man x t elecom plc
annual report and accounts
2014
manx telecom plc  annual report and accounts 2014
Photo courtesy of @TDWsport.com contents
strategic report
 1 highlights
 2 our island & our business
 4 our approach & our values
 6 chairman’s statement
 8 ceo’s review
 12 our strategy
 18 financial review
 20 risk management
 22 principal risks
 24 our responsibility
 26 it’s our community
governance
 28 board of directors
 29 executive team
 30 directors’ report
 33 corporate governance report
 35 report of the audit committee
 37 directors’ remuneration report
 41  statement of directors’ 
responsibilities
financial statements
 42  report of the independent auditors
 43  financial statements and notes
other
 ib c  directors, secretary, registered office 
and advisers
On 10 February 2014, Manx T elecom successfully 
floated on the Alternative Investment Market of  
the London Stock Exchange resulting in an initial 
market capitalisation of £160m.
Our vision is to provide the most complete advanced 
communication service, richly enhancing lives and 
businesses at home and overseas. Revenue (£m)
2014
2013
79.3
76.0
Cash generated (£m)
2014
2013
29.1
28.1
Underlying EBITDA (£m)
2014
2013
27.1
27.5
Underlying operating profit (£m)
2014
2013
17.6
18.1
+4%
Fixed line, broadband and data 
revenues grew 1.1% driven by 
good take-up of high speed 
broadband.
Strong growth of global 
solutions revenue with a 23% 
increase as a result of increased 
wholesale volumes, machine to 
machine (‘M2M’) and Strongest 
Signal Mobile (branded 
Chameleon) services revenue.
Steady growth in data centre 
revenues, increasing 2.3%.
Phase 1 of Greenhill Data 
Centre (‘GDC’) completed.
4G services launched.
increase in 
revenue to 
£79.3m
operational financial
dividend
6.6p
final dividend 
9.9p 
total dividend, representing a  
7% yield for the full year based 
on the IPO price of 142p
manx telecom plc annual report and accounts 2014 The Isle of Man is a self-governing dependent territory of the British Crown 
with its own Government, laws and currency but it is closely linked to the 
UK through a shared history, community and economic development. 
Home to 86,000 people and 4,000 businesses, the Isle of Man is a leading 
international business centre, best known for its financial services industry 
and for having successfully diversifying its economy in recent years to a wide 
range of sectors, including aviation, marine, bio-med, space, e-business and 
e-gaming. The Island has enjoyed 29 years of unbroken GDP growth and has 
2% unemployment with a clear and simple tax regime.
strategic report
the manx telecom 
network
our island & our business
4G Mobile – We launched the Island’s first 4G 
service in the summer of 2014 and now provide 
high speed mobile broadband to 99% of the 
Island’s population, at speeds up to 10 times 
faster than 3G.
Broadband – Our VDSL high speed broadband 
service is available to around 87% of homes  
and businesses on the Island. In early 2015 we 
launched a VDSL Plus service to 50% of the 
Island, offering speeds of 80Mbps download 
and 10Mbps upload. 100% of the Island’s 
telephone lines can already obtain ADSL2 Plus 
fixed line broadband offering speeds of up to 
16Mbps download.
Data hosting – Manx Telecom is the only 
on-island operator with two Tier 3 data centres 
(and one further data centre) which have  
full resilience built into every part of their 
infrastructure, providing a current capacity  
of 385 racks. Key customers include e-gaming 
companies, financial services companies and  
the Isle of Man Government.
Connectivity – We provide world-class private 
circuit and internet connectivity for customers, 
both on and off-island. Our high capacity 
Cisco-powered Multi-protocol Label Switching 
(‘MPLS’) off-island network is fully resilient, 
supplied via a 10Gbps backbone which 
connects the Isle of Man directly to London just 
12 milliseconds away.
voice  
lines 50.9k
mobile  
pre-paid 
customers 35.1k
mobile  
post-paid 
customers 28.9k
broadband 
customers 25.5k
2 Manx Telecom successfully listed on  
the AIM market of the London Stock 
Exchange on 10 February 2014. At the 
IPO placing price of 142p, the listing 
was 1.7 times oversubscribed, raising 
£89.2m before expenses. Proceeds 
were used to re-finance the 
Company’s balance sheet leaving it 
well placed to execute its strategy for 
future growth and to pursue a 
progressive dividend policy. Over 
97.8% of our shares are freely traded 
and held in the most part by 
long-term institutional investors.
The process has brought stability  
and certainty to our ownership and 
has helped raise our brand profile 
amongst the business community  
on and off-island. We also believe  
that a public Manx Telecom plc is in 
the interests of the Island as a whole. 
The Isle of Man Government has 
expressed a desire to have a well 
invested telecommunications 
infrastructure to support its strategy  
of encouraging business to the Island. 
In February 2015, we were delighted 
to announce the renewal of our 
‘ConnectMann’ agreements with the 
Government, providing them with 
mobile services to over 3,000 
handsets, local area network 
infrastructure to over 5,500 end 
customers, wide area networking to 
over 220 sites, as well as fixed line, 
internet access and network services. 
In March 2015, we were especially 
pleased to win the ‘Best 
Telecommunications PLC’ category  
of the prestigious UK Stock Market 
Awards, recognition for a successful 
first year as a public listed company.
initial  
public  
offering
Fixed line,  
broadband  
and data
We provide fixed line, broadband 
and connectivity services, 
connecting approximately 35,000 
homes and 4,000 businesses 
locally and internationally. 
Mobile
Our mobile business offers 
pre-paid and post-paid tariffs  
to all market segments and  
also sells mobile handsets 
and accessories. 
Data centre
Our data centre business offers 
co-location, managed hosting, 
cloud and disaster recovery to 
an international corporate client 
base, via three data centres on 
the Island.
Other  
services
Includes our telephone directory, 
hardware equipment, managed 
services and interconnection fees.
our key business lines are
Global  
solutions
Using our mobile technology 
platform, we enable international 
wholesale and corporate 
customers to offer a variety of 
innovative mobile services using 
Manx Telecom SIMs. 
manx telecom plc annual report and accounts 2014 commitment
Strong market position
expertise
Highly skilled local workforce
reliability
Quality network and 
customer service
enterprise 
Growth in data centre and 
off-island businesses
culture 
Attractive and affluent  
local market
strategic report
We operate from a unique and beautiful Island whose particular mix of legislative, 
regulatory, and lifestyle attractions make it a special place in which to live, work, 
and do business. We play our part in that mix by driving forward the Island’s 
communications infrastructure, ensuring that the Isle of Man possesses the 
telecoms and related technology necessary for a prosperous 21st century  
economy, and a thriving community.
our vision
T o be the Island’s leader 
in providing high quality , 
innovative communication 
services, richly enhancing 
lives and businesses at 
home and overseas.
our values
Our values are the most 
important behaviours 
and attitudes that our 
colleagues aspire to in their 
working lives, to achieve 
their goals.
4 our values’ ambassadors
enterprising
We are a creative and forward thinking organisation 
with a ‘can-do’ attitude. Wherever possible we 
demonstrate an ‘entrepreneurial spirit’, embracing 
new ideas and challenging current thinking to find 
new and better ways of helping our customers. 
We are resourceful, spirited, enthusiastic and keen. 
In short, we make things happen.
Martyn Quayle 
MT fixed voice engineer
Richard Kearney  
MT network specialist
Julie Rotheram 
MT mobile sales consultant
Jane Smith  
MT customer accounts supervisor
proactive 
At our heart, we are customer-driven, striving 
to deliver on our promises and trying to keep 
one step ahead of our customers’ immediate 
needs. Wherever possible, we think beyond the 
immediate task to look for opportunities to make 
improvements and refine processes. We are alert, 
hard working and committed. In short, we are the 
first to take ownership and responsibility.
confident 
Our ability, ambition, drive, and determination to 
be the best that we can be, enables us to deliver 
excellence in all that we do, both externally to 
customers and internally to our colleagues. We are 
positive, commercially assertive, taking credit where 
it’s due. In short, we lead by example.
trusted 
We are proud to be part of a trusted and reputable 
organisation where everyone acts with integrity in 
an open and honest way and delivers on promises 
made. We recognise our heritage and our role in the 
wider community, where we have always played 
our part in making a difference. We are dependable, 
credible, reputable, and community minded. In short, 
we are a trusted partner .
5 manx telecom plc annual report and accounts 2014 strategic report
I am pleased to report a positive set of results for 2014, 
which are in line with the Board’s expectations.
Revenue continues to show steady 
growth, along with a small expected 
decline in EBITDA as a result of the 
additional costs associated with being 
a public company. Cash generated 
from operating activities was strong 
notwithstanding continued significant 
investment in the future growth of 
the business.
The move to public company status 
continues to be well received by the 
Isle of Man Government and our 
customers, providing ownership 
certainty, greater transparency  
and more opportunities to grow.
During the year, our domestic business 
has performed well, with growth in 
both the core fixed, broadband and 
data business and also the data 
centre business. We have continued to 
invest in our infrastructure, both to 
facilitate further growth and also to 
defend our market position. We 
completed Phase I of our data centre 
investment programme which has 
provided an additional 100 racks to 
our estate, and rolled out a 4G mobile 
network across the Isle of Man to 
reach 99% of the population. We have 
continued the roll out of fibre across 
the Island and can now reach 87% of 
homes. More recently, we have 
announced the roll-out of superfast 
broadband for 50% of the homes and 
businesses on the Island, reaching 
speeds of up to 80Mbps and the 
launch of 4G to our pre-paid 
customers. An increased focus on 
global solutions saw a good return.
The regulatory and economic 
environment on the Island remains 
supportive for the growth of the 
business. The local economy continues 
to grow, with low levels of 
unemployment (c.2%) and a continued 
commitment to maintaining the current 
policy on taxation (0% corporation tax) 
and incentives to attract high net 
worth individuals to the Island.
Our people
The good performance of the business 
in 2014 is a testament to the excellent 
customer service, experience and 
professionalism of everyone involved 
in Manx Telecom. We launched our 
first share save scheme to all 
employees during 2014 and received 
an excellent take-up of over 80%, 
enabling the vast majority of our 
people to benefit from the continued 
success of Manx Telecom.
Following the recent announcement of 
Mike Dee’s intention to retire in H2 2015 
I wish to thank Mike for 31 years’ service 
and commitment to Manx Telecom. He 
will leave the Company well positioned 
for the future and recruitment for his 
successor has commenced.
Dividend policy
The Company paid its maiden  
interim dividend of 3.3p per share  
in November 2014 and intends to  
pay a final dividend of 6.6p on  
25 June 2015. The full year dividend of 
9.9p represents a 7% yield at the IPO 
price and is in line with the policy 
communicated when the Company 
was admitted to AIM. The shares will 
trade ex-dividend on 28 May 2015 and 
will have a record date of 29 May 2015.
As previously stated, the Company 
intends to operate a progressive 
dividend policy moving forward  
taking into account our profitability, 
underlying growth in earnings and 
cash flows.
Outlook
The Company remains committed to 
our dual strategy of defending our 
significant on-island presence, whilst 
seeking off-island opportunities to 
exploit and leverage our data centre 
and mobile infrastructure.
After a slower than anticipated start, 
demand for our data centre services 
has increased and we have signed an 
agreement with an anchor tenant for 
our data centre Phase II expansion.
2014 was a particularly strong year for 
global solutions and we do not expect 
this area to record the same level of 
growth in 2015, however we remain 
encouraged by its growth potential.
We continue to invest significantly in our 
on-island infrastructure, demonstrating 
our continued commitment to the 
Island community.
We remain committed to delivering a 
progressive dividend in 2015 and 
confident in the longer term growth 
prospects of the business.
Kevin Walsh
Non-Executive Chairman
6 “ 
The Company remains committed to creating shareholder value 
through our dual strategy of defending our significant on-island 
presence, whilst seeking off-island opportunities to exploit and leverage 
our data centre and mobile infrastructure. During 2014, we successfully 
followed this strategy and will strive to do the same through 2015.
 We are delighted to be paying a final dividend of 6.6p, meeting the 
commitment given when the Company was admitted to AIM in 
February 2014. Together with the interim dividend, this constitutes  
a 7% yield for the full year based on our IPO placing price of 142p.
 Following the recent announcement of Mike Dee’s intention to retire  
in H2 2015 I wish to thank Mike for 31 years’ service and commitment  
to Manx Telecom. He will leave the Company well positioned for  
the future and recruitment for his successor has commenced. 
” +4.2% 
revenue increase
+3.6% 
increase in cash generation
6.6p 
final dividend
7% 
dividend yield on  
142p IPO placing price
+80% 
employee share scheme 
take-up
2014 
highlights
manx telecom plc annual report and accounts 2014 +5%
growth in broadband revenues
87%
VDSL high speed  
broadband coverage
+5%
increase in mobile  
post-paid average  
revenue per user (‘ARPU’)
99%
4G population coverage
+22.8%
growth in global solutions 
revenues
2014 
highlights
Looking back at our achievements 
in 2014, I am pleased to say that we 
had a very busy and successful year .
strategic report Total revenue – 2014 (%)
23.2% 21.0%
Global 
solutions
Core 
mobile
47.5%
Fixed,
broadband,
data services
& other
Data
centre
8.3%
“ 
We have made good progress over the year, with revenue 
growth driven by strong sales in global solutions, as well as 
positive take-up of high speed broadband on the Island. 
After a slower than anticipated start, the Greenhill Data 
Centre now has a number of new local customers ready to 
move in. This, and the continuing success of 4G, gives us 
confidence in the year ahead. 
”
Following the IPO in February 2014,  
we have continued to focus on our 
core business of providing a wide 
range of communications services to 
consumers, businesses and the public 
sector on the Isle of Man. We have also 
continued to expand our data centre 
footprint and have had success in the 
local market for high value managed 
services contracts.
Our global solutions business 
continues to show good growth, 
utilising our various mobile virtual 
network operator (‘MVNO’) and 
international roaming relationships  
to address the international traveller 
market, as well as exploiting the 
opportunities arising from the 
increasing penetration of connected 
devices in the M2M market.
We continue to focus on providing a 
superior customer experience  
which, coupled with a reliable and 
trustworthy reputation, has enabled 
us to retain high market share in the 
local fixed, broadband and mobile 
markets despite increased competition.
Overall revenue has grown by 4.2% in 
the year driven primarily by growth in 
the global solutions business, helped 
by our move into managed services 
and an increased sales focus.
EBITDA of £27.1m has decreased by 
1.5%, as expected, due to the additional 
costs of being a public company. There 
has been a slight decline in EBITDA 
margin in the year, mainly driven by 
the mix of business within global 
solutions, with an increase in sales of 
lower margin wholesale voice and 
SMS. We remain committed to focusing 
on higher margin business across the 
Group, with an emphasis on sales of 
Chameleon SIMs and M2M within 
global solutions and a drive towards 
managed hosting sales within the data 
centre business.
Cash generation remains strong and 
we remain committed to a progressive 
dividend policy.
We have been successful in meeting 
our targets for key capital projects in 
the year including completion of Phase 
I of the new data centre and the 
launch of all Island 4G coverage. We 
have achieved this within the capital 
budget set at the start of the year. The 
4G launch has been highly successful 
with take up and usage exceeding our 
initial expectations. Pre-paid 4G 
services were launched in early 2015.
Whilst the contracts and associated 
revenues for Phase I of GDC have taken 
longer than expected to complete,  
we have now successfully signed new 
contracts with key corporate customers 
and the Government, and as a result 
have started to generate data services 
revenues from this increased capacity. 
We are looking to develop Phase II of 
the data centre later in 2015, given we 
now have an agreement signed with 
an anchor tenant.
Revenue
2014 
£’000
% 
Total 
revenue
2013 
£’000
% 
Total 
revenue
YonY 
%
Fixed, broadband and data 31,338 39.6 30,985 40.8 1.1
Core mobile 18,357 23.2 19,195 25.2 –4.4
Data centre 6,607 8.3 6,461 8.5 2.3
Global solutions 16,669 21.0 13,576 17.9 22.8
Other 6,283 7.9 5,812 7.6 8.1
Total revenue 79,254 76,029 4.2
9 manx telecom plc annual report and accounts 2014 continued
Fixed, broadband and data services
The fixed, broadband and data 
services business is the largest 
business by revenue contribution, and 
delivered solid revenue growth in the 
period, with revenues up by 1.1% to 
£31.3m (FY13: £31.0m).
This part of the business provides fixed 
line voice, broadband and connectivity 
services to both residential and 
business customers, connecting 
approximately 37,000 homes and over 
4,000 businesses. At December 2014 
the Company provided approximately 
50,900 voice lines. Broadband 
customers have access to ADSL and 
high speed VDSL broadband services 
throughout the Island via a high quality 
copper and fibre network. 
At December 2014 Manx Telecom  
had approximately 25,500 retail 
broadband customers with the total 
broadband base being approximately 
32,000 customers.
Manx Telecom also delivers connectivity 
solutions which can include voice, data 
and video services.
The ongoing roll out of high speed 
broadband resulted in total 
broadband revenues growing 5% in 
the year. This was partly due to an 
increase in broadband lines but also 
due to upsell from basic to high speed 
broadband. We expect further growth 
in take up of higher speed broadband 
in the year ahead.
Despite continuing increases in line 
rental charges, core fixed revenues fell 
1% this year as call usage continues 
to reduce.
Data services grew by approximately 
1% this year with further growth 
expected as customers come online in 
the new data centre.
Mobile
The Mobile business offers a 
combination of pre-paid and post-
paid tariffs, addressing all market 
segments and utilising 2G/3G and, 
since July 2014, 4G technology. It also 
sells mobile hardware (handsets and 
accessories) via the Manx Telecom 
retail outlet and online. The business 
continues to retain a majority market 
share on the Island, serving a 
substantial proportion of the available 
customer base.
Mid-way through the year the Group 
replaced the existing 2G and 3G radio 
access equipment and introduced 
new 4G services, giving enhanced 
speeds and data services across the 
Island. The introduction of new 4G 
services has been well received and 
our early progress is ahead of our 
major competitor, which introduced its 
first 4G service in late February 2015, 
seven months after our launch.
We have been encouraged by the 
positive uptake of 4G by our customers 
and the high volume of data that they 
are consuming. 4G is available on 99% 
of the Island and, on average, a Manx 
Telecom customer uses two and a 
half times more data on 4G than they 
did on 2G or 3G previously. We expect 
rises in both data usage and volume to 
continue as smartphone penetration 
increases among our customer base.
The 4% fall in mobile revenues in the 
year is primarily due to a fall in mobile 
termination rates in accordance with 
the glide path agreed with the 
regulator (ending in 2015).
As at December 2014, we had 
approximately 35,100 pre-paid 
customers (FY13: 36,000) and 28,900 
post-paid customers (FY13: 28,700). 
The introduction of 4G and general 
up-sell of data packages has 
contributed to a 5% increase in 
post-paid ARPU in 2014 whilst  
pre-paid ARPU has remained flat.
Data centre
The data centre business offers 
co-location, managed hosting, cloud 
and disaster recovery services to an 
international and local corporate client 
base. These services are supplied by 
three data centres at Douglas North, 
Douglas Central and Greenhill Data 
Centre (‘GDC’). The data centres at 
GDC and Douglas North are ranked as 
Tier III data centres (according to 
Telecommunications Industry 
Association standards). This provides 
high standards of data security, 
resilience and expandable hosting 
capacity, including business continuity 
and distributed denial of service 
protection (‘DDOS’).
The business has generated revenue 
growth of 2.3% to £6.6m (FY13: £6.5m) 
in 2014. This level of growth is lower 
than initially expected due to it taking 
longer than expected to finalise 
contracts for the new capacity added 
in the year. In 2015, demand has 
already picked up and we have a 
number of local companies set to 
move into the GDC over the next few 
months. This includes the Isle of Man 
Government which has been 
confirmed as the anchor tenant for 
Phase I of the GDC having signed a five 
year contract from 1 February 2015. 
A signed agreement with another 
significant anchor tenant means that 
we are looking to start development of 
GDC’s Phase II extension later in 2015.
strategic report
10 Global solutions
The global solutions business 
generates revenue from services 
which run on our domestic mobile 
technology platform and international 
roaming agreements. These enable us 
to offer a variety of products to UK 
and international partners utilising 
Manx Telecom SIM cards.
These revenues arise from four key 
areas, wholesale voice and SMS, 
international traveller market, M2M 
and strongest signal roaming 
(Chameleon).
Global solutions revenues have grown 
by 22.8% to £16.7m (FY13: £13.6m) driven 
by strong growth in lower margin 
wholesale voice and SMS, and to a 
lesser extent, M2M, which doubled 
revenue in the period. A drop in 
termination rates means that the 
wholesale voice and SMS growth 
shown in 2014 is not likely to be 
continued into 2015 and the focus will 
be on growing the higher margin 
contribution from Chameleon and 
M2M. We have continued to focus on 
these areas in terms of technical and 
sales/commercial expertise, resulting 
in high customer satisfaction and a 
positive outlook for 2015.
Other revenues
Other revenues include the advertising 
revenue from the Manx Telecom 
telephone directory, hardware 
equipment sales, interconnection  
fees from other operators and 
managed services.
Other revenue increased by 8.1% in  
the year to £6.3m (FY13: £5.8m). 
Growth was driven by a 36% increase 
in hardware equipment sales and 
continued success in managed 
services, with revenue growth of  
3%. This performance more than 
compensates for the continuing  
and expected decline in directory 
advertising revenues, which saw 
turnover decrease by 6% in the period.
Summary
In summary, this is a pleasing set of 
results, with revenue and cash 
generation, and EBITDA in line with  
the Board’s expectations.
We continue to focus on providing a 
high quality and innovative service  
to our local customer base. Our 
commitment to continuing investment 
has also been well received by the  
Isle of Man Government, which has 
recognised this by recently renewing  
a number of agreements with 
the Company.
We are looking forward to the revenue 
streams from new GDC customers 
coming through early in 2015 and will 
continue to focus on attracting 
business for Phases II and III of GDC’s 
expansion. We will continue to focus 
on our global solutions business as 
well as seeking new opportunities to 
expand our business using our core 
strengths in terms of network, people 
and customer service.
Mike Dee
CEO of Manx T elecom
key achievements
2014
10 February 
Admission to AIM and first day of 
dealing.
18 February
We won a prestigious silver award in  
the Design Business Association (‘DBA’) 
Design Effectiveness Awards for our 
brand and identity refresh.
28 March
The first phase of our new Greenhill 
Data Centre opened for business.
1 April
Our Business Development team was 
rebranded global solutions, more 
accurately reflecting the scope and 
scale of their growth.
6 May
We announced that superfast VDSL 
broadband would be available to 87%  
of homes and businesses on the 
Island by year-end.
3 July
The Chief Minister, Hon Allan Bell MHK, 
supported the launch of our new 
Distributed Denial of Service 
(‘DDoS’) platform.
17 July
The ‘Manx Missile’, Mark Cavendish 
MBE was announced as an 
ambassador for our 4G service.
29 July
4G services were launched to 
post-paid customers.
16 October
We announced our intention to launch  
a new superfast fixed line broadband 
service based on VDSL Plus 
technology in early 2015.
12 December
The launch date of our 4G service for 
pre-paid customers was announced.
manx telecom plc annual report and accounts 2014 Maintain our leading position in core markets by 
innovating and maintaining the highest levels of 
customer service.  
 
Grow by exploiting new market opportunities  
on-island and off-island with our market leading  
mobile platform and data centre capability.
strategic report
Business lines 2014 review 2015 plan Revenue performance
 – 50,900 voice lines and 25,500 broadband customers at 
year-end.
 – Increase in high speed VDSL broadband coverage to  
87% of homes on the Island.
 – Positive uptake of Manx Telecom ‘Ultima’ VDSL service; 
4,500 customers at year-end and market share of 82%.
 – Introduction of Carrier Pre-select services to fixed 
line market. 
 – Launch of ‘VDSL Plus’ superfast fixed line broadband 
service offering speeds of up to 80Mbps (download) and 
10Mbps (upload) to around 50% of homes and businesses 
on the Island.
 – Continued re-balancing of fixed line rental and 
call charges.
 – Further growth in our broadband business through 
upselling to higher speed packages. 
 – 35,100 pre-paid and 28,900 post-paid customers  
at year-end.
 – Successful launch of 4G services to post-paid customers in 
July; the Island’s first and at year-end, only 4G network, 
providing 99% population coverage.
 – Upgrade of 2G and 3G services in summer to the benefit 
of all mobile customers.
 – Improving churn levels in the second half of the year as a 
direct result of our network improvements.
 – Launch of 4G services to pre-paid mobile customers.
 – Continued upselling of customers to mobile smartphone 
plans, inclusive of 4G data.
 – Further optimisation of our 2G, 3G and 4G networks to 
ensure we remain ‘best for data’.
 – Upgrade of our billing and customer care systems to 
‘convergent’ capability, providing customers with more 
flexible and dynamic tariff plans.
 – Strong growth in all global solutions segments across  
the year delivering a 23% increase in revenue.
 – Gradual decline in lower margin wholesale voice and  
text revenues in the second half of the year, expected 
to continue.
 – Increasing interest to ‘Critical connection’ solutions; driven 
in part by political lobbying on UK coverage ‘not-spots’.
 – Continued growth in critical connection solutions, 
especially in machine 2 machine (‘M2M’) and strongest 
signal roaming (branded Chameleon) sectors.
 – Existing Mobile Virtual Network Enabler (‘MVNE’) 
partnerships forecast to grow through new 
roaming agreements.
 – Further growth in unique Mobile Virtual Network 
Operator (‘MVNO’) agreements, especially in the UK. 
 – Launch of our third data centre; the Tier III Greenhill Data 
Centre (‘GDC’) in Douglas, Isle of Man, providing a capacity 
of 385 racks across all sites.
 – Good interest and pipeline growth throughout 2014.
 – Announcement of our first major ‘anchor tenant’ in 
the GDC.
 – Development of the second phase of GDC offering  
further capacity to fuel demand.
 – Further uptake of data services connectivity by new  
data centre customers. 
 – Launch of our first data centre hosted ‘managed  
services’ solutions.
Fixed line,  
broadband  
and data
Mobile
Global solutions
Data centre
12 Fixed line, broadband and data (£m)
2014
2013
2012
31.3
31.0
30.3
Mobile (£m)
2014
2013
2012
18.4
19.2
19.2
Global solutions (£m)
2014
2013
2012
16.7
13.6
10.8
Data centre (£m)
2014
2013
2012
6.6
6.4
5.5
Business lines 2014 review 2015 plan Revenue performance
 – 50,900 voice lines and 25,500 broadband customers at 
year-end.
 – Increase in high speed VDSL broadband coverage to  
87% of homes on the Island.
 – Positive uptake of Manx Telecom ‘Ultima’ VDSL service; 
4,500 customers at year-end and market share of 82%.
 – Introduction of Carrier Pre-select services to fixed 
line market. 
 – Launch of ‘VDSL Plus’ superfast fixed line broadband 
service offering speeds of up to 80Mbps (download) and 
10Mbps (upload) to around 50% of homes and businesses 
on the Island.
 – Continued re-balancing of fixed line rental and 
call charges.
 – Further growth in our broadband business through 
upselling to higher speed packages. 
 – 35,100 pre-paid and 28,900 post-paid customers  
at year-end.
 – Successful launch of 4G services to post-paid customers in 
July; the Island’s first and at year-end, only 4G network, 
providing 99% population coverage.
 – Upgrade of 2G and 3G services in summer to the benefit 
of all mobile customers.
 – Improving churn levels in the second half of the year as a 
direct result of our network improvements.
 – Launch of 4G services to pre-paid mobile customers.
 – Continued upselling of customers to mobile smartphone 
plans, inclusive of 4G data.
 – Further optimisation of our 2G, 3G and 4G networks to 
ensure we remain ‘best for data’.
 – Upgrade of our billing and customer care systems to 
‘convergent’ capability, providing customers with more 
flexible and dynamic tariff plans.
 – Strong growth in all global solutions segments across  
the year delivering a 23% increase in revenue.
 – Gradual decline in lower margin wholesale voice and  
text revenues in the second half of the year, expected 
to continue.
 – Increasing interest to ‘Critical connection’ solutions; driven 
in part by political lobbying on UK coverage ‘not-spots’.
 – Continued growth in critical connection solutions, 
especially in machine 2 machine (‘M2M’) and strongest 
signal roaming (branded Chameleon) sectors.
 – Existing Mobile Virtual Network Enabler (‘MVNE’) 
partnerships forecast to grow through new 
roaming agreements.
 – Further growth in unique Mobile Virtual Network 
Operator (‘MVNO’) agreements, especially in the UK. 
 – Launch of our third data centre; the Tier III Greenhill Data 
Centre (‘GDC’) in Douglas, Isle of Man, providing a capacity 
of 385 racks across all sites.
 – Good interest and pipeline growth throughout 2014.
 – Announcement of our first major ‘anchor tenant’ in 
the GDC.
 – Development of the second phase of GDC offering  
further capacity to fuel demand.
 – Further uptake of data services connectivity by new  
data centre customers. 
 – Launch of our first data centre hosted ‘managed  
services’ solutions.
13 manx telecom plc annual report and accounts 2014 Mobile
Our 4G service now provides superfast 
mobile broadband coverage to 99% of 
the Isle of Man population. One person to 
benefit immediately was Paul Moulton, the 
person behind MTTV, the Island’s local online 
news and entertainment channel. When 
an important news story is in progress, Paul 
regularly uses Manx T elecom’s 4G service to 
upload an HD video file directly to the MTTV 
servers from the ‘field’, meaning the local 
community is always up to date with the 
latest news.
14 High speed broadband
Our Ultima and Ultima Plus 
broadband services allow 
our customers to connect to 
the internet at up to 80Mbps 
downstream and 10Mbps 
upstream. In early 2015, we 
were delighted to welcome 
our 5,000
th
 customer to the 
Ultima range.
15 manx telecom plc annual report and accounts 2014 Data centre
After a competitive tender , we were delighted 
to welcome an anchor tenant to the new 
Greenhill Data Centre. The Isle of Man 
Government signed a five year contract for 
25 racks, meaning equipment previously 
housed in their own premises and used to 
support frontline Government services, is now 
hosted by Manx T elecom.
16 Global solutions
One of our most innovative  
global solutions customers is 
Matrix, the leading supplier of 
unique roaming solutions to 
international travellers from India. 
Over the last two years, we have 
supplied SIM cards to Matrix, 
which ensure their customers 
always receive the best possible 
local call rates in the country they 
are in, appealing to Indian, leisure 
and business travellers.
manx telecom plc annual report and accounts 2014 17 Group revenue increased by 4.2% to 
£79.3m (2013: £76.0m), with growth in 
our core on-island fixed, broadband 
and data business, supplemented by 
good growth in our global solutions, 
data centre and other revenue 
streams.
The fixed line, broadband and data 
business remained steady, with 
revenue growth of 1.1% to £31.3m (2013: 
£31.0m). global solutions performed 
well in 2014 with growth of 23% to 
£16.7m (2013: £13.6m). The data centre 
business was also steady at £6.6m 
(2013: £6.5m), with growth lower than 
initially anticipated due to a delay in 
the signing of new customer contracts. 
Mobile revenues declined, in line with 
expectations, to £18.4m (2013: £19.2m) 
primarily due to as anticipated 
changes to termination rates. Other 
revenues were £6.3m (2013: £5.8m) 
following an increase in kit sales during 
the year.
The Group generated underlying 
EBITDA of £27.1m (2013: £27.5m), in line 
with expectations. This was lower than 
the previous year due to the increased 
cost of being a public company. The 
Group’s EBITDA margin decreased  
to 34.2% (2013: 36.1%) due to a change  
in product mix during the year, 
particularly within global solutions 
which delivered strong sales of lower 
margin wholesale voice and SMS.
Depreciation and amortisation was 
£9.5m (2013: £9.3m) which includes 
charges for network infrastructure 
(fixed network, broadband network 
and mobile network) as well as IT 
equipment and office equipment.
Underlying operating profit reduced by 
2.8% to £17.6m (2013: £18.1m) before a 
one-off impairment of equipment and 
a one-off pension adjustment following 
the closure of our defined benefit 
pension scheme to future accruals.
We recorded an impairment of 
equipment of £0.6m in relation to the 
write down of our pre-paid mobile 
platform and elements of our fixed 
voice network which are being 
replaced in 2015.
Following the closure of our defined 
benefit pension scheme to future 
accruals we recorded a one-off 
non-cash credit of £7.0m which 
partially offset previous years’ losses. 
This was in turn offset by a cash 
payment of £0.8m to transition 
members to our defined contribution 
pension scheme.
Underlying profit before tax increased 
by 77.1% to £12.9m (2013: £7.3m) primarily 
due to lower interest charges following 
the reduced level of debt post IPO.
Underlying diluted EPS was 12.17p, in 
line with expectations – based on total 
outstanding shares as at 31 December 
2014 of 112,959,787. It is worth noting 
that FY 2013 EPS of 14.69p was 
calculated under the previous private 
equity capital structure and as such 
reflects a very different capital 
structure to the one now in place.
The Company paid a maiden interim 
dividend of 3.3p in November 2014  
and it will pay a final dividend of 6.6p 
in June 2015.
Costs
Costs (excluding costs associated with 
the IPO, finance costs and pension 
reorganisation costs) increased by 
2.7%, or £1.7m, in the year. The main 
component of costs is staff, whose 
cost increased by 3.1% in the period, 
and included bonus payments based 
upon the successful achievement of 
targets across the Group.
Roaming costs increased by 22% in the 
year, driven by the continued success 
of our global solutions business. 
Energy costs were flat during 2014 
reflecting slower than expected initial 
occupancy of our new data centre. 
Mobile handset costs were 4% lower 
due to iPhone 6 supply constraints 
over the Christmas period, whilst 
maintenance charges increased 14% 
primarily due to our Next Generation 
Network (‘NGN’) completing its 
warranty period.
Net finance costs
Net finance costs were £8.4m (2013: 
£15.9m) including interest payments on 
bank facilities of £2.9m (2013: £7.1m), 
and interest payable on shareholder 
loan notes of £0.3m (2013: £3.9m).
Also included within the finance costs 
was a £4.6m charge against previously 
capitalised transaction charges, 
following the changes to financing 
arising from the IPO in February 2014.
One off costs associated with the IPO 
and related restructuring, charged to 
the income statement, were £8.0m.
We recorded a net loss of £1.3m on 
interest rate swaps, of which £0.3m 
related to the early cancellation of an 
interest rate swap in relation to the 
pre-IPO debt and an unrealised loss of 
£1.0m on interest rate swaps, having 
hedged £50m of our £70m gross IPO 
debt through its maturity in June 2018 
at an all-in rate of 3.7% per annum.
strategic report
18 Taxation
There is no corporate taxation payable 
on our profits for either 2014 and the 
comparative year. We have the benefit 
of an Isle of Man 0% corporate tax rate.
Cash flow
Cash generated from operating 
activities increased by 3.6% to £29.1m, 
(2013: £28.1m). This represents an 
underlying EBITDA cash conversion of 
107% (2013: 102%), the improvement 
driven primarily by good working capital 
management. The Company reported 
a working capital inflow of £1.6m, which 
included an accrual for final payments 
for 4G of £3m, due in 2015.
Our free cash flow after investing 
activities was 7.5% lower at £14.8m (2013: 
£16.0m), out of which we serviced our 
borrowings, financed our IPO and paid 
our maiden dividend to shareholders.
Good cash generation enabled us  
to reduce our net debt to £53.7m, 
equivalent to 1.98 times Adjusted EBITDA.
Capital expenditure
Capital expenditure for 2014, including 
intangibles, was £12.6m (2013: £10.0m), 
and included a £3m accrual for our 
4G mobile network relating to final 
payments due in 2015. Adjusting for  
the 4G accrual, capital expenditure 
including intangibles was £9.6m.
Significant capital expenditure in the 
period included the launch of the 4G 
mobile network and completion of 
Phase I of our new data centre in 
March 2014 which cost £3.6m (£1.5m 
paid in 2014). We were pleased to 
receive a £0.3m grant from the Isle of 
Man Government by way of support 
for this investment.
The remaining capital expenditure was 
spread across a number of business 
areas including network enhancements, 
IT and customer projects.
Balance sheet
Property, plant and equipment 
increased during the year by £2.5m to 
£65.1m primarily due to the completion 
of our 4G mobile network project in 
2014. Capital expenditure, including 
intangibles, of £12.6m exceeded 
depreciation of £9.3m but included  
an accrual for the completion of the  
4G mobile network of £3.0m.
We retain goodwill of £84.3m on the 
balance sheet arising from the 
purchase of Manx Telecom from 
Telefónica in 2010, which is robustly 
supported by current valuations.
The Group operates two pension 
schemes, a defined benefit scheme, 
and a defined contribution plan. During 
2014 the defined benefit scheme was 
closed to future accruals, and all 
current members transferred to a 
defined contributions scheme. Under 
accounting standard IAS19 the defined 
benefit scheme is shown as an asset of 
£2.2m (2013: £6.4m liability), in contrast 
to the previous full actuarial valuation 
which was completed in March 2014 
and showed a deficit of £7.7m.
Current assets increased to £32.7m 
(2013: £31.9m). Cash held at the end of 
the period, increased to £15.2m (2013: 
£13.5m). Trade receivables improved 
by £0.5m due to lower prepayments 
and an increase in the provision for 
bad debts.
Current liabilities increased to £27.5m 
(2013: £25.8m) primarily due to a 
provision for final payments for the 
4G mobile network. In September 2014 
the Company entered an interest rate 
swap which covered £50m of its 
banking debt (£70m) through to its 
maturity in June 2018. The fair value  
of the interest rate swap was a £1.0m 
liability (2013: £0.6m asset).
Non-current liabilities reduced 
significantly to £68.9m (2013: £153.1m) 
primarily following the IPO in February 
2014. Borrowings and interest payable 
were £68.9m (2013: £115.7m), following 
the repayment of the debt which was 
in place pre-IPO and entry into a new 
£70m facility. All shareholder loans 
were repaid on admission to AIM.
Net debt ended the period at £53.7m 
down from £134.1m at the end of 2013, 
following the capital raise at IPO, 
subsequent repayment of bank  
and shareholder debt and entry into  
a new banking arrangement as a 
public company, establishing a more 
conservative capital structure for  
the Company than under previous 
ownership.
During 2014 we issued a number  
of free shares to our workforce  
and introduced a share save scheme 
open to all employees. We are very 
pleased to report that over 80% of  
our workforce entered the share 
save scheme.
Gary Lamb
Finance Director
19 manx telecom plc annual report and accounts 2014 Business areas – 
management team
Risk identification 
and analysis.
Working with middle 
management and team 
leaders to identify and 
quantify principal areas 
of risk.
Group Risk 
Coordinator
Executive 
Committee
Audit and 
Risk Committees
Board
Leadership team – 
review and prioritisation
The leadership team 
review and challenge 
the findings of the 
Management Team.
Review of the impact 
and probability of risks 
supports informed 
decision making 
regarding prioritisation 
and mitigation strategies.
Audit Committee – 
oversight and control
Risk Register is reviewed 
periodically.
Suitability of controls and 
mitigations is validated, 
and where necessary 
Internal Audit and other 
independent bodies as 
appropriate will provide 
further assurance.
Main Board – 
review
Review and 
Confirmation by the 
Board to ensure that 
the Risk Management 
Framework acts 
effectively to mitigate 
risks appropriately.
strategic report
risk 
management
Risks are identified and managed 
through our Risk Management 
Framework (see below), which 
ensures that the impact of any specific 
risk is mitigated appropriately.
The review of the business at IPO 
helped us confirm that the processes 
for the identification and managing of 
the business risks were robust, and 
had identified most of the risks that the 
business was open to, and specifically 
the key risks to the business.
Our Risk Management process 
involves managers at all levels of the 
organisation, and is supported by the 
internal audit function, and other 
independent bodies, to systematically 
identify and quantify business risks,  
as we perceive them. This includes 
specific focus upon health, safety, 
environmental, security, and any other 
areas of standards or compliance.
We acknowledge that our processes 
provide reasonable assurance that the 
risks facing the business are identified, 
and that we can subsequently 
manage these risks so that any 
potential impacts are reduced 
appropriately. However, we recognise 
that we cannot guarantee that all risks 
are identified, or that the nature of 
identified risks will remain constant.
The Board
The Board has overall responsibility 
for ensuring that the Group maintains 
sound internal control and risk 
management systems, as well as 
reviewing the effectiveness of those 
systems. In order to do this, the Board 
receives regular reports from senior 
management, the Internal Audit team 
and the external auditors, via the Audit 
Committee, on the effectiveness of the 
systems of internal control and risk 
management. The Board is satisfied 
that the systems are embedded 
within the day-to-day activities of  
the business and cover all material 
controls, including financial, 
operational and compliance controls 
and that the Group continues to be 
compliant with the provisions of the 
UK Corporate Governance Code 
relating to internal control.
Risk Committee
The Risk Committee consisting of 
senior management representatives 
from across the Group, has been 
established to consider all types of risk, 
and meets on a regular basis. Input is 
received from around the business, 
and from external sources to inform 
on progress with risk action plans, and 
to ensure that new and emerging risks 
are identified and monitored.
20 21 manx telecom plc annual report and accounts 2014 principal 
risks
Risk Impact Mitigation Changes in the year Risk level
Regulation Manx Telecom operates under licence from the Isle 
of Man Communications Commission, which 
regulates the telecoms market on the Island. An 
adverse change to our licence or in the focus of 
regulation would be a significant risk to the business.
We remain committed to open dialogue with  
the regulator so that we work together to support 
the continuing growth of the economy, through 
investing in the business to support the 
introduction of new and innovative products.
The opening of the new data centre, and the launch of mobile 4G services have 
served to reinforce our commitment to the Island, and discussions with the Isle of 
Man Communications Commission have progressed towards the introduction of a 
wholesale fixed line product.
Stable
Increased 
competition
Competition in the domestic and wider markets  
has the potential to significantly impact our 
revenue streams.
To date we have successfully maintained a strong 
domestic market share of more than 75% in areas 
where we face competition.
A strategy to continue focusing on Customer 
Service and Value Added propositions across the 
portfolio of our products means that we are able 
to maintain market share and build customer 
loyalty, rather than try to compete purely on price.
We regularly benchmark product pricing against 
domestic competition, and against other markets to 
ensure that our strategy remains effective.
Our principal competitors have continued to focus their efforts on gaining market 
share, although the impact to the Group has been marginal. During the year the 
regulator announced a roadmap for the introduction of wholesale products in the 
fixed line market, although alternative calling products have been available for 
several years. This was expected and we are working with the regulator towards 
a launch.
Stable
Legislative 
change 
(tax)
Current corporate tax arrangements make the Isle of 
Man an attractive economy in which to invest and do 
business. The Group benefits from this environment 
both directly from the zero % corporate tax rate, and 
also from the wider economic benefit that arises 
from a growing economy. Significant changes to 
legislation both on the Isle of Man and further afield 
could result in a deterioration of the economy.
The Group has little opportunity to directly 
influence Government Policy or legislation, 
although we communicate our position through 
regular discussion with members of the legislature, 
and we actively support current government policy 
by working with the Government to attract new 
business to the Island.
Clear focus on attracting new business to the Island remains a high priority for the 
Isle of Man Government, and during the year the Group has actively supported 
inward investment through a joint presence at trade shows.
Stable
Technology The market in which the Group operates creates a 
high reliance on technology for the provision of 
services to our Customers. In the event that elements 
of the service provision fail as a result of failures in our 
network, the impact is likely to be felt beyond any initial 
revenue loss, and is likely to extend to reputational 
damage and a loss of customer confidence, with the 
attendant impact on future business.
The technology strategy focuses on network 
resilience, future proofing wherever possible, 
decreasing the dependency on single supplier, and 
the use of ‘off the shelf’ technologies, rather than 
bespoke solutions.
During the year the Group has reviewed and refined the technology investment 
strategy to support the continuing reduction in technology risk. This strategy has 
been approved by the Board.
Decreasing
Pension The Group supports a defined benefit pension 
scheme for some employees which has been 
closed to future accrual. Market conditions and 
investment strategies will continue to impact the 
schemes assets and could materially impact the 
ability of the scheme to meet its liabilities.
Regular review of the scheme’s assets and 
liabilities provides an opportunity to ensure that 
the scheme operates efficiently, and that any 
issues that arise can be addressed in a timely 
manner. The Trustees are provided with support 
to ensure that the scheme continues to deliver the 
necessary returns to fund its ongoing liabilities.
During 2014, the Group worked with the many stakeholders to close the defined 
benefit pension scheme to future accruals, thus mitigating the risk substantially.
Decreasing
strategic report
22 Risk Impact Mitigation Changes in the year Risk level
Regulation Manx Telecom operates under licence from the Isle 
of Man Communications Commission, which 
regulates the telecoms market on the Island. An 
adverse change to our licence or in the focus of 
regulation would be a significant risk to the business.
We remain committed to open dialogue with  
the regulator so that we work together to support 
the continuing growth of the economy, through 
investing in the business to support the 
introduction of new and innovative products.
The opening of the new data centre, and the launch of mobile 4G services have 
served to reinforce our commitment to the Island, and discussions with the Isle of 
Man Communications Commission have progressed towards the introduction of a 
wholesale fixed line product.
Stable
Increased 
competition
Competition in the domestic and wider markets  
has the potential to significantly impact our 
revenue streams.
To date we have successfully maintained a strong 
domestic market share of more than 75% in areas 
where we face competition.
A strategy to continue focusing on Customer 
Service and Value Added propositions across the 
portfolio of our products means that we are able 
to maintain market share and build customer 
loyalty, rather than try to compete purely on price.
We regularly benchmark product pricing against 
domestic competition, and against other markets to 
ensure that our strategy remains effective.
Our principal competitors have continued to focus their efforts on gaining market 
share, although the impact to the Group has been marginal. During the year the 
regulator announced a roadmap for the introduction of wholesale products in the 
fixed line market, although alternative calling products have been available for 
several years. This was expected and we are working with the regulator towards 
a launch.
Stable
Legislative 
change 
(tax)
Current corporate tax arrangements make the Isle of 
Man an attractive economy in which to invest and do 
business. The Group benefits from this environment 
both directly from the zero % corporate tax rate, and 
also from the wider economic benefit that arises 
from a growing economy. Significant changes to 
legislation both on the Isle of Man and further afield 
could result in a deterioration of the economy.
The Group has little opportunity to directly 
influence Government Policy or legislation, 
although we communicate our position through 
regular discussion with members of the legislature, 
and we actively support current government policy 
by working with the Government to attract new 
business to the Island.
Clear focus on attracting new business to the Island remains a high priority for the 
Isle of Man Government, and during the year the Group has actively supported 
inward investment through a joint presence at trade shows.
Stable
Technology The market in which the Group operates creates a 
high reliance on technology for the provision of 
services to our Customers. In the event that elements 
of the service provision fail as a result of failures in our 
network, the impact is likely to be felt beyond any initial 
revenue loss, and is likely to extend to reputational 
damage and a loss of customer confidence, with the 
attendant impact on future business.
The technology strategy focuses on network 
resilience, future proofing wherever possible, 
decreasing the dependency on single supplier, and 
the use of ‘off the shelf’ technologies, rather than 
bespoke solutions.
During the year the Group has reviewed and refined the technology investment 
strategy to support the continuing reduction in technology risk. This strategy has 
been approved by the Board.
Decreasing
Pension The Group supports a defined benefit pension 
scheme for some employees which has been 
closed to future accrual. Market conditions and 
investment strategies will continue to impact the 
schemes assets and could materially impact the 
ability of the scheme to meet its liabilities.
Regular review of the scheme’s assets and 
liabilities provides an opportunity to ensure that 
the scheme operates efficiently, and that any 
issues that arise can be addressed in a timely 
manner. The Trustees are provided with support 
to ensure that the scheme continues to deliver the 
necessary returns to fund its ongoing liabilities.
During 2014, the Group worked with the many stakeholders to close the defined 
benefit pension scheme to future accruals, thus mitigating the risk substantially.
Decreasing
23 manx telecom plc annual report and accounts 2014 At Manx T elecom, we know that it’s not enough to provide 
great products and services, and support the community 
through a range of sponsorships and charitable initiatives. 
Our responsibility to the Isle of Man goes much further 
and embraces wider social, environmental, and ethical 
goals, especially through the use of technology.
24
strategic report Our responsibility 
to the Isle of Man 
embraces social, 
environmental and 
ethical goals, especially 
through the use of 
technology and with 
the support of our 
280 employees.
Support for our colleagues
Giving something back to the Isle of 
Man and its residents is something 
Manx Telecom is extremely passionate 
about and which we encourage our 
employees to actively participate in. 
Our Compliment Scheme allows local 
charities to benefit from a donation 
when customers pay tribute to a 
member of staff who has given them 
especially good service. Annual funding 
is provided to community initiatives 
that our staff are actively involved in, 
while staff are also given time to help 
local charities and organisations. In 
2014, Special Olympics Isle of Man, the 
junior cycling league, local heritage 
centres and endowment trusts all 
benefited from our support.
Online safety
We have a raft of initiatives designed to 
help young people stay safe, both 
when using the internet, and their 
mobile phone. Our ‘Staying Safe 
Online’ leaflet was produced to help 
make children more aware of the 
dangers of using social networks, the 
internet and chatrooms. In early 2015, 
and in conjunction with Isle of Man 
College and the Isle of Man 
Constabulary, we created a new 
guide specifically aimed at teenagers, 
to help them stay safe online. The new 
e-safety guide was launched on Safer 
Internet Day 2015 and contained hints 
and tips on everything from how to 
manage a digital footprint to where to 
go if someone is a victim of cyber 
bullying. We also supported ‘Crucial 
Crew’, an island-wide initiative from 
multiple organisations and companies 
to help children learn important life 
skills and stay safe. 
Recycling
Manx Telecom introduced the first 
mobile phone recycling initiative on  
the Isle of Man. Anyone can take an 
old mobile phone to our Douglas shop 
or to the Manx Telecom Headquarters 
building, which is then refurbished 
and reused in developing countries. 
Those which are not reusable are 
disposed of safely, with no harmful 
elements put into landfill where they 
might leak into the environment. 
We also actively promote a trade-in 
scheme, where customers can trade 
in their old device to receive a discount 
off a new handset or tablet. In this 
instance, we partner with Mazuma 
mobile, who refurbishes and 
redistributes the handsets overseas, 
where mobile phones have become 
indispensable in helping drive social 
change and economic growth in 
developing countries.
Digital inclusion
Manx Telecom is delighted to work 
with the Isle of Man Government on a 
pilot project to explore ways to reduce 
social isolation and its associated 
health risks amongst older people, 
particularly those living independently 
in rural areas. Increasingly, research is 
showing that access to the internet – 
and particularly the ability to connect 
online with friends and family – can 
reduce feelings of loneliness amongst 
older people and can give them 
access to a range of different benefits. 
Manx Telecom also provides dedicated 
training and knowledge sharing to 
elderly people, as well as support to 
Age Isle of Man with internet access to 
their ‘drop-in’ centres on the Island. 
manx telecom plc annual report and accounts 2014 26
We are proud of our established role in developing 
and enhancing the local Isle of Man community, 
especially through the use of technology.
We know our continued success depends on the 
health of the wider community, and have an 
active and extensive programme which 
supports events, people, and community groups 
in a whole variety of ways – from simple 
donation of funds, to sponsorship, hands on 
help, and donations of equipment. Our 
customer loyalty programme also provides local 
businesses with the opportunity of reaching out 
to the Manx Telecom customer base in a 
mutually beneficial way. 
We seek to sponsor and support activities that 
by definition strive to build a stronger local 
community, that are consistent with our values 
and are relevant to our staff and our customers. 
In 2014, we were delighted to support two 
‘superfast’ local sporting superstars. Mark 
Cavendish MBE was on hand in July to launch 
and endorse our new 4G network in his role as 
a Manx Telecom 4G ambassador. We were also 
proud to support the motorcycle-racing 
ambitions of local rider Conor Cummins, and his 
skill and determination was rewarded with two 
TT podium finishes.
We were also a ‘Team Isle of Man champion’ 
supporting our Commonwealth Games squad 
in Glasgow and the official communications 
partner for Island of Culture 2014, which celebrated  
dance, music, theatre, film and digital innovation 
on the Island.
strategic report
Photo courtesy of @TDWsport.com our sponsorships
manx telecom parish walk
Now in its 102
nd
 year, the famous 24 hour, 85 mile 
walk around each of the Isle of Man’s 17 parishes 
is, undoubtedly, the biggest community event on 
the Island, each year attracting approximately 
1,700 entrants and thousands more helpers  
and supporters.
We have provided a comprehensive timing and 
results service for the Parish Walk since 2007 and 
were proud to assume title sponsorship in 2011. 
We provide the event organisers with technical, 
logistical, marketing and financial support. The 
Manx Telecom Parish Walk brings out the very 
best in our Island community and every year, 
those who take part raise large sums for a host 
of charities and good causes. The 2015 walk takes 
place on 27 June. 
the royal show with manx telecom
The Royal Manx Show is a longstanding Manx 
institution offering a prestigious annual agricultural 
show alongside a weekend of fun, entertainment 
and attractions for the entire family. Manx 
Telecom is in its fourth year of sponsorship and 
works closely with the show committee to ensure 
the Royal Manx Show is welcomed every year by 
the entire community. This year’s show falls on 
the weekend of 7 and 8 August.
manx telecom end 2 end challenge
Claiming to be ‘Europe’s biggest and best single 
day mountain bike event’, the Manx Telecom 
‘end 2 end’ Challenge is now in its 18
th
 year. The 
end 2 end provides a unique 75 km endurance 
challenge from the North to the South of the 
Island, through plantations, across heather 
clad moors, forest trails, sharp climbs and 
breathtaking descents. Manx Telecom supports 
the event with both funding and technical 
support.
Over 1,500 competitors from the Isle of Man, UK 
and beyond – many of whom have overcome 
personal challenges to take part – will this year 
be on the start line on 13 September.
it’s our 
community
This is our scheme that supports 
a wide range of local community 
projects with cash awards. Since 
it began in 2008 Manx T elecom’s 
It’s ‘our community’ scheme has 
donated thousands of pounds 
to local charities and community 
groups. In 2014, 13 organisations 
from across the Island benefitted 
from the scheme, including 
Manx Wildlife T rust, the Women’s 
Institute Choir and the Friends of 
St. John’s Ambulance. Projects 
for young people, the arts, the 
environment plus schools and 
sports clubs also received support.
The scheme will continue in 
2015, with the closing date for 
applications that demonstrate 
bold and innovative thinking being 
30 September . 
manx telecom plc annual report and accounts 2014 Kevin Walsh
Non-Executive Chairman
Kevin was appointed Chairman on  
the Company’s admission to AIM in 
February 2014. He is also Chairman  
of the Remuneration Committee.
Kevin was an Executive Director of 
KCOM Group plc, between May 2004 
and August 2014. In addition he was 
the Chief Executive for the KC brand, 
which is the market-leading internet 
and telecoms provider for Hull and 
East Yorkshire. Prior to joining KCOM  
in 2000 Kevin was Managing Director 
of an internet startup and held a 
number of Divisional Managing Director 
roles within the Electrolux group.
governance
Jeffrey Hume
Senior Independent Non-Executive 
Director
Jeffrey Hume joined the business  
as a Non-Executive Director and the 
Chairman of its Audit Committee in 
January 2013. He became the Senior 
Independent Director of Manx Telecom 
plc on its IPO and subsequently  
the Chairman of the Nominations 
Committee. He is also the Deputy 
Chairman of the Dover Harbour board, 
the Senior Independent Director of the 
housing association Moat Homes Ltd, a 
member of the London Stock Exchange’s 
Primary Markets Group, and was the 
Chairman of Hyder Consulting plc until its 
sale in 2014. He is a Fellow of both the 
Institute of Chartered Accountants and 
the Association of Corporate Treasurers.
Sir Miles Walker, CBE, LLD (hc)
Non-Executive Director
Sir Miles was awarded a Knight 
Batchelor in 1997 for services to the 
Government of the Isle of Man and 
was honoured as Commander of the 
British Empire in 1990. He became a 
director of the family company, which 
was involved with dairy farming and 
the retail dairy industry. From 1976 to 
2001, Sir Miles was a member of the 
Isle of Man Government, having been 
re-elected in 1981, 1986, 1991 and 1996. 
Highlights of his career include being in 
First Ministerial Office from 1981 to 1986, 
Chief Minister from 1986 to 1996 and a 
Member of Treasury from 1996 to 2001.
Mike Dee
Chief Executive Officer
Mike Dee is a qualified accountant 
(CIMA) and was appointed CEO  
in April 2011. He has over 30 years of 
experience at Manx Telecom. In 1987, 
Mike was part of the BT team involved 
in setting up Manx Telecom and as 
former Finance Director and Company 
Secretary was instrumental in the 
Company’s subsequent ownership 
changes. Before joining British Telecom 
plc in 1983, Mike held positions with the 
Dowty Group, Iloman Engineering and 
Castle Industries.
Gary Lamb
Finance Director and Company 
Secretary
Gary Lamb joined the business in 
October 2011 as Finance Director. Gary 
is a qualified accountant (CIMA) who 
has gained extensive business 
experience over the past 20 years in 
numerous senior roles. Prior to joining 
Manx Telecom, Gary was a Founder 
Director of Bladon Jets Limited and 
remains a Non-Executive Director. 
Prior to this, Gary was the Finance & IT 
Director of Strix Limited, a world-
leading innovator and manufacturer 
of thermostatic controls for water 
boiling appliances.
28 Kevin Paige
Customer Services and T echnology 
Director
Kevin has more than 30 years’ 
experience in the telecoms and IT 
industries and joined Manx Telecom  
in 2013 with responsibility for all 
technology aspects of Manx Telecom’s 
product portfolio, and service delivery 
on and off the Island. Before joining 
Manx Telecom, Kevin was with eircom, 
Ireland’s largest telecommunications 
operator. From 2007 to 2010, Kevin 
worked for Level 3 Communications 
as Senior Vice President Technology 
Services – Europe and prior to that, 
held senior positions with Cable & 
Wireless and Vodafone UK.
John McChesney
Human Resources Director
Prior to joining Manx Telecom in 2003, 
John held a number of key HR roles, 
primarily within the finance sector.  
He spent 16 years with the Zurich 
Financial Services group, and moved 
to live on the Island in 1995 to review 
and build the HR function within  
Allied Dunbar. He also spent time  
at Mi Research Ltd, an international 
consultancy group specialising in 
organisational culture change.
David Smith
Marketing Director
David joined Manx Telecom 
 in January 2011 and leads the  
marketing communications, product 
management and consumer sales 
teams. Prior to joining Manx Telecom, 
David was Regional Vice President 
Marketing Communications for Cable & 
Wireless in the Caribbean where he 
played a major role in developing and 
launching new brand propositions 
across 13 countries. He has also  
held senior marketing positions for 
telecoms operators in the UK, the 
Channel Islands, the Caribbean 
and Pakistan.
Fergal McKenna
Sales Director
Fergal joined Manx Telecom as Sales 
Director in January 2012. He has 
extensive experience gained working 
first with Siemens Nixdorf and more 
recently with Cable & Wireless and  
Colt in leadership positions in Ireland, 
the UK and Europe. He was Director 
of Corporate Sales in Ireland and  
also led Colt’s sales team in the UK 
finance sector, focusing on major 
international banks.
29 manx telecom plc annual report and accounts 2014 30
directors’ report
The Directors are pleased to present their Annual 
Report and consolidated financial statements of Manx 
Telecom plc for the year ended 31 December 2014.
On 10 February 2014 the Company secured admission to 
the London Stock Exchange as an AIM stock (‘Admission’).  
At this point its private equity controlling shareholders 
exited. As a result, approximately 97.8% of the Company’s 
shares are now freely traded and in the most part held  
by long-term institutional investors.
The Group’s business activities, together with the factors 
likely to affect its future development, performance and 
position are set out in the Strategic Report on pages 1 to 27 
which is incorporated into this report by reference together 
with the Corporate Governance Report on pages 33 and 34. 
These together contain certain forward-looking statements 
and forecasts with respect to the financial condition, results, 
operations and business of Manx Telecom plc which may 
involve risk and uncertainty because they relate to events 
and depend upon circumstances that will occur in the 
future. There are a number of factors that could cause 
actual results or developments to differ materially from 
those expressed or implied by these forward-looking 
statements and forecasts. Nothing in this Annual Report to 
shareholders should be construed as a profit forecast.
Results and dividends
Results for the year are set out in the financial statements 
on pages 43 to 47. The financial position of the Group, its 
cash flows and liquidity position are further described in the 
Financial Review on pages 18 to 19.
Details of the proposed final dividend for the year ended 
31 December 2014 are given in the Strategic Report on 
page 6. An interim dividend of 3.3p per share for the six 
months ended 30 June 2014 was paid on 10 November 2014.
Directors
The names and biographies of the current Directors of the 
Company are set out on page 28 of this Annual Report. 
The following Directors were appointed as Directors of  
the Company on 14 January 2014:
Mike Dee
Gary Lamb
Kevin Walsh
Jeffrey Hume
Sir Miles Walker
The following Directors resigned on 3 February 2014:
Simon Cain
Alexander King
Faye Moffatt
Directors’ share interests
Particulars of the number of ordinary shares of the 
Company in which the Directors were beneficially 
interested immediately following Admission on 10 February 
2014 and at 31 December 2014 are set out below. 
At  
10 February 
2014
At  
31 December 
2014
Mike Dee 576,228 576,228
Gary Lamb 500,000 500,000
Jeffrey Hume 70,422 70,422
Sir Miles Walker 63,523 63,523
Kevin Walsh 70,422 70,422
Directors’ remuneration
The Directors’ Remuneration Report is set out on pages 37 
to 40.
Related parties
The Group has no related parties other than the Directors 
and key management personnel.
Directors’ indemnities
The Articles permit the Board to grant the Directors 
indemnities in relation to their duties as Directors, including 
third party indemnity provisions (within the meaning of the 
Isle of Man Companies Act 2006) in respect of any liabilities 
incurred by them in connection with any negligence, default, 
breach of duty or breach of trust in relation to the 
Company. Deeds of indemnity have been granted to each 
Director, but do not cover criminal acts. 
Directors’ and Officers’ liability insurance
Directors’ and Officers’ Liability Insurance cover is in place at 
the date of this report. The Board remains satisfied that an 
appropriate level of cover is in place and a review of cover 
will take place on an annual basis.
Articles of Association
The Articles of Association (‘Articles’), adopted on 3 February 
2014, may only be amended by special resolution of the 
shareholders. A copy of the Articles is available on request 
from the Company Secretary.
Share capital: structure, rights and restrictions
Details of the Company’s share capital are set out in note 16 
to the financial statements on pages 68 to 69. The Company 
has a single class of share capital divided into 112,959,787 
ordinary shares of £0.002 each. The rights and obligations 
attaching to these shares are governed by Isle of Man law 
and the Company’s Articles. 
Voting rights attaching to shares
Ordinary shareholders are entitled to receive notice and to 
attend and speak at any general meeting of the Company. 
On a show of hands every shareholder present in person 
or by proxy (or being a corporation represented by a duly 
authorised representative) shall have one vote, and on a 
poll every shareholder who is present in person or by proxy 
shall have one vote for every share of which he is the 
holder. The Notice of Annual General Meeting specifies 
deadlines for exercising voting rights and appointing a proxy 
or proxies.
governance 31 manx telecom plc annual report and accounts 2014
Deadlines for exercising voting rights attaching  
to shares
The Articles provide a deadline for the submission of proxy 
forms (whether by an instrument in writing or electronically) 
of not less than 48 hours before the time appointed for the 
holding of the meeting or the adjourned meeting.
Shares in uncertificated form
Directors may determine that shares may be held in 
uncertificated form and title to such shares may be 
transferred by means of a relevant system or that shares 
should cease to be so held and transferred.
Variation of rights attaching to shares
The Articles provide that rights attached to any class of 
shares may be varied with the written consent of the 
holders of not less than three quarters in nominal value of 
the issued shares, or with the sanction of a special 
resolution passed at a separate general meeting of the 
holders of those shares. At every such separate general 
meeting, the quorum shall be two persons holding or 
representing by proxy at least one third in nominal value of 
the issued shares (calculated excluding any shares held in 
treasury). The rights conferred upon the holders of any 
shares shall not, unless otherwise expressly provided in the 
rights attaching to those shares, be deemed to be varied by 
the creation or issue of further shares ranking pari passu 
with them.
Restrictions on the transfer of shares and voting rights 
attaching to shares
There are no restrictions on the transfer of the ordinary 
shares other than:
• each of the Directors has undertaken that they shall not 
effect any direct or indirect sale or enter into any 
agreement to effect any direct or indirect sale of any of 
his shares within 24 months of Admission except in 
circumstances where they have discussed in advance 
the manner and timing of such sale with Liberum Capital 
Ltd, as the Company’s Nominated Adviser;
• awards made at Admission under the Co-Investment 
Plan are conditional upon the participant retaining his 
investment shares; 
• where, from time to time, certain restrictions may 
become imposed by laws and regulations (for example, 
insider trading laws); and 
• pursuant to the Listing Rules of the Financial Conduct 
Authority whereby certain Directors, officers and 
employees of the Company require the approval of the 
Company to deal in the ordinary shares. 
No shareholder holds securities carrying special rights as to 
the control of the Company. There are no limitations on the 
holding of securities. There are no restrictions on voting 
rights or any arrangements by which, with the Company’s 
cooperation, financial rights carried by securities are held by 
a person other than the holder of the securities. There are 
no agreements between holders of securities that are 
known to the Company which may result in restrictions on 
the transfer of voting rights.
Authority to purchase own shares
The Directors have been authorised to purchase up to 10% 
of the Company’s issued ordinary share capital as at 
Admission. This authority will expire at the Annual General 
Meeting in 2015 at which a resolution to renew the authority 
for a further year will be proposed. No shares have been 
purchased by the Company since Admission.
As at 20 April 2014, being the latest practicable date prior to 
the publication of this report, the Company did not hold any 
shares in treasury.
Appointment and replacement of Directors
Unless determined by ordinary resolution of the Company, 
the number of Directors shall not be less than two. A 
Director is not required to hold any shares in the Company 
by way of qualification. 
The Board may appoint any person to be a Director and 
such Director shall hold office only until the next AGM, when 
he or she shall be eligible for appointment by the 
shareholders. The Articles provide that at each AGM, one 
third of the Directors for the time being (or, if their number is 
not a multiple of three, then the number nearest to but not 
exceeding one third) shall retire from office. A Director who 
retires at any AGM shall be eligible for re-appointment. In 
addition, any Director appointed by the Board shall hold 
office only until the next following AGM and shall then be 
eligible for appointment.
Power of Directors
Subject to the Articles, the Isle of Man Companies Act 2006 
and any directions given by special resolution, the business 
of the Company shall be managed by the Board who may 
exercise all the powers of the Company to, for example: 
borrow money; mortgage or charge any of its undertakings, 
property and uncalled capital; and issue debentures and 
other securities, whether outright or as collateral security 
for any debt, liability or obligation of the Company.
Political donations
The Company has made no political donations since 
Admission on 10 February 2014 and intends to continue its 
policy of not doing so for the foreseeable future.
Post-balance sheet events
Post-balance sheet events are set out in note 25 to the 
financial statements on page 78. 32
Major interests in shares
As at 27 April 2015, the Company had been advised, in accordance with the Disclosure and Transparency Rules of the 
Financial Conduct Authority, of the following notifiable interests (whether directly or indirectly held) in 3% or more of its 
voting rights: 
Number of securities in issue – 112,959,787. AIM securities not in public hands – 2.16%. 
Identity of significant shareholders (over 3%) as follows: 
%
Artemis Investment Management LLP 9.36
Blackrock Investment Management (UK) Limited 7.52
Standard Life Investments Limited 7.35
FIL Investment Services (UK) Limited 6.32
AXA Investment Managers UK Limited 5.65
Aberdeen Fund Managers Limited 5.54
Hargreave Hale Limited 5.12
Premier Fund Managers Limited 4.71
Oakley Capital Management Limited 3.43
Going concern
After making enquiries, the Directors have a reasonable 
expectation that the Group has adequate resources to 
continue in operational existence for the foreseeable future. 
In making this assessment they have considered the 
Company and Group budgets, and cash flow forecasts for 
the period to December 2016. The Group has considerable 
financial resources, minimal liquidity risk and is operating 
within a sector that is experiencing relatively stable demand 
for its products. The Directors therefore have a reasonable 
expectation that the Company and the Group have 
adequate resources to continue in operational existence for 
the foreseeable future. Thus they continue to adopt the 
going concern basis of accounting in preparing the annual 
financial statements.
Audit information
Each of the Directors at the date of the approval of this 
report confirms that:
• so far as he is aware, there is no relevant audit 
information of which the Company’s auditors are 
unaware; and
• he has taken all the reasonable steps that he ought to 
have taken as a Director to make himself aware of any 
relevant audit information and to establish that the 
Company’s auditors are aware of the information.
Registered agent
The registered agent of the Company at 31 December 2014 
was Appleby Trust (Isle of Man) Limited who served 
throughout the year and has continued to date.
Auditors
The Auditors, KPMG Audit LLC, have indicated their willingness 
to continue in office and a resolution seeking to reappoint 
them will be proposed at the Annual General Meeting.
Annual General Meeting
The Company’s Annual General Meeting will be held at Isle 
of Man Business Park, Cooil Road, Braddan, Isle of Man 
IM99 1HX on 8 June 2015 at 4pm. Details of the meeting 
venue and the resolutions to be proposed are set out in a 
separate Notice of Meeting. 
The Directors’ Report has been approved by the Board of 
Manx Telecom plc.
Signed on behalf of the Board.
Gary Lamb
Company Secretary
27 April 2015
Manx Telecom plc
Registered Office: 
33-37 Athol Street 
Douglas
Isle of Man 
IM1 1LB
Company No: 005328V
directors’ report 
continued
governance 33 manx telecom plc annual report and accounts 2014
corporate governance report
Dear Shareholder
Principles of Corporate Governance
As a Board we recognise that applying sound governance 
principles in running the Company is essential to provide a 
solid platform for growth and to maintain the trust of our 
stakeholders. The Directors have decided to apply the 
principles set out in the QCA Code, which is a similar but 
simplified version of the UK Corporate Governance Code  
(‘the Code’). The Directors also acknowledge the importance 
of the principles set out in the Code and, although 
adherence to the Code is not compulsory, the Directors will 
aim for the Company to apply the Code to a greater extent, 
relative to its size, at a later stage.
The Board
The Board has arranged a schedule of meetings to consider 
strategy, performance and the framework of internal 
controls. We have a Board that has and will support and 
challenge management to deliver its objectives. The 
Company has established Audit, Remuneration and 
Nomination Committees of the Board with formally 
delegated duties and responsibilities. To enable the Board 
and its Committees to discharge their duties, all Directors 
receive appropriate and timely information. Briefing papers 
are distributed to all Directors in advance of Board 
meetings. All Directors have access to the advice and 
services of the Company Secretary, who is responsible for 
ensuring that the Board procedures are followed and that 
applicable rules and regulations are complied with.
As Chairman I would like to state my full commitment to 
maintaining high standards of corporate governance and to 
being transparent about our arrangements. 
Kevin Walsh
Chairman
Operation of the Board and its Committees
The role of the Board
The Board has an approved Schedule of Matters Reserved 
for the Board which sets out the Board’s responsibilities. 
The key tasks of the Board are:
• setting the Company’s values and standards;
• approval of the Group’s strategic aims and objectives;
• approval of operating and capital expenditure budgets;
• oversight of operations ensuring adequate systems of 
internal controls and risk management are in place, 
ensuring maintenance of accounting and other records 
and compliance with statutory and regulatory obligations;
• review of performance in light of strategy and budgets 
ensuring any necessary corrective actions are taken;
• approval of the financial statements, Annual Report and 
accounts, material contracts and major projects;
• approval of dividend policy;
• changes to structure, size and composition of the Board;
• determining remuneration policy for the Directors and 
senior executives and approval of the remuneration 
• of the Non-Executive Directors;
• approval of communications with shareholders and 
the market.
Composition of the Board
The Board comprises five Directors, two of whom are 
Executive Directors, and three of whom are Non-Executive 
Directors, reflecting a blend of different experience and 
backgrounds. A majority of the Directors are resident on the 
Isle of Man. Notwithstanding Sir Miles Walker’s involvement 
with the Group prior to the IPO, each Non-Executive 
Director is deemed independent for the purposes of the 
QCA Code. Details of each of the Directors’ experience and 
background is given in their biographies on page 28.
Appointments to the Board and re-election
Kevin Walsh will stand for re-election at the 2015 Annual 
General Meeting. The process for re-election of Directors of 
the Company is governed by its Articles. At each Annual 
General Meeting of the Company one third of the Directors 
who are subject to retirement by rotation or, if their number 
is not three or a multiple of three, the number nearest to 
but not exceeding one third, shall retire from office. If there 
are fewer than three Directors who are subject to 
retirement by rotation, one Director shall retire from office. 
Under the Articles, the Board has the power to appoint a 
Director during the year but any person so appointed must 
stand for election at the next Annual General Meeting. 
Division of responsibilities
Chairman and Chief Executive Officer
The division of responsibilities between the Chairman and 
Chief Executive Officer has been agreed by the Board. 
Senior Independent Director
The Senior Independent Director is Jeffrey Hume who is 
available to shareholders as a communication channel 
if required.
Non-Executive Directors
The Non-Executive Directors’ letters of appointment set out 
the duties of the Director and commitment expected. 
Non-Executive Directors are appointed for an initial 
three-year term with typical tenure expected of two 
three-year terms, subject to re-election by shareholders. 
They are expected to commit at least 24 days per annum  
to their role. Key elements of the Non-Executive Director’s 
role are:
• Strategy – Constructively challenge and develop proposals;
• Performance – Scrutinise the performance of 
management in meeting agreed goals and objectives 
and monitor reporting of performance;
• Risk – Non-Executive Directors should satisfy themselves 
on the integrity of financial information and that financial 
controls and systems of risk management are robust; and
• People – Determine appropriate levels of remuneration 
of Executive Directors and prime role in appointing 
Executive Directors and succession planning.
Development, information and support
The Directors are encouraged to attend training and 
continuing professional development courses as required.
The Finance Director, Gary Lamb, is also the Company 
Secretary and supports the Chairman in ensuring that the 
Board receive the information and support they need in 
order to carry out their roles. 34
Conflicts of interest
A process has been developed to identify any of the Directors’ potential or actual conflicts of interest. This includes declaring 
any new conflicts before the start of each Board meeting.
Performance evaluation
An internal performance evaluation of the Board and its Committees will be carried out in 2015. 
Board and committee attendance
The number of formal scheduled Board and committee meetings held and attended by Directors during the year was 
as follows:
Board Audit Remuneration Nomination
Kevin Walsh 7/7 3/3 5/5 1/1
Mike Dee 7/7 – – –
Gary Lamb 7/7 – – –
Jeffrey Hume 7/7 3/3 5/5 1/1
Sir Miles Walker* 6/7 3/3 4/5 1/1
* Sir Miles Walker was unable to attend the meetings held on 10 November 2014 due to a prior commitment.
The Board Committees
Membership of all three Board Committees is composed of 
the Chairman and the two Non-Executive Directors. As 
such they are compliant with both the UK Corporate 
Governance and QCA Codes.
Members of the Committees are authorised to obtain, at 
the Company’s expense, professional advice on any matter 
within their terms of reference and to have access to 
sufficient resources in order to carry out their duties. The 
role of the Nomination Committee is set out below. A report 
of the Audit Committee is provided separately on pages 35 
to 36 and the Directors Remuneration Report is provided on 
pages 37 to 40.
The Role of the Nomination Committee
Members of the Nomination Committee
The Nomination Committee was formed on 1 December 
2014 and consists entirely of independent Non-Executive 
Directors. The Chairman is Jeffrey Hume. At least one 
meeting will be held in each calendar year.
Duties
The main duties of the Nomination Committee are set out 
in its Terms of Reference and include:
• to regularly review the structure, size and composition 
(including the skills, knowledge, experience and diversity) 
of the Board and make recommendations to the Board 
with regard to any changes;
• to give full consideration to succession planning for 
Directors and other senior executives, taking into account 
the challenges and opportunities facing the Company, 
and the skills and expertise needed on the Board in 
the future;
• to keep under review the leadership needs of the 
organisation, both executive and non-executive, with a 
view to ensuring the continued ability of the organisation 
to complete effectively in the marketplace;
• to keep up to date and fully informed about strategic 
issues and commercial changes affecting the Company 
and the market in which it operates;
• to be responsible for identifying and nominating for the 
approval of the Board, candidates to fill Board vacancies 
as and when they arise;
• to evaluate the balance of skills, knowledge, experience 
and diversity on the Board and prepare a description of 
the role and capabilities required for a particular 
appointment before any appointment is made by 
the Board.
• to review the results of the Board evaluation process 
that relate to the composition of the Board and discuss 
the outcome with the full Board;
• to review annually the time required from  
Non-Executive Directors.
corporate governance report
continued
governance 35 manx telecom plc annual report and accounts 2014
report of the audit committee
Dear Shareholder
I have been the Chairman of the Audit Committee since 
early 2013 and am pleased, as a new development for 
Manx Telecom, to set out below an account of our role  
and activities during 2014 and up to the publication of this 
Annual Report. 
The primary responsibilities of the Audit Committee are to 
provide effective governance over the appropriateness of 
the Group’s financial reporting including the adequacy of 
related disclosures, the judgement whether the Annual 
Report as a whole is ‘Fair, balanced and understandable’, 
the performance of both the Internal Audit function and the 
External Auditor, and the management of the Group’s 
systems of internal control and business risks.
The Group has gone through a period of substantial  
change in preparation for and following its IPO. Much of the 
Committee’s focus has been on the development of external 
reporting from the level required of a company controlled by 
private equity to the level and transparency appropriate for 
an AIM company with important stakeholders. We have also 
concentrated upon the development of the Company’s suite 
of internal policies and procedures, and the activities and 
resourcing of our internal audit.
The Committee will continue with these priorities during the 
following year, with the added objective of there being 
further development of the Company’s existing risk 
management framework. 
Jeffrey Hume
Chairman of the Audit Committee
Who we are
The Audit Committee consists entirely of independent 
Non-Executive Directors:
Jeffrey Hume (Chairman)
Kevin Walsh 
Sir Miles Walker
The Board has determined that Jeffrey Hume has the 
recent and relevant financial experience, which would  
be required under the Corporate Governance Code, to 
chair this Committee. He is also a Fellow of both the 
Institute of Chartered Accountants and the Association  
of Corporate Treasurers.
How we meet
The Committee met three times during 2014 and has so far 
met once in 2015. KPMG Audit LLC, our External Auditor, 
attended each of these meetings. The Chief Executive 
Officer, Finance Director, Financial Controller the head of 
Internal Audit and a Secretarial Assistant also attended 
committee meetings by invitation. The Committee sought 
the views of the External Auditor and the head of Internal 
Audit, each without the other or any executives present. 
What we have been asked to do
The Board has set Terms of Reference for the Committee 
which require us:
a) to monitor the integrity of the financial statements of the 
Company, including its annual and interim reports;
b) to review and challenge where necessary any changes 
to, and consistency of, accounting policies, whether the 
Company has followed appropriate accounting 
standards and made appropriate estimates and 
judgements, taking into account the views of the external 
auditor, the going concern assumption and all material 
information presented with the financial statements;
c) to keep under review the effectiveness of the Company’s 
internal control systems (including financial, operational 
and compliance controls and risk management) and  
to review and approve the statements to be included  
in the Annual Report concerning internal controls and 
risk management;
d) to review the internal audit programme;
e) to consider and make recommendations to the Board, to 
be put to shareholders for approval at the Annual General 
Meeting, in relation to the appointment, reappointment 
and removal of the Company’s external auditor;
f) to oversee the relationship with the external auditor 
including approval of their remuneration, approval of 
their terms of engagement, assessment annually of their 
independence and objectivity taking into account relevant 
professional and regulatory requirements and the 
relationship with the auditor as a whole, including the 
provision of any non-audit services;
g) to meet regularly with the external auditor and at least 
once a year, without any Executive Director or other 
member of management present to discuss any issues 
arising from the audit;
h) to review and approve the annual audit plan and review 
the findings of the audit; and
i) to review the Company’s arrangements for its employees 
and contractors to raise concerns in confidence about 
possible improprieties in financial reporting or other 
matters, the Company’s procedures for detecting fraud 
and the Company’s anti-bribery procedures.
Financial reporting – significant issues
The Committee members reviewed the 2013 and 2014 
Preliminary Results announcements and Annual Reports, 
the 2014 Interim Results announcement and reports from 
the external auditor, KPMG Audit LLC, on the planning for 
and outcome of their reviews and audits.
We considered key accounting issues and judgements in 
relation to the Group’s financial statements and disclosures. 
The primary areas in relation to the 2014 accounts and how 
these were addressed were:
a) Revenue recognition – The Committee made enquiry into 
and obtained assurance in particular over termination 
income and roaming costs;
b) Underlying results – The Committee satisfied itself that 
the components of Profit before Tax excluded from the 
Underlying Results have been appropriately chosen to 
give shareholders a better understanding of how the 
business is performing; and
c) Defined benefit pension scheme – The Committee took 
advice from independent actuaries Towers Watson on 
the assumptions used to value the scheme and 
questioned the changes from the previous year. It also 
took some comfort from surveys by KPMG of their other 
clients’ Financial Statements. 36
UK Corporate Governance Code
The Board asked the Committee to formally consider 
whether the Annual Report and Accounts, taken as  
a whole, is fair, balanced, and understandable; also that  
it provides the information necessary for shareholders  
to assess the Company’s performance, business model 
and strategy. 
Committee members were provided with a draft copy of 
the Annual Report early in the drafting process in order to 
assess the broad direction and key messages being 
communicated. Committee members provided feedback 
highlighting any areas where they believed further clarity 
was required. This feedback was incorporated into the 
draft report provided to the Audit Committee meeting for 
final comment and approval and the External Auditor was 
given an opportunity to comment. The Committee was able 
to give the Board the requested assurance.
External audit
The effectiveness of the external audit process is dependent 
on appropriate audit risk identification at the start of the 
audit cycle. We received from KPMG Audit LLC a proposed 
audit plan which identified their assessment of the key risks. 
The audit plan set out the scope of the audit, areas to be 
targeted and audit timetable. This plan was reviewed and 
agreed in advance by the Audit Committee and KPMG 
subsequently presented their report on their findings to the 
Audit Committee for discussion.
The Audit Committee monitored the relationship with KPMG 
to ensure that auditor independence and objectivity are 
maintained. Our assessment was primarily based upon the 
reports we received, how our challenges were met, the 
enquiries we made into their work and the insights they 
were able to contribute. We also received feedback from 
the management team. As part of its review the Committee 
monitored the provision of non-audit services by KPMG 
which were small in comparison to the audit fee. Having 
reviewed the auditor’s independence and performance the 
Audit Committee is recommending that KPMG Audit LLC be 
reappointed as the Company’s auditor at the June 2015 
Annual General Meeting.
Internal audit
The Audit Committee monitored and reviewed the scope, 
extent and effectiveness of the activity of the Internal Audit 
department. Reports from the Internal Audit Manager 
usually include updates on audit activities, progress of the 
audit plan, management action plans to address areas 
requiring improvement and the changing resource 
requirements of the Internal Audit department. The 
Committee discussed the implications of these reports with 
management and ensured that the recommendations and 
agreed actions received proper focus.
Internal controls and risk management
The Company has in place a system of internal financial 
controls commensurate with its current size and activities, 
which is designed to ensure that the possibility of 
misstatement or loss is kept to a minimum. A suite of 
internal policies and procedures is being compiled. These 
procedures include the preparation of management 
accounts, forecast variance analysis and other ad hoc 
reports. There are clearly defined authority limits 
throughout the Group, including those matters which are 
reserved specifically for the Board. Risks throughout the 
Group are considered and reviewed on a regular basis. 
Risks are identified and mitigating actions put into place as 
appropriate. The principal risks identified are set out in the 
Strategic Report on pages 22 to 23.
Further governance
The Committee also reviewed, before publication, Company 
policy statements on anti-bribery and whistleblowing 
together with the effectiveness of the related procedures.
The Committee’s activities will be reviewed as part of the 
annual evaluation of Board effectiveness to be undertaken 
by the Board during 2015. All members of the Board will 
participate and any changes will be reported in the next 
Annual Report.
report of the audit committee
continued
governance 37 manx telecom plc annual report and accounts 2014
directors’ remuneration report
Chairman’s statement
This is our first Directors’ Remuneration Report covering  
our first full year as a listed Company. The report is split  
into two parts, the first part describes our remuneration 
policy and the second part describes how we intend to 
implement our policy for 2015 and, separately, the basis for 
the remuneration paid to Directors in respect of 2014. This 
level of disclosure exceeds the reporting requirements for 
an AIM listed Company in line with the Board’s commitment 
to high standards of corporate governance transparency 
and accountability.
In relation to remuneration paid in 2014, as described 
elsewhere in this Annual Report, the company has 
delivered revenue growth and strong cash generation, 
notwithstanding continued significant investment in the 
future growth of the business.
This overall performance, through a year of significant 
change, demonstrates the strength of our business model, 
the strong and effective leadership of our management 
team and the talents of our people. This performance is 
reflected in the achievement of annual bonus performance 
targets set out at the start of the year, which resulted in an 
annual bonus payable to Executive Directors of 50% of 
salary out of the maximum opportunity of 75% of salary. 
The Committee believes that the overall remuneration 
delivered in relation to 2014 represents a fair outcome in 
relation to the performance delivered to shareholders and 
other stakeholders.
I am delighted that we were able to launch our first share 
save scheme to all employees during 2014 and received an 
excellent take up of over 80%, enabling the vast majority of 
our people to participate in this employee share plan and 
benefit from the continued success of Manx Telecom.
Following the announcement of Mike Dee’s intention to 
retire later in 2015, he will continue to be paid in line with the 
policy and there will be no additional payments outside the 
policy on his retirement.
In adapting to life as a publicly listed company the 
Committee has considered carefully the structure of the 
remuneration policy, to ensure that it will support and 
motivate our senior team whilst aligning them both to the 
Company’s strategic objectives and to achieving long-term 
growth for our shareholders. There have been a number of 
changes to the policy, which are set out in the remuneration 
policy for Directors, together with details on how it will be 
applied in practice for 2015. These changes include the 
introduction of formal share ownership guidelines for 
Executive Directors and a provision to claw back payments 
made in certain circumstances.
We have made a successful start to life as a listed company 
and I hope that shareholders will be supportive of the 
remuneration paid in respect of 2014 and the policy with 
effect from 2015.
Kevin Walsh
Chairman of the Remuneration Committee
Membership of the Remuneration Committee
The members of the Committee are listed in the table 
below. All of these are independent Non-Executive 
Directors, as defined under the Corporate Governance 
Code with the exception of the Company Chairman who 
was independent on his appointment. 
The members of the Committee during the last financial 
year and their attendance at the meetings of the 
Committee were:
Number of 
meetings 
attended
Kevin Walsh 5/5
Jeffrey Hume 5/5
Sir Miles Walker 4/5
Duties 
The main duties of the Remuneration Committee are set 
out in its Terms of Reference and include: 
• determining the framework or broad policy for the 
remuneration of the Company’s Chief Executive, the 
Executive Directors, the Company Secretary and such 
other members of the executive management as it is 
designated to consider. The remuneration of Non-
Executive Directors shall be a matter for the Chairman 
and the executive members of the Board; 
• reviewing the ongoing appropriateness and relevance of 
the remuneration policy;
• approving the design of, and determining targets for, any 
performance-related pay schemes; 
• determining the policy for, and scope of, pension 
arrangements for each Executive Director and other 
senior executives;
• determining the total individual remuneration package of 
each Executive Director and other senior executives 
including bonuses, incentive payments and share options 
or other share awards; and
• establishing the selection criteria, selecting, appointing 
and setting the terms of reference for any remuneration 
consultants who advise the Committee.
Part 1 – Remuneration Policy for Executive Directors  
The objective of the Company’s remuneration policy for 
Executive Directors is to ensure that it supports the long-term 
strategy of the business and provides a strong alignment of 
interest between executives and shareholders. 
The total remuneration package is structured so that a 
significant proportion is linked to performance conditions 
measured over both the short term and longer term. A high 
proportion of the potential remuneration is paid in shares, 
thereby ensuring that executives have a strong ongoing 
alignment with shareholders through the Company’s share 
price performance.
When setting the levels of short-term and long-term  
variable remuneration and the balance of cash and 
share-based elements, consideration is given to obtaining 
the appropriate balance so as not to encourage 
unnecessary risk-taking, whilst ensuring that performance 
hurdles are suitably challenging. 38
directors’ remuneration report 
continued
The table below summarises the key aspects of the Company’s remuneration policy for Executive Directors:
Element Purpose and link to strategy Operation Maximum opportunity
Base salary To recruit and reward executives of  
a suitable calibre for the role and 
duties required.
Reviewed annually by the Committee, 
taking account of Company 
performance, individual performance, 
changes in responsibility and levels of 
increase for the workforce generally. 
Reference is also made to comparator 
benchmarks from time to time. 
The Committee considers the impact 
of any basic salary increase on the 
total remuneration package. 
In relation to the policy for salary 
increases, there is no prescribed 
maximum annual increase. The 
Committee is guided by movements 
in market rates, the performance of 
the business and the general salary 
increase for the broader employee 
population, but on occasions may need 
to recognise, for example, development 
in role, change in responsibility, and/or 
specific retention issues.
Benefits To provide market-competitive 
benefits and to ensure the  
well-being of employees.
The Company typically provides:
• Car allowance
• Medical insurance
• Death and disability insurance
• Other ancillary benefits, including 
relocation expenses (as required)
Executive Directors are also entitled to 
30 days’ leave per annum.
Car allowance is determined by 
seniority. The value of other benefits is 
based on the cost to the Company and 
is not pre-determined.
Pension To provide market-competitive 
benefits and to assist post retirement 
financial planning.
A Company contribution to a money 
purchase pension scheme or provision 
of cash allowance in lieu of pension at 
the request of the individual.
Up to 10% of base salary.
Annual bonus To encourage and reward  
delivery of the Company’s  
operational objectives.
The annual bonus is based on 
performance against a range of 
financial and non-financial metrics. 
With effect from the 2015 bonus one 
third of any bonus earned will be paid 
in shares, which must be held for at 
least two years. The bonus for 2014 
will be payable in cash.
A recovery and withholding mechanism 
applies in the event of a material 
misstatement of the Group’s accounts 
and also for other defined reasons. 
100% of salary at stretch performance. 
 
Long-term  
incentives (‘LTIP’)
To encourage and reward delivery 
of the Company’s long-term strategic 
objectives and provide alignment 
with shareholders through the use of 
share-based remuneration.
Annual awards of performance shares.
Awards are released subject 
to continued employment and 
satisfaction of challenging 
performance conditions measured 
over three years.
A recovery and withholding 
mechanism applies to all participants 
in the event of a material misstatement 
of the Group’s accounts and also for 
other defined reasons.
The maximum limit in the plan rules 
is 150% of salary (face value of shares 
at grant).
25% of the award is payable for 
threshold performance.
Dividends that would be payable on 
the share awards are rolled up and 
paid out (in cash) at the end of the 
vesting period based on the proportion 
of the award that actually vests.
Non-Executive 
Director fees
To attract and retain a high-calibre 
Chairman and Non-Executive 
Directors by offering a market-
competitive fee level.
The Chairman is paid a single fee  
for all his responsibilities. The 
Non-Executives are paid a basic fee. 
The Senior Independent Director is 
paid an additional fee to reflect his 
extra responsibilities. 
The level of these fees is reviewed 
every two years by the Committee 
and Chief Executive for the Chairman 
and by the Chairman and Executive 
Directors for the Non-Executive 
Directors, with reference to market 
levels in comparably sized FTSE 
companies, and a recommendation is 
then made to the Board. Fees are paid 
in cash. 
There is no prescribed maximum 
annual increase. Any increases to 
fee levels are guided by movements 
in market rates, the performance of 
the business and the general salary 
increase for the broader employee 
population, but on occasions may 
need to recognise, for example, 
change in responsibility, and/or time 
commitments.
governance 39 manx telecom plc annual report and accounts 2014
Service contracts & payments for loss of office
The Remuneration Committee reviews the contractual terms for new Executive Directors to ensure that these reflect 
best practice.
Service contracts normally continue until the Director’s agreed retirement date or such other date as the parties agree. 
The service contracts contain provision for early termination subject to six months’ notice from either the Company or the 
Executive Director.
A Director’s service contract may be terminated without notice and without any further payment or compensation, except for 
sums accrued up to the date of termination, on the occurrence of certain events such as gross misconduct. If the employing 
company terminates the employment of an Executive Director in other circumstances, compensation is limited to salary due 
for any unexpired notice period and any amount assessed by the Remuneration Committee as representing the value of other 
contractual benefits (including pension) which would have been received during the period. Payments in lieu of notice are not 
pensionable. In the event of a change of control of the Company there is no enhancement to contractual terms.
Service contracts are available for inspection at the Company’s registered office.
Part 2 – Annual remuneration report 
How the remuneration policy will be applied in 2015
2015 salary review
Salary levels are subject to annual review alongside all other employees in 2015 with any salary adjustments taking effect 
from 1 April 2015.
Performance targets for the 2015 annual bonus
For 2015, the annual bonus will continue to be based on a range of EBITDA, Free Cash Flow and Revenue metrics, with 
a weighting of 40:40:20 respectively.
LTIP awards to be granted in 2015
The LTIP awards granted in 2015 will be subject to Earnings Per Share and Free Cash Flow metrics, with a weighting of 
50:50 respectively. A sliding scale range for each metric is being finalised by the Committee and will be disclosed in next 
year’s report.
Remuneration for the financial year 2014
Remuneration payable to Directors in respect of 2014
The table below sets out the remuneration payable to the Directors in relation to the financial year 2014.
Salary  
and fees 
£
Benefits  
(1) 
£
Pension  
(2) 
£
Annual 
bonus  
(3) 
£
Long-term 
incentives 
£
Total 
£
Executive Directors
Mike Dee 196,625 14,443 33,440 100,000 – 344,508
Gary Lamb 177,000 13,127 17,6 1 1 90,000 – 297,738
Non-Executive Directors
Kevin Walsh 80,000 – – – – 80,000
Sir Miles Walker 40,000 – – – – 40,000
Jeffrey Hume 50,000 – – – – 50,000
Note 1: Benefits: these are as set out in the remuneration policy.
Note 2: For Mike Dee, part of this amount relates to a one-off transition payment relating to the closure of the Defined Benefit Pension Scheme.
Note 3:  This relates to the achievement of the Revenue, EBITDA and Free Cash Flow metrics at between a target and stretch level of performance. The bonus is 
paid in cash.
Directors’ interests in share-based incentive plans
Executive Scheme 
Grant  
date
Exercise 
price
Number of 
shares at 
10 February 
2014
Granted 
during 
year
Vested 
during 
year
Lapsed 
during 
year
Number of 
shares at  
31 December 
2014
End of 
performance 
period
Vesting  
date
Exercise 
period
Mike Dee CIP 10.02.14 1.42 – – – – 288, 1 1 3 09.02.17 09.02.17 N/A
Gary Lamb CIP 10.02.14 1.42 – – – – 250,000 09.02.17 09.02.17 N/A
1. The awards granted under the CIP on 10 February 2014 were structured on a co-investment basis whereby executives were granted a share award for 
every two beneficially owned shares that they committed into the plan.
2. The CIP awards will vest to the extent that a total shareholder return (‘TSR’) performance condition is achieved after three years, comparing the Company’s 
TSR (based on the IPO price) against a peer group of 11 other telecoms businesses listed in the UK. 25% of the award will vest if Manx Telecom’s TSR 
performance is at the median, rising on a straight-line basis so that there is full vesting for top quartile TSR performance. 40
Directors’ shareholding and share interests
To align the interests of the Executive Directors and senior management with shareholders, participating executives are 
required to build up shareholdings through the retention of shares vesting under the Company’s share plans. The Executive 
Directors are required to build up a shareholding equivalent to 100% of salary, to be achieved through retaining at least 50% 
of their net of taxes gain arising from any shares vesting or acquired under the long-term incentive share plans, until such 
time as the share ownership target has been met. The Chairman and Non-Executive Directors are encouraged to hold 
shares in the company but are not subject to a formal shareholding guideline. Details of the Directors’ interests in shares are 
shown in the table below:
Director
Beneficially 
owned at  
14 February 
2014
Beneficially 
owned at  
31 December 
2014
Outstanding 
CIP awards
% 
Shareholding 
guideline 
achieved at  
31 December 
2014
Mike Dee 576,227 576,227 288,113 100%
Gary Lamb 500,000 500,000 250,000 100%
Kevin Walsh 70,422 70,422 – –
Jeffrey Hume 70,422 70,422 – –
Sir Miles Walker 63,523 63,523 – –
This report was approved by the Board of Directors and signed on its behalf by: 
Kevin Walsh
Chairman of the Remuneration Committee 
directors’ remuneration report 
continued
governance 41 manx telecom plc annual report and accounts 2014
statement of directors’ responsibilities in respect of  
the annual report and the financial statements
The Directors are responsible for preparing the Annual 
Report and the financial statements in accordance with 
applicable law and regulations. In addition, the Directors 
have elected to prepare the financial statements in 
accordance with International Financial Reporting 
Standards as adopted by the EU.
The financial statements are required to give a true and fair 
view of the state of affairs of the Group and Company and 
of the profit or loss of the Group for that period. In 
preparing these financial statements, the Directors are 
required to:
• select suitable accounting policies and then apply 
them consistently;
• make judgements and estimates that are reasonable 
and prudent;
• state whether they have been prepared in accordance 
with International Financial Reporting Standards as 
adopted by the EU; and
• prepare the financial statements on the going concern 
basis unless it is inappropriate to presume that the 
Group and Company will continue in business.
The Directors are responsible for keeping proper accounting 
records that are sufficient to show and explain the 
Company’s transactions and disclose with reasonable 
accuracy at any time its financial position. They have general 
responsibility for taking such steps as are reasonably open 
to them to safeguard the assets of the Group and to prevent 
and detect fraud and other irregularities.
The Directors are responsible for the maintenance and 
integrity of the corporate and financial information included 
on the Company’s website. Legislation governing the 
preparation and dissemination of financial statements may 
differ from one jurisdiction to another.
By order of the Board
Gary Lamb
Company Secretary
27 April 2015
Manx Telecom plc
Registered Office: 
33-37 Athol Street 
Douglas
Isle of Man 
IM1 1LB
Company No: 005328V 42
report of the independent auditors, KPMG audit llc  
to the members of manx telecom plc  
(formerly trafford equityco limited)
We have audited the financial statements of Manx Telecom 
plc for the year ended 31 December 2014 which comprise 
the Consolidated Statement of Comprehensive Income, the 
Consolidated and Company Statements of Financial 
Position, the Consolidated and Company Statements of 
Changes in Equity and the Consolidated Statement of Cash 
Flows and the related notes. The financial reporting 
framework that has been applied in their preparation is 
applicable law and International Financial Reporting 
Standards as adopted by the EU (‘IFRSs’).
This report is made solely to the Company’s members, as a 
body. Our audit work has been undertaken so that we 
might state to the Company’s members those matters we 
are required to state to them in an auditor’s report and for 
no other purpose. To the fullest extent permitted by law, we 
do not accept or assume responsibility to anyone other 
than the Company and the Company’s members as a 
body, for our audit work, for this report, or for the opinions 
we have formed.
Respective responsibilities of Directors and Auditor
As explained more fully in the Statement of Directors’ 
Responsibilities set out on page 41, the Directors are 
responsible for the preparation of financial statements that 
give a true and fair view. Our responsibility is to audit, and 
express an opinion on, the financial statements in 
accordance with applicable law and International 
Standards on Auditing (UK and Ireland). Those standards 
require us to comply with the Auditing Practices Board’s 
(‘APB’s’) Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts 
and disclosures in the financial statements sufficient to give 
reasonable assurance that the financial statements are free 
from material misstatement, whether caused by fraud or 
error. This includes an assessment of: whether the 
accounting policies are appropriate to the Group’s 
circumstances and have been consistently applied and 
adequately disclosed; the reasonableness of significant 
accounting estimates made by the Directors; and the overall 
presentation of the financial statements.
In addition, we read all the financial and non-financial 
information in the Annual Report to identify material 
inconsistencies with the audited financial statements and to 
identify any information that is apparently materially 
incorrect based on, or materially inconsistent with, the 
knowledge acquired by us in the course of performing the 
audit. If we become aware of any apparent material 
misstatements or inconsistencies we consider the 
implications for our report.
Opinion on the financial statements
In our opinion the financial statements:
• give a true and fair view of the state of the Group’s and 
Parent Company’s affairs as at 31 December 2014 and of 
the Group’s profit for the year then ended; and
• have been properly prepared in accordance with IFRSs.
KPMG Audit LLC
Chartered Accountants
Heritage Court
41 Athol Street
Douglas
Isle of Man 
IM99 1HN
27 April 2015
financial statements 43 manx telecom plc annual report and accounts 2014
consolidated statement of comprehensive income
for the year ended 31 december 2014
Note
2014 
£’000
2013 
£’000
Revenue 1.13,2 79,254 76,029
Cost of sales (32,831) (30,836)
Gross profit 46,423 45,193
Administrative expenses (23,192) (29,742)
Operating profit 4 23,231 15,451
Underlying EBITDA 27,101 27,450
Depreciation and amortisation 7,8 (9,490) (9,326)
Underlying operating profit 17,611 18,124
Impairment of equipment 4 (592) (2,673)
Pension scheme reorganisation 4 6,212 –
Operating profit 23,231 15,451
Other income 140 47
Financial income 5 72 219
Finance costs 5 (8,437) (15,938)
Listing expenses 4 (7,991) –
Net (loss)/profit on interest rate swaps 17(d) (1,299) 585
Profit before tax 5,716 364
Taxation 6 – –
Profit for the year attributable to the owners of the Group 5,716 364
Underlying Profit before Tax 12,945 7,308
Impairment of equipment 4 (592) (2,673)
Pension scheme reorganisation 4 6,212 –
Release of capitalised loan transaction costs 4 (4,567) (3,301)
Refinancing costs 4 (291) (970)
Listing expenses 4 (7,991) –
Profit before tax 5,716 364
Other comprehensive income – items that will never be reclassified to profit or loss
Actuarial gains/(losses) on defined benefit pension scheme 15 800 (9,100)
Total comprehensive profit/(loss) for the year attributable to the owners of the Group 6,516 (8,736)
Earnings per share from continuing operations
Basic 23 5.40p 0.73p
Diluted 23 5.37p 0.73p
Underlying basic 23 12.22p 14.69p
Underlying diluted 23 12.17p 14.69p
The Directors consider that all results are derived from continuing operations.
The notes on pages 48 to 78 form an integral part of these financial statements. 44
financial statements
consolidated and company statements  
of financial position as at 31 december 2014
Note
Group 
2014 
£’000
Group 
2013 
£’000
Company 
2014 
£’000
Company 
2013 
£’000
Non-current assets
Property, plant and equipment 7 65,098 62,622 – –
Goodwill 3 84,277 84,277 – –
Intangible assets 8 516 362 – –
Retirement benefit asset 15 2,200 – – –
Investments in subsidiaries 9 – – 831 100
152,091 147,261 831 100
Current assets
Inventories 10 794 543 – –
Trade and other receivables 11 16,708 17,194 1 –
Due from related parties 19 – 100 87,208 187
Interest rate swaps 17(d) – 585 – –
Cash and cash equivalents 12 15,156 13,506 – –
32,658 31,928 87,209 187
Current liabilities
Interest-bearing loans and borrowings 13 – (957) – –
Due to subsidiary 19 – – (2,100) (2,119)
Trade and other payables 14 (26,475) (24,849) – –
Interest rate swaps 17(d) (1,008) – – –
(27,483) (25,806) (2,100) (2,119)
Net current assets/(liabilities) 5,175 6,122 85,109 (1,932)
Non-current liabilities
Interest-bearing loans and borrowings 13 (68,948) (115,690) – –
Due to shareholders 19 – (30,968) – –
Retirement benefit liability 15 – (6,400) – –
(68,948) (153,058) – –
Net assets/(liabilities) 88,318 325 85,940 (1,832)
Equity attributable to the owners of the Group and Company
Share capital 16 226 100 226 100
Share premium 16 84,343 – 84,343 –
Own shares 16 – – – –
Retained earnings/(deficit) 3,749 225 1,371 (1,932)
Total equity 88,318 325 85,940 (1,832)
The notes on pages 48 to 78 form an integral part of these financial statements.
These financial statements were approved by the Board of Directors and were signed on its behalf by:
Mike Dee Gary Lamb
Director Director
27 April 2015 45 manx telecom plc annual report and accounts 2014
consolidated statement of changes in equity
for the year ended 31 december 2014
Share 
capital 
£’000
Share 
premium 
£’000
Own 
shares 
£’000
Retained 
earnings 
£’000
Total 
equity 
£’000
Balance at 1 January 2013 98 – – 10,889 10,987
Total comprehensive loss for the year
Profit for the year – – – 364 364
Other comprehensive income – – – (9,100) (9,100)
Total comprehensive loss for the year – – – (8,736) (8,736)
Transactions with owners of the Group, recorded directly in equity
Share-based payment transactions (note 22) – – – 72 72
Issue of shares (note 16) 2 – – – 2
Dividend paid (note 24) – – – (2,000) (2,000)
Total contributions by and distributions to the owners of the Group 2 – – (1,928) (1,926)
Balance at 31 December 2013 100 – – 225 325
Balance at 1 January 2014 100 – – 225 325
Total comprehensive profit for the year
Profit for the year – – – 5,716 5,716
Other comprehensive income – – – 800 800
Total comprehensive profit for the year – – – 6,516 6,516 
Transactions with owners of the Group, recorded directly in equity
Share-based payment transactions (note 22) – – – 731 731
Issue of shares (note 16) 126 89,226 – – 89,352
Own shares acquired in the period (note 16) – – – – –
Listing costs recognised in equity (notes 4, 16) – (4,883) – – (4,883)
Dividend paid (note 24) – – – (3,723) (3,723)
Total contributions by and distributions to the owners of the Group 126 84,343 – (2,992) 81,477
Balance at 31 December 2014 226 84,343 – 3,749 88,318
The notes on pages 48 to 78 form an integral part of these financial statements. 46
financial statements
company statement of changes in equity
for the year ended 31 december 2014
Share 
capital 
£’000
Share 
premium 
£’000
Own 
shares 
£’000
Retained 
earnings 
£’000
Total 
equity 
£’000
Balance at 1 January 2013 98 – – 3 101
Total comprehensive loss for the year
Loss for the year – – – (7) (7)
Total comprehensive loss for the year – – – (7) (7)
Transactions with the owners of the Company, recorded directly in equity
Share-based payment transactions (note 22) – – – 72 72
Issue of shares (note 16) 2 – – – 2
Dividend paid (note 24) – – – (2,000) (2,000)
Total contributions by and distributions to the owners of the Company 2 – – (1,928) (1,926)
Balance at 31 December 2013 100 – – (1,932) (1,832)
Balance at 1 January 2014 100 – – (1,932) (1,832)
Total comprehensive profit for the year
Profit for the year – – – 6,295 6,295
Total comprehensive profit for the year – – – 6,295 6,295
Transactions with the owners of the Company, recorded directly in equity
Share-based payment transactions (note 22) – – – 731 731
Issue of shares (note 16) 126 89,226 – – 89,352
Own shares acquired in the period (note 16) – – – – –
Listing costs recognised in equity (notes 4, 16) – (4,883) – – (4,883)
Dividend paid (note 24) – – – (3,723) (3,723)
Total contributions by and distributions to the owners of the Company 126 84,343 – (2,992) 81,477
Balance at 31 December 2014 226 84,343 – 1,371 85,940
The notes on pages 48 to 78 form an integral part of these financial statements. 47 manx telecom plc annual report and accounts 2014
consolidated statement of cash flows
for the year ended 31 december 2014
Note
2014 
£’000
2013 
£’000
Cash flows from operating activities
Profit for the year 5,716 364
Adjustments for:
 Depreciation of property, plant and equipment 7 9,299 9,188
 Amortisation of intangibles 8 191 137
 Impairment of property, plant and equipment 4 592 2,673
 Profit on disposal of property, plant and equipment 7 (140) –
 Pension (credit)/charge 15 (6,000) 1,400
 Finance income 5 (72) (219)
 Finance costs 5 8,437 15,938
 Listing expenses 4 7,991 –
 Net (loss)/profit on interest rate swaps 17(d) 1,299 (585)
 Equity-settled share-based payments transactions 22 256 72
Changes in:
 Inventories 10 (251) 114
 Trade and other receivables 11 486 877
 Trade and other payables 14 1,318 (1,816)
23,406 27,779
Net cash generated from operating activities 29,122 28,143
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 123 346
Purchase of property, plant and equipment 7 (12,294) (9,947)
Government grants related to asset purchases 7 250 –
Purchase of intangible assets 8 (345) (34)
Pension contributions 15 (2,100) (2,600)
Interest received 5 72 119
Net cash used in investing activities (14,294) (12,116)
Cash flows from financing activities
Proceeds on issue of shares 16 89,352 –
Expenses incurred on issue of shares capitalised to equity 16 (4,883) –
Expenses incurred on issue of shares charged to profit or loss 4 (7,516)
Proceeds from new borrowings 13 70,000 122,129
Transaction costs related to loans and borrowings 13 (1,475) (6,209)
Repayment of borrowings 13 (121,081) (62,261)
Proceeds from settlement of interest rate swaps 17(d) 294
Repayment of shareholder loans 19 (22,128) (43,844)
Interest paid (12,018) (20,686)
Dividends paid 24 (3,723) (2,000)
Net cash used in financing activities (13,178) (12,871)
Net increase/(decrease) in cash and cash equivalents 1,650 3,156
Cash and cash equivalents brought forward 13,506 10,350
Cash and cash equivalents at 31 December 12 15,156 13,506
The notes on pages 48 to 78 form an integral part of these financial statements. 48
financial statements
notes
(forming part of the financial statements 
for the year ended 31 december 2014)
1 Accounting policies
Manx Telecom plc (‘the Company’) is a company incorporated and domiciled in the Isle of Man in accordance  
with the Isle of Man Companies Act 2006. The Company, formerly Trafford Equityco Limited, changed its name  
on 3 February 2014.
The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as ‘the Group’). 
The Parent Company financial statements present information about the Company as a separate entity.
The principal accounting policies adopted are set out below.
Basis of preparation
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards 
(‘IFRS’). The consolidated financial statements have also been prepared in accordance with IFRSs adopted by the European 
Union. Where necessary, comparative figures have been adjusted to conform to changes in presentation for the current year.
Going concern
The consolidated financial statements have been prepared on the going concern basis. Reduced revenues in mobile 
business have been more than offset by increasing revenues in global solutions, broadband and data centre revenue 
streams and has resulted in the Group achieving revenue growth of 4.2% at 31 December 2014 compared to 31 December 
2013. The Group is in a net asset and net current asset position and has reduced net debt significantly during the year 
following admittance to the London Stock Exchange AIM stock market. The Group has considerable financial resources, 
minimal liquidity risk and is operating within a sector that is experiencing relatively stable demand for its products.
The Group utilises secured lending facilities which require compliance with certain financial covenants. The Group has  
not breached any such financial covenants during the year or post year end and had significant headroom within its 
requirements at year end as detailed in note 13. Under the terms of the secured bank facility, the Group also has the ability 
to draw a further £10m of funding though currently has no intention of drawing on this facility.
Alongside the factors noted above, the Directors have considered the Group’s forecasts and budgets, including cash flow 
forecasts, together with reasonably possible risk sensitivity analysis. The Directors are satisfied that the forecasts, alongside 
the Group’s current and undrawn lending facilities, show that the Group will continue to be able to meet cash funding 
requirements as they fall due and operate for the foreseeable future.
Accordingly, after making enquiries, the Directors have a reasonable expectation that the Company and the Group have 
adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going 
concern basis of accounting in preparing the annual financial statements.
1.1 Measurement convention
The financial statements are prepared on the historical cost basis except for the revaluation of certain properties and 
financial instruments that are measured at revalued amounts or fair values at the end of each reporting period, as 
explained in the accounting policies below.
1.2 Basis of consolidation
Subsidiaries
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the 
Company (its subsidiaries) made up to 31 December each year. Control is achieved when the Company has the power over 
the investee, is exposed to, or has rights, to variable return from its involvement with the investee and has the ability to  
use its power to affect its returns. In assessing control, the Group takes into consideration potential voting rights that are 
currently exercisable. The acquisition date is the date on which control is transferred to the acquirer. The financial 
statements of subsidiaries are included in the consolidated financial statements from the date that control commences  
until the date that control ceases. Losses applicable to the non-controlling interests in a subsidiary are allocated to the 
non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance. The investments in 
subsidiaries are held at cost.
1.3 Foreign currency
The individual financial statements of each group company are presented in the currency of the primary economic 
environment in which it operates (its functional currency). For the purposes of the consolidated financial statements, the 
results and financial position of each group company are expressed in pounds sterling, which is the functional currency  
of the Company and the presentational currency for the consolidated financial statements.
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the foreign 
exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at  
the balance sheet date are retranslated to the functional currency at the foreign exchange rate ruling at that date. Foreign 
exchange differences arising on translation are recognised in the income statement. Non-monetary assets and liabilities  
that are measured in terms of historical cost in a foreign currency are not retranslated. Non-monetary assets and liabilities 
denominated in foreign currencies that are stated at fair value are retranslated to the functional currency at foreign 
exchange rates ruling at the dates the fair value was determined. 49 manx telecom plc annual report and accounts 2014
1.4 Non-derivative financial instruments
Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables,  
cash and cash equivalents, amounts due to/from Group and related companies, loans and borrowings, and trade and 
other payables.
Debt and equity instruments are classified as either financial liabilities or equity in accordance with the substance of the 
contractual arrangement.
The Group initially recognises financial assets such as loans and receivables and deposits on the date that they are 
originated. All other financial assets (including assets designated at fair value through profit or loss) are recognised initially  
on the trade date at which the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers 
the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks  
and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created 
or retained by the Group is recognised as a separate asset.
The Group initially recognises financial liabilities such as payables and liabilities designated at fair value through profit or loss 
on the trade date at which the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial liability when, and only when, the Group’s obligations are discharged, cancelled or  
they expire. Any interest in transferred financial liabilities that is created or retained by the Group is recognised as a  
separate liability.
Fair value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction  
between market participants at the measurement date, regardless of whether that price is directly observable or estimated 
using another valuation technique. In estimating the fair value of an asset or liability, the Group takes into account the 
characteristics of the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in 
these consolidated financial statements is determined on such a basis, except for share-based payments within the scope 
of IFRS 2, leasing transactions that are within the scope of IAS 17, and measurements that have some similarities to fair value 
but are not fair value, such as net realisable value in IAS 2 or value in use in IAS 36.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the 
degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value 
measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are 
described as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or 
indirectly; and
Level 3: inputs for the asset or liability that are not based on observable market data
Trade and other receivables
Trade and other receivables are recognised initially at fair value. Subsequent to initial recognition they are measured at 
amortised cost using the effective interest method, less any impairment losses.
Trade and other payables
Trade and other payables are recognised initially at fair value. Subsequent to initial recognition they are measured at 
amortised cost using the effective interest method.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial 
recognition, interest-bearing borrowings are stated at amortised cost using the effective interest method.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its 
liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.
Repurchase of the Company’s own equity instruments is recognised and deducted directly in equity. No gain or loss is 
recognised in profit or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments.
1 Accounting policies continued 50
financial statements
Own shares
Own shares represent shares in the Company held by the Group employee benefit trust and are recorded at cost 
deducted from equity. When shares vest unconditionally or are cancelled they are transferred from the own shares reserve 
to retained earnings at their weighted average cost. Other assets and liabilities of the employee benefit trust are 
consolidated within the assets of the Group.
1.5 Derivative financial instruments
Derivative financial instruments are recognised at fair value and classified as held for trading. The gain or loss on 
remeasurement to fair value is recognised immediately in profit or loss.
1.6 Property, plant and equipment
Property, plant and equipment is stated at historical cost less depreciation and accumulated impairment losses except  
for land and buildings which have been revalued to fair value. Revaluations are performed with sufficient regularity such 
that the carrying amount does not differ materially from that which would be determined using fair values at the balance 
sheet date.
Any gain arising on the remeasurement of land and buildings is recognised in profit or loss to the extent that it reverses a 
previous impairment loss on the specific property, with any remaining gain recognised in other comprehensive income and 
presented in the revaluation reserve. The cost of property, plant and equipment includes directly attributable incremental 
costs incurred in their acquisition and installation. Depreciation on revalued land and buildings is charged to the statement 
of comprehensive income.
Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when 
it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be 
measured reliably.
Depreciation is provided on property, plant and equipment from the date they are brought into use, in equal instalments 
over their estimated useful lives. The lives assigned to property, plant and equipment are:
Facilities (including property) 40 years
Network assets 5 to 20 years
Plant and machinery 4 to 10 years
Computers, software and office equipment 3 to 10 years
Motor vehicles 7 years
The estimated useful economic lives, residual value and depreciation method are reviewed at the end of each reporting 
period, with the effect of any changes in estimate accounted for on a prospective basis.
No depreciation is provided on freehold land or assets in course of construction. Assets in the course of construction are 
carried at cost, less any recognised impairment loss. Depreciation of assets in the course of construction commences when 
the assets are ready for their intended use.
Where there is evidence of impairment, fixed assets are written down to recoverable amounts. Any such write down is 
charged to operating profit as an impairment loss and separately disclosed if material.
Assets held under finance leases are depreciated over the shorter of their expected useful economic lives on the same 
basis as owned assets or, where shorter, over the term of the relevant lease.
Gains and losses on disposal of an item of property, plant and equipment are recognised within the statement of 
comprehensive income. When revalued assets are sold, the amounts included within the revaluation reserve are 
transferred to retained earnings.
1.7 Business combinations
All business combinations are accounted for by applying the acquisition method. Business combinations are accounted for 
using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group.
The Group measures goodwill at the acquisition date as:
• the fair value of the consideration transferred; plus
• the recognised amount of any non-controlling interests in the acquiree; plus
• the fair value of the existing equity interest in the acquiree; less
• the net recognised amount (fair value) of the identifiable assets acquired and liabilities assumed.
1 Accounting policies continued
notes 
continued 51 manx telecom plc annual report and accounts 2014
When the excess is negative, a bargain purchase gain is recognised immediately in the statement of comprehensive income.
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, are expensed 
as incurred.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is 
classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to 
the fair value of the contingent consideration are recognised in profit or loss.
1.8 Intangible assets and goodwill
Goodwill
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is  
not amortised but is tested annually for impairment by completing a goodwill assessment at the reporting date, or more 
frequently when there is an indication that the unit may be impaired. An impairment loss recognised for goodwill is not 
reversed in a subsequent period. In respect of equity accounted investees, the carrying amount of goodwill is included in the 
carrying amount of the investment in the investee.
Other intangible assets
Software
Non-current assets which incorporate both tangible and intangible elements are assessed to determine whether they 
should be classed as an intangible asset or as property, plant and equipment. The treatment is determined by an 
assessment of which element is more significant.
Acquired software is capitalised on the basis of the costs incurred to acquire and bring into use the specific software. These 
costs are amortised over their estimated useful lives of three to five years. Amortisation is charged to cost of sales in the 
statement of comprehensive income on a straight-line basis.
Domain names
Domain names are not amortised but are assessed for impairment on an annual basis.
1.9 Inventories
Inventories mainly comprise items of equipment held for sale or rental and consumable items. They are stated at the lower 
of cost, including appropriate overheads, and estimated net realisable value. Where necessary, provision is made for 
obsolete, slow moving and defective inventories. Inventories are shown net of any provisions made.
1.10 Impairment excluding inventories
Financial assets
A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether 
there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has 
occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash 
flows of that asset that can be estimated reliably.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its 
carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest 
rate. Interest on the impaired asset continues to be recognised through the unwinding of the discount. When a subsequent 
event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.
Non-financial assets
The carrying amounts of the Group’s non-financial assets, other than inventories, are reviewed at each reporting date to 
determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount 
is estimated. For goodwill, and intangible assets that have indefinite useful lives or that are not yet available for use, the 
recoverable amount is estimated each year at the same time.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to 
sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount 
rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose 
of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that 
generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of 
assets (the ‘cash-generating unit’). The goodwill acquired in a business combination, for the purpose of impairment testing, is 
allocated to cash-generating units, or (‘CGUs’) where appropriate.
1 Accounting policies continued 52
financial statements
An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. 
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to 
reduce the carrying amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the other 
assets in the unit (group of units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior 
periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An 
impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An 
impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that 
would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
1.11 Employee benefits
Employee benefits – pension obligations
The Group operates two pension arrangements. The Manx Telecom Trading Limited (formerly Manx Telecom Limited (see 
note 9)) Combined Pension Scheme is a defined benefit scheme and the Manx Telecom Employee Retirement Plan is a 
defined contribution plan.
A defined contribution plan is a post-employment benefit plan under which the Group pays fixed contributions into a 
separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to 
defined contribution pension plans are recognised as an expense in the income statement in the periods during which 
services are rendered by employees.
For the defined contribution plan, the Group pays fixed contributions to a privately administered pension plan on behalf of 
employees. The Group has no further payment obligations once the contributions have been paid. The contributions are 
recognised as an employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the 
extent that a cash refund or a reduction in the future payments is available.
A defined benefit scheme is a pension scheme that sets the amount of pension benefit that an employee will receive on 
retirement, usually dependent on one or more factors such as age, years of service and compensation.
The asset or liability recognised in the statement of financial position in respect of the defined benefit pension plan is the 
present value of the defined benefit obligation at the period end date less the fair value of plan assets. Any surplus resulting 
from this calculation is limited to the present value of any economic benefits available in the form of refunds from the 
scheme or reductions in future contributions to the scheme.
The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The 
present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using 
interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and 
that have terms to maturity approximating to the terms of the related pension liability.
Remeasurements of the net defined benefit asset/liability comprising actuarial gains and losses, the effect of the asset ceiling 
(if applicable) and the return on scheme assets (excluding interest) are recognised immediately in the balance sheet with a 
charge or credit to the statement of comprehensive income in the period in which they occur. Remeasurement recorded in 
the statement of comprehensive income is not recycled. 
Past service cost is recognised in profit or loss in the period of a plan amendment. Net interest is calculated by applying the 
discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorised 
as follows:
• Service cost (including current service cost, past service cost, as well as gains and losses on curtailments  
and settlements);
• Net interest expense or income; and
• Remeasurement
The Group presents the first two components of defined benefit costs in profit or loss in the line item ‘Administrative 
expenses’. Curtailment gains and losses are accounted for as past service costs. Net interest expense or income is 
recognised within finance costs (see note 5).
The assets of the schemes are held independently of the Group’s finances.
Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service 
is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans 
if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the 
employee and the obligation can be estimated reliably.
1 Accounting policies continued
notes 
continued 53 manx telecom plc annual report and accounts 2014
Share-based payments – equity-settled
The grant date fair value of share-based payment awards granted to employees is recognised as an employee expense, 
with a corresponding increase in equity. The fair value determined at the grant date of the equity-settled share-based 
payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of the equity 
instruments that will eventually vest. Fair value is measured using either a Black-Scholes or Monte Carlo method, whichever 
is most appropriate to the share-based payment arrangement.
At each balance sheet date, the Group revises its estimate of the number of equity instruments expected to vest as a  
result of the effect of non-market-based vesting conditions. The impact of the revision of the original estimates, if any, is 
recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment 
to equity reserves.
For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is 
measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.
Awards that lapse or are forfeited result in a credit to the income statement (reversing all previously recognised charges)  
in the year in which they lapse or are forfeited.
1.12 Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is 
probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can 
be made.
1.13 Revenue
Revenue, which excludes value added tax and other sales taxes, comprises of the value of services provided, equipment 
sales and other revenue.
Revenue is recognised on a gross basis where the Group’s role is that of principal in a transaction. The gross basis 
represents the gross value of the billing to the customer after trade discounts, with any related costs being charged to 
operating expenses. Where the Group acts as agent in a transaction, the net revenue earned is recognised as revenue.
Revenue from telecommunications services which include mobile, fixed line, broadband and data services provided to 
customers is recognised once the service is provided over the Group’s network regardless of whether the customer pays in 
advance or is billed in arrears. Prepayments made by customers are recorded in deferred income and recognised in 
revenue as and when usage occurs.
Inbound roaming revenue, earned from other mobile operators whose customers roam onto the Group’s network,  
and outbound roaming revenue, earned from customers roaming outside their domestic coverage area, is recognised  
upon usage.
Subscription fees are recognised evenly throughout the periods to which they relate. Hardware revenue principally consists 
of revenue from the sale of wireless mobile devices. The revenue associated with the sale of wireless handsets and 
accessories is recognised when the products are delivered and accepted by the customer. The amount of revenue 
recognised is the value of the cash received from the sale.
In revenue arrangements including more than one deliverable, the arrangements are divided into separate units of 
accounting. Deliverables are considered separate units of accounting if the following two conditions are met: (1) the 
deliverable has value to the customer on a stand-alone basis and (2) there is evidence of the fair value of the item. The 
arrangement consideration is allocated to each separate unit of accounting based on its relative fair value.
Other revenue comprises managed services and equipment sales. All revenue is recognised when the goods and services 
have been provided and accepted by the customer. The value recognised for equipment sales is the value of the cash 
received from the sale. Managed service revenues are recognised in the period to which they relate.
1.14 Expenses
Operating expenses
Operating expenses are recognised on an accruals basis.
Operating lease payments
Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as 
operating leases. Rentals under operating leases are charged to the statement of comprehensive income on a straight-line 
basis over the term of the lease.
Finance lease payments
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risk and rewards of 
ownership to the lessee. Assets held under finance leases are recognised as assets of the group at their fair value or, if 
lower, at the present value of the minimum lease payments, each determined at the inception of the lease. Minimum lease 
1 Accounting policies continued 54
financial statements
payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is 
allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining 
balance of the liability.
Financing income and expenses
Financing expenses comprise interest payable, loan repayment fee costs, finance charges on shares classified as liabilities 
and finance leases recognised in profit or loss using the effective interest method, unwinding of the discount on provisions, 
and net foreign exchange losses that are recognised in the income statement (see note 1.3).
Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that takes a 
substantial time to be prepared for use are capitalised as part of the cost of that asset. All other borrowing costs are 
recognised in profit or loss in the period in which they are incurred.
Loan arrangement fees are capitalised and amortised over the loan term.
Finance income comprises interest receivable on funds invested, dividend income, and net foreign exchange gains. Interest 
income and interest payable is recognised in profit or loss as it accrues, using the effective interest method. Dividend income 
is recognised in the income statement on the date the entity’s right to receive payments is established. Foreign currency 
gains and losses are reported on a net basis.
1.15 New currently effective requirements and forthcoming requirements
The following new and revised Standards and Interpretations have been adopted in the current year. Their adoption has 
not had any significant impact on the amounts reported in these financial statements.
IFRS 10 Consolidated Financial Statements
IFRS 11 Joint Arrangements
IFRS 12 Disclosure of Interests in Other Entities
IAS 27 Separate Financial Statements (2011)
IAS 28 Investments in Associate and Joint Ventures (2011)
IFRS 10, IFRS 12 & IAS 27 Investment Entities: Amendments to IFRS 10, IFRS 12 and IAS 27
IAS 32 Offsetting Financial Assets and Financial Liabilities – Amendments to IAS 32
IAS 36 Recoverable amount disclosures for non-financial assets – Amendments to IAS 36
IAS 39 Novation of Derivatives and Continuation of Hedge Accounting – Amendments to IAS 39
At the date of authorisation of these financial statements, the following Standards and Interpretations which have not been 
applied in these financial statements were in issue but not yet effective (and in some cases had not yet been adopted by the 
EU):
Amendments/improvements
Effective date (applicable to annual 
periods beginning on or after stated date)
IFRS 9 Financial Instruments 1 January 2018
IFRS 14 Regulatory Deferral Accounts 1 January 2016
IFRS 15 Revenue from Contracts with Customers 1 January 2017
IAS 19
Defined Benefit Plans: Employee Contributions  
(Amendments to IAS 19) 1 July 2014
Annual Improvements 2010-2012 cycle 1 July 2014
Annual Improvements 2011-2013 cycle 1 July 2014
Annual Improvements 2012-2014 Cycle 1 July 2016
IFRS 10, IFRS 12 & IAS 28
Investment Entities: Applying the Consolidation Exception 
(Amendments to IFRS 10, IFRS 12 and IAS 28) 1 January 2016
IFRS 11
Accounting for Acquisitions of Interests in Joint Operations 
(Amendments to IFRS 11) 1 January 2016
IAS 1 Disclosure Initiative (Amendments to IAS 1) 1 January 2016
IAS 16 & IAS 38
Clarification of Acceptable Methods of Depreciation and 
Amortisation (Amendments to IAS 16 and IAS 38) 1 January 2016
IAS 27
Equity Method in Separate Financial Statements  
(Amendments to IAS 27) 1 January 2016
1 Accounting policies continued
notes 
continued 55 manx telecom plc annual report and accounts 2014
The Directors do not expect that the adoption of the Standards and Interpretations listed above will have a material impact 
on the financial statements of the Group in future periods, except as that IFRS 9 will impact both the measurement and 
disclosure of Financial Instruments, and as that IFRS 15 may have a material impact on the amounts reported and 
disclosures made in the Group’s consolidated financial statements. 
Beyond the information above, it is not practicable to provide a reasonable estimate of the effect of these standards until a 
detailed review has been completed. 
1.16 Government grants
Government grants are recognised where there is a reasonable assurance that the grant will be received and all attached 
conditions complied with. When the grant relates to an expense item, it is recognised as income over the period necessary 
to match the grant on a systematic basis to the costs that it is intended to compensate.
Where the grant relates to an asset, it is recognised as a reduction in the carrying amount of the asset. The grant is then 
recognised as income over the useful life of a depreciable asset by way of a reduced depreciation charge.
1.17 Subscriber acquisition costs
Subscriber acquisition costs, which include the commission costs associated with acquiring new subscribers and other 
incremental costs of customer acquisition, are charged to the statement of comprehensive income as incurred.
1.18 Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group’s accounting policies, the Directors are required to make judgements, estimates and 
assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The 
estimates and associated assumptions are based on historical experience and other factors that are considered to be 
relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are 
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the 
revision and future periods if the revision affects both current and future periods.
Management consider the key estimates and judgements used in the preparation of these financial statements to be:
• Pension scheme assumptions used in the actuarial valuation prepared by independent actuaries Towers Watson for the 
financial year ended 31 December 2014 (and 31 December 2013). During 2011 the Isle of Man Government confirmed the 
use of CPI as the base index for pension scheme increases where the scheme provisions make direct reference to UK 
(as opposed to Isle of Man) statutory pension increase provisions. After taking legal advice, the trustees made the decision 
to reference CPI for pension increases in deferment for all sections, reference CPI for A/B section pension increases and 
reference RPI for section C pension increases.
• Recoverability of receivables (for further details on credit risk related to trade receivables see note 17(b), for details of 
provisions in respect of doubtful debts see note 11).
• Useful lives for property, plant and equipment. Property, plant and equipment represents 35% (2013: 35%) of the Group’s 
total assets; estimates and assumptions made regarding their useful economic lives may have a material impact on their 
carrying value and related depreciation charge. The depreciation charge for an asset is derived using estimates of its 
useful economic life and expected residual value, which are reviewed annually and changed when necessary to reflect 
current thinking on the remaining lives in light of technological change, network investment plans and the condition of the 
assets concerned. 
• Impairment of goodwill. The Group has only one cash generating unit to which goodwill has been allocated, the 
investment in Manx Telecom Trading Limited. The recoverable amount of the investment in Manx Telecom Trading Limited 
has been determined based on an estimate of the fair value of Manx Telecom Trading Limited less costs of disposal. The 
key assumptions and estimates used in performing the annual impairment review are disclosed in note 3.
• A number of the Group’s accounting policies and disclosures require the measurement of fair values for both financial 
and non-financial assets and liabilities. Further information about the fair value assumptions are included in the  
following notes:
• Note 7 – Property, plant and equipment.
• Note 17 – Financial instruments (derivative financial instruments).
• Note 22 – Share-based payment. 
1 Accounting policies continued 56
financial statements
2 Operating segments
The Group has five reportable revenue segments which management report on and base their strategic decisions on:
Group 
2014 
£’000
Group 
2013 
£’000
Fixed line, broadband and data 31,338 30,985
Mobile 18,357 19,195
Global solutions 16,669 13,576
Data centre 6,607 6,461
Other 6,283 5,812
79,254 76,029
The segmental analysis shows revenue classified according to market source. However, the Group is not structured on  
a divisional basis and has functional departments, processes, assets and obligations which serve each of these revenue 
streams. These are not allocated in the financial reports received by the Board and its decisions are not routinely based  
on any such identification. Consequently the analysis shown above does not extend to any segmentation of profits and  
net assets.
There is no inter-segmental trading.
The products and services included within each of the five segments are as follows:
Fixed line, broadband and data includes revenues from ADSL and VDSL rental and connection charges, fixed line call 
charges, fixed line rental and connection charges, and private circuit rental and connection charges.
Mobile includes revenues from mobile calls, SMS and data charges, mobile rental charges, mobile handset and accessory 
sales, and roaming.
Global solutions includes revenues from mobile termination, products such as Chameleon, strongest signal mobile and 
M2M (machine to machine).
Data centre includes revenues from hosting services provided.
Other includes kit sales, directory revenues and managed service rental charges.
3 Goodwill – Group
Cost £’000
Balance at 1 January 2013 84,277
Additions during the year –
Balance at 31 December 2013 84,277
Additions during the year –
Balance at 31 December 2014 84,277
Carrying amount
As at 31 December 2014 84,277
As at 31 December 2013 84,277
On 29 June 2010, the Group acquired all of the ordinary shares in Manx Telecom Trading Limited (previously Manx Telecom 
Limited) for £133,800,000 satisfied in cash.
Goodwill is deemed to have an indefinite life and so is not subject to amortisation. An impairment review was undertaken 
as at the reporting date to determine whether any impairment has occurred. Upon review, the Board deemed that no 
impairment was necessary (2013: nil).
The cash-generating unit to which goodwill has been allocated is the operations of Manx Telecom Trading Limited in its 
entirety due to the structure of the Company, which operates as one telecommunications business. Goodwill is considered 
to be impaired if the carrying amount exceeds the recoverable amount. The recoverable amount of an asset is considered 
to be the higher of its fair less costs of disposal and its value in use. The Group has performed its impairment review based 
on an assessment of the fair value less costs of disposal.
notes 
continued 57 manx telecom plc annual report and accounts 2014
In 2014, the fair value less costs of disposal of Manx Telecom Trading Limited has been determined on a market approach by 
reference to the enterprise value of Manx Telecom plc, based on the market capitalisation of Manx Telecom plc as at 31 
December 2014 (using the year end share price and shares in issue) plus debt. The enterprise value of Manx Telecom plc is 
considered to provide a comparable value to that of Manx Telecom Trading Limited as all the revenue generating operations 
of the Group are contained within Manx Telecom Trading Limited. Using this methodology fair value less costs to sell were 
considered to be higher than the total asset value (less goodwill), therefore no impairment was required. Management also 
performed an assessment of the fair value determined based on an income approach, using cash flows projected over a 
20 year period, a growth rate of 1% per annum and an 8% discount rate. This approach also indicated that there was no 
impairment of goodwill.
In 2013 the Group used the enterprise value methodology to determine the fair value of Manx Telecom Trading Limited. An 
enterprise value multiple was estimated by management based on similar publicly traded telecommunications enterprise 
value multiples, adjusted for Manx Telecom’s business model and discounted by 30%. This calculation also used earnings 
based on the last 12 months’ rolling EBITDA. Using this methodology fair value less costs to sell were considered to be higher 
than the total asset value (less goodwill), therefore no impairment was required. 
4 Operating profit
The operating profit is stated after charging/(crediting) the following:
2014 
£’000
2013 
£’000
Staff costs 15,142 14,691
Depreciation of property, plant and equipment – owned assets 9,299 9,188
Amortisation of software licences – intangibles 191 137
Impairment of property, plant and equipment 592 2,673
Net operating lease rentals payable – property 186 167
Trade receivables impairment 403 225
Audit services – statutory audit 158 84
– non-audit service fees 94 165
Listing costs incurred as a result of the Admission and refinancing costs relating to the Admission have been charged to 
equity, profit or loss or capitalised as set out below:
 
2014 
£’000
2013 
£’000
Listing costs charged to profit or loss (see below) 7,991 –
Listing costs presented in equity (see note 16) 4,883 –
Transaction costs capitalised (see note 13) 1,475 –
14,349 –
 
Listing costs have been recognised as a reduction to share premium within equity to the extent that they relate to the newly 
issued shares. All other costs that do not qualify for recognition in equity are recognised in financial expenses in the profit or 
loss. The borrowing costs capitalised are detailed in note 13.
Non-GAAP measures
The adjustments made to reported profit before tax and operating profit are income and charges that are one-off in 
nature, significant and distort the Group’s underlying performance. These adjustments include:
• Impairment of equipment. During the current year, following the implementation of 4G which was completed during 
2014, the Group made further impairments of equipment used to provide mobile prepaid services and fixed voice 
network equipment, resulting in an expense of £592,000.
• Refinancing costs. As a result of the refinancing described in note 13, net realised and unrealised losses of £291,000 were 
incurred in exiting the interest rate swap held in connection with the prior financing arrangements, which is not 
considered a regular finance cost to the Group.
• Listing expenses. On 10 February 2014, the Company was admitted to AIM. One-off listing costs charged to profit or loss in 
the period were £7,991,000, which include £475,000 in respect of share options which vested as a result of the admission 
to AIM.
3 Goodwill – Group continued 58
financial statements
• Pension scheme reorganisation. On 31 August 2014 the Manx Telecom Limited Combined Pension Scheme was closed to 
future accrual. In connection with the closure of the Manx Telecom Limited Combined Pension Scheme to future accrual, 
one-off expenses of £788,000 were incurred, including additional payments to members of the scheme of £666,000 and 
other related costs of £122,000. As a result of the changes made to the scheme, a one-off curtailment credit of 
£7,000,000 to past service cost was recorded. This credit has arisen from changes in actuarial assumptions regarding 
future salary increases, which are replaced with pension increases in deferment given the scheme is now closed to 
future accrual. See note 15 for further detail regarding pension schemes of the Group.
• Release of capitalised loan transaction costs. Due to the refinancing of the Group following Admission, unamortised 
transaction costs of £4,567,000 relating to prior financing arrangements were released to the statement of comprehensive 
income within finance expenses. See note 13 for further detail regarding lending arrangements of the Group.
5 Finance income and expense
Recognised in profit or loss
2014 
£’000
2013 
£’000
Finance income
Other interest receivable 72 119
Net interest on net pension asset – 100
72 219
Finance costs
Interest on shareholder loan notes (330) (3,928)
Interest on borrowings (2,933) (7,064)
Finance lease interest (6) (3)
Net interest on pension liabilities (300) –
Amortisation of loan transaction costs (301) (672)
Release of capitalised transaction costs (4,567) (3,301)
Refinancing costs – (970)
Total financial expense (8,437) (15,938)
Net total finance expense (8,365) (15,719)
In May 2010 Hg Capital LLP acquired Manx Telecom Trading Limited (formerly Manx Telecom Limited (see note 9)) and as a 
result the Group obtained bank debt and incurred financing costs of £5,341,000. These costs were capitalised. The debt was 
subsequently repaid as a result of refinancing in April 2013. The remaining unamortised financing costs were charged to the 
Consolidated Statement of Comprehensive Income in 2013. 
Refinancing costs incurred as a result of refinancing in April 2013 of £5,239,115 were capitalised in 2013. The debt was 
subsequently repaid as a result of the Admission and refinancing in February 2014 (see note 13 for further information). The 
remaining unamortised financing costs of £4,567,000 were charged to the Consolidated Statement of Comprehensive 
Income in 2014. 
The new debt arrangement (see note 13) incurred directly related expenses of £1,475,000 which have been capitalised in 
accordance with IAS 39 and which are being amortised over the period of the loan facility. Amortisation of £301,000 is 
included within financial expenses in the current year.
6 Taxation
The Company’s profits are charged at the Isle of Man standard rate of 0% for 2014 (2013: 0%). Therefore no provision has 
been made for taxation for 2014 (2013: £nil). Whilst the Group is required to apply Isle of Man Retail Tax to Isle of Man retail 
activity, profits from this revenue stream are not substantial enough to meet the taxable threshold.
4 Operating profit continued
notes 
continued 59 manx telecom plc annual report and accounts 2014
7 Property, plant and equipment – Group
Land and 
buildings 
£’000
Plant and 
equipment 
£’000
Under 
construction
£’000
Total 
£’000
Balance at 1 January 2013 32,983 113,196 6,307 152,486
Additions – – 9,947 9,947
Transfer 1,035 4,853 (5,888) –
Disposals – (2,347) – (2,347)
Impairment – (26,928) – (26,928)
Balance at 31 December 2013 34,018 88,774 10,366 133,158
Balance at 1 January 2014 34,018 88,774 10,366 133,158
Additions 29 172 12,180 12,381
Transfer 3,248 10,688 (13,936) –
Disposals (588) (9,777) – (10,365)
Impairment – – – – 
Balance at 31 December 2014 36,707 89,857 8,610 135,174
Depreciation and impairment
Balance at 1 January 2013 7,774 79,830 – 87,604
Depreciation charge for the year 1,294 7,894 – 9,188
Disposals – (2,338) – (2,338)
Impairment – (23,918) – (23,918)
Balance at 31 December 2013 9,068 61,468 – 70,536
Balance at 1 January 2014 9,068 61,468 – 70,536
Depreciation charge for the year 1,353 7,946 – 9,299
Disposals (588) (8,579) – (9,167)
Impairment – (592) – (592)
Balance at 31 December 2014 9,833 60,243 – 70,076
Net book value at 31 December 2014 26,874 29,614 8,610 65,098
Net book value at 31 December 2013 24,950 27,306 10,366 62,622
A formal independent valuation of the four main properties was undertaken by Dean Wood Estate Agents on 
17 December 2013. This confirmed that the net book value at 31 December 2013 was considered to be the same as the fair 
value of the land and buildings. The fair value of the freehold land and buildings was determined based on the market 
comparable approach that reflects recent transaction prices for similar properties.
As at the end of the reporting period, the Group performed an assessment of the estimated fair value of land and buildings 
using the valuation techniques described above, which estimated that the fair value did not materially differ from the 
carrying value and as such a revaluation of the land and buildings was not required. There has been no change to the 
valuation techniques used during the year. A full, independent third party valuation was not undertaken as at 31 December 
2014 following the fair value estimates made by the Group. 
The carrying value of land and buildings held by the Group under the revaluation model is the same as if it were held under 
the historical cost model.
During 2013 the Board agreed the implementation of 4G. As such, the 2G and 3G assets were fully impaired although 
remain operational. In 2014, following the implementation of 4G, the Group has made further impairments of equipment 
used to provide mobile prepaid services and fixed voice network equipment. As at 31 December 2014 the Group had 
recorded accrued costs of £3,044,000 for services received in respect of 4G implementation during 2014 which are due for 
payment in 2015. 60
financial statements
In 2014, the Group made a profit on disposal of certain fixed assets of £140,000 (2013: £nil).
During 2014, the Group received a grant of £250,000 towards the cost of construction of the Greenhill Data Centre, which in 
accordance with the Group’s accounting policy was deducted from the cost of the asset.
The accounting policies set out in note 1.6 are applicable to assets under construction and the capital commitments in 
respect of assets under construction are detailed in note 21.
Fair value hierarchy
The table below analyses land and buildings carried at fair value, grouped into Levels 1 to 3 based on the degree to which 
the fair value is observable (as described in the accounting policy in note 1.4).
31 December 2014
Level 1 
£’000
Level 2 
£’000
Level 3 
£’000
Total 
£’000
Land and buildings – – 26,874 26,874
31 December 2013
Level 1 
£’000
Level 2 
£’000
Level 3 
£’000
Total 
£’000
Land and buildings – – 24,950 24,950
There were no transfers between levels during the current or prior years.
8 Intangible assets – Group
Domain 
names 
£’000
Computer 
software 
£’000
Total 
£’000
Cost
Balance at 1 January 2013 109 1,216 1,325
Additions – 34 34
Balance at 31 December 2013 109 1,250 1,359
Balance at 1 January 2014 109 1,250 1,359
Additions – 345 345
Balance at 31 December 2014 109 1,595 1,704
Amortisation and impairment
Balance at 1 January 2013 – (860) (860)
Amortisation for the year – (137) (137)
Balance at 31 December 2013 – (997) (997)
Balance at 1 January 2014 – (997) (997)
Amortisation for the year – (191) (191)
Balance at 31 December 2014 – (1,188) (1,188)
Net book value at 31 December 2014 109 407 516
Net book value at 31 December 2013 109 253 362
The domain names were acquired on 1 March 2012. The Directors have considered the carrying value of the assets at 
31 December 2014 and in their opinion there are no indicators of impairment as the revenue base is maintained.
7 Property, plant and equipment – Group continued
notes 
continued 61 manx telecom plc annual report and accounts 2014
9 Investments in subsidiaries – Company
The Company has the following investments in its subsidiaries:
Company Holding Principal activity
Country of 
incorporation 
and operation
Class of  
shares held
Ownership 
2014
Ownership 
2013
Trafford Shareholder Debtco Limited Direct Holding company Isle of Man Ordinary 100% 100%
Trafford Midco Limited Indirect Holding company Isle of Man Ordinary 100% 100%
Manx Telecom Holdings Limited Indirect Holding company Isle of Man Ordinary 100% 100%
Manx Telecom Trading Limited Indirect Telecommunications provider Isle of Man Ordinary 100% 100%
Manx Telecom Limited changed its name on 3 February 2014 to Manx Telecom Trading Limited.
During the current year, the investment by the Company in Trafford Shareholder Debtco Limited has increased by £731,000 
(2013: £nil) due to capital contributions made in respect of share-based payments to be settled in the equity instruments of 
the Company for services received by Manx Telecom Trading Limited, which resulted in capital contributions being made to 
subsidiaries throughout the Group structure.
10 Inventories – Group
Group 
2014 
£’000
Group 
2013 
£’000
Raw materials and consumables 53 50
Work in progress 53 121
Finished goods 688 372
794 543
11 Trade and other receivables – Group
Group 
2014 
£’000
Group 
2013 
£’000
Amounts falling due within one year:
Trade receivables 7,566 7,391
Less provisions for impairment of receivables (720) (491)
Trade receivable – net 6,846 6,900
Other trade receivables 6,335 6,486
Prepayments 1,294 1,539
Accrued income 2,233 2,269
16,708 17,194
An analysis of the aging of overdue trade receivables is disclosed in note 17(b). The movement in the trade receivables 
provision for doubtful debts during the year is as follows:
£’000
Doubtful debt provision at 1 January 2013 762
Additions –
Reductions/amount paid (271)
Doubtful debt provision at 31 December 2013 491
Additions 229
Reductions/amount paid – 
Doubtful debt provision at 31 December 2014 720
Additions and reductions in the provision are recognised in administration costs within the Statement of Comprehensive 
Income. 62
financial statements
12 Cash and cash equivalents – Group
Group 
2014 
£’000
Group 
2013 
£’000
Cash held at bank 15,156 13,506
13 Interest-bearing borrowings – Group
This note provides information about the contractual terms of the Group’s interest-bearing bank loans and borrowings, 
which are measured at amortised cost. For more information about the Group’s exposure to interest rate and liquidity risk, 
see note 17.
Group 
2014 
£’000
Group 
2013 
£’000
Non-current liabilities
Finance lease liability 133 129
Secured bank loans 68,815 115,561
68,948 115,690
Current liabilities
Current portion of secured bank loans – 957
– 116,647
As at 31 December 2013, the Group had received shareholder loans from the previous shareholder, HG Capital LLP. These 
were included in ‘due to shareholders’ (note 19). All remaining shareholder loans and PIK (Payment In Kind) notes were 
repaid in the period. The capital component of the shareholder loans and PIK notes repaid was £22,228,000 and interest 
payable of £8,740,000 was settled. The secured PIK notes were interest bearing at a rate of 10%.
Terms and debt repayment schedule
Currency
Nominal 
interest  
rate %
Date of 
maturity
Carrying 
amount 
2014 
£’000
Carrying 
amount 
2013 
£’000
Finance lease GBP 2.92 31 July 2018 133 129
Revolving credit facility GBP 2.00 – 3.50 30 June 2018 70,000 –
Senior debt (GE Ares) GBP 6.50 25 March 2019 – 121,085
Unamortised finance costs GBP (1,185) (4,567)
68,948 116,647
Current facility agreement
In connection with the Admission on 10 February 2014, Manx Telecom Holdings Limited and Manx Telecom Trading Limited 
(previously Manx Telecom Limited) entered into an £80m revolving credit facility agreement on 3 February 2014 with Barclays 
Bank plc, Lloyds Bank plc and The Royal Bank of Scotland plc as arrangers and Lloyds Bank plc as agent and security agent 
(‘the Facility Agreement’).
 
The proceeds of the first drawdown under the Facility Agreement of £70m were used to (among other things) refinance the 
indebtedness existing at 31 December 2013 and to pay fees, costs and expenses in relation to the Admission process and the 
debt refinancing. Additional amounts may be drawn under the Facility Agreement for general corporate purposes and/or 
working capital purposes and the payment of fees, costs and expenses.
The loan is secured by way of a debenture in favour of the security agent providing a fixed and floating charge over certain 
of the Group’s assets, including the shares of Manx Telecom Holdings Limited and Manx Telecom Trading Limited and 
property, plant and equipment of the Group.
The initial interest rate was the applicable interbank offer rate plus a margin of 2.5% pa and, from 30 June 2014, is subject to 
an adjustment to the margin ranging from 2.0% pa to 3.5% pa based on the ratio of total net debt to adjusted EBITDA. As at 31 
December 2014, the margin applicable to the interest rate on the facility was 2%.
To mitigate the Group’s exposure to interest rate risk, the Group entered into two interest swap agreements. See note 17(d) 
for further details of the interest swap agreements.
notes 
continued 63 manx telecom plc annual report and accounts 2014
Amounts drawn under the Facility Agreement are to be repaid on the last day of each applicable interest period unless  
the relevant borrower elects otherwise and amounts repaid will (subject to certain drawdown conditions) remain available 
for re-drawing unless cancelled. The Facility Agreement will terminate and all amounts outstanding must be repaid on 
30 June 2018.
The Facility Agreement also provides for the payment of a commitment fee, agency fee and arrangement fee and contains 
certain undertakings, guarantees and covenants (including financial covenants) and provides for certain events of default. 
During the period the Group has not breached any financial covenants contained within the Facility Agreement.
Transaction costs incurred as part of the debt financing are amortised over the period of the loan. Transaction costs of 
£1,475,000 were capitalised in the period and will be amortised over the loan period. Due to the refinancing, unamortised 
transaction costs of £4,567,000 (2013: £3,301,000) relating to prior financing arrangements were released to the statement of 
comprehensive income within finance expenses.
As part of the refinancing, all remaining outstanding Shareholder loans and PIK notes (see note 19) were repaid during 
the period.
Prior facility agreement
The Group’s third party debt existing as at 31 December 2013 consisted of £121,085,000 senior term and £5,000,000 revolving 
facilities agreement arranged by GE Corporate Finance Bank SAS and with GE Corporate Finance Bank SAS, London Branch 
as agent and security agent and entered into on 19 March 2013 (‘the Agreement’).
The Agreement provided for two tranches: (i) a term loan tranche (‘the Term Loan’) and (ii) a revolving loan tranche 
(‘the Revolver’).
The main purpose of the Agreement was to refinance the Group’s then existing third party debt entered into in 2010. 
Amounts drawn under the Revolver were also used for general corporate purposes and working capital purposes  
of the Group.
The opening interest rate applicable to drawn amounts under the Term Loan was the applicable interbank offer rate plus  
a margin of 6.5% p.a. and, under the Revolver, the applicable interbank offer rate plus a margin of 4.5% p.a. To mitigate the 
Group’s exposure to interest rate risk, the Group entered into an interest swap agreement. See note 17(d) for further details 
of the interest swap agreement.
The Agreement also contained certain undertakings (including limitations on capital expenditure), guarantees and covenants 
(including financial covenants based on the ratio of total net debt to EBITDA, the ratio of net finance charges to EBITDA and 
cash flow cover) and provides for certain events of default.
Transaction costs incurred as part of the Group’s refinancing of existing debt are amortised over the period of the loan. As a 
result, in 2013 transaction costs of £5,239,115 were capitalised to be amortised over the loan period. As noted above, due to 
the refinancing, unamortised transaction costs of £4,567,000 relating to these prior financing arrangements were released 
to the statement of comprehensive income within finance expenses.
13 Interest-bearing borrowings – Group continued 64
financial statements
14 Trade and other payables – Group
Group 
2014 
£’000
Group 
2013 
£’000
Current
Trade payables 6,215 4,981
Other taxation and social security 3,837 4,212
Other payables 3,729 4,376
Accrued expenses 10,435 8,605
Deferred income 2,259 2,675
26,475 24,849
The directors consider that the carrying amount of trade and other payables approximates to their fair value.
15 Retirement benefit obligations – Group
The Group operates two pension schemes. The Manx Telecom Limited Combined Pension Scheme is a defined benefit 
scheme that is closed to new entrants and the Manx Telecom Employee Retirement Plan is a defined contribution plan.
Defined benefit plan
The Manx Telecom Limited Combined Pension Scheme (‘the Scheme’) provides benefits based on final pensionable salary. 
The assets of the Scheme are managed by independent Trustees and are held separately from those of the Group with a 
Legal & General managed portfolio and also with cash deposits.
The Isle of Man does not have minimum funding requirements. The only requirement is for a Schedule of Contributions, 
agreed between the Company and the Trustees, to be put in place after each actuarial valuation that is deemed by the 
Actuary to be sufficient to cover any shortfall revealed by the triennial actuarial valuation.
Under the projected unit method the current service cost will increase as the members of the Scheme approach retirement.
The contributions relating to the Scheme have been assessed in accordance with the advice of independent qualified 
actuaries and are funded by the Group. Independent actuarial valuations are carried out on a triennial basis by Towers 
Watson (formerly Watson Wyatt LLP), Actuaries and Consultants. The last such full valuation was carried out at 31 March 2013 
and in accordance with IAS 19 the defined benefit liabilities have been measured using the ‘projected unit method’.
The Group paid contributions of £1,850,000 (2013: £2,200,000) together with employee contributions of £250,000 (2013: 
£400,000) to the Manx Telecom Combined Pension Scheme for the financial year ended 31 December 2014.
With effect from 1 October 2009 the Scheme changed to a career average revalued earnings basis for benefits earned from 
that date. Members had the option of choosing between a normal retirement age of 62 with an 8% employee contribution 
rate, or a normal retirement age of 65 with a 6% employee contribution rate. No changes were made to benefits earned 
before 1 October 2009. The scheme was closed to new entrants in 2002.
On 31 August 2014, the Manx Telecom Combined Pension Scheme closed to future accrual. Under the terms of the plan 
amendment to close the scheme to future accrual, participants in the scheme were provided with a choice of three options 
regarding transition to the Manx Telecom Employee Retirement Plan. In connection with this transition, one-off lump sum 
payments of £666,000 in total were made in respect of participants in the scheme and other costs of £122,000 were 
incurred. A credit of £7,000,000 in respect of past service arose from the closure of the scheme to future accrual. This credit 
has arisen from changes in actuarial assumptions regarding future salary increases, which are replaced with pension 
increases in deferment given the scheme is now closed to future accrual. The assumed rate of pension increases in 
deferment is lower than the assumed rate of future salary increases, resulting in a credit for curtailments.
The actuarial valuation of the Manx Telecom Limited Combined Pension Scheme as at 31 March 2013 has been updated to 
31 December 2014. Scheme assets are stated at fair value.
The main assumptions adopted for the Scheme under IAS 19 (per annum) are as follows:
notes 
continued 65 manx telecom plc annual report and accounts 2014
2014 
%
2013 
%
Nominal rate of increase for in-payment benefits 2.55 – 3.00 2.55 – 3.20
Nominal rate of increase for deferred benefits 2.25 2.55
Average longevity of a member at age 60 now (years) - males 27.4 27.3
Average longevity of a member at age 60 now (years) - females 30.0 29.9
Average longevity of a member at age 60 in 2029 - males 29.3 29.1
Average longevity of a member at age 60 in 2029 - females 31.9 31.8
Discount rate 3.90 4.65
Retail Price Index (‘RPI’) 3.25 3.55
Consumer Price Index (‘CPI’) 2.25 2.55
Rate of salary increase N/A 4.55
During 2011 the Isle of Man Government confirmed the use of CPI as the base index for pension scheme increases where 
the scheme provisions make direct reference to UK (as opposed to Isle of Man) statutory pension increase provisions. After 
taking legal advice, the trustees made the decision to reference CPI for pension increases in deferment for all sections, 
reference CPI for A/B section pension increases and reference RPI for section C pension increases.
The risks associated with the actuarial assumptions include longevity, inflation, interest rate and market (investment) risks. 
The Scheme is not exposed to any unusual, entity or scheme specific risks.
Each year, the trustees of the scheme review the strategic investment policies of the scheme in terms of the risk and return 
profiles. The main strategic choices that are formulated are the asset mix. The scheme does not utilise annuities or swaps to 
manage risk in relation to asset-liability matching.
The Scheme holds a large proportion of equities which are expected to outperform bonds in the long term but give 
exposure to volatility and risk in the short term. The Trustees are responsible for investment strategy, and a reasonable 
proportion of equity investment is justified, given the time horizon of the Scheme and to provide a reasonable long-term 
return. If equities were to fall by 20%, the net pension asset would reduce by approximately £6,000,000 to become a liability 
of £3,800,000.
However, a fall in equity prices would be associated with a fall in the value of corporate bonds and a rise in corporate bond 
yields. The former would lead to a further reduction in scheme assets, just over £9,000,000 of which were invested in 
corporate bonds at 31 December 2014. However, the increase in corporate bond yields, which are used to determine the 
value of the defined benefit obligation would lead to a reduction in liabilities, which would partially or wholly offset the 
impact of the fall in asset values on the reported pension liability.
Sensitivity analysis on significant actuarial assumptions
The table below illustrates the impact on the financial statements that certain changes in the actuarial assumptions  
would have.
31 December 2014
Mortality –1 
year 
£’000
Discount 
rate +1% 
£’000
Inflation 
(including 
CPI and 
salary) 
+0.5% 
£’000
Real salary 
escalation 
+0.25% 
£’000
CPI inflation 
only +0.25% 
£’000
Balance sheet deficit +1,800 -13,000 +7,000 N/A +2,500
Net benefit expense +100 -700 +300 N/A +100
Service cost N/A N/A N/A N/A N/A
Net interest cost +100 -700 +300 N/A +100
31 December 2013
Mortality –1 
year 
£’000
Discount 
rate +1% 
£’000
Inflation 
(including 
CPI and 
salary) 
+0.5% 
£’000
Real salary 
escalation 
+0.25% 
£’000
CPI inflation 
only +0.25% 
£’000
Balance sheet deficit +1,800 –13,000 +6,700 +800 +1,400
Net benefit expense +100 –100 +500 – –
Service cost – –300 +200 – –
Net interest cost +100 –700 +300 – –
15 Retirement benefit obligations – Group continued 66
financial statements
Changes are marked ‘N/A’ above as there would be no financial impact if the salary escalation assumption is varied given 
the Scheme is now closed to future accrual. Similarly, there will also be no financial impact on the service cost.
In presenting the sensitivity analysis above, the present value of the defined benefit obligation has been calculated using the 
projected unit method, which is the same as that applied in calculating the defined benefit obligation liability recognised in 
the statement of financial position. The sensitivity analysis was conducted by altering and measuring the impact each 
assumption had on the level of expected future cash flows and discounting back to the valuation data.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years with the 
exception of the cash commutation assumption where an allowance is made for 80% of the Section C members 
exchanging pension for a lump sum at retirement on commutation factors that are 20% better than the current terms. The 
sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation, as it is 
unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be 
correlated. Extrapolation beyond the sensitivity figures shown may not be appropriate.
The amounts recognised in the statement of comprehensive income in respect of defined benefit obligation for the year 
ended 31 December 2014 are as follows:
2014 
£’000
2013 
£’000
Analysis of the amount (credited)/charged to profit or loss:
Current service cost 1,000 1,400
Past service cost (7,000) –
Net interest expense/(income) 300 (100)
Total (credited)/charged in profit before tax (5,700) 1,300
Analysis of the amount recognised in other comprehensive income:
2014 
£’000
2013 
£’000
Actuarial loss due to liability experience – 3,300
Actuarial loss due to liability assumption changes 5,900 7,600
Actuarial loss arising during the period 5,900 10,900
Return on Scheme assets greater than discount rate (6,700) (1,800)
Remeasurement effects recognised in other comprehensive income 800 (9,100)
The pension assets and liabilities recognised in the statement of financial position are as follows:
2014 
£’000
% of total 
fair value 
of scheme 
assets 
31 Dec 2014 
%
2013 
£’000
% of total 
fair value 
of scheme 
assets 
31 Dec 2013 
%
Fair value of assets:
 – Equities 29,800 39.1 29,300 43.8
 – UK Government bonds 46,200 60.5 37,200 55.7
 – Other bonds – 0.0 – 0.0
 – Other 300 0.4 300 0.5
Fair value of assets 76,300 66,800
Present value of defined benefit obligations (74,100) (73,200)
Net asset/(liability) recognised in the balance sheet 2,200 (6,400)
Deferred tax assets – –
Net pension surplus/(deficit) 2,200 (6,400)
Assets of the scheme are held within a Legal & General managed portfolio and are therefore indirectly invested in assets in 
quoted markets with active prices. The assets held directly with Legal & General are invested in Legal & General Funds for 
which regular quoted prices are readily available and for which transactions regularly occur and are classified as level 1 
instruments in the fair value hierarchy (see note 1.4 for further information on the fair value hierarchy).
15 Retirement benefit obligations – Group continued
notes 
continued 67 manx telecom plc annual report and accounts 2014
Analysis of the movement in the statement of financial position
Movements in the present value of defined benefit obligations in the current period were as follows:
2014 
£’000
2013 
£’000
At start of year 73,200 60,500
Current service cost 1,000 1,400
Past service cost and gains and losses on settlements (7,000) –
Interest cost 3,400 2,900
Actuarial loss due to liability experience – 3,300
Actuarial loss due to liability financial assumption changes 7,500 7,600
Actuarial loss due to liability demographic assumption changes (1,600) –
Benefits paid from scheme assets (2,400) (2,500)
At end of year 74,100 73,200
Movements in the fair value of scheme assets in the current and preceding year were as follows:
2014 
£’000
2013 
£’000
At start of year 66,800 61,900
Interest income on scheme assets 3,100 3,000
Return on scheme assets excluding interest income 6,700 1,800
Contributions from the employer 1,850 2,200
Contributions from plan participants 250 400
Benefits paid (2,400) (2,500)
At end of year 76,300 66,800
The defined benefit scheme’s impact on the Group’s future cash flows is affected by:
• Funding policy and arrangements – the Isle of Man does not have minimum funding requirements. A Schedule of 
Contributions is agreed between the Group and the Trustees and put in place following each successive actuarial 
valuation that is deemed by the actuary to be sufficient to cover any shortfall revealed by the triennial valuation.
• Contributions to the Scheme for the next annual reporting period – expected employer contributions for the year ended 
31 December 2015 are £1,200,000 and expected benefit payments from Scheme assets are £2,000,000.
• Timing of benefit payments and duration of the defined benefit obligation – the weighted average duration of the  
defined benefit obligation is 23.5 years (2013: 23.5 years) and benefit payments are expected as set out in the below 
maturity profile.
Expected benefit payments during annual reporting period ended: £’000
31 December 2015 2,000
31 December 2016 2,000
31 December 2017 2,000
31 December 2018 2,200
31 December 2019 2,400
31 December 2020 through 31 December 2024 13,700
Defined contribution plan
The Manx Telecom Employee Retirement Plan is a defined contribution pension scheme, which operates for employees 
who commenced employment after 1 July 2002. The assets of the Scheme are held separately from those of the Group in 
an Aviva administered pension plan. The total cost charged to the statement of comprehensive income for this plan during 
the period ended 31 December 2014 totalled £396,000 (year ended 31 December 2013: £301,000).
15 Retirement benefit obligations – Group continued 68
financial statements
16 Capital – Company
Share capital
The Company’s shares were admitted for trading on 10 February 2014. The table below sets out the amounts recorded in 
equity in respect of the existing and newly issued shares net of listing costs as detailed in note 4.
Number 
of shares 
in issue 
(thousands)
Ordinary 
share 
capital 
£’000
Share 
premium 
£’000
Total 
£’000
In issue at 1 January 2013 9,790 98 – 98
Issued shares during the year 190 2 – 2
At 31 December 2013 9,980 100 – 100
Opening balance as at 1 January 2014 9,980 100 – 100
Share split 39,918 – – –
Proceeds from issue of new shares on Admission 62,924 126 89,226 89,352
Share-based payment – – – –
Shares issued to employee benefit trust 138 – – –
Listing costs (note 4) – – (4,883) (4,883)
At 31 December 2014 112,961 226 84,343 84,569
2014 
£’000
2013 
£’000
Allotted, called up and subject to payment
Ordinary shares of 112,959,787 @ 0.2p each (2013: ordinary shares of 9,789,673 @ 1p each) 226 100
226 100
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote 
per share at meetings of the Company.
During 2013, the Company issued 200,000 1p ordinary shares for a consideration of £2,000 which was unpaid as at 31 
December 2013. The Company repurchased 10,000 1p ordinary shares for a consideration of £100. The unpaid amount 
represents the amount due from shareholders in note 19 and was received during the year.
During 2014, a share split was executed prior to the listing in the ratio of five shares for each existing share. The share split 
resulted in an additional 39,918,692 shares. Although the share split resulted in an increase in the number of shares in issue, 
there was no impact on the total value of issued share capital or reserves. 62,783,078 new shares were issued as part of 
the admission and a further 70,422 shares were issued to both Kevin Walsh and Jeffrey Hume. The total new shares issued 
amounted to 62,923,922 generating total proceeds of £89,226,121. 
The new and existing shares rank pari passu in all respects including voting rights and dividend entitlement.
Under a Co-Investment Plan established in connection with the listing the Executive Directors of the Company received a 
total of 538,114 conditionally awarded shares and other directors of Manx Telecom Trading Ltd (classified under IAS24 as ‘Key 
Management’) received a total of 376,733 conditionally awarded shares (of which 62,500 have subsequently been forfeited 
during the year), in both cases on the basis of a matching award of one share for every two invested shares then held by 
them. Such matching shares will only vest to the extent that invested shares remain held by the participant on 10 February 
2017 and are also subject to satisfaction of a three year relative Total Shareholder Return performance condition. See note 
22 for further information regarding share-based payments.
On 2 December 2014, 137,500 new ordinary shares were issued and transferred to the Manx Telecom plc Share Incentive 
Plan Trust as part of an employee share scheme (see note 22 for further information). The new ordinary shares rank pari 
passu in all respects with the existing issued ordinary shares of £0.002 each in the share capital of the Company.
The Company previously announced on 25 September 2014 that 1,000,000 new ordinary shares would be issued and 
transferred into an employee benefit trust from which shares would be granted to employees in 2014 and future years. The 
Board has subsequently decided to only issue new shares in respect of awards currently due.
notes 
continued 69 manx telecom plc annual report and accounts 2014
Own shares
Own shares relate to shares in the Company held by the Group employee benefit trust, Manx Telecom plc Share Incentive 
Plan Trust.
Number 
of shares 
in issue 
(thousands)
Ordinary 
share 
capital 
£’000
In issue at 1 January 2013 – –
At 31 December 2013 – –
Opening balance as at 1 January 2014 – –
Own shares issued 137,500 (0)
Share options vested – –
At 31 December 2014 137,500 (0)
On 2 December 2014, 137,500 new ordinary shares were issued and transferred to the Manx Telecom plc Share Incentive 
Plan Trust for nil consideration. The shares are held for the benefit of employees of the Group in respect of the free share 
options granted under the Share Incentive Plan described in note 22. At the year end, the shares had a market value 
of £242,000.
Capital management
The primary objective of the Group’s capital management is to ensure that it maintains healthy capital ratios in order to 
support its business and maximise shareholder value. The Group manages its capital structure and makes adjustments to 
it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may make dividend 
payments to the shareholder, return capital to the shareholder or issue new shares. The Group ensures that banking 
covenants are met as part of its capital management, see note 13 for further details of the Group’s lending arrangements 
including covenant compliance. 
Gearing ratio
The gearing ratio at the year end is as follows:
2014 
£’000
Secured bank loans (68,815)
Cash and cash equivalents 15,156
Net debt (53,659)
Equity 88,280
Net debt to equity ratio 0.61
Debt is defined as long and short-term borrowings (excluding derivatives) as detailed in note 13. Equity includes all capital 
and reserves of the Group that are managed as capital.
17 Financial instruments
17(a) Fair values of financial instruments
Trade and other receivables
The fair value of trade and other receivables, excluding construction contract debtors, is estimated as the present value of 
future cash flows, discounted at the market rate of interest at the balance sheet date if the effect is material.
Trade and other payables
The fair value of trade and other payables is estimated as the present value of future cash flows, discounted at the market 
rate of interest at the balance sheet date if the effect is material.
Cash and cash equivalents
The fair value of cash and cash equivalents is estimated as its carrying amount where the cash is repayable on demand. 
Where it is not repayable on demand then the fair value is estimated at the present value of future cash flows, discounted 
at the market rate of interest at the balance sheet date.
Interest-bearing borrowings
Fair value is calculated based on the present value of future principal and interest cash flows, discounted at the market rate 
of interest at the balance sheet date. For finance leases the market rate of interest is determined by reference to similar 
lease agreements.
16 Capital – Company continued 70
financial statements
Derivative financial instruments
The fair value of interest rate swaps is based on broker quotes.
The fair values of all financial assets and financial liabilities by class, together with their carrying amounts shown in the 
consolidated statement of financial position, are as follows:
Carrying 
amount 
2014 
£’000
Fair value 
2014 
£’000
Carrying 
amount 
2013 
£’000
Fair value 
2013 
£’000
Financial assets measured at amortised cost
Cash and cash equivalents (note 12) 15,156 15,156 13,506 13,506
Trade and other receivables (note 11) 16,708 16,708 15,655 15,655
Financial assets designated as fair value through profit or loss
Derivatives (note 17d) – – 585 585
Total financial assets 31,864 31,864 29,746 29,746
Carrying 
amount 
2014 
£’000
Fair value 
2014 
£’000
Carrying 
amount 
2013 
£’000
Fair value 
2013 
£’000
Financial liabilities measured at amortised cost
Finance leases (note 13) 133 133 129 129
Due to shareholders (note 19) – – 30,968 30,968
Other interest-bearing loans and borrowings (note 13) 68,815 68,815 116,518 116,518
Trade and other payables (note 14) 26,475 26,475 24,849 24,849
Financial liabilities designated as fair value through profit or loss
Derivatives (note 17d) 1,008 1,008 – –
Total financial liabilities 96,431 96,431 172,464 172,464
No financial assets or liabilities have been reclassified during the current or prior year.
Financial risk management
The Group’s operations expose it to a variety of financial risks including credit risk, currency risk, interest rate risk and liquidity 
risk. The Group’s overall risk management policies focus on the unpredictability of financial markets and seek to minimise 
potential adverse effects on the Group’s financial performance and net assets.
The principal financial risks of the Group and how the Group manages these risks are discussed below.
17(b) Credit risk
The Group’s principal credit risks are attributable to its cash and cash equivalents, trade receivables and related party 
receivables. Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to 
meet its contractual obligations, and arises principally from the Group’s receivables from customers and investment securities.
Trade receivables are presented in the statement of financial position net of allowances for doubtful receivables, estimated 
by the Group’s management based on prior experience and their assessment of the current economic environment. 
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis using credit 
checks. The Group manages its exposure to credit risk on cash and cash equivalents by only placing its financial assets with 
reputable financial institutions with strong credit ratings.
At the reporting date there were no significant concentrations of third party credit risk, with exposure spread over a large 
number of counterparties and customers. The maximum exposure to credit risk is represented by the carrying amount of 
each financial asset, including derivative financial instruments, in the statement of financial position. The Group does not 
require collateral in respect of financial assets.
The carrying amount of financial assets represents the maximum credit exposure. Therefore, the maximum exposure to 
credit risk at 31 December 2014 was £31,864,000 (2013: £31,385,000) being the total of the carrying amount of cash and cash 
equivalents, trade and other receivables and related party receivables.
17 Financial instruments continued
notes 
continued 71 manx telecom plc annual report and accounts 2014
The aging of trade receivables, including trade receivables past due but not impaired, is as follows:
Overdue on the reporting date
Carrying 
amount 
£’000
Not overdue 
on the 
reporting 
date 
£’000
Less than 
90 days 
£’000
Between  
90 and  
180 days 
£’000
Between 
180 and  
360 days 
£’000
Over  
360 days 
£’000
Trade receivables as at 31 December 2014 7,566 2,633 3,698 673 271 291
Allowance for doubtful debts (163) (173) (158) (226)
Of which past but not impaired 3,535 500 113 65
Overdue on the reporting date
Carrying 
amount 
£’000
Not overdue 
on the 
reporting 
date 
£’000
Less than 
90 days 
£’000
Between  
90 and  
180 days 
£’000
Between 
180 and  
360 days 
£’000
Over  
360 days 
£’000
Trade receivables as at 31 December 2013 7,391 2,006 3,515 1,003 510 357
Allowance for doubtful debts (111) (95) (116) (169)
Of which past due but not impaired 3,404 908 394 188
For the debtors which are not impaired and which are overdue at the reporting date, there has been no indication that 
their payment obligations will not be met.
17(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash to meet its obligations. The Group aims to maintain 
appropriate liquidity through the daily monitoring of its actual and projected cash position. Mitigation of liquidity risk is also 
provided by the undrawn amount of £10,000,000 under the revolving credit facility described in note 13 (2013: revolving credit 
facility negotiated with GE Corporate Finance Bank SAS) and by the use of interest rate swaps to partially offset interest rate 
movements impacting variable rate loans and borrowings.
Liquidity risk – Group
The following are the contractual maturities of financial liabilities, including estimated interest payments (all cash flows 
are undiscounted and include both interest and principal cash flows).
2014
1 year 
or less 
£’000
1 to  
<2 years 
£’000
2 to  
<5 years 
£’000
5 years 
and over 
£’000
Total 
£’000
Carrying 
amount 
£’000
Non-derivative financial liabilities
Finance leases 46 46 60 – 152 133
Secured bank loans 1,796 1,796 72,694 – 76,286 68,815
Trade and other payables 26,475 – – – 26,475 26,475
Due to shareholders – – – – – –
Derivative financial liabilities
Derivatives (note 17d) 573 573 859 – 2,005 1,008
28,890 2,415 73,613 – 104,918 96,431
2013
1 year 
or less 
£’000
1 to 
<2 years 
£’000
2 to 
<5 years 
£’000
5 years 
and over 
£’000
Total 
£’000
Carrying 
amount 
£’000
Non-derivative financial liabilities
Finance leases 46 46 106 – 198 129
Secured bank loans 8,562 8,562 25,686 123,155 165,965 116,518
Trade and other payables 24,849 – – – 24,849 24,849
Due to shareholders 3,097 3,097 9,290 37,162 52,646 30,968
36,554 11,705 35,082 160,317 243,658 172,464
17 Financial instruments continued 72
financial statements
17(d) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, will 
affect the Group’s income or the value of its holdings of financial instruments.
The Group incurs foreign currency risk on purchases that are denominated in currency other than sterling. However, the 
Group’s exposure to currencies other than sterling is not considered to be material.
The Group’s exposure to the risk of changes in market interest rates relates primarily to bank loans borrowed at floating 
interest rates. The terms of the bank loans and interest rates are disclosed in note 13. In the prior year, the Group held 
shareholder loans (see note 19) which were interest bearing at a fixed rate of 10% per annum and which therefore had 
limited interest rate risk attached.
Market risk – interest rate risk
At the balance sheet date the interest rate profile of the Group’s interest-bearing financial instruments was:
Group 
2014 
£’000
Group 
2013 
£’000
Company 
2014 
£’000
Company 
2013 
£’000
Variable rate financial instruments
Financial assets 11,721 13,019 – –
Financial liabilities (70,000) (141,496) – –
(58,279) (128,477) – –
Fixed rate financial instruments
Financial liabilities – (30,968) – –
(58,279) (159,445) – –
The Group’s exposure to interest rate risk is managed by the interest rate swaps entered into by the Group, under which 
the Group agrees to exchange floating interest rates for fixed interest rates on agreed notional principal amounts.
The Group held the following interest rate swaps as at 31 December 2014:
Bank
Interest  
rate 
%
Expiry 
date
Notional 
amount 
£’000
Fair value 
£’000
Royal Bank of Scotland PLC 1.711 29/06/2018 25,000 (504)
Lloyds Bank PLC 1.711 29/06/2018 25,000 (504)
(1,008)
The Group held the following interest rate swaps as at 31 December 2013:
Bank
Interest  
rate 
%
Expiry 
date
Notional 
amount 
£’000
Fair value 
£’000
Bank of Ireland 0.6650 31/03/2016 81,333 585
585
The net movement in unrealised gains/(losses) on interest rate swaps in the year gives rise to a loss of £1,593,000 in the 
current year. As a result of the refinancing described in note 13, realised gains of £294,000 were incurred in exiting the 
interest rate swap held at 31 December 2013.
Sensitivity analysis
If interest rates had been 100 basis points higher, the Group’s profit for the year ended 31 December 2014 would have 
increased by £1,411,000 (2013: increase £1,163,000). If interest rates had been 100 basis points lower, the Group’s profit for the 
year ended 31 December 2014 would have decreased by £1,411,000 (2013: decrease £1,163,000). This calculation assumes that 
the change occurred across the whole period and had been applied to risk exposures existing at the year end which were 
either not fixed or had not been mitigated by interest rate swaps.
This analysis assumes that all other variables, in particular foreign currency rates, remain constant and considers the effect 
of financial instruments with variable interest rates and financial instruments at fair value through profit or loss (the fixed 
rate element of interest rate swaps).
17 Financial instruments continued
notes 
continued 73 manx telecom plc annual report and accounts 2014
Fair value hierarchy
The table below analyses financial instruments carried at fair value, grouped into Levels 1 to 3 based on the degree to which 
the fair value is observable (as described in the accounting policy in note 1.4). Interest rate swaps are valued using 
discounted cash flows, under which future cash flows are estimated based on forward interest rate yields (from 
observable yield curves at the end of the reporting period) and contract interest rates. 
31 December 2014
Level 1 
£’000
Level 2 
£’000
Level 3 
£’000
Total 
£’000
Financial assets – – – –
Financial liabilities – (1,008) – (1,008)
31 December 2013
Level 1 
£’000
Level 2 
£’000
Level 3 
£’000
Total 
£’000
Financial assets – 585 – 585
Financial liabilities – – – –
There were no transfers between levels during the current or prior years.
18 Operating leases
During the year, the following lease payments under operating leases were recognised as expenses in the year:
2014 
£’000
2013 
£’000
Property operating lease payments 190 171
Site sharing operating lease payments 385 339
Sublease income of £4,000 (2013: £4,000) was recognised within income in the year.
At the balance sheet date, the Group had commitments for future minimum lease payments under non-cancellable land 
and buildings operating leases which fall due as follows:
2014 
£’000
2013 
£’000
Not later than one year 392 495
Later than one year not later than five years 1,256 1,983
Expiring in more than five years 1,290 2,055
The Group leases various offices, shops, vehicles and mast sites under non-cancellable operating lease agreements. These 
leases have various terms and renewal rights.
At the balance sheet date, the Group had contracted with tenants for the following future minimum sublease payments:
2014 
£’000
2013 
£’000
Not later than one year 4 4
Later than one year not later than five years 15 15
Expiring in more than five years 66 70
17 Financial instruments continued 74
financial statements
19 Related parties – Group and Company
The compensation of key management personnel including the Directors is as follows:
Group 
2014 
£’000
Group 
2013 
£’000
Company 
2014 
£’000
Company 
2013 
£’000
Salaries and short-term employee benefits 1,676 1,701 – –
Share-based payments 646 62 – –
Post-employment benefits 112 36 – –
2,434 1,799 – –
Further information about the remuneration and shareholdings of individual Directors is provided in the audited part of the 
Directors’ remuneration report on page 39.
Shares as at 31 December 2014 were in denominations of £0.002 per share. Shares as at 31 December 2013 were in 
denominations of £0.01 per share.
Dividends of £38,000 were paid in the year in respect of ordinary shares held by the Company’s Directors.
Other related party transactions – Group
Related party Relationship
Receivables 
outstanding 
2014 
£’000
Payables 
outstanding 
2014 
£’000
Receivables 
outstanding 
2013 
£’000
Payables 
outstanding 
2013 
£’000
Shareholders Shareholders – – 100 30,968
– – 100 30,968
The shareholder loans payable were interest bearing at 10% per annum, unsecured and were due to expire in the year 
ending 31 December 2020. Loan interest payable of £8,740,000 had accrued and was included in the payables balance as at 
31 December 2013. The shareholder loan was repaid in full in February 2014, with a payment of £30,968,000 representing 
the principal and accrued interest. The shareholders receivable balance was received during the year.
Other related party transactions – Company
Related party Relationship
Receivables 
outstanding 
2014 
£’000
Payables 
outstanding 
2014 
£’000
Receivables 
outstanding 
2013 
£’000
Payables 
outstanding 
2013 
£’000
Trafford Shareholder Debtco Limited Direct subsidiary 13,363 100 – 100
Manx Telecom Trading Limited 
(formerly Manx Telecom Limited) Indirect subsidiary 73,845 – 87 19
Manx Telecom Holdings Limited Indirect subsidiary – 2,000 – 2,000
Shareholders Shareholders – – 100 –
87,208 2,100 187 2,119
Intercompany balances arise through the capital management of the Group, as capital and financial resources are raised 
and deployed through the Group as required. The intercompany loans are unsecured, repayable on demand and 
non-interest bearing. No provisions have been made for doubtful debts in respect of amounts owed by related parties.
20 Ultimate Parent Company and Parent Company
During the year, Manx Telecom plc (formerly Trafford Equityco Limited) was admitted to trade its shares on AIM. Subsequent 
to admission to AIM, there is not considered to be any ultimate Parent Company.
As at 31 December 2013, Manx Telecom plc was ultimately owned by Rowan Nominees Limited, a nominee company 
holding on behalf of a series of private equity funds under management of Hg Capital LLP.
notes 
continued 75 manx telecom plc annual report and accounts 2014
21 Capital and other financial commitments
2014 
£’000
2013 
£’000
Contracts placed for future capital expenditure relating to property, plant and equipment 2,536 6,929
22 Share-based payment
As at 31 December 2013, the Company had one share option scheme in place. Following the Admission, the Company has 
created three new share-based payment arrangements. The new arrangements may be operated in conjunction with an 
employee benefit trust established by the Company. Any such employee benefit trust may be used to hold Shares for the 
purposes of these share plans or other employee share schemes established by the Company from time to time.
The Company is also in the process of setting up a long-term incentive plan as disclosed in the Company’s Admission 
Document, in which employees and Executive Directors of the Group will be eligible to participate. The rules of this plan 
were not yet finalised as at the year end and no share options had been granted under this plan as at 31 December 2014.
The total expense in respect of equity-settled share-based payments for the year ended 31 December 2014 was £731,000 
(2013: £72,000). 
All of the schemes operated during the current and prior year are equity settled share option schemes and are described 
in detail below. Details of the share options outstanding during the year are as follows:
2014
Pre–listing share options Co–investment plan Save as you earn Share incentive plan
Number of 
shares
Weighted 
average 
exercise 
price 
(£ per share)
Number of 
shares
Weighted 
average 
exercise 
price 
(£ per share)
Number of 
shares
Weighted 
average 
exercise 
price 
(£ per share)
Number of 
shares
Weighted 
average 
exercise 
price 
(£ per share)
Outstanding at beginning of year 490,000 0.01 – – – – – –
Granted during the year – – 914,887 – 1,287,312 1.40 137,500 –
Forfeited during the year – – (62,500) – – – – –
Exercised during the year (490,000) 0.01 – – – – – –
Expired during the year – – – – – – – –
Outstanding at the end of the year – – 852,387 – 1,287,312 1.40 137,500 –
Exercisable at the end of the year – – – – – – – –
2013
Pre–listing share options
Number of 
shares
Weighted 
average 
exercise 
price 
(£ per share)
Outstanding at beginning of year 300,000 0.01
Granted during the year 200,000 0.01
Forfeited during the year (10,000) –
Exercised during the year – –
Expired during the year – –
Outstanding at the end of the year 490,000 0.01
Exercisable at the end of the year – – 76
financial statements
Pre-listing share options
Subsequent to the acquisition of Manx Telecom Trading Limited by Hg Capital LLP in 2010, key management and employees 
were given the option to purchase ordinary shares in the Company at nominal value. The shares were recorded at the 
grant date fair value with the expense being recognised on a straight-line basis over the estimated vesting period.
In order for the shares to vest unconditionally, a sale or listing of the Group was required and the employee must have 
remained employed or be considered as a ‘good leaver’. The shares awarded were subject to a number of conditions, 
including restrictions on the transfer of the shares prior to a sale or listing of the Group. The vesting period was previously 
estimated to be the period from date of grant to June 2015, being the latest date by which the shares were expected to 
vest unconditionally. 
The Company listed on AIM on 10 February 2014, and as a result the vesting conditions were met and the share options 
exercised. As such, recognition of the remaining expense was accelerated to the date of vesting such that all remaining 
expense was recognised in the current year. 
The total expense recognised by the Group in respect of the pre-listing share options for the year ended 31 December 2014 
was £475,000 (2013: £72,000).
The weighted average fair value of options granted in 2013 was £2.45 per share. This value was calculated by estimating the 
average value of the total shares as being half the net asset value of the Group. The 50% discount applied to net asset value 
was intended to reflect the average of a net asset value basis and an alternative valuation model using earnings as a base. 
This has then been discounted by 20% to represent the illiquidity of the shares as at the time of granting. No adjustment was 
applied in respect of dividends as the shares awarded give the holders the same rights to dividends as all other 
shareholders. The valuation basis was agreed with Isle of Man Treasury as being an appropriate basis for tax purposes.
Co-investment plan (‘CIP’)
Under the CIP established in connection with the Admission, on 10 February 2014 the Executive Directors of the Company 
received a total of 538,114 conditionally awarded shares and other directors of Manx Telecom Trading Ltd (classified under 
IAS24 as ‘Key Management’) received a total of 376,773 conditionally awarded shares, in both cases on the basis of a 
matching award of one share for every two invested shares then held by them. Such matching shares will only vest to the 
extent that the individual remains employed by the Group and that invested shares remain held by the participant on 10 
February 2017, and are also subject to satisfaction of a three-year relative Total Shareholder Return performance condition.
The estimated fair value of options granted in the year was £0.93 per share. The aggregate of the estimated fair value of the 
options granted in the year under the CIP was £859,000, though due to forfeiture of awards in the year the total estimated 
fair value of the options outstanding to be recognised on a straight-line basis over the vesting period is £800,000. The fair 
value has been estimated using a Monte Carlo method, the inputs for which are detailed below.
The total expense recognised by the Group in respect of the CIP for the year ended 31 December 2014 was £238,000. As at 
31 December 2014, the CIP awards had a weighted average remaining contractual life of 2.11 years.
Save as you earn (‘SAYE’)
In October 2014, the Group established a SAYE scheme for employees of the Group based in the Isle of Man. The scheme 
was open for a limited period only during the year and permits the granting of options to Isle of Man resident employees of 
the Group linked to a bank SAYE contract for a term of three years. Contributions from employees range from £10 to £500 
per month. Options may be exercised at the end of the three year period at an exercise price of £1.40 per share if 
individuals continue to be employed by the Group at the maturity of the savings contract. The SAYE scheme contains 
provisions for ‘good leavers’ as defined in the SAYE scheme, which enable ‘good leavers’ to exercise options under the 
savings contract at the date the participate ceases to hold employment with the Group. The options must be exercised 
within six months of the maturity of the savings contract, otherwise they lapse and savings are returned to employees.
On 1 December 2014, 1,287,312 share options were granted under the scheme. At 31 December 2014 the options had a 
weighted average remaining contractual life of 2.92 years. 
The estimated fair value of options granted in the year was £0.35 per share. The aggregate of the estimated fair value of the 
options granted in the year under the SAYE scheme was £422,000, which will be recognised on a straight-line basis over the 
vesting period (subject to revisions for the estimated number of shares expected to vest and cancellations). The fair value 
has been estimated using a Black-Scholes method, the inputs for which are detailed below.
The total expense recognised by the Group in respect of the SAYE scheme for the year ended 31 December 2014 was £12,000.
An equivalent cash settled share option scheme for non Isle of Man resident employees has been established subsequent 
to the balance sheet date.
22 Share-based payment continued
notes 
continued 77 manx telecom plc annual report and accounts 2014
Share incentive plan (‘SIP’)
In October 2014, the Group established a SIP for employees of the Group based in the Isle of Man. Under the SIP, all 
permanent Isle of Man resident employees of the Group as at 17 October 2014 were invited to receive 500 free shares each. 
275 employees accepted the offer, resulting in 137,500 share options being granted on 1 December 2014.
The shares granted were issued and transferred by the Company to the Manx Telecom plc Share Incentive Plan Trust for nil 
consideration. The Manx Telecom plc Share Incentive Plan Trust is an employee benefit trust established by the Company to 
hold shares awarded under the SIP for the benefit of employees of the Group.
Options granted under the SIP may be exercised on 30 November 2017 if individuals either continue to be employed by the 
Group at that date or are considered to be ‘good leavers’ as defined in the SIP, at which point shares will be released from 
the Manx Telecom plc Share Incentive Plan Trust to the employee. At 31 December 2014 the options had a weighted average 
remaining contractual life of 2.92 years. 
The estimated fair value of options granted in the year was £1.7675 per share. The aggregate of the estimated fair value of 
the options granted in the year under the SIP was £224,000, which will be recognised on a straight-line basis over the 
vesting period (subject to revisions for the estimated number of shares expected to vest). The fair value has been estimated 
using a Black-Scholes method, the inputs for which are detailed below.
The total expense recognised by the Group in respect of the SIP for the year ended 31 December 2014 was £6,000.
An equivalent cash settled share option scheme for non Isle of Man resident employees has been established subsequent 
to the balance sheet date.
Valuation model inputs
The inputs into the Monte Carlo and Black-Scholes models for purposes of estimating the fair values of the share options 
granted in the year are as follows:
CIP (Monte 
Carlo)
SAYE 
(Black-
Scholes)
SIP  
(Black-
Scholes)
Share price on grant date 1.60 1.7675 1.7675
Exercise price 0.00 1.40 0.00
Expected volatility 29.06% 29.06% 29.06%
Expected life 3 years 3 years 3 years
Risk free rate 0% 0.95% 0%
Expected dividend yield 0% 5.60% 0%
Expected volatility would normally be determined by reference to share price movements (with dividends reinvested) over a 
period of time commensurate with the remaining performance period immediately prior to the date of grant. However 
given the Company was listed on 10 February 2014, there is insufficient data to calculate volatility of the Company’s share 
price. Therefore, a proxy volatility figure has been used. The proxy volatility figure has been derived from the median 
volatility of the 11 companies in the comparator group for the TSR performance condition in the CIP (as at the grant date) 
over the relevant period.
A risk free rate of 0% has been used for the CIP and SIP as the valuation of awards with no exercise price is not affected by 
the risk-free rate input, as no investment is required by the recipient and therefore no gain could be derived elsewhere.
The dividends that would be paid on a share in the period between grant and vesting reduce the fair value of an award if, 
in not owning the underlying shares, a participant does not receive the dividend income on these shares during the vesting 
period. An expected dividend yield of 0% has been used in respect of the CIP and SIP as under these plans participants are 
entitled to receive an amount equal to dividends payable to the vesting date. Accordingly, the dividend yield input has been 
set at nil so as not to discount for the loss of dividends. The expected yield used for the SAYE scheme has been based on the 
share price on grant date and the Company’s intention to maintain a dividend yield of 7% on the Admission placing price of 
£1.42 per share.
22 Share-based payment continued 78
financial statements
23 Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
Note
31 December 
2014 
000
31 December 
2013 
000
Weighted average number of ordinary shares at 31 December (Basic) 105,908 49,749
Effect of pre-listing share options 22 – –
Effect of Co-Investment plan 22 494 –
Effect of Save as you earn plan 22 2 –
Effect of Share incentive plan 22 1 –
Weighted average number of ordinary shares at 31 December (Diluted) 106,405 49,749
The share split which occurred in 2014 prior to admission (described in note 16) has been taken into account in the weighted 
average number of shares calculation by adjusting proportionately the number of shares outstanding as if the share split 
occurred at 1 January 2013. The own shares held as detailed in note 16 are excluded from the calculation of weighted 
average number of shares. 
None of the instruments noted above which potentially dilute earnings per share have any effects recorded within profit or 
loss which may be saved upon exercise, therefore no adjustments to earnings have been made in the calculation of diluted 
earnings per share.
23.1 Reported Earnings per Share
The calculation of the Reported Earnings per Share has been based on the weighted average number of shares outstanding 
during the period (as above) and the Profit/(loss) for the period after tax attributable to the owners of the Group (‘Earnings’).
Earnings 
£’000
Thousands 
of shares 
(Basic)
Basic 
earnings  
per share
Thousand 
of shares 
(Diluted)
Diluted 
earnings per 
share
31 December 2013 364 49,749 0.73p 49,749 0.73p
31 December 2014 5,716 105,908 5.40p 106,405 5.37p
23.2 Underlying Earnings per Share
The calculation of Underlying Earnings per Share has also been included to enable shareholders to assess the results of the 
Group excluding income and charges detailed in note 4 that are one-off in nature, significant and distort the Group’s 
underlying performance.
Earnings 
£’000
Thousands 
of shares 
(Basic)
Basic 
earnings  
per share
Thousand 
of shares 
(Diluted)
Diluted 
earnings per 
share
31 December 2013 7,308 49,749 14.69p 49,749 14.69p
31 December 2014 12,945 105,908 12.22p 106,405 12.17p
24 Dividends
The following amounts were recognised as distributions to equity holders in the year:
2014 
£’000
2013 
£’000
Final dividend for the year ended 31 December 2013 of 20p per share – 2,000
Interim dividend for the year ended 31 December 2014 of 3.3p (2013: nil) per share 3,723 –
Total dividends recognised in the year 3,723 2,000
Proposed final dividend for the year ended 31 December 2014 of 6.6p per share 7,455 –
The proposed dividend was declared on 14 April 2015. The proposed final dividend is subject to approval by shareholders at 
the Annual General Meeting and has not been included as a liability in these financial statements. The proposed dividend is 
payable to all shareholders on the Register of Members on 29 May 2015. The total estimated dividend to be paid is 6.6p per 
share. The payment of this dividend will not have any tax consequences for the Group.
25 Post-balance sheet events
Other than the dividend declared post-year end as detailed in note 24, there are no events after the balance sheet date 
which require disclosure.
notes 
continued 79 manx telecom plc annual report and accounts 2014
notes 80
financial statements
notes directors, secretary,  
registered office and advisers
Directors Kevin Walsh (Non-Executive Chairman)
Mike Dee (Chief Executive Officer)
Gary Lamb (Finance Director)
Sir Miles Walker (Non-Executive Director)
Jeffrey Hume (Senior Independent Non-Executive Director)
Company Secretary Gary Lamb
Registered Agent Appleby Trust (Isle of Man) Limited 
33–37 Athol Street
Douglas
Isle of Man 
IM1 1LB
Registered office 
of the Company
33–37 Athol Street 
Douglas 
Isle of Man 
IM1 1LB
Head office of 
the Company
Isle of Man Business Park 
Cooil Road, Braddan 
Isle of Man 
IM99 1HX
Nominated Adviser 
and Corporate Broker  
to the Company
Liberum Capital Limited 
Ropemaker Place, Level 12 
25 Ropemaker Street 
London 
EC2Y 9LY
Financial Adviser 
to the Company
Oakley Capital Limited 
3 Cadogan Gate 
London 
SW1X 0AS
English legal advisers 
to the Company
Linklaters LLP 
One Silk Street 
London 
EC2Y 8HQ
Reporting Accountants  
and Auditors
KPMG Audit LLC 
Heritage Court 
41 Athol Street 
Douglas 
Isle of Man 
IM99 1HN
Registrars Computershare Investor Services (IOM) Limited 
Millennium House 
46 Athol Street 
Douglas 
Isle of Man 
IM1 1JE
Financial PR advisers Powerscourt
1 Tudor Street 
London 
EC4Y 0AH manx telecom 
Isle of Man Business Park 
Cooil Road, Braddan 
Isle of Man  
IM99 1HX
manxtelecom.com
manx telecom plc  annual report and accounts 2014