REG - DCC PLC - Interim Report <Origin Href="QuoteRef">DCC.L</Origin> - Part 3
04/11/2014 08:06
- Part 3: For the preceding part double click ID:nRSD0473Wb
22,721
Adjusted profit after taxation and non-controlling interests 52,492 48,851 160,192
Basic earnings per ordinary share pence pence pence
Basic earnings per ordinary share 50.40p 41.82p 144.70p
Adjusted basic earnings per ordinary share 62.53p 58.34p 191.20p
Weighted average number of ordinary shares in issue (thousands) 83,948 83,742 83,781
Diluted earnings per ordinary share pence pence pence
Diluted earnings per ordinary share 50.03p 41.59p 143.90p
Adjusted diluted earnings per ordinary share 62.07p 58.02p 190.14p
Diluted weighted average number of ordinary shares in issue (thousands) 84,565 84,194 84,250
The adjusted figures for earnings per share are intended to demonstrate the results of the Group after eliminating the
impact of amortisation of intangible assets and net exceptionals.
10. Dividends
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2014 2013 2014
£'000 £'000 £'000
Interim - paid 26.12 pence per share on 29 November 2013 - - 22,167
Final - paid 50.73 pence per share on 24 July 2014 (paid 56.20 cent per share on 25 July 2013) 42,990 40,220 39,721
42,990 40,220 61,888
On 3 November 2014, the Board approved an interim dividend of 28.73 pence per share (£24.138 million). These condensed
consolidated interim financial statements do not reflect this dividend payable. The 2012/2013 final dividend which was
paid during the year ended 31 March 2014 was declared in euro and has been translated to sterling using the average
sterling/euro exchange rate for the year ended 31 March 2014.
11. Other Reserves
For the six months ended 30 September 2014 Foreign
Share based Cash flow currency Total
payment hedge translation Other other
reserve reserve reserve reserves reserves
£'000 £'000 £'000 £'000 £'000
At beginning of period 10,630 (3,844) 49,822 932 57,540
Currency translation - - (7,606) - (7,606)
Movements relating to cash flow hedges - (4,004) - - (4,004)
Movement in deferred tax liability on cash flow hedges - 20 - - 20
Share based payment 1,019 - - - 1,019
At end of period 11,649 (7,828) 42,216 932 46,969
For the six months ended 30 September 2013 Foreign
Share based Cash flow currency Total
payment hedge translation Other other
reserve reserve reserve reserves reserves
£'000 £'000 £'000 £'000 £'000
At beginning of period 9,445 (677) 57,017 932 66,717
Currency translation - - (4,001) - (4,001)
Movements relating to cash flow hedges - (2,766) - - (2,766)
Movement in deferred tax liability on cash flow hedges - 198 - - 198
Share based payment 671 - - - 671
At end of period 10,116 (3,245) 53,016 932 60,819
For the year ended 31 March 2014 Foreign
Share based Cash flow currency Total
payment hedge translation Other other
reserve reserve reserve reserves reserves
£'000 £'000 £'000 £'000 £'000
At beginning of period 9,445 (677) 57,017 932 66,717
Currency translation
- arising in the year - - (7,519) - (7,519)
- recycled to the Income Statement on disposal of subsidiary - - 324 - 324
Movements relating to cash flow hedges - (3,455) - - (3,455)
Movement in deferred tax liability on cash flow hedges - 288 - - 288
Share based payment 1,185 - - - 1,185
At end of period 10,630 (3,844) 49,822 932 57,540
12. Analysis of Net Debt
Restated Restated
Unaudited Unaudited Audited
30 Sept. 30 Sept. 31 March
2014 2013 2014
£'000 £'000 £'000
Non-current assets:
Derivative financial instruments 95,709 73,548 56,240
Current assets:
Derivative financial instruments 5,747 8,846 1,221
Cash and cash equivalents 1,075,909 875,152 962,139
1,081,656 883,998 963,360
Non-current liabilities:
Borrowings (205) (274) (619)
Derivative financial instruments (16,177) (41,236) (45,636)
Unsecured Notes (1,209,064) (796,048) (725,212)
(1,225,446) (837,558) (771,467)
Current liabilities:
Borrowings (174,474) (130,589) (149,079)
Derivative financial instruments (7,992) (14,918) (18,699)
Unsecured Notes (43,748) (190,604) (167,647)
(226,214) (336,111) (335,425)
Net debt excluding cash attributable to assets held for sale (274,295) (216,123) (87,292)
Cash and short term deposits attributable to assets held for sale 1,467 - -
Net debt including cash attributable to assets held for sale (272,828) (216,123) (87,292)
13. Retirement Benefit Obligations
The Group's defined benefit pension schemes' assets were measured at fair value at 30 September 2014. The defined benefit
pension schemes' liabilities at 30 September 2014 have been updated based on market conditions at that date.
The deficit on the Group's retirement benefit obligations increased from £16.033 million at 31 March 2014 to £21.949
million at 30 September 2014 (including the defined benefit schemes associated with assets held for sale at 30 September
2014). The increase in the deficit was primarily driven by an actuarial loss on liabilities which arose from a reduction in
the discount rate used to value these liabilities.
14. Changes in Estimates and Assumptions
The following actuarial assumptions have been made in determining the Group's retirement benefit obligation for the six
months ended 30 September 2014:
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept. 30 Sept. 31 March
2014 2013 2014
Discount rate
- Republic of Ireland 2.50% 3.70% 3.40%
- UK 4.00% 4.55% 4.50%
15. Business Combinations
A key strategy of the Group is to create and sustain market leadership positions through bolt-on acquisitions in markets it
currently operates in together with extending the Group's footprint into new geographic markets. In line with this
strategy, the principal acquisitions completed by the Group during the six months ended 30 September 2014 were as follows:
· the acquisition of 100% of Qstar Försäljning AB, a Swedish unmanned petrol station company, along with its related
fuel distribution and fuel card businesses ('Qstar'), completed in May 2014; and
· the acquisition in June 2014 of 100% of Williams Medical Holdings ('Williams'), a UK based business which supplies
medical and pharmaceutical products and related services to general practitioners in Britain; and
· the acquisition in September 2014 of CapTech Distribution AB, Sweden's largest independent technology distribution
business.
The carrying amounts of the assets and liabilities acquired (excluding net cash/debt acquired), determined in accordance
with IFRS before completion of the business combinations, together with the fair value adjustments made to those carrying
values were as follows:
Unaudited30 Sept.2014 Unaudited30 Sept.2014 Unaudited30 Sept.2014 Unaudited30 Sept.2014
£'000 £'000 £'000 £'000
Williams Qstar Others Total
Assets
Non-current assets
Property, plant and equipment 2,598 27,101 537 30,236
Intangible assets - other intangible assets 11,827 6,983 2,766 21,576
Deferred income tax assets 30 37 - 67
Total non-current assets 14,455 34,121 3,303 51,879
Current assets
Inventories 2,536 5,811 12,344 20,691
Trade and other receivables 6,817 28,596 14,537 49,950
Total current assets 9,353 34,407 26,881 70,641
Liabilities
Non-current liabilities
Deferred income tax liabilities (2,365) (1,536) (284) (4,185)
Provisions for liabilities and charges - (15,112) - (15,112)
Government grants (281) - - (281)
Total non-current liabilities (2,646) (16,648) (284) (19,578)
Current liabilities
Trade and other payables (8,307) (36,801) (12,651) (57,759)
Current income tax liabilities (65) - 60 (5)
Total current liabilities (8,372) (36,801) (12,591) (57,764)
Identifiable net assets acquired 12,790 15,079 17,309 45,178
Intangible assets - goodwill 31,628 24,597 376 56,601
Total consideration (enterprise value) 44,418 39,676 17,685 101,779
Satisfied by:
Cash 47,928 37,325 4,383 89,636
Net (cash)/debt acquired (3,510) - 9,322 5,812
Net cash outflow 44,418 37,325 13,705 95,448
Deferred and contingent acquisition consideration - 2,351 3,980 6,331
Total consideration 44,418 39,676 17,685 101,779
The acquisitions of Williams and Qstar have been deemed to be substantial transactions and separate disclosure of the fair
values of the identifiable assets and liabilities has therefore been made. None of the remaining business combinations
completed during the period were considered sufficiently material to warrant separate disclosure of the fair values
attributable to those combinations. The carrying amounts of the assets and liabilities acquired, determined in accordance
with IFRS, before completion of the combination together with the adjustments made to those carrying values disclosed above
were as follows:
Bookvalue Fair valueadjustments Fair value
Williams £'000 £'000 £'000
Non-current assets (excluding goodwill) 2,628 11,827 14,455
Current assets 9,353 - 9,353
Non-current liabilities and non-controlling interests (281) (2,365) (2,646)
Current liabilities (8,372) - (8,372)
Identifiable net assets acquired 3,328 9,462 12,790
Goodwill arising on acquisition 41,090 (9,462) 31,628
Total consideration (enterprise value) 44,418 - 44,418
Bookvalue Fair valueadjustments Fair value
Qstar £'000 £'000 £'000
Non-current assets (excluding goodwill) 27,138 6,983 34,121
Current assets 34,407 - 34,407
Non-current liabilities and non-controlling interests (15,112) (1,536) (16,648)
Current liabilities (36,801) - (36,801)
Identifiable net assets acquired 9,632 5,447 15,079
Goodwill arising on acquisition 30,044 (5,447) 24,597
Total consideration (enterprise value) 39,676 - 39,676
Bookvalue Fair valueadjustments Fair value
Other acquisitions £'000 £'000 £'000
Non-current assets (excluding goodwill) 537 2,766 3,303
Current assets 26,881 - 26,881
Non-current liabilities and non-controlling interests (284) - (284)
Current liabilities (12,591) - (12,591)
Identifiable net assets acquired 14,543 2,766 17,309
Goodwill arising on acquisition 3,142 (2,766) 376
Total consideration (enterprise value) 17,685 - 17,685
Bookvalue Fair valueadjustments Fair value
Total £'000 £'000 £'000
Non-current assets (excluding goodwill) 30,303 21,576 51,879
Current assets 70,641 - 70,641
Non-current liabilities and non-controlling interests (15,677) (3,901) (19,578)
Current liabilities (57,764) - (57,764)
Identifiable net assets acquired 27,503 17,675 45,178
Goodwill arising on acquisition 74,276 (17,675) 56,601
Total consideration (enterprise value) 101,779 - 101,779
The initial assignment of fair values to identifiable net assets acquired has been performed on a provisional basis in
respect of a number of the business combinations above given the timing of closure of these acquisitions, with any
amendments to these fair values to be finalised within a twelve month timeframe from the dates of acquisition. There were
no adjustments processed during the six months ended 30 September 2014 to the fair value of business combinations completed
during the preceding twelve months.
The principal factors contributing to the recognition of goodwill on business combinations entered into by the Group are
the expected profitability of the acquired business and the realisation of cost savings and synergies with existing Group
entities.
£0.671 million of the goodwill recognised in respect of acquisitions completed during the period is expected to be
deductible for tax purposes.
Acquisition and related costs included in the Group Income Statement amounted to £2.243 million.
No contingent liabilities were recognised on the acquisitions completed during the period or in prior financial years.
The gross contractual value of trade and other receivables as at the respective dates of acquisition amounted to £50.092
million. The fair value of these receivables was £49.950 million (all of which is expected to be recoverable) and is
inclusive of an aggregate allowance for impairment of £0.142 million.
The fair value of contingent consideration recognised at the date of acquisition is calculated by discounting the expected
future payment to present value at the acquisition date. In general, for contingent consideration to become payable,
pre-defined profit thresholds must be exceeded. On an undiscounted basis, the future payments for which the Group may be
liable for acquisitions in the current period range from £2.840 million to £14.350 million.
The acquisitions during the period contributed £253.739 million to revenues and £8.343 million to operating profit before
amortisation of intangible assets and net operating exceptionals. Had all the business combinations effected during the
period occurred at the beginning of the period, total Group revenue for the six months ended 30 September 2014 would be
£5,555.789 million and total Group operating profit before amortisation of intangible assets and net operating exceptionals
would be £73.589 million.
16. Assets Classified as Held for Sale
On 30 September 2014 the Group announced that it had reached agreement to dispose of Robert Roberts and Kelkin ('the
businesses') to Valeo Foods. The disposal is conditional on clearance from the Competition and Consumer Protection
Commission in Ireland. The total consideration for the businesses is expected to be approximately E60 million (£47 million)
less debt and debt like items, payable in cash on completion.
As at 30 September 2014, the businesses were classified as a disposal group held for sale. The fair value less costs to
sell of the major classes of assets and liabilities held for sale as at 30 September 2014 were as follows:
30 Sept.
2014
£'000
Assets
Property, plant and equipment 6,299
Intangible assets 8,844
Equity accounted investments 212
Deferred income tax assets 882
Inventories 17,017
Trade and other receivables 22,903
Cash and cash equivalents 1,467
Assets classified as held for sale 57,624
Liabilities
Deferred income tax liabilities (235)
Retirement benefit obligations (6,896)
Deferred and contingent acquisition consideration (78)
Trade and other payables (23,629)
Current income tax liabilities (692)
Liabilities associated with assets classified as held for sale (31,530)
Net assets of the disposal group 26,094
17. Seasonality of Operations
The Group's operations are significantly second-half weighted primarily due to the demand for a significant proportion of
DCC Energy's products being weather dependent and seasonal buying patterns in DCC Technology.
18. Goodwill
Goodwill is subject to impairment testing on an annual basis and more frequently if an indicator of impairment is
considered to exist. There were no other indicators of impairment during the six months ended 30 September 2014. The
Board is satisfied that the carrying value of goodwill at 30 September 2014 has not been impaired.
19. Related Party Transactions
There have been no related party transactions or changes in related party transactions other than those described in the
Annual Report in respect of the year ended 31 March 2014 that could have a material impact on the financial position or
performance of the Group in the six months ended 30 September 2014.
20. Events After the Balance Sheet Date
In October 2014, DCC agreed to dispose of Allied Logistics to Musgrave, a major food retailer and distributor in Ireland.
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