REG - Close Bros Grp PLC - Preliminary results for year ended 31 July 2017 <Origin Href="QuoteRef">CBRO.L</Origin> - Part 3
26/09/2017 07:06
- Part 3: For the preceding part double click ID:nRSZ7673Rb
126.7
Amortisation charge for the year - 17.2 5.1 22.3
Disposals (6.9) (0.3) - (7.2)
At 31 July 2016 54.9 59.1 27.8 141.8
Amortisation charge for the year - 17.2 6.2 23.4
Disposals (7.0) (0.6) - (7.6)
At 31 July 2017 47.9 75.7 34.0 157.6
Net book value at 31 July 2017 102.8 55.9 33.0 191.7
Net book value at 31 July 2016 85.9 45.5 16.5 147.9
Net book value at 1 August 2015 84.2 38.8 21.2 144.2
Additions in goodwill in 2017 of £12.1 million, £3.9 million and £0.9 million and intangible assets on acquisition of £15.9
million, £5.1 million and £1.7 million relate to the 100% acquisitions of Novitas Loans Limited ("Novitas"), EOS Wealth
Management Limited ("EOS") and Adrian Smith & Partners Limited ("ASPL") respectively. Novitas is a specialist provider of
secured finance to law firms and their clients and EOS and ASPL are independent financial advisers. Additions in goodwill
in 2016 of £1.7 million and intangible assets on acquisition of £0.4 million relates to the 100% acquisition of Finance for
Industry Group. These acquisitions are 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 £7.0 million disposal of goodwill in 2017 relates to the sale of Asset Management's OLIM Limited business. The £6.9
million disposal of goodwill in 2016 relates to the sale of Asset Management's corporate advice and investment management
activities.
Intangible assets on acquisition relate to broker and customer relationships and are amortised over a period of eight to 20
years.
In the 2017 financial year, £6.2 million (2016: £5.1 million) of the amortisation charge is included in amortisation of
intangible assets on acquisition and £17.2 million (2016: £17.2 million) of the amortisation charge is included in
administrative expenses shown in the consolidated income statement.
10. Property, plant and equipment
Leaseholdproperty Fixtures,fittings andequipment Assetsheld underoperatingleases Motorvehicles Total
£ million £ million £ million £ million £ million
Cost
At 1 August 2015 17.4 34.6 165.1 0.8 217.9
Additions 4.3 9.2 61.6 0.1 75.2
Disposals (0.2) (3.6) (25.3) (0.5) (29.6)
At 31 July 2016 21.5 40.2 201.4 0.4 263.5
Additions 1.6 5.4 56.2 - 63.2
Disposals (0.7) (0.5) (26.8) (0.1) (28.1)
At 31 July 2017 22.4 45.1 230.8 0.3 298.6
Depreciation
At 1 August 2015 7.2 23.7 38.1 0.5 69.5
Charge for the year 2.5 4.6 19.6 0.1 26.8
Disposals - (2.2) (16.1) (0.3) (18.6)
At 31 July 2016 9.7 26.1 41.6 0.3 77.7
Charge for the year 2.0 7.1 25.0 - 34.1
Disposals (0.6) (1.5) (13.6) (0.2) (15.9)
At 31 July 2017 11.1 31.7 53.0 0.1 95.9
Net book value at 31 July 2017 11.3 13.4 177.8 0.2 202.7
Net book value at 31 July 2016 11.8 14.1 159.8 0.1 185.8
Net book value at 1 August 2015 10.2 10.9 127.0 0.3 148.4
The loss from the sale of assets held under operating leases for the year ended 31 July 2017 was £0.1 million (2016: £0.1
million gain).
11. Settlement balances and short positions
31 July 31 July
2017 2016
£ million £ million
Settlement balances 524.9 456.3
Short positions held for trading:
Debt securities 11.5 5.8
Equity shares 16.2 13.5
27.7 19.3
552.6 475.6
12. 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 18.4 15.4 37.5 0.7 - - 72.0
Deposits by customers 123.4 956.6 2,528.2 991.3 513.6 - 5,113.1
Loans and overdrafts from banks 12.3 74.9 - 20.5 223.2 - 330.9
Debt securities in issue 13.6 22.8 108.4 516.0 540.9 287.9 1,489.6
At 31 July 2017 167.7 1,069.7 2,674.1 1,528.5 1,277.7 287.9 7,005.6
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 31.9 1.9 26.5 10.1 0.7 - 71.1
Deposits by customers 130.8 918.0 2,117.3 1,233.4 495.1 - 4,894.6
Loans and overdrafts from banks 11.0 207.8 160.1 90.2 - - 469.1
Debt securities in issue 30.2 7.1 557.1 201.5 589.1 37.8 1,422.8
At 31 July 2016 203.9 1,134.8 2,861.0 1,535.2 1,084.9 37.8 6,857.6
The group has accessed £224.4 million (31 July 2016: £nil) cash under the Term Funding Scheme and £197.5 million (31 July
2016: £451.0 million) UK Treasury Bills under the Funding for Lending Scheme. The UK Treasury Bills are not recorded on the
group's consolidated balance sheet as ownership remains with the Bank of England. £197.5 million (31 July 2016: £451.0
million) UK Treasury Bills have been drawn under the Funding for Lending Scheme, of which £100.0 million (31 July 2016:
£451.0 million) have been lent in exchange for cash. Cash from the repurchase agreements and Term Funding Scheme is
included within bank loans and overdrafts. Residual maturities of the repurchase agreements and Term Funding Scheme 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 2017 1.2 69.9 - 20.5 223.2 - 314.8
At 31 July 2016 - 197.8 160.1 90.2 - - 448.1
13. Capital
At 31 July 2017, the group's common equity tier 1 ("CET1") capital ratio was 12.6% (31 July 2016: 13.5%). CET1 capital
increased to £990.6 million (31 July 2016: £901.4 million) primarily due to growth in profit attributable to shareholders.
The increase in share capital in connection with the acquisition of Novitas Loans Limited ("Novitas") has been broadly
offset by a deduction for goodwill recognised as part of the transaction.
Risk weighted assets increased to £7,859.0 million (31 July 2016: £6,682.5 million) as a result of growth in credit and
counterparty risk associated with the loan book and due to European Banking Authority ("EBA") guidance which mandates 150%
risk weighting for property development loans. Notional risk weighted assets for operational risk also increased
reflecting increased performance over recent years.
During the year, the group issued £175 million of tier 2 capital. This changed the composition of capital with 82.8% (31
July 2016: 97.4%) of the total capital consisting of CET1 capital.
31 July 31 July
2017 2016
£ million £ million
CET1 capital
Called up share capital 38.0 37.7
Share premium account 307.8 284.0
Retained earnings 906.6 797.5
Other reserves recognised for CET1 capital 21.4 21.8
Deductions from CET1 capital
Intangible assets, net of associated deferred tax liabilities (186.3) (145.3)
Foreseeable dividend1 (59.8) (56.1)
Investment in own shares (34.1) (37.2)
Pension asset, net of associated deferred tax liabilities (2.8) (0.9)
Prudent valuation adjustment (0.2) (0.1)
CET1 capital 990.6 901.4
Tier 2 capital - subordinated debt2 205.6 24.0
Total regulatory capital 1,196.2 925.4
Risk weighted assets (notional) - unaudited
Credit and counterparty credit risk 6,967.6 5,824.9
Operational risk3 806.8 784.9
Market risk3 84.6 72.7
7,859.0 6,682.5
CET1 capital ratio 12.6% 13.5%
Total capital ratio 15.2% 13.8%
1 Under the Regulatory Technical Standard on own funds, a deduction has been recognised at 31 July 2017 and 31 July 2016
for a foreseeable dividend being the proposed final dividend as set out in note 5.
2 Shown after applying the Capital Requirements Regulations transitional and qualifying own funds arrangements.
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 CET1 capital after deductions:
31 July 31 July
2017 2016
£ million £ million
Equity 1,236.0 1,096.9
Regulatory deductions from equity:
Intangible assets, net of associated deferred tax liabilities (186.3) (145.3)
Foreseeable dividend1 (59.8) (56.1)
Pension asset, net of associated deferred tax liabilities (2.8) (0.9)
Prudent valuation adjustment (0.2) (0.1)
Other reserves not recognised for CET1 capital:
Cash flow hedging reserve 3.2 6.7
Non-controlling interests 0.5 0.2
CET1 capital 990.6 901.4
1 Under the Regulatory Technical Standard on own funds, a deduction has been recognised at 31 July 2017 and 31 July 2016
for a foreseeable dividend being the proposed final dividend as set out in note 5.
The following table shows the movement in CET1 capital during the year:
£ million
CET1 capital at 31 July 2016 901.4
Profit in the period attributable to shareholders 191.2
Shares issued in the period 24.1
Dividends paid and foreseen (89.3)
Increase in intangible assets, net of associated deferred tax liabilities (41.0)
Other movements in reserves recognised for CET1 capital 6.2
Other movements in deductions from CET1 capital (2.0)
CET1 capital at 31 July 2017 990.6
14. Consolidated cash flow statement reconciliation
31 July 31 July
2017 2016
£ million £ million
(a) Reconciliation of operating profit before tax to net cash inflow from operating activities
Operating profit before tax 258.6 228.5
Tax paid (63.6) (53.7)
Depreciation and amortisation 57.5 49.1
(Increase)/decrease in:
Interest receivable and prepaid expenses (18.1) (16.0)
Net settlement balances and trading positions 6.7 (9.7)
Net loans to/from money brokers against stock advanced (21.9) 16.0
Interest payable and accrued expenses 19.1 3.2
Net cash inflow from trading activities 238.3 217.4
Decrease/(increase) in:
Loans and advances to banks not repayable on demand 0.3 (26.7)
Loans and advances to customers (453.1) (693.8)
Assets let under operating leases (43.2) (51.9)
Certificates of deposit 20.7 (85.7)
Sovereign and central bank debt (44.5) 20.0
Other assets less other liabilities 22.5 28.9
Increase/(decrease) in:
Deposits by banks 0.9 36.0
Deposits by customers 218.5 413.2
Loans and overdrafts from banks (138.2) 87.9
Issuance of debt securities, net of transaction costs 297.8 35.9
Net cash inflow/(outflow) from operating activities 120.0 (18.8)
(b) Analysis of net cash outflow in respect of the purchase of subsidiaries and non-controlling interests
Cash consideration paid (6.3) (3.6)
(c) Analysis of net cash (outflow)/inflow in respect of the sale of a subsidiary
Cash consideration received 0.3 2.4
Cash and cash equivalents disposed of (0.6) (0.1)
(0.3) 2.3
(d) Analysis of changes in financing activities
Share capital (including premium), group bond and subordinated loan capital1:
Opening balance 566.6 566.6
Redemption of group bond (200.0) -
Issuance of subordinated loan capital, net of transaction costs 173.7 -
540.3 566.6
(e) Analysis of cash and cash equivalents2
Cash and balances at central banks 798.2 840.6
Loans and advances to banks repayable on demand 61.4 82.7
859.6 923.3
1 Excludes accrued interest.
2 Excludes Bank of England cash reserve account, amounts held as collateral and settlement money held in accordance
with Financial Conduct Authority Client Asset Rules.
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. Past performance is no guide to
future performance and persons needing advice should consult an independent financial adviser.
This preliminary results announcement does not constitute or form part of any offer or invitation to sell, or any
solicitation of any offer to subscribe for or purchase any shares or other securities in the company or any of its group
members, 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 or other securities of the company or any of its group members. 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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