Chairman's statement
"This strong financial base eables the group to continually invest in new ventures and explore new opportunities in media both in the UK and internationally"
Northern & Shell Network's underlying financial results to date demonstrate management's capabilities and clear focus across the spectrum of the group's media acticivties.
Group turnover increased by £48.3 million (13.0%) in 2004 with all the growth being organic through development of brands and consolidation within existing markets.
Underlying EBITDA (adjusted earnings before interest, tax, depreciation and amortisation) for 2004 was £83.3 million, an increase of £16.1million on 2003. Underlying EBITDA (like for like) excludes items which are exceptional (non-recurring in nature), changes in such items as the Chairman's emoluments that vary year on year, and certain other items which include changes in the pension surplus/deficit and restructuring costs, considered one off in nature by management but not considered exceptional for statutory accounting purposes.
When compared to many other media companies the Network's balance sheet carries a very low figure for Intangible Assets (£7.9 million as at 31 December 2004), with the true brand value of the Daily Express, Sunday Express, Daily Star and Daily Star Sunday newspaper titles not being reflected in the balance sheet. In addition there is no value attributed to the highly successful magazines, OK!, New! and Star, or indeed the television channels.
The Northern & Shell Network has a small amount of debt relative to the earnings and net assets of the group, with net debt standing at £18.7 million at 31 December 2004. This strong financial base enables the group to continually invest in new ventures and explore new opportunities in media both in the UK and internationally.
ACCOUNTS1
| Summery of underlying results | 1999 £'000 |
2000 £'000 |
2001 £'000 |
2002 £'000 |
2003 £'000 |
2004 £'000 |
|---|---|---|---|---|---|---|
| Turnover including JVs | 51,959 | 96,511 | 373,277 | 387,442 | 421,381 | 471,447 |
| Turnover excluding JVs | 51,959 | 91,303 | 325,277 | 347,592 | 370,784 | 419,108 |
| Profit/(loss) on ordinary activities before interest & tax | 3,153 | 7,764 | 31,887 | 11,958 | (15) | 3,187 |
| Exceptional items | - | 2,250 | 7,134 | 934 | - | (12,072) |
| Amortisation, goodwill and trademarks | 8 | 153 | 1,466 | 3,273 | 3,869 | 3,884 |
| Chairman's remuneration | 5,877 | 3,434 | 8,848 | 20,983 | 46,234 | 51,735 |
| Pension (debtor)/creditor movement*** | - | - | (1,800) | 1,400 | 4,500 | 10,241 |
| Other accounting adjustments**** | 1,020 | 1,409 | 663 | 2,093 | 3,665 | 17,826 |
| Underlying EBITA* | 10,058 | 15,010 | 48,198 | 40,641 | 58,253 | 74,801 |
| Depreciation | 659 | 1,183 | 9,841 | 9,212 | 8,904 | 8,522 |
| Underlying EBITDA** | 10,717 | 16,193 | 58,039 | 49,853 | 67,157 | 83,323 |
* EBITA is adjusted earnings before interest, tax and amortisation
** EBITDA is adjusted earnings before interest, tax, depreciation and amortisation
*** Pension (debtor)/creditor movement comprises the net effect on the profit and loss account for the year, arising from the difference between pension costs charged in the accounts and the amounts funded to date in accordance with SSAP24
**** Other accounting adjustments include the alignment of joint venture accounting policies and items which the company considers are non-recurring in nature but are not disclosed as exceptional for statutory accounting purposes, such as redundancy costs, costs in relation to the move to new corporate headquarters and Employer's NI on Chairman's remuneration (where appropriate)