REG - Costain Group PLC - Final Results <Origin Href="QuoteRef">COSG.L</Origin> - Part 3

CostainAnnouncement

03/03/2015 07:01

- Part 3: For the preceding part double click  ID:nRSC3212Gb 

                          
 Cash and cash equivalents                                         148.5  84.3   
 Bank overdrafts                                                   -      (1.6)  
 Cash, cash equivalents and overdrafts in the cash flow statement  148.5  82.7   
 
 
11 Pensions 
 
A defined benefit pension scheme is operated in the United Kingdom and a
number of defined contribution pension schemes are in place in the United
Kingdom and Overseas. Contributions are paid by subsidiary undertakings and
employees. The total pension charge in the income statement was £9.2 million
comprising £7.8 million included in operating costs plus £1.4 million included
in net finance expense (2013: £9.2 million, comprising £7.1 million in
operating costs plus £2.1 million in net finance expense). 
 
Defined benefit scheme 
 
The defined benefit scheme was closed to new members on 31 May 2005 and from 1
April 2006 future benefits were calculated on a Career Average Revalued
Earnings basis. The scheme was closed to future accrual of benefits to members
on 30 September 2009. A full actuarial valuation of the scheme was carried out
as at 31 March 2013 and this was updated to 31 December 2014 by a qualified
independent actuary. 
 
                                                       2014     2013     2012     
                                                       £m       £m       £m       
                                                                                  
 Present value of defined benefit obligations          (701.0)  (629.7)  (610.7)  
 Fair value of scheme assets                           659.3    592.5    558.8    
                                                                                  
 Recognised liability for defined benefit obligations  (41.7)   (37.2)   (51.9)   
 
 
Movements in present value of defined benefit obligations 
 
                 2014    2013    
                 £m      £m      
                                 
 At 1 January    629.7   610.7   
 Interest cost   28.3    26.2    
 Remeasurements  71.2    21.6    
 Benefits paid   (28.2)  (28.8)  
                                 
 At 31 December  701.0   629.7   
 
 
Movements in fair value of scheme assets 
 
                            2014    2013    
                            £m      £m      
                                            
 At 1 January               592.5   558.8   
 Interest income            26.9    24.1    
 Remeasurements             55.5    30.2    
 Contributions by employer  12.6    8.2     
 Benefits paid              (28.2)  (28.8)  
                                            
 At 31 December             659.3   592.5   
 
 
Contributions by the employer in 2014 included the transfer of two PFI
investments, Lewisham Schools for the Future Holdings 3 Limited and Lewisham
Schools for the Future Holdings 4 Limited, at an agreed amount of £7.4
million. 
 
Expense recognised in the income statement 
 
                                                                             2014   2013   
                                                                             £m     £m     
                                                                                           
 Administrative expenses                                                     (0.8)  (1.1)  
 Interest cost on the net liabilities of the defined benefit pension scheme  (1.4)  (2.1)  
                                                                                           
                                                                             (2.2)  (3.2)  
 
 
Fair value of scheme assets 
 
                                 2014   2013   
                                 £m     £m     
                                               
 Equities                        146.1  175.6  
 Multi-credit                    66.8   65.7   
 Government bonds                307.5  212.4  
 Infrastructure and property     73.6   64.8   
 Absolute return funds and cash  65.3   74.0   
                                               
                                 659.3  592.5  
 
 
Principal actuarial assumption (expressed as weighted averages) 
 
                           2014  2013  
                           %     %     
                                       
 Discount rate             3.60  4.60  
 Future pension increases  2.85  3.20  
 Inflation assumption      2.90  3.30  
 
 
Weighted average life expectancy from age 65 as per mortality tables used to
determine benefits at 31 December 2014 and 31 December 2013 is: 
 
                    2014     2013     
                    Male     Female   Male     Female   
                    (years)  (years)  (years)  (years)  
 Currently aged 65  22.1     24.6     22.0     24.5     
 Non-retirees       23.9     26.5     23.8     26.4     
 
 
The discount rate, inflation and pension increase and mortality assumptions
have a significant effect on the amounts reported. Changes in these
assumptions would have the following effects on the defined benefit scheme: 
 
                                                                                                          Pension liability  Pension cost  
                                                                                                          £m                 £m            
                                                                                                                                           
 Increase discount rate by 0.25%, decreases pension liability and reduces pension cost by                 27.5               1.0           
 Decrease inflation, pension increases by 0.25%, decreases pension liability and reduces pension cost by  24.0               0.9           
 Increase life expectancy by one year, increases pension liability and increases pension cost by          21.2               0.8           
 
 
 The Group expects to make contributions of approximately £7.0 million, plus an element of dividend matching and the expenses of administration to its defined benefit scheme in the next financial year.  
 Defined contribution schemes                                                                                                                                                                                              
 Several defined contribution pensions are operated. The total expense relating to these plans was £7.0 million (2013: £6.0 million).                                                                      
 
 
12 Related party transactions 
 
The Group has related party relationships with its major shareholders,
subsidiaries, joint ventures and associates and joint operations, in relation
to the sales of construction services and materials and the provision of staff
and with The Costain Pension Scheme. The total value of these services in 2014
was £127.5 million (2013: £112.7 million); transactions with The Costain
Pension Scheme are included in Note 11. 
 
13 Forward-looking statements 
 
The announcement contains certain forward-looking statements. The
forward-looking statements are not intended to be guarantees of future
performance but are based on current views and assumptions and involve known
and unknown risks, uncertainties and other factors that may cause actual
results to differ from any future results or developments expressed or implied
from the forward-looking statements. 
 
14 Responsibility statements 
 
The responsibility statement set out below has been prepared in connection
with (and will be set out in) the Annual Report and Accounts for the year
ended 31 December 2014. 
 
"Each of the directors of the Company confirms that, to the best of his or her
knowledge: 
 
·       the Group accounts, which have been prepared in accordance with
International Financial Reporting Standards as adopted by the European Union,
give a true and fair view of the assets, liabilities, financial position and
profits/losses of the Company (and of the Group taken as a whole); and 
 
·       the Strategic Report includes a fair review of the development and
performance of the business and the position of the Company (and of the Group
taken as a whole), together with a description of the principal risks and
uncertainties that they face." 
 
The directors of the Company are David Allvey (Chairman), Andrew Wyllie (Chief
Executive), Tony Bickerstaff (Finance Director), James Morley (Senior
Independent Director), Jane Lodge (Independent Non-Executive Director), Alison
Wood (Independent Non-Executive Director), David McManus (Independent
Non-Executive Director) and Ahmed Samy (Non-Executive Director). 
 
On behalf of the Board: 
 
DAVID ALLVEY 
 
Chairman 
 
ANDREW WYLLIE 
 
Chief Executive 
 
519653503 
 
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