REG - Computacenter - Half Yearly Report <Origin Href="QuoteRef">CCC.L</Origin> <Origin Href="QuoteRef">MORT.L</Origin> - Part 2
28/08/2015 07:01
- Part 2: For the preceding part double click ID:nRSb3777Xa
Total comprehensive income for the period 48,697 4,009 42,768
Attributable to:
Equity holders of the parent 48,697 4,009 42,768
Consolidated balance sheet
As at 30 June 2015
Note Unaudited H1 2015£'000 UnauditedH1 2014£'000 Audited Year 2014 £'000
Non-current assets
Property, plant and equipment 75,000 82,891 79,940
Intangible assets 79,032 95,710 90,344
Investment in associate 38 43 42
Deferred income tax asset 14,177 14,977 15,049
168,247 193,621 185,375
Current assets
Inventories 41,379 71,840 50,006
Trade and other receivables 506,375 532,520 695,915
Prepayments 50,640 56,745 52,688
Accrued income 89,478 69,180 50,869
Forward currency contracts 1,157 164 2,434
Cash and short-term deposits 14 53,619 70,982 129,865
742,648 801,431 981,777
Total assets 910,895 995,052 1,167,152
Current liabilities
Trade and other payables 466,481 482,414 635,279
Deferred income 95,762 109,060 106,862
Financial liabilities 6,169 11,614 6,850
Forward currency contracts 1,368 700 389
Income tax payable 8,188 9,118 9,810
Provisions 6,264 10,442 9,808
584,232 623,348 768,998
Non-current liabilities
Financial liabilities 2,564 5,350 3,818
Provisions 3,380 11,491 8,176
Deferred income tax liabilities 696 829 748
6,640 17,670 12,742
Total liabilities 590,872 641,018 781,740
Net assets 320,023 354,034 385,412
Capital and reserves
Issued capital 9,297 9,276 9,283
Share premium 3,830 4,597 4,597
Capital redemption reserve 74,957 74,963 74,957
Own shares held (10,260) (11,655) (10,760)
Foreign currency translation reserve (16,988) 838 (4,326)
Retained earnings 259,176 276,002 311,648
Shareholders' equity 320,012 354,021 385,399
Non-controlling interests 11 13 13
Total equity 320,023 354,034 385,412
Approved by the Board on 28 August 2015
MJ Norris FA Conophy
Chief Executive Officer Group Finance Director
Consolidated statement of changes in equity
For the six months ended 30 June 2015
Attributable to equity holders of the parent
Issued capital £'000 Share premium £'000 Capital redemption £'000 Own shares held £'000 Foreign currency translation reserve£'000 Retained earnings£'000 Shareholder's equity£'000 Non- controlling interest£'000 Total equity£'000
At 1 January 2014 9,271 4,362 74,963 (11,976) 6,649 281,388 364,657 13 364,670
Profit for the period - - - - - 10,115 10,115 - 10,115
Other comprehensive income - - - - (5,811) (295) (6,106) - (6,106)
Total comprehensive income - - - - (5,811) 9,820 4,009 - 4,009
Cost of share-based payments - - - - - 1,724 1,724 - 1,724
Tax on share-based payment transactions - - - - - 27 27 - 27
Exercise of options 5 235 - 321 - (321) 240 - 240
Equity dividends - - - - - (16,636) (16,636) - (16,636)
At 30 June 2014 9,276 4,597 74,963 (11,655) 838 276,002 354,021 13 354,034
Profit for the period - - - - - 45,002 45,002 1 45,003
Other comprehensive income - - - - (5,164) (1,078) (6,242) (1) (6,243)
Total comprehensive income - - - - (5,164) 43,924 38,760 - 38,760
Prior period corrections 6 - (6) 695 - (695) - - -
Cost of share-based payments - - - - - 1,086 1,086 - 1,086
Tax on share-based payment transactions - - - - - 12 12 - 12
Exercise of options 1 - - 2,483 - (644) 1,840 - 1,840
Purchase of own shares - - - (2,283) - - (2,283) - (2,283)
Equity dividends - - - - - (8,037) (8,037) - (8,037)
At 31 December 2014 9,283 4,597 74,957 (10,760) (4,326) 311,648 385,399 13 385,412
Profit for the period - - - - - 61,742 61,742 - 61,742
Other comprehensive income - - - - (12,662) (383) (13,045) (2) (13,047)
Total comprehensive income - - - - (12,662) 61,359 48,697 (2) 48,695
Cost of share-based payment - - - - - 2,033 2,033 - 2,033
Tax on share-based payment transactions - - - - - 761 761 - 761
Exercise of options - - - 3,874 - (2,933) 941 - 941
Issue of shares 14 (14) - - - - - - -
Expense on Return of Value - (753) - - - - (753) - (753)
Return of Value - - - - - (97,916) (97,916) - (97,916)
Purchase of own shares - - - (3,374) - - (3,374) - (3,374)
Equity dividends - - - - - (15,776) (15,776) - (15,776)
At 30 June 2015 9,297 3,830 74,957 (10,260) (16,988) 259,176 320,012 11 320,023
Consolidated cash flow statement
For the six months ended 30 June 2015
Note Unaudited H1 2015£'000 Unaudited H1 2014£'000 Audited Year 2014£'000
Operating activities
Profit before tax 70,677 18,034 76,418
Net finance expense 601 423 229
Depreciation 9,425 10,263 20,398
Amortisation 6,648 6,056 12,675
Share-based payments 2,033 1,724 2,810
Loss on sale of property, plant and equipment 147 106 676
Loss on sale of intangibles 21 133 1
(Increase)/decrease in inventories (1,568) (15,167) 5,834
Decrease/(increase) in trade and other receivables 111,834 107,200 (51,167)
(Decrease)/increase in trade and other payables (146,362) (108,140) 50,275
Decrease in customer contract provisions (1,172) (2,375) (1,851)
Gain on disposal of a subsidiary 7 (42,155) - -
Other adjustments (102) 623 (473)
Cash generated from operations 10,027 18,880 115,825
Income taxes paid (9,029) (8,592) (21,408)
Net cash flow from operating activities 998 10,288 94,417
Investing activities
Interest received 621 1,197 1,615
Disposal of subsidiary, net of cash disposed of 12 56,145 - -
Acquisition of subsidiaries, net of cash acquired - (465) (465)
Sale of property, plant and equipment 18 31 44
Purchases of property, plant and equipment (7,862) (5,216) (12,189)
Proceeds from sale of intangible assets - - 1
Purchases of intangible assets (2,000) (3,638) (5,494)
Net cash flow from investing activities 46,922 (8,091) (16,488)
Financing activities
Interest paid (1,042) (1,783) (1,275)
Dividends paid to equity shareholders of the parent (15,776) (16,636) (24,673)
Return of Value 11 (97,916) - -
Expenses on Return of Value (767) - -
Proceeds from issue of shares 941 240 1,791
Purchase of own shares (3,374) - (2,283)
Repayment of capital element of finance leases (1,704) (3,410) (4,983)
Repayment of loans (433) (2,378) (7,767)
New borrowings 113 2,363 3,908
Net cash flow from financing activities (119,958) (21,604) (35,282)
(Decrease)/increase in cash and cash equivalents (72,038) (19,407) 42,647
Effect of exchange rates on cash and cash equivalents (4,493) (1,363) (3,835)
Cash and cash equivalents at the beginning of the period 129,146 90,334 90,334
Cash and cash equivalents at the end of the period 14 52,615 69,564 129,146
Notes to the accounts
For the six months ended 30 June 2015
1 Corporate information
The interim condensed consolidated financial statements of the Group for the
six months ended 30 June 2015 were authorised for issue in accordance with a
resolution of the Directors on 27 August 2015.
Computacenter plc is a limited company incorporated and domiciled in England
whose shares are publicly traded.
2 Basis of preparation
The interim condensed consolidated financial statements for the six months
ended 30 June 2015 have been prepared in accordance with International
Accounting Standard 34 'Interim Financial Reporting', as adopted by the
European Union.
They do not include all of the information and disclosures required in the
annual financial statements, and should be read in conjunction with the
Group's annual financial statements as at 31 December 2014 which have been
prepared in accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union.
The Group has maintained its positive cash position in the period. In order to
ensure that the Group can maintain its strong liquidity position it has a £40
million committed facility, which remained unutilised at the reporting date.
The Group's forecast and projections, which allow for reasonably possible
variations, show that the Group will continue to maintain its strong liquidity
position, and therefore supports the Directors' view that the Group has
sufficient funds available to meet its foreseeable requirements. The Directors
have concluded therefore that the going concern basis remains appropriate.
3 Significant accounting policies
The accounting policies applied by the Group in these interim condensed
consolidated financial statements are the same as those applied by the Group
in its consolidated financial statements for the year ended 31 December 2014,
except for the adoption of new standards and interpretations as of 1 January
2015, which did not have any impact on the accounting policies, financial
position or performance of the Group, as noted below:
• Annual Improvements to IFRSs - 2010-2012 Cycle
• Annual Improvements to IFRSs - 2011-2013 Cycle
The Group has not early adopted any other standard, interpretation or
amendment that has been issued but is not yet effective.
4 Adjusted measures
The Company uses a number of non-Generally Accepted Accounting Practice
('non-GAAP') financial measures in addition to those reported in accordance
with IFRS. The Directors believe that these non-GAAP measures, listed below,
are important when assessing the underlying financial and operating
performance of the Group.
4.1 Adjusted revenue
Adjusted revenue excludes the revenue from a disposed subsidiary, RDC, for
both the current period and for comparative reporting periods. RDC was sold on
2 February 2015.
4.2 Adjusted results
As above, the adjusted results exclude the results of RDC for both the current
and comparative periods.
Adjusted revenue, adjusted Services revenue, adjusted Professional Services
revenue and adjusted Supply Chain revenue excludes the revenue from a disposed
subsidiary, RDC, for both the current period and the comparative reporting
period. RDC was sold on 2 February 2015. Adjusted operating profit or loss,
adjusted profit or loss before tax, adjusted profit or loss for the period,
adjusted earnings per share and adjusted diluted earnings per share are, as
appropriate, each stated before: exceptional and other adjusting items
including gain or loss on business disposals, amortisation of acquired
intangibles, utilisation of deferred tax assets (where initial recognition was
as an exceptional item or a fair value adjustment on acquisitions), and the
related tax effect of these exceptional and other adjusting items, as
management do not consider these items when reviewing the underlying
performance of the segment or the Group as a whole.
Additionally, adjusted operating profit or loss takes account of the interest
paid on customer-specific financing ('CSF') which management considers to be a
cost of sale.
A reconciliation between key adjusted and statutory measures is provided in
note 5, segment information, with further detail provided as part of financial
review.
5 Segment information
For management purposes, the Group is organised into geographical segments,
with each segment determined by the location of the Group's assets and
operations. The Group's business in each geography is managed separately.
No operating segments have been aggregated to form the reportable operating
segments shown below.
Segmental performance for the periods to H1 2015, H1 2014 and Full Year 2014
were as follows:
Six months ended 30 June 2015 (unaudited)
UK£'000 Germany£'000 France£'000 Belgium£'000 Total£'000
Revenue
Adjusted Supply Chain revenue 425,099 349,624 157,937 16,106 948,766
Adjusted Services revenue
Professional Services 64,665 51,061 8,381 752 124,859
Managed Services 198,923 134,669 23,477 7,263 364,332
Total adjusted Services revenue 263,588 185,730 31,858 8,015 489,191
Total adjusted revenue 688,687 535,354 189,795 24,121 1,437,957
RDC
Supply Chain revenue 3,157 - - - 3,157
Professional Services revenue 290 - - - 290
Total RDC revenue 3,447 - - - 3,447
Statutory revenue 692,134 535,354 189,795 24,121 1,441,404
Results
Adjusted gross profit 102,920 67,026 12,561 3,011 185,518
Administrative expenses (80,008) (58,505) (15,554) (1,962) (156,029)
Adjusted operating profit/(loss) 22,912 8,521 (2,993) 1,049 29,489
Adjusted net interest 273 (738) 94 (52) (423)
Adjusted profit/(loss) before tax 23,185 7,783 (2,899) 997 29,066
Exceptional items:
- onerous contracts trading losses - (690) - - (690)
- onerous contracts provision for future losses - 1,126 - - 1,126
- exceptional gains/(losses) - - (449) - (449)
Total exceptional items - 436 (449) - (13)
Gain on disposal of a subsidiary 42,155 - - - 42,155
Amortisation of acquired intangibles (240) (572) - (39) (851)
RDC 320 - - - 320
Statutory profit/(loss) before tax 65,420 7,647 (3,348) 958 70,677
The reconciliation for adjusted operating profit to operating profit, as
disclosed in the Consolidated Income Statement, is as follows:
Six months ended 30 June 2015 (unaudited)
UK£'000 Germany£'000 France£'000 Belgium£'000 Total£'000
Adjusted segment operating profit/(loss) 22,912 8,521 (2,993) 1,049 29,489
Add back interest on CSF 33 147 - - 180
Amortisation of acquired intangibles (240) (572) - (39) (851)
Exceptional items - 436 (449) - (13)
RDC 319 - - - 319
Segment operating profit/(loss) 23,024 8,532 (3,442) 1,010 29,124
Other segment information
Share-based payments 1,711 180 142 - 2,033
5 Segment information continued Six months ended 30 June 2014 (unaudited)
UK£'000 Germany£'000 France£'000 Belgium£'000 Total£'000
Revenue
Adjusted Supply Chain revenue 412,483 326,830 193,037 15,862 948,212
Adjusted Services revenue
Professional Services 58,480 55,446 10,316 1,474 125,716
Managed Services 181,570 144,246 27,525 8,169 361,510
Total adjusted Services revenue 240,050 199,692 37,841 9,643 487,226
Total adjusted revenue 652,533 526,522 230,878 25,505 1,435,438
RDC
Supply Chain revenue 21,559 - - - 21,559
Professional Services revenue 1,287 - - - 1,287
Total RDC revenue 22,846 - - - 22,846
Statutory revenue 675,379 526,522 230,878 25,505 1,458,284
Results
Adjusted gross profit 96,895 69,648 14,734 3,256 184,533
Administrative expenses (74,381) (61,807) (20,406) (2,274) (158,868)
Adjusted operating profit/(loss) 22,514 7,841 (5,672) 982 25,665
Adjusted net interest 377 328 (738) (57) (90)
Adjusted profit/(loss) before tax 22,891 8,169 (6,410) 925 25,575
Exceptional items:
- onerous contracts trading losses - (2,383) - - (2,383)
- onerous contracts provision for future losses - 2,375 - - 2,375
- exceptional gains/(losses) - - (9,092) - (9,092)
Total exceptional items - (8) (9,092) - (9,100)
Amortisation of acquired intangibles (240) (600) - (44) (884)
RDC 2,443 - - - 2,443
Statutory profit/(loss) before tax 25,094 7,561 (15,502) 881 18,034
The reconciliation for adjusted operating profit to operating profit as disclosed in the Consolidated Income Statement is as follows:
UK£'000 Germany£'000 France£'000 Belgium£'000 Total£'000
Adjusted segment operating profit/(loss) 22,514 7,841 (5,672) 982 25,665
Add back interest on CSF 108 227 - - 335
Amortisation of acquired intangibles (240) (600) - (44) (884)
Exceptional items - (8) (9,092) - (9,100)
RDC 2,441 - - - 2,441
Segment operating profit/(loss) 24,823 7,460 (14,764) 938 18,457
Other segment information
Share-based payments 1,373 178 173 - 1,724
5 Segment information continued Year ended 31 December 2014
UK£'000 Germany£'000 France£'000 Belgium£'000 Total£'000
Revenue
Adjusted Supply Chain revenue 878,145 774,913 393,406 34,580 2,081,044
Adjusted Services revenue
Professional Services 120,446 108,950 19,752 2,113 251,261
Managed Services 368,663 283,203 57,957 15,979 725,802
Total adjusted Services revenue 489,109 392,153 77,709 18,092 977,063
Total adjusted revenue 1,367,254 1,167,066 471,115 52,672 3,058,107
RDC
Supply Chain revenue 41,197 - - - 41,197
Professional Services revenue 8,455 - - - 8,455
Total RDC revenue 49,652 - - - 49,652
Statutory revenue 1,416,906 1,167,066 471,115 52,672 3,107,759
Results
Adjusted gross profit 209,555 151,682 31,757 6,120 399,114
Administrative expenses (148,827) (124,906) (40,592) (4,057) (318,382)
Adjusted operating profit/(loss) 60,728 26,776 (8,835) 2,063 80,732
Adjusted net interest 929 452 (929) (125) 327
Adjusted profit/(loss) before tax 61,657 27,228 (9,764) 1,938 81,059
Exceptional items:
- onerous contracts trading losses - (3,824) - - (3,824)
- onerous contracts provision for future losses - 5,364 - - 5,364
- exceptional gains/(losses) - - (9,128) - (9,128)
Total exceptional items - 1,540 (9,128) - (7,588)
Amortisation of acquired intangibles (551) (1,232) - (85) (1,868)
RDC 4,815 - - - 4,815
Statutory profit/(loss) before tax 65,921 27,536 (18,892) 1,853 76,418
The reconciliation for adjusted operating profit to operating profit, as disclosed in the Consolidated Income Statement, is as follows: Year ended 31 December 2014
UK£'000 Germany£'000 France£'000 Belgium£'000 Total£'000
Adjusted segment operating profit/(loss) 60,728 26,776 (8,835) 2,063 80,732
Add back interest on CSF 165 391 - - 556
Amortisation of acquired intangibles (551) (1,232) - (85) (1,868)
Exceptional and other adjusting items - 1,540 (9,128) - (7,588)
RDC 4,815 - - - 4,815
Segment operating profit/(loss) 65,157 27,475 (17,963) 1,978 76,647
Other segment information
Share-based payments 2,525 215 63 - 2,803
6 Seasonality of operations
Historically, revenues have been higher in the second half of the year than in
the first six months. This is principally driven by customer buying behaviour
in the markets in which we operate. Typically this leads to a more pronounced
effect on operating profit. In addition, the effect is compounded further by
the tendency for the holiday entitlements of our employees to accrue during
the first half of the year and to be utilised in the second half.
7 Exceptional and other adjusting items
Unaudited H1 2015£'000 Unaudited H1 2014£'000 Audited Year 2014£'000
Operating profit
Redundancy and other restructuring costs (449) (9,100) (9,128)
Onerous contracts 436 - 1,540
(13) (9,100) (7,588)
Gain on disposal of a subsidiary 42,155 - -
Exceptional and other adjusting items before taxation 42,142 (9,100) (7,588)
Income tax
Tax on onerous contracts included in operating profit (52) - (185)
Exceptional and other adjusting items after taxation 42,090 (9,100) (7,773)
Included within the current period are the following exceptional and other
adjusting items:
• Computacenter (UK) Limited disposed of its wholly owned
subsidiary RDC during the period. A gain of £42.2 million was recognised on
disposal of RDC. See Note 12 for details. In line with our accounting policy,
management has elected under IAS1 to report this gain as a separate line item
on the face of the income statement due to the materiality, infrequency and
nature of the gain on disposal of RDC. As noted on Note 4.2 the adjusted
results exclude this gain. This election provides the best guidance to users
of our external reporting as to the underlying profitability trends within the
Group and to present the results of the Group in a way that is fair, balanced
and understandable.
• Computacenter France continued with its substantial
restructuring exercise that began in 2014. An additional cost of £0.4 million
has been recognised as part of the Social Plan. As the redundancy and
restructuring costs were previously treated as an exceptional item on
recognition, the further provision has also been treated as an exceptional
item.
• The Group's remaining two onerous contracts continue to show
operational improvements therefore management has revised its estimates of the
losses to be incurred. On this basis the Group has released £0.4 million of
the provision. As the onerous contracts were previously treated as an
exceptional item on recognition, the write back of the provision has also been
released as an exceptional item.
Included within the prior period is the following exceptional and other
adjusting items:
Computacenter France incurred an exceptional charge of £9.1 million relating
to the estimated costs of a comprehensive restructuring plan within the
Group's French business that has been provided for at 30 June 2014. The
substantial restructuring exercise aimed to reduce the cost base, improve the
competitiveness and therefore improve the profitability of the Group's French
business.
8 Income tax
The Group calculates the period income tax expense using the tax rate that
would be applicable to the total expected total annual earnings.
The charge based on the profit for the period comprises:
Unaudited H1 2015£'000 Unaudited H1 2014£'000 Audited Year 2014£'000
UK corporation tax 6,077 6,653 17,048
Foreign tax
- before exceptional items 3,643 2,159 5,820
- exceptional items - - (459)
Total foreign tax 3,643 2,159 5,361
Adjustments in respect of prior periods - (103) 191
Total current income tax 9,720 8,709 22,600
Deferred tax
- before exceptional items (785) (790) (1,340)
- adjustments in respect of prior periods - - (604)
Exceptional items - - 644
Total deferred tax (785) (790) (1,300)
8,935 7,919 21,300
9 Earnings per ordinary share
Earnings per share amounts are calculated by dividing profit attributable to
ordinary equity holders by the weighted average number of ordinary shares
outstanding during the year (excluding own shares held).
Diluted earnings per share amounts are calculated by dividing profit
attributable to ordinary equity holders by the weighted average number of
ordinary shares outstanding during the year (excluding own shares held)
adjusted for the effect of dilutive options.
Unaudited H1 2015£'000 Unaudited H1 2014£'000 Audited Year 2014£'000
Profit attributable to equity holders of the parent 61,742 10,115 55,117
H1 2015No. '000 H1 2014No. '000 Year 2014No. '000
Basic weighted average number of shares (excluding own shares held) 124,571 135,961 135,985
Effect of dilution:
Share options 2,014 1,423 1,784
Diluted weighted average number of shares 126,585 137,384 137,769
H1 2015pence H1 2014pence Year 2014pence
Basic earnings per share 49.6 7.4 40.5
Diluted earnings per share 48.8 7.4 40.0
10 Dividends paid and proposed
A final dividend for 2014 of 13.1 pence per ordinary share was paid on 19 June
2015. An interim dividend in respect of 2015 of 6.4 pence per ordinary share,
amounting to a total dividend of £7,850,110, was declared by the Directors at
their meeting on 27 August 2015. The expected payment date of the dividend
declared is 16 October 2015. This interim report does not reflect this
dividend payable.
11 Return of Value
On 20 February 2015 (the "Issue Date"), the Company effected a capital
reorganisation (the "Capital Reorganisation") in order to facilitate the
Return of Value to shareholders. As part of the Capital Reorganisation, each
existing ordinary share of 6 2/3 each was subdivided into 15 undesignated
shares of 4/9 pence each, and immediately following such subdivision every 17
undesignated shares were consolidated into 1 new ordinary share of 7 5/9 pence
each. Additionally on the Issue Date, an amount of £14,500 standing to the
credit of the Company's share premium account was applied to pay up in full
145,000,000 non-redeemable B shares with a nominal value of 0.01 pence each.
12 Business combinations
Disposal of subsidiary
On 2 February 2015, the Group announced that it was disposing of its
wholly-owned IT disposal and recycling subsidiary, RDC. The Group reached
agreement
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