Ulster Television

Interim Report for the 6 months to 30 June 2016

22 August 2016 Wireless Group plc ("WLG" or "the Company" or "the Group")

Wireless Group plc today announces interim results for the six months ended 30 June 2016.

Financial highlights*  Disposal of TV business to ITV for a purchase price of £100m completed in February 2016  Profit on disposal of £79.2m and associated return of capital of £55.0m  Group revenue from continuing operations of £38.2m (2015 restated: £37.0m)  Group operating profit of £4.7m (2015 restated: £6.1m)  Group operating profit includes £1.8m start-up losses for D2  Pre-tax profits from continuing operations of £4.5m (2015 restated: £5.0m)  Reported profit for the period of £82.1m (2015 restated: loss of £0.5m)  Diluted adjusted earnings per share of 4.4p (2015 restated: 3.6p)  Net debt reduced to £1.6m (2015: £46.9m)  Recommended cash offer of 315p per share from News Corporation (“News Corp”), totalling £220m  No interim dividend declared in light of News Corp offer

Operational highlights  Strong performance by talkSPORT assisted by the European Football Championships  Three packages won for Premier League live audio rights for next three seasons  Advertising slowdown in Q2 in both the UK and Ireland impacted local radio performance  Successful launch of three new digital channels on the D2 multiplex, with strong audiences recorded in first RAJAR results

Richard Huntingford, Chairman, Wireless Group plc, said: “Wireless Group – and especially talkSPORT – has performed well in the first six months of the year. After a competitive bidding process, we were also delighted to be awarded three packages for Premier League live audio rights which will further underpin the outlook for talkSPORT going forward. The recent RAJAR and JNLR figures demonstrate the strength of the Group’s ongoing brands in its key markets as well as the ability to launch successfully new digital brands that are attractive to listeners which stands the Group in good stead going forward.

In our local stations and in Ireland, advertising trends were softer as we moved towards the referendum in Q2. Whilst it is still unclear what impact the uncertainty created by Brexit might have on advertising revenues in the all-important Q4, including in Ireland, the Group currently anticipates a full year outturn broadly in line with expectations.

In the meantime, good progress is being made in respect of the regulatory clearances required in connection with the News Corp offer.”

For further information contact:

Investor Enquiries

Norman McKeown, Group Finance Director +44 (0) 28 9026 2204

Media Enquiries

Maitland

James Devas +44 (0) 20 7379 5151

Wireless Group plc

Chairman’s Statement

Overview Following the sale of its television business to ITV, WLG became a focused radio group operating in the UK and Ireland with highly attractive assets including talkSPORT and a growing digital division. It is a profitable business – with a strong balance sheet – that owns and operates valuable brands that attract loyal audiences. On 30 June 2016, the Group announced a recommended cash offer of 315p per share from News Corp, subject to regulatory clearance. Good progress is being made in respect of the regulatory clearances and as at 17 August 2016, the first closing date of the offer, acceptances totalling 92 per cent. had been received from the Group’s shareholders.

Financial results * Group operating profit from continuing operations was £4.7m (2015 restated: £6.1m). After net interest costs of £0.6m (2015 restated: £1.0m) and foreign exchange gains of £0.4m (2015 restated: loss of £0.1m), Group profit before tax from continuing operations was £4.5m (2015 restated: £5.0m). Group profit after tax from continuing operations was £3.7m (2015 restated: £3.6m). Group profit after tax from continuing and discontinued operations was £82.1m (2015 restated: loss of £0.5m). Group net debt was substantially lower at £1.6m (2015: £46.9m) predominantly as a result of the disposal of the TV assets.

Dividend Following the offer from News Corp, the Group has agreed not to declare an interim dividend. Wireless shareholders named on the register on 20 May 2016 received on 15 July 2016 the previously announced Special Dividend of 6.15 pence as well as the 2015 Final Dividend of 7.60 pence – 13.75 pence in total.

Operating review

Revenue Operating profit

(£m) 2016 2015 2016 2015

(restated) (restated)

Radio GB 27.6 25.8 4.8 5.6

Radio Ireland 8.9 8.8 1.2 2.1

Digital services 1.7 2.4 0.1 0.1

38.2 37.0 6.1 7.8

Central Costs (1.6) (1.9)

JV/Associates 0.2 0.2

Total 4.7 6.1

* As appropriate, references to operating profit includes income from associates and joint ventures but excludes discontinued operations. 3 Wireless Group plc

Chairman’s Statement (continued)

talkSPORT is the UK’s premier sports radio station and the strength of its offering was again demonstrated in the recent Q2 RAJAR results published on 4 August. The channel’s weekly reach increased to 3.3m listeners – the station’s second highest ever result – with four of its key weekday shows breaking listener records. talkSPORT’s reach and audience demographic both remain attractive propositions for advertisers and while some additional benefit was always expected from the Euro 2016 tournament, talkSPORT nevertheless turned in an exceptionally good first half performance. talkSPORT was also pleased to be awarded three live UK audio packages for the Premier League for three seasons from 2016/17 to 2018/19 inclusive, meaning it will have more Premier League coverage than ever before and become the only national commercial radio station carrying live Premier League games. talkSPORT's international broadcasting business, now in its fifth season, continued to achieve double digit sales and profit growth in H1. These rights are in place for three further seasons and there are now partnership agreements in 68 territories. The Group successfully launched three new national digital radio services in March – Virgin Radio, a music service which brings the iconic Virgin Radio brand back to the UK under a 12 year brand licence agreement with Virgin Group; talkRADIO, a talk-led service focussed on current affairs and entertainment; and talkSPORT 2, a complementary service to talkSPORT covering live action across a broader range of sports. Early results have been encouraging. Virgin Radio’s strong presenter line-up – led by Edith Bowman’s breakfast show – saw the station post a weekly reach of 409,000 in Q2. talkSPORT 2 has also proven a popular choice, drawing an initial 285,000 listeners, attracted by a wider range of sporting coverage backed by a range of partnerships with leading sports rights holders. talkRADIO – fronted by a number of strong personalities – has attracted 224,000 weekly listeners with an encouragingly high listening profile of 6.5 hours per week. Sales in our local radio operations in GB were down on H1 on a like-for-like basis mainly as a result of reduced demand in the lead up to the Brexit referendum. Costs were tightly controlled in this division, largely mitigating the profit decline. Results for Radio GB overall include start-up losses attributable to the new digital station totalling £1.8m in the first six months and planned cost savings of £0.5m. The Irish radio advertising market continues to lag the recovery in the Irish economy, particularly amongst larger advertising agencies, although currency tailwinds mitigated the impact of this on Radio Ireland reported revenue. The key factors affecting this included the continued move towards more measurable digital campaigns, the uncertainty around the Brexit referendum and a slower than expected return to marketing investment from some key market sectors. The recent JNLR audience figures for Q2 have confirmed the market-leading positions that the Group’s stations enjoy in key urban areas, which alongside the relaunch of our agency sales operation as Urban Media, with improved digital/social capabilities, provides confidence for the future. Costs increased in part due to currency movements, external television advertising and investment in digital activities. Profits in the Digital Services division were unchanged but substantial progress was made in the period in improving the future profitability of Simply Zesty.

Outlook talkSPORT is a highly attractive medium for advertisers seeking male audiences. While a major football tournament typically would drive a 10% increase in sales over the course of a calendar year, talkSPORT is experiencing good underlying sales growth and is increasingly leveraging its brand strength through a growing number of major sponsorships and partnerships. The launch and establishment of our three recently-launched national radio stations on D2 was a key priority for 2016 and initial results are encouraging. Following the recent RAJAR results, operating losses at the three stations are still anticipated to be broadly in line with forecasts, moving to a small loss in 2017 and growing profitably beyond this. Encouragingly, 70% of our forecast 2016 revenue for the D2 stations has already been achieved.

Wireless Group plc

Chairman’s Statement (continued)

The recent RAJAR and JNLR figures demonstrate the strength of the Group’s ongoing brands in its key markets as well as the ability to launch successfully new digital brands that are attractive to listeners which stands the Group in good stead going forward.

Richard Huntingford Chairman 22 August 2016

Wireless Group plc

Group Income Statement for the six months ended 30 June 2016

Results before Results before Exceptional Exceptional Exceptional Exceptional Items Items Total Items Items Total 30 June 30 June 30 June 30 June 30 June 30 June Notes 2016 2016 2016 2015 2015 2015 (restated) (restated) £000 £000 £000 £000 £000 £000

Continuing operations Revenue 3 38,187 - 38,187 37,064 - 37,064 Operating costs (33,705) - (33,705) (31,185) - (31,185) ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– Operating profit from continuing operations before tax and finance costs 4,482 - 4,482 5,879 - 5,879

Share of results of JVs and associates accounted for using the equity method 180 - 180 185 - 185 ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– Profit from continuing operations before tax and finance costs 3 4,662 - 4,662 6,064 - 6,064

Finance revenue 23 - 23 22 - 22 Finance costs (580) - (580) (994) - (994) Foreign exchange gain/(loss) 361 - 361 (128) - (128) ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– Profit from continuing operations before tax 3 4,466 - 4,466 4,964 - 4,964

Taxation (737) - (737) (1,403) - (1,403) ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– Profit from continuing operations after tax 3,729 - 3,729 3,561 - 3,561

Discontinued operations (Loss)/profit from discontinued operations 5,6 (802) 79,202 78,400 (4,041) - (4,041) ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– Profit/(loss) for the period 2,927 79,202 82,129 (480) - (480) ––––––– ––––––– ––––––– –––––– ––––––– ––––––

Attributable to: Equity holders of the parent 2,799 79,202 82,001 (556) - (556) Non-controlling interest 128 - 128 76 - 76 ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– 2,927 79,202 82,129 (480) - (480) ––––––– ––––––– ––––––– –––––– ––––––– ––––––

Earnings /(Loss) per share 2016 2015 (restated) Continuing operations Basic 8 4.43p 3.64p Diluted 8 4.39p 3.63p Adjusted 8 4.43p 3.64p Diluted adjusted 8 4.40p 3.63p

Continuing and discontinued operations Basic 8 100.82p (0.58)p Diluted 8 99.94p (0.58)p Adjusted 8 3.44p (0.55)p Diluted adjusted 8 3.41p (0.55)p

Wireless Group plc

Group Statement of Comprehensive Income for the six months ended 30 June 2016

30 June 30 June 2016 2015 (restated) £000 £000

Profit/(loss) for the period 82,129 (480) ––––––– –––––––

Other comprehensive income /(loss)

Items that may be reclassified subsequently to profit or loss: Exchange difference on translation of foreign operations 6,860 (3,316) Income tax relating to items that may be reclassified subsequently 46 (22) ––––––– ––––––– 6,906 (3,338) ––––––– ––––––– Items that will not be reclassified subsequently to profit or loss: Actuarial loss on defined benefit pension schemes (16) (9) Income tax relating to items that will not be reclassified subsequently 3 2 ––––––– ––––––– (13) (7) ––––––– –––––––

Other comprehensive profit/(loss) for the period, net of tax 6,893 (3,345) ––––––– –––––––

Other comprehensive loss for the period from discontinued operations Items that may be reclassified subsequently to profit or loss: Exchange difference on translation of foreign operations (293) (558) Cash flow hedge - 276 Income tax relating to items that may be reclassified subsequently 50 - ––––––– ––––––– (243) (282) ––––––– ––––––– Items that will not be reclassified subsequently to profit or loss: Actuarial loss on defined benefit pension schemes (241) (1,771) ––––––– –––––––

Other comprehensive (loss) for the period from discontinued operations, net of tax (484) (2,053) ––––––– –––––––

––––––– ––––––– Total comprehensive income/(loss) for the period, net of tax 88,538 (5,878) ––––––– –––––––

Attributable to: Equity holders of the parent 88,410 (5,954) Non-controlling interest 128 76 ––––––– ––––––– 88,538 (5,878) ––––––– –––––––

Wireless Group plc

Group Balance Sheet for the six months ended 30 June 2016

30 30 31 June June December Notes 2016 2015 2015 (restated) £000 £000 £000 ASSETS Non-current assets Property, plant and equipment 9 6,109 17,546 5,701 Intangible assets 175,621 166,047 166,696 Investments accounted for using the equity method 1,023 864 1,053 Deferred tax asset 845 1,691 719 ––––––– ––––––– ––––––– 183,598 186,148 174,169 ––––––– ––––––– ––––––– Current assets Inventories 586 1,591 1,584 Trade and other receivables 14,639 21,567 16,986 Financial assets 11 - 376 - Cash and short term deposits 3,110 12,832 9,934 ––––––– ––––––– ––––––– 18,335 36,366 28,504 ––––––– ––––––– ––––––– Assets of disposal group - - 23,123 ––––––– ––––––– ––––––– TOTAL ASSETS 201,933 222,514 225,796 ––––––– ––––––– –––––––

EQUITY AND LIABILITIES Equity attributable to equity holders of the parent Equity share capital 4,806 55,557 55,557 Capital redemption reserve 50 50 50 Treasury shares - (104) (104) Foreign currency reserve 7,556 (303) 989 Cash flow hedge reserve - 276 - Retained earnings 124,612 38,038 51,958 ––––––– ––––––– ––––––– 137,024 93,514 108,450 Non-controlling interest 96 129 114 ––––––– ––––––– ––––––– TOTAL EQUITY 137,120 93,643 108,564 ––––––– ––––––– ––––––– Non-current liabilities Financial liabilities 11 - 56,437 52,322 Pension liability 284 3,229 512 Provisions 398 622 381 Deferred tax liabilities 32,754 32,979 30,853 ––––––– ––––––– ––––––– 33,436 93,267 84,068 ––––––– ––––––– ––––––– Current liabilities Trade and other payables 15,601 24,561 19,446 Dividends payable 7 9,440 5,205 - Financial liabilities 11 4,765 3,335 3,422 Tax payable 924 1,829 1,397 Provisions 647 674 665 ––––––– ––––––– ––––––– 31,377 35,604 24,930 ––––––– ––––––– ––––––– Liabilities of disposal group - - 8,234 ––––––– ––––––– ––––––– TOTAL LIABILITIES 64,813 128,871 117,232 ––––––– ––––––– ––––––– TOTAL EQUITY AND LIABILITIES 201,933 222,514 225,796 ––––––– ––––––– ––––––– 8

Wireless Group plc

Group Cash Flow for the six months ended 30 June 2016

30 June 30 June 2016 2015 Notes £000 £000 Operating activities Profit before tax (i) 83,038 980 Adjustments to reconcile profit before tax to net cash flows from operating activities Exceptional item – Profit on sale of Television (79,046) - Foreign exchange (gain)/loss (1,060) 703 Net finance costs 548 999 Share of post tax profits of associates and joint ventures (180) (185) Depreciation of property, plant and equipment 1,025 1,514 Gain on disposal of property, plant and equipment - (1) Share based payments 366 171 Difference between pension contributions paid and amounts recognised in the income statement (92) (1,038) Unrealised currency translation losses 1,106 - Working capital adjustments: Decrease in inventories 1,131 799 Decrease in trade and other receivables 5,269 1,286 Decrease in trade and other payables (7,636) (2,830) Increase/(decrease) in provisions - 115 ––––––– ––––––– Cash generated from operations 4,469 2,513 Income taxes paid (1,053) (1,241) ––––––– ––––––– Net cash flow from operating activities 3,416 1,272 ––––––– ––––––– Investing activities Interest received 21 24 Proceeds on disposal of property, plant and equipment - 1 Purchase of property, plant and equipment (1,080) (2,167) Income received from associates and joint ventures 210 221 Proceeds from the disposal of discontinued operations - 175 Net proceeds from the disposal of a group undertaking 94,945 - ––––––– ––––––– Net cash flow from investing activities 94,096 (1,746) ––––––– ––––––– Financing activities Interest paid (900) (1,084) Refinancing cost (328) - Acquisition of treasury shares (11) - Dividends paid to equity shareholders (164) (4) B Share scheme redemption 12 (50,762) - Dividends paid to non-controlling interests (146) - Repayment of borrowings 11 (57,195) (1,939) Proceeds from new borrowings 11 5,000 3,582 ––––––– ––––––– Net cash flow used in financing activities (104,506) 555 ––––––– ––––––– Net (decrease)/increase in cash and cash equivalents (6,994) 81

Effect of exchange rates on cash and cash equivalents 170 (135) Cash and cash equivalents at 1 January 9,934 12,886 ––––––– ––––––– Cash and cash equivalents at 30 June 3,110 12,832 ––––––– ––––––– (i) Includes both continuing and discontinued operations 9

Wireless Group plc

Group Statement of Changes in Equity for the six months ended 30 June 2016

Equity Capital Foreign Cash flow Shareholder Non- share redemption Treasury currency hedge Retained equity controlling capital reserve shares reserve reserve earnings interest Total £000 £000 £000 £000 £000 £000 £000 £000 £000

At 1 January 2015 55,557 50 (104) 3,571 - 45,428 104,502 53 104,555 –––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––

Loss/Profit for the period - - - - - (556) (556) 76 (480) Other comprehensive loss in the period - - - (3,316) - (29) (3,345) - (3,345) Other comprehensive (loss)/income in the period from discontinued operations - - - (558) 276 (1,771) (2053) - (2,053) –––––– –––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– Total net comprehensive (loss)/income in the period - - - (3,874) 276 (2,356) (5,954) 76 (5,878)

Share based payment - - - - - 171 171 - 171 Equity dividends paid and payable - - - - - (5,205) (5,205) - (5,205) –––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– At 30 June 2015 55,557 50 (104) (303) 276 38,038 93,514 129 93,643 –––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––

Profit for the period - - - - - 12,662 12,662 121 12,783 Other comprehensive income in the period - - - 737 - 61 798 - 798 Other comprehensive income/(loss) in the period from discontinued operations - - - 555 (276) 2,846 3,125 - 3,125 –––––– –––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– Total net comprehensive income/(loss) in the period - - - 1,292 (276) 15,569 16,585 121 16,706

Share based payment - - - - - 95 95 - 95 Equity dividends paid - - - - - (1,744) (1,744) (136) (1,880) –––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– At 31 December 2015 55,557 50 (104) 989 - 51,958 108,450 114 108,564 –––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––

Wireless Group plc

Group Statement of Changes in Equity (continued) for the six months ended 30 June 2016

At 1 January 2016 55,557 50 (104) 989 - 51,958 108,450 114 108,564 –––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––

Profit for the period - - - - - 82,001 82,001 128 82,129 Other comprehensive income in the period - - - 6,860 - 33 6893 - 6893 Other comprehensive (loss) in the period from discontinued operations - - - (293) - (191) (484) - (484) –––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– Total net comprehensive income in the period - - - 6,567 - 81,843 88,410 128 88,538

Issue of new shares 11 - - - - - 11 - 11 Acquisition of treasury shares - - (11) - - - (11) - (11) Treasury shares issued - - 115 - - (115) - - - Share based payment - - - - - 366 366 - 366 B Share Payment (50,762) - - - - - (50,762) - (50,762) Equity dividends paid and payable - - - - - (9,440) (9,440) (146) (9,586) –––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– At 30 June 2016 4,806 50 - 7,556 - 124,612 137,024 96 137,120 –––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––

Wireless Group plc

Notes to the accounts

1. Basis of preparation The condensed interim financial statements have been prepared in accordance with IAS34 “Interim Financial Reporting” and the Disclosure and Transparency Rules of the Financial Conduct Authority. In addition, the interim condensed financial statements have been prepared on a basis consistent with the accounting policies set out in the Group’s Annual Report and Accounts for the year ended 31 December 2015. A number of New European Union endorsed amendments to existing standards are effective for periods beginning on or after 1 January 2016. However, none of these have a material, if any, impact on the annual or condensed interim financial statements of the Group in 2016. In October 2015 the Group entered into a conditional agreement to sell its Television business to ITV Broadcasting Limited. The sale of this business was completed on 29 February 2016. Consequently the Group Income Statement reflects the classification of this business as discontinued operations for both 2016 and 2015, with the 30 June 2015 figures having been restated to reflect this. The Balance Sheet at 31 December 2015 has been restated to reflect the liability, amounting to £512,000, in respect of the unfunded pension arrangement that was retained as part of the continuing operations for the Group. In the Report and Accounts for the year ended 31 December 2015, this liability was erroneously netted against the defined benefit pension scheme asset included within the “Assets of disposal group”. These interim statements have been prepared on a going concern basis as the directors, having considered available relevant information, have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The interim results are unaudited but have been formally reviewed by the auditors and their report to the Company is set out at the end of this Interim Report. The information shown for the year ended 31 December 2015 does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006 and has been extracted from the Group’s 2015 Annual Report, which has been filed with the Registrar of Companies. The report of the auditors on the accounts contained within the Group’s 2015 Annual Report was unqualified and did not contain a statement under either Section 498(2) or Section 498(3) of the Companies Act 2006 regarding inadequate accounting records or a failure to obtain necessary information and explanations.

2. Seasonality and cyclicality There is no significant seasonality or cyclicality affecting the interim results of the continuing operations.

Wireless Group plc

Notes to the accounts

3. Segmental information The Group operates in three principal areas of activity – radio in GB, radio in Ireland and digital services. These business segments all form part of the Group’s continuing operations and these form the basis on which the Group is managed and reports are provided to the Executive Chairman and the Board. Following the agreement in 2015 to sell the main Television segment businesses, UTV and UTV Ireland as outlined in note 1, and the classification of these businesses as discontinued operations, Tibus and Simply Zesty which were previously included within the Television segment are now included as a separate segment, renamed Digital Services.

Revenue

Six months ended 30 June 2016

Radio Digital Radio GB Ireland Services Total £000 £000 £000 £000

Sales to third parties 27,577 8,877 1,733 38,187 Intersegmental sales 374 572 357 1,303 ––––––– ––––––– ––––––– ––––––– 27,951 9,449 2,090 39,490 ––––––– ––––––– ––––––– –––––––

Six months ended 30 June 2015

Radio Digital Radio GB Ireland Services Total (restated) £000 £000 £000 £000

Sales to third parties 25,839 8,814 2,411 37,064 Intersegmental sales 344 678 530 1,552 ––––––– ––––––– ––––––– ––––––– 26,183 9,492 2,941 38,616 ––––––– ––––––– ––––––– –––––––

Wireless Group plc

Notes to the accounts

3. Segmental information (continued)

Results Six months ended 30 June 2016

Radio Digital Radio GB Ireland Services Total £000 £000 £000 £000

Segment operating profit 4,806 1,186 88 6,080 ––––––– ––––––– –––––––

Central costs (1,598) Income from Joint Ventures and Associates 180 ––––––– Profit before exceptional items, tax and finance costs 4,662

Net finance cost (557) Foreign exchange gain 361 ––––– Profit before taxation 4,466 ––––––

Results Six months ended 30 June 2015 Radio Digital Radio GB Ireland Services Total £000 £000 £000 £000 (restated)

Segment operating profit 5,573 2,128 87 7,788 ––––––– ––––––– –––––––

Central costs (1,909) Income from Joint Ventures and Associates 185 –––––– Profit before exceptional items, tax and finance costs 6,064

Net finance cost (972) Foreign exchange loss (128) ––––––– Profit before taxation 4,964 –––––––

Wireless Group plc

Notes to the accounts

4. Taxation In the budget in March 2016, it was proposed that corporation tax rates in the UK would be reduced to 17% in 2020. As these have not yet been substantively enacted, deferred tax has been calculated at 18% within this Interim Report. If the proposed corporation tax rate changes were to be fully approved, the relevant deferred tax assets and liabilities would be restated accordingly resulting in a net exceptional credit of approximately £1,772,000.

5. Discontinued operations In October 2015 the Group entered into a conditional agreement to sell its Television business to ITV. The sale of this business was completed on 29 February 2016. The results of the discontinued operations for 2016 and 2015 are presented below. The figures for the six months ended 30 June 2015 have been restated to re-class the results of the Television businesses as discontinued last year. 30 June 30 June 2016 2015 (restated) £000 £000

Revenue 7,425 21,198 Operating costs (8,606) (24,580) ––––––– ––––––– Operating loss (1,181) (3,382)

Interest receivable 9 - Interest payable - (28) Foreign exchange gain/(loss) 698 (575) ––––––– ––––––– (Loss) before tax from discontinued operations (474) (3,984) Current tax charge (328) (56) ––––––– ––––––– (Loss) for the year from discontinued operations (802) (4,041)

Profit on the sale of discontinued operations (note 6) 79,202 - ––––––– ––––––– Total profit from discontinued operations 78,400 (4,041) ––––––– –––––––

Wireless Group plc

Notes to the accounts

6. Exceptional item On 29 February 2016, Wireless Group plc completed the sale of the entire issued share capital of UTV Limited and its wholly owned subsidiary UTV Ireland Limited, to ITV Broadcasting Limited. This resulted in a profit on disposal before tax of £79,202,000.

Profit on disposal of subsidiary 2016 £000

Consideration 138,867 –––––––

Property, plant and equipment 11,344 Deferred tax asset 66 Inventories 1,834 Trade and other receivables 81,008 Cash 3,449 Pension asset 123 Trade and other payables (40,780) Tax payable (647) Deferred tax liability (535)

––––––– Net assets disposed of 55,862 –––––––

83,005

Foreign exchange reserve reclassified on sale (774)

Professional fees (2,407) Other disposal costs (778) ––––––– Profit from disposal of subsidiary 79,046 Taxation 156 ––––––– Net profit from disposal of subsidiary 79,202 –––––––

The consideration received on completion of the sale of UTV Television was based on an estimated Balance Sheet at 29 February 2016. In line with the Share Purchase Agreement, an adjustment to the consideration received on Completion would be paid to or received from ITV Broadcasting Limited based on the subsequently agreed Balance Sheet at 29 February 2016. This adjustment was agreed on 9 August 2016 and a refund of £930,000 was paid to ITV Broadcasting Limited on 12 August 2016. This adjustment is included within the consideration noted above and included within trade and other payables at 30 June 2016.

Wireless Group plc

Notes to the accounts

7. Dividends 30 June 30 June 2016 2015 £000 £000 Equity dividends on ordinary shares Declared at the AGM during the period Final for 2015: 7.60p (2014: 5.43p) 5,218 5,205 Special dividend: 6.15p (2015: Nil) (see note 11) 4,222 - ––––––– ––––––– 9,440 5,205 ––––––– –––––––

Proposed but not recognised as a liability at 30 June Interim for 2016: Nil (2015: 1.82p) - 1,744 ––––––– –––––––

The special dividend in 2016 and final dividend for 2015 were paid on 15 July 2016 (2014: 15 July 2015).

8. Earnings per share Basic earnings per share are calculated based on the profit for the financial period attributable to equity holders of the parent and on the weighted average number of shares in issue during the period. Adjusted earnings per share are calculated based on the profit for the financial period attributable to equity holders of the parent adjusted for the exceptional items and the impact of net finance costs under IAS 19 “Employee Benefits (Revised)”. This calculation uses the weighted average number of shares in issue during the year. Diluted earnings per share are calculated based on profit for the financial period attributable to equity holders of the parent. Diluted adjusted earnings per share are calculated based on profit for the financial period attributable to equity holders of the parent before the exceptional items and the impact of net finance costs under IAS 19 “Employee Benefits (Revised)”. In each case the weighted average number of shares is adjusted to reflect the dilutive potential of the awards expected to be vested on the Long Term Incentive Schemes. The following reflects the income and share data used in the basic, adjusted, diluted and diluted adjusted earnings per share calculations:

Net profit attributable to equity holders 30 June 2016 30 June 2015 Continuing Discontinued Continuing Discontinued Operations Operations Total Operations Operations Total (restated) (restated) £000 £000 £000 £000 £000 £000

Net profit/(loss) attributable to equity holders 3,601 78,400 82,001 3,485 (4,041) (556) Adjustments to net financing costs 6 (9) (3) - 28 28 Exceptional items - (79,202) (79,202) - - - –––––– –––––– –––––– –––––– –––––– –––––– Total adjusted and diluted profit/(loss) attributable to equity holders 3,607 (811) 2,796 3,485 (4,013) (528) ––––––– ––––––– ––––––– ––––––– ––––––– –––––––

Wireless Group plc

Notes to the accounts

8. Earnings per share (continued) Weighted average number of shares 2016 2015 thousands thousands Weighted average number of shares for basic and adjusted earnings per share (excluding treasury shares) 81,335 95,850 Effect of dilution of the Long Term Incentive Plan 717 238 ––––––– ––––––– 82,052 96,088 ––––––– ––––––– Earnings per share 2016 2015 (restated) From continuing operations

Basic 4.43p 3.64p ––––––– –––––––

Diluted 4.39p 3.63p ––––––– –––––––

Adjusted 4.43p 3.64p ––––––– –––––––

Diluted adjusted 4.40p 3.63p ––––––– ––––––– From continuing and discontinued operations

Basic 100.82p (0.58)p ––––––– –––––––

Diluted 99.94p (0.58)p ––––––– –––––––

Adjusted 3.44p (0.55)p ––––––– –––––––

Diluted adjusted 3.41p (0.55)p ––––––– ––––––– From discontinued operations

Basic 96.39p (4.22)p ––––––– –––––––

Diluted 95.55p (4.21)p ––––––– –––––––

Adjusted (1.00)p (4.19)p ––––––– –––––––

Diluted adjusted (0.99)p (4.18)p ––––––– –––––––

Wireless Group plc

Notes to the accounts

9. Property, plant and equipment During the period the Group incurred £918,000 (2015: £2,020,000) of capital additions. At 30 June 2016 the Group had entered into contractual commitments for the acquisition of property, plant and equipment amounting to £Nil (2015: £390,000).

10. Net Debt 30 30 31 June June December 2016 2015 2015 £000 £000 £000

Cash and short term deposits 3,110 12,832 9,934 Interest bearing loans and borrowings (4,699) (59,772) (55,744) ––––––– ––––––– ––––––– (1,589) (46,940) (45,810) ––––––– ––––––– ––––––– 11. Financial instruments The Group’s principal financial instruments comprise bank loans, derivative financial instruments and cash and short-term deposits. The main purpose of these financial instruments is to raise finance for the Group’s operations. The Group has various other financial assets and liabilities, such as trade receivables and trade payables, which arise directly from its operations. Contingent consideration arises in respect of the disposal of businesses. Set out below is a comparison by category of carrying amounts and fair values of the Group’s financial assets and liabilities, excluding cash and cash equivalents, trade receivables and payables, that are carried in the financial statements. 30 June 2016 30 June 2015 31 December 2015 Carrying Carrying Carrying Fair Fair value Fair value amount amount amount value £000 £000 £000 £000 £000 £000 Financial assets Contingent consideration receivable - - 100 100 - - Derivative financial assets - - 276 276 - - –––––– –––––– –––––– –––––– –––––– –––––– - - 376 376 - - ––––––– ––––––– ––––––– ––––––– ––––––– –––––––

Financial liabilities Derivative financial liabilities 66 66 - - - - Interest-bearing loans and borrowings 4,699 4,699 59,772 59,772 55,744 55,744 –––––– –––––– –––––– –––––– –––––– –––––– 4,765 4,765 59,772 59,772 55,744 55,744 ––––––– ––––––– ––––––– ––––––– ––––––– –––––––

The Group uses the following hierarchy as set out in IFRS 7 “Financial Instruments: Disclosures” for determining and disclosing the fair value of financial instruments by valuation technique: . Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities; . Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly; and, . Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data. 19

Wireless Group plc

Notes to the accounts

11. Financial instruments (continued) The Group’s financial assets and liabilities are considered as falling within level 2 of this hierarchy, with the exception of the contingent consideration which existed at 30 June 2015 which was considered as falling within level 3. For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation at the end of each reporting period. There have been no transfers between level 1, 2 or 3 during the current period or in the previous years. Management have assessed that the fair value of cash and cash equivalents, trade and other receivables and trade and other payables approximate their carrying amounts largely due to the short-term maturities of these instruments. The fair value of interest bearing loans and borrowings are also a close approximation to their carrying value given that they bear interest at floating rates based on Libor/Euribor.

The Group’s banking facilities were refinanced on 29 February 2016. From the net cash proceeds of the sale of UTV Television the Group’s existing bank facilities of £57,195,000 at 29 February 2016 were repaid in full. New bank facilities were put in place with effect from Completion and comprise a £30m dual-currency Revolving Credit Facility (RCF), and an £8m overdraft Facility.

The bank loans at 30 June 2016 are stated net of deferred financing costs amounting to £301,000 (30 June 2015: £397,000; 31 December 2015: £345,000). The fair value of derivative financial assets and liabilities relating to foreign exchange forward contracts is determined by calculating the present value of future cash flows, estimated using forward rates from third party market price quotations. The Company has entered in to a commitment to sell €750,000 on 20 September 2016 and €800,000 on 20 January 2017 and buy sterling at agreed foreign exchange rates. A net financial liability has been recognised in respect of this commitment calculated as the difference between the commitment translated at the agreed exchange rates and at the exchange rate at 30 June 2016. The range of possible outcomes in respect of these arrangements is considered by the Directors to not be materially different from their fair values at 30 June 2016. The contingent consideration receivable at 30 June 2015 related to amounts due in respect of the disposal of certain of the Group’s New Media businesses in 2014.

12. Equity share capital Following completion of the sale of UTV Television, Wireless Group plc issued a new class of redeemable preference, B Shares. Shareholders received one B Share for each corresponding existing Ordinary Share held. Each B Share was then redeemed by the Company for 52.81 pence on 23 March 2016 and cancelled on redemption. In conjunction with the B Share Scheme, a Share Capital Consolidation was also undertaken whereby shareholders received 5 New Ordinary Shares for every 7 Existing Ordinary Shares held. As a consequence, from 24 March 2016, the issued share capital of the Company comprised 68,657,787 ordinary shares of 7 pence each.

13. Related party transactions The nature of related parties disclosed in the consolidated financial statements for the Group as at and for the year ended 31 December 2015 has not changed. There have been no significant related party transactions in the six month period ended 30 June 2016.

Wireless Group plc

Risks and uncertainties

The 2015 Annual Report sets out the most significant risk factors relating to Wireless Group plc’s continuing operations in the Company’s judgement at the time of that report. The Company does not consider that these principal risks and uncertainties have changed. However additional risks and uncertainties not currently known to the Company or that the Company does not currently deem material may also have an adverse effect on its business. With respect to the risks and uncertainties identified within the Annual Report, the Chairman’s statement highlights those risks and uncertainties that will have significant impact throughout 2016.

Statement of directors’ responsibilities

The interim report is the responsibility of, and has been approved by, the directors of Wireless Group plc. Accordingly, the directors confirm that to the best of their knowledge:  the condensed set of financial statements has been prepared in accordance with IAS 34 “Interim Financial Reporting” as adopted by the European Union;  the interim report includes a fair review of the information required by the Disclosure and Transparency Rules: - DTR 4.2.7R, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the year; and - DTR 4.2.8R, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period, and any changes in the related party transactions described in the last annual report that could do so.

By order of the Board:

Richard Huntingford Chairman 22 August 2016

Wireless Group plc

Independent review report to Wireless Group plc

Introduction We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the 6 months ended 30 June 2016 which comprises the Group Income Statement, Group Statement of Comprehensive Income, Group Balance Sheet, Group Statement of Changes in Equity, Group Cash Flow Statement and the related notes 1 to 13. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. This report is made solely to the company in accordance with guidance contained in ISRE 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed. Directors' Responsibilities The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority. As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union. Our Responsibility Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. Scope of Review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the 6 months ended 30 June 2016 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Ernst & Young LLP Belfast 22 August 2016