Final Results - Part 2
FirstGroup PLC
15 May 2001
PART 2
1 Principal accounting policies
The financial information set out herein does not constitute statutory
accounts but has been extracted from the accounts for the years ended 31
March 2000 and 2001. The accounts for the year ended 31 March 2000 have been
delivered to the Registrar of Companies and the accounts for the year ended
31 March 2001 will be delivered to the Registrar of Companies in due course.
The auditors have reported on both sets of accounts: their reports were
unqualified and did not contain a statement under section 237 (2) or (3) of
the Companies Act 1985.
The accounts for the year ended 31 March 2001 have been prepared using the
same accounting policies as were used in the preparation of the accounts for
the year ended 31 March 2000.
Copies of the statutory accounts for the year ended 31 March 2001 will be
sent to all shareholders by early June and will be available thereafter at
the Registered Office of the Company at 395 King Street, Aberdeen AB24 5RP.
2 Profit and loss account analysis and segmental information
Continu Disconti Total Continu Discontin Total
ing Acquisiti nued 2001 ing ued 2000
operati ons operatio operati operation
ons ns ons s
£m £m £m £m £m £m £m
Group
turnover 2,015.7 3.4 34.9 2,054.0 1,763.8 31.3 1,795.1
Group
operating
costs
- (1,809.2) (2.9) (23.4) (1,835.5)(1,582.8) (21.4) (1,604.2)
General
-
Goodwill (25.8) (0.1) - (25.9) (13.0) - (13.0)
amortisat
ion
-
Exception
al costs
(note 4) (53.5) - - (53.5) (11.6) - (11.6)
-
Employees'
profit
sharing
scheme (4.2) - - (4.2) (5.2) - (5.2)
Total
Group
operating
costs (1,892.7) (3.0) (23.4) (1,919.1) (1,612.6) (21.4) (1,634.0)
(note 3)
Group
operating
profit 123.0 0.4 11.5 134.9 151.2 9.9 161.1
The discontinued operation is Bristol International Airport.
Segmental information is as follows:
Turnover Profit before Net assets
interest /(liabilities)
2001 2000 2001 2000 2001 2000
£m £m £m £m £m £m
UK Bus 788.6 744.3 95.8 105.3 522.4 442.0
UK Rail 761.2 767.4 16.2 38.0 (18.5) (20.5)
North 462.7 246.4 25.7 20.8 305.4 235.8
America
Airport 34.9 31.3 11.5 9.9 - 8.5
Group 6.6 5.7 52.1 (8.5) (350.7) (329.6)
items
2,054.0 1,795.1 201.3 165.5 458.6 336.2
All of the Group turnover and Group operating profit for the year was
generated in the United Kingdom, except that shown above as being generated
in North America.
3 Operating costs
Continu Discontin Total Continui Discontin Total
ing Acquisitio ued ng ued
operati ns operation 2001 operatio operation 2000
ons s ns s
£m £m £m £m £m £m £m
Materials
and 234.3 0.6 1.1 236.0 180.3 1.1 181.4
consumables
Staff
costs 853.2 1.6 5.4 860.2 687.6 6.0 693.6
(note 5)
External
charges 688.4 0.4 14.8 703.6 663.9 12.7 676.6
Depreciation,
amortisat
ion and
other
amounts 116.8 0.4 2.1 119.3 80.8 1.6 82.4
written
off
fixed
assets
1,892.7 3.0 23.4 1,919.1 1,612.6 21.4 1,634.0
4 Exceptional costs
UK Bus Rail North America Other Total Total
2001 2001 2001 2001 2001 2000
£m £m £m £m £m £m
FNW franchise - 39.9 - - 39.9 -
amendment
Restructuring costs 1.8 - 3.8 - 5.6 6.8
Transition costs - - 2.3 - 2.3 0.6
New train - 2.5 - - 2.5 0.8
commissioning costs
Abortive project - - - 1.3 1.3 -
costs
Tram start up costs - - - 1.0 1.0 -
Southall court fine - - - - - 1.5
Other - - - 0.9 0.9 1.9
1.8 42.4 6.1 3.2 53.5 11.6
During the year cash payments of £14.5m (2000: £12.5m) were made in
respect of restructuring and other exceptional costs.
No tax relief has been accrued on the cost of the FNW franchise
amendment. The tax effect of the other exceptional costs was a credit of
£2.5m (2000: £3.0m).
5 Employees' and directors' remuneration
The average number of persons employed by the Group (including
directors) during the year was as follows:
2001 2000
Operational 49,214 38,996
Administration 2,770 2,122
51,984 41,118
The aggregate payroll costs of these persons were as follows:
2001 2000
£m £m
Wages and salaries 785.9 630.3
Social security costs 55.0 45.0
Other pension costs 19.3 18.3
860.2 693.6
6 Profit on disposal of businesses
2001 2000
£m £m
Bristol International Airport 55.6 -
New World First Holdings 13.8 -
69.4 -
On 24 January 2001, the Group sold its 51% interest in Bristol International
Airport for cash proceeds of £107.1m plus repayment of loans.
On 15 May 2000, the Group sold its 26% interest in New World First Holdings
for cash proceeds of HK$457m (£38.7m).
7 Net interest payable and similar charges
2001 2000
£m £m
Bank loans and overdrafts 49.4 32.3
Other loans 2.9 3.5
Finance charges payable in respect of
hire purchase contracts and finance leases 14.8 15.0
67.1 50.8
Income from short term deposits and other investments (4.4) (5.9)
Interest capitalised - (1.2)
Notional interest on provisions 0.6 0.3
63.3 44.0
Share of interest payable of joint ventures 1.2 -
Total 64.5 44.0
The interest capitalised was in relation to the construction of the new
terminal at Bristol International Airport.
8 Tax on profit on ordinary activities
2001 2000
£m £m
Corporation tax
Current year - UK at 30% (2000: 30%) 42.3 13.1
Current year - overseas 0.9 1.6
Prior years - UK (0.5) (2.3)
Prior years - overseas 0.2 -
Transfer to deferred tax
Current year - UK (2.0) 12.2
Current year - overseas 2.2 0.6
Prior years - UK (1.1) (0.9)
Group 42.0 24.3
9 Equity dividends
2001 2000
£m £m
Ordinary shares of 5p each
- Interim paid (3.0p (2000: 2.7p) per share) 12.6 11.6
- Final proposed (6.4p (2000: 5.8p) per share) 26.9 25.0
- Adjustment to prior year dividend in respect of shares (0.7) -
cancelled
38.8 36.6
10 Earnings per share
Basic earnings per share is based on earnings of £90.9m (2000: £93.5m)
and on the weighted average number of ordinary shares of 422.2m (2000:
396.8m) in issue. Diluted earnings per share is based on the same earnings
and on the weighted average number of ordinary shares of 424.6m (2000:
400.1m).
A reconciliation of the number of shares used in the basic and diluted
measures is set out below:
2001 2000
Number Number
(m) (m)
Weighted average number of shares used in basic 422.2 396.8
calculation
SAYE share options 1.9 2.8
Executive share options 0.4 0.3
Long term incentive plan awards 0.1 0.2
424.6 400.1
The adjusted basic earnings per share and adjusted cash earnings per share
measures are intended to demonstrate recurring elements of the results of the
Group before goodwill amortisation. No adjustment is made for the tax relief
of £7.8m (2000: £3.9m) obtained in the US as a result of the S338(h)(10)
election on the Ryder goodwill as this cash benefit is not dependent on the
accounting treatment. Both the adjusted basic and cash measures of earnings
per share use the same weighted average number of ordinary shares as the
basic earnings per share measure. A reconciliation of the earnings used in
these measures is set out below:
2001 2000
Earnings per Earnings per
£m share (p) £m share (p)
Profit for basic 90.9 21.5 93.5 23.6
earnings per share
calculation
Goodwill amortisation 27.8 6.6 13.0 3.3
FNW franchise 39.9 9.4 - -
amendment
Restructuring and 13.6 3.2 11.6 2.9
other exceptional
costs
Taxation effect of (2.5) (0.6) (3.0) (0.8)
this adjustment
Profit on disposal of (69.4) (16.4) - -
businesses
Taxation effect of 21.8 5.2 - -
this adjustment
Loss/(profit) on 0.1 - (4.0) (1.0)
disposal of fixed
assets
Taxation effect of - - 1.2 0.3
this adjustment
Profit for adjusted
basic earnings
per share calculation 122.2 28.9 112.3 28.3
Depreciation 88.4 20.9 69.4 17.5
Minority interests in (1.0) (0.2) (0.8) (0.2)
this adjustment
Profit for adjusted 209.6 49.6 180.9 45.6
cash earnings
per share calculation
11 Intangible fixed assets
Goodwill
£m
Cost
At beginning of year 547.0
Additions (note 24) 9.6
Exchange rate differences 58.8
At end of year 615.4
Amortisation
At beginning of year 13.2
Charge for the year 25.9
Exchange rate differences 2.7
At end of year 41.8
Net book value
At 31 March 2001 573.6
At 31 March 2000 533.8
12 Tangible fixed assets
Land and Passenger Other Total
buildings carrying plant and
vehicle fleet equipment
£m £m £m £m
Cost or valuation
At beginning of year 181.5 924.5 120.4 1,226.4
Subsidiary undertakings 0.8 8.6 0.5 9.9
acquired
Additions 8.3 115.9 26.7 150.9
Disposals (4.4) (48.2) (10.6) (63.2)
Subsidiary undertakings (70.9) - (20.5) (91.4)
sold
Exchange rate differences 1.4 35.4 2.5 39.3
At end of year 116.7 1,036.2 119.0 1,271.9
Depreciation
At beginning of year 36.1 389.1 76.4 501.6
Subsidiary undertakings - 3.5 0.2 3.7
acquired
Charge for the year 6.7 72.2 14.5 93.4
Disposals (2.7) (38.5) (9.8) (51.0)
Subsidiary undertakings (24.9) - (10.7) (35.6)
sold
Exchange rate differences 0.6 15.3 1.9 17.8
At end of year 15.8 441.6 72.5 529.9
Net book value
At 31 March 2001 100.9 594.6 46.5 742.0
At 31 March 2000 145.4 535.4 44.0 724.8
13 Fixed asset investments
Other
Joint invest- Own
ventures Associates ments shares Total
£m £m £m £m £m
Cost
At beginning of year 24.0 - 4.0 4.1 32.1
Additions 5.6 4.1 - 1.1 10.8
Reclassification - 4.0 (4.0) - -
Share of results (2.0) (0.2) - - (2.2)
Disposals (23.2) - - (2.9) (26.1)
Exchange differences 1.1 - - - 1.1
At end of year 5.5 7.9 - 2.3 15.7
Provision
At beginning of year - - - (0.8) (0.8)
Goodwill amortisation (0.1) (1.8) - - (1.9)
Other charges (0.9) - - - (0.9)
At end of year (1.0) (1.8) - (0.8) (3.6)
Total
At 31 March 2001 4.5 6.1 - 1.5 12.1
At 31 March 2000 24.0 - 4.0 3.3 31.3
14 Stocks
2001 2000
£m £m
Spare parts and consumables 21.0 19.5
Property development work in progress 2.5 2.4
23.5 21.9
15 Debtors
2001 2000
£m £m
Amounts due within one year
Trade debtors 176.1 155.1
Other debtors 26.9 24.0
Deposit paid for rolling stock 23.4 30.4
Pension funds' prepayments 3.2 3.0
Other prepayments and accrued income 23.1 23.6
252.7 236.1
Amounts due after more than one year
Pension funds' prepayments 25.0 23.6
Other prepayments and accrued income 1.6 1.1
26.6 24.7
279.3 260.8
16 Current asset investments
2001 2000
£m £m
Bank deposits 11.8 48.8
17 Cash at bank and in hand
2001 2000
£m £m
Ring fenced cash 50.2 33.8
Other cash 16.4 14.0
66.6 47.8
Under the terms of the franchise agreements cash can only be distributed
by the train operating companies up to the amount of retained profits. The
ring fenced cash represents that which is not available for distribution at
the year end.
18 Creditors
2001 2000
£m £m
Amounts falling due within one year
Bank loans and overdrafts 41.1 44.6
Obligations under hire purchase contracts and 65.2 65.3
finance leases
Loan notes 10.2 15.6
Trade creditors 113.1 120.9
Corporation tax 36.0 14.9
Other tax and social security 15.6 12.8
Other creditors 21.9 22.0
Pension funds' creditors 7.8 7.9
Accruals and deferred income 178.8 164.8
FNW franchise amendment accrual 37.0 -
Season ticket deferred income 38.1 38.6
Proposed dividends 27.0 25.0
591.8 532.4
Amounts falling due after more than one year
Bank loans
Due in more than one year but not more than two 60.9 35.5
years
Due in more than two years but not more than five 414.8 531.5
years
Obligations under hire purchase contracts and
finance leases
Due in more than one year but not more than two 58.7 58.9
years
Due in more than two years but not more than five 61.8 85.9
years
Due in more than five years 0.7 2.2
Loan notes
Due in more than one year but not more than two 25.5 36.5
years
Due in more than two years but not more than five 0.2 0.4
years
622.6 750.9
19 Provisions for liabilities and charges
Deferred tax Insurance Pensions Total
claims
£m £m £m £m
At beginning of year 12.8 15.7 11.4 39.9
Subsidiary undertakings (0.1) - - (0.1)
acquired
Subsidiary undertakings 0.5 - (5.1) (4.6)
sold
Provided/(released) in (0.9) 5.8 0.2 5.1
the year
Utilised in the year - (5.4) (0.5) (5.9)
Notional interest - 0.3 0.3 0.6
At end of year 12.3 16.4 6.3 35.0
20 Deferred tax
Provided Unprovided Provided Unprovided
2001 2001 2000 2000
£m £m £m £m
Accelerated capital 1.7 75.7 10.8 44.0
allowances
Other timing differences 8.1 (5.8) (0.7) (2.5)
Trading losses - (11.1) (0.4) (2.4)
Advance corporation tax
recoverable (0.2) - (0.2) -
Unrealised capital gains 2.7 2.1 3.3 2.1
Deferred tax liability 12.3 60.9 12.8 41.2
21 Reserves
Share
premium Revaluation Profit and
account reserve loss account
£m £m £m
At beginning of year 233.6 3.7 74.4
Exercise of executive share 0.5 - -
options
Issue of shares to QUEST (i) 2.6 - (1.5)
Cancellation of shares (ii) - - (31.1)
Transfer of realised revaluation - (0.1) 0.1
reserve
Retained profit for the year - - 52.1
Goodwill written back on disposal - - 1.6
of joint venture
Goodwill written back on disposal - - 38.2
of business
Foreign exchange differences - - 60.0
At end of year 236.7 3.6 193.8
Capital
Redemption Capital Total other
reserve reserves reserves
£m £m £m
At beginning of year 0.1 2.7 2.8
Cancellation of shares (ii) 0.6 - 0.6
At end of year 0.7 2.7 3.4
Notes:
(i) 1,070,707 ordinary shares were issued to the FirstGroup plc Qualifying
Employee Share Ownership Trust at a price of £2.475 and then written down to
the option price receivable.
(ii) 12,658,108 ordinary shares were repurchased at a total cost of
£31.1m and cancelled.
The cumulative amount of positive and negative goodwill arising from
acquisitions of subsidiary and associates written off at the end of the year
was £429.6m and £4.7m respectively (2000: £469.4m and £4.7m).
22 Notes to the consolidated cash flow statement
2001 2000
£m £m
(a) Reconciliation of operating profit to net
cash inflow from operating activities
Operating profit 134.9 161.1
Depreciation and other amounts written off tangible 93.4 69.4
fixed assets
Amortisation charges 25.9 13.0
Write down of investment in joint venture 0.9 -
Write down of own shares - 0.8
Profit on sale of non property fixed assets (1.5) (1.2)
Increase in stocks (0.3) (2.2)
Increase in debtors (22.0) (44.8)
Increase/(decrease) in creditors and provisions 30.5 (2.5)
Net cash inflow from operating activities 261.8 193.6
(b) Returns on investments and servicing of finance
Interest received 4.7 5.8
Interest paid (43.0) (30.0)
Interest element of hire purchase contract
and finance lease payments (14.9) (14.8)
Fees on issue of bank loans - (2.8)
Dividends paid to minority shareholders (1.4) (0.4)
Net cash outflow from returns on investments
and servicing of finance (54.6) (42.2)
(c) Capital expenditure and financial investment
Purchase of tangible fixed assets (108.1) (78.1)
Purchase of fixed asset investments - (4.0)
Sale of fixed asset properties 2.4 14.8
Sale of other tangible fixed assets 10.7 3.5
Deposits for rolling stock 7.0 (8.0)
Acquisition of investment in own shares - (1.8)
Decrease in other current asset investments 37.6 0.5
Net cash outflow from capital expenditure
and financial investment (50.4) (73.1)
(d) Acquisitions and disposals
Purchase of subsidiary undertakings (11.6) (613.2)
Net cash acquired with subsidiary undertakings 1.0 5.0
Net overdraft sold on disposal of subsidiary undertaking 22.9 -
Purchase of businesses (1.5) (0.7)
Sale of subsidiary undertaking 106.1 -
Sale of investment in joint ventures 38.5 -
Purchase of investment in joint ventures (4.2) (0.4)
Net cash inflow/(outflow) from acquisitions and 151.2 (609.3)
disposals
(e) Financing
Issue of share capital 3.4 232.0
Own shares repurchased (31.1) -
New bank loans 24.4 668.0
Repayment of amounts borrowed - bank loans (137.7) (230.2)
- other loans (16.7) (14.4)
Capital element of hire purchase contract
and finance lease payments (69.8) (68.2)
Net cash (outflow)/inflow from financing (227.5) 587.2
23 Analysis of net debt
At Cash flow Acquisitions Other At end
beginning non-cash of year
of year changes
£m £m £m £m £m
Liquid 11.2 0.6 - - 11.8
resources
Other current 37.6 (37.6) - - -
asset
investments
Current asset 48.8 (37.0) - - 11.8
investments
Cash at bank 47.8 18.2 - 0.6 66.6
and in hand
Bank (7.2) 4.5 - - (2.7)
overdrafts
Cash 40.6 22.7 - 0.6 63.9
Bank loans (37.4) 0.8 (0.6) (1.2) (38.4)
due within 1
year
Bank loans (567.0) 112.5 (1.3) (19.9) (475.7)
due after 1
year
Obligations
under hire
purchase
contracts and (212.3) 69.8 (0.3) (43.6) (186.4)
finance leases
Loans and (52.5) 16.7 - (0.1) (35.9)
loan notes
Financing (869.2) 199.8 (2.2) (64.8) (736.4)
Net debt (779.8) 185.5 (2.2) (64.2) (660.7)
The Group includes as liquid resources unencumbered bank deposits of
maturity of less than one year.
24 Summary of purchase of subsidiary undertakings and businesses
Hertz Other acquis Total Total
-itions 2001 2000
£m £m £m £m
Fair value of net assets
acquired:
Tangible fixed assets 5.4 0.8 6.2 171.5
Other current assets 2.0 - 2.0 51.5
Cash at bank and in hand 1.0 - 1.0 5.3
Bank overdrafts - - - (0.3)
Bank loans and other loans (1.9) - (1.9) (8.3)
Obligations under hire purchase - (0.3) (0.3) (17.6)
contracts and finance leases
Pension funds' creditors - - - (0.2)
Other creditors (3.0) (0.3) (3.3) (57.6)
Deferred taxation (0.6) 0.7 0.1 5.9
2.9 0.9 3.8 150.2
Goodwill 8.0 1.6 9.6 473.0
10.9 2.5 13.4 623.2
Satisfied by:
Cash paid and payable 10.9 2.3 13.2 615.3
Shares including premium - - - 2.7
Loan notes - - - 5.2
Other - 0.2 0.2 -
10.9 2.5 13.4 623.2
25 Sale of subsidiary undertaking
2001 2000
£m £m
Net assets sold:
Goodwill 37.2 -
Tangible fixed assets 55.9
Other current assets 4.8 -
Bank overdrafts (22.9) -
Pension funds' creditors (5.1) -
Other creditors (7.8) -
Deferred taxation 0.5 -
Minority interests (12.8) -
49.8 -
Profit on disposal 55.6 -
105.4 -
Satisfied by:
Net cash receivable 105.4 -
Tuesday, 1st October 2024
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