Interim Results
Compass Group PLC
16 May 2007
COMPASS GROUP PLC
INTERIM RESULTS
FOR THE SIX MONTHS ENDED 31 MARCH 2007
Strong first half - delivering ahead of expectations:
• Revenue £5.2 billion, 5% organic growth.
• Operating profit £267 million, up 14% reported basis, 25% constant
currency.
• Margin 5.1%, up 70 basis points.
• Underlying earnings per share 7.5p, up 79%.
• Interim dividend up 6% to 3.6p.
• Free cash flow of £136 million, up £98 million.
• Selecta disposal announced for £772 million, completion expected July
2007.
• Further £500 million share buyback, takes total to £1 billion.
Richard Cousins, Chief Executive Officer, said:
'We have exceeded our expectations in the first half of the year with the
operating margin up by 70 basis points to 5.1%. This positive trend is being
achieved due to the underlying quality of the business combined with the
introduction of a more transparent and intense management approach. The MAP
framework is helping us to be more selective about the new business we take on
and more disciplined in the investment of capital. Coupled with much more focus
on driving like for like revenue growth and more emphasis on cost management and
cash control, this has delivered encouraging results in terms of both operating
profit and free cash flow.
As previously announced, our strategy is to simplify our organisation and focus
on our core operations. I am therefore pleased that we have agreed the sale of
Selecta and announced an additional £500 million share buy back in the last few
days. This takes our total share buy back to £1 billion demonstrating our
confidence in the future of the business and our commitment to deliver value to
our shareholders'.
Sir Roy Gardner, Chairman, said:
'This is a very encouraging set of results, with a number of actions and
initiatives introduced over the last 6-9 months contributing to the improved
performance in many parts of the business. Looking ahead to the full year, we
expect to see a continuation of the underlying performance seen in the first
half'.
--------------------------------------------------------------------------------
Financial summary Increase/
For the six months ended 31 March 2007 2006 (decrease)
--------------------------------------------------------------------------------
Continuing operations
Revenue
- constant currency (1) £5,185m £4,943m 4.9%
- reported £5,185m £5,277m (1.7)%
Operating profit (2)
- constant currency (1) £267m £214m 24.8%
- reported £267m £234m 14.1%
Operating margin(3) 5.1% 4.4% 70bps
Profit before tax
- underlying (4) £224m £151m 48.3%
- reported £224m £158m 41.8%
Free cash flow £136m £38m 257.9%
Basic earnings per share
- underlying (4) 7.5p 4.2p 78.6%
- reported 7.5p 4.5p 66.7%
Total Group including discontinued operations
Basic earnings per share 9.6p 6.5p 47.7%
Interim dividend per ordinary share 3.6p 3.4p 5.9%
--------------------------------------------------------------------------------
(1) Constant currency restates the prior year results to 2007's
average exchange rates.
(2) Includes share of profit of associates.
(3) Excludes share of profit of associates.
(4) Underlying profit before tax excludes revaluation gains and losses on swaps
and hedging instruments (hedge accounting ineffectiveness) of £nil million
(2006: £7 million). Underlying basic earnings per share excludes these items
net of tax.
(5) Organic growth is calculated by adjusting for acquisitions (excluding
current period acquisitions and including a full six months in respect of
prior year acquisitions), disposals (excluded from both periods) and
exchange rate movements (translating the prior period at current period
exchange rates) and compares the results against 2006.
--------------------------------------------------------------------------------
Enquiries:
Compass Group PLC +44 (0)1932 573000
Investors/Analysts Andrew Martin
Media Chris King
Website
www.compass-group.com
For presentation and teleconference details refer to the notes on page 9.
GROUP TRADING REVIEW
Compass Group today announces its unaudited interim results for the six month
period ended 31 March 2007.
-------------------------------------------------------------------------------
Financial summary Increase/
For the six months ended 31 March 2007 2006 (decrease)
-------------------------------------------------------------------------------
Continuing operations
Revenue
- constant currency (1) £5,185m £4,943m 4.9%
- reported £5,185m £5,277m (1.7)%
Operating profit (2)
- constant currency (1) £267m £214m 24.8%
- reported £267m £234m 14.1%
Operating margin(3) 5.1% 4.4% 70bps
Profit before tax
- underlying (4) £224m £151m 48.3%
- reported £224m £158m 41.8%
Free cash flow £136m £38m 257.9%
Basic earnings per share
- underlying (4) 7.5p 4.2p 78.6%
- reported 7.5p 4.5p 66.7%
Total Group including discontinued operations
Basic earnings per share 9.6p 6.5p 47.7%
Interim dividend per ordinary share 3.6p 3.4p 5.9%
-------------------------------------------------------------------------------
(1) Constant currency restates the prior year results to 2007's average
exchange rates.
(2) Includes share of profit of associates.
(3) Excludes share of profit of associates.
(4) Underlying profit before tax excludes revaluation gains and losses on swaps
and hedging instruments (hedge accounting ineffectiveness) of £nil million
(2006: £7 million). Underlying basic earnings per share excludes these
items net of tax.
-------------------------------------------------------------------------------
Discontinued Operations
On 12 May 2007, the Group announced that it had entered into an agreement to
sell its European vending business, Selecta, for a consideration of £772 million
on a debt and cash free basis. Subject to obtaining various approvals, the sale
is expected to complete in July 2007. The Group has also completed the sale and
closure of a number of other small businesses as part of the exit from the
discontinued travel concessions business and Middle East military catering
operations. The 2006 revenue and operating profits of all of these businesses
combined were £539 million and £52 million respectively. The results of these
businesses are treated as discontinued operations and are therefore excluded
from the results of continuing operations in 2007. The 2006 results have been
restated on a consistent basis.
Revenue
Overall, organic revenue growth was 5%. The significant strengthening of
sterling, in particular against the US dollar, reduced revenues by 7%, resulting
in reported revenues declining by 2%. Organic growth is calculated by adjusting
for acquisitions (excluding current period acquisitions and including a full
period in respect of prior period acquisitions), disposals (excluded from both
periods) and exchange rate movements (translating the prior period at current
period exchange rates), and compares the results against 2006.
The table below summarises the performance of the Group's continuing operations
by geographic segment.
--------------------------------------------------------------------------------
Segmental performance Constant
Six months ended 31 March 2007 Reported currency Organic
change change change
2007 2006 % % %
--------------------------------------------------------------------------------
Continuing operations
Revenue (£m)
North America 2,133 2,224 (4) 7 7
Continental Europe 1,306 1,294 1 3 3
United Kingdom 957 962 (1) (1) (1)
Rest of the world 789 797 (1) 10 10
-------------------------------------------------------------------------------
Total 5,185 5,277 (2) 5 5
-------------------------------------------------------------------------------
Operating profit (1) (£m)
North America 130 126
Continental Europe 88 74
United Kingdom 53 53
Rest of the world 27 20
Unallocated overheads (34) (41)
Associates 3 2
-------------------------------------------------
Total 267 234
-------------------------------------------------
Operating margin (2) (%)
North America 6.1 5.7
Continental Europe 6.7 5.7
United Kingdom 5.5 5.5
Rest of the world 3.4 2.5
-------------------------------------------------
Total 5.1 4.4
-------------------------------------------------
(1) Operating profit includes share of profit of associates UK £2m (2006:£1m)
& North America £1m (2006: £1m).
(2) Operating margin is based on revenue and operating profit excluding share
of profit of associates.
North America - 41.1% Group revenue (2006: 42.2%)
We have continued to see good organic revenue growth of 7% in North America in
the first half, coming from all the contract sectors. In Chartwells, the
education business, we have been successful in driving like for like growth by
increasing participation in schools and voluntary meals, translating to organic
revenue growth of 9%. Some large contract wins in the Crothall support services
business have helped achieve organic revenue growth of 7% in the healthcare
sector and the pipeline continues to look strong. The sports and leisure sector
has also performed particularly well with Levy delivering organic revenue growth
of 9%. The revenue decline in the vending business, Canteen, reflects our
ongoing strategy to franchise more marginal operations, a reduction in retail
sales and continuing consolidation in the manufacturing sector.
Operating profit from continuing operations increased to £130 million (2006:
£126 million), a 40 basis point margin improvement, with all sectors
contributing to this delivery through an improvement in the quality of revenue
and very tight control of overheads. On a constant currency basis, operating
profit moved ahead strongly, up £19 million on the same period last year.
Excluding the adverse impact on profits in the first half of last year of
Hurricane Katrina and higher fuel costs, the underlying margin improvement in
the first half of this year was approximately 20 basis points.
Continental Europe - 25.2% Group revenue (2006: 24.5%)
Revenue in Continental Europe grew by 3% on an organic basis to £1,306 million
(2006: £1,294 million). We have seen a good start to the year in Spain, with
strong new contract wins in healthcare and education and good like for like
growth across all sectors driven by an increase in consumer numbers and new
services offered to clients. The Nordic region continues to perform well with
high activity levels at oil and gas clients and a focus on healthy eating
driving volumes in the business and industry sector. Our businesses in the
emerging markets of Central and Eastern Europe are also starting to make
progress.
Operating profit from continuing operations increased to £88 million (2006: £74
million), a margin increase of 100 basis points. The significant level of
restructuring costs in the first half of last year impacted last year's margin
by approximately 30 basis points, so the underlying increase in the first half
of this year was 70 basis points. Approximately half of this improvement is a
one time step up from the turnaround of previously underperforming countries
such as France and the Netherlands and the new management team in Italy
delivering an encouraging start to stabilising the business.
UK - 18.5% Group revenue (2006: 18.2%)
In the UK, revenue was flat compared to last year at £957 million (2006: £962
million) as we continue to be more selective on the new business we take on and
address low margin contracts. Operating profit from continuing operations was in
line with 2006 at £53 million.
The fundamentals in the UK are extremely attractive and we remain optimistic
that it will become a very good business. However, the poor discipline of the
past combined with the excessive complexity of the business will take time to
change.
The performance continues to stabilise with the second quarter results being
better than the first. Overall, a 5.5% margin represents a satisfactory outcome.
Significant changes in the senior management team have been made and confidence
is restored. In common with other parts of the Group, the culture is being
changed to focus more on like for like revenue growth and we continue to avoid,
renegotiate or exit poor performing contracts.
Good progress is being made to further reduce overheads and unit labour
scheduling is now receiving intensive focus. This, combined with a healthy sales
pipeline is helping to create a solid platform from which to grow profitability.
Rest of the World - 15.2% Group revenue (2006: 15.1%)
Strong organic revenue growth of 10% in the Rest of the World was largely a
result of 22% growth in Australia and 15% in Latin America, whilst revenues in
Japan remained flat. The remote site business in Australia has benefited from
the buoyancy of the mining and energy sectors and the mobilisation of new
business gained in 2006, while in Latin America a focus on volumes in the
business and industry sector has had a positive impact. The smaller, emerging
markets, particularly India and China, are also becoming more established and
offer a good opportunity for future growth.
Operating profit from continuing operations increased to £27 million (2006: £20
million), a margin increase of 90 basis points. Approximately half of this
improvement comes from the flow through from the high levels of new business
gained in 2006 in addition to the turnaround resulting from the focus on poorer
performing businesses.
Unallocated Overheads
Unallocated overheads for the first half year were £34 million (2006: £41
million). The decrease is largely due to the absence in the first half of the
year of non-recurring costs in the first half of last year relating to the UN
investigation and restructuring, partly offset by the strengthening of central
functions which will continue into the second half.
Operating Profit
Operating profit from continuing operations, including associates, was £267
million (2006: £234 million), an increase of 14% on a reported basis and 25% at
constant currency.
Finance Cost
Underlying net finance cost for the first half was £43 million (2006: £83
million, £76 million including the net effect of the revaluation of swaps and
hedging instruments that do not qualify for hedge accounting under IAS 39). We
expect a higher second half net finance cost due to the higher level of net debt
following the completion of the current £500 million share buy back, giving a
full year expected net finance cost of around £95 million to £100 million,
before any benefit from the Selecta disposal proceeds which we expect to have
for the final three months of the year.
Profit before taxation
Profit before taxation from continuing operations was £224 million (2006: £158
million).
On an underlying basis, excluding revaluation gains and losses on swaps and
hedging instruments (hedge accounting ineffectiveness), profit before tax from
continuing operations increased by 48% to £224 million (2006: £151 million).
Income Tax Expense
The overall Group tax charge before exceptional items was £65 million (2006: £54
million), an effective tax rate of 29% (2006: 34%). We continue to expect the
Group's effective tax rate to average out at around the 30% level for the
foreseeable future.
Basic Earnings per Share
Basic earnings per share were 9.6 pence (2006: 6.5 pence). Excluding the results
of discontinued operations, basic earnings per share on an underlying basis,
excluding revaluation gains and losses on swaps and hedging instruments (hedge
accounting ineffectiveness), were 7.5 pence (2006: 4.2 pence).
Continuing operations
-------------------------------------------------------------------------------
Attributable Basic earnings
Profit per share
--------------- -----------------------------
2007 2006 2007 2006 Change
£m £m Pence Pence
-------------------------------------------------------------------------------
Reported 198 140 9.6 6.5 47.7%
Discontinued operations (44) (44) (2.1) (2.0)
Hedge accounting
ineffectiveness
(net of tax) - (5) - (0.3)
-------------------------------------------------------------------------------
Underlying 154 91 7.5 4.2 78.6%
-------------------------------------------------------------------------------
Dividends
The interim dividend is 3.6 pence per share (2006: 3.4 pence), a year on year
increase of 6%.
Discontinued Operations
Operating profit from discontinued operations was £25 million (2006: £53
million). The profit after tax from discontinued operations was £20 million
(2006: £44 million).
Free Cash Flow
Free cash flow from the continuing business totalled £136 million (2006: £38
million). The major factors contributing to the increase were: £32 million
increase in operating profit before associates, £41 million lower net capital
expenditure and £37 million lower net interest payments.
Gross capital expenditure of £79 million represents 1.5% of revenue. We are
expecting a higher level of capex of around £100 million in the second half of
the year due to the phasing of activity and we therefore expect the full year to
be below the 2.0% of revenue level for the continuing business (excluding
Selecta). We still expect the working capital outflow to average out at around
£20 million per year.
The cash tax rate on continuing operations for the first half was 27% and we
continue to expect this to average around the mid to high 20s level for the
foreseeable future.
Net interest paid of £47 million benefits from the significant reduction in the
level of net debt as a result of the receipt of the SSP and Moto sale proceeds.
Overall, following the disposal of Selecta and the travel concessions business,
we expect free cash flow to be delivered more evenly across the year with only a
slight weighting towards the second half.
Acquisitions
The acquisition of the remaining 5% interest in Onama was completed in December
2006 for £7 million. A further £14 million was spent in the first half on
deferred consideration relating to prior year acquisitions and £3 million on new
acquisitions.
Financial Targets
The Group's three year targets for the continuing business for 2006 to 2008
remain unchanged at:
• 100 basis points improvement in ROCE
• free cash flow from continuing operations of £800 million to £850 million.
Outlook
This is a very encouraging set of results, with a number of actions and
initiatives introduced over the last 6-9 months contributing to the improved
performance in many parts of the business. Looking ahead to the full year, we
expect to see a continuation of the underlying performance seen in the first
half.
Richard Cousins Sir Roy Gardner
Chief Executive Chairman
NOTES
(a) The Annual Report for the year ended 30 September 2006 has been filed with
the Registrar of Companies. The auditors have reported on those accounts; their
report was unqualified and did not contain a statement under section 237 (2) or
(3) of the Companies Act 1985.
(b) Forward looking statements
This Press Release contains forward looking statements within the meaning of
Section 27A of the Securities Act 1933, as amended, and Section 21E of the
Securities Exchange Act 1934, as amended. These statements are subject to a
number of risks and uncertainties and actual results and events could differ
materially from those currently being anticipated as reflected in such forward
looking statements. The terms 'expect', 'should be', 'will be', 'is likely to'
and similar expressions identify forward looking statements. Factors which may
cause future outcomes to differ from those foreseen in forward looking
statements include, but are not limited to: general economic conditions and
business conditions in Compass Group's markets; exchange rate fluctuations;
customers' and clients' acceptance of its products and services; the actions of
competitors; and legislative, fiscal and regulatory developments.
(c) The timetable for the proposed interim dividend of 3.6p per share is as
follows:
Ex dividend date: 27 June 2007
Record date: 29 June 2007
Payment date: 6 August 2007
(d) A presentation for analysts and investors will take place at 9:30 am (BST/
London) on Wednesday 16 May 2007 at Merrill Lynch Financial Centre, 2 King
Edward Street, London, EC1.
The live presentation can also be accessed via both a webcast and dial-in
teleconference starting at 9:30 am:
• To listen to the live presentation via teleconference, dial (UK) +44 (0)
1452 562716. Conference access ID: 6579885
• To view the presentation slides and/or listen to a live audio webcast of
the presentation, go to www.compass-group.com or www.cantos.com
• Please note that remote listeners will not be able to ask questions
during the Q&A session.
A replay recording of the presentation will also be available via teleconference
and webcast:
• A teleconference replay of the presentation will be available for five
working days, from 14.00 on May 16 until midnight 22 May 2007. To hear the
replay, dial (UK) +44 (0)1452 55 00 00. The replay access number is
6579885#.
• A webcast replay of the presentation will be available for six months,
at www.compass-group.com and www.cantos.com
Enquiries:
Compass Group PLC 01932 573000
Investors/analysts Andrew Martin
Media Chris King
Website
www.compass-group.com
Compass Group is the world's largest foodservice company with annual revenue of
c. £10 billion. For more information visit www.compass-group.com
Independent review report to Compass Group PLC
Introduction
We have been instructed by Compass Group PLC ('the Company') to review the
financial information for the six months ended 31 March 2007 which comprises the
consolidated income statement, the consolidated statement of recognised income
and expense, the consolidated balance sheet, the consolidated cash flow
statement and related notes 1 to 14. We have read the other information
contained in the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
This report is made solely to the Company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the Company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the Company, for our review work, for this report, or for the conclusions we
have formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures are consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of Group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with International Standards on Auditing (UK and
Ireland) and therefore provides a lower level of assurance than an audit.
Accordingly, we do not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 March 2007.
Deloitte & Touche LLP
Chartered Accountants and Registered Auditors
London
16 May 2007
Consolidated income statement
for the six months ended 31 March 2007
Six months to
31 March Year ended 30 September 2006
-------------------- -----------------------------------
Before
exceptional Exceptional
2007 2006 items items Total
Unaudited Unaudited Audited Audited Audited
Notes £m £m £m £m £m
--------------------------------------------------------------------------------------------------
Continuing operations
Revenue 2 5,185 5,277 10,276 - 10,276
Operating costs (4,921) (5,045) (9,822) - (9,822)
--------------------------------------------------------------------------------------------------
Operating profit 2 264 232 454 - 454
Share of profit of
associates 2 3 2 2 - 2
--------------------------------------------------------------------------------------------------
Total operating profit 2 267 234 456 - 456
Finance income 3 13 3 15 - 15
Finance costs 3 (56) (86) (160) - (160)
Hedge accounting
ineffectiveness 3 - 7 11 - 11
--------------------------------------------------------------------------------------------------
Profit before tax 224 158 322 - 322
Income tax expense 4, 6 (65) (54) (109) 44 (65)
--------------------------------------------------------------------------------------------------
Profit for the period
from continuing operations 159 104 213 44 257
--------------------------------------------------------------------------------------------------
Discontinued operations
Profit before
exceptional items
(net of tax) 5 20 44 65 - 65
Exceptional items
(net of tax) 5, 6 24 - - (27) (27)
--------------------------------------------------------------------------------------------------
Profit for the period
from discontinued
operations 5 44 44 65 (27) 38
--------------------------------------------------------------------------------------------------
Continuing and
discontinued operations
--------------------------------------------------------------------------------------------------
Profit for the period 203 148 278 17 295
==================================================================================================
Attributable to
Equity shareholders of
the Company 198 140 268 17 285
Minority interest 5 8 10 - 10
--------------------------------------------------------------------------------------------------
Profit for the period 203 148 278 17 295
==================================================================================================
Earnings per share
Basic earnings per share
From continuing
operations 7 7.5p 4.5p 11.5p
From discontinued
operations 7 2.1p 2.0p 1.8p
--------------------------------------------------------------------------------------------------
From continuing
and discontinued
operations 7 9.6p 6.5p 13.3p
==================================================================================================
Diluted earnings per share
From continuing
operations 7 7.5p 4.4p 11.5p
From discontinued
operations 7 2.1p 2.1p 1.8p
--------------------------------------------------------------------------------------------------
From continuing
and discontinued
operations 7 9.6p 6.5p 13.3p
==================================================================================================
Consolidated statement of recognised income and expense
For the six months ended 31 March 2007
Six months to
31 March
-------------------- Year ended
30 September
2007 2006 2006
Unaudited Unaudited Audited
Notes £m £m £m
-------------------------------------------------------------------------------
Net income/(expense) recognised in
equity
Fair value movement on cash flow
hedges - 3 4
Currency translation differences (2) - (7)
Actuarial losses on post-retirement
employee benefits - - (37)
Tax on items taken directly to equity - - 3
-------------------------------------------------------------------------------
Recognition of deferred tax asset
relating to currency translation
differences in prior years 37 - -
-------------------------------------------------------------------------------
Net income/(expense) recognised in
equity 35 3 (37)
Transfers
Transfer to profit or loss from
equity of cumulative
translation differences on
discontinued activities - - 2
Transfer to profit or loss from
equity on cash flow hedges - (1) (6)
-------------------------------------------------------------------------------
Transfers - (1) (4)
Net gain/(loss) recognised directly
in equity
-------------------------------------------------------------------------------
Net gain/(loss) recognised directly
in equity 35 2 (41)
Profit for the period
Profit for the period 203 148 295
-------------------------------------------------------------------------------
Total recognised income and expense
for the period 8 238 150 254
===============================================================================
Attributable to
Equity shareholders of the Company 231 141 248
Minority interest 7 9 6
-------------------------------------------------------------------------------
Total recognised income and expense
for the period 238 150 254
===============================================================================
Consolidated balance sheet
As at 31 March 2007
As at 31 March
-------------------- As at
30 September
2007 2006 2006
Unaudited Unaudited Audited
Notes £m £m £m
-------------------------------------------------------------------------------
Assets
Non-current assets
Goodwill 3,017 3,434 3,451
Other intangible assets 139 167 152
Property, plant and equipment 579 928 756
Interests in associates 40 41 39
Other investments 6 9 9
Deferred tax assets 270 200 237
Trade and other receivables 101 137 117
Derivative financial instruments 4 29 22
-------------------------------------------------------------------------------
4,156 4,945 4,783
-------------------------------------------------------------------------------
Current assets
Inventories 180 241 212
Trade and other receivables 1,339 1,544 1,424
Tax recoverable 7 4 10
Derivative financial instruments 8 6 9
Cash and cash equivalents 536 231 848
-------------------------------------------------------------------------------
2,070 2,026 2,503
-------------------------------------------------------------------------------
Assets of disposal groups
Assets included in disposal groups
held for sale 5 652 1,663 -
-------------------------------------------------------------------------------
Total assets 6,878 8,634 7,286
-------------------------------------------------------------------------------
Liabilities
Current liabilities
Short-term borrowings (141) (218) (119)
Derivative financial instruments (1) (7) (2)
Current tax liabilities (219) (309) (357)
Trade payables and other payables (1,764) (2,196) (1,990)
Provisions (70) (10) (65)
-------------------------------------------------------------------------------
(2,195) (2,740) (2,533)
-------------------------------------------------------------------------------
Non-current liabilities
Long-term borrowings (1,771) (2,536) (1,835)
Derivative financial instruments (13) (7) (18)
Post-employment benefit obligations (254) (553) (282)
Provisions (291) (143) (242)
Deferred tax liabilities (6) (18) (18)
Other liabilities (46) (100) (46)
-------------------------------------------------------------------------------
(2,381) (3,357) (2,441)
-------------------------------------------------------------------------------
Liabilities of disposal groups
Liabilities included in disposal
groups held for sale 5 (149) (235) -
-------------------------------------------------------------------------------
Total liabilities (4,725) (6,332) (4,974)
-------------------------------------------------------------------------------
Net assets
-------------------------------------------------------------------------------
Net assets 2,153 2,302 2,312
===============================================================================
Equity
Share capital 201 216 210
Share premium account 103 94 96
Capital redemption reserve 24 9 15
Less: own shares (4) (1) -
Other reserves 4,301 4,161 4,288
Retained earnings (2,490) (2,204) (2,303)
-------------------------------------------------------------------------------
Total equity shareholders' funds 2,135 2,275 2,306
Minority interests 18 27 6
-------------------------------------------------------------------------------
Total equity 8 2,153 2,302 2,312
===============================================================================
Consolidated cash flow statement
For the six months ended 31 March 2007
Six months to
31 March
-------------------- Year ended
30 September
2007 2006 2006
Unaudited Unaudited Audited
Notes £m £m £m
-------------------------------------------------------------------------------
Cash flow from operating activities
Cash generated from operations 10 304 275 648
Interest paid (59) (87) (186)
Interest element of finance lease
rentals (1) (1) (3)
Tax received - 5 4
Tax paid (61) (54) (97)
-------------------------------------------------------------------------------
Net cash from operating activities
for continuing operations 183 138 366
Net cash from operating activities
for discontinued operations 18 103 181
-------------------------------------------------------------------------------
Net cash from operating activities 201 241 547
-------------------------------------------------------------------------------
Cash flow from investing activities
Purchase of subsidiary companies and
investments in associated undertakings (24) (31) (167)
Proceeds from sale of subsidiary
companies and associated undertakings 29 31 1,807
Tax on profits from sale of
subsidiary companies and
associated undertakings (61) - (50)
Contribution of disposal proceeds to
pension plans - - (280)
Purchase of property, plant and
equipment (64) (98) (152)
Proceeds from sale of property,
plant and equipment 17 11 20
Purchase of intangible assets and
investments (12) (13) (30)
Dividends received from associated
undertakings - 1 2
Interest received 13 4 15
-------------------------------------------------------------------------------
Net cash from/(used in) investing
activities for continuing operations (102) (95) 1,165
Net cash from/(used in) investing
activities for discontinued
operations (22) (63) (106)
-------------------------------------------------------------------------------
Net cash from/(used in) investing
activities (124) (158) 1,059
-------------------------------------------------------------------------------
Cash flow from financing activities
Proceeds from issue of ordinary
share capital 7 - 2
Purchase of own shares (net) (290) - (148)
Net increase/(decrease) in
borrowings 42 16 (647)
Repayment of obligations under
finance leases (9) (8) (15)
Equity dividends paid (136) (140) (213)
Dividends paid to minority interests (1) (5) (11)
-------------------------------------------------------------------------------
Net cash from/(used in) financing
activities (387) (137) (1,032)
-------------------------------------------------------------------------------
Cash and cash equivalents
Net increase/(decrease) in cash and
cash equivalents 11 (310) (54) 574
Cash and cash equivalents at
beginning of the period 848 281 281
Exchange gains and losses on cash
and cash equivalents (2) 4 (7)
-------------------------------------------------------------------------------
Cash and cash equivalents at end of
the period 536 231 848
===============================================================================
Reconciliation of free cash flow from continuing operations
for the six months ended 31 March 2007
Six months to 31 March
---------------------- Year ended
30 September
2007 2006 2006
£m £m £m
-------------------------------------------------------------------------------
Net cash from operating activities for
continuing operations 183 138 366
Purchase of property, plant and
equipment (64) (98) (152)
Proceeds from sale of property, plant
and equipment 17 11 20
Purchase of intangible assets and
investments (12) (13) (30)
Dividends received from associated
undertakings - 1 2
Interest received 13 4 15
Dividends paid to minority interests (1) (5) (11)
-------------------------------------------------------------------------------
Free cash flow from continuing
operations 136 38 210
===============================================================================
Notes to the consolidated financial statements
For the six months ended 31 March 2007
1 Basis of preparation
The unaudited interim financial statements for the six months ended 31 March
2007 have been prepared in accordance with International Financial Reporting
Standards ('IFRS') and International Financial Reporting Interpretations
Committee ('IFRIC') interpretations as adopted by the European Union at 31 March
2007 and with those parts of the Companies Act 1985 applicable to companies
reporting under IFRS. The Group has not yet adopted IAS34 'Interim Financial
Reporting' but intends to do so from 1 October 2007.
Details of the accounting policies applied are those set out in the Group's
Annual Report for the year ended 30 September 2006, which is published in the
Investor Relations section of the Group website (www.compass-group.com) and
which is also available on request.
In accordance with the requirements of IFRS 5 'Non-current assets held for sale
and discontinued operations', the IFRS consolidated income statements and
consolidated cash flow statements for 2006 previously presented have been
amended to reflect the classification of certain operations as discontinued, as
shown in note 5.
The unaudited interim financial statements for the six months ended 31 March
2007, which were approved by the Board of directors on 16 May 2007, do not
comprise statutory accounts for the purpose of Section 240 of the Companies Act
1985. The Annual Report for the year ended 30 September 2006 contained an
unqualified audit report and has been filed with the Registrar of Companies.
2 Segmental reporting
North Continental United Rest of
America Europe* Kingdom the World* Eliminations Total
£m £m £m £m £m £m
-------------------------------------------------------------------------------------------------
Revenue from continuing
operations
Six months to 31 March 2007
External revenue 2,133 1,306 957 789 - 5,185
Inter-segment revenue - - - 4 (4) -
-------------------------------------------------------------------------------------------------
Total revenue 2,133 1,306 957 793 (4) 5,185
-------------------------------------------------------------------------------------------------
Six months to 31 March 2006
External revenue 2,224 1,294 962 797 - 5,277
Inter-segment revenue - - - 8 (8) -
-------------------------------------------------------------------------------------------------
Total revenue 2,224 1,294 962 805 (8) 5,277
-------------------------------------------------------------------------------------------------
Year ended 30 September 2006
External revenue 4,290 2,484 1,889 1,613 - 10,276
Inter-segment revenue - - - 15 (15) -
-------------------------------------------------------------------------------------------------
Total revenue 4,290 2,484 1,889 1,628 (15) 10,276
-------------------------------------------------------------------------------------------------
North Continental United Rest of
America Europe* Kingdom the World* Other Total
£m £m £m £m £m £m
-------------------------------------------------------------------------------------------------
Operating profit from
continuing operations
Six months to 31 March 2007
Operating profit/(loss) 130 88 53 27 (34) 264
Share of profit of associates 1 - 2 - - 3
-------------------------------------------------------------------------------------------------
Segment result 131 88 55 27 (34) 267
-------------------------------------------------------------------------------------------------
Six months to 31 March 2006
Operating profit/(loss) 126 74 53 20 (41) 232
Share of profit of associates 1 - 1 - - 2
-------------------------------------------------------------------------------------------------
Segment result 127 74 54 20 (41) 234
-------------------------------------------------------------------------------------------------
Year ended 30 September 2006
Operating profit/(loss) 245 129 110 47 (77) 454
Share of profit of associates 1 - 1 - - 2
-------------------------------------------------------------------------------------------------
Segment result 246 129 111 47 (77) 456
-------------------------------------------------------------------------------------------------
* Russia and Turkey were transferred from the Rest of World to the Continental
Europe segment during the current reporting period to ensure alignment with the
new management reporting structure. The 2006 segmental results have been
restated on a consistent basis. The combined revenue and operating profit of
these businesses was £24 million and £1 million respectively for the period to
31 March 2006 and £46 million and £3 million respectively for the year ended 30
September 2006.
3 Finance income and costs
Six months to 31 March
---------------------- Year ended
30 September
2007 2006 2006
£m £m £m
-------------------------------------------------------------------------------
Finance income
Bank interest 13 3 15
-------------------------------------------------------------------------------
Finance costs
Bank loans and overdrafts 2 23 35
Other loans 52 53 107
Finance lease interest 1 1 3
-------------------------------------------------------------------------------
Interest on bank and other loans and
finance leases 55 77 145
Unwinding of discount on put options
held by minority shareholders - 3 4
Interest on pension scheme liabilities
net of expected return on scheme assets 1 6 11
-------------------------------------------------------------------------------
Total 56 86 160
-------------------------------------------------------------------------------
Hedge accounting ineffectiveness
Unrealised net gains on financial
instruments - 7 11
-------------------------------------------------------------------------------
4 Tax
The tax charge on continuing operations for the period is based on an estimated
full year effective tax rate of 29% (last full year 34% before exceptional
items).
The estimated full year effective tax rate of 29% does not take into account the
impact of the proposed reduction in the UK statutory rate of corporation tax
from 30% to 28% from 1 April 2008 announced in the March 2007 Budget, as the
relevant legislation was not substantively enacted at the interim balance sheet
date. If, as anticipated, substantive enactment has occurred by the Group's full
year balance sheet date of 30 September 2007, it is estimated that the full year
effective tax rate would be approximately 30%. This increase would be due
largely to a charge arising from the reduction in the balance sheet carrying
value of deferred tax assets in the UK to reflect the reduced rate of
corporation tax at which those assets are expected to reverse.
Six months to
31 March Year ended 30 September 2006
---------------- ---------------------------------
Before
exceptional Exceptional
2007 2006 items items Total
£m £m £m £m £m
-----------------------------------------------------------------------------------
Tax on continuing
operations
UK tax 7 11 29 (44) (15)
Overseas tax 58 43 80 - 80
-----------------------------------------------------------------------------------
Total 65 54 109 (44) 65
-----------------------------------------------------------------------------------
5 Discontinued operations
In November 2006, as part of the Group's strategy of focussing on its core
contract catering business, the Group announced its intention to dispose of its
European vending business, Selecta. As explained in Note 13 'Post balance sheet
events', the Group announced on 12 May 2007 that it had agreed to sell Selecta
to a company managed by Allianz Capital Partners GmbH. The transaction is
expected to be completed by the end of the current financial year. The Group has
also completed the sale and closure of a number of other small businesses as
part of the exit from the discontinued travel concessions business and Middle
East military catering operations. The results of all these businesses are
classified as discontinued operations and are therefore excluded from the
results of continuing operations in 2007. The 2006 results have been restated on
a consistent basis. Where appropriate, the assets and liabilities of these
businesses are classified as being held for sale as at 31 March 2007.
In the year ended 30 September 2006, the Group disposed of its Inflight catering
operations, which operated principally in Continental Europe, on 19 December
2005, and disposed of its travel concession catering business, Select Service
Partner, including Creative Host Services in the US (together 'SSP') on 15 June
2006. The results of these businesses are classified as discontinued operations
and are therefore excluded from the results of continuing operations in 2006.
The assets and liabilities of SSP were classified as being held for sale as at
31 March 2006.
In the second half of the year ended 30 September 2006, the Group also
discontinued its Middle East military catering operations and withdrew from or
disposed of various other businesses. The results of these businesses are
classified as discontinued operations and are therefore excluded from the
results of continuing operations in 2006. This process was substantially
complete by the end of the year and no assets or liabilities were classified as
being held for sale at 30 September 2006.
The results of the discontinued operations were as follows:
Six months to 31 March
---------------------- Year ended
30 September
2007 2006 2006
£m £m £m
-------------------------------------------------------------------------------
Trading activities of discontinued
activities
External revenue 262 1,315 1,988
Operating costs (237) (1,262) (1,913)
-------------------------------------------------------------------------------
Profit before exceptional items 25 53 75
Exceptional operating items (note 6) - - (47)
-------------------------------------------------------------------------------
Profit before tax 25 53 28
Income tax expense (5) (9) (10)
-------------------------------------------------------------------------------
Profit after tax 20 44 18
-------------------------------------------------------------------------------
Disposal of net assets and other
adjustments relating to discontinued
activities
Profit on disposal of net assets of
discontinued operations - - 116
Cumulative translation exchange loss - - (2)
Increase in provisions related to
discontinued operations (45) - -
-------------------------------------------------------------------------------
Profit before tax (45) - 114
Tax 69 - (94)
-------------------------------------------------------------------------------
Profit after tax 24 - 20
-------------------------------------------------------------------------------
Profit for the period from discontinued
operations
-------------------------------------------------------------------------------
Profit for the period from discontinued
operations 44 44 38
-------------------------------------------------------------------------------
The major classes of assets and liabilities of the businesses classified as held
for sale (on a cash free / debt free basis) were as follows:
As at 31 March
------------- As at
30 September
2007 2006 2006
£m £m £m
-------------------------------------------------------------------------------
Selecta/Other SSP None
Assets
Goodwill 394 813 -
Property, plant and equipment 144 745 -
Inventories 36 27 -
Trade and other receivables 71 56 -
Other assets 7 22 -
-------------------------------------------------------------------------------
Assets included in disposal groups held for
sale 652 1,663 -
-------------------------------------------------------------------------------
Liabilities
Trade and other payables (129) (199) -
Other liabilities (20) (36) -
-------------------------------------------------------------------------------
Liabilities included in disposal groups
held for sale (149) (235) -
-------------------------------------------------------------------------------
Net Assets
-------------------------------------------------------------------------------
Net Assets included in disposal groups held
for sale 503 1,428 -
-------------------------------------------------------------------------------
6 Exceptional items
Exceptional items are disclosed and described separately in the interim
financial statements where it is necessary to do so to clearly explain the
financial performance of the Group. Items reported as exceptional are material
items of income or expense that have been shown separately due to the
significance of their nature or amount.
Six months to 31 March
---------------------- Year ended
30 September
2007 2006 2006
£m £m £m
-------------------------------------------------------------------------------
Continuing operations
Income tax expense - - 44
-------------------------------------------------------------------------------
Discontinued operations
Settlement of UN contract claims and
related expenses - - (39)
Middle East military catering business - - (8)
-------------------------------------------------------------------------------
Exceptional operating costs - - (47)
-------------------------------------------------------------------------------
Profit on disposal of net assets and
other adjustments relating to discontinued
operations (note 5) 24 - 20
-------------------------------------------------------------------------------
24 - (27)
-------------------------------------------------------------------------------
Continuing and discontinued operations
-------------------------------------------------------------------------------
Total 24 - 17
-------------------------------------------------------------------------------
In the period to 31 March 2007, the Group released tax provisions totalling £69
million following the settlement of a number of long-standing issues connected
with prior year discontinued activities. The Group also established provisions
totalling £45 million in respect of the prior year disposal of travel
concessions catering businesses and in respect of discontinued Middle East
military catering operations. The result of these items was a net profit of £24
million in the period.
In the year ended 30 September 2006, a £44 million exceptional tax credit arose
in respect of previously unrecognised tax losses and tax deductions in respect
of pension prepayments in the UK tax group that originated in previous years.
£39 million was charged to complete investigations and to settle lawsuits for
lost profits brought by two competitors of the Group, ES-KO International Inc
and Supreme Foodservice AG in relation to contracts awarded to Eurest Support
Services by the UN.
£8 million was provided to settle claims arising in respect of the discontinued
Middle East military catering operations.
A profit of £20 million (net of cumulative translation exchange losses and tax)
was recognised in respect of the disposal of the Group's Inflight catering
services business on 19 December 2005 and its travel concessions catering
business ('SSP') on 15 June 2006.
7 Earnings per share
The calculation of earnings per share is based on earnings after tax and the
weighted average number of shares in issue during the period. The adjusted
earnings per share figures have been calculated based on earnings excluding the
effect of discontinued activities and exceptional items; these are disclosed to
show the underlying trading performance of the Group.
Six months to 31 March
---------------------- Year ended
30 September
2007 2006 2006
£m £m £m
------------------------------------------------------------------------------
Attributable profit
Profit for the period attributable to
equity shareholders of the Company 198 140 285
Less profit for the period from
discontinued operations (44) (44) (38)
------------------------------------------------------------------------------
Attributable profit for the period from
continuing operations 154 96 247
Less exceptional items included in
continuing operations (net of tax) - - (44)
------------------------------------------------------------------------------
Attributable profit for the period from
continuing operations before exceptional
items 154 96 203
Hedge accounting ineffectiveness
(net of tax) - (5) (7)
------------------------------------------------------------------------------
Underlying attributable profit for the
period from continuing operations
before exceptional items 154 91 196
------------------------------------------------------------------------------
Six months to 31 March
---------------------- Year ended
30 September
2007 2006 2006
------------------------------------------------------------------------------
Average number of shares (millions of
ordinary shares of 10p each)
Average number of shares for basic
earnings per share 2,052 2,156 2,147
Dilutive share options 13 2 3
------------------------------------------------------------------------------
Average number of shares for diluted
earnings per share 2,065 2,158 2,150
------------------------------------------------------------------------------
Basic earnings per share
From continuing and discontinued
operations 9.6p 6.5p 13.3p
From discontinued operations (2.1)p (2.0)p (1.8)p
------------------------------------------------------------------------------
From continuing operations 7.5p 4.5p 11.5p
Effect of exceptional items (net of tax) - - (2.0)p
------------------------------------------------------------------------------
From continuing operations before
exceptional items 7.5p 4.5p 9.5p
Hedge accounting ineffectiveness - (0.3)p (0.4)p
------------------------------------------------------------------------------
From underlying continuing operations
before exceptional items 7.5p 4.2p 9.1p
------------------------------------------------------------------------------
Diluted earnings per share
From continuing and discontinued
operations 9.6p 6.5p 13.3p
From discontinued operations (2.1)p (2.1)p (1.8)p
------------------------------------------------------------------------------
From continuing operations 7.5p 4.4p 11.5p
Effect of exceptional items (net of tax) - - (2.0)p
------------------------------------------------------------------------------
From continuing operations before
exceptional items 7.5p 4.4p 9.5p
Hedge accounting ineffectiveness - (0.2)p (0.4)p
------------------------------------------------------------------------------
From underlying continuing operations
before exceptional items 7.5p 4.2p 9.1p
------------------------------------------------------------------------------
8 Reconciliation of movements in total shareholders' equity
Six months to 31 March
---------------------- Year ended
30 September
2007 2006 2006
£m £m £m
-------------------------------------------------------------------------------
Opening total shareholders' equity 2,312 2,278 2,278
Total recognised income and expense 238 150 254
Issue of shares 7 - 2
Fair value of share-based payments 11 16 25
Share buy-back (282) - (149)
Transfer on exercise of put options 8 - 131
Other changes - 3 (5)
-------------------------------------------------------------------------------
2,294 2,447 2,536
Dividends paid to Compass shareholders
(note 9) (136) (140) (213)
Dividends paid to minority interest (1) (5) (11)
-------------------------------------------------------------------------------
2,157 2,302 2,312
Increase in own shares held for staff
compensation schemes* (4) - -
-------------------------------------------------------------------------------
Closing total shareholders' equity 2,153 2,302 2,312
-------------------------------------------------------------------------------
* These shares are held in trust and are used to satisfy some of the Group's
liabilities to employees for share options, share bonus and long-term incentive
plans.
9 Dividends
The interim dividend of 3.6 pence per share (2006: 3.4 pence per share) will be
payable on 6 August 2007 to shareholders on the register at the close of
business on 29 June 2007. The dividend was approved by the Board after the
balance sheet date, and has thus not been reflected as a liability in these
interim financial statements. The dividends paid in the periods presented were
as follows:
Six months to 31 March
---------------------- Year ended
30 September
2007 2006 2006
£m £m £m
-------------------------------------------------------------------------------
Dividends on ordinary shares of 10p each
Final 2005 - 6.5p per share - 140 140
Interim 2006 - 3.4p per share - - 73
Final 2006 - 6.7p per share 136 - -
-------------------------------------------------------------------------------
Total 136 140 213
-------------------------------------------------------------------------------
10 Reconciliation of operating profit to cash generated from operations
Six months to 31 March
---------------------- Year ended
30 September
2007 2006 2006
£m £m £m
-------------------------------------------------------------------------------
Operating profit from continuing
operations 264 232 453
Adjustments for:
Depreciation of property, plant and
equipment 71 74 150
Amortisation of intangible fixed assets 15 15 38
(Gain)/loss on disposal of property,
plant and equipment (1) 1 5
Increase/(decrease) in provisions (7) (2) (38)
Share-based payments 11 14 21
Other non-cash items (net) - 1 -
-------------------------------------------------------------------------------
Operating cash flows before movement in
working capital 353 335 629
(Increase)/decrease in inventories (7) (9) (4)
(Increase)/decrease in receivables (26) (61) (37)
Increase/(decrease) in payables (16) 10 60
-------------------------------------------------------------------------------
Cash generated from operations 304 275 648
-------------------------------------------------------------------------------
11 Reconciliation of net cash flow to movement in net debt
Six months to 31 March
---------------------- Year ended
30 September
2007 2006 2006
£m £m £m
-------------------------------------------------------------------------------
Net increase/(decrease) in cash and cash
equivalents (310) (54) 574
Cash (inflow)/outflow from changes in
debt and lease financing (33) (8) 662
Valuation movements and other non-cash
changes 12 16 39
Changes in finance leases (3) (6) (15)
Foreign exchange movements 51 (25) 69
Acquisitions and disposals - - 1
-------------------------------------------------------------------------------
(Increase)/decrease in net debt during
the period (283) (77) 1,330
Opening net debt (1,095) (2,425) (2,425)
-------------------------------------------------------------------------------
Closing net debt (1,378) (2,502) (1,095)
-------------------------------------------------------------------------------
The table above is presented as additional information to show movement in net
debt, defined as overdrafts, bank and other borrowings and finance leases, net
of cash and cash equivalents.
12 Contingent liabilities
On 21 October 2005 the Company announced that it had instructed Freshfields
Bruckhaus Deringer to conduct an investigation into the relationships between
Eurest Support Services ('ESS') (a member of the Group), IHC Services Inc.
('IHC') and the United Nations. Ernst & Young assisted Freshfields Bruckhaus
Deringer in this investigation. On 1 February 2006 it was announced that the
investigation had concluded.
The investigation established serious irregularities in connection with
contracts awarded to ESS by the UN. The work undertaken by Freshfields Bruckhaus
Deringer and Ernst & Young gave no reason to believe that these issues extended
beyond a few individuals within ESS to other parts of ESS or the wider Compass
Group of companies.
IHC's relationship with the UN and ESS is part of a wider and on-going
investigation into UN procurement activity being conducted by the United States
Attorney's Office for the Southern District of New York, and with which the
Group is co-operating fully. These investigators have access to sources
unavailable to the Group, Freshfields Bruckhaus Deringer and Ernst & Young, and
further information may emerge which is inconsistent with or additional to the
findings of the Freshfields Bruckhaus Deringer investigation,
which could have an adverse impact on the Group. The Group has however not been
contacted by or received further requests for information from the United States
Attorney's Office for the Southern District of New York or the UN in connection
with these matters since January 2006.
In February 2007, the Group's Portuguese business, Eurest (Portugal) Sociedade
Europeia Restaurantes LDA, was visited by the Portuguese Competition Authority
(PCA) as part of an investigation into possible past breaches of competition law
by the Group and other caterers in the sector. The PCA investigation relates to
a part of the Portuguese catering business which services mainly public sector
contracts. The Group is cooperating fully with the PCA's ongoing investigation.
Revenues of the Portuguese business for the year ended 30 September 2006 were
£90 million (€132 million). It is likely that the investigation will take
several months to complete and its outcome cannot be predicted at this point.
No provision has been made in the financial statements in respect of these
matters and it is not currently possible to quantify any potential liability
which may arise. The directors currently have no reason to believe that any
potential liability that may arise would be material to the financial position
of the Group.
The Group, through a number of its subsidiary undertakings, is, from time to
time, party to various other legal proceedings or claims arising from its normal
business. Provisions are made as appropriate. None of these proceedings is
regarded as material litigation.
The Group has provided guarantees to certain minority shareholders and joint
venture partners over the level of profits which will accrue to them in future
periods.
13 Post balance sheet events
The Group announced on 12 May 2007 that it had agreed to sell its European
vending business, Selecta, to a company managed by Allianz Capital Partners GmbH
for a consideration of £772 million on a debt and cash free basis, subject to
customary closing adjustments. The sale is expected to be completed in July
2007.
The Group's share buyback programme continued after the balance sheet date.
Between 1 April 2007 and 11 May 2007, the Group repurchased for cancellation 13
million ordinary shares for a total consideration of £46 million, bringing the
total number of shares repurchased since the share buyback programme began to
166 million shares for a total consideration of £474 million (before brokers
commission and stamp duty).
14 Exchange rates
The main exchange rates used to translate the results and financial position of
subsidiaries reporting in foreign currency were:
Six months to 31 March
-------------------- Year ended
30 September
2007 2006 2006
£m £m £m
-------------------------------------------------------------------------------
Average exchange rate for period*
Australian Dollar 2.48 2.36 2.41
Brazilian Real 4.14 3.88 3.97
Canadian Dollar 2.26 2.03 2.06
Euro 1.49 1.46 1.46
Japanese Yen 230.72 204.55 209.07
Norwegian Krone 12.15 11.62 11.66
South African Rand 14.10 11.07 11.95
Swedish Krona 13.62 13.76 13.67
Swiss Franc 2.39 2.28 2.29
US Dollar 1.95 1.75 1.80
Closing exchange rate as at end of period*
Australian Dollar 2.43 2.43 2.53
Brazilian Real 4.01 3.77 4.22
Canadian Dollar 2.26 2.02 2.13
Euro 1.47 1.43 1.48
Japanese Yen 231.59 204.66 220.54
Norwegian Krone 11.97 11.38 12.47
South African Rand 14.22 10.69 14.52
Swedish Krona 13.76 13.52 13.80
Swiss Franc 2.39 2.27 2.34
US Dollar 1.96 1.73 1.87
-------------------------------------------------------------------------------
* Average rates are used to translate the income statement and cash flow.
Closing rates are used to translate the balance sheet. Only the most significant
currencies are shown.
This information is provided by RNS
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