Financial Summary
31 July 2002
|
2002 £m |
2001 £m
restated |
Change % |
| Turnover |
|
|
|
| - Actual |
559.6 |
581.4 |
-3.7% |
| - Like-for-like (1) |
554.8 |
575.6 |
-3.6% |
| Group operating profit (2) |
|
|
|
| - Actual |
96.3 |
101.1 |
-4.7% |
| - Like-for-like (1) |
95.9 |
100.5 |
-4.6% |
| Profit before tax (3) |
78.4 |
80.6 |
-2.7% |
| Earnings per share (3) |
18.4p |
19.4p |
-5.2% |
| Dividend per share |
5.3p |
5.3p |
- |
| (1) |
Adjusted to exclude the results of Post Publications Limited and Ethnic Media Group Limited which were disposed of in June 2002 (the "disposed businesses"). |
| (2) |
Excludes operating exceptional items of £6.4 million pre tax (2001: £7.6 million) |
| (3) |
Excludes net exceptional items of £6.3 million pre tax (2001: £7.6 million) |
| (4) |
Accounting policies used in the preparation of the unaudited financial information for the 26 weeks ended 30th June 2002 are consistent with those set out in the Group's financial statements for the 52 weeks ended 30th December 2001, as amended by the adoption this year of financial reporting standard, FRS 17: "Retirement Benefits". FRS 17 requires the full service cost of pension provision to be charged to operating profit and results in a charge to operating profit for the 26 week period to 30th June 2002 of £12.8 million (2001: £11.0 million), an increase of £7.0 million (2001 : £5.7 million) over the previous SSAP 24 charge. The adoption of FRS 17 has required the restatement of the profit and loss account, balance sheet, statement of total recognised gains and losses, reconciliation of movements in consolidated shareholders' funds and associated notes for the 26 weeks ended 1st July 2001 and the 52 weeks ended 30th December 2001. Notes 8 and 11 to the unaudited interim financial statements summarise the implications of the adoption of FRS 17. There is no impact on the Group's underlying operations. |
|
Within the following financial summary and the review of operations, all figures are presented on a 'like-for-like' basis unless otherwise stated.
Financial Summary
Group revenue decreased by 3.6% to £554.8 million (2001: £575.6 million), reflecting a fall of 4.0% in advertising revenue to £312.9 million, a 1.3% decline in circulation revenue to £191.1 million, (including £7.5 million reduction in respect of the Daily Mirror cover price discount compared to £3.6 million in 2001) and a 9.3% decline in other revenue to £50.8 million (2001: £56.0 million).
Group operating profit before exceptional items decreased by 4.6% to £95.9 million (2001: restated £100.5 million). The £8.7 million incremental investment in marketing, editorial and product support of the Group's titles and the £20.8 million fall in revenue have been partially offset by cost savings of £14.6 million and £10.3 million reduced net investment in digital media activities. The Group remains on track to deliver targeted cost savings of £32 million in the full year.
Profit before tax (including disposed businesses) and before exceptional items declined by 2.7% to £78.4 million. This decline reflects the reduction in operating profit of 4.6% partially offset by a £1.9 million reduction in financing costs (net interest payable and other finance income).
Operating exceptional items of £6.4 million have been incurred during the 26 week period, primarily in respect of the ongoing implementation of the Group's strategies and cost reduction plans. It is anticipated that a further £9 million will be incurred during the second half of the year.
Earnings per share (including disposed businesses) before exceptional items decreased by 5.2% from 19.4p (restated) to 18.4p, reflecting both the decline in profit before tax and the increase in the estimated effective tax rate from 30.0% in 2001 to 31.3% in 2002.
The interim dividend is being held at the same level as the 2001 interim dividend, 5.3p. It will be paid on 31 October 2002 to shareholders on the register at 4 October 2002.
Strong operating cash flow of £101.0 million (2001: £88.9 million) contributed to net debt falling by £31.1 million from £735.0 million at 30th December 2001 to £703.9 million at 30th June 2002.
Net assets at 30th June 2002 were £1,323.8 million (2001: restated £1,345.0 million), supported by intangible fixed assets of £1,849.8 million (2001: £1,866.9 million). Included within net assets is a net pension fund deficit of £84.1 million (2001: £25.9 million), as required to be recorded under FRS 17. The increase in the net pension fund deficit of £58.2 million has been offset against the accumulated profit and loss reserve.
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