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3 1 Pro forma financial results include the results of Phase 4 Films, Paperny Entertainment and Force Four Entertainment (which were acquired on 3 June 2014, 31 July 2014 and 28 August 2014 respectively) as if those businesses had been acquired on the first day of the comparative period. In addition, pro forma results have been adjusted to take into account The Mark Gordon Company, where the accounting treatment was changed to reflect its consolidation as a subsidiary effective 19 May 2015 as if it had been fully consolidated from 1 April Pro forma financial results also include the impact of Astley Baker Davies Limited ( ABD ) as if that business had been acquired on the first day of the comparative period. The ABD acquisition was completed on 22 October 2015, however due to the terms of the sales and purchase agreement ( SPA ) and a new coproduction agreement signed on 30 September 2015, royalty savings have been recognised in the six months ended 30 September 2015, and therefore to show a likeforlike comparison pro forma financial results include those cost savings as if they had occurred from 1 April Comparative figures are translated at 2015 actual foreign exchange rates. 2 Underlying EBITDA is operating profit before oneoff items, amortisation of acquired intangible assets, depreciation and amortisation of software, sharebased payment charge, and tax, finance costs and depreciation related to joint ventures. Underlying EBITDA is reconciled to operating profit in the "Other Financial Information section of this Interim Results Announcement. 3 Adjusted profit before tax is the reported measure before amortisation of acquired intangible assets, sharebased payment charge, tax, finance costs and depreciation related to joint ventures, operating oneoff items and oneoff items relating to the Group s financing arrangements. Adjusted diluted earnings is adjusted for the tax effect of these items and other oneoff tax items. 4 The Group defines free cash flow as cash generated from operations less purchase of investment in productions, net of grants received, purchase of investment in acquired content rights, purchase of acquired intangibles, purchase of property, plant and equipment and purchase of software. Comparative numbers for 2014 have been restated to exclude tax paid from the definition of free cash flow and adjusted free cash flow in line with the methodology adopted for the year ended 31 March Adjusted free cash flow is underlying EBITDA adjusted for content and production investment/amortisation gap, joint venture adjustments, working capital, and net drawdown of interim production financing and production cash.

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5 5 Pro forma financial results include the results of Paperny Entertainment and Force Four Entertainment (which were acquired on 31 July 2014 and 28 August 2014 respectively) as if those businesses had been acquired on the first day of the comparative period. In addition, pro forma results have been adjusted to take into account The Mark Gordon Company, where the accounting treatment was changed to reflect its consolidation as a subsidiary effective 19 May 2015 as if it had been fully consolidated from 1 April Pro forma financial results also include the impact of Astley Baker Davies Limited ( ABD ) as if that business had been acquired on the first day of the comparative period. The ABD acquisition was completed on 22 October 2015, however due to the terms of the sales and purchase agreement ( SPA ) and a new coproduction agreement signed on 30 September 2015, royalty savings have been recognised in the six months ended 30 September 2015 and therefore to show a likeforlike comparison pro forma financial results include those cost savings as if they had occurred from 1 April Comparative figures are translated at 2015 actual foreign exchange rates. 6 In the current period certain intersegment sales have been adjusted to recognise third party music label sales made by the Film Distribution business within the Music business. Consequently, the prior year period intersegment sales and intersegment sales eliminations previously reported have been restated to reflect this change.

6 7 Pro forma financial results include the results of Paperny Entertainment and Force Four Entertainment (which were acquired on 31 July 2014 and 28 August 2014 respectively) as if those businesses had been acquired on the first day of the comparative period. Comparative figures are translated at 2015 actual foreign exchange rates.

7 8 Pro forma financial results include the impact of Astley Baker Davies Limited ( ABD ) as if that business had been acquired on the first day of the comparative period. The ABD acquisition was completed on 22 October 2015, however due to the terms of the SPA and a new coproduction agreement signed on 30 September 2015, royalty savings have been recognised in the six months ended 30 September 2015, and therefore to show a likeforlike comparison pro forma financial results include those cost savings as if they had occurred from 1 April Comparative figures are translated at 2015 actual foreign exchange rates.

8 9 Pro forma results have been adjusted to take into account the change in accounting treatment to reflect its consolidation as a subsidiary effective 19 May 2015 as if it had been fully consolidated from 1 April Comparative figures translated at 2015 actual foreign exchange rates. 10 Comparative figures translated at 2015 actual foreign exchange rates.

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10 11 Pro forma financial results include the results of Phase 4 Films, which was acquired on 3 June 2014, as if that business had been acquired on the first day of the comparative period, with comparative figures translated at 2015 actual foreign exchange rates.

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12 12 The Group calculates the effective tax rate after adjusting for the share of results of joint ventures of 4.0 million. The Group calculates adjusted effective tax rate after adjusting for profit before tax relating to joint ventures of 6.1 million and the related underlying income tax charge of 2.6 million (excluding a oneoff tax income of 0.5 million recognised during the period).

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19 FINANCIAL REVIEW

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24 1 In the current period certain intersegment sales have been adjusted to recognise third party music label sales made by the Film Distribution business for the Music business. Consequently, the prior year period intersegment sales and eliminations previously reported have been restated to reflect this change. The impact of the change for the six months ended 30 September 2014 was an increase in Television and Eliminations intersegment sales by 9.6m.

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26 1 None of the goodwill is expected to be deductible for income tax purposes. 2 The directors do not consider there to be a material difference in the fair value of the previously held equity interest at the date of change of control on 19 May 2015 and the fair value of the equity interest as at the date of the initial acquisition of the 51% stake in MGC on 7 January 2015 plus the Group s share of the profits during the interim period.

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