REG - Close Bros Grp PLC - Final Results <Origin Href="QuoteRef">CBRO.L</Origin> - Part 3
22/09/2015 07:00
- Part 3: For the preceding part double click ID:nRSV7296Zb
Profit attributable to shareholders on continuing operations 174.5 145.2
Adjustments:
Amortisation of intangible assets on acquisition 5.0 4.9
Tax effect of adjustments (1.0) (1.0)
Adjusted profit attributable to shareholders on continuing operations 178.5 149.1
1 Restated - see note 4.
2015 2014
million million
Average number of shares
Basic weighted 148.1 147.6
Effect of dilutive share options and awards 1.7 2.2
Diluted weighted 149.8 149.8
6. Dividends
2015 2014
£ million £ million
For each ordinary share
Final dividend for previous financial year paid in November 2014: 32.5p (2013: 29.5p) 47.6 42.9
Interim dividend for current financial year paid in April 2015: 18.0p (2014: 16.5p) 26.7 24.2
74.3 67.1
A final dividend relating to the year ended 31 July 2015 of 35.5p, amounting to an estimated £52.4 million, is proposed.
This final dividend, which is due to be paid on 24 November 2015 to shareholders on the register at 16 October 2015, is not
reflected in these financial statements.
7. Loans and advances to customers
On demand Within three months Between three months and one year Between one and two years Between two and five years After more than five years Impairment provisions Total
£ million £ million £ million £ million £ million £ million £ million £ million
At 31 July 2015 45.4 1,543.5 1,797.8 1,108.2 1,254.1 44.9 (56.1) 5,737.8
At 31 July 2014 60.9 1,463.3 1,660.8 1,038.3 1,093.3 21.4 (48.3) 5,289.7
2015 2014
£ million £ million
Impairment provisions on loans and advances to customers
At 1 August 48.3 61.9
Charge for the year 41.9 44.1
Amounts written off net of recoveries (34.1) (57.7)
At 31 July 56.1 48.3
Loans and advances to customers comprise
Hire purchase agreement receivables 2,552.9 2,341.4
Finance lease receivables 473.0 466.5
Other loans and advances 2,711.9 2,481.8
At 31 July 5,737.8 5,289.7
At 31 July 2015, gross impaired loans were £162.3 million (31 July 2014: £159.9 million) and equate to 3% (31 July 2014:
3%) of the gross loan book before impairment provisions. The majority of the group's lending is secured and therefore the
gross impaired loans quoted do not reflect the expected loss.
8. Debt securities
Held for trading Available for sale Loans and receivables Total
£ million £ million £ million £ million
Long trading positions 14.1 - - 14.1
Certificates of deposit - - 115.3 115.3
Gilts - 20.1 - 20.1
At 31 July 2015 14.1 20.1 115.3 149.5
Held for trading Available for sale Loans and receivables Total
£ million £ million £ million £ million
Long trading positions 48.6 - - 48.6
Certificates of deposit - - - -
Gilts - 45.6 - 45.6
At 31 July 2014 48.6 45.6 - 94.2
Movements on the book value of gilts and floating rate notes ("FRNs") comprise:
Available for sale
Gilts Floating rate notes Total
£ million £ million £ million
At 1 August 2013 46.7 39.4 86.1
Disposals - (37.8) (37.8)
Redemptions at maturity - - -
Currency translation differences - (1.6) (1.6)
Movement in value (1.1) - (1.1)
At 31 July 2014 45.6 - 45.6
Disposals - - -
Redemptions at maturity (25.0) - (25.0)
Currency translation differences - - -
Movement in value (0.5) - (0.5)
At 31 July 2015 20.1 - 20.1
9. Equity shares
31 July 31 July
2015 2014
£ million £ million
Long trading positions 31.1 56.5
Other equity shares 10.1 19.6
41.2 76.1
Movements on the book value of other equity shares held during the year comprise:
Available for sale Fair value through profit or loss Total
£ million £ million £ million
At 1 August 2013 27.1 0.6 27.7
Additions 0.1 - 0.1
Disposals (8.2) (0.5) (8.7)
Currency translation differences (1.8) - (1.8)
Movement in value of:
Equity shares classified as available for sale 2.3 - 2.3
At 31 July 2014 19.5 0.1 19.6
Additions - - -
Disposals (8.1) - (8.1)
Currency translation differences (0.4) - (0.4)
Movement in value of:
Equity shares classified as available for sale (1.0) - (1.0)
At 31 July 2015 10.0 0.1 10.1
10. Intangible assets
Goodwill Software Intangible assets on acquisition Total
£ million £ million £ million £ million
Cost
At 1 August 2013 156.5 51.6 42.4 250.5
Additions - 19.9 - 19.9
Disposals - (2.7) - (2.7)
Foreign exchange (0.4) - - (0.4)
At 31 July 2014 156.1 68.8 42.4 267.3
Additions 0.3 20.3 1.5 22.1
Disposals (10.4) (8.1) - (18.5)
Foreign exchange - - - -
At 31 July 2015 146.0 81.0 43.9 270.9
Amortisation and impairment
At 1 August 2013 68.0 28.0 12.9 108.9
Amortisation charge for the year - 9.8 4.9 14.7
Disposals - (2.6) - (2.6)
At 31 July 2014 68.0 35.2 17.8 121.0
Amortisation charge for the year - 13.5 5.0 18.5
Disposals (6.2) (6.5) (0.1) (12.8)
At 31 July 2015 61.8 42.2 22.7 126.7
Net book value at 31 July 2015 84.2 38.8 21.2 144.2
Net book value at 31 July 2014 88.1 33.6 24.6 146.3
Net book value at 1 August 2013 88.5 23.6 29.5 141.6
Additions in goodwill of £0.3 million relate to the 100% acquisition of Mackay Stewart and Brown Limited, a Scottish
Independent Financial Adviser with £72.0 million of client assets, for cash consideration of £1.1 million for the equity of
the business. This acquisition is not regarded as material in the context of the group's financial statements and therefore
information required for material acquisitions by IFRS 3 has not been disclosed.
The goodwill disposals of £10.4 million relate to the Seydler disposal of £4.2 million, and the write off of fully impaired
goodwill of £6.2 million relating to the wind up of Fortune Asset Management Limited.
Intangible assets on acquisition relates to broker and customer relationships and are amortised over a period of eight to
20 years.
In the 2015 financial year, £5.0 million (2014: £4.9 million) of the amortisation charge is included in amortisation of
intangible assets on acquisition and £13.5 million (2014: £9.8 million) of the amortisation charge is included in
administrative expenses shown in the consolidated income statement.
11. Property, plant and equipment
Leaseholdproperty Fixtures,fittings andequipment Assetsheld underoperatingleases Motorvehicles Total
£ million £ million £ million £ million £ million
Cost
At 1 August 2013 9.3 40.9 99.1 1.2 150.5
Additions 0.8 4.6 46.1 0.5 52.0
Disposals - (10.6) (12.5) (0.5) (23.6)
At 31 July 2014 10.1 34.9 132.7 1.2 178.9
Additions 7.4 7.7 43.7 - 58.8
Disposals (0.1) (8.0) (11.3) (0.4) (19.8)
At 31 July 2015 17.4 34.6 165.1 0.8 217.9
Depreciation
At 1 August 2013 4.4 32.6 23.1 0.7 60.8
Charge for the year 1.3 4.5 13.9 0.3 20.0
Disposals - (10.4) (8.1) (0.4) (18.9)
At 31 July 2014 5.7 26.7 28.9 0.6 61.9
Charge for the year 1.6 4.5 16.7 0.1 22.9
Disposals (0.1) (7.5) (7.5) (0.2) (15.3)
At 31 July 2015 7.2 23.7 38.1 0.5 69.5
Net book value at 31 July 2015 10.2 10.9 127.0 0.3 148.4
Net book value at 31 July 2014 4.4 8.2 103.8 0.6 117.0
Net book value at 1 August 2013 4.9 8.3 76.0 0.5 89.7
Assets held under operating leases relate to our rentals businesses within the Banking division. In addition to the
depreciation charged in the year of £16.7 million (2014: £13.9 million), these assets generated other income of £39.1
million (2014: £32.4 million) and interest and fee expense of £12.5 million (2014: £11.1 million). The gains/(losses) from
the sale of assets held under operating leases for the year ended 31 July 2015 was £nil (2014: £0.3 million gain).
12. Settlement balances and short positions
31 July 31 July
2015 2014
£ million £ million
Settlement balances 376.5 444.1
Short positions held for trading:
Debt securities 13.7 34.3
Equity shares 14.1 15.6
27.8 49.9
404.3 494.0
13. Financial liabilities
On demand Within threemonths Between three months and one year Betweenone and two years Between two and five years After more than five years Total
£ million £ million £ million £ million £ million £ million £ million
Deposits by banks 11.5 0.3 22.8 0.5 - - 35.1
Deposits by customers 154.8 828.4 2,347.7 851.2 299.3 - 4,481.4
Loans and overdrafts from banks 8.6 99.1 123.7 59.9 89.9 - 381.2
Debt securities in issue 11.2 6.7 1.1 747.8 299.3 298.9 1,365.0
At 31 July 2015 186.1 934.5 2,495.3 1,659.4 688.5 298.9 6,262.7
On demand Within threemonths Betweenthree months and one year Betweenone and two years Betweentwo and five years Aftermore than five years Total
£ million £ million £ million £ million £ million £ million £ million
Deposits by banks 21.1 20.0 8.5 - - - 49.6
Deposits by customers 165.0 1,256.5 1,532.5 1,399.3 160.4 - 4,513.7
Loans and overdrafts from banks 4.4 5.0 - - - - 9.4
Debt securities in issue - 6.7 350.5 227.8 470.4 299.0 1,354.4
At 31 July 2014 190.5 1,288.2 1,891.5 1,627.1 630.8 299.0 5,927.1
Of the debt securities in issue, £298.9 million mature on 27 June 2021, £199.4 million mature on 10 February 2017 and
£847.7 million relate to the insurance premium and motor loan receivables securitisations.
The group has repurchase agreements at 31 July 2015 (2014: none) whereby £375.0 million Treasury Bills have been drawn and
lent in exchange for cash which is included within loans and overdrafts from banks. Residual maturities of the repurchase
agreements are as follows:
On demand Within threemonths Betweenthree months and one year Betweenone and two years Betweentwo and five years Aftermore than five years Total
£ million £ million £ million £ million £ million £ million £ million
At 31 July 2015 - 99.1 123.7 59.9 89.9 - 372.6
14. Capital
At 31 July 2015, the group's common equity tier 1 capital ratio increased to 13.7% (31 July 2014: 13.1%).
Common equity tier 1 capital increased to £813.2 million (31 July 2014: £710.8 million) primarily due to growth in profit
attributable to shareholders.
Risk weighted assets increased to £5,932.1 million (31 July 2014: £5,445.8 million) as a result of growth in credit and
counterparty risk associated with the loan book, which was partly offset by a reduction in market risk due to the disposal
of Seydler as well as lower trading balances at Winterflood. Notional risk weighted assets for operational risk also
increased reflecting increased performance over recent years.
The composition of capital remained broadly stable with 95.9% (31 July 2014: 91.1%) of the total capital consisting of
common equity tier 1 capital.
31 July 31 July
2015 2014
£ million £ million
Common equity tier 1 capital
Called up share capital 37.7 37.7
Share premium account 284.0 283.8
Retained earnings 694.4 589.8
Other reserves recognised for common equity tier 1 capital 18.3 21.4
Deductions from common equity tier 1 capital
Intangible assets, net of associated deferred tax liabilities (140.6) (142.1)
Foreseeable dividend1 (52.4) (47.7)
Investment in own shares (25.6) (27.9)
Pension asset, net of associated deferred tax liabilities (2.5) (3.9)
Additional valuation adjustments (0.1) (0.3)
Common equity tier 1 capital 813.2 710.8
Tier 2 capital
Subordinated debt2 31.5 60.0
Unrealised gains on available for sale equity shares 3.3 9.6
Tier 2 capital 34.8 69.6
Total regulatory capital 848.0 780.4
Risk weighted assets (notional) - unaudited
Credit and counterparty credit risk 5,103.2 4,564.5
Operational risk3 753.5 695.5
Market risk3 75.4 185.8
5,932.1 5,445.8
Common equity tier 1 capital ratio 13.7% 13.1%
Total capital ratio 14.3% 14.3%
1 Under the Regulatory Technical Standard on own funds, a deduction has been recognised at 31 July 2015 and 31 July 2014
for a foreseeable dividend being the proposed final dividend as set out in note 6.
2 Under the Capital Requirements Regulation's transitional arrangements, 70% (31 July 2014: 80%) of the principal value
of
subordinated debt is recognised.
3 Operational and market risk include a notional adjustment at 8% in order to determine notional risk weighted assets.
The following table shows a reconciliation between equity and common equity tier 1 capital after deductions:
31 July 31 July
2015 2014
£ million £ million
Equity 1,009.9 917.6
Regulatory deductions from equity:
Intangible assets, net of associated deferred tax liabilities (140.6) (142.1)
Foreseeable dividend1 (52.4) (47.7)
Pension asset, net of associated deferred tax liabilities (2.5) (3.9)
Additional valuation adjustments (0.1) (0.3)
Other reserves not recognised for common equity tier 1 capital:
Available for sale movements reserve (3.3) (9.6)
Cash flow hedging reserve 2.3 (2.1)
Non-controlling interests (0.1) (1.1)
Common equity tier 1 capital 813.2 710.8
1 Under the Regulatory Technical Standard on own funds, a deduction has been recognised at 31 July 2015 and 31 July 2014
for a foreseeable dividend being the proposed final dividend as set out in note 6.
15. Consolidated cash flow statement reconciliation
31 July 31 July
2015 20141
£ million £ million
(a) Reconciliation of operating profit before tax to net cash inflow from operating activities
Operating profit before tax from continuing operations 219.9 188.8
Profit before tax on discontinued operations 11.6 6.9
Tax paid (53.4) (35.3)
Depreciation and amortisation 41.4 34.7
(Increase)/decrease in:
Interest receivable and prepaid expenses (4.2) 4.9
Net settlement balances and trading positions 22.8 (8.8)
Net loans to/from money broker against stock advanced (2.9) 0.2
Increase in interest payable and accrued expenses 8.2 15.9
Net cash inflow from trading activities 243.4 207.3
Decrease/(increase) in:
Loans and advances to banks not repayable on demand 1.6 (2.6)
Loans and advances to customers (448.1) (644.1)
Assets let under operating leases (39.8) (41.4)
Floating rate notes classified as available for sale - 37.8
Certificates of deposit (115.3) -
Debt securities held for liquidity 25.0 -
Other assets less other liabilities (19.1) 30.5
(Decrease)/increase in:
Deposits by banks (14.5) (17.0)
Deposits by customers (23.0) 498.3
Loans and overdrafts from banks 371.8 (28.2)
Debt securities in issue, net of transaction costs - 299.0
Net cash inflow from operating activities (18.0) 339.6
(b) Analysis of net cash outflow in respect of the purchase of non-controlling interests
Cash consideration paid (1.0) (7.5)
(c) Analysis of net cash inflow in respect of the sale of a subsidiary
Cash consideration received 36.9 -
Cash and cash equivalents disposed of (13.7) -
23.2 -
(d) Analysis of changes in financing activities
Share capital (including premium) and subordinated loan capital2:
Opening balance 396.5 396.4
Shares issued for cash 0.1 0.1
396.6 396.5
(e) Analysis of cash and cash equivalents3
Cash and balances at central banks 1,031.2 1,164.7
Loans and advances to banks repayable on demand 72.5 74.0
1,103.7 1,238.7
1 Restated - see note 4.
2 Excludes accrued interest.
3 Excludes Bank of England cash reserve account and amounts held as collateral.
16. Post balance sheet event
On 14 September 2015, the group agreed the sale of its corporate advice and investment management activities, which are
part of the Asset Management division, to JLT Benefit Solutions Ltd. The activities disposed of represented net assets of
£0.3 million and operating profit before tax of £0.7 million for the year ended 31 July 2015. The timing for completion is
subject to the satisfaction of customary conditions.
Cautionary statement
Certain statements included or incorporated by reference within this preliminary results announcement may constitute
"forward-looking statements" in respect of the group's operations, performance, prospects and/or financial condition.
Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as
"anticipates", "aims", "due", "could", "may", "will", "should", "expects", "believes", "intends", "plans", "potential",
"targets", "goal" or "estimates". By their nature, forward-looking statements involve a number of risks, uncertainties and
assumptions and actual results or events may differ materially from those expressed or implied by those statements.
Accordingly, no assurance can be given that any particular expectation will be met and reliance should not be placed on any
forward-looking statement. Additionally, forward-looking statements regarding past trends or activities should not be taken
as a representation that such trends or activities will continue in the future. No responsibility or obligation is accepted
to update or revise any forward-looking statement resulting from new information, future events or otherwise. Nothing in
this preliminary results announcement should be construed as a profit forecast. This preliminary results announcement does
not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any shares or
other securities in the company, nor shall it or any part of it or the fact of its distribution form the basis of, or be
relied on in connection with, any contract or commitment or investment decisions relating thereto, nor does it constitute a
recommendation regarding the shares and other securities of the company. Past performance cannot be relied upon as a guide
to future performance and persons needing advice should consult an independent financial adviser. Statements in this
preliminary results announcement reflect the knowledge and information available at the time of its preparation. Liability
arising from anything in this preliminary results announcement shall be governed by English Law. Nothing in this
preliminary results announcement shall exclude any liability under applicable laws that cannot be excluded in accordance
with such laws.
This information is provided by RNS
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