REG - Compass Group PLC - Full year results <Origin Href="QuoteRef">CPG.L</Origin> - Part 5
24/11/2015 07:02
- Part 5: For the preceding part double click ID:nRSX7239Gd
(3) - (85) (88)
Business acquisitions - 62 - 62
Business disposals - (1) - (1)
Reclassified - (1) 2 1
Currency adjustment (6) (12) 47 29
At 30 September 2015 254 521 1,128 1,903
AMORTISATION
At 1 October 2013 155 62 364 581
Charge for the year 21 25 107 153
Disposals (4) - (54) (58)
Business disposals - - 2 2
Reclassified - - 3 3
Currency adjustment (5) (3) (5) (13)
At 30 September 2014 167 84 417 668
At 1 October 2014 167 84 417 668
Charge for the year 21 26 126 173
Disposals (2) - (75) (77)
Reclassified - (1) - (1)
Currency adjustment (2) (6) 18 10
At 30 September 2015 184 103 486 773
NET BOOK VALUE
At 30 September 2014 65 389 556 1,010
At 30 September 2015 70 418 642 1,130
1 Contract related intangible assets, other than those arising on acquisition, result from payments made by the Group in respect of client contracts and generally arise where it is economically more efficient for a client to purchase assets used in the performance of the contract and the Group fund these purchases. The intangible assets arising on acquisition are all contract related.
Compass Group PLC
Consolidated Financial Statements (continued)
11 PROPERTY, PLANT AND EQUIPMENT
Land and Plant and Fixtures and
PROPERTY, PLANT AND EQUIPMENT buildings machinery fittings Total
£m £m £m £m
COST
At 1 October 2013 358 1,015 531 1,904
Additions1 29 140 79 248
Disposals (17) (79) (37) (133)
Business disposals - other activities - (12) (1) (13)
Business acquisitions 2 5 1 8
Reclassified - 8 (3) 5
Currency adjustment (16) (39) (26) (81)
At 30 September 20142 356 1,038 544 1,938
At 1 October 2014 356 1,038 544 1,938
Additions1 13 171 89 273
Disposals (21) (104) (40) (165)
Business disposals - other activities - (1) - (1)
Business acquisitions 2 2 2 6
Reclassified (1) 9 (1) 7
Currency adjustment (10) (15) (29) (54)
At 30 September 2015 339 1,100 565 2,004
DEPRECIATION
At 1 October 2013 174 666 356 1,196
Charge for the year 25 112 52 189
Disposals (16) (69) (32) (117)
Business disposals - other activities - (9) - (9)
Reclassified (1) 8 (2) 5
Currency adjustment (7) (26) (17) (50)
At 30 September 20142 175 682 357 1,214
At 1 October 2014 175 682 357 1,214
Charge for the year 21 118 54 193
Disposals (18) (92) (35) (145)
Business disposals - other activities - (1) - (1)
Reclassified - 4 - 4
Currency adjustment (1) (7) (17) (25)
At 30 September 2015 177 704 359 1,240
NET BOOK VALUE
At 30 September 20142 181 356 187 724
At 30 September 2015 162 396 206 764
The net book amount of the Group's property, plant and equipment includes assets held under finance leases as follows:
Land and Plant and Fixtures and
PROPERTY, PLANT AND EQUIPMENT HELD UNDER FINANCE LEASES buildings machinery fittings Total
£m £m £m £m
At 30 September 2014 7 6 1 14
At 30 September 2015 6 6 1 13
1 Includes leased assets at a net book value of £2 million (2014: £2 million).
2 2014 has been restated for the change in the accounting treatment of joint ventures in accordance with IFRS11, as detailed in note 15.
Compass Group PLC
Consolidated Financial Statements (continued)
12 EQUITY ACCOUNTED INVESTMENTS
Significant interests in associates are:
2015 2014
Country of incorporation ownership1 ownership1
Twickenham Experience Ltd2 England & Wales 16% 16%
Oval Events Limited3 England & Wales 25% 25%
AEG Facilities, LLC4 USA 49% 49%
Thompson Hospitality Services LLC4 USA 49% 49%
1 % ownership is of the ordinary share capital.
2 Financial statements applied using the equity method relate to the year ended 30 June, rolled forward to 30 September. 2014 has been restated to correctly reflect ownership %.
3 Financial statements applied using the equity method relate to the year ended 31 January, rolled forward to 30 September.
4 Financial statements applied using the equity method relate to the year ended 31 December of the prior year, rolled forward to 30 September. Significant interests in joint ventures are:
2015 2014
Country of incorporation ownership1 ownership1
Quadrant Catering Ltd2 England & Wales 49% 49%
ADNH-Compass Middle East LLC United Arab Emirates 50% 50%
Express Support Services Limitada2,3 Angola 49% 49%
1 % ownership is of the ordinary share capital.
2 49% ownership entitles Compass Group to 50% of voting rights.3 2014 has been restated to correctly reflect ownership %.
None of these investments is held directly by the ultimate Parent Company. All joint ventures provide food and/or support
services in their respective countries of incorporation and make their accounts up to 30 September. All holdings are in
the ordinary shares of the respective joint venture company.
These investments are structured through separate vehicles and the Group has a residual interest in their respective net
assets. Accordingly the Group has classified its interests as joint ventures which are equity accounted. The tables below
reconcile the summarised financial information to the carrying amount of the Group's interests in these joint ventures.
INTERESTS IN ASSOCIATES AND JOINT VENTURES 2015 2014 Restated1
£m £m
NET BOOK VALUE
Interests in associates 122 114
Interests in joint ventures 81 75
At 30 September 203 189
At 1 October 189 155
Additions 2 48
Disposals - (19)
Share of profits less losses (net of tax) 39 30
Dividends declared (33) (24)
Currency and other adjustments 6 (1)
At 30 September 203 189
1 2014 has been restated for the change in the accounting treatment of joint ventures in accordance with IFRS11, as
detailed in note 15.
Compass Group PLC
Consolidated Financial Statements (continued)
12 EQUITY ACCOUNTED INVESTMENTS CONTINUED
The Group's share of revenues and profits is included below:
ASSOCIATES AND JOINT VENTURES 2015 2014 Restated1
£m £m
SHARE OF REVENUE AND PROFITS
Revenue 310 250
Expenses/taxation2 (271) (220)
Profit after tax for the year 39 30
Share of net assets
Non-current assets 165 166
Current assets 157 190
Non-current liabilities (13) (18)
Current liabilities (106) (149)
Net assets 203 189
SHARE OF CONTINGENT LIABILITIES
Contingent liabilities (22) (23)
1 2014 has been restated for the change in the accounting treatment of joint ventures in accordance with IFRS11, as detailed in note 15.
2 Expenses include the relevant portion of income tax recorded by associates and joint ventures.
13 OTHER INVESTMENTS
2015 2014
£m £m
NET BOOK VALUE
At 1 October 36 41
Additions 1 2
Disposals (1) (10)
Currency and other adjustments 2 3
At 30 September 38 36
COMPRISED OF
Other investments1, 3 9 9
Life insurance policies and mutual fund investments1 ,2 , 3 29 27
Total 38 36
1 Categorised as 'available for sale' financial assets (IAS 39).
2 Life insurance policies used by overseas companies to meet the cost of unfunded post-employment benefit obligations as set out in note 22.
3 As per the fair value hierarchies explained in note 19, other investments are Level 1 and the life insurance policies are Level 2.
Compass Group PLC
Consolidated Financial Statements (continued)
14 TRADE AND OTHER RECEIVABLES
2015 2014 Restated1
TRADE AND OTHER RECEIVABLES Current Non-current Total Current Non-current Total
£m £m £m £m £m £m
NET BOOK VALUE
At 1 October 2,069 70 2,139 2,013 86 2,099
Net movement 142 2 144 153 (12) 141
Currency adjustment (96) (1) (97) (97) (4) (101)
At 30 September 2,115 71 2,186 2,069 70 2,139
COMPRISED OF
Trade receivables 1,627 - 1,627 1,762 - 1,762
Less: Provision for impairment of trade receivables (57) - (57) (75) - (75)
Net trade receivables2 1,570 - 1,570 1,687 - 1,687
Other receivables 254 80 334 82 78 160
Less: Provision for impairment of other receivables (9) (15) (24) (11) (16) (27)
Net other receivables 245 65 310 71 62 133
Accrued income 177 - 177 189 - 189
Prepayments 117 6 123 122 8 130
Amounts owed by associates, joint ventures and related parties2 6 - 6 - - -
Trade and other receivables 2,115 71 2,186 2,069 70 2,139
1 2014 has been restated for the change in the accounting treatment of joint ventures in accordance with IFRS11, as detailed in note 15.
2 Categorised as 'loans and receivables' financial assets (IAS 39).
TRADE RECEIVABLES
The book value of trade and other receivables approximates to their fair value due to the short term nature of the majority of the receivables.
Credit sales are only made after credit approval procedures have been completed satisfactorily. The policy for making provisions for bad and doubtful debts varies from country to country as different countries and markets have different payment practices, but various factors are considered, including how overdue the debt is, the type of receivable and its past history, and current market and trading conditions. Full provision is made for debts that are not considered to be recoverable.
There is limited concentration of credit risk with respect to trade receivables due to the diverse and unrelated nature of the Group's client base. Accordingly, the directors believe that there is no further credit provision required in excess of the provision for the impairment of receivables. The book value of trade and other receivables represents the Group's maximum exposure to credit risk.
Trade receivable days for the continuing business at 30 September 2015 were 41 days (2014: 41 days).
Compass Group PLC
Consolidated Financial Statements (continued)
14 TRADE AND OTHER RECEIVABLES CONTINUED
The ageing of gross trade receivables and of the provision for impairment is as follows:
2015
Not 0-3 3-6 6-12 Over 12
yet months months months months
TRADE RECEIVABLES due overdue overdue overdue overdue Total
£m £m £m £m £m £m
Gross trade receivables 1,294 260 29 12 32 1,627
Less: Provision for impairment of trade receivables (2) (9) (9) (10) (27) (57)
Net trade receivables 1,292 251 20 2 5 1,570
2014 Restated1
Not 0-3 3-6 6-12 Over 12
yet months months months months
due overdue overdue overdue overdue Total
TRADE RECEIVABLES £m £m £m £m £m £m
Gross trade receivables 1,415 266 33 15 33 1,762
Less: Provision for impairment of trade receivables (4) (15) (18) (10) (28) (75)
Net trade receivables 1,411 251 15 5 5 1,687
1 2014 has been restated for the change in the accounting treatment of joint ventures in accordance with IFRS11, as detailed in note 15.
Movements in the provision for impairment of trade and other receivables are as follows:
2015 2014
PROVISION FOR IMPAIRMENT OF TRADE AND OTHER RECEIVABLES Trade Other Total Trade Other Total
£m £m £m £m £m £m
At 1 October 75 27 102 101 11 112
Charged to income statement 18 6 24 20 1 21
Credited to income statement (13) - (13) (27) (5) (32)
Utilised (21) (2) (23) (14) - (14)
Reclassified - - - (2) 21 19
Currency adjustment (2) (7) (9) (3) (1) (4)
At 30 September 57 24 81 75 27 102
At 30 September 2015, trade receivables of £278 million (2014: £276 million) were past due but not impaired. The Group has made a provision based on a number of factors, including past history of the debtor, and all amounts not provided for are considered to be recoverable.
Compass Group PLC
Consolidated Financial Statements (continued)
15 IFRS 11 RESTATEMENT
Comparative financial information for the year ended 30 September 2014 has been restated for the effects of IFRS 11. The following principal joint arrangements, previously accounted for as jointly controlled entities under IAS 31 are now classified as joint ventures and are equity accounted under the requirements of the revised IAS 28:
- Quadrant Catering Limited
- ADNH-Compass Middle East LLC
- Express Support Services Limitada
The impact of the restatements on the Group's consolidated income statement, statement of comprehensive income, balance sheet and cash flow statement is as shown below:
CONSOLIDATED INCOME STATEMENT For the year ended 30 September 2014
As published IFRS 11 Restated
£m £m £m
CONTINUING OPERATIONS
Revenue 17,058 (204) 16,854
Operating costs before goodwill impairment (15,850) 180 (15,670)
Operating profit 1,208 (24) 1,184
Share of profit of joint ventures - 21 21
Share of profit of associates 9 - 9
Total operating profit 1,217 (3) 1,214
Profit on disposal of US businesses 1 - 1
Profit on disposal of interest in associates 13 - 13
Finance income 5 - 5
Finance costs (91) - (91)
Change in the fair value of investments 2 - 2
Profit before tax 1,147 (3) 1,144
Income tax expense (279) 3 (276)
Profit for the year from continuing operations 868 - 868
DISCONTINUED OPERATIONS
Profit for the year from discontinued operations 3 - 3
CONTINUING AND DISCONTINUED OPERATIONS
Profit for the year 871 - 871
Compass Group PLC
Consolidated Financial Statements (continued)
15 IFRS 11 RESTATEMENT CONTINUED
CONSOLIDATED BALANCE SHEET
As at 30 September 2014
As published1 IFRS11 Restated
£m £m £m
NON-CURRENT ASSETS
Goodwill 3,565 (37) 3,528
Other intangible assets 1,010 - 1,010
Property, plant and equipment 729 (5) 724
Interests in joint ventures and associates 114 75 189
Other investments 36 - 36
Trade and other receivables 67 3 70
Deferred tax assets* 246 - 246
Derivative financial instruments** 50 - 50
Non-current assets 5,817 36 5,853
CURRENT ASSETS
Inventories 270 (5) 265
Trade and other receivables 2,128 (59) 2,069
Tax recoverable* 32 - 32
Cash and cash equivalents** 431 (23) 408
Derivative financial instruments** 16 - 16
Current assets 2,877 (87) 2,790
Total assets 8,694 (51) 8,643
CURRENT LIABILITIES
Short term borrowings1** (315) - (315)
Derivative financial instruments** (4) - (4)
Provisions (161) - (161)
Current tax liabilities* (148) - (148)
Trade and other payables1 (3,121) 44 (3,077)
Current liabilities (3,749) 44 (3,705)
NON_CURRENT LIABILITIES
Long term borrowings** (2,526) 1 (2,525)
Derivative financial instruments** (1) - (1)
Post-employment benefit obligations (176) 6 (170)
Provisions (277) - (277)
Deferred tax liabilities* (39) - (39)
Trade and other payables (78) - (78)
Non-current liabilities (3,097) 7 (3,090)
Total liabilities (6,846) 51 (6,795)
Net assets 1,848 - 1,848
EQUITY
Share capital
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