Half Yearly Report

RNS Number : 2317X

STV Group PLC

27 August 2015

 

                                                                                              Press Release

                                                                                           0700 hours, 27 August 2015             

STV Group plc Half Year Results 2015

Half year results for the six months ended 30 June 2015

Commercially focused; creatively led

Highlights

Trading and financial performance in line with expectations at the half year and good operational performance delivered against corporate and consumer business KPIs

Interim dividend of 3.0 pence per share confirmed in line with enhanced dividend policy announced last year, an increase of 50% year on year.  Intended final 2015 dividend of 7.0 pence per share; making a total of 10.0 pence per share for the full year, up 25%

Net debt continues to reduce significantly, down 13% at £35.0m, and on track to achieve target of sub 1.0x net debt:EBITDA by end of 2015

Innovative strategic development partnership between STV Productions and GroupM Entertainment announced creating scale and increasing development funds with first pilot project under this deal, The Dressing Room, currently in development

Digital revenues continue to grow significantly, up 30% year on year

Financial highlights

	H1 2015	H1 2014	Year on year
Revenue	£53.6m	£54.7m	-2%
EBITDA	£10.0m	£10.7m	-7%
Operating profit*	£8.6m	£9.8m	-12%
Pre-tax profit and IAS 19 interest*	£8.0m	£8.4m	-5%
Pre-tax profit*	£7.8m	£8.4m	-7%
EPS pre IAS 19 interest*	16.8p	18.7p	-10%
Statutory EPS	13.7p	18.7p	-27%
Net debt	£35.0m	£40.1m	-13%
Dividends per share	3.0p	2.0p	+50%

*before exceptionals

Rob Woodward, Chief Executive Officer, said: "Today's results are in line with expectations at the half year and represent another milestone on our route to achieving our strategic ambitions and KPI growth targets for the end of 2016. We are continuing to create sustainable growth and increased consumer margins, resulting in a rebalancing of the business through the growth of our profitable non broadcast services.  Confirmation of the enhanced dividend payment reflects the Board's confidence in our ability to deliver against our strategic plans."

27 August 2015

There will be a presentation for analysts at the offices of Peel Hunt, Moor House, 120 London Wall, London, EC2Y 5ET today at 12.30pm.  Should you wish to attend the presentation, please contact Katie Martin, STV (Tel:  [phone]).

Enquiries:

STV Group plc

George Watt, Chief Financial Officer                                Tel: [phone]

Richard Holligan, PR & Communications Manager               Tel: [phone]

Charlotte Street Partners

Chris Sibbald                                                              Tel: [phone]

Laura Leslie                                                               Tel: [phone]

Financial performance

Performance during the first half of the year is in line with forecasts against all key financial measures in the consumer business.  The performance of STV Productions reflects the normal second half weighting of deliveries.

The Board's commitment to the long-term delivery of increased shareholder returns was demonstrated last year through the re-instatement of dividend payments and the announcement of a progressive dividend policy, designed to increase returns over the next two years.  This delivered a total dividend payment for 2014 of 8.0 pence per share, representing a 300% increase on 2013 and an increase from previous guidance.  It is announced today that an interim dividend payment of 3.0 pence per share will be paid and the final dividend is planned to be 7.0 pence per share; making a total of 10.0 pence per share for the full year, an increase of 25% year on year.

The balance sheet has continued to improve and net debt has reduced by 13% year on year to £35.0m. The Group is on track to achieve the target of sub 1.0x net debt:EBITDA by the end of 2015. 

Consumer business revenues are up 2% to £51.9m, reflecting the trend across the wider television market and despite challenging FIFA World Cup comparators.  Strong growth in digital revenues continues to be delivered, up 30% at £2.8m. STV Productions' revenues are down year on year at £1.7m due to deliveries in 2015 being concentrated in the second half of the year.

Short term profitability is impacted by initial losses of £0.8m associated with City TV with STV Glasgow remaining on track to breakeven by the year end.  As a result, EBITDA is down 7% and operating profit before exceptional items is down 12% at £8.6m; however, the consumer business margin is above target at 18.7%. PBT before exceptional items and IAS19 interest fell by only 5% as the improved terms of the amended bank facility and lower debt levels fed through in lower interest costs.

Earnings per share before exceptional and IAS19 interest is down 10% but only 5% on an equivalent effective tax rate of 20%.

A provision of £1.0m has been made against the carrying value of the Group's investment in Mirriad Limited.  Mirriad failed to complete a strategically important fundraising round in April and required immediate funding to continue trading.  The Group supported a rescue of the business with £0.2m of new investment as part of a wider £4.6m funding package. 

Operational Review

STV Consumer

The consumer business has performed in line with expectations during the period with good operational performance against improved advertising revenues and continued growth and profitability of digital activities.  Overall, consumer revenues are up 2% with digital revenues continuing to perform strongly up 30% and in line with expectations. 

National airtime revenues were up 3% despite strong 2014 comparatives due to the FIFA World Cup.  Regional airtime revenues were down 7% due to a reduction in spend by the Scottish Government as a result of the General Election in May impacting the phasing of campaigns.

Operating profit before exceptionals amounted to £8.6m, down 12% on last year, reflecting the initial losses of City TV.

The key performance indicator targets for the consumer business relating to consumer engagement and reach across every platform within the STV Family of services: STV; STV Player; City TV services; STV City Apps and stv.tv are all on track to be achieved by the target end date of December 2016.

Our core channel, STV, has continued to perform ahead of the Network achieving peak-time out performance of 0.6 share points and this is expected to continue in the second half of the year with a strong schedule including exclusive rights to Rugby World Cup and a strong slate of high quality drama in the autumn schedule.

Both City TV services are performing in line with expectations in relation to revenue and audience targets and STV Glasgow remains on track to achieve breakeven by the year end.  The services are reaching an average of 0.9 million viewers every month, over 30% of consumers within their broadcast area. 

The acquisition of consumer insights is key to achieving stronger consumer engagement.   The KPI target is to achieve 1.6m insights by end of 2015 is on track with a 30% increase in registered users achieved in H1 taking the total to 1.3m.

Strong growth in digital revenue has been maintained with an increase of 30% during H1 and is on track to maintain and grow this rate of growth for the full year as the reach and engagement levels achieved across the STV family of services continue to grow.

Outlook

STV national airtime revenue is expected to be up 3% in Q3, resulting in a cumulative position from January to September up 3%.

The regional market continues to be more volatile than the national market and is expected to be up 15% in Q3.  The cumulative position from January to end September will be flat year on year.

Digital revenues are expected to continue to grow, up 30% year on year to the end of Q3 and this rate is expected to be maintained for the full year.

To ensure that we maximise margins and revenues across the Consumer business, it is confirmed that a review of the options to manage airtime and sponsorship sales upon expiry of the current Airtime Sales Agreement with ITV at the end of 2016 has commenced. Under the terms of the current agreement, STV is legally entitled to receive terms similar and will undertake a full review of options on this basis.

STV Productions

A key strategic development partnership with GroupM Entertainment has been agreed.  This deal will see the companies co-develop and co-produce ideas across a broad range of genres, delivering scale and growth in STV Productions activities.

The first project to be developed under this new deal is also confirmed.  A documentary series, The Dressing Room, is being co-developed and the pilot will be available to present to broadcasters later this year.

The priority of the business continues to be extending the customer base and securing returning series commissions.  During the period, new commissions have been secured with entertainment format Safeword for ITV2 (7 episodes); a one-off documentary for ITV to commemorate the tenth anniversary of the London bombings -The 7/7 Bombing: Survivors' Stories; a one-off documentary for BBC 1 Scotland, Dunblane: Our Story; an eight part documentary, Prisons - First and Last 24 hours, for Sky One; and a one off documentary for BBC4, Rollermania.

Securing a drama commission remains a key strategic priority for STV Productions. Since the changes were made to the team at the end of 2014, good progress has been made with scripts in development for the BBC, ITV and Channel 4.

Pensions

A programme of liability reduction measures continues to be progressed in conjunction with the trustees of both defined benefit schemes. Discussions with the trustees' of the schemes to agree the next triennial valuation have commenced and these are expected to conclude in early 2016.  The 2015 deficit funding payment of £7.8m was paid in January 2015.

During Q2 a Pension Increase Exchange follow up exercise was undertaken resulting in a £3.0m decrease to the pension scheme funding liability. 


Principal Risks and Uncertainties

This announcement contains certain statements that are or may be forward-looking with respect to the financial condition, results or operations and business of STV Group plc.  By their nature forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future.

The Group set out in its 2014 Annual Report and Financial Statements the principal risks and uncertainties that could impact its performance.  These remain unchanged since the annual Report was published.  The Group has rigorous internal systems to identify, monitor and manage any risks to the business.  The principal risks identified are set out in detail on pages 17 and 18 of the 2014 Annual Report which is available on the STV Group plc website:  www.stvplc.tv

Basis of preparation

These condensed interim financial statements for the six months ended 30 June 2015 have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority (previously the Financial Services Authority) and with IAS34, 'Interim financial reporting', as adopted by the European Union. The condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2014, which have been prepared in accordance with IFRSs as adopted by the European Union.

Going concern basis

The group meets its day-to-day working capital requirements through its bank facilities. The current economic conditions continue to create uncertainty particularly over (a) the level of demand for the group's products; and (b) the availability of bank finance for the foreseeable future. The group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the group should be able to operate within the level of its current facilities. After making enquiries, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. The group therefore continues to adopt the going concern basis in preparing its condensed interim financial statements.

Statement of directors' responsibilities

The directors' confirm that these condensed interim financial statements have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

a.  an indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year;

and

b.  material related-party transactions in the first six months and any material changes in the related-party transactions described in the last annual report.

The directors of STV Group plc are listed in the STV Group plc Annual Report for 31 December 2014. A list of current directors is maintained on the STV Group plc website: www.stvplc.tv

Appendix 1

KPI Update (as at 30 June 2015)

					2015 Target	Comment at 2015 interim
Corporate
1 Non broadcast earnings share					33% by end of 2015	Tracking below due to broadcast operating strength
Consumer
2 Audience to outperform ITV Network					To exceed Network	On track
3 Consumer division margin					17.5%	On track
4 Consumer reach					Target for each consumer service for end of 2016	All services on track
5 Consumer engagement					Target for each consumer service for end of 2016	All services on track
6 Consumer insights					1.6m	On track
7 Long form video streams					18m	On track
8 Digital revenues					£7.7m	On track
9 Digital margin					45%	On track
STV Productions
10 STV Productions revenue					£20.0m	Tracking below
11 STV Productions margin					6%	Tracking below

Condensed interim income statement Six months ended 30 June 2015
		Six months	Six months
		2015	2014
		£m	£m
	Note	Unaudited	Unaudited
Revenue	5	53.6	54.7
Net operating expenses		(46.0)	(44.9)
Operating profit		7.6	9.8
Analysed as:
Operating profit before exceptional items		8.6	9.8
Exceptional items	7	(1.0)	-
Operating profit		7.6	9.8
Finance costs     - borrowings	8	(0.6)	(1.4)
- IAS 19 pension	8	(0.2)	-
		(0.8)	(1.4)
Profit before tax		6.8	8.4
Tax charge	9	(1.6)	(1.3)
Profit for the period		5.2	7.1
Earnings per share
Basic	10	13.7p	18.7p
Diluted	10	13.3p	18.2p

 

A reconciliation of the statutory results to the adjusted results is included at note 19.

Condensed interim statement of comprehensive income Six months ended 30 June 2015
	Six months	Six months
	2015	2014
	£m	£m
	Unaudited	Unaudited
Profit for the period	5.2	7.1
Items that will not be reclassified to profit or loss:
Remeasurement gains on defined benefit pension schemes	0.1	(0.7)
Deferred tax credit/(charge)	-	0.1
Other comprehensive income for the period	0.1	(0.6)
Total comprehensive income for the period	5.3	6.5

 

The above condensed interim income statements should be read in conjunction with the accompanying notes.

Condensed interim balance sheet As at 30 June 2015
		30 June	31 December		30 June
		2015	2014		2014
		£m	£m		£m
	Note	Unaudited	Audited		Unaudited
Non-current assets
Property, plant and equipment	12	8.4	8.8		8.5
Goodwill		7.9	7.9		7.9
Other intangible assets	13	2.0	1.6		1.4
Investments		0.4	1.2		1.0
Deferred tax asset		5.8	7.4		3.9
Retirement benefit asset	17	-	-		5.3
		24.5	26.9		28.0
Current assets
Inventories		18.8	18.3		18.8
Trade and other receivables		19.5	23.1		21.4
Cash and cash equivalents		4.3	19.8		10.1
		42.6	61.2		50.3
Total assets		67.1	88.1		78.3
Equity attributable to owners of the parent
Ordinary shares	15	19.6	19.6	19.5
Share premium	15	101.8	101.8	100.7
Merger reserve		173.4	173.4	173.4
Other reserve		0.7	0.6	0.4
Accumulated losses		(289.8)	(291.9)	(281.0)
Total equity		5.7	3.5	13.0
Non-current liabilities
Borrowings	14	39.3	49.2	50.2
Derivative financial instruments		0.1	0.2	-
Provisions		0.5	0.6	0.8
Retirement benefit obligation	17	7.2	14.9	-
		47.1	64.9	51.0
Current Liabilities
Trade and other payables		13.9	19.3	13.8
Provisions		0.4	0.4	0.5
		14.3	19.7	14.3
Total liabilities		61.4	84.6	65.3
Total equity and liabilities		67.1	88.1	78.3

 

The above condensed interim balance sheet should be read in conjunction with the accompanying notes.

Condensed interim statement of changes in equity Six months ended 30 June 2015
	Equity attributable to owners of the parent
	Ordinary  shares	Share premium	Merger reserve	Other reserve	Accumulated losses	Total equity
	£m	£m	£m	£m	£m	£m
Balance at 1 January 2015	19.6	101.8	173.4	0.6	(291.9)	3.5
Profit for the period	-	-	-	-	5.2	5.2
Remeasurement gain	-	-	-	-	0.1	0.1
Deferred tax thereon	-	-	-	-	-	-
Total comprehensive income for the period	-	-	-	-	5.3	5.3
Value of employee services	-	-	-	0.1	-	0.1
Credit to equity for equity-settled share based payments	-	-	-	-	(0.9)	(0.9)
Dividends	-	-	-	-	(2.3)	(2.3)
Balance at 30 June 2015 (unaudited)	19.6	101.8	173.4	0.7	(289.8)	5.7
Balance at 1 January 2014	19.5	112.0	173.4	0.3	(297.6)	7.6
Profit for the period	-	-	-	-	7.1	7.1
Remeasurement gain	-	-	-	-	(0.7)	(0.7)
Deferred tax thereon	-	-	-	-	0.1	0.1
Total comprehensive income for the period	-	-	-	-	6.5	6.5
Share premium reduction (net)	-	(11.3)	-	-	11.0	(0.3)
Value of employee services	-	-	-	0.1	-	0.1
Credit to equity for equity-settled share based payments	-	-	-	-	(0.1)	(0.1)
Dividends	-	-	-	-	(0.8)	(0.8)
Balance at 30 June 2014 (unaudited)	19.5	100.7	173.4	0.4	(281.0)	13.0

 

The above condensed interim statement of changes in equity should be read in conjunction with the accompanying notes.

Condensed interim statement of cash flows Six months ended 30 June 2015
		Six months	Six months
		2015	2014
		£m	£m
	Note	Unaudited	Unaudited
Operating activities
Cash generated by operations	16	7.6	6.0
Interest paid		(0.6)	(1.3)
Pension deficit funding     - recovery plan payment		(7.8)	(4.7)
Net cash used in operating activities		(0.8)	-
Investing activities
Purchase of investment		(0.2)	(0.1)
Capitalised web development spend		(0.6)	(0.7)
Purchase of property, plant and equipment		(0.7)	(2.7)
Net cash used in investing activities		(1.5)	(3.5)
Financing activities
Purchase of treasury shares		(0.9)	-
Net borrowings (repaid)/drawn		(10.0)	5.6
Dividend paid	11	(2.3)	(0.8)
Net cash (used in)/ generated by financing activities		(13.2)	4.8
Net (decrease)/increase in cash and cash equivalents		(15.5)	1.3
Net cash and cash equivalents at beginning of period		19.8	8.8
Net cash and cash equivalents at end of period		4.3	10.1

 

Although not required under IFRS the directors have provided the following reconciliation of net debt for further clarity.  The net debt represents Group borrowings less cash and cash equivalents.

Reconciliation of movement in net debt Six months ended 30 June 2015
		Six months	Six months
		2015	2014
		£m	£m
Opening net debt		(29.4)	(35.7)
Net (decrease)/increase in cash and cash equivalents in the period		(15.5)	1.3
Net movement in debt financing		9.9	(5.7)
Closing net debt		(35.0)	(40.1)

 

Notes to the condensed set of financial statements

Six months ended 30 June 2015

1.   General information

STV Group plc ("the Company") and its subsidiaries (together "the Group") is listed on the London Stock Exchange and incorporated and domiciled in the UK.  The address of the registered office is Pacific Quay, Glasgow, G51 1PQ.  The principal activities of the Group are the production and broadcasting of television programmes, internet services and the sale of advertising airtime and space in these media.

These condensed interim financial statements were approved for issue on 27 August 2015 and have been reviewed not audited. They do not comprise statutory accounts within 
the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year 
ended 31 December 2014 were approved by the board of directors on 16 March 2015 and 
delivered to the Registrar of Companies. The report of the auditors on those accounts was 
unqualified, did not contain an emphasis of matter paragraph and did not contain any 
statement under section 498 of the Companies Act 2006.

2.    Accounting policies

Basis of preparation

These condensed interim financial statements for the six months ended 30 June 2015 have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority (previously the Financial Services Authority) and with IAS34, 'Interim financial reporting', as adopted by the European Union. The condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2014, which have been prepared in accordance with IFRSs as adopted by the European Union.

Going concern basis

The group meets its day-to-day working capital requirements through its bank facilities. The current economic conditions continue to create uncertainty particularly over (a) the level of demand for the group's products; and (b) the availability of bank finance for the foreseeable future. The group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the group should be able to operate within the level of its current facilities. After making enquiries, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. The group therefore continues to adopt the going concern basis in preparing its condensed interim financial statements.

Changes in accounting policies

Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2014.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profit or loss.

The following new standards, amendments to standards or interpretations are mandatory for the first time for accounting periods beginning on or after 1 January 2015. They either were not relevant for the Group or had no material impact on the financial statements of the Group.

IFRS 7 (amendment)	Financial instruments: disclosures
IFRS 9 (amendment)	Financial instruments
IAS 36 (amendment)	Impairment of assets
IAS 38 (amendment)	Intangible assets
IFRIC 21	Levies

3.    Estimates

The preparation of 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, with the exception of changes in estimates that are required in determining the provision for income taxes.

4.    Financial risk management and financial instruments

The Group's activities expose it to a variety of financial risks:  currency risk, credit risk, liquidity risk and cash flow interest rate risk.

The 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.  There have been no changes in any risk management policies since the year end.

5.    Business segments

The Group's Chief Executive, the chief operating decision maker, considers the business primarily from a product perspective. Under IFRS 8, the reportable segments are therefore Consumer and Productions.

The performance of the segments is assessed based on a measure of adjusted operating profit. 

	External sales
Segment revenues	Six months 2015	Six months 2014
	£m	£m
Consumer	51.9	50.8
Productions	1.7	3.9
	53.6	54.7

 

Segment result	Six months 2015	Six months 2014
	£m	£m
Consumer	9.7	10.9
Productions	(1.1)	(1.1)
	8.6	9.8
Provision for write-down of investment	(1.0)	-
Operating profit	7.6	9.8
Financing	(0.8)	(1.4)
Profit before tax	6.8	8.4
Tax charge	(1.6)	(1.3)
Profit attributable to owners of the parent	5.2	7.1

There has been no significant change in total assets from the amount disclosed in the last annual financial statements. There are no differences from the last annual financial statements in the basis of segmentation or in the basis of measurement of segment profit or loss.

6.    Seasonality of operations

In line with the UK advertising market as a whole, the autumn season provides the Group with the highest level of revenues. The Productions business also delivers the majority of its programmes to broadcasters in the second half of the year.

7.    Exceptional items

A provision of £1.0m has been made against the carrying value of the Group's investment in MirriAd Limited.  MirriAd failed to complete a strategically important fundraising round in April and required immediate funding to continue trading.  The Group supported a rescue of the business with £0.2m of new investment as part of a wider £4.6m funding package.  However, the price of that investment fully recognised the parlous state of MirriAd and resulted in the existing investment being revalued.

8.    Finance costs

	Six months	Six months
	2015	2014
	£m	£m
Bank borrowings	0.6	1.4
Pension finance charge	0.2	-
Finance costs	0.8	1.4

9.    Tax

Tax on underlying results for the six month period is charged at 20% (30 June 2014: 15%) representing the best estimate of the average annual effective tax rate expected for the full year, applied to the pre-exceptional pre-tax income of the six month period.  The tax charge is lower than the standard rate of 20.25% due to adjustments for prior year provisions and certain tax planning initiatives.

10.  Earnings per share

							Earnings £m	Six months 2015 Weighted average number of shares (m)	Per share Pence	Earnings £m	Six months 2014 Weighted average number of shares (m)		Per share Pence
EPS (pre-exceptional items):
Earnings attributable to ordinary shareholders							6.2	38.0	16.3p	7.1	37.9		18.7p
Basic EPS							6.2	38.0	16.3p	7.1	37.9		18.7p
EBT purchased shares								1.1			1.2
Diluted EPS							6.2	39.1	15.9p	7.1	39.1		18.2p
EPS (including exceptional items):
Earnings attributable to ordinary shareholders (including exceptional items)							5.2	38.0	13.7p	7.1	37.9		18.7p
Basic EPS							5.2	38.0	13.7p	7.1	37.9		18.7p
EBT purchased shares								1.1			1.2
Diluted EPS							5.2	39.1	13.3p	7.1	39.1		18.2p

11.  Dividends

A dividend of £2.3m (2013: £0.8m) which relates to the year ended 31 December 2014 was paid in May 2015. 

An interim dividend of 3.0p per share (2014: 2.0p per share) has been proposed and is subject to approval by the board of directors. It is payable on 9 October 2015 to shareholders who are on the register at 11 September 2015. The ex dividend date is 10 September 2015. This interim dividend, amounting to £1.2m (2013: £0.8m), has not been recognised as a liability in this interim financial information.  It will be recognised in shareholders' equity in the year to 31 December 2015. 

12.  Property, plant and equipment

During the six months to 30 June 2015, the Group has incurred expenditure of £0.7m on property, plant and equipment (£4.0m in the year to 31 December 2014; £2.7m in the six months to 30 June 2014).

13.  Other intangible assets

During the six months to 30 June 2015, the Group has incurred expenditure of £0.6m on web development (£1.0m in the year to 31 December 2014; £0.7m in the six months to 30 June 2014).

14.  Borrowings and loans

At 30 June 2015, the Group had revolving credit and overdraft bank facilities in place totalling £60.0m (£60.0m at 31 December 2014; £60.0m at 30 June 2014). At 30 June 2015, £40.0m of the facility was drawn down.

The £60.0m revolving credit and overdraft facility has a maturity date of June 2019.  Security is provided to the debt providers by way of cross guarantees and a share pledge.

15.  Share capital and share premium

There were no movements in share capital during the six months to 30 June 2015.

16.  Notes to the condensed interim statement of cash flows

	Six months	Six months
	2015	2014
	£m	£m
Operating profit (before exceptional items)	8.6	9.8
Adjustments for:
Depreciation on property, plant and equipment	1.1	0.9
Depreciation of intangible assets	0.2	-
Share based payment expense	0.1	-
	10.0	10.7
Increase in inventories	(0.5)	(1.2)
Decrease in trade and other receivables	3.6	-
Decrease in trade and other payables	(5.5)	(3.5)
Cash generated by operations	7.6	6.0

17.  Retirement benefit schemes

The fair value of the assets in the schemes and the present value of the liabilities in the schemes at each balance sheet date was:

	At 30 June	At 31 December	At 30 June
	2015	2014	2014
	£m	£m	£m
Equities	160.4	154.8	153.1
Bonds	165.2	166.5	153.6
Fair value of schemes' assets	325.6	321.3	306.7
Present value of defined benefit obligations  obligations	(332.8)	(336.2)	(301.4)
(Deficit)/surplus in the schemes	(7.2)	(14.9)	5.3

A related offsetting deferred tax credit of £1.5m is shown under non-current assets.  Therefore the net pension scheme deficit amounts to £5.7m at 30 June 2015 (deficit £11.8m at 31 December 2014; surplus £8.2m at 30 June 2014).

18.  Transactions with related parties

There has been no change from the 2014 Annual Report and no transactions with any related parties in the period to 30 June 2015.

19.  Reconciliation of statutory results to adjusted results

	2015	2014
	Profit  before tax	Basic EPS					Diluted EPS	Profit  before tax	Basic EPS	Diluted EPS
	£m	pence					pence	£m	pence	pence
Statutory results
Post-exceptional	6.8	13.7p					13.3p	8.4	18.7p	18.2p
Add back: Exceptionals	1.0	2.6p					2.6p	-	-	-
Pre-exceptional	7.8	16.3p					15.9p	8.4	18.7p	18.2p
Add back: IAS 19	0.2	0.5p					0.5p	-	-	-
Adjusted results	8.0	16.8p					16.4p	8.4	18.7p	18.2p
Adjusted results at normalised tax rate of 20%	8.0	16.8p					16.4p	8.4	17.7p	17.1p

 

Independent review report to STV Group plc

Report on the condensed interim financial statements

Our conclusion

We have reviewed the condensed interim financial statements, defined below, in the interim financial report of STV Group plc for the six months ended 30 June 2015.  Based on our review, nothing has come to our attention that causes us to believe that the condensed interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

This conclusion has to be read in the context of what we say in the remainder of this report.

What we have reviewed

The condensed interim financial statements, which are prepared by STV Group plc, comprise:

•     the condensed interim balance sheet as at 30 June 2015;

•     the condensed interim income statement and the condensed interim statement of comprehensive income for the period then ended;

•     the condensed interim statement of cash flows for the period then ended;

•     the condensed interim statement of changes in equity for the period then ended; and

•     the explanatory notes to the condensed interim financial statements.

As disclosed in note 2, the financial reporting framework that has been applied in the preparation of the full annual financial statements of STV Group plc is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

The condensed interim financial statements included in the interim financial report have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting', as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

What a review of condensed interim financial statements involves

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed interim financial statements.

Responsibilities for the condensed interim financial statements and the review

Our responsibilities and those of the directors

The interim financial report, including the condensed interim financial statements, is the responsibility of, and has been approved by, the directors.  The directors are responsible for preparing the interim financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Our responsibility is to express to the Company a conclusion on the condensed interim financial statements in the interim financial report based on our review. This report, including the conclusion, has been prepared for and only for the Company for the purpose of complying with the Disclosure and Transparency Rules of the Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

PricewaterhouseCoopers LLP
Chartered Accountants
Glasgow

27 August 2015


Notes:

(a)  The maintenance and integrity of the STV Group plc website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the interim financial statements since they were initially presented on the website.

(b)  Legislation in the United Kingdom governing the preparation and dissemination of financial information may differ from legislation in other jurisdictions.

 

END

 

 

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