Information  X 
Enter a valid email address

Hibu Plc (HIBU)

  Print      Mail a friend       Annual reports

Thursday 25 July, 2013

Hibu Plc

Financial Information for 12 months

RNS Number : 0998K
hibu plc
25 July 2013
 



 

 

           

 

For Immediate Release                                                                                               25 July 2013

hibu plc

("hibu" or the "Group")

Financial information for the twelve month period
ended 31 March 2013

Financial headlines(1)

·     Group revenue of £1,347m decreased by 16% (three months decreased by 17%)

- Digital services revenues grew by 34% to £174m (three months grew by 31%)

- Digital directories revenue fell by 12% to £271m (three months fell by 11%)

- Print and other directory revenues fell by 22% to £902m (three months fell by 24%)

·     EBITDA(2) of £283m was down by £178m

·     Free cash flow of £217m decreased by £82m

·     Exceptional pre-tax gain of £39m on below par settlement of 2006 debt

·     Loss after tax increased by £629m to a loss after tax of £1,818m

·     Profit after tax and before legacy issues(3) decreased by £296m to a loss of £27m

Operational headlines

·     Total digital revenue has increased from 29% to 33% of revenue

·     Digital services

- Customers increased by 35%(4) to 443,000

- Annual digital services revenue per customer declined by 10.4% to £437

- Live customer websites increased by 41%(4) to 452,000

·     Digital directories

- Advertisers fell by 11% to 754,000

- Annual digital directory revenue per advertiser declined by 8.9% to £338

- Visitors declined 14% to 43.7m in March

·     Yellow Pages

- Advertisers reduced by 16% to 868,000

- Revenue per advertiser decreased by 6% to £923

(1)The financial information in this document is for the twelve months to 31 March 2013, is unaudited and is compared with the same period in the prior year. Changes in revenue, revenue per advertiser and EBITDA presented on pages 1 through 6 are stated at constant currency. Revenue percentage changes are also adjusted for rescheduling, changes in bundled revenue allocation in the US and acquisitions.

(2)EBITDA is profit before interest, tax, depreciation, amortisation and exceptional items.

(3) Profit after tax and before legacy issues excludes non-cash after tax charges of £1,790m (2012 - £1,306m) to write down intangible assets and £nil (2012 - £152m) to write off capitalised directories in development costs.

(4)Customers increased by 13% and websites increased by 18% excluding the 72,000 Moonfruit customers that were acquired during the twelve month period.

 

 

Mike Pocock, Chief Executive Officer, said:

"The market remained difficult for all of our directories businesses. Despite growing or maintaining our market share, industry wide declines have continued to drive significant earnings pressure and further reduction in the value of our print brands.

"The Group made good progress in implementing its transformational strategy. Digital services revenues continued to grow strongly. Major developments included the acquisition of Moonfruit, the launch of new products into pilot, the full US roll out of Community Magazines, the start of a major overhaul of our digital directories and launch of the hibu business store. I remain confident that the new strategy will provide a viable new business for hibu over the medium term.

"We have also worked hard to streamline and improve the Group's supporting infrastructure with cost reduction programmes and foundation IT projects. Costs have now been reduced by more than £300m over the last two years, over and above the reductions due to lower volume.

"After a year of negotiating with our lenders, we have today separately announced the principal terms determined by the Co-ordinating Committee of the Group's lenders for the proposed restructuring of the Group's debt. As part of this process, the listing of hibu's shares and the trading of those shares on the London Stock Exchange have today been suspended. Formal schemes of arrangement to implement the restructuring will be proposed to lenders in due course and the restructuring is expected to complete in the fourth quarter of the current calendar year. On completion of the restructuring, the listing of hibu's shares will be cancelled."

Trading and strategic update

hibu has made significant progress with its strategic transformation to a digitally focussed business. This is despite the continued difficult economic environment and revenue shift from directories to other forms of media which caused total revenue to decline 16% over the year (17% in the three months).

During the twelve month period, hibu gathered strong momentum in developing its digital business with digital services revenue growing 34%(1) (31% in the three months) to an annual run rate of over £190m. hibu is uniquely placed to help small and medium-sized enterprises (SMEs) take advantage of the evolving digital opportunity. The acquisition of Moonfruit in June 2012 means the Group now has an even stronger platform from which to grow its 452,000 live customer websites and provide additional digital marketing capabilities. hibu's 6,000 strong sales force is increasingly offering small businesses sophisticated digital marketing solutions, ranging from being found more effectively on the large search engines to enabling sites for mobile functionality.

(1)The digital services revenue percentage for the twelve month period is adjusted to exclude a £10m reduction related to the timing effect on revenue recognition of changes in bundle allocations in the US.

  

The Group has also identified the need to help small businesses transact online and operate more efficiently. The technology provided by the Znode acquisition has allowed the Group to trial services such as the eMarketplace and offer sophisticated online stores to allow SMEs to sell direct to their end consumers. Partnerships with companies such as American Express, Global Payments and Vantiv were agreed in the twelve months enabling hibu's salespeople to offer attractive credit card and payment processing capabilities in the US and UK. The opportunity to expand the market through a wider choice of offers and address a larger base of customers is central to hibu's new strategy.

Digital directory revenue declined 12%(1) in the twelve months (11% in the three months) as competition and the difficult economic environment continue to drive fewer customers and a reduction in their average spend. The product is now managed centrally to leverage economies of scale and share best practice. As a result, there has been significant focus on improving the merchant offer and consumer user experience which are expected to improve run rates in the coming twelve months. Usage remains resilient with users in March 7% up on December to 43.7m, although this was 14% down on the prior year as hibu concentrates on organic usage and on purchasing fewer but higher quality users in the US.

(1)The digital directory revenue percentage for the twelve month period is adjusted to exclude a £14m reduction related to the timing effect on revenue recognition of changes in bundle allocations in the US

  

Print and other directory revenue declined 22% over the prior year(2) with the three month decline of 24% reflecting the tougher trading environment, particularly in the US, and the publication of poorer performing, larger metro books in the period. The decline reflects both fewer customers and lower revenue per advertisers as SMEs are reducing their Yellow Pages expenditure and moving to other forms of advertising. During the twelve months, the Group successfully launched the Community Magazine product in the US (with trials in all other countries). Over 800 magazines are now being sold-in with over 400 of these now in publication. At an average weekly sales run rate of £0.6m, this new product has recorded significant levels of forward sales and contributed £3m of revenue in the three months ended 31 March 2013.

(2)The print revenue percentage changes for the twelve month period are adjusted to exclude a £16m benefit related to the revenue associated with directories delayed into FY13 in Argentina and other rescheduling. Other directory revenue consists of White Pages, Magazines, direct mail and directory enquiries.

  

The transformation of the Group into a predominantly digital business required it to adopt a modern new brand to help its customers and consumers find, and identify with, its new products. As a consequence, during the twelve months, the Group launched its new brand, hibu and formally changed its name in July, following shareholder approval at the AGM.

  

Following a successful pilot phase, hibu business stores went live in the UK and US at the end of March. These stores allow small businesses to purchase a new suite of hibu products online, helping them compete strongly for mobile and online customers. At the hibu business store, SMEs can create a website or online shop that is fully optimised for mobile and start selling and advertising to prospects within ten minutes. This launch is an important step to open up a wider market, reduce sales costs and allow a more efficient approach to selling hibu products year round.

  

Developments such as launching and promoting a successful online channel support the Group's efforts to reduce costs and operate more efficiently within the context of its multi-channel strategy. The Group continues to consolidate its suppliers, rationalise its technology platforms and property portfolio and improve the efficiency of its sales channels. As a result, over the last 24 months, the Group has reduced costs by more than £300m, independent of the decline in revenue, and expects the cost base to benefit further from headcount reductions in the three months ended 31 March 2013. However, the relatively fixed nature of the Group's cost base means that the decline in print and digital directory revenue has a very significant effect on earnings, leaving EBITDA £178m down on the prior year at £283m.

Operating losses have increased by £392m reflecting both the fall in EBITDA and the £222m increase in exceptional costs that are mostly from cleaning up legacy issues.

Underlying net interest fell £25m largely as a result of lower debt (9.7% lower in the twelve months at constant exchange rates) as hibu has taken action to significantly decrease its debt over recent years by settling and buying back debt and managing its working capital whilst further reducing interest costs by not renewing interest rate hedges. The early settlements and buy backs have also provided additional financial income of £39m and £253m in 2013 and 2012, respectively.

Profit after tax is affected by all the factors listed above and from the relative weighting of taxable profit from different tax jurisdictions. Exceptional tax credits were also £91m lower in 2013 than in 2012.

Free cash flow of £217m decreased £82m on the prior year due to the lower EBITDA and despite the suspension in interest payments in August, a tax refund in the UK and continued working capital release.

Net debt reduced £151m to £2,050m due to the £217m of free cash flow and the £39m gain on the December settlement with the 2006 lenders despite £15.4m of fees incurred in respect of the refinancing. If sterling had not weakened against particularly the dollar over the twelve months, net debt at March 2013 would have been £63m lower at £1,987m. At the end of March, the Group had £211m of cash in the bank.

In March, the Group made a £2,008m one-off, non-cash write off of goodwill, brands and other assets acquired in previous directory acquisitions. In addition, there were £32m of one-off exceptional costs related to restructuring the organisation and delivering the new strategy.

Accounting reference period and share suspension

As noted in other RNS announcements made by the Group today, the Group is at an advanced stage of negotiations regarding its financial restructuring. The financial restructuring will not result in any payment being made to shareholders or leave hibu shares with any value. The Group has therefore decided to suspend the listing of hibu's shares and the trading of those shares on the London Stock Exchange with effect from 07:30 BST today. The Board of Directors has given consideration to both the implications of the share suspension and the significant effect of any financial restructuring on the future shape of the Group, including the fact that hibu plc, which is the Group's ultimate holding company, is expected to be placed into administration as part of the financial restructuring. As a consequence, the Board has concluded that it is not in the interests of either the Group or its stakeholders to publish audited accounts and issue an Annual Report that does not reflect the expected effect of the financial restructuring.

The Board of Directors of hibu has therefore today given notice to the Registrar of Companies that it is changing its accounting reference date to 30 September. As a consequence, the accounting period that commenced on 1 April 2012 will now cover the 18 months ending on 30 September 2013.

Forward looking statements

This news release contains forward-looking statements regarding hibu's intentions, beliefs or current expectations concerning, among other things, hibu's results of operations, revenue, financial condition, liquidity, prospects, growth, strategies, new products, the level of new directory launches and the markets in which hibu operates. Readers are cautioned that any such forward-looking statement is not a guarantee of future performance and involves risks and uncertainties, and that actual results may differ materially from those in the forward-looking statement as a result of various factors. These factors include any adverse change in regulations, exchange rates, unforeseen operational or technical problems, the nature of the competition that hibu will encounter, wider economic conditions including economic downturns, the final outcome of addressing hibu's capital structure and changes in financial and equity markets. Readers are advised to read the Risk Statement below. hibu undertakes no obligation to update or revise publicly any forward-looking statements, except as may be required by law.

Risk statement

hibu's risks and uncertainties include strategic and operational risks faced by hibu's businesses; debt and financing risks faced in funding Group operations and the financial reporting and related risks faced in reporting hibu's results. Readers are advised to read pages 22 to 29, page 116 and notes 1 and 16 to the financial statements included in Yell Group plc's 2012 annual report (Yell Group plc changed its name to hibu plc on 27 July 2012) for the financial year ended 31 March 2012, a copy of which is available on hibu's website at http://www.hibu.com. 

The majority of hibu's debt matures in April 2014. The Group has been in negotiations with a co-ordinating committee of the lenders (the "CoCom") under its facilities agreement dated 30 November 2009 (as amended) (the "2009 lenders") to represent the interests of the 2009 lenders during the process of determining an appropriate new capital structure. The Group obtained certain waivers, with CoCom support, from the 2009 lenders to enable, among other things, substantive discussions to take place around a balance sheet restructuring.

The Group is currently in default under the 2009 facilities agreement. The lenders' facility agent may, and must if directed by two-thirds of lenders, demand immediate repayment of all amounts due. The default can only be waived by the unanimous approval of all 2009 lenders. As this is not considered likely in the current circumstances, a waiver request for this default is not being made. As announced today, the principal terms for the restructuring of the Group's debt have been agreed in principle with the CoCom subject to clearance from the UK Pensions Regulator. The members of the CoCom together represent approximately 32.8 per cent of the Group's financial debt. The restructuring will be implemented through schemes of arrangement that will require the approval of lenders that hold at least 75 per cent of the debt. Closing of the transaction is expected to take place in the fourth quarter of the current calendar year.

The restructuring will not attribute any value to the existing ordinary shares of hibu plc, and the listing of hibu's shares will be cancelled upon completion of the restructuring. The restructuring will also result in a Group reorganisation that will require hibu plc and some other Group holding companies to be placed into administration. The Group is cash generative and the directors believe that the lenders will receive a higher recovery on their loans through a restructuring that allows the business to continue to operate as a going concern rather than by any other course of action. Therefore, the financial information has been prepared on a going concern basis and does not necessarily include all adjustments that would be required if the business were unable to continue as a going concern.

The Group net liabilities of £1,486m include goodwill and other acquired intangible assets totalling £485m which is supported by the Group's strategic plans. It is clear that the Group faces challenges and material uncertainties that may affect the carrying value of these intangible assets.

 

About hibu

hibu helps communities thrive by facilitating millions of connections each year between consumers who want to find products and services locally and the merchants who provide them.

hibu enables consumers to find local businesses and shop in new, innovative ways - whether online, on the move or in store. hibu helps merchants compete in the digital world with a broad range of marketing and commerce solutions delivered online and through hibu's direct sales teams. Building on its heritage as a premier directories provider, hibu continues to offer a full range of print- and distribution-based marketing services.

hibu operates in the UK, US, Spain, Argentina, Chile, Peru and US Hispanic markets. In the twelve months to 31 March 2013, hibu had one million SME customers and total revenues of £1.3 billion.

For further information about hibu, visit corporate.hibu.com.

Enquiries

hibu - Investors                                                    RLM Finsbury

Andrew Clatworthy                                                 Andrew Dowler or Charles Chichester

Tel:    +44 (0) 118 358 2838                                 Tel:    +44 (0) 207 251 3801

hibu - Media

Jon Salmon

Tel:    +44 (0) 118 358 2656

 

Key operational metrics for hibu plc

Twelve months to 31 March


US

UK

Spain

Latin America

Total


2013

2012

2013

2012

2013

2012

2013

2012

2013

2012












Digital Directories revenue (£m)

85.5

111.2

121.8

142.0

43.3

52.8

20.2

21.0

270.8

327.0

Growth (%)(1)  

(11.4)


(14.2)


(13.0)


(1.8)


(12.3)


Unique live advertisers at period end (thousands)(2)

306

349

182

185

131

166

135

152

754

852

Average annualised digital directories revenue per advertiser (£)(2)

261

307

659

748

289

304

145

140

338

373

Growth (%)(3)

(16.0)


(11.9)


0.7


5.3


(8.9)


Unique visitors for
month of period
end (millions)(4)

13.7

23.7

10.5

9.3

7.9

7.9

5.3

5.4

37.4

46.3

Unique mobile visitors

 for month of period
end (millions)

0.9

1.3

3.6

2.1

1.6

0.9

0.1

0.0

6.2

4.3












Digital Services revenue (£m)

99.8

72.0

59.8

51.3

9.5

8.4

5.2

2.7

174.3

134.4

Growth (%)(1)

51.5


9.7


20.5


105.5


34.3


Unique live customers
at period end (thousands)(2) (5)

187

199

178

76

44

42

34

12

443

329

Average annualised digital services revenue per customer (£)(2) (5)

509

418

439

815

214

236

221

348

437

485

Growth (%)(3)

20.6


(46.2)


(4.3)


(32.5)


(10.4)


Websites live at period end (thousands) (5) (6)

232

225

147

43

44

44

29

10

452

322












Total Digital revenue (£m)

185.3

183.2

181.6

193.3

52.8

61.2

25.4

23.7

445.1

461.4

Growth (%)(1)

13.2


(7.9)


(8.5)


10.5


1.3


Unique live customers
at period end (thousands)(5) (7)

319

359

294

204

135

168

141

153

889

884

Average annualised digital media revenue per customer (£)(5) (8)

543

490

690

943

346

350

176

158

493

512

Growth (%)(3)

9.7


(26.8)


4.9


14.8


(3.3)


(1) Revenue growth rates are at constant currency and are also adjusted for the change to the bundle allocation in the US in fiscal year 2012 and acquisitions.

(2) US data on advertisers / customers and average revenue per advertiser / customer is under review and subject to change.

(3) Growth rates for average revenue per advertiser / customer are at constant currency but not adjusted for changes in bundle allocation in the US or acquisitions.

(4) Excludes mobile visitors. US figures include visitors to the Yellowbook.com network.

(5) UK digital services customers, total digital customers and website counts in FY13 include 88,000 Moonfruit website customers who were not included in the prior year. UK digital services and total digital average revenue per customer in FY13 fell because these customers generate significantly lower average revenues.

(6) Excludes non-revenue generating sites.

(7) The prior year US digital customers have been restated (previously reported: 416,000). Customer data remains under review and subject to change.

(8) The prior year US average revenue per customer has been restated (previously reported: £455). The data remains under review and subject to change.

 

 

Twelve months to 31 March


US

UK

Spain

Latin America

Total


2013

2012

2013

2012

2013

2012

2013

2012

2013

2012












Printed Yellow  Pages











Revenue (£m)

522.8

635.7

163.0

223.9

50.2

81.7

65.2

66.0

801.2

1,007.4

Growth (%)(1)  

(19.2)


(27.2)


(35.1)


(11.1)


(21.6)


Unique advertisers (thousands)

383

450

190

236

152

194

143

150

868

1,030

Print revenue per unique advertiser (£)

1,367

1,413

856

949

331

421

454

440

923

979

Growth (%)(2)

(4.4)


(10.6)


(17.2)


4.7


(6.1)


Unique advertiser retention rate (%)

73

72

71

72

73

76

61

69



Directory editions published

991

990

104

104

63

62

98

83 

1,256

1,239












White Pages and other directories (including magazines, enquiry services and direct mail)

Revenue (£m)(3)

19.1

15.1

8.6

24.0

42.6

72.2

30.8

29.9

101.1

141.1

Growth (%)(1) (4)

25.9


(65.2)


(37.2)


(2.6)


(27.1)













All Product Total

Revenue (£m)

727.2

834.0

353.2

441.2

145.6

215.1

121.4

119.6

1,347.4

1,609.9

Growth (%)(1)

(11.3)


(20.8)


(28.3)


(5.1)


(15.6)


 

(1) Revenue growth rates are at constant currency and are also adjusted for rescheduling.

(2) Revenue per unique advertiser growth rates are at constant currency but not adjusted for rescheduling.

(3)  This includes £14.6m of Direct Mail and magazine revenues.

(4) £14m of the decline in Spanish White pages and other directory revenue is due to the cessation of the Telefonica contract to produce the White Pages which is broadly EBITDA neutral

 

Financial information for hibu plc and subsidiaries

All of the following financial information is unaudited except the comparative information for 31 March 2012, which was presented in the Yell Group 31 March 2012 Annual Report.

Group income statement

Twelve months to 31 March





£m, unless noted otherwise

Notes



2013 


2012 








Revenue

2



1,347.4


1,609.9 

Cost of sales:







- Excluding write-off of directories in development




(644.5)


(706.9)

- Write-off of directories in development

6



-   


(214.2)

Gross profit




702.9


688.8 

Distribution costs




(58.2)


(61.8)

Administrative expenses, excluding exceptional items




(514.9)


(540.9)

Exceptional administrative expenses:

6






- Restructuring charges




(31.6)


(14.9)

- Impairment of assets

6,7



(2,007.7)


(1,588.7)

Operating loss




(1,909.5)


(1,517.5)








Finance costs




(137.7)


(159.5)

Finance income:







- Excluding exceptional gains




10.7


6.8 

- Exceptional gains

6



39.3


253.1 

Net finance (costs) income




(87.7)


100.4 

Loss before taxation




(1,997.2)


(1,417.1)

Taxation:

4






- Tax credit (charge) on profit,
 excluding exceptional tax credits




0.5


(41.7)

- Exceptional tax credits

6



178.9


269.9 

Loss for the twelve months




(1,817.8)


(1,188.9)








Basic earnings per share (pence)




(77.1)


(51.1)

Diluted earnings per share (pence)




(77.1)


(51.1)

 

 

Group statement of comprehensive income

Twelve months to 31 March





£m

Notes



2013


2012








Loss for the twelve months




(1,817.8)


(1,188.9)








Exchange gain (loss) on
translation of foreign operations




3.1


(9.7)

Actuarial gain (loss) on
defined benefit pension schemes

16



17.4


(47.9)

Unwinding the reserve for fair value of
financial instruments used as hedges




12.5


11.1 

Tax effect of net (gains) losses not
recognised in the income statement

4



(5.4)


8.5 

Comprehensive income (loss) not
recognised in the income statement




27.6


(38.0)

Total comprehensive loss for the twelve months




(1,790.2)


(1,226.9)








 

 

See notes to the financial information for additional details.

Group statement of cash flows

Twelve months to 31 March







£m

Notes



2013


2012








Net cash generated from operating activities







Cash generated from operations




311.8


507.9 

Interest paid




(41.9)


(137.7)

Interest received




1.6


2.2 

Net corporate income tax refunded (paid)




11.1


(8.5)

Net cash generated from operating activities




282.6


363.9 








Cash flows from investing activities







Purchase of software, property,
plant and equipment

 

8



(47.7)


(52.4)

Purchase of subsidiary undertakings,
net of cash acquired

 

9



(17.6)


(12.6)

Net cash used in investing activities




(65.3)


(65.0)

Free cash flow




217.3


298.9 








Cash flows from financing activities







Proceeds from issuance of ordinary shares




-


0.6 

Purchase of own shares




-


(0.1)

Repayment of borrowings at par




(107.0)


(185.0)

Financing fees paid




(16.6)


(20.5)

Cash paid on debt repaid or purchased below par




(25.2)


(159.5)

Net cash used in financing activities




(148.8)


(364.5)

Net increase (decrease) in cash and cash equivalents




68.5


(65.6)








Cash and cash equivalents at beginning of the period




134.6


200.5 

Exchange gain (loss) on cash and cash equivalents




8.0


(0.3)

Cash and cash equivalents at period end




211.1


134.6 








Cash generated from operations







Loss for the twelve months




(1,817.8)


(1,188.9)

Adjustments for:







Tax




(179.4)


(228.2)

Finance income




(50.0)


(259.9)

Finance costs




137.7


159.5 

Depreciation of property, plant and
equipment and amortisation of software




83.3


71.6 

Amortisation of other acquired intangibles




69.9


89.4 

Impairment of goodwill and other intangibles




2,007.7


1,588.7 

Changes in working capital:







Inventories and directories in development




4.4


220.9 

Trade and other receivables




128.0


193.7 

Trade and other payables




(78.9)


(149.4)

Share based payments and other




6.9


10.5 

Cash generated from operations




311.8


507.9 








 

 

See notes to the financial information for additional details.

Group balance sheet

At 31 March






£m

Notes


2013


2012

Non-current assets






Goodwill

10


350.5 


1,909.9 

Other intangible assets

11


196.4 


637.7 

Property, plant and equipment

12


77.2 


86.5 

Deferred tax assets



21.4 


48.0 

Retirement benefit surplus

16


46.9 


9.4 

Investment and other assets



10.1 


9.1 

Total non-current assets



702.5 


2,700.6 







Current assets






Inventory



7.5 


11.7 

Trade and other receivables

13


474.5 


598.3 

Cash and cash equivalents

14


211.1 


134.6 

Total current assets



693.1 


744.6 







Current liabilities






Financial liabilities - loans
and other borrowings

14


(2,260.8)


(169.8)

Financial liabilities - derivative
financial instruments




(4.0)

Accrued interest



(59.8)


(1.6)

UK corporation and foreign income tax



(113.2) 


(126.9)

Trade and other payables

15


(339.6) 


(394.1)

Total current liabilities



(2,773.4)


(696.4)

Net current (liabilities) assets



(2,080.3)


48.2 







Non-current liabilities






Financial liabilities - loans
and other borrowings

14



(2,165.2)

Deferred tax liabilities



(89.0)


(271.6)

Trade and other payables

15


(18.9)


(14.4)

Total non-current liabilities



(107.9)


(2,451.2)

Net (liabilities) assets



(1,485.7)


297.6 







Capital and reserves attributable to owners






Share capital



1,879.5 


1,870.0 

Other reserves



217.0 


191.7 

Accumulated deficit



(3,582.2)


(1,764.1)

Total equity



(1,485.7)


297.6 







 

 

See notes to the financial information for additional details.

 

Group statement of changes in equity

Twelve months to 31 March 2013







Attributable to owners

 

£m


Share

capital


Other reserves(1)


Accumulated deficit


 

Total

Balance at 31 March 2012


1,870.0 


191.7 


(1,764.1)


297.6 

Loss on ordinary activities after taxation


-   


-   


(1,817.8)


(1,817.8)

Comprehensive income not
recognised in the income statement


-   


27.6 


-   


27.6 

Total comprehensive income (loss) for the twelve months


-   


27.6 


(1,817.8)


(1,790.2)

Value of services provided
in return for share based payments


-   


6.9 


-   


6.9 

Treasury shares issued to employees


9.5 


(9.2)


(0.3)




9.5 


25.3 


(1,818.1)


(1,783.3)

Balance at 31 March 2013


1,879.5 


217.0 


(3,582.2)


(1,485.7)










 

 

Twelve months to 31 March 2012







Attributable to owners

 

£m


Share

Capital


Other reserves(1)


Accumulated deficit


 

Total

Balance at 31 March 2011


1,858.2 


229.1 


(573.8)


1,513.5 

Loss on ordinary activities after taxation


-   


-   


(1,188.9)


(1,188.9)

Comprehensive loss not
recognised in the income statement


-   


(38.0)


-   


(38.0)

Total comprehensive loss
for the twelve months


-   


(38.0)


(1,188.9)


(1,226.9)

Value of services provided
in return for share based payments


-   


10.5 


-   


10.5 

Own shares purchased by ESOP trust


(0.1)


-   


-   


(0.1)

Ordinary share capital issued to employees


1.0 


(0.4)


-   


0.6 

Treasury shares issued to employees


10.9 


(9.5)


(1.4)


-   



11.8 


(37.4)


(1,190.3)


(1,215.9) 

Balance at 31 March 2012


1,870.0 


191.7 


(1,764.1)


297.6 










(1) Cumulative foreign currency gains attributable to owners at 31 March 2013 are £309.1m (31 March 2012 - £303.0m gain).

 

See notes to the financial information for additional details.

 

Notes to the financial information

1. Nature of report

This document does not constitute an annual financial report, half year report, second interim report, preliminary announcement or interim management statement (as defined in the Listing or the Disclosure and Transparency Rules) in respect of the twelve month period to 31 March 2013 or any part of that period. The unaudited consolidated financial information contained herein does not constitute statutory financial statements within the meaning of section 434 of the Companies Act 2006.

As noted in RNS announcements made by the Group today, hibu plc will be placed into administration if the restructuring takes place as agreed with the CoCom. The directors therefore are not able to make any assertions regarding the basis of the presentation of the financial information for the twelve months to 31 March 2013. The financial information does not include all adjustments that would be required if the businesses or the Group in its current structure were unable to continue as a going concern. The financial information is not audited and only serves as a detailed trading update of the businesses on a like-for-like basis in comparison with the year ended 31 March 2012, presented in such a way that stakeholders can understand the results.

The preparation of the consolidated financial information requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial information and the reported amounts of income and expenditure during the period. Actual results could differ from those estimates. Estimates are used principally when accounting for doubtful debts, depreciation, retirement benefits, acquisitions, impairment testing and taxation.

Where change at constant currency is stated in this document it states the change in the current period compared with the previous period as if the current period results were translated at the same exchange rates as those used to translate the results for the previous period. Figures reported at constant exchange rates are stated at the same exchange rates as those used to translate the comparative figures for the previous period. Exchange impact is the difference between the results reported at constant exchange rates and the results reported using current period exchange rates. The average effective exchange rates for the twelve months to 31 March 2013 were $1.58: £1.00 and €1.23: £1.00 as compared to $1.59: £1.00 and €1.16: £1.00 for the same period last year.

Readers are advised to read the Risk Statement beginning on page 5.

 

2. Revenue

Twelve months to 31 March





Change

£m, unless noted otherwise

2013


2012

Reporting

currency

Constant

currency





%

US

727.2 


834.0 

(12.8)

(13.8)

UK

353.2 


441.2 

(20.0)

(20.0)

Spain

145.6 


215.1 

(32.3)

(28.3)

Latin America

121.4 


119.6 

1.5 

5.2 

Group revenue

1,347.4 


1,609.9 

(16.3)

(16.0)







Print and other directory services

902.3 


1,148.5 

(21.4)

(21.2)

Digital directories

270.8 


327.0 

(17.2)

(16.5)

Other digital services

174.3 


134.4 

29.7 

29.7 

Group revenue

1,347.4 


1,609.9 

(16.3)

(16.0)







3. EBITDA(1)

Twelve months to 31 March





Change

£m, unless noted otherwise

2013


2012

Reporting

currency

Constant

currency





%

%

US

160.7 


236.8 

(32.1)

(33.0)

UK

52.2 


125.2 

(58.3)

(58.9)

Spain

45.7 


64.1 

(28.7)

(24.0)

Latin America

24.4 


35.2 

(30.7)

(29.0)

Group EBITDA

283.0 


461.3 

(38.7)

(38.5)

 

(1)       EBITDA and operating profit are presented on the basis of where revenues and costs are managed and may not reflect the legal location of revenue and costs.

 

4. Taxation

The tax credit for the twelve months is different from the standard rate of corporation tax in the United Kingdom of 24% (2012 - 26%). The differences are explained below:

Twelve months to 31 March



£m


2013 


2012 

Loss before tax


(1,997.2)


(1,417.1)






Loss before tax multiplied by the standard rate of corporation tax in the United Kingdom


(479.3)


(368.4)

Effects of:





Non-deductible impairment of goodwill and intangible assets


421.0 


170.2 

Differing tax rates on foreign earnings


(153.1)


(102.2)

Deferred tax assets not recognised


22.5 


72.1 

Adjustments in respect of prior years


13.6 


(6.2)

Deferred tax effect of tax rate changes


(0.3)


1.5 

Other


(3.8) 


4.8 

Tax credit on loss before tax


(179.4)


(228.2)

Effective tax rate on loss before tax(1)


9.0%


16.1%






(1)The effective tax rates in 2012 and 2013 have been significantly affected by non-tax deductible impairments of goodwill and intangible assets.

Taxation (charged) credited directly to equity is as follows:

Twelve months to 31 March



£m


2013 


2012 

Current tax on actuarial gains losses



4.4 

Deferred tax on actuarial (gains) losses


(4.3)


7.9 

Deferred tax on fair valuations of
financial instruments used as hedges


(1.1)


(3.8)

Total taxation recorded in equity


(5.4)


8.5 

 

5. Adjusted earnings

£m unless noted otherwise

Statutory

Exceptional items(1)

Other items(2)

Adjusted

Twelve months to 31 March 2013





Operating (loss) profit

(1,909.5)

2,039.3 

-  

129.8 

Amortisation of acquired intangibles

-   

69.9 

69.9 

Net finance costs 

(87.7)

(39.3)

-  

(127.0)

Group (loss) profit before tax 

(1,997.2)

2,000.0 

69.9 

72.7 

Taxation 

179.4

(178.9)

(24.4)

(23.9)

Group (loss) profit after tax

(1,817.8)

1,821.1 

45.5 

48.8 

 

 

£m unless noted otherwise

Statutory

Exceptional items(1)

Other items(2)

Adjusted

Year to 31 March 2012





Operating (loss) profit 

(1,517.5)

1,817.8 

-   

300.3 

Amortisation of acquired intangibles

-   

-   

89.4 

89.4 

Net finance costs 

100.4 

(253.1)

1.0 

(151.7)

Group (loss) profit before tax 

(1,417.1)

1,564.7 

90.4 

238.0 

Taxation 

228.2 

(269.9)

(28.3)

(70.0)

Group (loss) profit after tax

(1,188.9)

1,294.8 

62.1 

168.0 

(1)  Details of exceptional items are set out in note 6.

(2)  Other items include amortisation of acquired intangibles and in 2012 the fair valuation charge for the time value of interest rate caps taken directly to the Income Statement.

6. Exceptional items

Exceptional items are transactions which, by virtue of their incidence, size or a combination of both, are disclosed separately. Exceptional items comprise the following:

Twelve months to 31 March


£m

2013 


2012

Restructuring charges and strategy implementation

31.6 


14.9 

Directories in development written off through cost of sales(1)


214.2 

Exceptional expenses in Group EBITDA

31.6 


229.1 

Impairment of goodwill and other intangibles (note 7)

2,007.7 


1,588.7 

Gain on debt settlement/buy back

(39.3)


(253.1)

Net exceptional expenses in Group loss before tax

2,000.0 


1,564.7 

Net tax credits(2)

(178.9)


(269.9)

Net exceptional expenses in Group loss after tax

1,821.1 


1,294.8 

(1)  Capitalised sales costs in directories in development were written off as the transformation to the digital model means the deferral of sales costs is less appropriate and more difficult to reliably calculate.

(2)  Net tax credits primarily arose on exceptional charges listed above and are net of tax charges on the debt settlement/buybacks and derecognised deferred tax assets.

7. Impairments

Goodwill is not amortised but is tested, at least annually, for impairment. The value of each cash generating unit is determined and compared with its carrying value to determine whether the carrying value is impaired. The valuation is based on certain assumptions, including future revenue and profit growth, which can change the conclusion on whether carrying value is impaired. The impairment loss is firstly applied against goodwill and, if it exceeds the amount of goodwill, then secondly the excess is allocated to other long-lived intangible assets followed by an allocation across other assets if required.

During the twelve months to 31 March 2012 and 2013 the Group recognised the following net impairment losses:

Twelve months to 31 March 2013

(£m)

US

UK

Spain

Argentina

Chile

Peru

Group

Goodwill

(912.2)

(702.7)

-  

(15.5)

-

-

(1,630.4)

Other intangible assets

-   

-   

(317.3)

-

(53.4)

-

(370.7)

Other assets

-   

-   

-  

-

(6.6)

-

(6.6)

Exceptional charge before taxation

(912.2)

(702.7)

(317.3)

(15.5)

(60.0)

-

(2007.7)

Related taxation accounts

105.2 

-   

95.1 

-

17.0 

-

217.3 

Net exceptional charge

(807.0)

(702.7)

(222.2)

(15.5)

(43.0)

-

(1,790.4)

 

Year to 31 March 2012

(£m)

US

UK

Spain

Argentina

Chile

Peru

Group

Goodwill

(607.6)

(221.4)

(256.9)

-

(78.6)

(44.7)

(1,209.2)

Other intangible assets

-

-

(359.5)

-

(20.0)

-

(379.5)

Exceptional charge before taxation

(607.6)

(221.4)

(616.4)

(98.6)

(44.7)

(1,588.7)

Related taxation accounts

149.5

4.7

121.8

-

7.0

-

283.0

Net exceptional charge

(458.1)

(216.7)

(494.6)

-

(91.6)

(44.7)

(1,305.7)

In accordance with IAS 36, future financial results expected for all group operations were reduced period on period in the calculation to reflect the difficult economic outlook in all of the Group's markets, the latest revenue trends for the legacy directory products and the fact that the expected revenue effect of the new strategy is delayed and not yet confirmed. At 31 March 2013 the fair values of the operations in the US, UK, Spain, Argentina and Chile equalled their carrying values and consequently, any adverse change in a key assumption with all other assumptions held unchanged would cause recognition of further impairment losses. The carrying value of the operations in Peru has not been written down, because the estimated recoverable amount of operations in that country exceeded that carrying value.

If the expected benefits in the strategic plan, including significantly higher revenues than the Group has historically achieved, either run later or in aggregate deliver less new value than currently expected, then the directors may need to include further impairment charges. However, at this stage it is uncertain and cannot be quantified. The value of goodwill is also dependent on the Group's refinancing and the current strategy may have to change, which could materially affect the carrying value of each cash generating unit.

8. Capital expenditure

Twelve months to 31 March


£m

2013


2012

Capital expenditure on software, other intangible assets,
  property, plant and equipment

46.0 


47.4 

Decrease in accrued capital expenditure

1.7 


5.0 

Cash paid for capital expenditure

47.7 


52.4 

Proceeds on the sale of property, plant and equipment were £nil in the twelve months to 31 March 2013 and 2012. Capital expenditure committed at 31 March 2013 was £3.0m (2012 - £5.9m).

9. Acquisitions and disposals

In the twelve months to 31 March 2013, hibu paid £18.0m for Moonfruit in the UK with recorded net assets of £0.1m. Goodwill of £10.6m was attributable to the expected future synergies, the workforces acquired and the expected future growth of the businesses.

In the year ended 31 March 2012, hibu paid $19.4m (£12.1m) for Znode in the US with recorded net assets of £0.6m. Goodwill of £4.4m was attributable to the expected future synergies, the workforces acquired and the expected future growth of the businesses.

Cash flow

A reconciliation of cash paid on acquisitions, including deferred payments for prior year acquisitions, to the cash flow on page 10 is as follows:

Twelve months to 31 March




£m

2013


2012 

Cost of acquisitions in the twelve months, net of cash acquired

17.6 


11.9 

Payments in period for amounts
deferred on prior period acquisitions

Net cash outflow in period


-   


0.7 

17.6 


12.6 







hibu did not make any disposals in any of the periods presented in this financial information.

10. Goodwill

At 31 March




£m

2013


2012

Opening net book value at 1 April 2012 and 2011

1,909.9 


3,123.9 

Impairment (note 7)

(1,630.4)


(1,209.2)

Acquisitions (note 9)

10.6 


4.4 

Currency movements

60.4 


(9.2)

Net book value at period end

350.5 


1,909.9 





Goodwill is not amortised but is tested, at least annually, for impairment. See note 7.

11. Other intangible assets

At 31 March




£m

2013


2012

Opening net book value at 1 April 2012 and 2011

637.7 


1,157.0 

Impairment (note 7)

(370.7)


(379.5)

Acquisitions

9.5 


11.6 

Additions

31.9 


33.8 

Disposals and write-offs

-   


(0.6)

Amortisation

(130.1)


(134.8)

Currency movements

18.1 


(49.8)

Net book value at period end

196.4 


637.7 





12. Property, plant and equipment

At 31 March




£m

2013


2012

Opening net book value at 1 April 2012 and 2011

86.5 


100.5 

Additions

14.1 


13.6 

Acquisitions

0.1 


0.1 

Disposals, write-offs and impairment

(5.4)


-   

Depreciation

(23.1)


(26.2)

Currency movements

5.0 


(1.5)

Net book value at period end

77.2 


86.5 





13. Trade and other receivables

At 31 March




£m

2013


2012

Net trade receivables (1)



360.6 


464.1 

Net accrued income (1)



64.1 


68.2 

Corporate income tax recoverable



4.9 


29.4 

Prepayments (2)



38.1 


18.9 

Other receivables



6.8 


17.7 

Total trade and other receivables



474.5 


598.3 







(1)  The Group's trade receivables and accrued income are stated after deducting a provision of £140.1m (March 2012 - £149.8m) for bad and doubtful debts.

(2)  The Group's prepayments include £18.2m (March 2012 - £nil) in respect of fees relating to the ongoing refinancing of the extended 2009 debt facility.

14. Loans and other borrowings, net debt

At 31 March




£m

2013


2012

Amounts falling due within twelve months




Term loans under senior credit facilities(1)

2,258.4 


167.1 

Net obligations under finance
leases and other short term borrowings

2.4 


2.7 

Total amounts falling due within twelve months

2,260.8 


169.8 

Amounts falling due after more than twelve months




Term loans under senior credit facilities(1)


2,165.2 

Net loans and other borrowings

2,260.8 


2,335.0 

Cash and cash equivalents

(211.1)


(134.6)

Net debt at period end

2,049.7 


2,200.4 





(1)  Balances are shown net of deferred financing fees of £32.9m (March 2012 - £62.0m).

On 25 October 2012 the Group cancelled the revolving credit facility and announced that it would be suspending all further payments of principal and interest to lenders until such time as a restructuring of its balance sheet can be concluded. As a result, the amounts due for payment under the old 2006 lending were settled for less than face value and amounts due under the 2009 lending facility have not been paid. This is an event of default and all amounts due under the extended 2009 lending facilities became, and are presented, as current.

hibu has been in negotiations with a co-ordinating committee of the lenders (the "CoCom") under its facilities agreement dated 30 November 2009 (as amended) (the "2009 lenders") to represent the interests of the 2009 lenders during the process of determining an appropriate new capital structure. See the Risk Statement beginning on page 5.

The movement in net debt for the Twelve months to 31 March 2013 and 2012 arose as follows:

Year to 31 March




£m

2013


2012

At 1 April 2012 and 2011

2,200.4 


2,765.1 

Free cash flow

(217.3)


(298.9)

Gain on debt buyback


(253.1)

Settlement of debt below face value

(39.3)


Currency movements

60.9 


(36.7)

Amortisation of financing fees

29.8 


24.5 

Debt restructuring fees classified as prepayments

15.2 


Purchase of own shares


0.1 

Proceeds from shares issued, net of expenses


(0.6)

At period end

2,049.7 


2,200.4 

Amounts outstanding under the extended 2009 debt facilities at 31 March 2013 were as follows:

At 31 March

A tranche

B tranche



 



extended facilities


extended facilities

 

Other

 

Total

£m







Pounds sterling


553.4 


-   

-   

553.4 

US dollars (1)


467.8 


725.6 

2.3 

1,195.7 

Euro (1)


314.1 


230.4 

0.1 

544.6 

Total principal


1,335.3 


956.0 

2.4 

2,293.7 

Deferred financing fees






(32.9)

Cash and cash equivalents






(211.1)

Net debt at period end






2,049.7








(1)  The closing rate for the US dollar at 31 March 2013 was $1.52 to £1.00 and for the Euro was €1.18 to £1.00.

The extended 2009 facilities contain covenants over net cash interest cover and debt cover. However, they are not disclosed here as they are no longer relevant in the current situation, where hibu is in default under the 2009 lending facility.

15. Trade and other payables

At 31 March




£m

2013 


2012

Amounts falling due within twelve months




Trade payables

37.0 


64.3 

Other taxation and social security

8.1 


6.9 

Accruals and other payables

185.8 


178.7 

Deferred income

108.7 


144.2 

Trade and other payables
falling due within twelve months

339.6 


394.1 

Amounts falling due after more than twelve months




Accruals and other payables

18.9 


14.4 

Trade and other payables
falling due after more than twelve months

18.9 


14.4 

Total trade and other payables

358.5 


408.5 





16. Retirement benefits

At 31 March




£m

2013


2012

Net retirement benefits surplus at 1 April 2012 and 2011

9.4 


37.3 

Net actuarial gain (loss) on defined benefit pension schemes

17.4 


(47.9)

Contributions in excess of charges

20.1 


20.0 

Net movement in retirement benefits surplus

37.5 


(27.9)

Net retirement benefits surplus at period end

46.9 


9.4 





The net actuarial gain in the twelve month period to 31 March 2013 was mostly the result of asset returns being better than those assumed for the period. There was also a small experience gain from the inflationary adjustments to benefits being lower than expected.  These gains were offset by the effect of updating the long-term mortality rates. The reason for the net actuarial loss in the year ended 31 March 2012 was primarily a 60 basis point decrease in real interest rates, thus increasing estimated liabilities, partially offset by an increase in the value of assets held.

The Group is required to agree its contributions to the pension plan with the trustees based on actuarial advice. Such agreement must be reached in a way that complies with the UK Pension Regulator's "Scheme Specific Funding" guidance. Any failure to agree would result in the intervention of the Pensions Regulator and, possibly, an imposed settlement.

As part of the overall financial restructuring of the Group, hibu has agreed with the Pension Trustees the valuations of the Pension Fund as at April 2011 and April 2013 and a schedule of contributions to the fund for the five years following completion of the restructuring. That settlement is subject to clearance from the Pensions Regulator and the approval of lenders as part of the restructuring proposals.

17. Financial commitments, litigation and contingent liabilities

At 31 March 2013, hibu has no material unrecorded litigation settlement obligations.

Following headcount reductions in the three months ended 31 March 2013, the Group has an estimated £18.5m of restructuring provisions expensed but not yet paid at 31 March 2013.

There are no contingent liabilities or guarantees other than those referred to above and those arising in the ordinary course of the Group's business. No material losses are anticipated on liabilities arising in the ordinary course of business.

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
FR SELEELFDSEFW

a d v e r t i s e m e n t