Interim Results
Capita Group PLC
24 July 2007
THE CAPITA GROUP PLC
Interim results for the 6 months to 30 June 2007
STRONG PERFORMANCE
Financial Highlights
Interim 2007 Interim 2006 Change
Turnover £985m £845m +17%
Operating profit £118.9m £99.1m +20%
Profit before tax £103.8m £88.3m +18%
Earnings per share 12.13p 9.96p +22%
Interim dividend per 4.0p 2.7p +48%
share
Key points
• Excellent organic growth: £1.15bn major contracts in the first 6 months
of 2007 (first 6 months of 2006: £655m)
• Strong bid pipeline of £3bn (Feb 2007: £2.6bn)
• Continued margin progression: increased to 12.1% (interim 2006: 11.7%)
• Strong free cash flow - up by 43% to £83m (interim 2006: £58m)
• 48% increase in interim dividend to 4.0p per share
• Returning £155m to shareholders through a special dividend of 25p per
share
• Markets remain highly active
Paul Pindar, Chief Executive of The Capita Group Plc, commented:
'2007 is progressing strongly. Our businesses across the Group have performed
well and we have secured a record level of new major contracts in the first 6
months of the year.
We remain very positive about future growth. Our markets continue to generate
opportunity, our sales prospects are exciting and our operational performance is
consistently strong. Our successes in 2006 and progress in the first half of
2007 mean that the ingredients for a successful year and beyond are already in
place.'
For further information:
The Capita Group Plc Tel: 020 7799 1525
Paul Pindar, Chief Executive
Shona Nichols, Corporate Communications Director
Capita Press Office Tel: 0870 2400 488
Financial Dynamics Tel: 020 7269 7121
Richard Mountain/Susanne Yule
The Capita Group Plc
Interim results for the 6 months to 30 June 2007
2007 is progressing strongly. Our businesses across the Group have performed
well and we have secured a record level of new major contracts worth £1.15bn in
the first 6 months of the year.
In the period ended 30 June 2007, turnover increased by 17% to £985m (6 months
to 30 June 2006: £845m). Operating profit before amortisation rose by 20% to
£118.9m (2006: £99.1m) and profit before taxation and amortisation increased by
18% to £103.8m (2006: £88.3m). Earnings per share before amortisation grew by
22% to 12.13p (2006: 9.96p).
Operating cash flow rose by 19% to £145m (2006: £122m). We have increased our
interim dividend by 48% and we propose to pay a special dividend of 25p per
share accompanied by a share consolidation. We have also returned a further £29m
to shareholders through purchasing our own shares.
Building value for shareholders
To ensure we build value for shareholders on a consistent basis over the long
term, we focus on a number of key financial measures:
• Margins - We have continued our long term trend of improving operating
margins (before amortisation) which have increased during the period to
12.1% (2006: 11.7%). This is due to several factors including operational
leverage, continued focus on seeking efficiencies in service delivery and
increased use of our offshore facilities.
• Cash flow - The strength of our business model is reflected in our
excellent underlying cash flow, with £145m (2006: £122m) generated by
operations in the period, representing an operating profit to cash
conversion rate of 122% (2006: 118%). Our free cash flow increased by 43% to
£83m (2006: £58m).
We use surplus cash to add value in 3 main ways - through acquisitions, share
buybacks and dividends:
- Acquisitions - Acquisitions help us to enter new markets where we can
grow organically, strengthen existing market positions and build economies
of scale, or access a new customer base. To date in 2007, we have spent a
total of £63m on 7 acquisitions. We will continue with our strategy of
acquiring small to medium-sized businesses which are priced at a level
which adds value for our shareholders.
- Share buybacks - Opportunistic share buybacks help us to maintain an
efficient capital structure and minimise our long term cost of capital. In
the period to 30 June 2007, the Group has bought back 4.5m shares
(representing 0.7% of the issued share capital) at an average price of
644p. Following these buybacks, there are 620m shares in issue.
Shareholders renewed the Group's authority to purchase up to 10% of issued
share capital at our AGM in May.
- Interim dividend - The Board has declared an interim dividend of 4.0p
per ordinary share (2006: 2.7p), representing an increase of 48%. The
dividend will be payable on 19 October 2007 to shareholders on the register
at the close of business on 14 September 2007.
- Special dividend - As the Group has continued to grow, its cash flow has
become increasingly substantial and predictable. Consequently, we have
reviewed the Group's capital requirements, including acquisitions, and have
concluded that there is a modest cash surplus which currently is best
returned directly to shareholders. Accordingly, in addition to the interim
dividend, we propose to return £155m to shareholders through a special
dividend of 25p per share. We expect to pay this dividend alongside the
interim dividend on 19 October 2007 to shareholders on the register at the
close of business on 14 September 2007. Following the payment of the
interim and special dividends, Group interest cover will be comfortably
above 7 times.
We will also be undertaking a share consolidation of 30 new shares for
31 old shares. The share consolidation is subject to approval by
shareholders at an EGM to be held in early September.
• Capital expenditure - We aim to contain capital expenditure at or below
4% of revenue. During the period, we met this objective with net capital
expenditure at 3.2% (2006: 3.9%) of revenue.
• Return on capital employed - We focus on driving a steadily increasing
return on capital. Over the last 12 months, the post tax return on average
capital employed (including debt) has improved to 18.6% (12 months to 30
June 2006: 17.8%). This compares to our estimated weighted average cost of
capital which is 8.1%.
Our marketplace
The market for Business Process Outsourcing (BPO) in the UK and Ireland
continues to provide strong growth opportunities. Industry analysts estimate the
total potential market at £94.8bn per annum with only 5% of this market
outsourced in 2006 (£4.6bn).*
We are well positioned to exploit this market potential. Our increasing scale
and capability provide us with a strong competitive edge across our markets and
enable us to present compelling propositions to clients. With our recent strong
performance in securing new business, we have extended the leading positions we
hold in the majority of our markets, particularly local government and life and
pensions. We remain the clear market leader in the overall UK BPO market.
Generating profitable growth
We generate profitable growth by winning business from new and existing
customers in the UK and Ireland and supplement this by acquiring businesses that
broaden our skill base and extend our market reach.
Organic growth
Each of our businesses employs sales teams focused upon securing growth from
both existing and new customers. Performance has been strong in the first half
of the year, particularly in our HR and resourcing businesses, local government
services, education software, trust administration and in Capita Symonds, our
property consultancy.
Our centrally managed Major Sales Team pursues complex, long term contracts
worth over £10m which require a wide range of the Group's skills and generate
high quality, recurring revenues. Securing and renewing major contracts is an
important component of our growth.
Our sales performance to date in 2007 has been excellent. In the first 6 months,
we have secured 6 major contracts with a total value of £1.15bn (6 months to
2006: £655m):
• Countrywide Assured - to provide administrative services for 80,000 life
and pensions policies in a deal worth £19m over 15 years.
• Swindon Borough Council - to deliver a wide range of local government
services in a partnership worth £243m over 15 years (this contract had
previously been estimated to be worth £140m over 10 years when we were
selected as preferred supplier in October 2006). The contract commenced on 1
February and the transition is complete. We have successfully transferred
approximately 370 staff to Capita and we are currently implementing a
transformation programme to improve the way in which customer services are
delivered to the citizens of Swindon.
• Southampton City Council - selected as preferred bidder to develop a 10
year strategic partnership valued at approximately £290m. Final negotiations
are currently in progress. The contract is expected to commence on 1 October
2007.
• Official Solicitor and Public Trustee ('OSPT') - Capita Trust has been
chosen to act as the new Trustee of an initial group of 471 private trusts
managed by the OSPT in a contract worth £12m over 10 years.
• Service Birmingham - In December 2005, Birmingham City Council chose
Capita as its strategic partner to support business transformation and ICT
within the Council. A special purpose vehicle, Service Birmingham, was set
up by Capita and a 10 year, £475m contract to deliver ICT transformation was
signed in April 2006. Governance arrangements were also put in place for
additional business transformation programmes to be proposed and
implemented. In May 2007, the Council approved the business case for the
second of these programmes, to transform Customer Services, with a budget of
£142m over 10 years. (The first was approved in July 2006 and related to
Corporate Services).
• Resolution plc - selected as strategic partner to deliver customer
services, IT services, policy servicing, claims and new business processing
for 4.5 million policyholders and future new business in the Phoenix Life
Assurance (formerly Abbey National Life), Scottish Mutual, Scottish
Provident and Phoenix Life (formerly Britannic Assurance, Britannic Unit
Linked Assurance, Britannic Retirement Solutions and Alba Life) funds. The
contract is worth £580 million over 12 years and involves both closed and
open book policies. Service transition commences on 1 August 2007 and
involves transferring around 2000 Resolution staff to Capita.
Despite record contract wins in the first 6 months, our bid pipeline has been
replenished swiftly and reflects the quality of business opportunities across
our markets. The pipeline currently stands at £3bn (February 2007: £2.6bn) and
only includes bid situations in which Capita is shortlisted as one of 4 or fewer
competitors and caps the largest bids at £500m. Behind this is an active
prospect list of opportunities which are yet to reach a shortlist stage.
We are now in the position where we have no material contracts (defined as
having annual revenue in excess of 1% of 2006 turnover) due for renewal in 2007
and 2008 and only two in 2009.
Stimulating growth through acquisition
A key element of our growth is the acquisition of small to medium sized
companies which extend our presence in existing marketplaces or provide a
footprint in a new market. We have substantial experience of integrating
acquired businesses and achieving synergies with our existing operations. To
date in 2007, we have completed 7 acquisitions including:
• Harry Weeks, a business travel software company specialising in online
rail ticketing solutions for corporates and travel intermediaries, was
acquired in February for £21m. The acquisition further extends our business
travel administration offering, following our entry into this marketplace in
November 2005 with the acquisition of Lonsdale Travel. Travel administration
is an area of major spend across the public and private sectors and there is
a growing demand for outsourced support.
• CMGL, acquired for £32m in March 2007, expands our offering and client
base in the outsourced claims and insurance management services arena,
particularly within the General Insurer and Corporate markets. Clients
include FTSE quoted corporations, general insurers, Lloyd's underwriters and
London Market companies.
• Global Fund Administration Limited (GFA), a leading provider of fund
administration to the hedge fund industry, has been fully integrated with
our existing business. GFA expands our jurisdictional coverage, adding
Gibraltar to our fund administration capability which already includes
Dublin and the Channel Islands. As a result of this acquisition and wider
business development, Capita Financial Group now administers over 20% of all
open ended authorised funds in the UK market, representing an increase of
11% in the first 6 months of the year.
• CPFR Solutions Limited, a leading supplier of recording and assessment
solutions to children's centres in more than 70 local authorities, enhances
our existing offering. The integration of CPFR's eStart technology with
Capita's existing ONE technology (currently used by 126 local authorities to
manage children's data) is progressing well and generating new opportunities
for the business. The additional capability brought by CPFR will support the
development of an integrated database which will enable local authorities to
support children as they move from birth to adulthood via a single record.
Realising the benefits of scale and operational excellence
Through contract wins and acquisitions we have developed the scale which today
enables us to produce compelling propositions for clients in terms of cost
efficiency and specialist skills. Another key strength of the Group is our
record of transitional and operational excellence. This supports high client
retention and also creates a pool of positive referees providing vital support
to new sales initiatives.
As a result of our scale and broad capability, we are increasingly winning major
integrated service transformations across the public and private sectors.
• We are working with a growing number of local authorities to help them
deliver extensive transformation programmes across the entire back office
and customer service infrastructure, including recent clients Birmingham
City Council and Swindon Borough Council.
• Since our entry into the life and pensions market in 2002, we have
created a business employing 7000 people administering over 15 million
policies, with our group pensions business administering a further 3.5m
policies. Over the past 18 months, we have accelerated our growth in this
area, securing a number of large contracts with clients including Zurich,
Prudential (Belfast) and Resolution.
• We entered the HR market in 1996 and have expanded our service offering
mainly through acquisitions. The scale and breadth of the business now
positions us well to provide clients with extensive outsourced and managed
services solutions. An example of this is our integrated HR services
contract with the BBC.
Development of our blended onshore/offshore delivery model provides further
flexibility and benefits to our clients and the Group. Our offshore operation in
India continues to develop strongly both in scale and scope of services. We now
have 1000 staff working across our 2 sites in Mumbai and we are securing a
3rd site in Chennai, chosen for its excellent infrastructure and large supply of
highly skilled, experienced BPO staff.
By the end of 2007, we anticipate employing around 1500 staff in India with the
figure rising to 3000 by 2009. We are steadily moving our own backoffice
functions offshore and successfully running blended onshore/offshore models of
service delivery for existing and new clients. The recent new business wins,
with clients such as Resolution, will add further scale to our offshore
operations and provide us with the opportunity to leverage this for the benefit
of the Group and our clients.
Valuing our people
Our people are the engine room driving our achievements. Their enthusiasm, hard
work and commitment to service delivery are vital to meeting client expectations
and supporting our growth. The culture that we have created across the Group is
a key differentiator from our competitors and our people are valuable
ambassadors. We also offer a warm welcome to the employees that have joined us
since the beginning of 2007 through direct recruitment, contracts and
acquisitions. The Board would like to thank everyone across the Group for the
role they play in Capita's success.
Future prospects
We remain very positive about future growth. Our markets continue to generate
opportunities, our sales prospects are exciting and our operational performance
is consistently strong.
Our successes in 2006 and progress in the first half of 2007 mean that the
ingredients for a successful year and beyond are already in place.
-Ends-
*Source: Ovum 2006
The Capita Group Plc is the UK's leading provider of integrated professional
support service solutions. The Group's service capabilities encompass business
process outsourcing (BPO), customer services, administration and support, human
resources, ICT, property consultancy, finance & treasury and consultancy
delivered to both public sector and private organisations. With 27,800 employees
at more than 250 offices across the UK, Channel Islands, Ireland and India,
Capita is quoted on the London Stock Exchange (CPI.L), and is a constituent of
the FTSE100 with revenues for 2006 of £1,739 million.
Further information on The Capita Group Plc can be found at: www.capita.co.uk
The Capita Group Plc
Interim results for the 6 months to 30 June 2007
Interim condensed consolidated income statement
for the 6 months to 30 June 2007
30 30
June June
2007 2006
Before Before
amortisation Amortisation Total amortisation Amortisation Total
Notes £m £m £m £m £m £m
Continuing operations:
Revenue 3 985.0 - 985.0 845.0 - 845.0
Operating profit 3 118.9 (4.1) 114.8 99.1 (3.2) 95.9
Finance costs (15.1) - (15.1) (10.8) - (10.8)
Profit from continuing
operations before
taxation 103.8 (4.1) 99.7 88.3 (3.2) 85.1
Income tax expense (28.8) 1.7 (27.1) (24.8) 0.9 (23.9)
Profit for the period 75.0 (2.4) 72.6 63.5 (2.3) 61.2
Attributable to:
Equity holders of the
parent 75.0 (2.4) 72.6 63.6 (2.3) 61.3
Minority interest - - - (0.1) - (0.1)
75.0 (2.4) 72.6 63.5 (2.3) 61.2
Earnings per share
(EPS) - Basic 4 12.13p (0.38)p 11.75p 9.96p (0.36)p 9.60p
- Diluted 4 11.85p (0.37)p 11.48p 9.78p (0.35)p 9.43p
Interim condensed consolidated statement of recognised income and expense
for the 6 months to 30 June 2007
30 30
June June
2007 2006
£m £m
Actuarial gain on defined benefit pension
schemes 34.9 19.7
Exchange differences on translation of
foreign operations (0.1) (0.3)
Gain on available for sale investments 1.5 -
Tax on items taken directly to equity (9.2) (5.5)
Net income recognised directly in equity 27.1 13.9
Profit for the period 72.6 61.2
Total income and expense for the period 99.7 75.1
Attributable to:
Equity holders of the parent 99.7 75.2
Minority interest - (0.1)
99.7 75.1
Interim condensed consolidated balance sheet
at 30 June 2007
30 June 30 June
2007 2006
Notes £m £m
Non-current assets
Property, plant and equipment 183.4 163.3
Intangible assets 699.1 605.0
Financial assets 38.7 17.3
Deferred taxation 7.8 15.0
Employee benefits 11.0 -
940.0 800.6
Current assets
Trade and other receivables 496.7 435.9
Total assets 1,436.7 1,236.5
Current liabilities
Trade and other payables 554.1 451.3
Financial liabilities 66.9 128.9
Income tax payable 42.4 34.4
663.4 614.6
Non-current liabilities
Financial liabilities 384.3 354.8
Provisions 1.4 4.0
Employee benefits - 22.0
385.7 380.8
Total liabilities 1,049.1 995.4
Net assets 387.6 241.1
Capital and reserves
Issued capital 8 12.5 12.6
Share premium 8 334.5 269.2
Treasury shares 8 - (0.4)
Capital redemption reserve 8 1.8 1.1
Foreign currency translation 8 (0.5) -
Retained earnings 8 39.2 (41.5)
Equity shareholders' funds 387.5 241.0
Minority interest 8 0.1 0.1
Total equity 387.6 241.1
Interim condensed consolidated cash flow statement
for the 6 months to 30 June 2007
30 June 30 June
2007 2006
Notes £m £m
Cash flows from operating activities
Operating profit on continuing activities before
interest and taxation 114.8 95.9
Depreciation 21.5 21.2
Amortisation of intangible assets 4.1 3.2
Share based payment expense 4.1 4.1
Pension charge 7.3 7.7
Pension contributions (10.3) (8.9)
Movement in provisions (0.6) 0.7
Movement in debtors and creditors 4.4 (2.4)
Cash generated from operations 145.3 121.5
Income tax paid (15.2) (20.0)
Net interest paid (15.1) (10.8)
Net cash generated from operating activities 115.0 90.7
Net cash used in investing activities
Purchase of property, plant and equipment (31.7) (31.9)
Purchase of intangible fixed assets - (1.4)
Acquisition of subsidiary undertakings and
businesses (54.0) (14.6)
Investment - (12.5)
Cash acquired with subsidiary undertakings 2.4 (0.3)
Purchase of trade investments in insurance
captives (4.6) (5.2)
(87.9) (65.9)
Net cash used in financing activities
Issue of ordinary share capital 8 26.7 11.2
Share buybacks 8 (29.4) (214.5)
Share transaction costs 8 (0.1) (0.8)
Dividends 5 (39.2) (31.7)
Capital element of finance lease rental payments 7 (0.2) (0.1)
Asset based securitised financing 7 8.3 3.9
Repayment of loan notes and long term loans 7 (33.2) (3.2)
Proceeds on issue of bonds 7 - 102.8
(67.1) (132.4)
Net decrease in cash and cash equivalents (40.0) (107.6)
Cash and cash equivalents at the beginning of the
period 9.2 (19.3)
Cash and cash equivalents at 30 June (30.8) (126.9)
Cash and cash equivalents comprise:
Overdraft 7 (30.8) (126.9)
Total (30.8) (126.9)
Notes to the interim condensed consolidated financial statements
at 30 June 2007
1 Corporate information
The Capita Group Plc is a public limited company incorporated and domiciled in England whose
shares are publicly traded. The interim condensed consolidated financial statements of the
company and its subsidiaries ('the Group') were authorised for issue in accordance with a
resolution of the Directors on 23 July 2007.
2 Basis of preparation and accounting policies
Basis of preparation
The interim condensed consolidated financial statements for the 6 months to 30 June 2007 have
been prepared on the basis of the accounting policies set out in the Group's latest annual
financial statements for the year ended 31 December 2006. These accounting policies are drawn
up in accordance with International Accounting Standards (IAS) and International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board, with
the exception of IAS 34 Interim Financial Reporting which has not been applied in these
interim condensed consolidated financial statements.
The interim condensed consolidated financial statements do not include all the information
and disclosures required in the annual financial statements and should be read in conjunction
with the Group's annual financial statements as at 31 December 2006.
The interim condensed consolidated financial statements for the 6 months to 30 June 2007 have
not been audited or reviewed by auditors pursuant to the Auditing Practices Board guidance on
Review of Interim Financial Information.
Significant accounting policies
The accounting policies adopted in the preparation of the interim condensed consolidated
financial statements are consistent with those followed in the preparation of the Group's
annual financial statements for the year ended 31 December 2006, except for the adoption of
new standards and interpretations, noted below. Adoption of these Standards and
Interpretations did not have any effect on the financial position or performance of the
Group.
• IFRS 7 Financial Instruments: Disclosures
In the current financial year, the Group will adopt this standard for the first time. This
standard requires disclosures that enable users to evaluate the significance of the Group's
financial instruments and the nature and extent of risks arising from those financial
instruments. As IFRS 7 is a disclosure standard, there is no impact of that change in
accounting policy on the interim condensed consolidated financial statements. Full details of
the change will be disclosed in our annual report for the year ended 31 December 2007.
• IFRIC 9 Reassessment of Embedded Derivatives
The Group adopted this interpretation as of 1 January 2007, which states that the date to
assess the existence of an embedded derivative is the date that an entity first becomes party
to the contract, with reassessment only if there is a change to the contract that
significantly modifies the cash flows.
• IFRIC 10 Interim Financial Reporting and Impairment
The Group adopted IFRIC Interpretation 10 as of 1 January 2007, which requires that an entity
must not reverse an impairment loss recognised in a previous interim period in respect of
goodwill or an investment in either an equity instrument or a financial asset carried at
cost.
The Group has also early adopted the following Interpretation.
• IFRIC 11 IFRS 2 - Group and Treasury Share Transactions
The Group has elected to adopt IFRIC Interpretation 11 as of 1 January 2007. This
interpretation requires arrangements whereby an employee is granted rights to an entity's
equity instruments to be accounted for as an equity-settled scheme, even if the entity buys
the instruments from another party, or the shareholders provide the equity instruments
needed. The adoption of this Interpretation did not have any effect on the financial position
or performance of the Group.
3 Segmental reporting
Analysis of segment revenue:
Restated
Six months Six months
to 30 June to 30 June
2007 2006
Continuing £m £m
HR solutions 123.3 101.2
Property consultancy 112.3 101.1
Insurance and specialist services 149.3 139.9
Financial services 74.8 60.5
Integrated services 152.4 151.2
ICT and advisory services 142.9 102.9
Life & pensions 102.0 91.8
Professional services 128.0 96.4
985.0 845.0
Analysis of segment result:
Continuing
HR solutions 12.0 8.8
Property consultancy 8.9 4.7
Insurance and specialist services 13.6 12.6
Financial services 16.5 14.6
Integrated services 20.7 21.8
ICT and advisory services 15.7 10.5
Life & pensions 11.2 10.4
Professional services 20.3 15.7
118.9 99.1
The comparative figures have been restated due to a reorganisation of the Group's business
divisions during the period. The directors decided this was necessary to best manage the
growth in the business and to enhance service provision across the Group.
4 Earnings per share
Earnings per share have been calculated in accordance with IAS 33 Earnings per share. The
average number of shares in issue during the period was 618.1m (30 June 2006: 638.6m). The
diluted earnings per share have been calculated on the diluted profit for the period of
£72.6m (30 June 2006: £61.3m) and an average diluted number of shares of 632.7m (30 June
2006: 649.9m). As at 23 July 2007, there were 620.1m shares in issue.
5 Dividends paid and proposed
The interim dividend of 4.00p (2006: 2.70p) per share (not recognised as a liability at 30
June 2007) will be payable on 19 October 2007 to ordinary shareholders on the register at
the close of business on 14 September 2007. The dividend disclosed in the cash flow
statement represents the final ordinary dividend of 6.3p (2006: 4.9p) per share as proposed
in the 31 December 2006 financial statements and approved at the Group's AGM (not recognised
as a liability at 31 December 2006).
In addition to the interim dividend, it is proposed to return £155m to shareholders through
a special dividend of 25p per share. It is expected that this dividend will be paid
alongside the interim dividend on 19 October 2007 to shareholders on the register at the
close of business on 14 September 2007.
6 Business combinations
The Group has made a number of acquisitions in the period which are shown in aggregate. The
book and fair values of the assets acquired are disclosed in the table below:
Book Fair value
values to Group
£m £m
Intangible assets - 11.9
Property, plant and equipment 1.7 1.5
Deferred tax 1.9 1.9
Debtors 2.9 2.5
Cash and short term deposits 2.4 2.4
Creditors (11.2) (11.4)
Corporation tax (0.1) (0.1)
Long term loans (11.0) (11.0)
Net assets (13.4) (2.3)
Goodwill arising on acquisition 56.2
53.9
Discharged by:
Cash 48.0
Loan notes 5.9
53.9
The full exercise to determine the intangible assets acquired is still to be completed, thus
the above numbers are provisional; this exercise will be finalised for the full year
financial statements. Further cash consideration was paid in respect of previous
acquisitions of £6.0m, including deferred consideration, of which £4.0m had been accrued in
the previous year. The net impact was an increase in goodwill of £2.0m. As required by IAS
12, deferred taxation has been calculated on intangible assets provisionally recognised. The
impact of this is to create a deferred tax liability of £3.8m and to increase goodwill by
the same amount.
7 Movement in net debt
Debt at 1 Other cash Debt at
January Acquisitions flow Non cash 30 June
2007 in period movements movements 2007
£m £m £m £m £m
Cash and cash equivalents 9.7 - (9.7) - -
Overdrafts (0.5) 2.4 (32.7) - (30.8)
Cash 9.2 2.4 (42.4) - (30.8)
Loan notes (22.2) - 22.2 (5.9) (5.9)
Long term debt - (11.0) 11.0 - -
Bonds (372.0) - - 29.3 (342.7)
Currency swaps (6.4) - - (28.5) (34.9)
Interest rate swaps - - - (0.8) (0.8)
Finance leases (0.5) - 0.2 - (0.3)
Sub-total net debt (391.9) (8.6) (9.0) (5.9) (415.4)
Asset based securitised financing (27.5) - (8.3) - (35.8)
(419.4) (8.6) (17.3) (5.9) (451.2)
Debt at 1 Other cash Debt at
January Acquisitions flow Non cash 30 June
2006 in period movements movements 2006
£m £m £m £m £m
Overdrafts (19.3) (0.3) (107.3) - (126.9)
Cash (19.3) (0.3) (107.3) - (126.9)
Loan notes (22.7) - 0.2 - (22.5)
Long term debt - (2.9) 2.9 - -
Bonds (197.6) - (102.8) 2.0 (298.4)
Currency swaps (2.6) - - (1.9) (4.5)
Interest rate swaps 1.6 - - (0.8) 0.8
Finance leases (0.2) - 0.1 - (0.1)
Sub-total net debt (240.8) (3.2) (206.9) (0.7) (451.6)
Asset based securitised financing (28.2) - (3.9) - (32.1)
(269.0) (3.2) (210.8) (0.7) (483.7)
8 Capital and reserves - reconciliation of movements in equity
Profit
Capital Foreign and
Share Treasury Share redemption currency loss Minority Total
capital shares premium reserve reserve reserve Total interest equity
£m £m £m £m £m £m £m £m £m
At 1 January 2006 13.4 (0.4) 258.1 0.2 0.3 125.8 397.4 0.2 397.6
Total recognised
income and
expense for the
period - - - - (0.3) 75.5 75.2 (0.1) 75.1
Dividends - - - - - (31.7) (31.7) - (31.7)
Share buybacks (0.9) - - 0.9 - (215.3) (215.3) - (215.3)
Issue of share
capital 0.1 - 11.1 - - - 11.2 - 11.2
Share based payment - - - - - 4.2 4.2 - 4.2
At 30 June 2006 12.6 (0.4) 269.2 1.1 - (41.5) 241.0 0.1 241.1
At 1 January 2007 12.3 - 308.1 1.7 (0.4) 4.0 325.7 0.1 325.8
Total recognised
income and
expense for the
period - - - - (0.1) 99.8 99.7 - 99.7
Dividends - - - - - (39.2) (39.2) - (39.2)
Share buybacks (0.1) - - 0.1 - (29.5) (29.5) - (29.5)
Issue of share
capital 0.3 - 26.4 - - - 26.7 - 26.7
Share based payment - - - - - 4.1 4.1 - 4.1
At 30 June 2007 12.5 - 334.5 1.8 (0.5) 39.2 387.5 0.1 387.6
This information is provided by RNS
The company news service from the London Stock Exchange
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