Interim Results - Part 2
FirstGroup PLC
7 November 2001
PART 2
Notes to the interim financial information
1 Basis of preparation
This interim financial information does not constitute statutory
accounts within the meaning of section 240 of the Companies Act 1985.
The figures for the six months to 30 September 2001 include the
results of the rail businesses for the 24 weeks ended 15 September 2001 and
the results of the other businesses for the 26 weeks ended 29 September 2001.
These results are unaudited but have been reviewed by the auditors. The
comparative figures for the six months to 30 September 2000 are unaudited and
are derived from the interim report for the six months ended 30 September
2000, which was also reviewed by the auditors.
The comparative figures for the year to 31 March 2001 are not the
company's statutory accounts for that financial year but have been derived
from them. Those accounts have been reported on by the company's auditors and
delivered to the Registrar of Companies. The report of the auditors was
unqualified and did not contain a statement under section 237(2) or (3) of the
Companies Act 1985.
This interim financial information will be sent to all
shareholders in November 2001 and will be available to the public at the
Registered Office of the Company, 395 King Street, Aberdeen, AB24 5RP. This
interim financial information was approved by the board of directors on 6
November 2001.
2 Principal accounting policies
The results for the six months to 30 September 2001 have been prepared using
the same accounting policies as were used in the preparation of the annual
report for the year ended 31 March 2001 except as set out below.
FRS 19 Deferred Tax has now been adopted. Previously, provision was made for
deferred tax to the extent that it was probable that a liability or asset
would crystallise. The new policy is to provide for deferred tax on all
timing differences except those arising from the revaluation of fixed assets
for which there is no binding agreement to sell or on the undistributed
profits of overseas subsidiaries, associates and joint ventures. Deferred tax
is calculated at the rates at which it is estimated the tax will arise. The
deferred tax provision is not discounted to net present value.
The impact of this change in policy on the taxation charge for the 6 months to
30 September 2000 is an increase of £5.6m to £18.2m and for the year ended 31
March 2001 is an increase of £13.2m to £55.2m.
3 Tax on profit on ordinary activities
6 months to 6 months to Year to
30 September 30 September 31 March
2001 2000 2001
(restated) (restated)
£m £m £m
Corporation tax 7.9 14.6 42.9
Deferred tax 3.4 3.6 12.3
11.3 18.2 55.2
4 Dividends
6 months to 6 months to Year to
30 September 30 September 31 March
2001 2000 2001
£m £m £m
Ordinary shares of 5p each
- Interim proposed 13.9 12.6 12.6
- Final paid - - 26.9
- Adjustment to prior year final dividend in
respect of shares cancelled (0.1) (0.7) (0.7)
13.8 11.9 38.8
The interim dividend of 3.3p per ordinary share will be paid on 13
February 2002 to shareholders on the register of members at the close of
business on 18 January 2002.
5 Earnings per share
Basic earnings per share is based on earnings of £25.2m (six
months to 30 September 2000: £35.8m and year to 31 March 2001: £77.7m) and on
the weighted average number of ordinary shares of 420.4m (six months to 30
September 2000: 424.1m and year to 31 March 2001: 422.2m) in issue.
Diluted earnings per share is based on the same earnings for each
of the periods and on the weighted average number of ordinary shares of 422.0m
(six months to 30 September 2000: 426.7m and year to 31 March 2001: 424.6m).
The difference in the number of shares between the basic calculation and the
diluted calculation represents the weighted average number of dilutive
potential ordinary shares.
The adjusted basic earnings per share and adjusted cash earnings
per share are intended to demonstrate recurring elements of the results of the
Group before goodwill amortisation. A reconciliation of the earnings used in
the bases is set out below:
6 months to
30 September 2001
£m Earnings
per share p
Profit for basic earnings per share calculation 25.2 6.0
Goodwill amortisation 14.7 3.5
Group restructuring and other exceptional costs 4.2 1.0
Joint venture marketing costs 0.3 0.1
Taxation effects of adjustments (6.2) (1.5)
Profit for adjusted basic earnings per share 38.2 9.1
calculation
Depreciation 45.9 10.9
Profit for adjusted cash earnings per share 84.1 20.0
calculation
6 months to
30 September 2000
(restated)
£m Earnings
per share p
Profit for basic earnings per share calculation 35.8 8.4
Goodwill amortisation 13.0 3.1
Restructuring and other exceptional costs 3.0 0.7
Profit on disposal of fixed assets (13.9) (3.3)
Taxation effects of adjustments (0.5) (0.1)
Profit for adjusted basic earnings per share 37.4 8.8
calculation
Depreciation 43.8 10.3
Minority interests in this adjustment (0.7) (0.1)
Profit for adjusted cash earnings per share 80.5 19.0
calculation
Year to
31 March 2001
(restated)
£m Earnings
per share p
Profit for basic earnings per share calculation 77.7 18.4
Goodwill amortisation 27.8 6.6
FNW franchise amendment 39.9 9.4
Restructuring and other exceptional costs 13.6 3.2
Profit on disposal of businesses (69.4) (16.4)
Loss on disposal of fixed assets 0.1 -
Taxation effect of adjustments 9.2 2.2
Profit for adjusted basic earnings per share 98.9 23.4
calculation
Depreciation 88.4 20.9
Minority interests in this adjustment (1.0) (0.2)
Profit for adjusted cash earnings per share 186.3 44.1
calculation
6 Intangible fixed assets
Goodwill
£m
Cost
At 31 March 2001 615.4
Additions 3.3
Exchange rate differences (20.8)
At 30 September 2001 597.9
Amortisation
At 31 March 2001 41.8
Charge for the period 13.7
Exchange rate differences (2.0)
At 30 September 2001 53.5
Net book value
At 30 September 2001 544.4
At 31 March 2001 573.6
At 30 September 2000 562.2
7 Tangible fixed assets
Land and Passenger Other Total
buildings carrying plant and
vehicle equip-
fleet ment
£m £m £m £m
Cost or valuation
At 31 March 2001 116.7 1,036.2 119.0 1,271.9
Businesses acquired - 4.1 0.1 4.2
Additions 5.4 103.0 9.2 117.6
Disposals (0.6) (16.9) (1.6) (19.1)
Exchange rate differences (0.6) (15.5) (1.1) (17.2)
At 30 September 2001 120.9 1,110.9 125.6 1,357.4
Depreciation
At 31 March 2001 15.8 441.6 72.5 529.9
Businesses acquired - 2.0 0.1 2.1
Charge for period 1.8 38.5 5.6 45.9
Disposals (0.5) (16.2) (1.2) (17.9)
Exchange rate differences (0.1) (5.8) (0.6) (6.5)
At 30 September 2001 17.0 460.1 76.4 553.5
Net book value
At 30 September 2001 103.9 650.8 49.2 803.9
At 31 March 2001 100.9 594.6 46.5 742.0
At 30 September 2000 145.5 592.0 50.6 788.1
8 Debtors
30 September 30 September 31 March
2001 2000 2001
£m £m £m
Amounts due within one year
Trade debtors 178.2 137.0 176.1
Other debtors 30.0 25.3 26.9
Deposit paid for rolling stock 21.4 28.5 23.4
Pension funds' prepayments 3.5 3.0 3.2
Other prepayments and accrued income 44.8 51.6 23.1
277.9 245.4 252.7
Amounts due after more than one year
Pension funds' prepayments 26.8 24.2 25.0
Other prepayments and accrued income 1.6 1.2 1.6
28.4 25.4 26.6
306.3 270.8 279.3
9 Current asset investments
30 September 30 September 31 March
2001 2000 2001
£m £m £m
Bank deposits 30.1 36.8 11.8
10 Creditors
30 September 30 September 31 March
2001 2000 2001
£m £m £m
Amounts falling due within one year
Bank loans and overdrafts 100.6 107.9 41.1
Obligations under hire purchase
contracts and finance leases 60.6 65.6 65.2
Loan notes 5.9 5.4 10.2
Trade creditors 114.3 111.1 113.1
Corporation tax 27.9 24.7 36.0
Other tax and social security 18.2 18.1 15.6
Other creditors 17.9 22.3 21.9
Pension funds' creditors 8.4 7.2 7.8
Accruals and deferred income 196.7 172.7 178.8
FNW franchise amendment - - 37.0
Season ticket deferred income 35.3 34.6 38.1
Proposed dividends 13.9 12.6 27.0
Dividend payable 0.1 0.1 -
599.8 582.3 591.8
Amounts falling due after more than one year
Bank loans
Due in more than one year but not
more than two years 211.2 51.8 60.9
Due in more than two years but not
more than five years 360.1 524.3 414.8
Obligations under hire purchase
contracts and finance leases
Due in more than one year but not
more than two years 47.5 60.2 58.7
Due in more than two years but not
more than five years 42.6 72.4 61.8
Due in more than five years 0.6 1.3 0.7
Loan notes
Due in more than one year but not
more than two years 23.7 30.8 25.5
Due in more than two years but not
more than five years 0.2 0.3 0.2
685.9 741.1 622.6
Bank loans and overdrafts
Whilst the majority of bank loans and overdrafts are repayable
within three months of the balance sheet date, they have been classified by
reference to the maturity date of the longest refinancing permitted under
these facilities. The bank loans and overdrafts are unsecured.
Hire purchase contracts and finance leases
Hire purchase contract and finance lease liabilities are secured on the assets
to which they relate. While the contracts vary in length between four and ten
years, all new contracts entered into during the period were for five years.
Loan notes
The loan notes have been classified by reference to the earliest date on which
the loan note holders can request redemption. £27.2m (30 September 2000: £
32.3m and 31 March 2001: £32.0m) of the loan notes are backed up by guarantees
provided under the banking facilities.
11 Provisions for liabilities and charges
Deferred Insurance
Tax Claims Pensions Total
£m £m £m £m
At 31 March 2001 as previously reported 12.3 16.4 6.3 35.0
Prior year adjustment 58.8 - - 58.8
At 31 March 2001 as restated 71.1 16.4 6.3 93.8
Provided in the period 3.4 7.0 - 10.4
Utilised in the period - (3.4) (0.1) (3.5)
Notional interest - 0.7 0.1 0.8
Exchange rate difference - (0.2) - (0.2)
At 30 September 2001 74.5 20.5 6.3 101.3
12 Called up share capital
30 September 30 September 31 March
2001 2000 2001
£m £m £m
Authorised
Ordinary shares of 5p each 30.0 30.0 30.0
Allotted, called up and fully paid
Ordinary shares of 5p each 21.0 21.1 21.1
The number of ordinary shares of 5p each in issue at the end of
the period was 421.1m (30 September 2000: 420.8m and 31 March 2001: 422.4m).
The changes in the number and amount of issued share capital
during the period (of which further details are given in the Financial Review)
are set out below:
Number
(m) £m
At 31 March 2001 422.4 21.1
Shares cancelled (1.3) (0.1)
At 30 September 2001 421.1 21.0
Between 3 April 2001 and 25 May 2001 1,243,000 ordinary shares
were repurchased at a total cost of £4.1m and cancelled.
13 Reserves
Share
premium Revaluation Profit and
account reserve loss account
£m £m £m
At 31 March 2001 as previously 236.7 3.6 193.8
reported
Prior year adjustment - - (58.8)
At 31 March 2001 as restated 236.7 3.6 135.0
Cancellation of shares - - (4.1)
Retained profit for the period - - 11.4
Foreign exchange differences - - (21.1)
Transfer of depreciation on
revalued assets - (0.1) 0.1
At 30 September 2001 236.7 3.5 121.3
Capital
redemption Capital Total other
reserve reserves reserves
£m £m £m
At 31 March 2001 0.7 2.7 3.4
Cancellation of shares 0.1 - 0.1
At 30 September 2001 0.8 2.7 3.5
14 Notes to the consolidated cash flow statement
6 months to 6 months to Year to
30 September 30 September 31 March
2001 2000 2001
£m £m £m
(a) Reconciliation of operating profit to
net cash inflow from operating
activities
Group operating profit 65.9 75.9 134.9
Depreciation charges 45.9 43.8 93.4
Goodwill amortisation 13.7 12.9 25.9
Write down of investment in joint venture - - 0.9
Profit on sale of non property fixed (0.2) (0.9) (1.5)
assets
Increase in stocks (2.8) (0.3) (0.3)
Increase in debtors (31.5) (5.3) (22.0)
Increase/(decrease) in creditors and provisions 31.1 (15.9) 30.5
FNW franchise amendment payment (37.0) - -
Net cash inflow from operating activities 85.1 110.2 261.8
(b) Returns on investments and servicing
of finance
Interest received 1.2 2.1 4.7
Interest paid (24.4) (18.3) (43.0)
Interest element of hire purchase
contract and finance lease payments (6.4) (7.6) (14.9)
Dividends paid to minority shareholders - - (1.4)
Net cash outflow from returns on
investments and servicing of finance (29.6) (23.8) (54.6)
(c) Capital expenditure and financial investment
Purchase of tangible fixed assets (123.8) (78.4) (108.1)
Sale of fixed asset properties 0.9 1.4 2.4
Sale of other tangible fixed assets 0.4 4.7 10.7
Deposits for rolling stock 2.0 1.9 7.0
Decrease in other current asset
investments - 2.5 37.6
Net cash outflow from capital
expenditure and financial investment (120.5) (67.9) (50.4)
(d) Acquisitions and disposals
Purchase of subsidiary undertakings (0.8) (0.4) (11.6)
Net cash acquired with subsidiary
undertakings - - 1.0
Net overdraft sold on disposal of subsidiary
undertaking - - 22.9
Purchase of businesses (4.1) (0.6) (1.5)
Sale of subsidiary undertaking - - 106.1
Sale of investment in joint venture - 38.6 38.5
Purchase of investment in joint venture (4.9) - (4.2)
Net cash (outflow) / inflow from acquisitions
and disposals (9.8) 37.6 151.2
(e) Financing
Issue of share capital - - 3.4
Own shares repurchased (4.1) (31.1) (31.1)
New bank loans 194.7 119.9 24.4
Repayment of amounts borrowed - bank loans (40.3) (59.3) (137.7)
- other loans (6.1) (16.1) (16.7)
Capital element of hire purchase
contract and finance lease payments (34.9) (35.2) (69.8)
Net cash inflow / (outflow) from financing 109.3 (21.8) (227.5)
15 Analysis of net debt
Other At 30 September
non-cash
At 31 Cash changes 2001
March 2001 flow
£m £m £m £m
Liquid resources 11.8 18.3 - 30.1
Current asset investments 11.8 18.3 - 30.1
Cash at bank and in hand 66.6 (16.9) 0.6 50.3
Bank overdrafts (2.7) (9.7) - (12.4)
Cash 63.9 (26.6) 0.6 37.9
Bank loans due within one year (38.4) (49.8) - (88.2)
Bank loans due after one year (475.7) (104.6) 9.0 (571.3)
Obligations under hire purchase
contracts and finance leases (186.4) 34.9 0.2 (151.3)
Loans and loan notes (35.9) 6.1 - (29.8)
Financing (736.4) (113.4) 9.2 (840.6)
Net debt (660.7) (121.7) 9.8 (772.6)
16 Major non-cash transactions
During the period the Group entered into hire purchase contracts
in respect of assets with a capital value of £nil (6 months to 30 September
2000: £21.7m and year to 31 March 2001: £42.5m). Other non-cash changes
include £10.0m (6 months to 30 September 2000: £15.4m and year to 31 March
2001: £21.3m) foreign exchange movements.
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