TIDMMANX
RNS Number : 4666T
Manx Telecom PLC
30 March 2016
Manx Telecom Plc
Results for the year ended 31 December 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 year ended 31 December 2015.
Financial Highlights
- Revenues up 0.4% to GBP79.6m (2014: GBP79.3m)
-- Fixed Line, Broadband and Data revenues grew 2.2%, driven by
good take-up of high speed broadband
-- Mobile revenues increased 9.3% boosted by 4G adoption and mobile data revenues
-- Strong growth in Data Centre revenues, up 20.3%, driven by one-off equipment sales
-- Global Solutions revenues declined 15.3% in line with
expectations, due to lower SMS termination revenue, partially
offset by higher core product revenues
- Underlying EBITDA increased 2.0% to GBP27.7m (2014: GBP27.1m)
- Underlying Profit Before Tax increased 27.9% to GBP16.6m (2014: GBP12.9m)
- Underlying diluted EPS up 19.4% to 14.53p (2014: 12.17p)
- Continued strong cash generation with operational cash flow at
GBP25.4m (2014: GBP27.0m) equating to cash conversion from
underlying EBITDA of 92%
- Net debt at the period end of GBP52.2m (2014: GBP53.7m),
equivalent to net debt/EBITDA ratio of 1.9x
- Final dividend of 6.9p (2014: 6.6p) making 10.4p for the full
year (2014: 9.9p), in line with the Company's progressive dividend
policy
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
- Expansion of data centres continued with completion of phase 2
of the Greenhill Data Centre ("GDC") and its anchor tenant, in
place from October 2015
Gary Lamb, Chief Executive Officer, said:
"I am pleased to report a solid performance for the full year
which was in line with the Board's expectations. The highly cash
generative core business of fixed line and mobile services
continues to perform strongly, with revenue growth driven by good
take up of our high speed broadband products and an increase in the
number of mobile customers returning to Manx Telecom following our
investment in 4G. During the year we completed the development of
phase 2 of our Greenhill Data Centre and our anchor tenant moved in
during Q4. We also made a number of changes to strengthen our
Global Solutions business during H2 which has resulted in an
increase in sales momentum as we have entered 2016.
"Looking ahead, we remain confident in the outlook for the
group, reflected in our commitment to maintain our progressive
dividend policy. We have developed a highly attractive market
proposition, and I was delighted to renew our long term
relationship with the Government of the Isle of Man. We continue to
generate strong cash flow, which enables us to create value for
shareholders, while continuing to invest in our infrastructure
projects at an average of GBP10m per year over the last 3
years."
Reported and Underlying Reported Change
underlying results results results* in underlying
results
2015 2014 2014
GBPm GBPm GBPm
Revenue 79.6 79.3 79.3 0.4%
EBITDA 27.7 27.1 32.7 2.0%
Margin 34.7% 34.2% 41.3%
Operating Profit 18.6 17.6 23.2 5.5%
Margin 23.3% 22.2% 29.3%
Cash generated from operations 25.4 27.0 27.0 (5.8%)
Capital Expenditure (excl
intangibles) 7.9 12.4 12.4
Free cash flow 15.6 14.8 14.8 5.1%
Profit before and after
tax 16.6 12.9 5.7 27.9%
Basic earnings per share 14.65p 12.22p 5.40p
Diluted earnings per
share 14.53p 12.17p 5.37p 19.4%
Final dividend per share 6.90p 6.60p 6.60p
* 2014 after the listing and associated refinancing costs,
pension scheme reorganisation and equipment impairment
For further enquiries, please contact:
Manx Telecom plc +44 (0) 1624 636400
Gary Lamb, Chief Executive Officer
Danny Bakhshi, Chief Financial Officer
Liberum Capital (Nominated Adviser and Corporate
Broker) +44 (0)20 3100 2000
Steve Pearce
Steve Tredget
Oakley Capital (Financial Adviser) +44 (0) 20 7766 6900
Christian Maher
Victoria Boxall
Powerscourt Group (Public Relations) +44 (0) 20 7250 1446
Simon Compton
Peter Ogden
Harriet O'Reilly
Chairman's Statement
Introduction
I am pleased to report a positive set of results for 2015 which
are in line with the Board's expectations. The core business
performed particularly well with good growth from our broadband and
mobile businesses.
Results
Revenue grew by 0.4% in the year to GBP79.6m and underlying
EBITDA was 2.0% higher than last year at GBP27.7m. Cash generation
from operating activities was strong at GBP25.4m and we continue to
make significant investment to support future growth.
Underlying profit before tax was 27.9% higher at GBP16.6m (2014:
GBP12.9m). This was due to the higher level of EBITDA coupled with
lower interest costs as a result of reduced debt and improved terms
under the renegotiated debt facility. There was also lower
depreciation due to mobile asset decommissioning in 2014.
Underlying diluted earnings per share increased by 19.4% to
14.5p.
Trading Performance
It was a busy year operationally for the business, with the
introduction of several new exciting products for our customers and
the retention of key strategic customers for the group. 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, and this has been adopted
by 26% of the Ultima customer base by the end of the year. We also
launched our 4G pay as you go service, which provides speeds up to
10 times faster than the previous 3G network service which has
helped to drive an increase in our prepaid data revenue by over 50%
compared to last year.
In February 2015, we announced 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 announced in April that the Isle of Man
Government would be the anchor tenant for Phase 1 of the GDC. In
Q4, we completed Phase 2 at the GDC, before welcoming an anchor
tenant into the facility in October. Both facilities are now over
50% occupied and our focus is on continuing to attract further
co-location and managed service business into our data centre
portfolio.
As expected, Global Solutions experienced revenue headwinds at
the start of 2015 as a result of a reduction in termination
revenues. Following targeted investment and the implementation of
specific initiatives, including additional resource, we saw an
improvement in performance in the second half, with momentum
continuing into the current financial year.
Our People
The solid performance during 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 and welcomed Gary Lamb, our former Chief Financial
Officer, following a thorough selection process into the role of
Chief Executive Officer. We have recently announced the appointment
of Danny Bakhshi as Chief Financial Officer, who joined us on 1
February 2016. Danny has an excellent track record in the industry
and will be a valuable addition to the Board.
Dividend
The Board has declared a full year dividend of 10.4p per share
(2014: 9.9p), and will pay a final dividend of 6.9p on 24 June
2016. The shares will trade ex-dividend on 26 May 2016 and will
have a record date of 27 May 2016.
Outlook
We will continue to follow the dual strategy of strengthening
our position in our core market on the Isle of Man through high
quality customer service and value for money offerings, whilst
looking for growth on and off island by exploiting our data centre
capacity and leveraging our mobile technology platform.
The completion of Phase 2 at the GDC provides additional
capacity to the data centre business and we will focus on
increasing occupancy by using our co-location and managed services
to attract new customers looking for a full-service offering.
We have seen a good start to the year in Global Solutions where
we have continued to build a good pipeline of business, continuing
the momentum seen throughout the second half of 2015.
Steady performance during the period, combined with the solid
start to trading this year, confirming our confidence in the
Company's prospects for the year. This, together with our outlook
for continued strong cash generation, allows us to reiterate our
progressive dividend policy.
CEO Review
Overview
(MORE TO FOLLOW) Dow Jones Newswires
March 30, 2016 02:01 ET (06:01 GMT)
Following my appointment as Chief Executive Officer on 1 July
2015, I am delighted to present the full year results, after
another good twelve month period for the business. It has been a
busy year with a number of achievements to report.
The Company continues to provide a wide range of
telecommunications services to consumers, businesses and the public
sector on the Isle of Man, and we pride ourselves on our excellent
customer service. Our core domestic business performed well during
the year, with growth in 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 year.
The Data Centre business has seen strong revenue growth during
the period. This reflects a higher than usual level of equipment
sales, as customers moved into the first phase of the GDC (GDC 1).
We completed the second phase of our GDC (GDC 2) and welcomed our
anchor tenant into the facility in the fourth quarter. Both GDC 1
and GDC 2 are now over 50% occupied and we continue to focus on
attracting further co-location and managed service business into
the portfolio.
The Global Solutions business has seen good growth in its core
products, M2M, Strongest Signal Mobile (branded Chameleon) and the
international traveler market, which helped to partially offset the
expected 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 an anchor
tenant for phase 2 of our Greenhill data centre development are
testament to the hard work of our teams on the ground and strong
business partnerships on the Isle of Man.
The Isle of Man economy continues to perform well, with
unemployment at 1.9%, 31 years of unbroken GDP growth and economic
growth forecast to continue. We look to support the Isle of Man
Government in attracting business to the Island, and our
telecommunications infrastructure and the services we provide form
an important part of the Island's continued success.
The Company was also 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 0.4% to GBP79.6m, driven by
increases in Fixed, Broadband and Data, Mobile and Data Centre
services, partially offset by a decline in Global Solutions
revenues.
Underlying EBITDA was 2.0% higher than last year at GBP27.7m and
the margin was maintained at 34.7% (2014: 34.2%). A reduction in
the lower margin, wholesale SMS and voice elements of the Global
Solutions business was partly offset by a high level of equipment
sales and increases in the broadband and mobile business.
Cash generation has remained strong with cash generated from
operations of GBP25.4m (2014: GBP27.0m), equating to cash
conversion of 92% of EBITDA.
Underlying profit before tax increased by 27.9% to GBP16.6m
(2014: GBP12.9m) primarily due to the increased EBITDA, lower
interest costs (GBP1.3m reduction), lower depreciation (GBP0.4m
reduction) and a positive movement in the fair value of interest
rate swaps (GBP1.6m positive variance to prior year). This
translates into a 19.4% increase in underlying diluted earnings per
share to 14.53p (2014: 12.17p).
We continue to invest in capital projects on the Isle of Man and
have spent GBP8.0m (2014: GBP12.6m) in the year. This includes the
development of the second phase of the GDC and the upgrade of our
CRM, billing and charging platform which will enhance our consumer
offering on the Isle of Man from 2016.
Revenue 2015 % 2014 % YonY
------------------
GBP'000 Total Revenue GBP'000 Total %
Revenue
------------------ -------- -------------- -------- --------- -------
Fixed, Broadband
and Data 32,027 40.2% 31,338 39.5% 2.2%
------------------ -------- -------------- -------- --------- -------
Mobile 20,058 25.2% 18,357 23.2% 9.3%
------------------ -------- -------------- -------- --------- -------
Data Centre 7,951 10.0% 6,607 8.3% 20.3%
------------------ -------- -------------- -------- --------- -------
Global Solutions 14,122 17.7% 16,669 21.0% -15.3%
------------------ -------- -------------- -------- --------- -------
Other 5,440 6.8% 6,283 7.9% -13.4%
------------------ -------- -------------- -------- --------- -------
Total Revenue 79,598 79,254 0.4%
------------------ -------- -------------- -------- --------- -------
Fixed, Broadband and Data Services
Fixed, Broadband and Data Services provide fixed line voice,
broadband and connectivity services for customers, connecting
approximately 37,000 homes and 4,000 businesses on the Isle of Man.
Fixed, Broadband and Data is our largest business, representing 40%
of all Company revenues. In 2015 revenue increased by 2.2% to
GBP32m (2014: GBP31.3m).
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 remained flat in the year, as the
decline in fixed line usage was offset by line rental
increases.
We continue to roll out high speed VDSL broadband services (up
to 40mbps download) across the Island and now reach 91% of
households, and is now at almost 30% penetration. 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. The sale of Ultima and Ultima Plus has helped Broadband
revenues to increase by 4.3% to GBP8.7m.
Mobile
Mobile had a strong year, with revenue up 9.3% to GBP20.1m
(2014: GBP18.4m), driven primarily by increased inbound roaming
revenue and increased post paid contract revenue.
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.
By the end of 2015, we had approximately 34.5k pre-paid
customers (2014: 35.1k) and 30.1k post-paid customers (2014:
28.9k). The introduction of 4G and general up-selling of data
packages has contributed to a 2.0% increase in post-paid Average
Revenue Per User (ARPU) and 4.3% 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. The data centres at GDC and Douglas North are Tier III
designed 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).
During 2015 we completed the development of the second phase of
our Greenhill Data Centre and welcomed an anchor tenant into the
facility during the fourth quarter. Both GDC 1 and GDC 2 are now
over 50% occupied. Data centre revenues increased by 20.3% in the
period, to GBP8.0m (2014: GBP6.6m), however this was driven by
lower margin equipment sales as a result of new customers entering
GDC 1.
We have seen a trend towards co-location data centre business
and our focus is to secure more managed service business to better
utilise our investment.
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 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).
As expected, revenues declined in the period with turnover down
15.3% during the year to GBP14.1m, (2014: GBP16.7m) driven by the
decline in SMS termination revenue. A number of initiatives
including the addition of additional resource, helped to increase
revenues in the second half of the year and generate momentum into
2016. The higher margin core revenue from M2M and Chameleon,
increased by 20% during the year, helping to offset some of the
decline from reducing termination revenues, and supporting the
positive long term outlook for Global Solutions.
Other Revenues
Other revenues include the advertising revenue from our
telephone directory, hardware equipment sales, interconnection fees
and managed services.
Other revenue declined by 13.4% during the year to GBP5.4m
(2014: GBP6.3m). This was primarily due to lower equipment sales
and the expected decline in directory advertising revenues, which
accounted for 10% of the revenue decline in the period.
Financial review
(MORE TO FOLLOW) Dow Jones Newswires
March 30, 2016 02:01 ET (06:01 GMT)
Group revenue increased by 0.4% to GBP79.6m (2014: GBP79.3m),
with growth in our core on-island fixed, broadband and data
business, supplemented by good growth in our data centre business,
but offset by a decline in global solutions and other revenue
streams.
The fixed line, broadband and data business continued to perform
well, with steady revenue growth of 2.2% to GBP32.0m (2014:
GBP31.3m). The data centre business saw a significant increase in
revenue to GBP8.0m (2014: GBP6.6m), driven by increased equipment
sales. Mobile revenues also increased significantly in 2015 to
GBP20.1m (2014: GBP18.4m) driven by increased post paid contract
revenue, sales of mobile handsets and inbound roaming revenue.
Global Solutions had a challenging 2015 with full year revenue of
GBP14.1m (2014: GBP16.7m), a fall of 15.3%, as a result of a
decline in mobile termination rates. Some of this decline has been
offset by growth in the Chameleon product and international
traveller market. Other revenues were down 13.4% to GBP5.4m (2014:
GBP6.3m) due to one off revenues for equipment sales which were not
repeated from 2014 and declining revenue from directory sales.
The Group generated underlying EBITDA of GBP27.7m (2014:
GBP27.1m), in line with expectations, and up 2.0% on the previous
year. The Group's EBITDA margin increased 50bp to 34.7% (2014:
34.2%) due to good performance from the core business, and changing
business mix within Global Solutions towards more sustainable
products.
Depreciation and amortisation was GBP9.1m (2014: GBP9.5m), down
GBP0.4m primarily due to network assets being fully written down in
2014. This includes charges for network infrastructure (fixed
network, broadband network and mobile network) as well as IT
equipment and office equipment.
Underlying operating profit increased by 5.5% to GBP18.6m (2014:
GBP17.6m) due to the improvement in EBITDA and aided further by the
lower depreciation and amortisation charge.
Underlying profit before tax increased by 27.9% to GBP16.6m
(2014: GBP12.9m) primarily due to the higher EBITDA, lower
depreciation and lower interest charges due to improved terms
following the renegotiation of the lending facility effective from
30 June 2015.
Underlying diluted EPS was up 19.4%, in line with the Board's
expectations at 14.53p (2014: 12.17p).
The Company paid an interim dividend of 3.5p per share in
November 2015 and declared a final dividend for 2015 of 6.9p per
share on 30 March 2016 resulting in a full year dividend for 2015
of 10.4p per share, a 5% increase from 2014.
Costs
Costs of sales decreased by 2.7% in the year as a result of the
reduction in Global Solutions revenue and the associated 18.1%
reduction in roaming costs.
Administrative expenses increased by 25.4% to GBP29.1m (2014:
GBP23.2m) predominantly due to a one off credit of GBP7.0m in the
prior year arising from the closure of the defined benefit scheme
to future accrual. Adjusting for this, administration expenses
reduced by GBP1.1m, primarily due to various exceptional items in
2014, including a GBP0.6m impairment charge and the cost of
transferring members of the defined benefit pension scheme to the
defined contribution scheme (GBP0.8m). The main component of
administrative costs is staff, the cost of which decreased by 3.2%
in the period, including bonus payments.
Energy costs were up 4.6% during 2015 reflecting increased
occupancy of our new data centre. Mobile handset costs were 21.9%
higher due to significant increase in corporate customer sales,
whilst maintenance charges increased very slightly by less than
2%.
Net finance costs
Reduction in Net finance costs to GBP2.4m (2014: GBP8.4m) mainly
as a result of a GBP4.6m charge in 2014 against previously
capitalised transaction charges, following the changes to financing
arising from the IPO in February 2014. Included in this figure is
the cost of interest at GBP2.3m (2014: GBP3.3m), the reduction
being due to lower interest rates secured from the renegotiation of
external lending facilities. Interest payable on shareholder loan
notes reduced to nil (2014: GBP0.3m).
One off costs associated with the IPO and related restructuring,
charged to the income statement, were nil (2014: GBP8.0m).
We recorded an unrealised gain of GBP0.3m on interest rate swaps
due to increases in market interest rates since the prior year end.
No swaps have been exited during the year, therefore there are no
realised gains or losses.
Taxation
There is no corporate taxation payable on our profits for either
2015 and the comparative year. We have the benefit of an Isle of
Man 0% corporate tax rate.
Cash flow
Cash generated from operating activities decreased by 5.8% to
GBP25.4m (2014: GBP27.0m). This year on year reduction, despite the
increase in EBITDA, is due to a working capital outflow of GBP1.7m,
primarily due to large trade and roaming debtor balances at the
year end, compared to an inflow of GBP1.6m in 2014.
Our free cash flow after investing activities was 5.1% higher at
GBP15.6m (2014: GBP14.8m), out of which we serviced our borrowings
and paid our dividend to shareholders.
Capital expenditure
The 2015 capital expenditure, including intangibles, was GBP8.0m
(2014: GBP12.6m). Prior year included a GBP3.0m accrual for our 4G
mobile network relating to final payments due in 2015. Adjusting
for the 4G accrual, capital expenditure including intangibles for
current and prior year averaged GBP10.3m per year, in line with our
guidance.
Significant capital expenditure in the period included the
completion of Phase 2 of our new data centre in September 2015
which cost GBP2.7m, and GBP2.3m on fixed voice and mobile network
upgrades.
The remaining capital expenditure was spread across a number of
business areas including network enhancements, an upgrade to our
CRM, billing and charging platform and customer projects.
Balance sheet
Property, plant and equipment decreased during the year by
GBP1.1m to GBP64m. Capital additions were GBP7.9m (2014: GBP12.4m),
of which GBP2.7m related to GDC 2 and GBP2.3m on fixed and mobile
networks. Depreciation of GBP8.9m (2014: GBP9.3m) was lower than
last year by GBP0.4m.
We retain goodwill of GBP84.3m on the balance sheet arising from
the purchase of Manx Telecom from Telefónica in 2010, which is
robustly supported by current valuations.
The Group operates two pension schemes, a defined benefit
scheme, and a defined contribution plan. During 2014 the defined
benefit scheme was closed to future accruals, and all current
members transferred to a defined contributions scheme. Under
accounting standard IAS19 the defined benefit scheme is shown as an
asset of GBP0.4m (2014: GBP2.2m).
Current assets increased to GBP36.4m (2014: GBP32.7m). Cash held
at the end of the period, increased to GBP16.6m (2014: GBP15.2m).
Trade and other receivables increased by GBP4.3m, of which trade
receivables increased by GBP1.6m, due to late settlements of some
key trade debts and an increase in roaming debtors compared to
prior year.
Current liabilities reduced to GBP24.9m (2014: GBP26.5m) and
include a reduction in trade payables of GBP0.6m.
Non-current liabilities reduced to GBP69.6m (2014: GBP70.0m).
Interest bearing loans and borrowings were relatively unchanged at
GBP68.8m (2014: GBP68.9m). In September 2015 the Company entered an
interest rate swap which covered GBP50m of its banking debt
(GBP70m) from July 2018 through to its maturity in June 2020,
extending the period for which interest rates are hedged to match
the lending terms. The fair value of the previously existing
interest rate swaps was a GBP0.8m liability (2014: GBP1.0m), while
the new interest rate swap fair value was a GBP0.1m asset.
Net debt at the period end was GBP52.2m (2014: GBP53.7m), aided
by good cash generation, resulting in net debt to underlying EBITDA
of 1.9 times.
consolidated statement of comprehensive income
for the year ended 31 December 2015
2015 2014
Note GBP'000 GBP'000
====================================================== ===== ========= =========
Revenue 1 79,598 79,254
Cost of sales (31,943) (32,831)
====================================================== ===== ========= =========
Gross profit 47,655 46,423
------------------------------------------------------ ----- --------- ---------
Administrative expenses (29,080) (23,192)
Operating profit 2 18,575 23,231
------------------------------------------------------ ----- --------- ---------
Underlying EBITDA 27,654 27,101
Depreciation and amortisation (9,079) (9,490)
Underlying operating profit 18,575 17,611
Impairment of equipment 2 - (592)
Pension scheme reorganisation 2 - 6,212
Operating profit 18,575 23,231
---------
Other income 50 140
Financial income 170 72
Finance costs 3 (2,576) (8,437)
Listing expenses - (7,991)
Net profit/(loss) on interest rate swaps 334 (1,299)
====================================================== ===== ========= =========
Profit before tax 16,553 5,716
(MORE TO FOLLOW) Dow Jones Newswires
March 30, 2016 02:01 ET (06:01 GMT)
------------------------------------------------------ ----- --------- ---------
Taxation - -
Profit for the year attributable to the owners
of the Group 16,553 5,716
====================================================== ===== ========= =========
Underlying Profit before Tax 16,553 12,945
Impairment of equipment 2 - (592)
Pension scheme reorganisation 2 - 6,212
Release of capitalised loan transaction costs 2 - (4,567)
Refinancing costs - (291)
Listing expenses 2 - (7,991)
Profit before tax 16,553 5,716
------------------------------------------------------ ----- --------- ---------
Other comprehensive income - items that will never
be reclassified to profit or loss
Remeasurement of defined benefit pension scheme
asset (3,100) 800
====================================================== ===== ========= =========
Total comprehensive profit for the year attributable
to the owners of the Group 13,453 6,516
====================================================== ===== ========= =========
Earnings per share from continuing operations
Basic 4 14.65p 5.40p
Diluted 4 14.53p 5.37p
Underlying basic 4 14.65p 12.22p
Underlying diluted 4 14.53p 12.17p
------------------------------------------------------ ----- --------- ---------
The Directors consider that all results are derived from
continuing operations.
consolidated statement of financial position
as at 31 December 2015
Group Group
2015 2014
Note GBP'000 GBP'000
================================================ ====== ========= =========
Non-current assets
Property, plant and equipment 63,968 65,098
Goodwill 84,277 84,277
Intangible assets 364 516
Retirement benefit asset 400 2,200
Interest rate swaps 103 -
149,112 152,091
------------------------------------------------------- --------- ---------
Current assets
Inventories 594 794
Trade and other receivables 19,235 16,708
Cash and cash equivalents 16,601 15,156
36,430 32,658
------------------------------------------------------- --------- ---------
Current liabilities
Trade and other payables (24,933) (26,475)
(24,933) (26,475)
------------------------------------------------------- --------- ---------
Net current assets 11,497 6,183
-------------------------------------------------------- --------- ---------
Non-current liabilities
Interest-bearing loans and borrowings (68,785) (68,948)
Interest rate swaps (777) (1,008)
-------------------------------------------------------- --------- ---------
(69,562) (69,956)
------------------------------------------------------- --------- ---------
Net assets 91,047 88,318
-------------------------------------------------------- --------- ---------
Equity attributable to the owners of the Group
and Company
Share capital 226 226
Share premium 84,347 84,343
Retained earnings 6,474 3,749
-------------------------------------------------------- --------- ---------
Total equity 91,047 88,318
======================================================== ========= =========
consolidated statement of changes in equity
for the year ended 31 December 2015
Share Share Own Retained Total
capital premium shares earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
================================================ ========= ========= ========= ========== =========
Balance at 1 January 2014 100 - - 225 325
Total comprehensive profit for the year
Profit for the year - - - 5,716 5,716
Other comprehensive income - - - 800 800
================================================ ========= ========= ========= ========== =========
Total comprehensive profit for the year - - - 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 profit for the year
Profit for the year - - - 16,553 16,553
Other comprehensive (loss)/income - - - (3,100) (3,100)
================================================ ========= ========= ========= ========== =========
Total comprehensive profit for the year - - - 13,453 13,453
================================================ ========= ========= ========= ========== =========
Transactions with owners of the Group, recorded
directly in equity
Share-based payment transactions - - - 681 681
Issue of shares - 4 - - 4
Dividend paid - - - (11,409) (11,409)
================================================ ========= ========= ========= ========== =========
Total contributions by and distributions to the
owners of the Group - 4 - (10,728) (10,724)
================================================ ========= ========= ========= ========== =========
Balance at 31 December 2015 226 84,347 - 6,474 91,047
================================================ ========= ========= ========= ========== =========
consolidated statement of cash flows
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for the year ended 31 December 2015
2015 2014
Note GBP'000 GBP'000
------------------------------------------------- ----- -------- -------- --------- --------
Cash flows from operating activities
Profit for the year 16,553 5,716
Adjustments for:
Depreciation of property, plant and equipment 8,886 9,299
Amortisation of intangibles 193 191
Impairment of property, plant and equipment - 592
Profit on disposal of property, plant
and equipment (50) (140)
Pension (credit)/charge - (6,000)
Finance income (170) (72)
Finance costs 2,576 8,437
Listing expenses - 7,991
Net (profit)/loss on interest rate swaps (334) 1,299
Equity-settled share-based payments transactions 681 256
Pension contributions (1,200) (2,100)
Changes in:
Inventories 200 (251)
Trade and other receivables (2,527) 486
Trade and other payables 641 1,318
-------------------------------------------------------- -------- -------- --------- --------
8,896 21,306
------------------------------------------------------- -------- -------- --------- --------
Net cash generated from operating activities 25,449 27,022
Cash flows from investing activities
Proceeds from sale of property, plant and
equipment 228 123
Purchase of property, plant and equipment (10,116) (12,294)
Government grants related to asset purchases - 250
Purchase of intangible assets (41) (345)
Interest received 70 72
-------------------------------------------------------- -------- -------- --------- --------
Net cash used in investing activities (9,859) (12,194)
Cash flows from financing activities
Proceeds on issue of shares 4 89,352
Expenses incurred on issue of shares capitalised
to equity - (4,883)
Expenses incurred on issue of shares charged
to profit or loss - (7,516)
Proceeds from new borrowings - 70,000
Transaction costs related to loans and
borrowings (438) (1,475)
Repayment of borrowings (40) (121,081)
Proceeds from settlement of interest rate
swaps - 294
Repayment of shareholder loans - (22,128)
Interest paid (2,262) (12,018)
Dividends paid (11,409) (3,723)
-------------------------------------------------------- -------- -------- --------- --------
Net cash used in financing activities (14,145) (13,178)
Net increase in cash and cash equivalents 1,445 1,650
Cash and cash equivalents brought forward 15,156 13,506
-------------------------------------------------------- -------- -------- --------- --------
Cash and cash equivalents at 31 December 16,601 15,156
-------------------------------------------------------- -------- -------- --------- --------
notes
1 Operating segments
The Group has five reportable revenue segments which management
report on and base their strategic decisions on:
Group Group
2015 2014
GBP'000 GBP'000
------------------------------- -------- --------
Fixed line, broadband and data 32,027 31,338
------------------------------- -------- --------
Mobile 20,058 18,357
------------------------------- -------- --------
Global solutions 14,122 16,669
------------------------------- -------- --------
Data centre 7,951 6,607
------------------------------- -------- --------
Other 5,440 6,283
------------------------------- -------- --------
79,598 79,254
------------------------------- -------- --------
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 Strongest Signal Mobile (Chameleon) and M2M
(machine to machine).
Data centre includes revenues from hosting services
provided.
Other includes kit sales, directory revenues and managed service
rental charges.
2 Operating profit
The operating profit is stated after charging/(crediting) the
following:
2015 2014
GBP'000 GBP'000
------------------------------------------------------------- -------- --------
Staff costs 14,670 15,142
------------------------------------------------------------- -------- --------
Depreciation of property, plant and equipment - owned assets 8,886 9,299
------------------------------------------------------------- -------- --------
Amortisation of software licences - intangibles 193 191
------------------------------------------------------------- -------- --------
Impairment of property, plant and equipment - 592
------------------------------------------------------------- -------- --------
Net operating lease rentals payable - property 254 186
------------------------------------------------------------- -------- --------
Trade receivables impairment 723 403
------------------------------------------------------------- -------- --------
Audit services - statutory audit 106 158
------------------------------------------------------------- -------- --------
* non-audit service fees 12 94
------------------------------------------------------------- -------- --------
Listing costs incurred as a result of the Admission to AIM in
2014 and refinancing costs relating to the Admission were charged
to equity, profit or loss or capitalised as set out below:
2015 2014
GBP'000 GBP'000
---------------------------------------------------- -------- --------
Listing costs charged to profit or loss (see below) - 7,991
---------------------------------------------------- -------- --------
Listing costs presented in equity - 4,883
---------------------------------------------------- -------- --------
Transaction costs capitalised - 1,475
---------------------------------------------------- -------- --------
Total Listing Costs - 14,349
---------------------------------------------------- -------- --------
Listing costs were recognised as a reduction to share premium
within equity to the extent that they related to the newly issued
shares. All other costs that did not qualify for recognition in
equity were recognised in financial expenses in profit or loss.
Non-GAAP measures
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The adjustments made to reported profit before tax and operating
profit are income and charges that are one-off in nature,
significant and distort the Group's underlying performance. No such
adjustments have been made in respect of the year ended 31 December
2015.
3 Finance income and expense
Recognised in profit or loss
2015 2014
GBP'000 GBP'000
----------------------------------------- -------- --------
Finance income
----------------------------------------- -------- --------
Other interest receivable 70 72
----------------------------------------- -------- --------
Net interest on pension asset 100 -
----------------------------------------- -------- --------
170 72
----------------------------------------- -------- --------
Finance costs
----------------------------------------- -------- --------
Interest on shareholder loan notes - (330)
----------------------------------------- -------- --------
Interest on borrowings (2,256) (2,933)
----------------------------------------- -------- --------
Finance lease interest (6) (6)
----------------------------------------- -------- --------
Net interest on pension liabilities - (300)
----------------------------------------- -------- --------
Amortisation of loan transaction costs (314) (301)
----------------------------------------- -------- --------
Release of capitalised transaction costs - (4,567)
----------------------------------------- -------- --------
Total financial expense (2,576) (8,437)
----------------------------------------- -------- --------
Net total finance expense (2,406) (8,365)
----------------------------------------- -------- --------
Refinancing costs incurred as a result of refinancing in April
2013 of GBP5,239,115 were capitalised in 2013. The debt was
subsequently repaid as a result of the Admission and refinancing in
February 2014. The remaining unamortised financing costs of
GBP4,567,000 were charged to the Consolidated Statement of
Comprehensive Income in 2014.
A new debt arrangement entered into in 2014 incurred directly
related expenses of GBP1,475,000 which were capitalised in
accordance with IAS 39 and amortised over the period of the loan
facility. In 2015, the terms of this debt arrangement were amended,
incurring additional directly related expenses of GBP437,000 which
were capitalised. These expenses, together with the remaining
unamortised element of the initial capitalised expenses, are being
amortised over the amended loan term. Amortisation of GBP314,000 is
included within financial expenses in the current year.
4 Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following data:
4.1 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 and the Profit/(loss) for the period after tax
attributable to the owners of the Group ('Earnings').
Thousands Basic Thousands Diluted
Earnings of shares earnings of shares earnings
GBP'000 (Basic) per share (Diluted) per share
----------------- -------- ---------- ---------- ---------- ----------
31 December 2014 5,716 105,908 5.40p 106,405 5.37p
----------------- -------- ---------- ---------- ---------- ----------
31 December 2015 16,553 112,960 14.65p 113,965 14.53p
----------------- -------- ---------- ---------- ---------- ----------
4.2 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.
Thousands Basic Thousands Diluted
Earnings of shares earnings of shares earnings
GBP'000 (Basic) per share (Diluted) per share
----------------- -------- ---------- ---------- ---------- ----------
31 December 2014 12,945 105,908 12.22p 106,405 12.17p
----------------- -------- ---------- ---------- ---------- ----------
31 December 2015 16,553 112,960 14.65p 113,965 14.53p
----------------- -------- ---------- ---------- ---------- ----------
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAFDNALLKEAF
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