RNS Number:8061T
Media & Income Trust PLC
28 March 2002
THE MEDIA AND INCOME TRUST PLC
PRELIMINARY ANNOUNCEMENT OF UNAUDITED CONSOLIDATED ANNUAL RESULTS
for the year ended 30 November 2001
The media sector has experienced a difficult twelve months. Expectations for
advertising growth were steadily downgraded throughout the year, reflected
correspondingly in declining revenue assumptions for much of the media
industry. High operational leverage in sub-sectors such as free TV, radio and
advertising agencies led to significant short-falls in earnings across the
media space. Over the 12 months ending 30 November 2001 the Dow Jones Stoxx
600 Media index fell 29.4% in local currency (down 27.0% in Sterling terms),
whilst the Bloomberg United States Media index fell 9.1% in dollar terms (down
8.3% in Sterling terms).
The weak market conditions for split capital investment trusts and bonds I
referred to in my interim statement continued into the second half of the
Company's reporting period.
During the year under review the Company has paid Ordinary dividends totalling
7.75p and Preferred Income dividends totalling 4.15p. The Company is
currently prohibited by Section 264 of the Companies Act 1985 from making
further dividend payments and accordingly has had to suspend the payment on
both classes of shares.
Subsequent to the year end, on 25 February 2002, the Company announced that it
was in negotiations with its banks with a view to repaying a significant
proportion of its bank loan. On 28 February 2002 £30 million of bank debt was
repaid. The Company is currently in breach of its banking covenants and is
continuing to negotiate with its banks in order to address its present
situation.
As at close of business on 26 March 2002 the Company's portfolio consisted of
the following asset classes:
£ %
Media Equities 40,017,983 47.64
Investment trust income shares
A rated (0-25% other investment
trusts) 4,246,314
B rated (25%-50% other investment
trusts) 5,889,346
C rated 5,992,989
16,128,649 19.20
Bonds 3,943,699 4.70
Cash 23,899,486 28.46
Total 83,989,817 100.00
Banking update
The net asset position of the Company has deteriorated since the year end. At
26 March 2002 the bank loan cover position was as follows:
£m
Investments 60.1
Cash 23.9
-----
Total assets 84.0
Bank loans (74.2)
-----
Cover 9.8
The Directors announced on 15 March 2002 that the Company had received notice
from it's bankers that it was in breach of its ratio of bank indebtedness to
total qualifying assets as set out in the Company's senior loan facility
agreement. The Company is still in breach of this ratio. As at 26 March 2002
the ratio of bank indebtedness to total qualifying assets amounted to 64.69%
(adjusted for cash offset), compared with a maximum permissible level of 61%.
The Company is also in breach of the loan to value ratios applicable to its
mezzanine loan.
As previously announced, in order to remedy this situation the Company is
negotiating with its bankers terms for a repayment of a further significant
proportion of its bank loans. Substantial repayments of the senior bank debt
and repayment of part of the Company's mezzanine debt outstanding are
currently planned. These repayments are intended to be funded by cash, the
disposal of the bond portfolio and partial disposal of the media equities
portfolio. The break costs on the anticipated repayments are estimated at £1.0
million. The Directors believe that they are likely to be able to announce
agreement in due course on these repayments and on related amendments to the
terms of the loans. In the event that the Company fails to reach agreement for
partial repayment of the bank debt, then the bank loans could be repaid in
full. This would result in additional break costs estimated to be £1.2 million
and would require further liquidation of the portfolio.
Future dividend payments
At the current level of the Company's total assets, the Company continues to
be prohibited under Section 264 (1) of the Companies Act 1985 from paying
dividends on its Ordinary Shares or Preferred Income Shares, as previously
announced. The Directors believe that it is unlikely that the Company will be
able to resume dividend payments on either class of Share for the foreseeable
future. There is a material risk that dividends will not be resumed prior to
the repayment date for the Zero Dividend Preference Shares in Media Zeros PLC
(MZP) in 2006. If dividend payments were to be resumed, it is likely that
they will be at levels considerably lower than those paid prior to the
prohibition of such payments.
However, Preferred Income Shareholders are entitled to the revenue reserves
and accordingly the value of such reserves has been included in the net asset
values announced for such Shares.
In addition, the Directors note that the retention of such income assists to a
small extent in reducing the level of the ratio of bank indebtedness to total
qualifying assets.
Waiver of management fee
Aberdeen Asset Management PLC, the Manager of the assets of the Company, has
waived its management fee with effect from 28 February 2002 until further
notice.
The Company and MZP are today despatching to shareholders notices of the
forthcoming Annual General Meetings. In previous years it has been the
practice of the Group to include these notices as part of the consolidated
annual report and accounts. However, this has not proved possible this year.
Due to the current financial position of the Company and the ongoing
discussions with its bankers, a number of accounting issues have arisen, the
need to resolve which has delayed the final printing and publication of the
consolidated annual report and accounts. The Company and MZP are, however,
required to convene their AGMs within certain time limits imposed by the
Companies Act 1985 (the "Act") regardless of whether or not the annual report
and accounts are available. The boards of the Company and MZP have therefore
convened the AGMs for 22 April 2002.
The Act also requires that the accounts have been in the hands of shareholders
for at least 21 clear days before the holding of the meeting at which they are
to be a laid before shareholders, and that the resolution to reappoint the
Company's and MZP's auditors should only take place at the meetings at which
the accounts are laid before the members. Accordingly the AGMs convened for
22 April 2002 will only deal with the resolutions to reappoint C R Cox and G J
Duncan as directors. An extraordinary general meeting will then be convened
for each Company at a later date, notices of which will be contained in the
annual report and accounts when completed. These extraordinary general
meetings will then deal with the laying of the accounts and the resolutions to
reappoint the auditors of the Company and MZP.
George A Robb
Chairman
28 March 2002
The unaudited results were:
Group Statement of Total Return (incorporating the profit and loss account of
the Group*)
Year ended
30 November 2001
(unaudited)
Revenue Capital Total
£'000 £'000 £'000
Losses on investments - (73,908) (73,908)
Income 13,051 - 13,051
Investment management fee (544) (1,435) (1,979)
Other expenses (420) - (420)
Exchange losses - (223) (223)
________ ________ ________
Net return/(loss) before finance
costs and taxation 12,087 (75,566) (63,479)
Interest payable and similar charges (1,943) (5,053) (6,996)
Zero Dividend Preference
shares of subsidiary - (1,923) (1,923)
________ ________ ________
Return/(loss) on ordinary activities
before taxation 10,144 (82,542) (72,398)
Taxation on ordinary activities (36) - (36)
________ ________ ________
Return/(loss) on ordinary activities
after taxation 10,108 (82,542) (72,434)
Dividends in respect of
Preferred Income shares (461) - (461)
________ ________ ________
Revenue/(loss) attributable to Ordinary
shareholders 9,647 (82,542) (72,895)
Dividends in respect of equity shares (8,635) - (8,635)
________ ________ ________
Transfer to/(from)reserves 1,012 (82,542) (81,530)
======== ======== ========
Return per share (pence):
Ordinary share 8.44 (72.22) (63.78)
======== ======== ========
Preferred Income share 8.31 - 8.31
======== ======== ========
Ten month period ended
30 November 2000
(audited)
Revenue Capital Total
£'000 £'000 £'000
Losses on investments - (25,148) (25,148)
Income 3,935 - 3,935
Investment management fee (182) (747) (929)
Other expenses (185) - (185)
Exchange gains - 91 91
________ ________ ________
Net return/(loss) before finance
costs and taxation 3,568 (25,804) (22,236)
Interest payable and similar charges (415) (1,244) (1,659)
Zero Dividend Preference shares of subsidiary - (302) (302)
________ ________ ________
Return/(loss) on ordinary activities
before tax 3,153 (27,350) (24,197)
Tax on ordinary activities (10) - (10)
________ ________ ________
Revenue/(loss) attributable to Ordinary
shareholders 3,143 (27,350) (24,207)
Dividends in respect of equity shares (2,727) - (2,727)
________ ________ ________
Transfer to/(from) reserves 416 (27,350) (26,934)
======== ======== ========
Return/(loss) per share (pence):
Ordinary share 5.70 (49.58) (43.88)
======== ======== ========
* The Statements of Total Return presented above are in accordance with the
Statement of Recommended Practice for Financial Statements of Investment Trust
Companies.
The revenue column of this statement is the profit and loss account of the
Group.
All revenue and capital items in the above statements derive from continuing
operations.
Balance Sheet
Group Company Group Company
at at at at
30 November 30 November 30 November 30 November
2001 2001 2000 2000
(unaudited) (unaudited) (audited) (audited)
£'000 £'000 £'000 £'000
Fixed assets
Investments 109,924 109,861 156,597 156,499
Current assets
Debtors 2,225 2,310 7,460 7,460
Cash at bank and in hand 32,357 32,287 2,309 2,305
_________ _________ _________ _________
34,582 34,597 9,769 9,765
Creditors: amounts falling
due within one year:
Bank loans (106,161) (106,161) - -
Creditors excluding bank
Loans (2,021) (2,005) (4,874) (4,857)
_________ _________ _________ _________
Total Creditors:
falling due within one year: (108,182) (108,166) (4,874) (4,857)
_________ _________ _________ _________
Net current(liabilities)
/assets (73,600) (73,569) 4,895 4,908
_________ _________ _________ _________
Total assets less
current liabilities 36,324 36,292 161,492 161,407
Creditors: amounts falling
due after one year excluding
Zero Dividend Preference shares
Bank loans - - (89,190) (89,190)
Loan from
subsidiary undertaking - (27,883) - (11,566)
Amounts due under
subscription agreement - (2,247) - (267)
_________ _________ _________ _________
- (30,130) (89,190) (101,023)
_________ _________ _________ _________
Zero Dividend
Preference shares (30,162) - (11,918) -
_________ _________ _________ _________
Net assets 6,162 6,162 60,384 60,384
========= ========= ========= =========
Share capital and reserves
Called-up share capital 3,405 3,405 2,419 2,419
Share premium account 3,000 3,000 10,000 10,000
Special reserve 87,263 87,263 53,941 53,941
Capital reserves:
Realised (including accrued
finance costs) (25,610) (25,685) 5,954 5,939
Unrealised (63,485) (63,448) (12,507) (12,508)
Revenue reserve 1,589 1,627 577 593
_________ _________ _________ _________
Total shareholders' funds 6,162 6,162 60,384 60,384
========= ========= ========= =========
Attributable to:
Non-equity shareholders' funds 11,100 11,100 - -
Equity shareholders' funds (4,938) (4,938) 60,384 60,384
_________ _________ _________ _________
Total shareholders' funds 6,162 6,162 60,384 60,384
========= ========= ========= =========
Net asset value
per Ordinary share (pence):
Per FRS 4 (3.75) (3.75) 62.42 62.42
========= ========= ========= =========
Per Articles - - 62.42 62.42
========= ========= ========= =========
Net asset value per
Preferred Income share (pence):
Per FRS 4 100.00 100.00 - -
========= ========= ========= =========
Per Articles 55.51 55.51 - -
========= ========= ========= =========
Group Cash Flow Statement
Ten month
Year ended period ended
30 November 2001 30 November 2000
(unaudited) (audited)
£'000 £'000 £'000 £'000
Net cash inflow/(outflow)
from operating activities 11,490 (212)
Servicing of finance
Bank and loan interest paid (6,336) (1,594)
Dividends paid on non equity shares (230) -
_________ _________
Net cash outflow from servicing of finance (6,566) (1,594)
Taxation
Withholding and income tax recovered 2 17
_________ _________
Net tax recovered 2 17
Financial investment
Purchase of investments (131,532) (197,906)
Sale of investments 108,092 42,599
_________ _________
Net cash outflow from financial investment (23,440) (155,307)
Equity dividends paid (9,774) (486)
_________ _________
Net cash outflow before financing (28,288) (157,582)
Financing
Proceeds from issue of new Ordinary shares 17,589 61,654
Expenses paid in respect
of Ordinary share issue - (3,604)
Proceeds from issue of
Preferred Income shares 11,100 -
Proceeds from issue of
Zero Dividend Preference shares 16,323 12,100
Expenses paid in respect of Zero
Dividend Preference share issue - (484)
Expenses paid in respect of new Ordinary
and Preferred Income shares issued (1,381) -
Drawdown of loans 14,870 88,830
_________ _________
Net cash inflow from financing 58,501 158,496
_________ _________
Increase in cash 30,213 914
========= =========
Reconciliation of net cash
flow to movements in net debt
Increase in cash as above 30,213 914
Cash inflow from increase in debt (31,193) (100,446)
_________ _________
Change in net debt resulting from cash flows (980) (99,532)
Exchange movements (223) 91
Increase in debt (3,964) (317)
_________ _________
Movement in net debt in the period (5,167) (99,758)
Net (debt)/funds at 1 December (98,799) 959
_________ _________
Net debt at 30 November (103,966) (98,799)
========= =========
Notes:-
1. Income
Year Ten months
ended ended
30 Nov 2001 30 Nov 2000
£'000 £'000
Income from investments
Franked investment income (net) 5,345 1,497
Unfranked investment income 2,709 96
Overseas dividends 4,361 1,925
________ ________
12,415 3,518
________ ________
Other income
Deposit interest 636 417
________ ________
Total income 13,051 3,935
======== ========
Total income comprises:
Dividends 8,310 2,185
Interest 4,741 1,750
________ ________
13,051 3,935
======== ========
Income from investments:
Listed UK 5,345 1,497
Unlisted UK - 96
Listed overseas 7,070 1,925
________ ________
12,415 3,518
======== ========
2. The revenue return per Ordinary share is based on the net revenue on
ordinary activities after taxation and Preferred Income share dividends of
£9,647,000 (2000 - £3,143,000) and on 114,293,707 (2000 - 55,165,949) Ordinary
shares, being the weighted average number of Ordinary shares in issue for the
year.
3. The capital loss per Ordinary share is based on net capital losses of
£82,542,000 (2000 - £27,350,000) after deductions in respect of the Zero
Dividend Preference shares of £1,923,000 (2000 - £302,000) and on 114,293,707
(2000 - 55,165,949) Ordinary shares, being the weighted average number of
Ordinary shares in issue for the year.
4. The revenue return per Preferred Income share is based on appropriations
due to Preferred Income shareholders of £461,000 (2000 - £nil) and on
5,550,000 (2000 - nil) Preferred Income shares, being the weighted average
number of Preferred Income shares in issue for the year.
5. The net asset value per Ordinary share computed in accordance with FRS4 is
based on total equity shareholders' funds and on 131,750,000 (2000 -
96,741,500) Ordinary shares, being the number of Ordinary shares in issue at
the year end. The net asset value per Ordinary share computed in accordance
with the Articles is nil as all net assets are attributable to the Preferred
Income shares at the year end.
6. The net asset value per Preferred Income share computed in accordance with
FRS4 is based on total non-equity shareholders' funds and on 11,100,000 (2000
- nil) Preferred Income shares, being the number of Preferred Income shares in
issue at the year end. The net asset value per Preferred Income share computed
in accordance with the Articles is based on total net assets, due to the
shortfall in net asset cover of the full entitlement under FRS4 at the year
end, and on 11,100,000 (2000 - nil) Preferred Income shares, being the number
of shares in issue at the year end.
7. The financial information set out above does not constitute the Company's
statutory accounts for the periods ended 30 November 2000 or 30 November 2001.
The financial information for 30 November 2000 is derived from the statutory
accounts, which have been delivered to the Registrar of Companies. The
Auditors have reported on the 30 November 2000 accounts; their report was
unqualified and did not contain a statement under section 237(2) or (3) of the
Companies Act 1985. The statutory accounts for 30 November 2001 will be
finalised on the basis of the financial information presented by the Directors
in this preliminary announcement and will be delivered to the Registrar of
Companies in due course.
8. Copies of the Annual Report will be posted to all shareholders in due
course and further copies may be obtained from the registered office, One Bow
Churchyard, Cheapside, London EC4M 9HH.
Aberdeen Asset Management PLC
Secretaries
28 March 2002
This information is provided by RNS
The company news service from the London Stock Exchange
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