REG - Compass Group PLC - Full year results <Origin Href="QuoteRef">CPG.L</Origin> - Part 6
24/11/2015 07:02
- Part 6: For the preceding part double click ID:nRSX7239Ge
178 - 178
Share premium account 174 - 174
Capital redemption reserve 293 - 293
Less: Own shares (1) - (1)
Other reserves 4,277 4,277
Retained earnings (3,082) - (3,082)
Total equity shareholders' funds 1,839 - 1,839
Non-controlling interests 9 - 9
Total equity 1,848 - 1,848
1 2014 has been restated to reflect a reclassification between other payables and short term borrowings.
* Component of current and deferred taxes. ** Component of net debt.
Compass Group PLC
Consolidated Financial Statements (continued)
15 IFRS 11 RESTATEMENT CONTINUED
CONSOLIDATED CASH FLOW STATEMENT For the year ended 30 September 2014
As published IFRS11 Restated
£m £m £m
CASH FLOW FROM OPERATING ACTIVITIES
Cash generated from operations 1,442 (25) 1,417
Interest paid (77) - (77)
Tax received 24 - 24
Tax paid (268) 2 (266)
Net cash from operating activities 1,121 (23) 1,098
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of subsidiary companies and investments in associates 1 (176) - (176)
Proceeds from sale of subsidiary companies and associates - discontinued activities1 (1) - (1)
Proceeds from sale of subsidiary companies and associates - continuing activities1 66 - 66
Tax on profits from sale of subsidiary companies and associates (4) - (4)
Purchase of intangible assets (206) - (206)
Purchase of property, plant and equipment2 (263) 2 (261)
Proceeds from sale of property, plant and equipment/intangible assets 22 - 22
Purchase of other investments (2) - (2)
Proceeds from sale of other investments 3 - 3
Dividends received from associates 7 - 7
Dividends received from joint ventures - 15 15
Interest received 6 - 6
Net cash used in investing activities (548) 17 (531)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issue of ordinary share capital 5 - 5
Purchase of own shares3 (280) - (280)
Net increase in borrowings 597 - 597
Repayment of obligations under finance leases (5) - (5)
Return of cash to Compass shareholders (1,000) - (1,000)
Equity dividends paid (444) - (444)
Dividends paid to non-controlling interests (5) 2 (3)
Net cash used in financing activities (1,132) 2 (1,130)
CASH AND CASH EQUIVALENTS
Net decrease in cash and cash equivalents (559) (4) (563)
Cash and cash equivalents at beginning of the year 1,006 (19) 987
Currency translation losses on cash and cash equivalents (16) - (16)
Cash and cash equivalents at end of the period 431 (23) 408
1 Net of cash acquired or disposed and payments received or made under warranties and indemnities.
2 Includes property, plant and equipment purchased under client commitments.
3 Includes stamp duty and brokers' commission.
Compass Group PLC
Consolidated Financial Statements (continued)
16 INVENTORIES
INVENTORIES 2015 2014 Restated1
£m £m
NET BOOK VALUE
At 1 October 265 250
Business acquisitions 3 -
Net movement 17 25
Currency adjustment (3) (10)
At 30 September 282 265
1 2014 has been restated for the change in the accounting treatment of joint ventures in accordance with IFRS11, as detailed in note 15.
17 CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS 2015 2014 Restated1
£m £m
Cash at bank and in hand 224 252
Short term bank deposits 59 156
Cash and cash equivalents2 283 408
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).
CASH AND CASH EQUIVALENTS BY CURRENCY 2015 2014 Restated1
£m £m
Sterling 72 132
US Dollar 33 76
Euro 44 39
Japanese Yen 14 12
Other 120 149
Cash and cash equivalents 283 408
The Group's policy to manage the credit risk associated with cash and cash equivalents is set out in note 19. The book value of cash and cash equivalents represents the maximum credit exposure.
MASTER NETTING OR SIMILAR AGREEMENTS
The Group has master netting agreements for its cash and bank overdrafts and the following balances are offset within the consolidated balance sheet:
2015
Gross Offset Net
£m £m £m
Cash and cash equivalents 328 (45) 283
Bank overdrafts (104) 45 (59)
2014 Restated1
Gross Offset Net
£m £m £m
Cash and cash equivalents 579 (171) 408
Bank overdrafts (208) 171 (37)
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)
18 SHORT TERM AND LONG TERM BORROWINGS
2015 2014 Restated1,2
SHORT TERM AND LONG TERM BORROWINGS Current Non-current Total Current Non-current Total
£m £m £m £m £m £m
Bank overdrafts 59 - 59 37 - 37
Bank loans 78 251 329 22 301 323
Loan notes 107 1,330 1,437 - 1,076 1,076
Bonds - 1,093 1,093 251 1,136 1387
Borrowings (excluding finance leases) 244 2,674 2,918 310 2,513 2,823
Finance leases 3 10 13 5 12 17
Borrowings (including finance leases)3 247 2,684 2,931 315 2,525 2,840
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 2014 has been restated to reflect a reclassification between other payables and short term borrowings.
3 Categorised as 'other financial liabilities' (IAS 39).
Bank overdrafts principally arise as a result of uncleared transactions. Interest on bank overdrafts is at the relevant money market rates.
All amounts due under bonds, loan notes and bank facilities are shown net of unamortised issue costs. Additionally, the Group adjusts the carrying values of the bonds and loan notes that are designated in effective fair value hedge relationships, for fair value gains and losses (based on observable market inputs) attributable to the risk being hedged.
The Group has fixed term, fixed interest private placements denominated in US dollar and sterling. The $100 million 2024 and $300 million 2026 US dollar private placements were issued during the year.
2015 2014
Carrying value Carrying value
LOAN NOTES Nominal value Redeemable Interest £m £m
US$ private placement $162m Oct 2015 6.72% 107 102
Sterling private placement £35m Oct 2016 7.55% 36 36
US$ private placement $250m Oct 2018 3.31% 170 157
US$ private placement $200m Sep 2020 3.09% 132 123
US$ private placement $398m Oct 2021 3.98% 262 245
US$ private placement $352m Oct 2023 4.12% 250 223
US$ private placement $100m Dec 2024 3.54% 66 -
US$ private placement $300m Sep 2025 3.81% 216 190
US$ private placement $300m Dec 2026 3.64% 198 -
1,437 1,076
2015 2014
BONDS Carrying value Carrying value
Nominal value Redeemable Interest £m £m
Sterling Eurobond £250m Dec 2014 7.00% - 251
Euro Eurobond E600m Feb 2019 3.13% 458 485
Euro Eurobond E500m Jan 2023 1.88% 386 402
Sterling Eurobond £250m Jun 2026 3.85% 249 249
1,093 1,387
Compass Group PLC
Consolidated Financial Statements (continued)
18 SHORT TERM AND LONG TERM BORROWINGS CONTINUED
The maturity profile of borrowings (excluding finance leases) is as follows:
MATURITY PROFILE OF BORROWINGS (EXCLUDING FINANCE LEASES) 2015 2014 Restated1
£m £m
Within 1 year, or on demand 244 310
Between 1 and 2 years 287 153
Between 2 and 3 years - 286
Between 3 and 4 years 628 -
Between 4 and 5 years 132 642
In more than 5 years 1,627 1,432
Borrowings (excluding finance leases) 2,918 2,823
The fair value of the Group's borrowings is calculated by discounting future cash flows to net present values at current
market rates for similar financial instruments. The fair values have been determined by reference to Level 2 inputs as
defined by the fair value hierarchy of IFRS 13 'Fair value measurements'. The table below shows the fair value of
borrowings excluding accrued interest:
2015 2014 Restated1
CARRYING VALUE AND FAIR VALUE OF BORROWINGS (EXCLUDING FINANCE LEASES) Carrying value Fair value Carrying value Fair value
£m £m £m £m
Bank overdrafts 59 59 37 37
Bank loans 329 329 323 323
Loan notes 1,437 1,456 1,076 1,095
£250m Eurobond Dec 2014 - - 251 253
E600m Eurobond Feb 2019 458 478 485 517
E500m Eurobond Jan 2023 386 379 402 403
£250m Eurobond Jun 2026 249 269 249 259
Bonds 1,093 1,126 1,387 1,432
Borrowings (excluding finance leases) 2,918 2,970 2,823 2,887
1 2014 has been restated for the change in the accounting treatment of joint ventures in accordance with IFRS11, as
detailed in note 15.
2015 2014
Present Present
GROSS AND PRESENT VALUE OF FINANCE LEASE LIABILITIES Gross value Gross value
£m £m £m £m
Finance lease payments falling due:
Within 1 year 4 3 5 5
In 2 to 5 years 7 7 9 8
In more than 5 years 3 3 5 4
14 13 19 17
Less: Future finance charges (1) - (2) -
Gross and present value of finance lease liabilities 13 13 17 17
Compass Group PLC
Consolidated Financial Statements (continued)
18 SHORT TERM AND LONG TERM BORROWINGS CONTINUED
2015 2014 Restated1
Finance Finance
Borrowings leases Total Borrowings leases Total
BORROWINGS BY CURRENCY £m £m £m £m £m £m
Sterling 584 - 584 835 - 835
US Dollar 1,441 - 1,441 1,040 1 1,041
Euro 853 11 864 904 13 917
Other 40 2 42 44 3 47
Total 2,918 13 2,931 2,823 17 2,840
1 2014 has been restated for the change in the accounting treatment of joint ventures in accordance with IFRS11, as
detailed in note 15.
The Group had the following undrawn committed facilities available at 30 September, in respect of which all conditions
precedent had then been met:
Undrawn committed facilities 2015 2014
£m £m
Expiring between 1 and 5 years 1,000 1,000
19 DERIVATIVE FINANCIAL
INSTRUMENTS
CAPITAL RISK MANAGEMENT
The Group manages its capital
structure to ensure that it will
be able to continue as a going
concern. The capital structure of
the Group consists of cash and
cash equivalents as disclosed in
note 17; debt, which includes the
borrowings disclosed in note 18;
and equity attributable to equity
shareholders of the Parent,
comprising issued share capital,
reserves and retained earnings as
disclosed in the consolidated
statement of changes in equity.
FINANCIAL MANAGEMENT
The Group continues to manage its
interest rate and foreign currency
exposure in accordance with the
policies set out below. The
Group's financial instruments
comprise cash, borrowings,
receivables and payables that are
used to finance the Group's
operations. The Group also uses
derivatives, principally interest
rate swaps, forward currency
contracts and cross currency
swaps, to manage interest rate and
currency risks arising from the
Group's operations. The Group does
not trade in financial
instruments. The Group's treasury
policies are designed to mitigate
the impact of fluctuations in
interest rates and exchange rates
and to manage the Group's
financial risks. The Board
approves any changes to the
policies.
LIQUIDITY RISK
The Group finances its borrowings
from a number of sources including
the bank, the public and the
private placement markets. The
Group has developed long term
relationships with a number of
financial counterparties with the
balance sheet strength and credit
quality to provide credit
facilities as required. The Group
seeks to avoid a concentration of
debt maturities in any one period
to spread its refinancing risk.
2015 2014
Current Non-current Current Non-current Current Non-current Current Non-current
DERIVATIVE FINANCIAL INSTRUMENTS assets assets liabilities liabilities assets assets liabilities liabilities
£m £m £m £m £m £m £m £m
Interest rate swaps:
Fair value hedges1 2 58 - - 11 34 - -
Not in a hedging relationship2 - - (2) (2) - - (1) -
Other derivatives:
Forward currency contracts and 17 - (5) (23) 4 16 (3) (1)
cross currency swaps
Others - - - - 1 - - -
Total 19 58 (7) (25) 16 50 (4) (1)
1 Derivatives that are designated
and effective as hedging
instruments carried at fair value
(IAS 39).
2 Derivatives carried at 'fair
value through profit or loss' (IAS
39).
Compass Group PLC
Consolidated Financial Statements (continued)
19 DERIVATIVE FINANCIAL INSTRUMENTS CONTINUED
2015 2014
NOTIONAL AMOUNT OF DERIVATIVE FINANCIAL INSTRUMENTS BY CURRENCY Fair value Cash flow Fair value Cash flow
swaps swaps swaps swaps
£m £m £m £m
Sterling 20 - 220 -
US Dollar 658 390 615 472
Euro 700 22 741 27
Japanese Yen - 73 - 75
Other - 236 - 248
Total 1,378 721 1,576 822
2015 20141,2
Forward Effective Forward Effective
EFFECTIVE CURRENCY DENOMINATION OF BORROWINGS AFTER THE EFFECT OF DERIVATIVES Gross currency currency of Gross currency currency of
borrowings contracts3 borrowings borrowings contracts3 borrowings
£m £m £m £m £m £m
Sterling 584 (293) 291 835 (600) 235
US Dollar 1,441 406 1,847 1,041 623 1,664
Euro 864 (578) 286 917 (624) 293
Japanese Yen - 125 125 - 128 128
Other 42 389 431 47 482 529
Total 2,931 49 2,980 2,840 9 2,849
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 2014 has been restated to reflect a reclassification between other payables and short term borrowings.3 Includes cross currency contracts.
Compass Group PLC
Consolidated Financial Statements (continued)
20 TRADE AND OTHER PAYABLES
2015 2014 Restated1,2
TRADE AND OTHER PAYABLES Current Non-current Total Current Non-current Total
£m £m £m £m £m £m
NET BOOK VALUE
At 1 October 3,077 78 3,155 3,010 75 3,085
Net movement 149 12 161 204 6 210
Reclassification 1 (2) (1) (18) - (18)
Currency adjustment (70) (4) (74) (119) (3) (122)
At 30 September 3,157 84 3,241 3,077 78 3,155
COMPRISED OF
Trade payables3 1,400 - 1,400 1,333 - 1,333
Social security and other taxes 273 - 273 279 - 279
Other payables2 155 28 183 164 23 187
Deferred consideration on acquisitions3 16 28 44 13 21 34
Accruals4 1,027 28 1,055 1,025 34 1,059
Deferred income 286 - 286 257 - 257
Amounts owed to associates, joint ventures and related parties5 - - - 6 - 6
Trade and other payables 3,157 84 3,241 3,077 78 3,155
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 2014 has been restated to reflect a reclassification between other payables and short term borrowings.
3 Categorised as 'other financial liabilities' (IAS 39).
4 Of this balance £415 million (2014: £436 million) is categorised as 'other financial liabilities' (IAS 39). 5 Categorised as 'loans and receivables' financial assets (IAS 39).
The Directors consider that the carrying amount of trade and other payables approximates to their fair value. The current trade and other payables are payable on demand.
Trade payable days for the continuing business at 30 September 2015 were 72 days (2014: 72 days).
Compass Group PLC
Consolidated Financial Statements (continued)
21 PROVISIONS
Provisions in
respect of
discontinued
and disposed Onerous Legal and
PROVISIONS Insurance businesses Contracts other claims Reorganisation Other Total
£m £m £m £m £m £m £m
At 1 October 2013 228 47 56 91 67 42 531
Reclassified 1 (3) - (12) (20) - 14 (21)
Expenditure in the year (2) (1) (19) (9) (34) (24) (89)
Charged to income statement 9 - 9 8 11 2 39
Credited to income statement - - (7) (2) (3) (2) (14)
Business acquisitions - - 1 - - 1 2
Business Disposals - - - - (3) - (3)
Unwinding of discount on provisions - - 3 - - - 3
Currency adjustment - - (2) (4) (2) (2) (10)
At 30 September 2014 232 46 29 64 36 31 438
At 1 October 2014 232 46 29 64 36 31 438
Reclassified1 - - (1) 1 (1) - (1)
Expenditure in the year (5) (1) (11) (15) (20) (6) (58)
Charged to income statement 9 - 9 17 7 2 44
Credited to income statement (12) - (6) (16) (4) (4) (42)
Business disposals - - - - (2) - (2)
Unwinding of discount on provisions 5 - 1 - - - 6
Currency adjustment 13 - (1) (7) (2) (1) 2
At 30 September 2015 242 45 20 44 14 22 387
1 Including items reclassified between accrued liabilities and other balance sheet captions.
PROVISIONS 2015 2014
£m £m
Current 136 161
Non-current 251 277
Total provisions 387 438
The provision for insurance relates to the potential settlements in respect of claims under self-funded insurance schemes,
primarily workers' compensation schemes in the US, and is essentially long term in nature.
Provisions in respect of discontinued and disposed of businesses relate to estimated amounts payable in connection with
onerous contracts and claims arising from disposals. The final amount payable remains uncertain as, at the date of approval
of these financial statements, there remains a further period during which claims may be received. The timing of any
settlement will depend upon the nature and extent of claims received.
Provisions for onerous contracts represent the liabilities in respect of short term and long term leases on unoccupied
properties and other contracts lasting under five years.
Provisions for legal and other claims relate principally to provisions for the estimated cost of litigation and other
sundry claims. The timing of the settlement of these claims is uncertain.
Provisions for re organisation include provision for redundancy costs and these are expected to be utilised over the next
year.
Other provisions include environmental provisions. These are in respect of potential liabilities relating to the Group's
responsibility for maintaining its operating sites in accordance with statutory requirements and the Group's aim to have a
low impact on the environment. These provisions are expected to be utilised as operating sites are disposed of or as
environmental matters are resolved.
Provisions are discounted to present value where the effect is material using the Group's weighted average cost of
capital.
Compass Group PLC
Consolidated Financial Statements (continued)
22 POST EMPLOYMENT BENEFIT OBLIGATIONS
PENSION SCHEMES OPERATED
The Group operates a number of pension arrangements throughout the world which have been developed in accordance with statutory requirements and local customs and practices. The majority of schemes are self-administered and the schemes' assets are held independently of the Group's assets. Pension costs are assessed in accordance with the advice of independent, professionally qualified actuaries. The Group makes employer contributions to the
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