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