REG - Halfords Group PLC - Interim Results: Financial Year 2017 <Origin Href="QuoteRef">HFD.L</Origin> - Part 2
10/11/2016 07:06
- Part 2: For the preceding part double click ID:nRSJ8034Oa
(2.9)
Transfers to net profit:
Cost of sales - (0.7) (0.6)
Tax on other comprehensive income (1.6) 0.6 0.4
Other comprehensive income for the period,net of tax (0.1) (0.9) 1.6
Total comprehensive income for the periodattributable to equity shareholders 31.0 36.5 65.1
HALFORDS GROUP PLC
Condensed consolidated statement of financial position
For the 26 weeks to 30 September 2016
As at As at As at
30 September 2 October 1 April
2016 2015 2016
Notes Unaudited Unaudited
Assets £m £m £m
Non-current assets
Intangible assets 391.8 358.1 362.9
Property, plant and equipment 101.6 107.5 107.3
Deferred tax assets - 2.6 -
Total non-current assets 13 493.4 468.2 470.2
Current assets
Inventories 176.6 159.0 157.9
Trade and other receivables 66.4 61.5 60.7
Derivative financial instruments 8.4 1.4 4.2
Cash and cash equivalents 14 20.3 23.2 11.9
Total current assets 271.7 245.1 234.7
Total assets 765.1 713.3 704.9
Liabilities
Current liabilities
Borrowings 14 (23.5) (27.6) (23.4)
Derivative financial instruments (0.1) (0.6) -
Trade and other payables (202.5) (183.6) (182.5)
Current tax liabilities (9.0) (8.8) (7.5)
Provisions (9.5) (9.4) (9.5)
Total current liabilities (244.6) (230.0) (222.9)
Net current assets 27.1 15.1 11.8
Non-current liabilities
Borrowings 14 (61.6) (58.0) (36.4)
Accruals and deferred income - lease incentives (32.2) (30.8) (32.3)
Deferred tax liability (3.8) - -
Provisions (7.5) (8.0) (7.9)
Total non-current liabilities (105.1) (96.8) (76.6)
Total liabilities (349.7) (326.8) (299.5)
Net assets 415.4 386.5 405.4
Shareholders' equity
Share capital 15 2.0 2.0 2.0
Share premium account 15 151.0 151.0 151.0
Investment in own shares (10.7) (11.0) (10.9)
Other reserves 3.1 0.7 3.2
Retained earnings 270.0 243.8 260.1
Total equity attributable to equity holders of the Company 415.4 386.5 405.4
HALFORDS GROUP PLC
Condensed consolidated statement of changes in equity (continued)
For the 26 weeks to 30 September 2016
For the period ended 30 September 2016 (Unaudited)
Attributable to the equity holders of the Company
Other reserves
Share Investment Capital
Sharecapital premiumaccount in ownshares redemption reserve Hedgingreserve Retainedearnings Totalequity
£m £m £m £m £m £m £m
Balance at 1 April 2016 2.0 151.0 (10.9) 0.3 2.9 260.1 405.4
Total comprehensive income for the period
Profit for the period - - - - - 31.1 31.1
Other comprehensive income
Cash flow hedges:
Fair value changes in the period - - - - 10.4 - 10.4
Transfers to inventory - - - - (8.9) - (8.9)
Transfers to net profit:
Cost of sales - - - - - - -
Income tax on other comprehensive income - - - - (1.6) - (1.6)
Total other comprehensive income for the period net of tax - - - - (0.1) - (0.1)
Total comprehensive income for the period - - - - (0.1) 31.1 31.0
Transactions with owners
Share options exercised - - 0.2 - - - 0.2
Share-based payment transactions - - - - - 1.1 1.1
Income tax on share-based payment transactions - - - - - - -
Dividends to equity holders - - - - - (22.3) (22.3)
Total transactions with owners - - 0.2 - - (21.2) (21.0)
Balance at 30 September 2016 2.0 151.0 (10.7) 0.3 2.8 270.0 415.4
The notes on pages 22 to 30 are an integral part of these consolidated
financial statements.
For the period ended 2 October 2015 (Unaudited)
Attributable to the equity holders of the Company
Other reserves
Share Investment Capital
Sharecapital premiumaccount in ownshares redemption reserve Hedgingreserve Retainedearnings Totalequity
£m £m £m £m £m £m £m
Balance at 3 April 2015 2.0 151.0 (13.6) 0.3 1.3 226.7 367.7
Total comprehensive income for the period
Profit for the period - - - - - 37.4 37.4
Other comprehensive income
Cash flow hedges:
Fair value changes in the period - - - - (0.9) - (0.9)
Transfers to inventory - - - - 0.1 - 0.1
Transfers to net profit:
Cost of sales - - - - (0.7) - (0.7)
Tax on other comprehensive income - - - - 0.6 - 0.6
Total other comprehensive income for the period net of tax - - - - (0.9) - (0.9)
Total comprehensive income for the period - - - - (0.9) 37.4 36.5
Transactions with owners
Share options exercised - - 2.6 - - - 2.6
Share-based payment transactions - - - - - 1.1 1.1
Purchase of own shares - - - - - - -
Tax on share-based payment transactions - - - - - - -
Dividends to equity holders - - - - - (21.4) (21.4)
Total transactions with owners - - 2.6 - - (20.3) (17.7)
Balance at 2 October 2015 2.0 151.0 (11.0) 0.3 0.4 243.8 386.5
HALFORDS GROUP PLC
Condensed consolidated statement of cash flows
For the 26 weeks to 30 September 2016
26 weeks to 26 weeks to 52 weeks to
30 September 2 October 1 April
2016 2015 2016
Unaudited Unaudited
Notes £m £m £m
Cash flows from operating activities
Profit after tax for the period before non-recurring items 32.5 37.4 64.9
Non-recurring items (1.4) - (1.4)
Profit after tax for the period 31.1 37.4 63.5
Depreciation - property, plant and equipment 10.9 11.7 23.8
Amortisation - intangible assets 4.4 2.7 6.3
Net finance costs 1.3 1.5 3.0
Loss on disposal of property, plant and equipment 0.4 0.1 0.4
Equity settled share based payment transactions 1.1 1.1 3.0
Fair value (gain)/loss on derivative financial instruments (2.5) 0.3 (0.4)
Corporation tax expense 8.0 9.0 16.3
Increase in inventories (18.7) (9.7) (8.6)
Increase in trade and other receivables (5.7) (5.7) (4.9)
Increase in trade and other payables 17.1 0.7 2.3
Decrease in provisions (0.4) (1.4) (1.4)
Finance income received 0.1 - 0.1
Finance costs paid (0.8) (0.7) (2.3)
Corporation tax paid (7.6) (9.9) (17.2)
Net cash from operating activities 38.7 37.1 83.9
Cash flows from investing activities
Acquisition of subsidiary, net of cash acquired (18.0) - -
Purchase of intangible assets (9.7) (4.0) (12.5)
Purchase of property, plant and equipment (5.8) (13.5) (26.0)
Net cash used in investing activities (33.5) (17.5) (38.5)
Cash flows from financing activities
Net proceeds from issue of ordinary shares 0.7 2.6 2.7
Proceeds from loans, net of transaction costs 163.0 110.0 219.0
Repayment of borrowings (138.0) (114.0) (245.0)
Payment of finance lease liabilities (0.3) (0.7) (0.6)
Dividends paid to shareholders 11 (22.3) (21.4) (32.4)
Net cash used in financing activities 3.1 (23.5) (56.3)
Net increase / (decrease) in cash and bank overdrafts 14 8.3 (3.9) (10.9)
Cash and cash equivalents at the beginning of the period 14 (10.8) 0.1 0.1
Cash and cash equivalents at the end of the period 14 (2.5) (3.8) (10.8)
(10.8)
HALFORDS GROUP PLC
Notes to the condensed consolidated interim financial statements (continued)
For the 26 weeks to 30 September 2016
1. General information
The condensed consolidated interim financial statements of Halfords Group plc
(the "Company") comprise the Company together with its subsidiary undertakings
(the "Group").
The Company is a limited liability company incorporated, domiciled and
registered in England and Wales. Its registered office is Icknield Street
Drive, Washford West, Redditch, Worcestershire, B98 0DE.
The Company is listed on the London Stock Exchange.
These condensed consolidated interim financial statements were approved by the
Board of Directors on 10 November 2016.
2. Statement of compliance
These condensed consolidated interim financial statements for the 26 weeks to
30 September 2016 have been prepared in accordance with IAS 34 'Interim
financial reporting' as endorsed by the European Union. They do not include
all of the information required for full annual financial statements, and
should be read in conjunction with the 2016 Annual Report and Accounts, which
have been prepared in accordance with IFRSs as adopted by the European Union.
The comparative figures for the financial period ended 1 April 2016 are not
the Group's statutory accounts for that financial period. Those accounts have
been reported on by the Group's auditors and delivered to the registrar of
companies. The report of the auditor was (i) unqualified, (ii) did not include
a reference to any matters to which the auditor drew attention by way of
emphasis without qualifying their report, and (iii) did not contain a
statement under section 498 (2) or (3) of the Companies Act 2006.
3. Risks and uncertainties
The Directors consider that the majority of the principal risks and
uncertainties which could have a material impact on the Group's performance in
the remaining 26 weeks of the financial year remain the same as those stated
on pages 30 to 33 of our Annual Report and Accounts for the 52 weeks to 1
April 2016, which are available on our website www.halfordscompany.com. Since
the report was published, however, the UK has voted to leave the European
Union ("Brexit"), which presents significant uncertainties to the Group as a
result of the impact on the wider UK economy. The main areas in which Brexit
is likely to impact the Group are as follows:
1. Impact on exchange rates - the value of Sterling has fallen by
approximately 15% since the end of FY16 as a result of Brexit. The Group buys
a significant proportion of its goods in US Dollars, and as such is exposed to
significant fluctuations in exchange rates. This risk is managed by forward
buying currency, but a prolonged devaluation of Sterling will lead to higher
input costs.
2. The vote for Brexit could lead to a slowdown or recession in the UK
economy, and consequent loss of consumer confidence, impacting trading
conditions for the Group.
4. Significant accounting policies
As required by the Disclosure and Transparency Rules of the Financial Conduct
Authority, the condensed consolidated interim financial statements have been
prepared by applying the accounting policies and presentation that were
applied in the preparation of the 2016 Annual Reports and Accounts, which are
published on the Halfords Group website, www.halfordscompany.com.
The Directors consider that the Group has adequate resources to remain in
operation for the foreseeable future and have therefore continued to adopt the
going concern basis in preparing the condensed consolidated interim financial
statements. The Group's forecasts and projections, taking into account
reasonably possible changes in trading performance, show that the Group has
adequate resources to continue in operational existence for the foreseeable
future.
There are no new or amended standards effective in the period which have had a
material impact on the interim consolidated financial information.
5. Estimates
The preparation of interim financial statements requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expense. Actual results may differ from those estimates.
In preparing these condensed consolidated interim financial statements, the
significant judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the same as those
applied to the consolidated financial statements as at and for the 52 week
period ended 1 April 2016 and the 26 weeks ended 02 October 2015.
6. Operating segments
The Group has two reportable segments, Retail and Car Servicing, which are the
Group's strategic business units. Car Servicing became a reporting segment of
the Group as a result of the acquisition of Nationwide Autocentres on 17
February 2010. The strategic business units offer different products and
services, and are managed separately because they require different
operational, technological and marketing strategies.
The operations of the Retail reporting segment comprise the retailing of
automotive, leisure and cycling products through retail stores, Tredz and
Wheelies and Boardman Bikes. The operations of the Car Servicing reporting
segment comprise car servicing and repair performed from Autocentres.
The Chief Operating Decision Maker is the Executive Directors. Internal
management reports for each of the segments are reviewed by the Executive
Directors on a monthly basis. Key measures used to evaluate performance are
Revenue and Operating Profit. Management believe that these measures are the
most relevant in evaluating the performance of the segment and for making
resource allocation decisions.
The following summary describes the operations in each of the Group's
reportable segments. Performance is measured based on segment operating
profit, as included in the management reports that are reviewed by the
Executive Directors. These internal reports are prepared in accordance with
IFRS accounting policies consistent with these Group Financial Statements.
All material operations of the reportable segments are carried out in the UK
and all material non-current assets are located in the UK. The Group's
revenue is driven by the consolidation of individual small value transactions
and as a result Group revenue is not reliant on a major customer or group of
customers. All revenue is from external customers.
Income statement RetailUnaudited £m Car ServicingUnaudited£m 26 weeks to 30 September 2016 Total Unaudited £m 26 weeks to 2 October 2015TotalUnaudited£m
Revenue 489.1 78.2 567.3 533.5
Segment result before non-recurring items 41.8 0.9 42.7 48.5
Non-recurring items (1.5) - (1.5) -
Segment result 40.3 0.9 41.2 48.5
Unallocated expenses1 (0.9) (0.6)
Operating profit 40.3 47.9
Net financing expense (1.2) (1.5)
Profit before tax 39.1 46.4
Tax (8.0) (9.0)
Profit after tax 31.1 37.4
1Unallocated expenses have been disclosed to reflect the format of the
internal management reports reviewed by the Chief Operating Decision Maker and
include an amortisation charge of £0.9m in respect of assets acquired through
business combinations (2015: £0.6m).
Income statement Retail£m Car Servicing £m 52 weeks to 1 April 2016Total£m
Revenue 868.5 153.0 1,021.5
Segment result before non-recurring items 81.8 3.8 85.6
Non-recurring items (1.2) (0.5) (1.7)
Segment result 80.6 3.3 83.9
Unallocated expenses1 (1.1)
Operating profit 82.8
Net financing expense (3.0)
Profit before tax 79.8
Taxation (16.3)
Profit after tax 63.5
63.5
1Unallocated expenses have been disclosed to reflect the format of the
internal management reports reviewed by the Chief Operating Decision maker and
include an amortisation charge of £1.1m in respect of assets acquired through
business combinations (2015: £1.9m).
Other segment items: RetailUnaudited£m Car Servicing Unaudited £m 26 weeks to 30 September 2016 Total Unaudited £m 26 weeks to 2 October 2015TotalUnaudited£m
Capital expenditure 13.7 1.6 15.3 19.5
Depreciation expense 8.4 2.5 10.9 11.7
Amortisation expense 3.5 - 3.5 2.1
3.5
-
3.5
2.1
Other segment items: Retail£m Car Servicing £m 52 weeks to 1 April 2016Total£m
Capital expenditure 32.1 8.2 40.3
Depreciation expense 19.1 4.7 23.8
Amortisation expense 5.2 - 5.2
5.2
There have been no significant transactions between segments in the 26 weeks
ended 30 September 2016 (2015: £nil).
7. Non-recurring items
26 weeks to 26 weeks to 52 weeks to
30 September 2016 2 October2015 1 April2016
Unaudited Unaudited
£m £m £m
Non-recurring operating expenses:Acquisition related fees (a) 1.2 - -
Operating lease obligation (b) 0.3 - -
Organisational Restructure Costs (c) - - 1.7
Non-recurring operating expense 1.5 - 1.7
Acquisition related interest charge (d) 0.2 - -
Non-recurring items before tax 1.7 - 1.7
Tax on non-recurring items (0.3) - (0.3)
Non-recurring expense after tax 1.4 - 1.4
(a) Acquisition costs relate to the costs associated with purchase of the
share capital of Tredz Limited and Wheelies Direct Limited during the period.
(b) The operating lease obligation relates to rectification work required to
make good an area of land upon which one of the Group's retail sites is
located.
(c) In the prior year organisational restructuring was undertaken across
Autocentres and Retail, to better align resource to the requirements of the
business. This resulted in a non-recurring redundancy expense of £1.7m.
(d) The acquisition related interest charge reflects the unwinding of the
discounting applied to the contingent consideration due on the acquisition of
Tredz Limited.
8. Net finance costs
26 weeks to 26 weeks to 52 weeks to
30 September 2016 2 October2015 1 April2016
Unaudited Unaudited
£m £m £m
Finance costs:
Bank borrowings (0.4) (0.4) (0.9)
Amortisation of issue costs on loans (0.3) (0.3) (0.7)
Commitment and guarantee fees (0.4) (0.3) (0.6)
Cost of forward foreign exchange contracts - (0.1) (0.1)
Interest payable on finance leases (0.4) (0.4) (0.8)
Other interest payable (non-recurring) (0.2) - -
Finance costs (1.7) (1.5) (3.1)
Finance income:
Bank and similar income 0.1 - 0.1
Income from forward foreign exchange contracts 0.4 - -
Finance income 0.5 - 0.1
Net finance costs (1.2) (1.5) (3.0)
(1.2)
(1.5)
(3.0)
9. Income tax expense
Income tax expense is recognised based on management's best estimate of the
weighted average annual income tax rate expected for the full financial year
applied to the pre-tax income of the interim period.
The effective tax rate before non-recurring items for the 26 weeks to 30
September 2016 is 20.5% (2015: 19.5%). The effective tax rate is higher than
the UK corporation tax rate principally due to the non-deductibility of
depreciation charged on capital expenditure.
10. Financial instruments and related disclosures
Other financial assets and other financial liabilities include the fair value
of derivative contracts which the Group uses to manage its foreign currency
and interest rate risks. All derivatives are categorised as Level 2 under the
requirements of IFRS 13, as they are valued using techniques based
significantly on observed market data.
11. Dividends
During the period the Group paid a final dividend of 11.34 pence per share in
respect of the 52 weeks to 1 April 2016 (2015: 11.00 pence per share), which
absorbed £22.3m of shareholders' funds (2015: £21.4m).
The directors have approved an interim dividend of 5.83 pence per share for
the 26 weeks to 30 September 2016 (2015: 5.66 pence per share), which is
expected to be £11.3m (2015: £11.1m) and will be paid on 20 January 2017 to
those shareholders on the share register at the close of business on 16
December 2016.
12. Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of ordinary shares in
issue during the period. The weighted average number of shares excludes shares
held by the Employee Benefit Trust and has been adjusted for the
issue/repurchase of shares during the period.
For diluted earnings per share the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all dilutive potential ordinary
shares. These represent share options granted to employees where the exercise
price is less than the average market price of the Company's ordinary shares
during the 26 weeks to 30 September 2016.
26 weeks to 26 weeks to 52 weeks to
30 September 2016 2 October 2015 1 April2016
Unaudited Unaudited
Number Number Number
m m m
Weighted average number of shares in issue 199.1 199.1 199.1
Less: shares held by the Employee Benefit Trust (3.8) (4.7) (3.9)
Weighted average number of shares for calculating basic earnings per share 195.3 194.4 195.2
Weighted average number of dilutive share options 0.6 1.2 1.1
Total number of shares for calculating diluted earnings per share 195.9 195.6 196.3
26 weeks to 26 weeks to 52 weeks to
30 September 2016 2 October 2015 1 April2016
Unaudited Unaudited
£m £m £m
Basic earnings attributable to equity shareholders 31.1 37.4 63.5
Non-recurring items:
Operating expenses 1.5 - 1.7
Finance costs 0.2 - -
Tax charge on non-recurring items (0.3) - (0.3)
Underlying earnings before non-recurring items 32.5 37.4 64.9
Basic earnings per share 15.9p 19.2p 32.5p
Diluted earnings per share 15.9p 19.1p 32.4p
Basic earnings per share before non-recurring items 16.6p 19.2p 33.2p
Diluted earnings per share before non-recurring items 16.6p 19.1p 33.0p
The alternative measure of earnings per share is provided because it reflects
the Group's underlying performance by excluding the effect of non-recurring
items.
13. Capital expenditure - tangible and intangible assets
Unaudited
£m
Net book value at 3 April 2015 460.6
Additions 19.5
Disposals (0.1)
Depreciation, amortisation, impairments and other movements (14.4)
Net book value at 2 October 2015 465.6
465.6
Unaudited
£m
Net book value at 1 April 2016 470.2
Additions 37.7
Non-current assets acquired as part of business combination 1.2
Disposals (0.4)
Depreciation, amortisation, impairments and other movements (15.3)
Net book value at 30 September 2016 493.4
493.4
14. Analysis of movements in the Group's net debt in the period
At 3 April 2015 Cash flow Other non-cash changes At 2 October 2015
Unaudited Unaudited Unaudited
£m £m £m £m
Cash in hand and at bank 0.1 (3.9) - (3.8)
Debt due after one year (50.7) 4.0 (0.3) (47.0)
Total net debt excluding finance leases (50.6) 0.1 (0.3) (50.8)
Finance leases due within one year (0.6) 0.7 (0.7) (0.6)
Finance leases due after one year (10.6) - (0.4) (11.0)
Total finance leases (11.2) 0.7 (1.1) (11.6)
Total net debt (61.8) 0.8 (1.4) (62.4)
At 1 April 2016 Cash flow Other non-cash changes At 30 September 2016
Unaudited Unaudited Unaudited
£m £m £m £m
Cash in hand and at bank (10.8) 8.3 - (2.5)
Debt due after one year (25.4) (25.0) (0.3) (50.7)
Total net debt excluding finance leases (36.2) (16.7) (0.3) (53.2)
Finance leases due within one year (0.7) 0.3 (0.3) (0.7)
Finance leases due after one year (11.0) - 0.1 (10.9)
Total finance leases (11.7) 0.3 (0.2) (11.6)
Total net debt (47.9) (16.4) (0.5) (64.8)
Non-cash changes comprise finance costs in relation to the amortisation of
capitalised debt issue costs of £0.3m, new finance lease liabilities of £0.3m
and changes in classification between amounts due within and after one year.
Cash and cash equivalents at the period end consist of £14.9m of liquid
assets, £5.4m of cash held in Trust and £22.8m of bank overdrafts.
15. Share capital
Number of sharesm Sharecapital£m Sharepremiumaccount£m
As at 3 April 2015 and 2 October 2015 199.1 2.0 151.0
Number of shares£m Sharecapital£m Sharepremiumaccount£m
As at 1 April 2016 and 30 September 2016 199.1 2.0 151.0
During the 26 weeks to 30 September 2016, there were no movements in company
share capital. During the 26 weeks to 2 October 2015 there were 53,410 new
shares authorised but were yet to be issued. The shares held in treasury are
used to meet options under the Company's share options schemes.
16. Contingent liability
The Group's banking arrangements include the facility for the bank to provide
a number of guarantees in respect of liabilities owed by the Group during the
course of its trading. In the event of any amount being immediately payable
under the guarantee, the bank has the right to recover the sum in full from
the Group. The total amount of guarantees in place at 30 September 2016
amounted to £2.5m.
Where right of set off is included within the Group's banking arrangements,
credit balances may be offset against the indebtedness of other Group
companies.
17. Seasonality
In general, the Group's results are not seasonal with revenue in the first
half broadly similar to that of the second, however sales of certain products
tend to fluctuate by season. For example, sales of children's cycles peak in
the Christmas season and sales of adult cycles tend to peak in the summer.
18. Related party transactions
There were no (2015: nil) related party transactions during the 26 weeks to 30
September 2016.
19. Acquisition of subsidiary
On 23rd May 2016 the Group acquired 100% of the issued share capital of Tredz
Limited and Wheelies Direct Limited for initial cash consideration of £19.2m
(excluding transaction costs). The acquired businesses comprise an online
retailer of premium bikes and cycling parts, accessories and clothing, which
trades UK-wide under the brand Tredz, and the UK's largest provider of bicycle
replacement for insurance companies which trades under the brand Wheelies. The
transaction has been accounted for using the acquisition method of
accounting.
Contingent consideration
In addition to the initial consideration, a liability of £5.5m, discounted to
the acquisition date, has been recognised in respect of contingent
consideration due to the previous shareholders. The contingent consideration
is dependent upon the performance of Tredz for the year ended 28 Feb 2017.
The range of possible payments under the contingent consideration arrangement
is £nil to £12.5m.
The acquisition had the following impact on the Group's assets and
liabilities:
Book value Fair value adjustment Final fair value
£m £m £m
Tredz and Wheelies net assets at the acquisition date
Intangible assets and goodwill 0.8 (0.8) -
Tangible Assets 1.3 (0.1) 1.2
Inventories 5.7 (0.1) 5.6
Trade and other receivables 1.8 - 1.8
Cash 1.2 - 1.2
Trade and other payables (6.1) - (6.1)
Borrowings (0.3) - (0.3)
Current tax liabilities (0.2) - (0.2)
Deferred Tax Liability (0.2) - (0.2)
Total 4.0 (1.0) 3.0
Goodwill
Goodwill was recognised as a result of the acquisition as follows:
£m
Total consideration 23.9
Less fair value of identifiable assets (3.0)
Goodwill and intangible assets 20.9
Intangible Assets:
Supplier Relationships 7.8
Tredz and Wheelies Brand Names 5.6
Computer Software 0.5
Deferred tax liability (2.5)
Goodwill 9.5
None of the goodwill acquired is expected to be deductible for income tax
purposes. The goodwill relates to the assembled workforce of Tredz and
Wheelies and future expansion and growth opportunities.
The Tredz and Wheelies businesses contributed £16.5m revenue and a profit of
£1.4m to the Group's profit before tax for the period between the date of
acquisition and the balance sheet date.
If the acquisition of the Tredz and Wheelies businesses had been completed on
the first day of the financial year, Group revenues for the period would have
been £6.7m higher and Group profit before tax of the parent would have been
£0.5m higher (before amortisation of intangible assets arising on
consolidation).
Responsibility statement of the Directors in respect of the half-yearly
financial report
We confirm that to the best of our knowledge:
· the condensed set of financial statements has been prepared in accordance
with IAS 34 Interim Financial Reporting as adopted by the EU;
· the interim management report includes a fair review of the information
required by:
a. DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication
of important events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial statements;
and a description of the principal risks and uncertainties for the remaining
six months of the year; and
b. DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the entity during that period; and any changes in the related
party transactions described in the last annual report that could do so.
By order of the Board
Jill McDonald, Chief Executive Jonny Mason, Chief Financial Officer
10 November 2016
INDEPENDENT REVIEW REPORT TO HALFORDS GROUP PLC
Introduction
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the 26 weeks ended 30
September 2016 which comprises the Condensed Consolidated Income Statement,
Condensed Consolidated Statement of Comprehensive Income, Condensed
Consolidated Statement of Financial Position, Condensed Consolidated Statement
of Changes in Equity, Condensed Consolidated Statement of Cash Flows and the
related explanatory notes. We have read the other information contained in
the half-yearly financial report and considered whether it contains any
apparent misstatements or material inconsistencies with the information in the
condensed set of financial statements.
This report is made solely to the company in accordance with the terms of our
engagement to assist the company in meeting the requirements of the Disclosure
and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority
("the UK FCA"). Our review has been undertaken so that we might state to the
company those matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company for our review work,
for this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 2, the annual financial statements of the group are
prepared in accordance with IFRSs as adopted by the EU. The condensed set of
financial statements included in this half-yearly financial report has been
prepared in accordance with IAS 34 Interim Financial Reporting as adopted by
the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 Review of Interim Financial Information
Performed by the Independent Auditor of the Entity issued by the Auditing
Practices Board for use in the UK. A review of interim financial information
consists of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK and Ireland) and consequently
does not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the 26 weeks ended 30 September 2016 is not prepared, in
all material respects, in accordance with IAS 34 as adopted by the EU and the
DTR of the UK FCA.
Peter Meehan
for and on behalf of KPMG LLP
Chartered Accountants
One Snowhill
Snow Hill Queensway
Birmingham
B4 6GH
10 November 2016
This information is provided by RNS
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