The Mission Group Regulatory News (TMG)

Audited results for the year ended 31 December 2015

22 March 2016

The Mission Marketing Group plc ("TMMG" or "the missiontm"), the marketing communications and advertising group, is pleased to announce its audited results for the year ended 31 December 2015.

Financial headlines

· Operating income ("revenue") up 11% to £61.0m (2014: £55.0m)

· Headline trading profit (operating profit before central costs) up 11% to £8.5m (2014: £7.7m)

· Headline profit before tax up 17% to £6.5m (2014: £5.5m)

· Headline diluted EPS up by 15% to 5.91 pence (2014: 5.13 pence)

· Full year dividend up by 9% to 1.2p (2014: 1.1p)

· Total cash investment in growth: £4.0m (on acquisitions, start-ups and capex)

· Nearly £1m of new business generated from cross-Agency referrals

· Almost 60% of revenue came from Clients of 5 or more years; over 20% from Clients of 20+ years standing

· Good revenue visibility into 2016, which has started as expected

David Morgan, Chairman, commented: "A cracking second half performance from our Agencies helped us deliver our forecasted numbers and springboard us into 2016 in very good shape.

Further progress is expected in 2016. We have a high degree of visibility of forecast revenue and fully expect to benefit from the acquisitions and investments we made during 2015. In addition, we have a number of new initiatives planned. It looks set to be another busy and productive year."

the missiontm is a network of entrepreneurial marketing communications Agencies employing over 950 people in the UK, Asia and San Francisco. The Group comprises a complementary mix of integrated generalists, specialists in specific marketing/communications activities and specialists in particular market sectors, all providing award-winning solutions to national and international Clients.

www.themission.co.uk

Chairman's statement

A cracking second half performance from our Agencies helped us deliver our forecasted numbers and springboard us into 2016 in very good shape.

2015 was a busy year for the mission where we saw ever so slightly improved market conditions and benefits from important improvements to our portfolio in line with the strategy that we set five years ago. At the same time we have been able to continue to upgrade the quality of our team and our expertise.

Towards the end of 2015 we acquired Chapter which is one of the UK's fastest growing Agencies based in the Midlands. Chapter brings to us a top notch management team and an exciting array of Clients and capabilities through its truly unique style and approach which fits perfectly with the mission. As such Chapter will also further consolidate our position in the region.

Their CEO, Mike Rose joined the Group Board which was also strengthened by the introduction of Julian Hanson-Smith as our senior independent Non-Executive Director. His breadth of experience will serve us well in the years to come, I'm sure. At the end of the year Stephen Boyd stood down from the Board and I would like to thank him for his contribution.

Lots of news elsewhere to report in 2015, not the least being April Six's move into Singapore on the back of their strengthening position in San Francisco, Bray Leino's introduction into Chicago for tactical reasons, a relocation of our Edinburgh based Story Agency who integrated The Weather digital team and our investment in Watchable, a very smart film and video content business. Watchable brings to our Clients greater options in branded content through their measurable seeded messaging capability.

Late in 2015, our Solaris Healthcare Agency absorbed the pharma specialist Agency, Echo, into their fold adding further strength and breadth to their offering.

We launched Mongoose Sports and Entertainment Marketing in July which is now picking up steam and working with our Agencies to bring greater marketing and sponsorship options to our Clients. Further plans to build this business will be announced during 2016, suffice to say that we are delighted to be entering into this arena with such a dynamic young team.

In the early part of 2015 we merged our Bray Leino PR business into our just acquired Speed PR Agency and I'm encouraged by the way their integration has gone and the positive plans for the future.

All good stuff.

New Client wins in 2015 include British Airways, BMW, Byron Burgers, Citibank, Pfizer and the Post Office with our Agencies developing well in the UK and USA and through our Splash Group in Asia. A couple of major restructures included a Bray Leino repositioning of locations and the merger of Big and balloon dog into bigdog. The latter proved to be more challenging than we had hoped but unlike the home countries' teams in the Rugby World Cup they ended the year flying. Six pitches six wins!

Looking forward to 2016 we are planning the next stage of our journey. We are already considering adjustments to our portfolio and have a pipeline of initiatives and potential acquisitions that meet with our objective to embrace and utilise smarter technologies that are strategically and creatively empowered and lock into audience mindsets. All of which will fuel the quality of what we do and the success we bring to our Clients.

I feel that we are going in the right direction with our intrapreneurial approach and innovative ideas. We aren't quite sansculottes but we are a Group focused on building value through a measured approach to the future that even our doryphores should find it hard to question.

Onwards and very much upwards, methinks.

David Morgan

Chairman

Financial Review

Summary

2015 was a year of significant progress for the Group, with each of Group's five financial KPIs again met. Acquisitions made in 2014 have contributed well to the growth of our business and the Group has again been strengthened during the year, not just via further acquisitions but also through "revenue investments" (ie funded from profits rather than acquisition consideration) in new start-up ventures (a first for the Group) and hirings, not only in the UK but in Asia and the US. Although the merger of balloon dog and Big Communications resulted in some initial teething difficulties which impacted on profits, these were compensated for by a more streamlined business elsewhere following restructuring to accelerate growth. Overall, in a market which showed only modest signs of improvement, we are pleased to have delivered 17% growth in headline profits and again hit market expectations.

Key Performance Indicators

The Group manages its internal operational performance and capital management by monitoring various key performance indicators ("KPIs''). The Group's current financial KPIs, which are quantified and commented on below, are:

· operating income ("revenue"), which the Group aims to increase year-on-year both via organic growth and from acquisitions;

· operating profit margins, where the Group aims to achieve levels at least in line with industry averages;

· headline profits before tax, which the Group aims to increase year-on-year;

· the ratio of net bank debt to EBITDA (Headline operating profit before depreciation and amortisation charges), which the Group is aiming to maintain below x2.0; and

· the ratio of total debt (including both bank debt and deferred acquisition consideration) to EBITDA, which the Group is aiming to maintain below x2.5.

In addition to financial KPIs, the Board periodically monitors the length of Client relationships, the forward visibility of revenue and the retention of key staff.

Trading Performance

Turnover (billings) was 5% higher than the previous year, at £132.2m (2014: £125.5m) but since billings include pass-through costs (eg TV companies' charges for buying air-time), the Board does not consider turnover to be a key performance measure. Instead, the Board views operating income (turnover less third party costs) as a more meaningful measure of Agency activity levels.

Operating income ("revenue") increased 11% to £61.0m (2014: £55.0m), once again achieving the first of our KPIs. The chart below illustrates the consistent growth in revenue achieved over the last five years.

The majority of revenue growth in 2015 resulted from acquisitions made in 2014 and 2015, but simplistic distinctions between organic and acquisitive growth are misleading since several of our acquired Agencies have grown rapidly since they joined the Group precisely because of the opportunities afforded by being part of the mission. Accordingly, the Board is primarily concerned with growth irrespective of its source. Of equal interest to the Board is the quality of Client relationships, illustrated by the facts that nearly £1m of revenue flowed into the Group from over 30 incumbent Clients thanks to inter-Agency Client introductions and that 59% of revenue in 2015 was from Clients that have been with us for 5 years or more and over 20% from Clients that have been with us for 20 years or more. In the fast-paced and ever-changing marketing communications sector, this is a strong achievement.

The Directors measure the Group's profit performance by reference to headline profits, calculated before exceptional items, acquisition adjustments and losses from start-up activities (as set out in Note 3). Headline trading profits (ie segmental operating profit, before central costs, as set out in Note 2) increased by 11%, in line with revenue growth, to £8.5m (2014: £7.7m) and, after reduced central costs, headline operating profit increased by 14% to £6.9m (2014: £6.1m).

Although we would prefer it otherwise, Clients' spending appears to have developed a predictable pattern of second half bias, with the consequence that we end our financial year frantically busy. Although this imbalance in workload is difficult to manage, we are pleased to report that our second half operating profits were again very strong in 2015, delivering profit margins (headline operating profit as a percentage of revenue) of 14% in H2 (2014: 14%), increasing our overall margin for the year to 11.4% (2014: 11.1%). In a market which continues to apply relentless downward pressure on margins, we are pleased with this year-on-year improvement and again to have comfortably exceeded margins achieved by the Group's peer group of UK quoted marketing companies (excluding WPP, which is so large it distorts all comparisons). This achieves the second of our KPIs.

Underlying net interest costs fell 14% from the prior year to £0.5m, an encouraging result given the expansion of the Group in both 2014 and 2015 via acquisition. This in part reflects our cautious approach to acquisitions, which limits the level of up-front cash consideration and places more emphasis on post-acquisition payments linked to post-acquisition profits. This is of course not always possible but has served us well overall.

After financing costs, headline profit before tax increased by 17% to £6.5m (2014: £5.5m), achieving the third of our KPIs and continuing the growth in headline profit over recent years.

Adjustments to reported profits in 2015 comprise restructuring costs totalling £0.9m, treated as exceptional items (2014: nil), acquisition-related items of £0.1m (2014: not significant) and losses from start-up activities totaling £0.3m (2014: nil).

The restructuring costs relate to amounts payable for loss of office and other costs incurred relating to the restructuring of certain operations in order to streamline activities and underpin the Board's growth expectations. An example of the positive effect of this can be seen in the improvement in profitability from Events and Learning, which showed a more-than-doubling of profits (see Note 2).

As well as expanding the Group via acquisition and organic growth, we launched a Sports Marketing Agency in the second half of the year, the first start-up Agency in the Group's history, and, towards the end of the year, expanded April Six's operations into Singapore. In line with industry practice, we have excluded start-up losses from our headline results. The combined adjustment in 2015 for these two new ventures amounted to £0.3m.

After these adjustments, reported profit before tax was £5.1m (2014: £5.4m).

Taxation and Earnings Per Share

The Group's effective tax rate reduced to 20.2% (2014: 21.7%), compared with the statutory rate of 20.25% (2014: 21.5%). The Group's effective tax rate is normally above the statutory rate, primarily due to non-deductible staff and client-related expenditure, however in both years this has been offset by the non-taxable movements in the fair value of contingent consideration. In 2015, other elements which have offset each other are the impact of the growth of our US activities, where corporation tax rates are higher than in the UK, and adjustments in respect of prior years.

After tax, the headline diluted EPS increased by 15% to 5.91 pence (2014: 5.13 pence).

Dividends

The Group has a progressive dividend policy, aiming to grow dividends each year, but always balancing the desire to reward shareholders via dividends with the need to preserve cash to fund the Group's growth ambitions. The Board's recommended final dividend of 0.9 pence per share brings the total for the year to 1.2 pence per share, representing an increase of 9%. The final dividend will be payable on 18 July 2016 to shareholders on the register at 8 July 2016. The Board will continue to keep under regular review the best use of the Group's cash resources but it remains the Board's intention to follow a progressive policy provided trading conditions allow.

Balance Sheet and Cash Flow

During the year cash consideration payments totalling £3.0m were made, comprising initial consideration for new acquisitions and investments of £2.1m and deferred contingent consideration in respect of acquisitions made in prior years of £0.9m (2014: total of £2.9m). Cash totalling £1.4m was acquired with the businesses purchased during the year, of which £0.8m was committed for the settlement of short-term obligations. The net cash outlay in respect of acquisitions in the year was therefore £2.4m. In addition, £1.3m was invested in capital expenditure, lower than in the prior year due to the relocation in that year of two of our Agencies, and a further £0.3m was invested in supporting the Mongoose and April Six Asia start-up ventures. The total cash investment in support of the Group's expansion during the year was £4.0m.

Working capital, adjusted for the effect of obligations acquired with the business purchased, increased by £2.0m, exacerbated by changes in processes within the NHS, which resulted in a significant increase in outstanding debts, and changes in the number of Clients choosing to make payments in advance of work being done. As a result, net bank debt increased by £1.5m to £10.9m (2014: £9.4m). Despite this, the Group's "leverage ratio" (ratio of net bank debt to headline EBITDA) remained virtually unchanged at x1.3 at 31 December 2015 (2014: x1.25), comfortably achieving our fourth KPI. Including an assessment of the amount of contingent acquisition consideration payable, the ratio of total debt to EBITDA at 31 December 2015 (calculated by reference to the amount of consideration which would be payable if the acquired business were to maintain its current level of profitability) was x2.0, higher than at 31 December 2014 due to the acquisitions made during the year but still comfortably within our final KPI.

Early in the financial year, we agreed new bank facilities to extend their term (from December 2015 to February 2019). At the same time, we agreed an increase in the level of committed loan facilities, from £11m to £15m, to support our growth ambitions. In addition to these committed loan facilities, we have a further overdraft facility of £3m. Interest rate margins on the loans are subject to a ratchet depending on leverage ratios but, at every ratio level, are lower than under previous arrangements. More detail of the facilities is set out in Note 12.

Outlook

Further progress is expected in 2016. We have a high degree of visibility of forecast revenue and fully expect to benefit from the acquisitions and investments we made during 2015. In addition, we already have plans to launch a new Sales Promotion Agency, beef up our Healthcare reach through partnership in Europe, build on our Sports Marketing business and introduce new technology and data-based products to keep us at the forefront of this ever-developing marketing arena. It looks set to be another busy and productive year.

Peter Fitzwilliam

Finance Director

Consolidated Income Statement

For the year ended 31 December 2015

The earnings per share figures derive from continuing and total operations.

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2015

Consolidated Balance Sheet

As at 31 December 2015

Consolidated Cash Flow Statement

for the year ended 31 December 2015

Consolidated Statement of Changes in Equity for the year ended 31 December 2015

Notes to the Consolidated Financial Statements

1. Principal Accounting Policies

Basis of preparation

The results for the year to 31 December 2015 have been extracted from the audited consolidated financial statements, which are expected to be published by 23 March 2016.

The financial information set out above does not constitute the Company's statutory accounts for the years to 31 December 2015 or 2014 but is derived from those accounts. Statutory accounts for the year ended 31 December 2014 were delivered to the Registrar of Companies following the Annual General Meeting on 15 June 2014 and the statutory accounts for 2015 are expected to be published on the Group's website (www.themission.co.uk) shortly, posted to shareholders at least 21 days ahead of the Annual General Meeting ("AGM") on 13 June 2016 and, after approval at the AGM, delivered to the Registrar of Companies.

The auditors, Francis Clark LLP, have reported on the accounts for the years ended 31 December 2015 and 31 December 2014; their reports in both years were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006 in respect of those accounts.

The annual financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) adopted by the European Union and the Companies Act 2006.

Basis of consolidation

The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring accounting policies used into line with those used by the Group.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Turnover and revenue recognition

The Group's operating subsidiaries carry out a range of different activities. The following policies apply consistently across subsidiaries and business segments.

Turnover represents fees, commissions, rechargeable expenses and sales of materials performed subject to specific contracts. Income is recognised on the following basis:

· Retainer fees are apportioned over the time period to which they relate.

· Project income is recognised by apportioning the fees billed or billable to the time period for which those fees were earned by relationship to the percentage of completeness of the project to which they relate.

· Media commission is recognised when the advertising has been satisfactorily aired or placed.

· Unbilled costs relating to contracts for services are included at rechargeable value in accrued income.

Where recorded turnover exceeds amounts invoiced to Clients, the excess is classified as accrued income (within Trade and other receivables). Where amounts invoiced to Clients exceed recorded turnover, the excess is classified as deferred income (within Accruals).

Goodwill and other intangible assets

Goodwill

Goodwill arising from the purchase of subsidiary undertakings and trade acquisitions represents the excess of the total cost of acquisition over the Group's interest in the fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary acquired. The total cost of acquisition represents both the unconditional payments made in cash and shares on acquisition and an estimate of future contingent consideration payments to vendors in respect of earn-outs.

Goodwill is not amortised, but is reviewed annually for impairment. Goodwill impairment is assessed by comparing the carrying value of goodwill for each cash-generating unit to the future cash flows, discounted to their net present value using an appropriate discount rate, derived from the relevant underlying assets. Where the net present value of future cash flows is below the carrying value of goodwill, an impairment adjustment is recognised in profit or loss and is not subsequently reversed.

Other intangible assets

Other intangible assets purchased separately, or separately identified as part of an acquisition, are amortised over periods of between 3 and 10 years, except certain brand names which are considered to have an indefinite useful life. The value of such brand names is not amortised, but rather an annual impairment test is applied and any shortfall in the present value of future cash flows derived from the brand name versus the carrying value is recognised in profit and loss.

Contingent consideration payments

The Directors manage the financial risk associated with making business acquisitions by structuring the terms of the acquisition, wherever possible, to include an element of the total consideration payable for the business which is contingent on its future profitability (ie earn-out). Contingent consideration is initially recognised at its estimated fair value based on a reasonable estimate of the amounts expected to be paid. Changes in the fair value of the contingent consideration that arise from additional information obtained during the first twelve months from the acquisition date, about facts and circumstances that existed at the acquisition date, are adjusted retrospectively, with corresponding adjustments against goodwill. The fair value of contingent consideration is reviewed annually and subsequent changes in the fair value are recognised in profit or loss, but excluded from headline profits. 

Accounting estimates and judgements

The Group makes estimates and judgements concerning the future and the resulting estimates may, by definition, vary from the actual results. The Directors considered the critical accounting estimates and judgements used in the financial statements and concluded that the main areas of judgement are, in order of significance:

Potential impairment of goodwill

The potential impairment of goodwill is based on estimates of future cash flows derived from the financial projections of each cash-generating unit over an initial three year period and assumptions about growth thereafter, discussed in more detail in Note 11.

Contingent payments in respect of acquisitions

Contingent consideration, by definition, depends on uncertain future events. At the time of purchasing a business, the Directors use the financial projections obtained during due diligence as the basis for estimating contingent consideration. Subsequent estimates benefit from the greater insight gained in the post-acquisition period and the business' track record of financial performance.

Revenue recognition policies in respect of contracts which straddle the year end

Estimates of revenue to be recognised on contracts which straddle the year end are typically based on the amount of time so far committed to those contracts in relation to the total estimated time to complete them.

Valuation of intangible assets on acquisitions

When considering the valuation of intangible assets on acquisitions, a range of methods is undertaken both for identifying intangibles and placing valuations on them. Brand names, customer relationships and intellectual property rights are the most frequently identified intangible assets. The valuation of each element is assessed by reference to commonly used techniques, such as "relief from royalty" and "excess earnings" and to industry leaders and competitors. Estimating the length of customer retention is the principal uncertainty and draws on historic experience.

2. Segmental Information

Business segmentation

For management purposes the Group had thirteen operating units during the year, each of which carries out a range of activities. These activities have been divided into four business and operating segments.

3. Reconciliation of Headline Profit to Reported Profit

The Board believes that headline profits, which eliminate certain amounts from the reported figures, provide a better understanding of the underlying trading of the Group. The adjustments to reported profits fall into three categories: exceptional items, acquisition-related items and start-up costs.

Start-up costs derive from organically started businesses and comprise the trading losses of such entities until the earlier of two years from commencement or when they show evidence of becoming sustainably profitable. Start-up costs in 2015 relate to the launch of new venture Mongoose Sports & Entertainment and April Six's new operations in Singapore.

4. Exceptional Items

Exceptional items represent revenue or costs that, either by their size or nature, require separate disclosure in order to give a fuller understanding of the Group's financial performance.

Exceptional costs in 2015 comprise amounts payable for loss of office and other costs incurred relating to the restructuring of certain operations in order to streamline activities and underpin the Board's growth expectations. In 2014 the exceptional item related to the accelerated write off of arrangement fees attached to banking facilities which were replaced by the signing of new banking facilities.

5. Acquisition Adjustments

The movement in fair value of contingent consideration relates to a net downward revision in the estimate payable to vendors of businesses acquired in prior years. Acquisition transaction costs relate to the acquisitions made during the year.

6. Net Finance Costs

7. Profit on Ordinary Activities before Tax

Profit on ordinary activities before taxation is stated after charging:-

8. Taxation

Factors Affecting the Tax Charge for the Current Year:

The tax assessed for the year is marginally lower (2014: higher) than the standard rate of corporation tax in the UK. The differences are:

9. Dividends

A final dividend of 0.9 pence is to be paid in July 2016. In accordance with IFRS this final dividend will be recognised in the 2016 accounts, should it be approved by shareholders at the AGM.

10. Earnings Per Share

The calculation of the basic and diluted earnings per share is based on the following data, determined in accordance with the provisions of IAS 33: Earnings per Share.

Basic earnings per share includes shares to be issued subject only to time as if they had been issued at the beginning of the period.

A reconciliation of the profit after tax on a reported basis and the headline basis is given in Note 3.

11. Intangible Assets

In accordance with the Group's accounting policies, an annual impairment test is applied to the carrying value of goodwill. The review performed assesses whether the carrying value of goodwill is supported by the net present value of projected cash flows derived from the underlying assets for each cash-generating unit ("CGU"). For all CGUs, the Directors assessed the sensitivity of the impairment test results to changes in key assumptions (in particular expectations of future growth) and concluded that a reasonably possible change to the key assumptions would not cause the carrying value of goodwill to exceed the net present value of its projected cash flows.

Other intangible assets

Additions in the year include Client relationships and trade names acquired relating to the Chapter and The Weather acquisitions.

12. Bank Overdrafts, Loans and Net Debt

Bank debt arrangement fees, where they can be amortised over the life of the loan facility, are included in finance costs. The unamortised portion is reported as a reduction in bank loans outstanding.

At 31 December 2015, the Group had a term loan facility of £6.9m due for repayment by February 2019 on a quarterly basis, and a revolving credit facility of up to £7.0m (£6.0m drawn at 31 December 2015), expiring on 3 February 2019.

Interest on both the term loan and revolving credit facilities is based on 3 month LIBOR plus 2.25%, payable in cash on loan rollover dates.

In addition to its committed facilities, the Group had available an overdraft facility of up to £3.0m with interest payable by reference to National Westminster Bank plc Base Rate plus 2.5%.

At 31 December 2015, there was a cross guarantee structure in place with the Group's bankers by means of a fixed and floating charge over all of the assets of the Group companies in favour of Royal Bank of Scotland plc.

All borrowings are in sterling.

13. Acquisitions

13.1 Acquisition Obligations

The terms of an acquisition may provide that the value of the purchase consideration, which may be payable in cash or shares or other securities at a future date, depends on uncertain future events such as the future performance of the acquired company. The Directors estimate that the liability for contingent consideration payments that may be due is as follows:

13.2 Acquisition of Chapter Agency Ltd

On 26 November 2015, the Group acquired the whole issued share capital of Chapter Agency Ltd ("Chapter"), a full service marketing communications agency. The fair value of the consideration given for the acquisition was £5,394,000, comprising initial cash consideration and deferred contingent cash and share consideration.

Maximum contingent consideration of £3,700,000 is dependent on Chapter achieving a profit target over the period 1 January 2015 to 31 December 2018. The Group has provided for contingent consideration of £3,630,000 to date.

The fair value of the net identifiable assets acquired was £978,000 resulting in goodwill and other intangible assets of £4,416,000. Goodwill arises on consolidation and is not tax-deductible. Management carried out a review to assess whether any other intangible assets were acquired as part of the transaction. Management concluded that both a brand name and customer relationships were acquired and attributed a value to each of these by applying commonly accepted valuation methodologies. The goodwill arising on the acquisition is attributable to the anticipated profitability of the Company.

Chapter contributed turnover of £385,000, operating income of £256,000 and headline operating profit of £112,000 to the results of the Group since acquisition.

13.3 Acquisition of The Weather Digital and Print Communications Ltd

On 13 February 2015, the Group acquired the whole issued share capital of The Weather Digital and Print Communications Ltd ("The Weather"), one of Scotland's leading full service digital agencies. The fair value of the consideration given for the acquisition was £688,000, comprising initial cash and share consideration and deferred contingent cash and share consideration. 210,136 ordinary shares were issued as part of the initial consideration.

Maximum contingent consideration of £540,000 is dependent on The Weather achieving various profit targets over the period November 2014 to December 2015. The Group has provided for contingent consideration of £315,000.

The fair value of the net identifiable assets acquired was £141,000 resulting in goodwill and other intangible assets of £547,000. Goodwill arises on consolidation and is not tax-deductible. Management carried out a review to assess whether any other intangible assets were acquired as part of the transaction and concluded that the value of the business lies in its workforce and as such no other intangible assets were acquired. The goodwill arising on the acquisition is attributable to the anticipated profitability of the Company.

Weather contributed turnover of £782,000, operating income of £722,000 and a headline operating profit of £222,000 to the results of the Group in 2015.

13.4 Other acquisitions

A total of £272,000 was invested in other acquisitions during the year, comprising initial cash consideration of £99,000 and deferred contingent consideration of £173,000.

13.5 Pro-forma results including acquisitions

The Directors estimate that the turnover, operating income and headline operating profit of the Group would have been approximately £136.5m, £63.8m and £7.7m had the Group consolidated the results of Chapter, The Weather and the other smaller acquisitions made during the year, from the beginning of the year.

14. Share Capital

Options

The Group has the following options in issue:

The TMMG Long Term Incentive Plan ("LTIP") was created to incentivise senior employees across the Group. Nil cost options are awarded at the discretion of the Remuneration Committee of the Board and vest three years later only if the profit performance of the Group in the intervening period is sufficient to meet predetermined criteria (always subject to Remuneration Committee discretion). During the year, 297,273 of these options were exercised at a weighted average share price of 41.8p and at the end of the year none of the outstanding options are exercisable.

Shares held in an Employee Benefit Trust will be used to satisfy share options exercised under The Mission Marketing Group Long Term Incentive Plan.