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Taxation
The tax charge of £22.5 million (45%) compares to
£12.0 million (35%) in 2004. UK corporation tax is provided
at 30% (2004: 30%). The factors contributing to the
increase in the effective rate are attributable to the UK tax
on overseas dividends, non-deductible expenditure such
as goodwill, a high associate tax rate, overseas tax rates in
excess of UK rates and significant prior year adjustments in
respect of foreign-exchange credits and losses ceasing to be
available.
Dividends
Interim dividends of £15.0 million and £0.4 million were paid
in December 2004 (2004: £27.0 million). A final dividend
of £0.3 million is proposed (2004: £20.2 million), resulting
in a total dividend for the year of £15.7 million (2004:
£47.2 million).
Debt structure and borrowings
BBC Worldwide had net borrowings of £53.9 million at
31 March 2005 (2004: £73.9 million).
BBC Worldwide has a loan facility with BBC Commercial
Holdings Limited, the holding company for the BBC's
commercial subsidiaries, and BBC Worldwide's immediate
parent company. The outstanding loan balance at 31 March
2005 was £67.6 million (2004: £82.2 million). The loan
facility, which was originally scheduled to terminate on
30 September 2005, was in the process of renegotiation at
31 March 2005 and consequently the outstanding balance has been |
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disclosed as a creditor falling due within one year. This renegotiation has been completed post-year-end and the facility extended until 30 September 2006.
At 31 March 2005 there were unsecured loan notes
outstanding of £1.5 million (2004: £1.6 million). These were
issued in connection with the acquisitions of Cover to Cover
Limited and Origin Publishing Limited.
Foreign exchange
Forty-three per cent of BBC Worldwide's revenues in the year were
generated outside the UK and have been affected by
fluctuations in exchange rates. It is the policy of BBC
Worldwide to take a risk-averse approach to the
management of foreign exchange, including the hedging
of risk by entering into forward exchange contracts.
Programme investments and amortisation
BBC Worldwide and its joint-venture partners invested
a total of £75.2 million in programme investments in the
year (following a record year in 2004 of £90.7 million,
including substantial investment in Planet Earth). It was split
£74.6 million in BBC programmes (2004: £88.6 million) and
£0.6 million in non-BBC programming (2004: £2.1 million).
£7.7 million of the reduction is accounted for by timing of
payments on major JV Programmes LLC investment. |
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