Final Results - Year Ended 31 March 2000, Part 3

FirstGroup PLC 16 May 2000 PART 3 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. Both 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: 2000 1999 Earnings per Earnings per £m share (p) £m share (p) Profit for 93.5 23.6 69.4 19.6 basic earnings per share calculation Goodwill 13.0 3.3 - - amortisation Restructurin 11.6 2.9 17.9 5.1 g and other exceptional costs Profit on (4.0) (1.0) (2.0) (0.5) disposal of fixed assets Taxation (1.8) (0.5) (4.9) (1.4) effects of these adjustments Minority - - (0.2) (0.1) interests in these adjustments Profit for adjusted basic earnings per share 112.3 28.3 80.2 22.7 calculation Depreciation 69.4 17.5 47.0 13.3 Minority (0.8) (0.2) (0.8) (0.2) interests in this adjustment Profit for 180.9 45.6 126.4 35.8 adjusted cash earnings per share calculation 10 Intangible fixed assets Goodwill £m Cost At beginning of year 74.8 Additions (note 23) 473.0 Exchange rate differences (0.8) At end of year 547.0 Amortisation At beginning of year - Charge for the year 13.0 Exchange rate differences 0.2 At end of year 13.2 Net book value At 31 March 2000 533.8 At 31 March 1999 74.8 11 Tangible fixed assets Land and Passenger Other Assets in Total buildings carrying plant and course of vehicle equipment construc- fleet tion £m £m £m £m £m Cost or valuation At 126.3 584.0 79.2 13.5 803.0 beginning of year Subsidiary 12.8 282.8 21.4 - 317.0 undertakings acquired Additions 11.5 82.5 19.8 22.2 136.0 Disposals (0.6) (24.3) (4.2) - (29.1) Reclassifica 31.5 - 4.2 (35.7) - tion Exchange - (0.5) - - (0.5) rate differences At end of 181.5 924.5 120.4 - 1,226.4 year Depreciation At 29.6 230.7 53.5 - 313.8 beginning of year Subsidiary 3.7 124.5 17.3 - 145.5 undertakings acquired Charge for 3.0 56.8 9.6 - 69.4 the year Disposals (0.2) (22.9) (4.0) - (27.1) At end of 36.1 389.1 76.4 - 501.6 year Net book value At 31 March 145.4 535.4 44.0 - 724.8 2000 At 31 March 96.7 353.3 25.7 13.5 489.2 1999 12 Fixed asset investments Joint Other Own ventures investments shares Total £m £m £m £m Shares Cost At 0.6 - 3.7 4.3 beginning of year Additions - 4.0 4.1 8.1 Cancellatio - - (3.7) (3.7) n of shares At end of 0.6 4.0 4.1 8.7 year Provision At - - - - beginning of year Charge - - (0.8) (0.8) At end of - - (0.8) (0.8) year Share of post acquisition reserves At (0.4) - - (0.4) beginning of year Share of 0.4 - - 0.4 results At end of - - - - year Loans Cost At 22.7 - - 22.7 beginning of year Additions 0.4 - - 0.4 Exchange 0.3 - - 0.3 differences At end of 23.4 - - 23.4 year Total At 31 24.0 4.0 3.3 31.3 March 2000 At 31 22.9 - 3.7 26.6 March 1999 13 Stocks 2000 1999 £m £m Spare parts and consumables 19.5 12.0 Property development work in progress 2.4 6.2 21.9 18.2 14 Debtors 2000 1999 £m £m Amounts due within one year Trade debtors 139.9 70.2 Other debtors 24.0 33.3 Deposit paid for rolling stock 30.4 10.6 Pension funds' prepayments 3.0 3.4 Other prepayments and accrued income 38.8 14.9 236.1 132.4 Amounts due after more than one year Deposits paid for rolling stock - 11.8 Pension funds' prepayments 23.6 20.4 Other prepayments and accrued income 1.1 1.6 24.7 33.8 260.8 166.2 15 Current asset investments 2000 1999 £m £m Bank deposits 48.8 38.1 Of the bank deposits £37.6m (1999: £37.5m) support the Group's commitments (which are guaranteed by two of the Group's bankers) under the rail companies' season ticket bonds to the Director of Passenger Rail Franchising. The bank deposits, which are charged to the bank, cannot be reduced to below the amount of the season ticket bonds. 16 Cash at bank and in hand 2000 1999 £m £m Ring fenced cash 33.8 36.6 Other cash 14.0 6.9 47.8 43.5 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. 17 Creditors 2000 1999 £m £m Amounts falling due within one year Bank loans and overdrafts 44.6 28.3 Obligations under hire purchase contracts and finance leases 65.3 58.1 Loan notes 15.6 13.7 Trade creditors 120.9 101.9 Corporation tax 14.9 17.2 Other tax and social security 12.8 11.5 Other creditors 22.0 12.1 Pension funds' creditors 7.9 7.7 Accruals and deferred income 164.8 129.3 Season ticket deferred income 38.6 37.5 Proposed dividends 25.0 17.2 532.4 434.5 Amounts falling due after more than one year Bank loans Due in more than one year but not more than two years 35.5 - Due in more than two years but not more than five years 531.5 140.0 Obligations under hire purchase contracts and finance leases Due in more than one year but not more than two years 58.9 55.1 Due in more than two years but not more than five years 85.9 94.0 Due in more than five years 2.2 1.9 Loan notes Due in more than one year but not more than two years 36.5 43.2 Due in more than two years but not more than five years 0.4 3.9 750.9 338.1 18 Provisions for liabilities and charges Deferred Insurance Pensions Total tax claims £m £m £m £m At 3.5 15.2 11.7 30.4 beginning of year Subsidiary (5.9) - - (5.9) undertaking s acquired Provided 11.9 6.7 0.1 18.7 in the year Utilised - (6.2) (0.7) (6.9) in the year Notional - - 0.3 0.3 interest Advance 3.3 - - 3.3 corporation tax utilised At end of 12.8 15.7 11.4 39.9 year 19 Deferred tax Provided Unprovided Provided Unprovided 2000 2000 1999 1999 £m £m £m £m Accelerate 10.8 44.0 8.5 40.3 d capital allowances Other (0.7) (2.5) (4.9) (1.6) timing difference s Trading (0.4) (2.4) (2.5) (0.8) losses Advance corporatio n tax recoverabl (0.2) - (3.4) - e Unrealised 3.3 2.1 5.8 2.4 capital gains Deferred 12.8 41.2 3.5 40.3 tax liability 20 Reserves Share Revaluation Profit and premium reserve loss account account £m £m £m At beginning - 3.3 25.3 of year Rights issue 227.6 - - Exercise of 0.1 - - savings related share options Issue of 5.9 - (3.7) shares to QUEST (i) Cancellation - - (3.7) of shares (ii) Transfer of - 0.4 (0.4) realised revaluation reserve Retained - - 56.9 profit for the year At end of year 233.6 3.7 74.4 Capital Capital Total other redemption reserves reserves reserve £m £m £m At beginning 0.1 - 0.1 of year Shares issued - 2.7 2.7 in relation to acquisitions At end of year 0.1 2.7 2.8 Notes: (i) 2,089,200 ordinary shares were issued to the FirstGroup plc Qualifying Employee Share Ownership Trust at a price of £2.87 and then written down to the option price receivable. (ii)1,000,000 ordinary shares previously held by Mainline were 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 £464.6m and £4.7m respectively (1999: £464.6m and £4.7m) and of positive goodwill arising from acquisitions of businesses written off was £2.3m (1999: £2.3m). 21 Notes to the consolidated cash flow statement 2000 1999 £m £m (a) Reconciliation of operating profit to net cash inflow from operating activities Operating profit 161.1 121.9 Depreciation and 82.4 47.0 amortisation charges Write down in 0.8 - value of own shares Profit on sale of (1.2) (0.8) non property fixed assets (Increase)/decreas (2.2) 1.4 e in stocks Increase in (44.8) (8.7) debtors Decrease in (2.5) (10.6) creditors and provisions Net cash inflow 193.6 150.2 from operating activities (b) Returns on investments and servicing of finance Interest received 5.8 6.2 Interest paid (30.0) (18.5) Interest element of hire purchase contract and finance lease (14.8) (14.9) payments Fees on issue of (2.8) (0.2) bank loans Dividends paid to (0.4) (1.0) minority shareholders Net cash outflow from returns on investments and servicing of (42.2) (28.4) finance (c) Capital expenditure and financial investment Purchase of tangible fixed assets (78.1) (42.2) Purchase of fixed asset investments (4.0) - Sale of fixed asset properties 14.8 8.8 Sale of other tangible fixed assets 3.5 1.7 Deposits for rolling stock (8.0) (22.4) Acquisition of own shares (1.8) - Decrease/(increase) in other current 0.5 (2.2) asset investments Net cash outflow from capital expenditure and financial investment (73.1) (56.3) (d) Acquisitions and disposals Purchase of subsidiary undertakings (613.2) (63.3) Net cash acquired with subsidiary 5.0 1.6 undertakings Purchase of businesses (0.7) (2.5) Purchase of investment in joint (0.4) (22.8) ventures Net cash outflow from acquisitions (609.3) (87.0) and disposals 21 Notes to the consolidated cash flow statement (continued) 2000 1999 £m £m (e) Financing Issue of share capital 232.0 0.1 New bank loans 668.0 136.0 Repayment of amounts borrowed - bank loans (230.2) (31.7) - other loans (14.4) (23.4) Capital element of hire purchase contract and finance lease payments (68.2) (48.1) Net cash inflow from financing 587.2 32.9 22 Analysis of net debt At Cash Acquisi-tions Other At end beginning flow Non-cash of year of year Changes £m £m £m £m £m Liquid - 11.2 - - 11.2 resource s Other current 38.1 (0.5) - - 37.6 asset investments Current 38.1 10.7 - - 48.8 asset investme nts Cash at 43.5 4.3 - - 47.8 bank and in hand Bank (7.3) 0.1 - - (7.2) overdraf ts Cash 36.2 4.4 - - 40.6 Bank (21.0) (9.5) (7.4) 0.5 (37.4) loans due within 1 year Bank (140.0) (428.3) - 1.3 (567.0) loans due after 1 year Obligations under hire purchase contracts and (209.1) 68.2 (17.6) (53.8) (212.3) finance leases Loans (60.8) 14.4 (0.9) (5.2) (52.5) and loan notes Financing (430.9) (355.2) (25.9) (57.2) (869.2) Net debt (356.6) (340.1) (25.9) (57.2) (779.8) The Group includes as liquid resources unencumbered bank deposits of maturity of less than one year. 23 Summary of purchase of subsidiary undertakings and businesses Southern Ryder Bruce Other Total Total National Acquis 2000 1999 -itions 1 £m £m £m £m £m £m Fair value of net assets acquired : Tangible 8.3 139.2 23.0 1.0 171.5 34.2 fixed assets Fixed - - - - - 3.7 asset investme nts Other 2.0 48.4 0.8 0.3 51.5 5.1 current assets Cash at 0.5 4.7 0.1 - 5.3 1.6 bank and in hand Bank - - - (0.3) (0.3) - overdraf ts Bank - (0.9) (7.4) - (8.3) (5.5) loans and other loans Obligati ons (3.6) (0.2) (13.6) (0.2) (17.6) (18.9) under hire purchase contract s and finance leases Pension (0.2) - - - (0.2) (2.0) funds' creditor s Other (3.0) (52.6) (1.5) (0.5) (57.6) (20.8) creditor s Deferred - 1.5 - 4.4 5.9 0.5 taxation Other - - - - - (6.1) provisio ns Minority - - - - - (0.1) interest s 4.0 140.1 1.4 4.7 150.2 (8.3) Goodwill 6.8 461.8 6.8 (2.4) 473.0 74.8 10.8 601.9 8.2 2.3 623.2 66.5 Satisfie d by: Cash 2.9 601.9 8.2 2.3 615.3 36.6 paid and payable Shares 2.7 - - - 2.7 27.2 includin g premium Loan 5.2 - - - 5.2 - notes Existing - - - - - 2.7 investme nt 10.8 601.9 8.2 2.3 623.2 66.5 1 Including adjustments to goodwill on prior year acquisitions in relation to revised estimates for deferred taxation.

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