Preliminary Results - Part 1
FirstGroup PLC
15 May 2002
PART 1
Embargoed until 07.00 am on Wednesday 15 May 2002
FIRSTGROUP plc
RESULTS FOR THE YEAR TO 31 MARCH 2002
International passenger transport company FirstGroup today announced its
financial results for the twelve months to 31 March 2002 in line with
expectations.
FINANCIAL HIGHLIGHTS
• Turnover £2.2bn(1) up 7%
• Pre tax profit £156.7m(2) up 5%
• Cash generation £314.3m(1), (3) up 7%
• Earnings per share 25.8p(4) up 10%
• Dividend per share 10.3p up 10%
(1). Continuing operations excluding Bristol International Airport
(2). Continuing operations before ESOP, goodwill and restructuring and other
exceptional items
(3). Group operating profit before ESOP, goodwill and restructuring and other
exceptional costs, plus depreciation
(4). 2001 Restated for FRS 19
BUSINESS HIGHLIGHTS
• Solid results in line with market expectations
• Focused strategy and management
• Growth across all divisions
• Strengthening of market leadership in UK bus industry
• Well positioned for consolidation of UK rail franchises
• Building a strong position in North America
Commenting on these results, Chief Executive, Moir Lockhead said:
'The backdrop to these results is another tragedy on the railways at Potters
Bar. We extend our deepest sympathy to the families of the bereaved and to the
injured.
During the past year we had to contend with severe disruption of the whole
railway system as well as wider global uncertainty. I am therefore pleased to
announce another set of strong results. We are making real progress in
establishing the service culture needed to deliver the expectations of our
customers. Looking ahead, in all the markets in which we operate there are
opportunities for further growth. In UK Bus we are concentrating on improved
marketing and service delivery. In UK Rail we are encouraged by the prospect of
new and enlarged rail franchises. In North America there remain significant
opportunities for further growth. Trading in the new financial year has started
well and is in line with our expectations.'
Enquiries FirstGroup plc:
Moir Lockhead, Chief Executive Tel: 020 7291 0510
Iain Lanaghan, Finance Director Tel: 020 7291 0510
Michael Mitchell, Corporate Communications Director Tel: 020 7291 0504
Photographs for the media are available at www.newscast.co.uk
Chairman's statement
These results are clearly overshadowed by the tragic accident at Potters Bar on
10 May. On behalf of the Group I would like to convey our sincere condolences to
the families of the bereaved and to the injured. Safety remains at the top of
our agenda and we continue to work to embed a strong safety culture in all of
our operations.
This has been another very successful year for the Group against a background of
global uncertainty. Despite the more difficult trading conditions, all three of
our businesses showed a welcome resilience and demonstrated the underlying
quality of our operations. Turnover from continuing operations has increased by
7% to £2,164 million and profit before tax, goodwill and exceptional items
increased by 5% to £156.7 million. Adjusted basic earnings per share has
increased by 10% to 25.8p and the Board has proposed a final dividend, subject
to approval by shareholders, of 7p making a full year payment of 10.3p, an
increase of 10%.
The Group's strategy is to continue to develop its three core businesses, UK
Bus, US Bus and UK Rail. UK Bus offers opportunities for organic growth through
more efficient management and operational delivery linked to better marketing
and promotion of our services. The US continues to offer significant
opportunities for expansion both in yellow school bus as well as transit
contracting and management and vehicle maintenance. We have strengthened the
management team in the US and the focus remains on delivering a high return on
our investment.
In UK Rail we believe that we have an excellent record of delivering benefits to
passengers in our two main rail companies First Great Eastern and First Great
Western. It is our priority to extend these franchises as well as bidding for
new franchises such as TransPennine Express and Northern.
In our view the private sector has much to offer in the re-generation of the
UK's transport system. We will continue to build on the strong partnerships we
have developed, since the formation of the company, with customers, local
authorities and the communities where we operate. We believe that our industry
has demonstrated the success of these voluntary Quality Partnerships through the
level of new investment we have made. As a result we believe that the future
does not lie with increased regulation, but through the commitment of Government
and local authorities to deliver the necessary traffic priority measures and
infrastructure investment required for public transport to succeed.
I am pleased to announce the appointment of John Sievwright to the Board as a
non-executive Director. John is a Chartered Accountant and has held various
senior management positions in banking in the UK, USA and Japan. He will bring
extensive international financial experience to the Board. At the end of
November 2001, Tony Osbaldiston, Deputy Chief Executive, left the Group. I would
like to thank Tony for his contribution to the development of the business over
the last seven years.
We have a dedicated workforce and once again, I would like to pay tribute to
their continued commitment to the business. I believe that we are well placed to
continue to develop our businesses in both the UK and North America. As part of
the longer-term development of the Group we continue to appraise opportunities
in related fields which will enhance shareholder value. I look forward to the
future with confidence.
Martin Gilbert
Chairman
Chief Executive's operating review
Overview
The trading environment during the past year has been more difficult on both
sides of the Atlantic and global uncertainties remain. The UK rail network
experienced continued disruption as a result of the emergency engineering work
undertaken by Railtrack in the aftermath of the Hatfield accident. It is too
early to determine what effect the accident at Potters Bar may have on the rail
industry as a whole. Safety remains at the heart of everything we do and our
priority continues to be to reinforce a culture of safety throughout our
company.
Despite these uncertainties, I am pleased to report another set of strong
results for the Group. Operating profit* rose to £219.2 million an increase of
6%, (2001: £207.0 million excluding Bristol International Airport). We have seen
an increase in operating profit across all of our three divisions and continued
strong cashflow of £314.3 million (2001: £293.3 million excluding Bristol
International Airport). During the year we have continued to invest in the
business and capital expenditure has increased to £153.4 million.
This year we have embarked on a major business change programme, 'Transforming
Travel', to help us improve efficiency, motivate our staff and focus on service
delivery. Integral to this is the re-launch of the 'First' brand as a single
unified identity that our customers, staff and stakeholders can recognise across
all our businesses. Our overriding aim is to improve the travel experience for
our customers and change the perceptions of public transport.
UK Bus
Turnover increased by 3% to £811.5 million (2001: £788.6 million) and operating
profit before financing costs increased to £105.7 million (2001: £105.0
million). This was a good result in the light of the significant increase in the
price of oil which had a major impact on the cost base of the division last
year. During the year the division continued to experience encouraging growth in
passenger volumes, which increased by 1.4%. Growth was particularly strong in
cities such as Glasgow, Leeds, Aberdeen, York and Plymouth where we have
introduced Quality Partnerships and 'The Overground', our simplified route and
fares structure. In these areas there have been increases of up to 11%. In
London, where we operate bus services on behalf of Transport for London (TfL),
operating mileage has also continued to grow strongly.
UK Bus has also enjoyed success in a number of areas where it has been able to
develop Quality Partnerships with local authorities to introduce improved bus
priority measures. Flagship schemes that have opened in the last twelve months
include new guided busways in Bradford (November) and Leeds (February). In the
short periods since opening, passenger volumes on these schemes are already
showing encouraging increases. During the year additional bus priority and park
and ride schemes have been successfully introduced in Bristol, Glasgow and York.
We believe that such schemes are critical in maintaining the impetus to increase
bus usage countrywide and to achieve the Government's aspirations to increase
bus travel by 10% over the next ten years.
As part of our 'Transforming Travel' vision we are focusing on improving the
quality of service we offer to our customers. Key to this is the training and
motivation of staff. We have now introduced improved recruitment and training
techniques for drivers and this has already resulted in a welcome reduction in
staff turnover. Improved benefits packages for application at local level are
also being developed to assist in staff retention and encourage skill
development and lifetime learning. In addition we are introducing new marketing
programmes which include more attractive ticketing structures, simplified
information and a range of promotional activities designed to widen the appeal
of our services and create more value for money travel opportunities.
*Operating profit in the remainder of the Chief Executive's Operating Review and
the Financial Review refers to continuing operating profit before ESOP, goodwill
and restructuring and other exceptional costs.
We have continued to develop our trial programme of US style yellow school buses
in the UK. Two pilot schemes were successfully started during the year in
Yorkshire and Surrey and a further scheme will start in Wrexham in June 2002. It
is hoped that the success of these schemes will lead to other local authorities
moving to this concept, which provides a proven, safe method of transporting
children and offers a solution to traffic congestion created by the 'school
run'.
UK Rail
Turnover in the Group's three train operating companies was £802.9 million
(2001: £761.2 million), an increase of 5.5%. Operating profit, which benefited
substantially from the re-negotiation of the First North Western franchise, was
£66.8 million (2001: £56.2 million).
The results for the year reflect two main events. In March 2001 the Group
concluded an agreement with the Strategic Rail Authority (SRA) to amend the
terms of the franchise agreement for First North Western and increase the
operating subsidy for 2002 to eliminate losses on the franchise.
Secondly, as predicted at the half year, passenger volumes on First Great
Western and First Great Eastern recovered during the second half of the year as
we moved into the post-Hatfield comparative period.
Although total passenger volumes have returned to pre-Hatfield levels, at this
stage it is too early to say when the rates of passenger growth will fully
recover, particularly in the light of the Potters Bar accident. However, early
indications are that as reliability is restored growth is returning. Speed
restrictions are now at a lower level with a general improvement in train
service reliability. Since September, punctuality in our three train operating
companies has improved and customer complaints have been reduced by over 20%.
First Great Western has put in place an £18 million package of improvements to
the existing High Speed Train fleet. As part of the continued focus on customer
service action has been taken to provide cleaner, tidier stations and additional
employees have been recruited at key stations and on-board trains. We are now
focusing on an enhanced programme of marketing and on train service targeted at
particular market segments. For example, First Great Western has introduced 'The
Travelling Chef' a new catering facility provided on peak train services which
recently won the prestigious HSBC Rail Business Award.
In June 2002 the first of 70 new 'Adelante' 125mph vehicles will be introduced
in to timetabled service on the Great Western main line. These new trains, which
have already undergone extensive testing and consumer evaluation, will provide
much needed additional capacity and enable First Great Western to operate the
most frequent service ever to Bristol and Cardiff. New trains will also be
introduced on First Great Eastern in 2003, replacing the last of the slam door
rolling stock. These new class 360 Desiro units will provide greater levels of
comfort for commuters to Colchester and Essex.
We welcome the opportunity to work with the new team at the SRA. Our priority is
to put forward proposals for the enlargement of the First Great Eastern and
First Great Western franchises. We believe we can offer passengers immediate
improvements to services through the amalgamation of services at Liverpool
Street and Paddington stations. In addition we are bidding for two of the
successor franchises to First North Western - Transpennine Express and Northern.
We have a strong service record in these regions through our bus and rail
operations and we will offer attractive and cost effective proposals for these
railways.
North America
The United States is the largest transport market in the western world. In North
America we operate in three sub-sectors: school bus, transit contracting and
management and vehicle maintenance services which in total are worth some $30
billion in annual revenues. We have strong positions in these highly fragmented
markets and, as the second largest school bus operator, and a leading provider
of transit contracting and management and vehicle maintenance services, we have
significant opportunities for further expansion. We have restructured and
strengthened the senior management team in the US with the appointment of a new
President for FirstGroup America, and the creation of a new post of President
for First Vehicle Services. Both of these positions will be based in Cincinnati.
Turnover from our three North American operations was £542.9 million (2001:
£462.7 million) an increase of 14% excluding exchange rate movements. Operating
profit was £60.8 million (2001: £56.3 million) an increase of 4.5% excluding
exchange rate movements. This performance reflects the particularly high level
of new school bus business won in 2001 (12% up from the start of the new term in
September 2001). However, this growth was to some extent offset by extra start
up costs incurred on a new school bus contract in Jacksonville, Florida and a
transit contract in Dallas, Texas which impacted our results by £2.5 million.
During the year First Student expanded into five new states. The acquisition of
four companies running 320 school buses took the division into Maine and
Wisconsin and there were contract wins in Florida, Alaska and North Carolina.
Contracts for a total of 1,800 additional buses started during the year, of
which some 800 buses were accounted for by three particularly large contracts.
At 31 March 2002 First Student operated 14,800 school buses in 33 states across
the US and Canada.
Bidding for new school bus contracts is now underway. Whilst we do not
anticipate matching the particularly high level of contract wins made last year,
we are confident we will see another healthy increase in our school bus business
during the current year.
First Transit also had a successful year. We retained over 90% of the division's
contracts, which were due to be renewed, and net new business with an annualised
turnover of approximately $30 million was won. Important new contracts were
gained in Denver, East Bay in San Francisco and Houston. First Transit also
expanded into the states of Arkansas and Wyoming for the first time. We were
also pleased to announce our first para-transit contract win in Canada, where we
were awarded the contract to provide wheelchair accessible public transportation
services for the city of Ottawa.
First Vehicle has also continued to expand with significant new contract wins in
Florida where it was successful in gaining its first state contract award from
the Florida Department of Transportation. New contracts were also won in
Massachusetts and the District of Columbia. In addition, based on its proven
quality and service record, First Vehicle Services was successful in retaining a
number of important contracts such as Allegheny County in Pennsylvania, Galloway
and Neptune in New Jersey and Wilmington in Delaware. We believe that this
division has great potential for further growth and the appointment of a new
President will increase the impetus to actively develop this part of the
business.
The consolidation of the accounting and management systems in North America was
completed at the beginning of the year with the relocation of the head office of
First Student from St Louis to Cincinnati.
Going forward, the US business is expected to generate sufficient free cashflow
each year to enable the division to become self financing for capital
expenditure, while still being able to sustain strong growth through contract
wins and new business acquisitions. We will continue to focus on tight cost
control within the business and, in particular, we will be managing the issues
of increased insurance and fuel costs.
We believe that the outlook for the growth of the North American business is
excellent. Increasing pressure on tax revenues at Federal and State levels
should speed up the move towards outsourcing. Furthermore, 'best value'
legislation is being proposed which should also increase the rate of transfer
to the private sector.
In our three existing business divisions we have made good in-roads in
geographical areas where we do not already have a presence. The high quality of
our start-ups has also enhanced our reputation with potential customers. We will
also continue to look for attractive opportunities for strategic expansion in
related business fields within North America, where we can build on our
outsourcing expertise.
Outlook
Despite the ongoing market uncertainties, this is an exciting time for the
Group. In all the markets in which we operate there are opportunities for
further growth. In UK Bus we are focusing on improved marketing and service
delivery. In UK Rail we are encouraged by the prospect of new and enlarged
railway franchises. In North America there remain significant opportunities for
further growth. Trading in the new financial year has started well and is in
line with our expectations.
Moir Lockhead
Chief Executive
Financial review
Overall
Group turnover in the year increased by £110.1 million, or 5.3%, to £2,164.1
million. Continuing Group operating profit, before ESOP, goodwill and one-off
costs, was £219.2 million, an increase of £12.2 million, or 5.9% on 2001.
Divisional Results
Year to 31 March 2002 Year to 31 March 2001
Operating Operating Operating Operating
Turnover profit# margin# Turnover profit# margin#
£m £m % £m £m %
UK Bus Division 811.5 105.7 13.0 788.6 105.0 13.3
North America Division 542.9 60.8 11.2 462.7 56.3 12.2
Rail Division 802.9 66.8 8.3 761.2 56.2 7.4
Financing elements of leases*
- (3.4) - - - -
Other** 6.8 (10.7) - 6.6 (10.5) -
Continuing Group 2,164.1 219.2 10.1 2,019.1 207.0 10.3
Bristol International Airport - - - 34.9 11.5 32.8
Total Group 2,164.1 219.2 10.1 2,054.0 218.5 10.6
# Before ESOP, goodwill and restructuring and other exceptional costs
* Financing elements of UK PCV operating lease costs
** Tram operations, central management, Group information technology, and
other items
Revenue in the UK Bus Division grew by £22.9 million to £811.5 million, or 4.4%
after allowing for the extra week's trading last year. Passenger volumes rose
1.4% on a comparable basis, after allowing for the extra week and other one off
effects last year. This was as a result of successful additional London tenders
and growth outside London. Fuel costs were £5.1 million higher than last year,
with the increased oil price under the four year cap which commenced in April
2001, partially offset by the increased fuel duty rebate on Ultra Low Sulphur
Diesel. This and other cost pressures, particularly on drivers' wages, led to
the margin falling 0.3% to 13.0%.
The financing element of leases totalling £3.4 million has been disclosed
separately in the divisional results. During the year we rolled out further
contract hire and maintenance schemes in York and Leicester. We now have some
850 vehicles leased from and maintained by the manufacturer. This has achieved
operational benefits and fleet standardisation focused on growth areas.
Additionally, we entered in to further operating leases for our London
contracts, which are co-terminus the contract periods.
The North America Division's turnover grew by £80.2 million to £542.9 million.
The majority of the increase in business was in First Student where we were
successful in winning net new contracts for 1600 school buses. Operating profit
increased by £4.5 million. Operating margin at 11.2% was 1.0% down on last year
principally due to difficulties encountered on new contracts in Dallas and
Jacksonville, which have subsequently been addressed. In particular Jacksonville
proved to be a difficult contract during the start-up phase as a result of
litigation and recruitment issues that were resolved during the year. We believe
that this has enhanced our reputation and has given us competitive advantage in
winning and managing new work.
Rail Division revenue was £41.7 million up on last year largely through
increased subsidies as a result of the new financial arrangement in respect of
the North Western franchise. Shortfalls in passenger revenue arising from delays
and disruption caused by speed restrictions have been largely matched by
compensation through the performance regime. Operating profit at £66.8 million,
was £10.6 million higher than last year. Passenger revenue was 4% up on last
year, with the first half down by 3% due to the disruption following the
Hatfield accident, and the second half up by 11%. The overall passenger growth
on the previous year, before the Hatfield accident, was 5.1%. During the year
additional compensation of £17.3 million for gauge corner cracking was received,
reflecting the loss of future revenue growth post-Hatfield. Accordingly, this
will be recognised in 2002/03.
Exceptional costs
Exceptional costs include a charge of £8.0 million for the provision against the
unamortised cost of investments in totaljourney.com and Prepayment Cards Limited
(PCL). The £10.9 million of other items includes £5.3 million in North America
for restructuring and transition costs, £2.1 million for UK restructuring costs,
£2.0 million for abortive rail bid costs and £1.5m in respect of industrial
action in North America.
Joint Ventures and Associates
The Group's share of losses in totaljourney.com amounted to £1.6 million in the
period up to this company ceasing operations, and our share of losses in PCL
during the year was £0.4 million. Our shareholding in PCL was diluted shortly
after the year-end and it will be accounted for as a trade investment in future.
As explained above we have fully provided against our investments in both
companies. During the year we also entered into an agreement to dispose of our
interest in Tramtrack Croydon Limited and completion of this sale is expected
later in the year.
Goodwill amortisation
The overall goodwill charge this year was £29.3 million, including £26.8 million
in North America and £2.0 million on joint ventures and associates. The £1.5
million increase over last year is mainly due to North American acquisitions
during the year and the full year effect of acquisitions made last year.
Interest
Net interest payable was £56.3 million (2001: £64.5 million). This was covered
5.6 times by cash generation. The reduction in the interest charge over the
previous year principally reflects the full year effect of the reduction in net
debt following the disposal of Bristol International Airport in January 2001.
Employee Share Ownership Plan (ESOP)
The charge for the ESOP represents 5% of profits earned in the UK. The
appropriation of £4.2 million (2001: £4.2 million) will be shared among an
estimated 27,000 eligible UK employees.
Acquisitions and disposals
During the year the Group acquired four school bus companies in North American
for a total cash consideration of £6.1 million. Goodwill arising on these
acquisitions amounted to £4.2 million.
Taxation
The Group has adopted FRS 19, which has involved moving from a partial provision
basis for deferred tax to a full provision basis, and prior year comparatives
have been restated to reflect this change. The restatement of the tax charge has
resulted in an increase in the profit and loss charge of £13.2 million for the
year to 31 March 2001 and the restatement of the balance sheet deferred tax
provision at
31 March 2001 has resulted in an increase of £58.8 million to £71.1 million. It
should be noted that these changes have no cash impact. The tax charge for the
year of £33.9 million is an effective rate of 31.0%. This compares to a current
tax rate of 23.4%.
Cash flow and investment in the business
Cash generation (operating profit, before ESOP, goodwill and one-off costs, plus
depreciation) was £314.3 million, 7.2% higher than last year's £293.3 million
(excluding Bristol International Airport). Capital expenditure was £153.4
million. The majority of capital expenditure was in the US where £121.8 million
was spent primarily on 2,665 new vehicles which supported existing and new
contracts.
Balance sheet
Net assets of the Group increased from £400.7 million to £422.3 million. The
main element of the increase was £32.4 million of retained profit which was
offset by a £3.2 million foreign exchange movement and £7.7 million of share
repurchases. The Group's net debt has fallen over the year by £8.2 million to
£652.5 million, reflecting the Group's strong operating cash flow which remains
positive after high capital expenditure and the payment of the £37.0 million in
connection with the North Western Trains franchise.
Funding and risk management
In February the Group issued a £300.0 million 11 year 6.875% fixed rate sterling
bond. The issue was well received by the market and as a result was
significantly over-subscribed. The proceeds were received just before year end
and were largely used to repay certain shorter-term facilities. The bond issue
was significant, being the first time the Group has raised this type of debt in
the market. It also enabled the Group to increase the diversity of its debt
profile.
The Group only borrows to finance investment and provide working capital. It
does not enter into speculative financial transactions and uses financial
instruments for risk management purposes only. As the Group is a net borrower,
it minimises cash and bank deposits, although it can only withdraw cash and bank
deposits from the rail companies to the extent of retained profits. Cash
received in advance for rail season tickets is protected by an insurance
arrangement approved by the SRA, which has replaced the bonded cash. The Group
limits deposits with any one bank to a maximum of £30 million, depending upon
the individual bank's credit rating. The Group reduces exposure to interest rate
risk by using interest rate swaps and fixed rate debt.
Analysis of net debt
Fixed Variable Total
£m £m £m
Cash 65.2 - 65.2
Rail ring fenced cash 36.2 - 36.2
Sterling bank loans and overdrafts - (45.0) (45.0)
US dollar bank loans - (262.6) (262.6)
Canadian dollar bank loans - (7.5) (7.5)
Bond (2013 6.875%) (294.8) - (294.8)
HP and finance leases (98.9) (20.7) (119.6)
Loan notes (9.2) (15.2) (24.4)
Interest rate caps and swaps (175.3) 175.3 -
Total (476.8) (175.7) (652.5)
The maturity profile of banking facilities is regularly reviewed. Well in
advance of their expiry, the facilities are extended or replaced. At the year
end, bank borrowing and guarantee facilities amounted to £585 million, of which
£275 million had more than two years to maturity. This compares with total
utilisation of £315 million.
The Group hedges part of its exposure to the impact of exchange rate movements
on translation of foreign currency net assets by holding net borrowings in
foreign currencies. The Group manages exposure to fuel price movements by
entering contracts with suppliers to cap or fix the purchase price for future
periods.
Shares in issue
During the year, 2.6 million shares were repurchased and cancelled at a total
cost of £7.7 million with the total number of shares in issue decreasing from
422.4 million to 419.8 million. For the purpose of the earnings per share (EPS)
calculation (excluding 1.0m own shares held in trust for employees), the average
number of shares in issue for the year was 419.8 million. If the number of
shares remained unchanged for the forthcoming year, the average number in issue,
for the EPS calculation, would be 418.8 million.
Foreign exchange
The profits from the US have been translated at an average rate of £1:$1.44
(2001: £1:$1.49). The year end rate was £1:$1.43, compared with £1:$1.42 last
year.
Accounting standards and policies
As explained above, FRS 19 Deferred Tax was adopted during the year ended 31
March 2002. As a result the Group's policy for deferred tax has changed from
partial provision to full provision. Prior year figures have been restated to
reflect the new policy. More details are given in note 1.
The Group intends to follow the phased implementation of FRS 17 Retirement
Benefits provided for in its transitional arrangements, which will be fully
incorporated in our financial statements from the year ended 31 March 2004
onwards. The Group operates a number of individual pension schemes and the total
market value of the assets of the schemes at 31 March 2002 was £1.3 billion. If
FRS17 had been applied the net pension deficit after tax would have been £26.1
million. At this stage we believe that the profit and loss impact of adopting
FRS 17 would not be material to the Group.
Iain M Lanaghan
Group Finance Director
Consolidated profit and loss account
For the year ended 31 March 2002
Notes Before Goodwill and
goodwill and exceptional
Before exceptional items
goodwill and items
exceptional Goodwill and 2001
items exceptional 2001
items Restated Total
2002 2002 Total Restated 2001
2002 Restated
£m £m £m £m £m £m
Turnover
Continuing operations 2,159.4 - 2,159.4 2,019.1 - 2,019.1
Acquisitions 4.7 - 4.7 - - -
2,164.1 - 2,164.1 2,019.1 - 2,019.1
Discontinued - - - 34.9 - 34.9
operations
Group turnover 2 2,164.1 - 2,164.1 2,054.0 - 2,054.0
Share of turnover of
joint ventures 0.1 - 0.1 2.1 - 2.1
Total turnover 2,164.2 - 2,164.2 2,056.1 - 2,056.1
Operating profit
Continuing operations 214.2 (46.1) 168.1 202.8 (79.4) 123.4
Acquisitions 0.8 (0.1) 0.7 - - -
215.0 (46.2) 168.8 202.8 (79.4) 123.4
Discontinued - - - 11.5 - 11.5
operations
Group operating profit 2 215.0 (46.2) 168.8 214.3 (79.4) 134.9
Group operating profit
before goodwill and
exceptional costs 219.2 - 219.2 218.5 - 218.5
FNW franchise amendment 4 - - - - (39.9) (39.9)
Other exceptional costs 4 - (18.9) (18.9) - (13.6) (13.6)
Goodwill amortisation 2 - (27.3) (27.3) - (25.9) (25.9)
Employees' profit
sharing scheme 2 (4.2) - (4.2) (4.2) - (4.2)
Group operating profit 2 215.0 (46.2) 168.8 214.3 (79.4) 134.9
Share of operating
losses of joint ventures (1.6) - (1.6) (0.8) - (0.8)
Share of operating
losses of associate (0.4) - (0.4) (0.2) - (0.2)
Amortisation of goodwill
on associate - (1.4) (1.4) - (1.8) (1.8)
Amortisation of goodwill
on joint ventures - (0.6) (0.6) - (0.1) (0.1)
Total operating profit 213.0 (48.2) 164.8 213.3 (81.3) 132.0
Profit on disposal of
businesses -
discontinued operations 6 - - - - 69.4 69.4
Profit/(loss) on
disposal of fixed assets
- continuing operations - 1.0 1.0 - (0.1) (0.1)
Profit on ordinary
activities before
interest 2 213.0 (47.2) 165.8 213.3 (12.0) 201.3
Net interest payable and
similar charges 7 (56.3) - (56.3) (64.5) - (64.5)
Profit on ordinary
activities before
taxation 156.7 (47.2) 109.5 148.8 (12.0) 136.8
Tax on profit on
ordinary activities
8 (48.1) 14.2 (33.9) (46.0) (9.2) (55.2)
Profit on ordinary
activities after
taxation 108.6 (33.0) 75.6 102.8 (21.2) 81.6
Equity minority (0.1) - (0.1) (3.9) - (3.9)
interests
Profit for the financial 108.5 (33.0) 75.5 98.9 (21.2) 77.7
year
Equity dividends paid
and proposed 9 (43.1) - (43.1) (38.8) - (38.8)
Retained profit for the
financial year 21 65.4 (33.0) 32.4 60.1 (21.2) 38.9
Adjusted Actual Adjusted Actual
Basic earnings per share 10 25.8p 18.0p 23.4p 18.4p
Cash earnings per share 10 48.5p - 44.1p -
Diluted earnings per - 17.9p - 18.3p
share
Consolidated balance sheet
At 31 March 2002
Notes 2002 2001
Restated
£m £m
Assets employed:
Fixed assets
Intangible assets 11 547.0 573.6
Tangible assets 12 797.5 742.0
Investments
- Joint ventures
- Goodwill - 2.6
- Share of gross assets - 35.1
- Share of gross liabilities - (34.3)
- Shareholder loans - 1.1
- 4.5
- Other 1.5 7.6
13 1.5 12.1
1,346.0 1,327.7
Current assets
Stocks 14 25.0 23.5
Debtors 15 285.9 279.3
Investments 16 60.4 11.8
Cash at bank and in hand 17 41.0 66.6
412.3 381.2
Creditors: amounts falling
due within one year 18 (537.4) (591.8)
Net current (liabilities)/assets
Due within one year (155.1) (237.2)
Amounts due after more than one year 15 30.0 26.6
Net current (liabilities)/assets (125.1) (210.6)
Total assets less current liabilities 1,220.9 1,117.1
Creditors: amounts falling
due after more than one year 18 (687.9) (622.6)
Provisions for liabilities and charges 19 (110.7) (93.8)
422.3 400.7
Financed by:
Capital and reserves
Called up share capital 21.0 21.1
Share premium account 21 236.7 236.7
Revaluation reserve 21 3.6 3.6
Other reserves 21 3.5 3.4
Profit and loss account 21 156.5 135.0
Equity shareholders' funds 421.3 399.8
Equity minority interests 1.0 0.9
422.3 400.7
Consolidated cash flow statement
For the year ended 31 March 2002
Notes 2002 2001
£m £m
Net cash inflow from operating activities 22(a) 310.3 261.8
Returns on investments and servicing of finance 22(b) (65.8) (54.6)
Taxation
Corporation tax paid (37.6) (20.3)
Capital expenditure and financial investment 22(c) (140.3) (50.4)
Acquisitions and disposals 22(d) (14.0) 151.2
Equity dividends paid (40.7) (36.9)
Cash inflow before use of liquid
resources and financing 11.9 250.8
Management of liquid resources
Increase in bank deposits (48.6) (0.6)
Financing 22(e) 13.8 (227.5)
(Decrease)/increase in cash in year (22.9) 22.7
Reconciliation of net cash flows to movements in net debt
For the year ended 31 March 2002
Notes 2002 2001
£m £m
(Decrease)/increase in cash in year (22.9) 22.7
Cash (inflow)/outflow from (increase)/decrease in debt and hire
purchase contract and finance lease financing (21.4) 199.8
Movement in current asset investments 48.6 (37.0)
Debt and hire purchase contracts and finance leases
acquired with subsidiary undertakings and businesses - (2.2)
Inception of hire purchase contracts and finance leases - (42.5)
Fees on issue of Bond 5.2 -
Amortisation of debt issuance fees (1.2) (0.4)
Foreign exchange difference (0.1) (21.3)
Movement in net debt in year 8.2 119.1
Net debt at beginning of year 23 (660.7) (779.8)
Net debt at end of year 23 (652.5) (660.7)
Consolidated statement of total recognised gains and losses
For the year ended 31 March 2002
2002 2001
Restated
£m £m
Profit for the year attributable to shareholders 75.5 77.7
Foreign exchange differences (3.2) 60.0
Total recognised gains and losses 72.3 137.7
Prior period adjustment on adoption of FRS 19 (58.8)
Total recognised gains and losses since the last
annual report 13.5
Reconciliation of movements in shareholders' funds
For the year ended 31 March 2002
2002 2001
Restated
£m £m
Profit for the financial year 75.5 77.7
Dividends (43.1) (38.8)
32.4 38.9
Shares issued:
- to QUEST - 2.6
- in respect of exercise of savings related and - 0.5
executive share options
Own shares purchased and cancelled (7.7) (31.1)
Write down of own shares held by QUEST - (1.5)
Goodwill written back on disposal of businesses - 39.8
Foreign exchange differences (3.2) 60.0
Net addition to shareholders' funds 21.5 109.2
Shareholders' funds at beginning of year 399.8 290.6
Shareholders' funds at end of year 421.3 399.8
1 Principal accounting policies
The financial information set out herein does not constitute the Group's
statutory accounts but has been extracted from the accounts for the years ended
31 March 2001 and 2002. The accounts for the year ended 31 March 2001 have been
delivered to the Registrar of Companies and the accounts for the year ended 31
March 2002 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 2002 have been prepared using the same
accounting policies as were used in the preparation of the accounts for the year
ended 31 March 2001 with the exception of deferred taxation where FRS 19 has
been adopted.
The Group has adopted FRS19, which has involved moving from a partial provision
basis for deferred tax to a full provision basis, and prior year comparatives
have been restated to reflect this change. The restatement of the tax charge has
resulted in an increase of £13.2m for the year to 31 March 2001. The restatement
of the deferred tax provision at 31 March 2001 has resulted in an increase of
£58.8m to £71.1m and a reduction in equity shareholders' funds of £58.8m to
£399.8m.
Copies of the summary financial statements or statutory accounts for the year
ended 31 March 2002 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 AB 24 5RP.
2 Profit and loss account analysis and segmental information
Continuing Total Continuing Discontinued Total
operations operations operations
Acquisitions 2002 2001
£m £m £m £m £m £m
Group turnover 2,159.4 4.7 2,164.1 2,019.1 34.9 2,054.0
Group operating
costs
- General (1,941.0) (3.9) (1,944.9) (1,812.1) (23.4) (1,835.5)
- Goodwill
amortisation (27.2) (0.1) (27.3) (25.9) - (25.9)
- Exceptional
costs (note 4) (18.9) - (18.9) (53.5) - (53.5)
- Employees'
profit sharing
scheme (4.2) - (4.2) (4.2) - (4.2)
Total Group
operating costs
(note 3) (1,991.3) (4.0) (1,995.3) (1,895.7) (23.4) (1,919.1)
Group operating
profit 168.1 0.7 168.8 123.4 11.5 134.9
The discontinued operation in 2001 was Bristol International Airport.
2 Profit and loss account analysis and segmental information (continued)
Segmental information is as follows:
Turnover Profit before interest Net assets
/(liabilities)
2002 2001 2002 2001 2002 2001
Restated
£m £m £m £m £m £m
UK Bus 811.5 788.6 102.9 95.8 237.4 146.2
UK Rail 802.9 761.2 66.5 16.2 4.3 (80.2)
North America 542.9 462.7 27.3 25.7 521.9 305.4
Airport - 34.9 - 11.5 - -
Group items 6.8 6.6 (30.9) 52.1 (342.3) 28.4
2,164.1 2,054.0 165.8 201.3 421.3 399.8
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
Continuing Total Continuing Discontinued Total
operations operations operations
Acquisitions 2002 2001
£m £m £m £m £m £m
Materials and
consumables 232.7 0.3 233.0 234.9 1.1 236.0
Staff costs (note
5) 942.5 2.5 945.0 854.8 5.4 860.2
External charges 686.2 0.7 686.9 688.8 14.8 703.6
Depreciation,
amortisation and
other amounts
written off fixed
assets 129.9 0.5 130.4 117.2 2.1 119.3
1,991.3 4.0 1,995.3 1,895.7 23.4 1,919.1
This information is provided by RNS
The company news service from the London Stock Exchange
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