REG - Halfords Group PLC - Preliminary Results: Financial Year 2016 <Origin Href="QuoteRef">HFD.L</Origin> - Part 2
01/06/2016 07:05
- Part 2: For the preceding part double click ID:nRSA8086Za
Openings 6 Nottingham, Manchester, Bristol, Battersea, Fenchurch Street (London) and Bloomsbury (London)
Closures 1 Newcastle (Newgate Street)
The six openings in the Retail portfolio were all Cycle Republic. Eleven new
Autocentres were opened and two were closed in the year, taking the total
number of Autocentre locations to 314 as at 1 April 2016 (end of FY15: 305).
With the exception of eight long leasehold and two freehold properties within
Autocentres, the Group's operating sites are occupied under operating leases,
the majority of which are on standard lease terms, typically with a 5 to
15-year term at inception and with an average lease length of less than 7
years.
Management anticipates opening around 5 Cycle Republic stores and 10-15
Autocentres in FY17, as well as refreshing 15 to 25 Retail stores and
Autocentres.
Net Non-Recurring expenses
The following table outlines the components of the non-recurring items
recognised in the year:
FY16 £m FY15 £m
Asset impairment charges - (0.7)
Release of Focus lease-guarantee provision - 0.2
Onerous lease provision release - 0.2
Organisational restructure costs (1.7) -
Net non-recurring expenses (1.7) (0.3)
In the prior year, all non-recurring items arose within the 52 week period to
27 March 2015.
In the current year organisational restructuring was undertaken across
Autocentres and Retail, mainly in their support centres, to better align
resource to the implementation of the new strategy.
Non-recurring costs in the prior year represented the net effect of: £0.7m
charge in relation to the impairment costs to support the Stores Fit to Shop
initiative; £0.2m income from the release of the final balance held in
relation to the Focus lease guarantee provision; and £0.2m income from the
release of an excess onerous lease provision following the finalisation of the
exit agreement for the Wembley store. The provisions had all been previously
charged as non-recurring items.
Finance Expense
The net finance expense for the year was £3.0m (FY15: £3.5m). Lower average
debt and favourable interest rates following the amendment and extension
agreed in November 2014 contributed to the reduced charge.
Taxation
The taxation charge on profit for the financial year was £16.3m (FY15:
£18.0m), including a £0.3m credit (FY15: £0.1m charge) in respect of
non-recurring items. The effective tax rate on profit before tax and
non-recurring items of 20.5% (FY15: 21.5%) was higher than the UK corporation
tax rate (20.0%) principally due to the effect of non-deductible depreciation
charged on capital expenditure.
Earnings Per Share ("EPS")
Basic EPS before non-recurring items was 33.2 pence and after non-recurring
items 32.5 pence (FY15: 32.7 pence before non-recurring, 32.5 pence after
non-recurring), a 1.5% increase on the prior year. Basic weighted-average
shares in issue during the year were 195.2m (FY15: 194.1m).
Dividend ("DPS")
The Board has recommended a final dividend of 11.3 pence per share (FY15: 11.0
pence), taking the full year dividend to 17.0 pence per share, an increase of
3.0%. If approved, the final dividend will be paid on 26 August 2016 to
shareholders on the register at the close of business on 5 August 2016.
The Board continues to target to grow the dividend every year with an average
cover of around 2 times over time.
Capital Expenditure
Capital investment in the year totalled £40.3m (53 week FY15: £37.5m)
comprising £32.1m in Retail and £8.2m in Autocentres.
Within Retail, £13.4m (53 week FY15: £18.5m) was invested in stores, including
25 store refreshes, 3 of which were also store relocations or right-sizes, as
well as general capital spend relating to training rooms, roofing, flooring
and heating. By the end of FY16, 97 stores were trading in a refreshed
format. Retail continued to roll out the Cycle Republic brand, opening 6
dedicated stores in the year. Additional investments in Retail infrastructure
included a £17.4m investment in IT systems, such as continual development of
the online Retail proposition, refresh of store tills, investment in vehicle
recognition software and tablets in store and investment in the underlying web
platform.
The £8.2m (53 week FY15: £6.8m) investment in Autocentres comprised of the
opening of 11 centres in the year (FY15: 9) along with investment in
refreshing centres and new equipment.
On a cash basis, total capital expenditure in the year was £38.5m (53 week
FY15: £39.6m).
Inventories
Group inventory held as at the year-end was £157.9m (FY15: £149.3m). Retail
inventory increased to £156.5m (FY15: £147.8m) mostly due to the impact of
foreign exchange. Autocentres' inventory was £1.4m (FY15: £1.5m).
Cashflow and Borrowings
Cash generated from operating activities during the year was £103.7m (53 and
52 weeks FY15: £142.2m). In the prior year there was a reduction in working
capital of £25.3m partly due to the change in timing of year end, compared to
an increase of £11.2m in FY16. After taxation, capital expenditure and net
finance costs, free cash flow of £45.4m (FY15: £66.4m) was generated in the
year.
Group net debt was £47.9m (53 and 52 week FY15: £61.8m), with the
non-lease-adjusted 12-month net debt: EBITDA ratio at 0.4:1.
Financial Guidance
In November 2015 we set out our medium term financial target of maintaining
Group EBITDA % roughly flat as we invest to drive sustainable long-term
growth. We also stated that we expected FY17 Group Profit Before Tax to be
broadly unchanged on FY16. This guidance was issued on the basis of a US
Dollar exchange rate of $1.50. There is no change to this profit guidance
other than the impact of the extent to which the US Dollar rate varies from
our original planning assumption of $1.50. Each year we buy goods worth
approximately £200m denominated in US Dollar and about half of that is hedged
in advance. The impact on cost of goods of a 5 cent move in exchange rate
(for example from $1.50 to $1.45) would be around £3m in a full year.
There is no change to our prevailing guidance on capital expenditure
requirements in the medium term, which we continue to expect to average around
£40m per annum for the Group over the next three years. In FY17 we anticipate
this to be circa £45m, split as circa £35m in Retail and circa £10m in
Autocentres. We anticipate the Group depreciation and amortisation charge to
be circa £34m for FY17.
We anticipate the net finance expense to be circa £3m and an effective tax
rate of circa 20% in FY17.
The timing of Easter is different year-on-year and we have estimated the
impact on trading to be as follows:
· In Q1 FY17 there is no Easter compared to half an Easter period
occurring in Q1 FY16. We estimate the impact of this will be circa 1% of LFL
revenue in Q1 itself.
· In Q4 FY17 there will be no Easter compared to a full Easter in Q4
FY16. We estimate the impact of this will be circa 2% of LFL revenue in Q4
itself.
Principal Risks and Uncertainties
The Board considers risk assessment, identification of mitigating actions and
internal control to be fundamental to achieving Halfords' strategic corporate
objectives. In the Annual Report & Accounts the Board sets out what it
considers to be the principal commercial and financial risks to achieving the
Group's objectives. The main areas of potential risk and uncertainty in the
balance of the financial year are described in the Strategic Report on page 32
of the Annual Report and Accounts. These include:
· Economic risk
· Business strategy risks
· Competitive risks
· Compliance
· Changing customer preferences
· Reliance on foreign manufacturers
· Product and service quality
· Information technology systems and infrastructure
· Dependence on key management personnel
Specific risks associated with performance include Christmas trading as well
as weather-sensitive sales, particularly within the Car Maintenance and
Cycling categories in the Retail business.
Jonny Mason
Chief Financial Officer, 31 May 2016
CONSOLIDATED INCOME STATEMENT
For the period 52 weeks to 1 April 2016 53 weeks to 3 April 2015
BeforeNon-recurring Items Non-recurring items Total BeforeNon-recurring Items Non-recurring items Total
Notes £m £m £m £m £m £m
Revenue 1,021.5 - 1,021.5 1,025.4 - 1,025.4
Cost of sales (478.4) - (478.4) (479.1) - (479.1)
Gross profit 543.1 - 543.1 546.3 - 546.3
Operating expenses 2 (458.6) (1.7) (460.3) (458.7) (0.3) (459.0)
Results from operating activities 3 84.5 (1.7) 82.8 87.6 (0.3) 87.3
Finance costs 5 (3.1) - (3.1) (3.6) - (3.6)
Finance income 5 0.1 - 0.1 0.1 - 0.1
Net finance expense (3.0) - (3.0) (3.5) - (3.5)
Profit before income tax 81.5 (1.7) 79.8 84.1 (0.3) 83.8
Income tax expense 6 (16.6) 0.3 (16.3) (17.9) (0.1) (18.0)
Profit for the financial period attributable to equity shareholders 64.9 (1.4) 63.5 66.2 (0.4) 65.8
Earnings per share
Basic 8 33.2p 32.5p 34.1p 33.8p
Diluted 8 33.0p 32.4p 33.5p 33.3p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
52 weeks to 53 weeks to
1 April 2016 3 April 2015
Notes £m £m
Profit for the period 63.5 65.8
Other comprehensive income
Cash flow hedges:
Fair value changes in the period 4.7 7.9
Transfers to inventory (2.9) (1.4)
Transfers to net profit:
Cost of sales (0.6) (3.4)
Income tax on other comprehensive income 6 0.4 (1.2)
Other comprehensive income for the period, net of income tax 1.6 1.9
Total comprehensive income for the period attributable to equity shareholders 65.1 67.7
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
1 April2016 3 April2015
£m £m
Assets
Non-current assets
Intangible assets 362.9 356.8
Property, plant and equipment 107.3 103.8
Deferred tax asset - 4.1
Total non-current assets 470.2 464.7
Current assets
Inventories 157.9 149.3
Trade and other receivables 60.7 55.8
Derivative financial instruments 4.2 3.9
Cash and cash equivalents 11.9 22.4
Total current assets 234.7 231.4
Total assets 704.9 696.1
Liabilities
Current liabilities
Borrowings (23.4) (22.9)
Derivative financial instruments - (0.1)
Trade and other payables (182.5) (181.4)
Current tax liabilities (7.5) (12.4)
Provisions (9.5) (10.6)
Total current liabilities (222.9) (227.4)
Net current assets 11.8 4.0
Non-current liabilities
Borrowings (36.4) (61.3)
Accruals and deferred income - lease incentives (32.3) (31.5)
Provisions (7.9) (8.2)
Total non-current liabilities (76.6) (101.0)
Total liabilities (299.5) (328.4)
Net assets 405.4 367.7
Shareholders' equity
Share capital 2.0 2.0
Share premium 151.0 151.0
Investment in own shares (10.9) (13.6)
Other reserves 3.2 1.6
Retained earnings 260.1 226.7
Total equity attributable to equity holders of the Company 405.4 367.7
405.4
367.7
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
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 28 March 2014 2.0 151.0 (14.3) 0.3 (0.6) 187.7 326.1
Total comprehensive income for the period
Profit for the period - - - - - 65.8 65.8
Other comprehensive income
Cash flow hedges:
Fair value changes in the period - - - - 7.9 - 7.9
Transfers to inventory - - - - (1.4) - (1.4)
Transfers to net profit:
Cost of sales - - - - (3.4) - (3.4)
Income tax on other comprehensive income - - - - (1.2) - (1.2)
Total other comprehensive income for the period net of tax - - - - 1.9 - 1.9
Total comprehensive income for the period - - - - 1.9 65.8 67.7
Transactions with owners
Share options exercised - - 0.7 - - - 0.7
Share-based payment transactions - - - - - 1.4 1.4
Income tax on share-based payment transactions - - - - - 0.2 0.2
Dividends to equity holders - - - - - (28.4) (28.4)
Total transactions with owners - - 0.7 - - (26.8) (26.1)
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 - - - - - 63.5 63.5
Other comprehensive income
Cash flow hedges:
Fair value changes in the period - - - - 4.7 - 4.7
Transfers to inventory - - - - (2.9) - (2.9)
Transfers to net profit:
Cost of sales - - - - (0.6) - (0.6)
Income tax on other comprehensive income - - - - 0.4 - 0.4
Total other comprehensive income for the period net of tax - - - - 1.6 - 1.6
Total comprehensive income for the period - - - - 1.6 63.5 65.1
Transactions with owners
Share options exercised - - 2.7 - - - 2.7
Share-based payment transactions - - - - - 3.0 3.0
Income tax on share-based payment transactions - - - - - (0.7) (0.7)
Dividends to equity holders - - - - - (32.4) (32.4)
Total transactions with owners - - 2.7 - - (30.1) (27.4)
Balance at 1 April 2016 2.0 151.0 (10.9) 0.3 2.9 260.1 405.4
CONSOLIDATED STATEMENT OF CASH FLOWS
52 weeks to 53 weeks to
1 April 3 April
2016 2015
Notes £m £m
Cash flows from operating activities
Profit after tax for the period, before non-recurring items 64.9 66.2
Non-recurring items (1.4) (0.4)
Profit after tax for the period 63.5 65.8
Depreciation - property, plant and equipment 23.8 20.2
Impairment charge - 0.7
Amortisation - intangible assets 6.3 5.5
Net finance costs 3.0 3.5
Loss on disposal of property, plant and equipment 0.4 1.7
Equity-settled share based payment transactions 3.0 1.4
Fair value loss on derivative financial instruments (0.4) (2.0)
Income tax expense 16.3 18.0
(Increase)/Decrease in inventories (8.6) 0.9
(Increase)/Decrease in trade and other receivables (4.9) (3.0)
Increase in trade and other payables 2.3 27.2
(Decrease)/Increase in provisions (1.4) 0.5
Finance income received 0.1 0.1
Finance costs paid (2.3) (3.2)
Income tax paid (17.2) (17.1)
Net cash from operating activities 83.9 120.2
Cash flows from investing activities
Acquisition of subsidiary, net of cash acquired - (14.0)
Purchase of intangible assets (12.5) (7.5)
Purchase of property, plant and equipment (26.0) (32.1)
Net cash used in investing activities (38.5) (53.6)
Cash flows from financing activities
Net proceeds from exercise of share options 2.7 0.7
Purchase of own shares - -
Proceeds from loans, net of transaction costs 219.0 220.2
Repayment of borrowings (245.0) (254.0)
Payment of finance lease liabilities (0.6) (0.3)
Dividends paid (32.4) (28.4)
Net cash used in financing activities (56.3) (61.8)
Net (decrease)/increase in cash and bank overdrafts 9 (10.9) 4.8
Cash and cash equivalents at the beginning of the period 0.1 (4.7)
Cash and cash equivalents at the end of the period 9 (10.8) 0.1
1. General information and basis of preparation
The financial information, which comprises the consolidated income statement,
consolidated statement of comprehensive income, consolidated statement of
financial position, consolidated statement of changes in equity, consolidated
statement of cash flows and related notes, does not constitute full accounts
within the meaning of s435 (1) and (2) of the Companies Act 2006. The auditor
has reported on the Group's statutory accounts for each of the years FY15 and
FY16, which did not contain any statement under s498 of the Companies Act 2006
and are unqualified. The statutory accounts for FY15 have been delivered to
the Registrar of Companies and the statutory accounts for FY16 will be filed
with the Registrar in due course.
The consolidated financial statements of Halfords Group plc and its subsidiary
undertakings (together "the Group") have been prepared in accordance with
International Financial Reporting Standards ("IFRSs") and IFRS Interpretations
Committee ("IFRS IC") Interpretations as adopted by the European Union and
with those parts of the Companies Act 2006 applicable to companies reporting
under IFRS. The financial statements are prepared on a going concern basis and
under the historical cost convention, except where adopted IFRSs require an
alternative treatment. The principal variations relate to financial
instruments (IAS 39 "Financial instruments: recognition and measurement") and
share based payments (IFRS 2 "Share-based payment").
The financial statements are presented in millions of UK pounds, rounded to
the nearest £0.1m.
The accounts of the Group are prepared for the period up to the Friday closest
to 31 March each year. Consequently, the financial statements for the current
period cover the 52 weeks to 1 April 2016, whilst the comparative period
covered the 53 weeks to 3 April 2015.
2. Operating expenses
For the period 52 weeks to 53 weeks to
1 April 2016 3 April 2015
£m £m
Selling and distribution costs 385.7 385.5
385.7 385.5
Administrative expenses, before non-recurring items 72.9 73.2
Non-recurring administrative expenses 1.7 0.3
74.6 73.5
460.3 459.0
3. Operating profit
For the period 52 weeks to 53 weeks to
1 April 2016 3 April 2015
£m £m
Operating profit is arrived at after charging/(crediting) the following expenses/(incomes) as categorised by nature:
Operating lease rentals:
- plant and machinery 2.8 2.6
- property rents 89.6 91.6
- rentals receivable under operating leases (3.5) (4.2)
Landlord surrender payments (2.7) (2.8)
Loss on disposal of property, plant and equipment 0.4 1.7
Amortisation of intangible assets 6.3 5.5
Depreciation of:
- owned property, plant and equipment 23.0 19.7
- assets held under finance leases 0.8 0.5
Impairment of property, plant and equipment - 0.7
Trade receivables impairment 0.2 0.1
Staff costs 206.4 203.1
Cost of inventories consumed in cost of sales 472.8 470.2
4. Non-recurring items
For the period 52 weeks to 53 weeks to
1 April 2016 3 April 2015
£m £m
Non-recurring operating expenses:
Organisational Restructure Costs (a) 1.7 -
Lease guarantee provision (b) - (0.2)
Onerous lease provision (c) - (0.2)
Impairment of Property, Plant and Equipment (d) - 0.7
Non-recurring items before tax 1.7 0.3
Tax on non-recurring items (e) (0.3) 0.1
Non-recurring items after tax 1.4 0.4
(a) In the current 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.
(b) A non-recurring expense of £7.5m was incurred in 2011. This expense
related to the creation of a provision for the potential liabilities arising
from lease guarantees provided by Halfords prior to July 1989. The guarantees
were provided to landlords of properties leased by Payless DIY (now part of
Focus DIY) when both Halfords and Payless DIY were under ownership of the Ward
White Group. Focus DIY entered into administration in May 2011. In the prior
year the continued settlement of the Group's guarantor obligations resulted in
a release of £0.2m of the original amounts provided, which resulted in no
further outstanding provision in relation to this issue.
(c) A charge was incurred in prior periods relating to stores where the
present value of expected future cash flows was deemed to be insufficient to
cover the lower of cost of exit or value in use. During the prior year a
release of £0.2m occurred following the finalisation of an exit agreement for
the Wembley store.
(d) Impairment charge in respect of property, plant and equipment, in
respect of the Stores Fit To Shop initiative, where the carrying amount of
these assets has been deemed to exceed the recoverable amount.
(e) The tax credit of £0.3m represents a tax rate of 20% applied to
non-recurring items. The prior period represents a tax charge at 21% applied
to non-recurring items after adjusting for the non-deductibility of the asset
impairment charge and settlements to release Halfords from its guarantor
obligations under the leases.
5. Finance income and costs
Recognised in profit or loss for the period 52 weeks to 53 weeks to
1 April 2016 3 April 2015
£m £m
Finance costs:
Bank borrowings (0.9) (1.3)
Amortisation of issue costs on loans (0.7) (0.6)
Commitment and guarantee fees (0.6) (0.8)
Costs of forward foreign exchange contracts (0.1) (0.2)
Interest payable on finance leases (0.8) (0.7)
Finance costs (3.1) (3.6)
Finance income:
Bank and similar interest 0.1 0.1
Finance income 0.1 0.1
Net finance costs (3.0) (3.5)
6. Taxation
For the period 52 weeks to 53 weeks to
1 April 2016 3 April 2015
£m £m
Current taxation
UK corporation tax charge for the period 13.1 20.9
Adjustment in respect of prior periods - (1.8)
13.1 19.1
Deferred taxation
Origination and reversal of temporary differences 3.1 (1.5)
Adjustment in respect of prior periods 0.1 0.4
3.2 (1.1)
Total tax charge for the period 16.3 18.0
The tax charge is reconciled with the standard rate of UK corporation tax as
follows:
For the period 52 weeks to 53 weeks to
1 April 2016 3 April 2015
£m £m
Profit before tax 79.8 83.8
UK corporation tax at standard rate of 20% (2015: 21%) 16.0 17.6
Factors affecting the charge for the period:
Depreciation on expenditure not eligible for tax relief 1.1 1.3
Employee share options (0.4) 0.4
Other disallowable expenses (0.3) 0.4
Adjustment in respect of prior periods 0.1 (1.4)
Impact of overseas tax rates (0.4) (0.4)
Impact of change in tax rate on deferred tax balance 0.2 0.1
Total tax charge for the period 16.3 18.0
The UK corporation tax rate reduced from 21% to 20% (effective 1 April 2015)
and will be further reduced to 19% (effective from 1 April 2017) and 18%
(effective from 1 April 2020) following changes substantively enacted on 26
October 2015. This will reduce the Company's future current tax charge
accordingly. The deferred tax asset at 1 April 2016 has been calculated based
on the rate of 18% substantively enacted at the balance sheet date.
In the Chancellors March 2016 budget he announced plans to further reduce the
corporation tax rate to 17% from 1 April 2020, however this was yet to be
substantively enacted at the balance sheet date. In this financial period, the
UK corporation tax rate was 20% (2015: 21%).
The effective tax rate of 20.5% (2015:21.5%) is higher than the UK corporation
tax rate principally due to the non-deductibility of depreciation charged on
capital expenditure.
The tax charge for the period was £16.3m (2015: £18.0m), including a £0.3m
credit (2015: £0.1m charge) in respect of tax on non-recurring items.
An income tax credit of £0.4m (2015: £1.2m charge) on other comprehensive
income relates to the movement in fair valuing forward currency contracts
outstanding at the year end. No other items within other comprehensive income
have a tax impact.
In addition to the above a £0.7m (2015: £nil) current tax credit and a £1.4m
deferred tax debit (2015: £0.3m credit) is recognised in reserves in relation
to employee share options.
The Group engages openly and proactively with tax authorities both in the UK
and internationally, where it trades and sources products, and is considered
low risk by HM Revenue and Customs ("HMRC"). The Company is fully committed
to complying with all of its tax payment and reporting obligations.
In this period, the Group's contribution to the UK Exchequer from both taxes
paid and collected exceeded £150m (2015: £149.0m) with the main taxes
including corporation tax £17.2m (2015: £16.1m), net VAT £50.2m (2015:
£53.1m), Employment taxes of £45.3m (2015: £42.8m) and business rates £36.9m
(2015: £37.0m).
7. Dividends
For the period 52 weeks to 53 weeks to
1 April 2016 3 April 2015
£m £m
Equity - ordinary shares
Final for the 53 weeks to 3 April 2015 -paid 11.00pper share (2015: 9.10p) 21.4 17.7
Interim for the 52 weeks to1 April 2016- paid 5.66pper share(2015: 5.50p) 11.0 10.7
32.4 28.4
In addition, the directors are proposing a final dividend in respect of the
financial period ended 1 April 2016 of 11.30p per share (2015: 11.00p per
share), which will absorb an estimated £22.0m (2015: £21.4m) of shareholders'
funds. It will be paid on 28 August 2016 to shareholders who are on the
register of members on 7 August 2016.
8. Earnings per share
Basic earnings per share are calculated by dividing the profit 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 an Employee Benefit Trust and has been adjusted for the
issue/purchase 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 52 weeks to 1 April 2016.
The Group has also chosen to present an alternative earnings per share
measure, with profit adjusted for non-recurring items because it better
reflects the Group's underlying performance.
For the period 52 weeks to 53 weeks to
1 April 2016 3 April 2015
Number of shares Number of shares
m m
Weighted average number of shares in issue 199.1 199.1
Less: shares held by the Employee Benefit Trust (weighted average) (3.9) (4.9)
Weighted average number of shares for calculating basic earnings per share 195.2 194.2
Weighted average number of dilutive shares 1.1 3.2
Total number of shares for calculating diluted earnings per share 196.3 197.4
For the period 52 weeks to 53 weeks to
1 April 2016 3 April 2015
£m £m
Basic earnings attributable to equity shareholders 63.5 65.8
Non-recurring items:
Operating expenses 1.7 0.3
Tax on non-recurring items (0.3) 0.1
Underlying earnings before non-recurring items 64.9 66.2
Earnings per share is calculated as follows:
For the period 52 weeks to 53 weeks to
1 April 2016 3 April 2015
Basic earnings per ordinary share 32.5p 33.8p
Diluted earnings per ordinary share 32.4p 33.3p
Basic earnings per ordinary share before non-recurring items 33.2p 34.1p
Diluted earnings per ordinary share before non-recurring items 33.0p 33.5p
9. Analysis of movements in the Group's net debt in the period
At 3 April 2015 Cash flow Other non-cash changes At 1 April 2016
£m £m £m £m
Cash and cash equivalents at bank and in hand 0.1 (10.9) - (10.8)
Debt due after one year (50.7) 26.0 (0.7) (25.4)
Total net debt excluding finance leases (50.6) 15.1 (0.7) (36.2)
Finance leases due within one year (0.6) 0.6 (0.7) (0.7)
Finance lease due after one year (10.6) - (0.4) (11.0)
Total finance leases (11.2) 0.6 (1.1) (11.7)
Total net debt (61.8) 15.7 (1.8) (47.9)
Non-cash changes include finance costs in relation to the amortisation of
capitalised debt issue costs of £0.7m (2015: £0.6m), new finance leases and
changes in classification between amounts due within and after one year.
Cash and cash equivalents at the period end consist of £11.9m (2015:£22.4m) of
liquid assets and £22.7m (2015: £22.3m) of bank overdrafts.
10. Post Balance Sheet Events
On 24 May 2016, after the year end, the Group acquired 100% of the issued
share capital of Tredz Limited and Wheelies Direct Limited, for a total capped
consideration of £31.6m which includes £12.5m contingent consideration. Tredz
Limited is an online and shop based cycling retailer and Wheelies Direct
Limited is a cycling
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