'000 GBP'000
-------------------------------------- ---------- ---------- -------- ----------- -------
Cash flows from operating activities
Profit/(loss) for the period 8,535 (5,072)
Adjustments for:
Depreciation of property, plant
and equipment 9 4,367 3,968
Amortisation of intangibles 96 97
Impairment of property, plant and - -
equipment
Profit on disposal of property,
plant and equipment (145) (3)
Pension Charge - 700
Finance income (99) (34)
Finance costs 1,380 7,209
Listing expenses - 7,566
Net (profit)/loss on interest rate
swaps (314) -
Equity-settled share-based payments
transactions 296 53
Changes in:
Inventories 92 (215)
Trade and other receivables (2,946) 462
Trade and other payables (306) (3,528)
-------------------------------------- ---------- --------- --------- ----------- -------
2,421 16,275
-------------------------------------- ---------- --------- --------- ----------- -------
Net cash generated from operating
activities 10,956 11,203
-------------------------------------- ---------- --------- --------- ----------- -------
Cash flows from investing activities
Proceeds from sale of property,
plant and equipment 145 15
Purchase of property, plant and
equipment 9 (4,429) (4,511)
Purchase of intangible assets (42) (215)
Pension contributions (600) (1,300)
Interest received 49 34
-------------------------------------- ---------- --------- --------- ----------- -------
Net cash used in investing activities (4,877) (5,977)
-------------------------------------- ---------- --------- --------- ----------- -------
Cash flows from financing activities
Proceeds from issue of shares 11 - 89,352
Expenses incurred on issue of shares
capitalised in equity - (4,883)
Expenses incurred on issue of shares
charged to profit or loss - (7,535)
Proceeds from new borrowings 12 - 70,064
Transaction costs related to loans
and borrowings 7, 12 - (1,485)
Repayment of borrowings 12 (20) (121,122)
Proceeds from settlement of interest
rate swaps - 291
Repayment of Shareholder loans 12 - (22,128)
Interest paid (1,212) (10,899)
Dividends paid 16 (7,455) -
Net cash used in financing activities (8,687) (8,345)
-------------------------------------- ---------- --------- --------- ----------- -------
Net increase / (decrease) in cash
and cash equivalents (2,608) (3,119)
Cash and cash equivalents brought
forward 15,156 13,506
-------------------------------------- ---------- --------- --------- ----------- -------
Cash and cash equivalents at 30
June 12,548 10,387
-------------------------------------- ---------- --------- --------- ----------- -------
The accompanying notes form an integral part of these condensed interim financial statements.
Notes to the condensed interim financial statements for the six month period ended 30 June 2015
1 General information
Manx Telecom plc (the "Company") and its subsidiaries (together "the Group") supply of a broad range of telecommunications services to the Isle of Man.
The Company is a public limited company, which is listed on the Alternative Investment Market of the London Stock Exchange ("AIM") and is incorporated and domiciled in the Isle of Man. The address of its registered office is 33-37 Athol Street, Douglas, Isle of Man, IM1 1LB.
On 10 February 2014, Manx Telecom plc was admitted to trade its shares on the Alternative Investment Market of the London Stock Exchange ("the Admission"). On the same date the Group's borrowing facilities were also restructured (see note 12). The Company changed its name from Trafford Equityco Limited to Manx Telecom plc on 3 February 2014 as the Admission required adoption of public liability status.
These condensed interim consolidated financial statements were approved for issue on 14 September 2015. The interim report will be available from 15 September 2015 on the group's website www.manxtelecom.com and from the registered office.
2 Basis of preparation
These interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union. They do not include all the information required for a complete set of financial statements prepared in accordance with International Financial Reporting Standards as adopted by the European Union. However, explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual consolidated financial statements as at and for the year ended 31 December 2014.
3 Accounting policies
The accounting policies adopted are consistent with those of the previous financial year. The Group has not adopted any new accounting policies in the period to 30 June 2015. Other amendments to IFRSs effective for the financial year ending 31 December 2015 are not expected to have a material impact on the Group.
Going concern
The Directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly they continue to adopt the going concern basis in preparing the condensed financial statements.
4 Estimates
The preparation of these condensed interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing these condensed interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2014.
5 Financial risk management and financial instruments 5.1 Financial risk factors
The Group's operations expose it to a variety of financial risks including credit risk, currency risk, interest rate risk and liquidity risk. The Group's overall risk management policies focus on the unpredictability of financial markets and seek to minimise potential adverse effects on the Group's financial performance and net assets.
These condensed interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the Group's annual financial statements as at 31 December 2014.
5.2 Liquidity risk
The Group's liquidity profile has improved during the period as a result of the refinancing detailed in note 12.
5.3 Fair value estimation
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Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or liability, the Group takes into account the characteristics of the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for share based payments within the scope of IFRS 2, leasing transactions that are within the scope of IAS 17, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in IAS 2 or value in use in IAS 36.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and
Level 3: inputs for the asset or liability that are not based on observable market data
The table below analyses financial instruments carried at fair value at 30 June 2015, grouped into Levels 1 to 3 based on the degree to which the fair value is observable. Interest rate swaps are valued using discounted cash flows, under which future cash flows are estimated based on forward interest rate yields (from observable yield curves at the end of the reporting period) and contract interest rates.
Level Level
Level 1 2 3 Total
30 June 2015 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ---------- --------- --------- ---------
Financial assets - - - -
Financial liabilities - (694) - (694)
----------------------- ----------- --------- --------- ---------
The following table presents the group's assets and liabilities that are measured at fair value at 30 June 2014.
Level Level
Level 1 2 3 Total
30 June 2014 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- --------- --------- --------- ---------
Financial assets - - - -
Financial liabilities - - - -
---------------------- --------- --------- --------- ---------
The following table presents the group's assets and liabilities that are measured at fair value at 31 December 2014.
Level Level
Level 1 2 3 Total
31 December 2014 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ---------- --------- --------- ---------
Financial assets - - - -
Financial liabilities - (1,008) - (1,008)
----------------------- ----------- --------- --------- ---------
There were no transfers between levels during the current or prior periods.
6 Operating segment information
The Group has five reportable revenue segments which management report on and base their strategic decisions on:
30 June 2015 30 June 2014
GBP'000 GBP'000
-------------------------- -------------- --------------
Fixed line, broadband and
data 15,825 15,595
Mobile 10,051 8,979
Global Solutions 6,214 8,250
Data Centre 4,062 3,128
Other 3,684 3,582
--------------------------- -------------- --------------
Total 39,836 39,534
--------------------------- -------------- --------------
The segmental analysis shows revenue classified according to market source. However the group is not structured on a divisional basis and has functional departments, processes, assets and obligations which serve each of these revenue streams. These are not allocated in the financial reports received by the Board and its decisions are not routinely based on any such identification. Consequently the analysis shown above does not extend to any segmentation of profits and net assets.
There is no inter-segmental trading.
The products and services included within each of the five segments are as follows:
Fixed line, broadband and data includes revenues from ADSL and VDSL rental and connection charges, fixed line call charges, fixed line rental and connection charges, and private circuit rental and connection charges.
Mobile includes revenues from mobile calls, SMS and data charges, mobile rental charges, mobile handset and accessory sales, and roaming.
Global solutions includes revenues from mobile termination, products such as Chameleon, strongest signal mobile and M2M (machine to machine).
Data centre includes revenues from hosting services provided.
Other includes kit sales, directory revenues and managed service rental charges.
7 Costs related to the Admission
Listing costs incurred as a result of the Admission to AIM in 2014 and refinancing costs relating to the Admission have been charged to equity, profit or loss or capitalised as set out below.
30 June 30 June
2015 2014
GBP'000 GBP'000
---------------------------------------- --------- ---------
Listing costs charged to profit or
loss (see note 8) - 7,566
Listing costs presented in equity (see
note 11) - 4,883
Transaction costs capitalised (see
note 12) - 1,485
---------------------------------------- --------- ---------
Total - 13,934
---------------------------------------- --------- ---------
Listing costs have been recognised as a reduction to share premium within equity to the extent that they relate to the newly issued shares. All other costs that do not qualify for recognition in equity are recognised in financial expenses in the profit or loss. The borrowing costs capitalised are detailed in note 12.
8 Finance income and expense recognised in profit or loss
30 June 30 June
2015 2014
GBP'000 GBP'000
----------------------------------------- -------- --------
Finance income
Other interest receivable 49 34
Net interest on pension asset 50 -
----------------------------------------- -------- --------
Total 99 34
----------------------------------------- -------- --------
Finance expense
Interest payable on borrowings 1,209 1,808
Interest on shareholder loan notes - 331
Net interest on pension liabilities - 100
Amortisation of loan transaction costs 168 130
Release of capitalised loan transaction
costs - 4,546
Finance lease interest 3 -
Costs relating to the listing on AIM - 7,566
----------------------------------------- -------- --------
Total 1,380 14,481
----------------------------------------- -------- --------
Unamortised loan transaction costs of GBP4.5m, relating to a refinancing in March 2013, were charged to the profit or loss in February 2014. The new debt arrangement (see note 12) entered into in February 2014 had directly related expenses of GBP1.5m which were capitalised in accordance with IAS 39. The extension of the debt arrangement in the period (see note 12) has incurred additional expenses of GBP0.4m which have been capitalised.
9 Property, plant and equipment
Fixed asset additions during the period relate principally to the development of the phase two of the Greenhill Data Centre, investment in the Group's fixed voice network and billing systems.
Property, plant and equipment Land and Plant Under construction Total
buildings and equipment
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ----------- --------------- ------------------- ---------
Cost or valuation
Balance at 1 January 2014 34,018 88,774 10,366 133,158
Additions - - 4,511 4,511
Transfer 64 1,682 (1,746) -
Disposals (996) (445) - (1,441)
------------------------------- ----------- --------------- ------------------- ---------
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Balance at 30 June 2014 33,086 90,011 13,131 136,228 ------------------------------- ----------- --------------- ------------------- --------- Balance at 1 January 2014 34,018 88,774 10,366 133,158 Additions 29 172 12,180 12,381 Transfer 3,248 10,688 (13,936) - Disposals (588) (9,777) - (10,365) ------------------------------- ----------- --------------- ------------------- --------- Balance at 31 December 2014 36,707 89,857 8,610 135,174 ------------------------------- ----------- --------------- ------------------- --------- Balance at 1 January 2015 36,707 89,857 8,610 135,174 Additions - - 2,169 2,169 Transfer 255 6,285 (6,540) - Disposals - - - - ------------------------------- ----------- --------------- ------------------- --------- Balance at 30 June 2015 36,962 96,142 4,239 137,343 ------------------------------- ----------- --------------- ------------------- --------- Depreciation Balance at 1 January 2014 9,068 61,468 - 70,536 Depreciation charge for the period 652 3,316 - 3,968 Disposals (996) (433) - (1,429) ------------------------------- ----------- --------------- ------------------- --------- Balance at 30 June 2014 8,724 64,351 - 73,075 ------------------------------- ----------- --------------- ------------------- --------- Balance at 1 January 2014 9,068 61,468 - 70,536 Depreciation charge for the period 1,353 7,946 - 9,299 Disposals (588) (8,579) - (9,167) Impairment - (592) - (592) ------------------------------- ----------- --------------- ------------------- --------- Balance at 30 December 2014 9,833 60,243 - 70,076 ------------------------------- ----------- --------------- ------------------- --------- Balance at 1 January 2015 9,833 60,243 - 70,076 Depreciation charge for the period 775 3,592 - 4,367 Disposals - - - - ------------------------------- ----------- --------------- ------------------- --------- Balance at 30 June 2015 10,608 63,835 - 74,443 ------------------------------- ----------- --------------- ------------------- --------- Net book value 30 June 2015 26,354 32,307 4,239 62,900 ------------------------------- ----------- --------------- ------------------- --------- Net book value 31 December 2014 26,874 29,614 8,610 65,098 ------------------------------- ----------- --------------- ------------------- --------- Net book value 30 June 2014 24,362 25,660 13,131 63,153 ------------------------------- ----------- --------------- ------------------- ---------
The carrying value of land and buildings held under the revaluation model is the same as if it were held under the historical cost model. There were no changes in valuation techniques during the period.
10 Goodwill Cost GBP'000 ============================ ======= Balance at 1 January 2014 84,277 Additions during the period - ============================ ======= Balance at 30 June 2014 84,277 ============================ ======= Additions during the period - ============================ ======= Balance at 31 December 2014 84,277 ============================ ======= Additions during the period - ============================ ======= Balance at 30 June 2015 84,277 ============================ ======= Carrying amount As at 30 June 2015 84,277 ============================ ======= As at 31 December 2014 84,277 ============================ ======= As at 30 June 2014 84,277 ============================ =======
On 29 June 2010, the Group acquired all of the ordinary shares in Manx Telecom Trading Limited (previously Manx Telecom Limited) for GBP133.8m satisfied in cash.
Goodwill is deemed to have an indefinite life and so is not subject to amortisation.
The cash generating unit of the Group is considered to be the operations of Manx Telecom Trading Limited in its entirety due to the structure of the Company which operates as one telecommunications business. Goodwill is considered to be impaired if the carrying amount exceeds the recoverable amount.
A review for indicators of impairment since 31 December 2014 has been performed with no such indicators identified.
11 Share capital
The table below sets out the amounts recorded in equity:
Number of shares Ordinary Share premium Total
in issue (thousands) share capital GBP'000 GBP'000
GBP'000
---------------------------- ---------------------- --------------- -------------- ---------
Opening balance as
at 1 January 2015 112,961 226 84,343 84,569
---------------------------- ---------------------- --------------- -------------- ---------
At 30 June 2015 112,961 226 84,343 84,569
---------------------------- ---------------------- --------------- -------------- ---------
Opening balance as
at
1 January 2014 9,980 100 - 100
Share Split 39,918 - - -
Proceeds from issue
of new shares 62,924 126 89,226 89,352
Share based payment - - - -
Listing costs (note
7) - - (4,883) (4,883)
---------------------------- ---------------------- --------------- -------------- ---------
At 30 June 2014 112,822 226 84,343 84,569
---------------------------- ---------------------- --------------- -------------- ---------
Opening balance as
at
1 January 2014 9,980 100 - 100
Share split 39,918 - - -
Proceeds from issue
of new shares 62,924 126 89,226 89,352
Share based payment - - - -
Shares issued to employee 138 - - -
benefit trust
Listing costs (note
7) - - (4,883) (4,883)
---------------------------- ---------------------- --------------- -------------- ---------
At 31 December 2014 112,961 226 84,343 84,569
---------------------------- ---------------------- --------------- -------------- ---------
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.
During 2014, a share split was executed prior to the listing in the ratio of 5 shares for each existing share. The share split resulted in an additional 39,918,692 shares. Although the share split resulted in an increase in the number of shares in issue, there was no impact on the total value of issued share capital or reserves. 62,783,078 new shares were issued as part of the admission and a further 70,422 shares were issued to both Kevin Walsh and Jeffrey Hume. The total new shares issued amounted to 62,923,922 generating total proceeds of GBP89,226,121. The new and existing shares rank pari passu in all respects including voting rights and dividend entitlement.
On 2 December 2014, 137,500 new ordinary shares were issued and transferred to the Manx Telecom plc Share Incentive Plan Trust as part of an employee share scheme. The new ordinary shares rank pari passu in all respects with the existing issued ordinary shares of GBP0.002 pence each in the share capital of the Company.
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The Company previously announced on 25 September 2014 that 1,000,000 new ordinary shares would be issued and transferred into an employee benefit trust from which shares would be granted to employees in 2014 and future years. The Board has subsequently decided to only issue new shares in respect of awards currently due.
12 Interest-bearing loans and borrowings
31 December
30 June 2015 30 June 2014
2014
GBP'000 GBP'000 GBP'000
Non-current Liabilities
Finance lease liability 113 155 133
Secured bank loans 68,546 68,198 68,815
---------------------------------- --------------- ---------- ------------
68,659 68,353 68,948
---------------------------------- --------------- ---------- ------------
Current Liabilities
Current portion of secured bank - 338 -
loans
---------------------------------- --------------- ---------- ------------
Total 68,659 68,691 68,948
---------------------------------- --------------- ---------- ------------
In connection with the Admission on 10 February 2014, Manx Telecom Holdings Limited and Manx Telecom Trading Limited (previously Manx Telecom Limited) entered into an GBP80m revolving credit facility agreement on 3 February 2014 with Barclays Bank plc, Lloyds Bank plc and The Royal Bank of Scotland plc as arrangers and Lloyds Bank plc as agent and security agent (the "Facility Agreement").
The proceeds of the first drawdown under the Facility Agreement of GBP70m were used to (among other things) refinance the indebtedness existing at 31 December 2013 and to pay fees, costs and expenses in relation to the Admission process and the debt refinancing. Additional amounts may be drawn under the Facility Agreement for general corporate purposes and/or working capital purposes and the payment of fees, costs and expenses.
The initial interest rate was the applicable interbank offer rate plus a margin of 2.5% pa and, from 30 June 2014, was subject to an adjustment to the margin ranging from 2.0% pa to 3.5% pa based on the ratio of total net debt to adjusted EBITDA. As at 31 December 2014, the margin applicable to the interest rate on the facility was 2%.
To mitigate the Group's exposure to interest rate risk, the Group entered into two interest swap agreements. The Group held the following interest rate swaps as at 30 June 2015 and 31 December 2014 (the Group held no interest rate swaps as at 30 June 2014):
Fair value Fair value
Interest Notional at 30 June at 31 December
rate amount 2015 2014
Bank % Expiry date GBP'000 GBP'000 GBP'000
=========================== ======== =========== ======== =========== ===============
Royal Bank of Scotland PLC 1.711 29/06/2018 25,000 (347) (504)
Lloyds Bank PLC 1.711 29/06/2018 25,000 (347) (504)
--------------------------- -------- ----------- -------- ----------- ---------------
(694) (1,008)
=========================== ======== =========== ======== =========== ===============
Amounts drawn under the Facility Agreement are to be repaid on the last day of each applicable interest period unless the relevant borrower elects otherwise and amounts repaid will (subject to certain drawdown conditions) remain available for re-drawing unless cancelled. The Facility Agreement also provides for the payment of a commitment fee, agency fee and arrangement fee and contains certain undertakings, guarantees and covenants (including financial covenants) and provides for certain events of default. During the period the Group has not breached any financial covenants contained within the Facility Agreement.
Transaction costs incurred as part of the debt financing in February 2014 of GBP1,475,000 were capitalised in the prior period and are amortised over the loan period. Due to the refinancing, unamortised transaction costs of GBP4,546,000 relating to prior financing arrangements were released to the statement of comprehensive income in 2014 within finance expenses. As part of the refinancing, all remaining outstanding Shareholder loans and PIK notes were repaid during the prior period.
On 30 June 2015, the Group extended the term of the revolving credit facility agreement by a further 2 years from 30 June 2018 to 30 June 2020. In connection with the modification to the lending arrangements, the Group also negotiated a reduction in the applicable margin range from 2.0% pa to 3.5% pa, to 1.5% pa to 3% pa. As at 30 June 2015, the margin applicable to the interest rate on the facility was 1.5%. Transaction costs incurred as part of the extension to the facility of GBP437,000 were capitalised in the period and will be amortised over the loan period.
The loan is secured by way of a debenture in favour of the security agent providing a fixed and floating charge over certain of the Group's assets, including the shares of Manx Telecom Holdings Limited and Manx Telecom Trading Limited and property, plant and equipment of the Group.
13 Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
30 June 30 June 31 December
2015 2014 2014
000's 000's 000's
------------------------------------- -------- -------- ------------
Weighted average number of ordinary
shares at 30 June/31 December
(Basic) 112,961 98,839 105,908
Effect of Co-Investment plan 655 692 494
Effect of Save as you earn plan 133 - 2
Effect of Share incentive plan 37 - 1
Effect of Shadow save as you earn
plan 1 - -
Effect of Shadow share incentive
plan - - -
Effect of Long term incentive
plan 5 - -
------------------------------------- -------- -------- ------------
Weighted average number of ordinary
shares at 30 June/31 December
(Diluted) 113,792 99,531 106,405
-------------------------------------- -------- -------- ------------
13.1 Reported Earnings per Share
The calculation of the Reported Earnings per Share has been based on the weighted average number of shares outstanding during the period (as above) and the Profit/(loss) for the period after tax attributable to the owners of the Group ("Earnings").
Number of Number of
Earnings shares (Basic) Basic Earnings shares (Diluted) Diluted earnings
GBP'000 000's per Share 000's per share
---------------- --------- ---------------- ----------------- ------------------ -----------------
30 June 2015 8,535 112,961 7.56p 113,792 7.50p
30 June 2014 (5,072) 98,839 (5.13)p 99,531 (5.10)p
31 December
2014 5,716 105,908 5.40p 106,405 5.37p
---------------- --------- ---------------- ----------------- ------------------ -----------------
13.2 Underlying Earnings per Share
The calculation of Underlying Earnings per Share has also been included to enable shareholders to assess the results of the Group excluding income and charges that are one-off in nature, significant and distort the Group's underlying performance.
Number of Number of
Earnings shares (Basic) Basic Earnings shares (Diluted) Diluted earnings
GBP'000 000's per Share 000's per share
---------------- --------- ---------------- --------------- ------------------ -----------------
30 June 2015 8,535 112,961 7.56p 113,792 7.50p
30 June 2014 7,040 98,839 7.12p 99,531 7.07p
31 December
2014 12,945 105,908 12.22p 106,405 12.17p
---------------- --------- ---------------- --------------- ------------------ -----------------
14 Retirement Benefit Obligations
The Group operates two pension schemes. The Manx Telecom Limited Combined Pension Scheme is a defined benefit scheme that is closed to new entrants and the Manx Telecom Employee Retirement Plan is a defined contribution plan.
At 30 June 2015, the net liability on the defined benefit scheme increased to GBP0.95m from an asset of GBP2.2m at 31 December 2014 (30 June 2014:GBP6.6m liability). The fair value of the assets at 30 June 2015 were GBP76.5m (31 December 2014: GBP76.3m, 30 June 2014: GBP69.3m). The defined benefit obligation at 30 June 2015 was GBP77.45m (31 December 2014 GBP74.1m, 30 June 2014: GBP75.9m).
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