REG - Balfour Beatty PLC - Half Year Results <Origin Href="QuoteRef">BALF.L</Origin> - Part 2
12/08/2015 07:01
- Part 2: For the preceding part double click ID:nRSL7766Va
were £247 million (2014: £91 million). This was mostly offset by an operating working capital inflow of
£211 million (2014: outflow £195 million).
Working capital
Including the impact of foreign exchange, negative operating working capital increased from £731 million at the end of 2014
to £965 million at June 2015. The increase is mainly driven by Construction Services, where an increase in negative working
capital of £202 million has occurred. Working capital for all other segments remain broadly in line with December 2014's
position, including the impact of exchange.
A portion of the Group's working capital inflow is a result of contract performance deteriorations in both the UK and US
construction businesses, and risk contingencies taken on a number of contracts across both businesses. These impact the
movements in the Group's due to/from construction contract customers and provision balances.
Excluding the effects of working capital movements in the Group's due to/from construction contract customers and provision
balances, the Group generated a working capital inflow of £42 million from its trade and other receivables. This is a
favourable movement from FY 2014 whereby the Group generated a working capital outflow of £43 million. The Group also
generated a more favourable working capital inflow from inventories and non-construction work in progress, increasing
favourably from an outflow of £30 million in FY 2014 to a £19 million working capital inflow in H1 2015. These movements
reflect the Group's improvements in its billing and WIP management, converting debtors and WIP into cash at a quicker
rate.
Offsetting this is a working capital outflow in trade and other payables of £30 million at the half-year (FY 2014: £85
million inflow).
Net borrowings
Average net borrowings in the six-month period were £16 million (H2 2014: £318 million).
The Group's net cash position at 26 June 2015 was £260 million (FY 2014: £219 million), representing a £41 million inflow
during the period, before taking into account the consolidation of £327 million (FY 2014: £445 million) of non-recourse net
borrowings held in wholly owned infrastructure concessions. The balance sheet also includes £97 million for the liability
component of the preference shares.
Banking facilities
The Group's principal committed banking facilities total £760 million and extend through to November 2016. The purpose of
these facilities, and other small facilities, is to provide liquidity from a group of core relationship banks to support
Balfour Beatty in its current and future activities. Over time, as the Group's business has evolved and particularly
reflecting the long-term nature of the Investments portfolio, the Group diversified its sources of funds away from the
shorter term bank market through the issue of US$350 million of US private placement notes in March 2013 with maturities up
to 2025, and £253 million of unsecured convertible bonds due in December 2018.
At 26 June 2015, the Group's £760 million of committed bank facilities were undrawn.
Responsibility statement
We confirm that to the best of our knowledge:
· the condensed Group financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting;
· the interim management report, as required by Disclosure and Transparency Rules 4.2.7R and 4.2.8R, includes a fair
review of:
o important events during the half-year ended 26 June 2015 and their impact on the condensed Group financial statements;
o a description of the principal risks and uncertainties for the second half of the year; and
o related parties' transactions and changes therein.
On behalf of the Board
Leo Quinn Phil Harrison
Group Chief Executive Chief Financial Officer
11 August 2015
ENDS
Forward-looking statements
This announcement may include certain forward-looking statements, beliefs or opinions, including statements with respect to
Balfour Beatty plc's business, financial condition and results of operations. These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "anticipates",
"targets", "aims", "continues", "expects", "intends", "hopes", "may", "will", "would", "could" or "should" or, in each
case, their negative or other various or comparable terminology. These statements are made by the Balfour Beatty plc
Directors in good faith based on the information available to them at the date of this announcement and reflect the Balfour
Beatty plc Directors' beliefs and expectations. By their nature these statements involve risk and uncertainty because they
relate to events and depend on circumstances that may or may not occur in the future. A number of factors could cause
actual results and developments to differ materially from those expressed or implied by the forward-looking statements,
including, without limitation, developments in the global economy, changes in UK and US government policies, spending and
procurement methodologies, and failure in Balfour Beatty's health, safety or environmental policies.
No representation or warranty is made that any of these statements or forecasts will come to pass or that any forecast
results will be achieved. Forward-looking statements speak only as at the date of this announcement and Balfour Beatty plc
and its advisers expressly disclaim any obligations or undertaking to release any update of, or revisions to, any
forward-looking statements in this announcement. No statement in the announcement is intended to be, or intended to be
construed as, a profit forecast or profit estimate or to be interpreted to mean that earnings per Balfour Beatty plc share
for the current or future financial years will necessarily match or exceed the historical earnings per Balfour Beatty plc
share. As a result, you are cautioned not to place any undue reliance on such forward-looking statements.
INDEPENDENT REVIEW REPORT TO BALFOUR BEATTY PLC
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report
for the six months ended 26 June 2015 which comprises the Condensed Group Income Statement, the Condensed Group Statement
of Comprehensive Income, the Condensed Group Statement of Changes in Equity, the Condensed Group Balance Sheet, the
Condensed Group Statement of Cash Flows and related Notes 1 to 26. We have read the other information contained in the
half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with
the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland)
2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" 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 it 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 half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are
responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
As disclosed in Note 1.1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by
the European Union. The condensed set of financial statements included in this half-yearly financial report has been
prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" as adopted by the European
Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the
half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board
for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland)
and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial
statements in the half-yearly financial report for the six months ended 26 June 2015 is not prepared, in all material
respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and
Transparency Rules of the United Kingdom's Financial Conduct Authority.
Deloitte LLP
Chartered Accountants and Statutory Auditor
London, United Kingdom
11 August 2015
Condensed Group Income Statement
For the half-year ended 26 June 2015
2015 first half unaudited 2014 first half unaudited2,3,4,5 2014 year audited
Notes UnderlyingItems1£m Non-underlying items (Note 7)£m Total£m Underlying items1£m Non-underlyingitems(Note 7)£m Total £m Underlying items1£m Non-underlyingitems(Note 7)£m Total £m
Continuing operations
Revenue including share 4,085 106 4,191 4,072 153 4,225 8,440 353 8,793
of joint ventures and
associates
Share of revenue of 4 (714) (11) (725) (670) - (670) (1,490) (39) (1,529)
joint ventures and
associates
Group revenue 3,371 95 3,466 3,402 153 3,555 6,950 314 7,264
Cost of sales (3,381) (94) (3,475) (3,240) (196) (3,436) (6,723) (410) (7,133)
Gross (loss)/profit (10) 1 (9) 162 (43) 119 227 (96) 131
Gain on disposals of 19 84 - 84 51 - 51 93 - 93
interests in investments
Amortisation of acquired - (5) (5) - (5) (5) - (11) (11)
intangible assets
Other net operating (202) (16) (218) (226) (23) (249) (433) (114) (547)
expenses
Group operating (128) (20) (148) (13) (71) (84) (113) (221) (334)
(loss)/profit
Share of results of 4 8 - 8 42 (1) 41 55 (2) 53
joint ventures and
associates
(Loss)/profit from (120) (20) (140) 29 (72) (43) (58) (223) (281)
operations
Investment income 5 26 - 26 30 - 30 64 - 64
Finance costs 6 (36) - (36) (44) (1) (45) (86) (1) (87)
(Loss)/profit before (130) (20) (150) 15 (73) (58) (80) (224) (304)
taxation
Taxation 8 (4) 3 (1) 7 8 15 2 1 3
(Loss)/profit for the (134) (17) (151) 22 (65) (43) (78) (223) (301)
period from continuing
operations
(Loss)/profit for the 9 (1) 2 1 15 (15) - 24 218 242
period from discontinued
operations
(Loss)/profit for the (135) (15) (150) 37 (80) (43) (54) (5) (59)
period
Attributable to
Equity holders (135) (15) (150) 37 (80) (43) (55) (5) (60)
Non-controlling - - - - - - 1 - 1
interests
(Loss)/profit for the (135) (15) (150) 37 (80) (43) (54) (5) (59)
period
1 Before non-underlying
items (Note 7).2 Re
-presented to classify
Parsons Brinckerhoff as
a discontinued operation
(Note 9).3 Re-presented
to include results of
Rail Germany, which no
longer meets the
definition of a
discontinued operation,
as non-underlying items
within continuing
operations (Note 7). 4
Re-presented to show the
results of certain
legacy Engineering
Services contracts as
non-underlying items
(Note 7).5 Restated to
correct prior period
error relating to the
recognition of contract
losses in the UK
construction business
(Note 1.7).
Notes 2015 first half unaudited pence 2014 first half unaudited2,3,5pence 2014year audited pence
Basic (loss)/earnings
per ordinary share
- continuing operations 10 (22.0) (6.2) (43.9)
- discontinued 10 0.1 - 35.3
operations
(21.9) (6.2) (8.6)
Diluted (loss)/earnings
per ordinary share
- continuing operations 10 (22.0) (6.2) (43.9)
- discontinued 10 0.1 - 35.3
operations
(21.9) (6.2) (8.6)
Dividends per ordinary 11 - 5.6 5.6
share proposed for the
period
2 Re-presented to classify Parsons Brinckerhoff as a discontinued operation (Note 9).
3 Re-presented to include results of Rail Germany, which no longer meets the definition of a discontinued operation, as
non-underlying items within continuing operations (Note 7).
5 Restated to correct prior period error relating to the recognition of contract losses in the UK construction business
(Note 1.7).
Condensed Group Statement of Comprehensive Income
For the half-year ended 26 June 2015
2015 first half unaudited£m 2014 first half unaudited5£m 2014 yearaudited£m
Loss for the period (150) (43) (59)
Other comprehensive (expense)/income for the period
Items which will not subsequently be reclassified to the income statement
Actuarial (losses)/gains on retirement benefit liabilities (133) 18 232
Tax on above 26 (4) (48)
(107) 14 184
Items which will subsequently be reclassified to the income statement
Currency translation differences (1) (28) 32
Fair value revaluations - PPP financial assets (175) 64 303
- cash flow hedges 53 (23) (156)
- available-for-sale investments in mutual funds - 1 2
Recycling of revaluation reserves to the income statement on disposal^ (14) (8) 11
Tax on above 24 (9) (29)
(113) (3) 163
Total other comprehensive (expense)/income for the period (220) 11 347
Total comprehensive (expense)/income for the period (370) (32) 288
Attributable to
Equity holders (370) (32) 287
Non-controlling interests - - 1
Total comprehensive (expense)/income for the period (370) (32) 288
^ Recycling of revaluation reserves to the income statement on disposal has no associated tax effect.
5 Restated to correct prior period error relating to the recognition of contract losses in the UK construction business
(Note 1.7).
Condensed Group Statement of Changes in Equity
For the half-year ended 26 June 2015
Other reserves
Called-upsharecapital£m Sharepremiumaccount£m Specialreserve£m Shareof jointventures'andassociates'reserves £m Equity component of preference shares and convertible bonds£m Hedging reserves£m PPP financial assets£m Currency translation reserve£m Merger reserve£m Other£m Retainedprofits£m Non-controllinginterests£m Total£m
At 1 January 2014 audited 344 64 24 278 44 (56) 56 8 249 22 - 2 1,035
Total comprehensive income/(expense) for the period5 - - - 55 - 16 (7) (26) - - (70) - (32)
Ordinary dividends - - - - - - - - - - (58) - (58)
Joint ventures' and associates' dividends - - - (14) - - - - - - 14 - -
Issue of ordinary shares+ 1 - - - - - - - - - - - 1
Movements relating to share-based payments - - - - - - - - - (2) 5 - 3
Reserve transfers relating to joint venture and associate disposals - - - (22) - - - - - - 22 - -
Other transfers - - (1) - - - - - - - 1 - -
At 27 June 2014+ 345 64 23 297 44 (40) 49 (18) 249 20 (86) 2 949
Total comprehensive income/(expense) for the period - - - 87 - (34) 52 73 - (5) 146 1 320
Ordinary dividends - - - - - - - - - - (38) - (38)
Joint ventures' and associates' dividends - - - (42) - - - - - - 42 - -
Movements relating to share-based payments - - - - - - - - - (1) - - (1)
Reserve transfers relating to joint venture and associate disposals - - - (2) - - - - - - 2 - -
Other transfers - - - - - - - - (249) - 249 - -
At 31 December 2014 345 64 23 340 44 (74) 101 55 - 14 315 3 1,230
Total comprehensive (expense)/income for the period - - - (89) - 15 (34) - - - (262) - (370)
Joint ventures' and associates' dividends - - - (23) - - - - - - 23 - -
Movements relating to share-based payments - - - - - - - - - (3) (3) - (6)
Reserve transfers relating to disposals - - - (6) - 1 (6) - - - 11 - -
At 26 June 2015 345 64 23 222 44 (58) 61 55 - 11 84 3 854
5 Restated to correct prior period error relating to the recognition of contract losses in the UK construction business
(Note 1.7).
+ Called-up share capital and share premium account have been re-presented at 27 June 2014 to reflect an increase of £1m in
share capital rather than share premium.
Condensed Group Balance Sheet
At 26 June 2015
Notes 2015 first half unaudited£m 2014 first halfunaudited5,+£m 2014 year audited£m
Non-current assets
Intangible assets - goodwill 12 824 1,005 826
- other 235 208 216
Property, plant and equipment 162 213 171
Investments in joint ventures and associates 4 699 679 759
Investments 47 93 51
PPP financial assets 15 365 287 559
Trade and other receivables 13 108 123 111
Deferred tax assets 73 123 52
2,513 2,731 2,745
Current assets
Inventories and non-construction work in progress 151 161 170
Due from construction contract customers 449 721 562
Trade and other receivables 13 941 1,335 966
Cash and cash equivalents - infrastructure concessions 18.2 16 46 40
- other 18.2 724 411 691
Current tax assets 2 17 8
Derivative financial instruments 1 1 2
2,284 2,692 2,439
Assets held for sale 9 - 205 60
2,284 2,897 2,499
Total assets 4,797 5,628 5,244
Current liabilities
Due to construction contract customers (385) (358) (350)
Trade and other payables 14 (1,969) (2,128) (1,959)
Provisions (152) (93) (120)
Borrowings - non-recourse loans 18.3 (14) (4) (14)
- other 18.3 - (367) (4)
Current tax liabilities (5) (39) (5)
Derivative financial instruments (13) (11) (14)
(2,538) (3,000) (2,466)
Liabilities held for sale 9 - (179) (47)
(2,538) (3,179) (2,513)
Non-current liabilities
Trade and other payables 14 (109) (177) (134)
Provisions (78) (89) (77)
Borrowings - non-recourse loans 18.3 (329) (266) (471)
- other 18.3 (464) (431) (468)
Liability component of preference shares (97) (95) (96)
Retirement benefit liabilities 16 (231) (397) (128)
Deferred tax liabilities (38) (4) (49)
Derivative financial instruments (59) (41) (78)
(1,405) (1,500) (1,501)
Total liabilities (3,943) (4,679) (4,014)
Net assets 854 949 1,230
Equity
Called-up share capital 17 345 345 345
Share premium account 64 64 64
Special reserve 23 23 23
Share of joint ventures' and associates' reserves 222 297 340
Other reserves 113 304 140
Retained profits 84 (86) 315
Equity attributable to equity holders of the parent 851 947 1,227
Non-controlling interests 3 2 3
Totalequity 854 949 1,230
5 Restated to correct prior period error relating to the recognition of contract losses in the UK construction business
(Note 1.7).
+ Called-up share capital and share premium account have been re-presented at 27 June 2014 to reflect an increase of £1m in
share capital rather than share premium.
Condensed Group Statement of Cash Flows
For the half-year ended 26 June 2015
Notes 2015first halfunaudited£m 2014first halfunaudited2,3,4,5£m 2014yearaudited£m
Cash flows from operating activities
Cash (used in)/generated from:
- continuing operations - underlying1 18.1 2 (198) (192)
- non-underlying 18.1 (37) (51) (114)
- discontinued operations 18.1 (1) (37) (46)
Income taxes received/(paid) 6 (8) (20)
Net cash used in operating activities (30) (294) (372)
Cash flows from investing activities
Dividends received from joint ventures and associates - infrastructure concessions6 15 13 28
Dividends received from joint ventures and associates - other 6 8 1 28
Interest received - infrastructure concessions6 10 13 23
Interest received - other6 5 3 5
Acquisition of businesses, net of cash and cash equivalents acquired 19.1 (3) (3) (3)
Purchases of: - intangible assets - infrastructure concessions (15) (13) (28)
- intangible assets - other (16) (8) (35)
- property, plant and equipment - infrastructure concessions (2) (15) (23)
- property, plant and equipment - other (10) (25) (43)
- other investments (3) (3) (8)
Investments in and long-term loans to joint ventures and associates - infrastructure concessions (61) (4) (40)
Short-term loans to joint ventures and associates (3) - (4)
Loans repaid from joint ventures and associates - infrastructure concessions 1 1 2
PPP financial assets cash expenditure 15 (38) (22) (232)
PPP financial assets cash receipts 15 15 20 37
Disposals of: - investments in joint ventures - infrastructure concessions6 19.2 71 - 117
- investments in joint ventures - other6 19.2 20 - -
- subsidiaries net of cash disposed, separation and transaction costs - infrastructure concessions6 19.2 23 34 34
- subsidiaries net of cash disposed, separation and transaction costs - other6 19.2 3 (14) 701
- property, plant and equipment 2 3 16
- other investments 8 6 12
Net cash from/(used in) investing activities 30 (13) 587
Cash flows from financing activities
Purchase of ordinary shares 17 (7) (2) (2)
Proceeds from: - issue of ordinary shares - 1 1
- loans - infrastructure concessions6 18.4 33 19 236
- loans - other6 18.4 - 262 11
- More to follow, for following part double click ID:nRSL7766VcRecent news on Balfour Beatty
See all newsREG - Balfour Beatty PLC - Director/PDMR Shareholding
AnnouncementREG - Balfour Beatty PLC - Balfour Beatty disposes of Foundry Courtyard
AnnouncementREG - Balfour Beatty PLC - Transaction in Own Shares
AnnouncementREG - Balfour Beatty PLC - Transaction in Own Shares
AnnouncementREG - Balfour Beatty PLC - Transaction in Own Shares
Announcement