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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Top Wealth Group Holding Ltd | NASDAQ:TWG | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.10 | -5.75% | 1.64 | 1.70 | 1.84 | 1.81 | 1.61 | 1.73 | 150,947 | 01:00:00 |
RNS Number:0903K Wireless Group PLC 16 April 2003 THE WIRELESS GROUP PLC ("TWG") PRELIMINARY UNAUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002 Financial results + *Operating losses before goodwill amortisation, digital development and one-off costs reduced by 74.8% to #2.3 million (2001: #9.1 million) + *Continuing Group turnover increased by 1.7% to #28.5 million (2001: #28.0 million) despite difficult trading conditions in national market + *talkSPORT revenue (excluding contra revenue) up 3.4% + *talkSPORT operating loss, before digital development, central, selling and one-off costs, reduced 61.0% from #3.6 million to #1.4 million + *Strong performance by ILRs - operating profit, before digital development, central, selling and one-off costs, up 83.6% from #2.0 million to #3.7 million + *#2.2 million of costs taken out of central and sales costs Operating achievements + *Highest ever ratings achieved for talkSPORT with audience topping 2.4 million per week. Total hours per week, average hours per week and market share all at record levels (RAJAR Q4 2002) Outlook + *The group has operated profitably in the first quarter of 2003 (before amortisation and interest) + *Indications are that April will also be profitable + *Advertising revenue for the first four months flat year on year + *Cost base has been reduced and the Group is set to exploit any increases in revenue + *With the uncertainty associated with the liberation of Iraq the visibility of revenue has become even shorter Kelvin MacKenzie, Chairman and Chief Executive of TWG, said: "We have delivered yet another set of positive results. I am pleased that we are on track to deliver the breakeven of the Group on schedule despite some of the worst markets the industry has ever seen. The Wireless Group has been innovative and not afraid to embrace new ways of looking at the industry. For example, the results of the electronic audience measurement research we have commissioned will start to be published from May. We hope this accurate method of measuring audience will be adopted by the rest of the industry. "Even without this development I am still confident about the Group's future." - ends - For further information, please contact Kelvin MacKenzie, The Wireless Group plc 0207 959 7900 David Rydell/Luke Morton/Robin Tozer Bell Pottinger Financial 0207 861 3232 Chairman's Statement Despite the gloom within the media sector, that I reported at the half year, continuing to the year-end, I am pleased to report we have continued to improve the Group's performance. Operating losses before exceptionals, and amortisation of goodwill fell from #10.5 million to #3.8 million, an improvement of 63.8 per cent. We have stuck to our business plan and have produced results in line with that plan. Turnover from continuing activities increased from #28.0 million to #28.5 million an increase of 1.7 per cent. Although this is a positive growth rate, it does indicate the difficult trading conditions under which the industry has been operating. The driver for the Group has been cost reduction and this has benefited the bottom line. We saw improvement in our operating activities both within talkSPORT and our ILRs. talkSPORT improved its performance by 61.0 per cent reducing its losses (including the cost of digital transmission) from #3.6 million to #1.4 million. We have made a one-off provision against the cost of our football rights of #1.5 million, which has been included in administrative expenses. Therefore without this provision the Group's results would have shown operating losses, excluding goodwill amortisation, falling from #10.5 million to #2.3 million, a 78.0 per cent improvement. Our local stations have turned in operating profits up from #2.0 million to #3.7 million. With increased revenues and a reduced cost base our local stations continue to improve. During the year we increased our holding in two digital multiplexes. Switch Digital London is now a subsidiary, our holding increasing from 42.5 per cent to 80.5 per cent. Our holding in Switchdigital Scotland was increased from 69 per cent to 92 per cent. The total cost of both investments was #0.9 million. As I stated last year we embarked upon a cost reduction programme and we have seen the full year benefits of that programme during 2002 as predicted. Through headcount reduction in our sales force we saved #0.9 million, we cut back by #0.8 million our digital investment by not broadcasting stand alone digital stations and, further, reduced central costs by #1.3 million. This total saving of #3.0 million was a significant factor in the Group's improvement. We announced in February that the first electronic measurement of radio broadcasting in the UK has been started. The research is carried out by the international independent research organisation GfK International GmbH who will publish their results on a monthly basis. This is a tremendous move forward for the radio industry in measuring its audience accurately. It will give the advertisers vital information about how their marketing budget is targeted and spent. It will also allow radio broadcasters to improve their output based on up to date, relevant information, which can only be good news for listeners and broadcasters alike. As in other areas it is the Wireless Group that has been innovative and forward looking in the radio industry. A resolution is being put to shareholders at the annual general meeting to increase the limit for the share option scheme from its current 5 per cent to 10 per cent of the issued share capital. Due to the small share capital base the current scheme has reached its limit and therefore the management are unable to make awards of share options. The management feel it is important to align shareholders and staff interests which can, in part, be achieved by an effective share option scheme. Outlook The first four months of 2003 are expected to produce flat advertising revenues against the first four months of 2002. Excluding contra revenue, advertising revenues are up 3.6 per cent. Based on our unaudited management accounts, before interest and amortisation of goodwill, the Group has produced an operating profit for the quarter ended 31 March 2003. This is an encouraging start for the Group but as we have seen in previous years the second six months seem to be tougher than the first. We continue to manage the business within strict cost controls and look forward to improved markets in the future. I look forward with confidence to the future performance of The Wireless Group. Kelvin MacKenzie Chairman and Chief Executive 16 April 2003 Operational Review Results Group turnover for the year ended 31 December 2002, from continuing activities, increased 1.7 per cent to #28.5 million from #28.0 million. Including the stations sold in the year ended 31 December 2001 Group turnover fell 8.3 per cent to #28.5 million from #31.1 million. The operating loss before goodwill amortisation fell from #10.5 million for 2001 to #3.8 million for 2002, an improvement of 63.8 per cent. This includes a one-off provision for football rights of #1.5 million and therefore excluding this one-off charge the operating loss before goodwill amortisation for the year ended 31 December 2002 is #2.3 million. The table below sets out the operating performance for the Group entities. Before digital development, one-off costs and goodwill amortisation, operating losses fell from #9.1 million to #2.3 million. Year ended 31 December 31 December 2002 2001 #m #m Turnover talkSPORT 11.2 11.2 ILR - continuing 17.1 16.8 ILR - discontinued - 3.1 Other 0.2 - -------- -------- Total turnover 28.5 31.1 ------ ------ Operating (loss)/profit before goodwill amortisation, digital development and one-off costs talkSPORT (1.4) (3.6) ILR - continuing 3.7 2.0 ILR - discontinued - (0.7) Impact - national sales house (1.7) (2.6) Central costs (2.9) (4.2) ------- -------- Operating loss before goodwill amortisation, (2.3) (9.1) digital development and one-off costs Digital development - (0.8) One-off costs (1.5) (0.6) --------- --------- Operating loss before goodwill amortisation (3.8) (10.5) Goodwill amortisation (15.2) (17.9) -------- -------- Reported operating loss (19.0) (28.4) -------- -------- talkSPORT talkSPORT continues to improve its performance with the losses before allocation of central and sales costs down from #3.6 million to #1.4 million for the year ended 31 December 2002, a 61.0 per cent reduction in losses. Achievement of this ongoing improvement has come from the cost reduction programme we introduced during 2001 and have continued through 2002. As in previous years the performance of talkSPORT was in two halves. At the half-year we reported talkSPORT revenue was up 6.7 per cent, the second quarter of which had benefited from the football World Cup. Revenues in this second quarter were up 28.8 per cent. As the world markets continued to suffer into the second six months revenues became harder to generate as advertisers reduced their marketing budgets. However, talkSPORT still managed to produce revenues of #5.2 million against #5.6 million in the comparable period of 2001. Airtime revenue increased for the year ended 31 December 2002 by 2.6 per cent and sponsorship and promotion revenue increased by 5.2 per cent indicating our ability to generate positive revenue growth. If contra revenue is excluded, the revenue generated for talkSPORT for the year ended 31 December 2002 increased by 3.4 per cent against the industry reporting an increase of 1.0 per cent. In these difficult times this is an excellent result. Audience figures produced by RAJAR, the diary based research system, for talkSPORT continue to show improvement. Quarter four of 2002 showed total hours increased by 4.9 per cent to 18.4 million hours and market share growing to 1.7 percent. Our reach remained static at 5 per cent. The cost reduction initiative has reduced the cost base of talkSPORT so that before the allocation of central and selling costs the operating losses have fallen to #1.4 million. A one-off charge has been made for the provision for football rights, which run into the 2003/2004 season. This provision has been made to reflect the reduced value in the football rights market. We estimate our cost reduction programme has reduced the cost base of talkSPORT by #2.0 million. GfK have launched their electronic research methodology to measure accurately radio audiences and will publish their results on a monthly basis from May 2003. We feel that once this method is adopted by the industry audience figures streams will be generated and should increase the overall spend into the radio market. Regional and local radio (ILRs) The ILRs have produced an excellent result with operating profits before the allocation of central and sales costs from continuing operations, up 83.6 per cent at #3.7 million from #2.0 million last year. For all continuing activities revenue has increased by 1.3 per cent over the previous year. Costs have been well controlled within the local stations and we seek to improve the operating margins in the future. Before allocation of central and selling costs some of the stations have mid 40 per cent operating profit margins and we bench mark our other stations against this performance to make improvements throughout the Group. Revenue generation benefited from a push in sponsorship and promotions for the local stations, which was up 6.2 per cent for the year. The ILRs suffered along with other radio groups from a fall in national revenue which was down 15.6 per cent. The latest RAJAR results were mixed for our local stations. The stations we operate in the north west all improved their market share, but our heritage stations elsewhere faced competition from new regional stations. We have implemented programming training to ensure our stations offer exactly what their local market place seeks together with improved training of production and presenters alike. We acquired a 15 per cent holding in Dee 106.3 Radio Limited based in Chester. This licence was awarded in April 2002. Part of this investment was to be held through Town & Country Broadcasting Limited, a company in which we had a 20 per cent shareholding. It was decided to make a direct investment in Chester and dispose of our holding in Town & Country Broadcasting Limited. We continue to support local radio in the UK through licence applications and we have announced that we have applied for the West Midlands regional licence. To increase choice to the residents of the area we believe that a speech based format is appropriate rather than another music station. Digital radio Our ongoing support of digital radio in the UK has been evidenced through our purchase of Clear Channel's share holdings in the London II and Central Scotland digital multiplexes for #0.9 million. We have also applied for and been successful in winning the multiplex licences for Bradford and Huddersfield and Stoke on Trent. We operate the Pulse analogue station in Bradford and Signal analogue station in Stoke and by putting the services on the multiplexes we obtain an automatic rollover of the analogue licence. We shall be making further applications for digital multiplex licences through a subsidiary in which EMAP has a minority interest. Unaudited Consolidated Profit and Loss Account For the year ended 31 December Notes 2002 2001 #'000 #'000 Turnover Continuing operations 28,470 27,982 Discontinued operations - 3,083 __________ __________ 28,470 31,065 __________ __________ Administration expenses - goodwill amortisation (15,204) (17,887) - other administration expenses (32,271) (41,569) __________ __________ (47,475) (59,456) __________ __________ Operating loss Continuing operations (19,005) (22,935) Discontinued operations (including - (5,456) amortisation of goodwill) __________ __________ (19,005) (28,391) Income from interests in associated 87 110 undertakings Profit on sale of discontinued 1 1,141 22,240 operations Interest receivable and similar 880 1,029 income Amounts written of fixed asset 2 (1,760) (849) investments Interest payable and similar (1,603) (4,258) charges __________ __________ Loss on ordinary activities before (20,260) (10,119) taxation Tax on loss on ordinary - - activities __________ __________ Loss on ordinary activities after (20,260) (10,119) taxation Minority interests - equity (113) (21) interests __________ __________ Retained loss for the year (20,373) (10,140) __________ __________ =========== ============ Basic loss per share: Loss attributable to each ordinary (0.21) (0.11) share (#) __________ __________ ============ ============ Loss attributable to each "B" (210.45) (104.75) ordinary share (#) __________ __________ =========== ============ Basic loss per share before profit on sale of discontinued operations: Loss attributable to each ordinary (0.22) (0.33) share (#) __________ __________ =========== ============ Loss attributable to each "B" (222.24) (334.48) ordinary share (#) __________ __________ =========== ============ There were no gains or losses during the year or the prior year other than the losses reported above, accordingly no separate Statement of Total Recognised Gains and Losses has been prepared. The diluted loss per share is the same as the basic loss per share because the share options are not dilutive as they would have the effect of reducing the loss per share if exercised. Unaudited Balance Sheet Group Company ------------- ------------- At 31 Notes 2002 2001 2002 2001 December #'000 #'000 #'000 #'000 Fixed assets Intangible 3 47,368 63,712 - - assets Tangible 4 2,584 3,080 61 48 assets Investments 5 1,726 3,635 7,826 7,757 __________ __________ __________ __________ 51,678 70,427 7,887 7,805 __________ __________ __________ __________ Current assets Debtors 6 8,241 9,038 33,674 35,179 Loan notes 7 6,000 6,000 - - receivable Short term 8 15,449 15,552 - - deposits Cash at bank 418 121 12 - and in hand __________ __________ __________ __________ 30,108 30,711 33,686 35,179 __________ __________ __________ __________ Creditors: amounts falling due within one year Bank and 8 (11,287) (7,239) - (68) other borrowings Loan notes 8 (15,449) (15,552) - - Other 8 (13,082) (13,591) (620) (624) creditors __________ __________ __________ __________ (39,818) (36,382) (620) (692) __________ __________ __________ __________ Net current (9,710) (5,671) 33,066 34,487 liabilities __________ __________ __________ __________ Total assets 41,968 64,756 40,953 42,292 less current liabilities Creditors: amounts falling due after more than one year Bank and 9 (219) (463) - (39) other borrowings Other 9 (10,419) (12,523) - - creditors __________ __________ __________ __________ (10,638) (12,986) - (39) Provisions 10 (158) (213) - - for liabilities and charges __________ __________ __________ __________ Net assets 31,172 51,557 40,953 42,253 __________ __________ __________ __________ ============ ============ ============ ============ Capital and reserves Called-up 9,682 9,681 9,682 9,681 share capital Share premium 11 35,064 35,064 35,064 35,064 account Merger 11 81,820 81,820 - - reserve Profit and 11 (95,570) (75,003) (3,793) (2,492) loss account __________ __________ __________ __________ Shareholders' 30,996 51,562 40,953 42,253 funds Equity 12 176 (5) - - minority interests __________ __________ __________ __________ Total capital 31,172 51,557 40,953 42,253 employed __________ __________ __________ __________ ============ =========== ============ ============ Unaudited Consolidated Cash Flow Statement For the year ended 31 December Notes 2002 2001 #'000 #'000 Net cash outflow from operating 14 (3,656) (7,464) activities Dividends from associates 7 - Return on investments and servicing 15 (716) (3,217) of finance Taxation 15 - - Capital expenditure and financial 15 (382) (930) investment Acquisitions 15 271 - Disposals 15 999 37,055 __________ __________ Cash (outflow)/inflow before management of (3,477) 25,444 liquid resources and financing Financing 15 3,702 (23,271) __________ __________ Increase in cash in the year 225 2,173 __________ __________ ============ ============ Reconciliation of Movements in Shareholders' Funds Group For the year ended 31 December 2002 2001 #'000 #'000 Loss for the financial year (20,373) (10,140) Elimination of reserves attributable to (194) - associate on it becoming a subsidiary Proceeds from issue of new shares 1 - __________ __________ Net reduction to shareholders' funds (20,566) (10,140) Opening shareholders' funds 51,562 61,702 __________ __________ Closing shareholders' funds 30,996 51,562 __________ __________ =========== ============ Notes 1. Profit on disposal of discontinued operations 2002 2001 #'000 #'000 Profit on disposal of Big 235 - licence Profit on disposal of associate 906 - - Kingdom FM Limited Profit on sale of SCOT FM - 22,472 Limited Loss on disposal of Wave 105 FM - (232) Limited ________ ________ 1,141 22,240 ________ ________ ========== ========== On 31 January 2002 the Group disposed of its 24.5% associate undertaking Kingdom FM limited. The proceeds, after costs, on the disposal were #999,000, which realised a profit on disposal of #906,000. On 19 February 2002, 1458 Big AM Limited, a wholly owned subsidiary, disposed of its Big AM radio licence for #235,000 after costs. 2. Amounts written off fixed assets investments 2002 2001 #'000 #'000 Provision to write down fixed asset investments to lower of cost and net realisable value Investment in own shares (note 5) 24 458 Other investments (note 5) 1,736 391 ________ ________ 1,760 849 ________ ________ ========== ========== 3. Intangible fixed assets Group Goodwill Licence Total #'000 #'000 #'000 Cost At 1 January 2002 91,035 15,500 106,535 Additions 514 - 514 Disposals (340) - (340) ________ ________ ________ At 31 December 2002 91,209 15,500 106,709 ________ ________ ________ Amortisation At 1 January 2002 41,500 1,323 42,823 Charge for the year 13,076 1,654 14,730 Charge for impairment 2,128 - 2,128 Disposals (340) - (340) ________ ________ ________ At 31 December 2002 56,364 2,977 59,341 ________ ________ ________ Net book value At 31 December 2001 49,535 14,177 63,712 ________ ________ ________ ========== ========== ========== At 31 December 2002 34,845 12,523 47,368 ________ ________ ________ ========== ========== ========== The charge for impairment relates to the partial write down of the carrying value of goodwill relating to QFM Limited. Company The Company does not have any intangible fixed assets. 4. Tangible fixed assets Fixtures, fittings and equipment Land and Studio Motor vehicles buildings equipment Transmitters Total Group #'000 #'000 #'000 #'000 #'000 #'000 Cost At 1 January 1,857 122 3,245 2,618 177 8,019 2002 Additions 201 1 132 193 100 627 Disposals (82) - (120) (103) (98) (403) _________ __________ _________ _________ _________ ________ At 31 December 1,976 123 3,257 2,708 179 8,243 2002 _________ __________ _________ _________ _________ ________ Depreciation At 1 January 757 85 2,401 1,594 102 4,939 2002 Charge for the 150 24 320 419 29 942 year Disposals (32) - (108) (59) (23) (222) _________ __________ _________ _________ ________ ________ At 31 December 875 109 2,613 1,954 108 5,659 2002 _________ __________ _________ _________ ________ ________ Net book value At 31 December 1,100 37 844 1,024 75 3,080 2001 _________ __________ _________ _________ _________ ________ =========== ============ =========== =========== =========== ========== At 31 December 1,101 14 644 754 71 2,584 2002 _________ __________ _________ _________ _________ ________ =========== ============ =========== =========== =========== ========== The net book value of fixed assets includes assets held under finance leases of #513,700 (2001: #743,900) and the depreciation charge on those assets during the year was #182,400 (2001: #156,600). Included in land and buildings are freehold land and buildings with a net book value of #Nil at 31 December 2002 (2001: #50,000); long leasehold land and buildings with a net book value of #144,000 at 31 December 2002 (2001: #151,000); and short leasehold improvements with a net book value of #957,000 at 31 December 2002 (2001: #899,000). Motor vehicles Total Company #'000 #'000 Cost At 1 January 2002 66 66 Additions 100 100 Disposals (98) (98) _________ _________ At 31 December 2002 68 68 _________ _________ Depreciation At 1 January 2002 18 18 Charge for the year 12 12 Disposals (23) (23) ________ ________ At 31 December 2002 7 7 ________ ________ Net book value At 31 December 2001 48 48 ________ ________ ========= ========= At 31 December 2002 61 61 ________ ________ ========== ========== 5. Fixed asset investments Group Company 2002 2001 2002 2001 #'000 #'000 #'000 #'000 Subsidiary - - 7,449 7,449 undertakings Associated 47 226 - - undertakings Investment in 284 308 284 308 own shares Other 1,395 3,101 93 - investments __________ _________ __________ _________ 1,726 3,635 7,826 7,757 _________ ________ _________ ________ =========== ========== =========== ========== Associated undertakings Group Company #'000 #'000 Cost and net book value At 1 January 2002 226 - Disposal (93) - Acquisition of additional stake in (194) - associate to become a subsidiary Acquired in the year 21 - Share of retained profit for the year 87 - __________ __________ At 31 December 2002 47 - __________ __________ ============ ============ Investment in own shares Group Company #'000 #'000 Carrying amount At 1 January 2002 308 308 Provision against carrying value (24) (24) __________ __________ At 31 December 2002 284 284 __________ __________ ============ ============ The investment in own shares is held through an employee share option trust. On 15 May 2000, the Company established the Wireless Group Employee Benefits Trust (the "Trust"). The trustee of the Trust is an independent trustee company resident in the Channel Islands. The Trust is used to manage the funding and delivery of Ordinary Shares under the Share Option Plans. At 31 December 2002 the cost of investment in own shares is represented by 436,289 ordinary shares acquired at an average cost of #1.75 per ordinary share. The nominal value of the shares at 31 December 2002 was #43,629 (2001: #43,629). The market value of the shares at 31 December 2002 based on the prevailing market price of 65.0 pence per share was #283,588 (2001: #307,583). In accordance with the Group's accounting policy the investment in own shares has been written down by #24,000 in the year ended 31 December 2002 (2001: #458,000). Other investments Group Company #'000 #'000 Carrying amount At 1 January 2002 3,101 - Additions 60 60 Disposal (30) - Group transfer - 33 Provision against carrying value (1,736) - __________ __________ At 31 December 2002 1,395 93 __________ __________ ============ ============ Other investments include a 16.1% holding in Forever Broadcasting plc. The market value of the Group interest in Forever Broadcasting plc as at 31 December 2002 was #1,301,960 (2001: #3,037,905). In accordance with the Group's accounting policy, the investment is carried at the lower of cost and net realisable value. This has resulted in a write down of #1,736,000 in the year ended 31 December 2002 (2001: #391,000). During the year the Group acquired a 15% direct holding in Dee 106.3 Radio Limited based in Chester at a cost of #61,000. The Group sold its holding in Town & Country Broadcasting Limited. 6. Debtors Group Company 2002 2001 2002 2001 #'000 #'000 #'000 #'000 Amounts falling due within one year: Amounts due from - - 33,674 34,908 Group undertakings Trade debtors 5,827 6,791 - - Other debtors 457 541 - 140 Prepayments and 1,957 1,706 - 131 accrued income ________ ________ ________ ________ Total debtors 8,241 9,038 33,674 35,179 ________ ________ ________ ________ ========== ========== ========== ========== 7. Loan notes receivable The #6,000,000 loan notes were issued by Guardian Media Group plc, guaranteed by the National Westminster Bank plc, as part of the purchase consideration on the sale of SCOT FM Limited. The loan notes carry an interest rate of LIBOR less 0.75%. They were redeemed on 6 January 2003. 8. Creditors: amounts falling due within one year Group Company 2002 2001 2002 2001 #'000 #'000 #'000 #'000 Bank and other borrowings Bank loans 10,000 6,000 - - Finance leases 206 230 - 13 Bank overdraft 1,081 1,009 - 55 __________ __________ __________ __________ 11,287 7,239 - 68 __________ __________ __________ __________ ============ ============ ============ ============ Loan notes 15,449 15,552 - - __________ __________ __________ __________ ============ ============ ============ ============ Other creditors Trade 2,354 2,974 - - creditors Amounts owed to - 233 - - associates Corporation tax 267 109 - - payable Other taxation 1,138 538 - 59 and social security Accruals and 7,048 7,450 526 476 deferred income Licence fees 2,104 1,654 - - Other 171 633 94 89 creditors __________ __________ __________ __________ 13,082 13,591 620 624 __________ __________ __________ __________ ============ ============ ============ ============ The loan notes were issued as part consideration for the acquisition of The Radio Partnership Limited in 1999 and are guaranteed by Barclays Bank PLC in accordance with an agreement dated 23 July 1999, pursuant to which the Company has agreed to maintain sufficient funds to cover the outstanding liability from time to time, and has therefore deposited #15,449,000 (2001: #15,552,000) as guarantee collateral with Barclays Bank PLC to cover the liability. Repayment of the loan notes is at the option of the holder with a final maturity date of 2004. Interest is paid at 0.425% above LIBOR with an annual guarantee fee of 0.575%. The bank loans and overdrafts comprise: + *An overdraft of #1,081,000 drawn against an overdraft and revolving credit facility totalling #12.5 million. This borrowing is secured by the assets of the Group and bears interest at 1.75% above LIBOR. + *A loan of #4,000,000 drawn against the revolving credit facility totalling #12.5 million. This borrowing is secured by the assets of the Group and bears interest at 1.75% above LIBOR. + *A loan of #6,000,000 drawn down against a facility of #6,000,000 secured against the loan notes issued by Guardian Media Group plc for the acquisition of SCOT FM Limited. The loan bears interest at 0.5% above LIBOR. This loan was cleared on 6 January 2003 when the loan notes were redeemed. 9. Creditors: amounts falling due after more than one year Group Company 2002 2001 2002 2001 #'000 #'000 #'000 #'000 Bank and other borrowings Finance 219 463 - 39 leases __________ __________ __________ __________ ============ ============ ============ ============ Other creditors Licence 10,419 12,523 - - fees __________ __________ __________ __________ ============ ============ ============ ============ 10. Provisions for liabilities and charges Deferred Property Total taxation provisions #'000 #'000 #'000 Group At 1 January 2002 9 204 213 Utilised in the year - (55) (55) __________ __________ __________ At 31 December 2002 9 149 158 __________ __________ __________ ============ ============ ============ The property provisions relate to estimated dilapidation costs and committed rental costs on currently unoccupied properties. The timing of these liabilities depends on each individual lease and the possibility of leasing the relevant properties. No amounts have been discounted. 11. Reserves Share Profit and loss Merger Reserve premium account account #000 #'000 #'000 Group At 1 January 2002 81,820 35,064 (75,003) Elimination of reserves - - (194) on acquisition of subsidiary (previously associate) Retained loss for the - - (20,373) year __________ __________ __________ At 31 December 2002 81,820 35,064 95,570 __________ __________ __________ ============ ============ ============ Share Profit and loss premium account account #'000 #'000 Company At 1 January 2002 35,064 (2,492) Retained loss for the year - (1,301) __________ __________ At 31 December 2002 35,064 (3,793) __________ __________ ============ ============ 12. Minority interests - equity interests #'000 At 1 January 2002 (5) Acquisition of subsidiary (note 13) 89 Acquisition of minority interest (note 13) (21) Share of profits on ordinary activities after 113 taxation __________ At 31 December 2002 176 __________ ============ 13. Acquisition Switch Digital (London) Limited On 17 November 2002 the Group increased it's holding in Switch Digital (London) Limited. The Group's original share holding was 42.5 per cent which has now been increased to 80.5 percent. This has changed the way the Group accounts for Switch Digital London Limited from that of an associate to a subsidiary. #'000 Book and fair value of net assets acquired (including 368 #1.0 million of cash) Goodwill 398 __________ Consideration satisfied by cash 766 __________ =========== Switchdigital (Scotland) Limited On 17 November 2002 the Group increased it's holding in Switchdigital (Scotland) Limited from 69% to 92% at a cost of #137,000. The share of net assets acquired (book and fair value) was #91,000 giving rise to goodwill of #116,000. 14. Reconciliation of operating loss to net cash outflow from operating activities 2002 2001 #'000 #'000 Operating loss (19,005) (28,391) Depreciation charges 942 1,260 (Profit)/loss on disposal of fixed (17) 212 assets Goodwill amortisation 13,076 17,887 Goodwill impairment 2,128 - Licence amortisation 1,654 1,323 Disposal of trade investments 30 - Write down of trade investments - 6 Decrease in debtors 1,052 1,549 Decrease in creditors (3,516) (1,310) __________ __________ Net cash outflow from operating (3,656) (7,464) activities __________ __________ ============ ============ 15. Analysis of cash flows for headings netted in the cash flow statement 2002 2001 #'000 #'000 Returns on investments and servicing of finance Interest received 598 816 Dividends received 78 98 Interest paid (1,392) (4,131) __________ __________ Net cash outflow (716) (3,217) __________ __________ ============ ============ Capital expenditure and financial investment Purchase of tangible fixed assets (596) (893) Disposal of tangible fixed assets 197 15 Disposal of licence (note 1) 235 - Purchase of fixed asset investments (81) (30) (note 5) Purchase of minority interest (note 13) (137) (22) __________ __________ Net cash outflow (382) (930) __________ __________ ============ ============ 2002 2001 #'000 #'000 Acquisitions and disposals Acquisitions Purchase of subsidiary undertakings (766) - (note 13) Cash at bank and in hand acquired 1,037 - __________ __________ Net cash inflow 271 - __________ __________ ============ ============ Disposals Sale of subsidiary undertakings - 37,000 Sale of associate 999 - Settlement of subsidiary overdraft - 480 Cash transferred on sale of subsidiary - (2) Costs of disposal on sale of - (423) subsidiaries __________ __________ Net cash inflow 999 37,055 __________ __________ ============ ============ 2002 2001 #'000 #'000 Financing and management of liquid resources Financing Net increase/(reduction) in borrowings 4,000 (23,000) Proceeds on exercise of options 1 - Redemption of loan notes (103) - Capital element of finance lease rental (299) (271) payments __________ __________ 3,599 (23,271) Management of liquid resources Decrease in short term deposits 103 - __________ __________ Net cash inflow /(outflow) 3,702 (23,271) __________ __________ ============ ============ 16. Reconciliation of movement in net debt 2002 2001 #'000 #'000 Increase in cash in the year 225 2,173 Cash (inflow)/outflow from (increase)/ (3,701) 23,271 decrease in debt and lease financing __________ __________ Change in net debt resulting from cash (3,476) 25,444 flows Finance leases (31) (296) Loans and finance leases disposed of - 102 with subsidiaries Loan notes received on disposal of - 6,000 subsidiary __________ __________ (Increase)/Decrease in net debt in (3,507) 31,250 year Net debt at 1 January (1,581) (32,831) __________ __________ Net debt at 31 December (5,088) (1,581) __________ __________ =========== =========== 17. Analysis of net debt 1 January Non-cash 31 December changes 2002 #'000 Cash #'000 2002 flow #'000 #'000 Bank (1,009) (72) - (1,081) overdraft Cash at bank 121 297 - 418 and in hand __________ __________ __________ __________ (888) 225 - (663) Debt due (6,000) (4,000) - (10,000) within 1 year Loan notes 6,000 - - 6,000 receivable Loan notes (15,552) 103 - (15,449) Short term 15,552 (103) - 15,449 deposits Finance (693) 299 (31) (425) leases __________ __________ __________ __________ Net debt (1,581) (3,476) (31) (5,088) __________ __________ __________ __________ ============ ============ ============ ============ 18. Post balance sheet events On 6 January 2003 the Group redeemed the #6,000,000 loan notes from Guardian Media Group issued on the Sale of Scot FM Limited. The proceeds were used to reduce the Group's debt. Preliminary results These unaudited preliminary results do not constitute statutory accounts. The preliminary results for the year ended 31 December 2002 are extracted from the unaudited Group's accounts for the year, which will be delivered to the Registrar of Companies in due course. The results for the year ended 31 December 2001 have been extracted from the accounts for The Wireless Group PLC, which have been delivered to the Registrar of Companies and on which the auditors gave an unqualified report that did not contain a statement under Section 237 (2) or (3) of the Companies Act 1985. These preliminary results have been prepared on the basis of the accounting policies set out in the Company's 2001 statutory accounts, which have been updated for changes in Financial Reporting Standards and UITF Abstracts coming into force during the year, the impact of which on the financial information has not been material. This information is provided by RNS The company news service from the London Stock Exchange END FR UVUKROURSAAR
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