REG - Card Factory PLC - Final Results <Origin Href="QuoteRef">CARDC.L</Origin> - Part 2

Card FactoryAnnouncement

25/03/2015 07:01

- Part 2: For the preceding part double click  ID:nRSY3641Ia 

Social
security costs include £1.4m relating to residual management equity presented
as a non-underlying expense. 
 
6              Finance income and expense 
 
                                        2015     2014   
                                        £'m      £'m    
 Finance income                                         
 Bank interest received                 (0.3)    (0.5)  
                                                        
 Finance expense                                        
 Interest on bank loans and overdrafts  8.5      9.5    
 Amortisation of loan issue costs       9.0      1.9    
 Interest on loan notes                 4.3      29.9   
 Interest on deferred consideration     0.1      0.1    
                                        21.9     41.4   
 Net finance expense                    21.6     40.9   
 
 
Amortisation of loan issue costs include £7.7 million expensed to the income
statement on the repayment of borrowings as part of a refinancing on 30 May
2014 and are presented as non-underlying, see note 1. 
 
7              Taxation 
 
Recognised in the income statement 
 
                                                    2015     2014   
                                                    £'m      £'m    
 Current tax expense                                                
 Current year                                       10.6     11.4   
 Adjustments in respect of prior periods            (0.7)    (0.7)  
                                                    9.9      10.7   
 Deferred tax (credit)/expense                                      
 Origination and reversal of temporary differences  (0.5)    0.2    
 Adjustments in respect of prior periods            0.1      0.6    
 Effect of change in tax rate                       -        0.2    
                                                    (0.4)    1.0    
 Total income tax expense                           9.5      11.7   
 
 
The effective tax rate of 22.3% (2014: 38.9%) is higher than the standard rate
of corporation tax in the UK. The tax charge is reconciled to the standard
rate of UK corporation tax as follows: 
 
                                                                       2015     2014   
                                                                       £'m      £'m    
                                                                                       
 Profit before tax                                                     42.7     30.1   
                                                                                       
 Tax at the standard UK corporation tax rate of 21.32% (2014: 23.16%)  9.1      7.0    
 Tax effects of:                                                                       
 Interest expense not deductible for tax purposes                      -        4.2    
 Other expenses not deductible for tax purposes                        1.1      0.6    
 Non-taxable income                                                    (0.1)    (0.2)  
 Adjustments in respect of prior periods                               (0.6)    (0.1)  
 Effect of change in tax rate                                          -        0.2    
 Total income tax expense                                              9.5      11.7   
 
 
The effective tax rate was higher in the prior year principally due to
non-deductible interest costs in relation to shareholder loan notes.
Shareholder loan notes were part repaid in October 2013 and the remaining
balance settled by share exchange in May 2014 prior to the IPO. Furthermore,
under a new thin capitalisation agreement approved in the year, shareholder
loan note interest for the period October 2013 to May 2014 is now fully
deductible giving rise to a £0.7 million non-underlying current period tax
credit on interest accrued to 31 January 2014. 
 
8          Dividends 
 
The Board is recommending a total dividend in respect of the financial year
ended 31 January 2015 of 6.8 pence per share, resulting in a total dividend of
£23.2 million. The total dividend comprises an interim dividend which the
Directors are declaring of 2.3 pence per share and a proposed final dividend
of 4.5 pence per share.  The final dividend will, subject to shareholders'
approval at the Annual General Meeting on 27 May 2015, be paid alongside the
interim dividend on 5 June 2015 to shareholders on the register at the close
of business on 1 May 2015. No liability is recorded in the financial
statements in respect of the dividends as they were not approved at the
balance sheet date. 
 
No dividends have been paid in the year (2014: £nil). 
 
9          Earnings per share 
 
Basic earnings per share is calculated by dividing the profit for the period
attributable to ordinary shareholders by the weighted average number of
ordinary shares in issue during the period. 
 
The weighted average number of shares for the prior period reflects the
weighted average number of ordinary shares of CF Topco Limited, multiplied for
a 1:50 share split effected on the reverse acquisition as described in the
basis of preparation. 
 
Diluted earnings per share is based on the weighted average number of shares
in issue for the period, adjusted for the dilutive effect of potential
ordinary shares. Potential ordinary shares represent share incentive awards
granted to employees in the period. 
 
The Group has chosen to present an alternative earnings per share measure,
with profit adjusted for non-underlying items to reflect the Group's
underlying profit for the year. Underlying earnings is not a recognised profit
measure under IFRS and may not be directly comparable with 'adjusted' profit
measures used by other companies. 
 
                                                                   2015           2014         
                                                                   (Number)       (Number)     
                                                                                               
 Weighted average number of shares in issue                        312,568,527    245,635,000  
 Weighted average number of dilutive share options                 15,919         -            
 Weighted average number of shares for diluted earnings per share  312,584,446    245,635,000  
 
 
                                                            £'m     £'m   
                                                                          
 Profit for the financial year                              33.2    18.4  
 Non-underlying items                                       17.9    1.5   
 Total underlying profit for underlying earnings per share  51.1    19.9  
 
 
                                        pence    pence  
 Basic earnings per share               10.6     7.5    
 Diluted earnings per share             10.6     7.5    
 Underlying basic earnings per share    16.3     8.1    
 Underlying diluted earnings per share  16.3     8.1    
 
 
10        Notes to the cash flow statement 
 
Reconciliation of operating profit to cash generated from operations. 
 
                                                         2015     2014   
                                                         £'m      £'m    
                                                                         
 Profit before tax                                       42.7     30.1   
 Net finance expense                                     21.6     40.9   
 Operating profit                                        64.3     71.0   
 Adjusted for:                                                           
 Depreciation and amortisation                           8.8      7.5    
 Cash flow hedging foreign currency losses               0.4      -      
 Share based payments charge                             10.3     -      
 Operating cash flows before changes in working capital  83.8     78.5   
 Decrease in receivables                                 0.7      0.5    
 Increase in inventories                                 (2.2)    (4.7)  
 Increase in payables                                    2.6      4.8    
 Cash inflow from operating activities                   84.9     79.1   
 
 
This information is provided by RNS
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