REG - Halma PLC - Final Results <Origin Href="QuoteRef">HLMA.L</Origin> - Part 5
14/06/2016 07:06
- Part 5: For the preceding part double click ID:nRSN0651Bd
£000 £000
Process Safety (3,026) (928) - (538) (4,492) - (4,492)
Infrastructure Safety (765) (486) (102) (130) (1,483) 1,076 (407)
Medical (12,156) (21) (1,581) - (13,758) 354 (13,404)
Environmental & Analysis (4,007) - 2,303 - (1,704) - (1,704)
Total Segment & Group (19,954) (1,435) 620 (668) (21,437) 1,430 (20,007)
The transaction costs arose mainly on the acquisitions of Rohrback Cosasco Systems Inc. (RCS), Advanced and Plasticspritzerei AG, which were acquired in the prior year. The charge of £1,581,000 to contingent consideration related mainly to a revision in the estimate of the remaining MST payable from US$6,504,000 to US$9,061,000. The £2,303,000 credit to contingent consideration related to a revision in the estimate of the remaining ASL payable from £2,500,000 to £197,000. The release of fair value
adjustments to inventory arose from revaluing the inventories of RCS and Advanced at acquisition.
Geographic information The Group's revenue from external customers (by location of customer) is detailed below:
Revenue by destination
53 weeks to 2 April2016 52 weeks to 28 March 2015
£000 £000
United States of America 272,933 223,374
Mainland Europe 179,290 167,363
United Kingdom 144,821 138,312
Asia Pacific 124,992 116,842
Africa, Near and Middle East 55,712 44,037
Other countries 30,057 36,206
807,805 726,134
3 Finance income
53 weeks to 2 April 2016 52 weeks to 28 March 2015
£000 £000
Interest receivable 217 134
Fair value movement on derivative financial instruments - 33
217 167
4 Finance expense 53 weeks to 2 April 2016 52 weeks to 28 March 2015
£000 £000
Interest payable on borrowings 4,104 3,090
Amortisation of finance costs 561 530
Net interest charge on pension plan liabilities 2,013 1,419
Other interest payable 45 28
6,723 5,067
Fair value movement on derivative financial instruments 508 -
Unwinding of discount on provisions 38 46
7,269 5,113
5 Taxation 53 weeks to 2 April 2016 52 weeks to 28 March 2015*£000
£000
Current tax
UK corporation tax at 20% (2015: 21%) 9,093 9,397
Overseas taxation 25,014 24,851
Adjustments in respect of prior years (3,422) (725)
Total current tax charge 30,685 33,523
Deferred tax
Origination and reversal of timing differences (4,833) (4,075)
Adjustments in respect of prior years 1,595 162
Total deferred tax credit (3,238) (3,913)
Total tax charge recognised in the Consolidated Income Statement 27,447 29,610
Reconciliation of the effective tax rate:
Profit before tax 136,288 133,611
Tax at the UK corporation tax rate of 20% (2015: 21%) 27,258 28,058
Overseas tax rate differences 9,970 7,562
Tax incentives, exemptions and credits (including patent box, R&D and High-Tech status) (5,964) (3,675)
Permanent differences (1,990) (1,772)
Adjustments in respect of prior years (1,827) (563)
27,447 29,610
Effective tax rate 20.1% 22.2%
* The comparative has been restated for consistency with the current year disclosure. There is no change to the prior year tax charge.
53 weeks to 2 April 2016 52 weeks to 28 March 2015
£000 £000
Adjusted* profit before tax 166,014 153,618
Total tax charge on adjusted* profit 36,373 35,706
Effective tax rate 21.9% 23.2%
* Adjustments include the amortisation of acquired intangible assets; acquisition items; and profit or loss on disposal of operations.
6 Earnings per ordinary share Basic earnings per ordinary share are calculated using the weighted average of 378,412,359 shares in issue during the year (net of shares purchased by the Company and held as own shares) (2015: 378,328,541). Diluted earnings per ordinary share are calculated using the weighted average of 378,412,359 shares (2015: 378,475,804), which includes dilutive potential ordinary shares of nil (2015: 147,263). Dilutive potential ordinary shares were calculated from those exercisable
share options where the exercise price is less than the average price of the Company's ordinary shares during the year.Adjusted earnings are calculated as earnings from continuing operations excluding the amortisation of acquired intangible assets; acquisition items; profit or loss on disposal of operations; and the associated taxation thereon. The Directors consider that adjusted earnings represent a more consistent measure of underlying performance. A reconciliation of earnings and the effect on basic
earnings per share figures is as follows:
Per ordinary share
53 weeks to 2 April 2016 52 weeks to 28 March 2015 53 weeks to 2 April 2016 52 weeks to 28 March 2015
£000 £000 pence pence
Earnings from continuing operations 108,841 104,001 28.76 27.49
Amortisation of acquired intangible assets (after tax) 16,102 14,121 4.26 3.73
Acquisition transaction costs (after tax) 2,941 1,423 0.78 0.38
Release of fair value adjustments to inventory (after tax) 998 474 0.26 0.13
Adjustments to contingent consideration (after tax) 1,315 (1,162) 0.35 (0.31)
Profit on disposal of operations (after tax) (556) (945) (0.15) (0.25)
Adjusted earnings 129,641 117,912 34.26 31.17
7 Dividends Per ordinary share
53 weeks to 2 April2016 52 weeks to 28 March 2015 53 weeks to 2 April2016 52 weeks to 28 March 2015
pence pence £000 £000
Amounts recognised as distributions to shareholders in the year
Final dividend for the year to 28 March 2015 (29 March 2014) 7.31 6.82 27,629 25,799
Interim dividend for the year to 2 April 2016 (28 March 2015) 4.98 4.65 18,844 17,600
12.29 11.47 46,473 43,399
Dividends declared in respect of the year
Interim dividend for the year to 2 April 2016 (28 March 2015) 4.98 4.65 18,844 17,600
Proposed final dividend for the year to 2 April 2016 (28 March 2015) 7.83 7.31 29,628 27,629
12.81 11.96 48,472 45,229
The proposed final dividend is subject to approval by shareholders at the Annual General Meeting on 21 July 2016 and has not been included as a liability in these financial statements. If approved, the final dividend for 2015/16 will be paid on 17 August 2016 to shareholders on the register at the close of business on 15 July 2016.The Company offers a Dividend Reinvestment Plan ('DRIP') to enable shareholders to elect to have their cash dividends reinvested in Halma shares. Shareholders who wish to elect
for the DRIP for the forthcoming final dividend, but have not already done so, should return a DRIP mandate form to the Company's Registrars no later than 27 July 2016.
8 Acquisitions In accounting for acquisitions, adjustments are made to the book values of the net assets of the companies acquired to reflect their fair values to the Group. Acquired inventories are valued at fair value adopting Group bases and any liabilities for warranties relating to past trading are recognised. Other previously unrecognised assets and liabilities at acquisition are included and accounting policies are aligned with those of the Group where appropriate.The Group made four acquisitions
during the year: Value Added Solutions LLC (VAS); Firetrace USA, LLC (Firetrace); Visiometrics, S.L. (Visiometrics); and CenTrak Inc. (CenTrak). The four acquisitions in the year contributed £21,798,000 of revenue and £3,128,000 of profit after tax for the year ended 2 April 2016. If these acquisitions had been held since the start of the financial year, it is estimated the Group's reported revenue and profit after tax would have been £38,362,000 and £5,565,000 higher respectively.The combined fair value
adjustments made for all acquisitions, excluding acquired intangible assets recognised and deferred tax thereon, resulted in net adjustments to goodwill of negative £3,262,000.Below are summaries of the assets and liabilities acquired and the purchase consideration of:a) The total of VAS, Firetrace, Visiometrics and CenTrak;b) VAS, on a stand-alone basis;c) Firetrace, on a stand-alone basis;d) Visiometrics, on a stand-alone basis; ande) CenTrak, on a stand-alone basis.
(A) Total of VAS, Firetrace, Visiometrics and CenTrak Book value Fair value adjustments Total
£000 £000 £000
Non-current assets
Intangible assets 2,233 101,306 103,539
Investment 14 (14) -
Property, plant and equipment 742 231 973
Deferred tax 354 148 502
Current assets
Inventories 12,941 4,146 17,087
Trade and other receivables 12,410 (512) 11,898
Cash and cash equivalents 1,830 - 1,830
Total assets 30,524 105,305 135,829
Current liabilities
Trade and other payables (9,984) 4 (9,980)
Provisions (128) (872) (1,000)
Corporation tax (2) 2 -
Non-current liabilities
Other payables (5,578) 5 (5,573)
Deferred tax - (24,371) (24,371)
Total liabilities (15,692) (25,232) (40,924)
Net assets of businesses acquired 14,832 80,073 94,905
Initial cash consideration paid (VAS, Firetrace, Visiometrics and CenTrak) 187,601
Initial consideration repayable* (846)
Additional consideration payable* 986
Contingent purchase consideration paid 6,558
Contingent purchase consideration estimated to be paid (VAS and Visiometrics) 15,432
Total consideration 209,731
Goodwill arising on current year acquisitions 114,826
* Estimate in respect of net tangible asset and cash adjustments, and other contractual clauses.
Due to their contractual dates, the fair value of receivables acquired (shown above) approximate to the gross contractual amounts receivable. The amount of gross contractual receivables not expected to be recovered is immaterial. There are no material contingent liabilities recognised in accordance with paragraph 23 of IFRS 3 (revised).£919,000 and £17,297,000 of goodwill arising on the acquisitions of VAS and Firetrace respectively are expected to be deductible for tax purposes.As at the date of approval
of the financial statements, the acquisition accounting for VAS and all prior year acquisitions is complete. Other than VAS, the accounting for certain balances on current year acquisitions is provisional. These balances mainly comprise the valuation of CenTrak's acquired intangible assets, as a result of the proximity of its acquisition date to the year end, and the initial considerations which are subject to the net tangible asset adjustments and other contractual clauses being agreed.
Analysis of cash outflow in the Consolidated Cash Flow Statement 53 weeks to 2 April2016 52 weeks to 28 March 2015
£000 £000
Initial cash consideration paid 187,601 90,828
Cash acquired on acquisitions (1,830) (9,619)
Contingent consideration paid in relation to current year acquisitions 6,558 2,601
Contingent consideration paid and loan notes repaid in cash in relation to prior year acquisitions* 10,246 3,933
Net cash outflow relating to acquisitions (per Consolidated Cash Flow Statement) 202,575 87,743
* The £10,246,000 comprises £368,000 loan notes and £9,878,000 contingent purchase consideration paid into escrow in respect of prior year acquisitions, of which £9,419,000 had been provided in the prior year's financial statements.
(B) Value Added Solutions, LLC. Book value Fair value adjustments Total
£000 £000 £000
Non-current assets
Intangible assets 2 1,881 1,883
Property, plant and equipment 26 212 238
Current assets
Inventories 22 7 29
Trade and other receivables 193 (11) 182
Total assets 243 2,089 2,332
Current liabilities
Trade and other payables (27) (6) (33)
Provisions - (2) (2)
Non-current liabilities
Other payables (5) 5 -
Total liabilities (32) (3) (35)
Net assets of businesses acquired 211 2,086 2,297
Initial cash consideration paid 3,228
Contingent purchase consideration estimated to be paid 645
Total consideration 3,873
Goodwill arising on acquisition 1,576
The Group acquired the entire interest in Value Added Solutions, LLC on 19 May 2015 for an initial cash consideration of US$5,000,000 (£3,228,000). The maximum contingent consideration payable is US$1,500,000 (£968,000). The current provision of US$1,000,000 (£645,000) represents the fair value of the estimated payable based on performance to date and the expectation of future cash flows. The contingent consideration is payable based on annualised gross margin for an eighteen month performance period to 1
October 2016.VAS forms part of the Medical sector and operates as a 'bolt-on' to Diba Industries Inc. (Diba). Diba creates innovative fluid handling solutions that are invaluable to device OEMs, while VAS specialises in precision plastic machining, production of thermally bonded manifolds, and fluid component integrations. VAS adds complementary expertise, capabilities, and products that allow Diba to provide broader solutions to its existing customers, as well as expand its customer base. VAS's production
facility is located in Berlin, Connecticut, USA, approximately one hour from Diba's headquarters. The excess of the fair value of the consideration paid over the fair value of the assets acquired is represented by customer related intangibles of £1,451,000; and technology related intangibles of £432,000; with residual goodwill arising of £1,576,000. The goodwill represents: a) the technical expertise of the acquired workforce;b) the opportunity to leverage this expertise across some of Halma's
businesses; and c) the ability to exploit the Group's existing customer base.The VAS acquisition contributed £1,460,000 of revenue and £131,000 of profit after tax for the year ended 2 April 2016. If this acquisition had been held since the start of the financial year, it is estimated that the Group's reported revenue and profit after tax would have been £322,000 and £11,000 higher respectively.
(C) Firetrace USA, LLC. Book value Fair value adjustments Total
£000 £000 £000
Non-current assets
Intangible assets 1,784 35,479 37,263
Property, plant and equipment 342 55 397
Current assets
Inventories 7,721 2,768 10,489
Trade and other receivables 5,405 (518) 4,887
Cash and cash equivalents 107 - 107
Total assets 15,359 37,784 53,143
Current liabilities
Trade and other payables (2,064) 20 (2,044)
Provisions (50) (700) (750)
Non-current liabilities
Deferred tax - (2,629) (2,629)
Total liabilities (2,114) (3,309) (5,423)
Net assets of businesses acquired 13,245 34,475 47,720
Initial cash consideration paid 72,675
Initial consideration repayable (607)
Total consideration 72,068
Goodwill arising on acquisition 24,348
On 5 October 2015 the Group acquired the entire interest in Firetrace USA, LLC and its subsidiary companies for a total cash consideration of US$110,000,000 (£72,675,000), adjustable based on the closing date net assets. The adjustment was determined to be US$nil. No contingent consideration is payable. It is estimated that US$919,000 (£607,000) of this consideration will be repaid. Firetrace, based in Scottsdale, Arizona, USA, designs and manufactures automatic fire detection and suppression systems for
installation in small enclosed environments to protect people and critical assets. It will continue to operate out of its current facilities and existing management will remain in place. Firetrace has become part of the Infrastructure Safety sector and further extends the Group's product offering within the fire protection industry. The excess of the fair value of the consideration paid over the fair value of the assets acquired is represented by customer related intangibles of £28,686,000; technology
related intangibles of £3,861,000; and trademarks, brands and patents of £4,715,000 with residual goodwill arising of £24,348,000. The residual goodwill represents: a) the technical expertise of the acquired workforce;b) future business from new customers; and c) the opportunity to develop new technologies and products to support future growth.The Firetrace acquisition contributed £15,257,000 of revenue and £2,404,000 of profit after tax for the year ended 2 April 2016. If this acquisition had
been held since the start of the financial year, it is estimated that the Group's reported revenue and profit after tax would have been £11,444,000 and £2,978,000 higher respectively.
(D) Visiometrics, S.L. Book value Fair value adjustments Total
£000 £000 £000
Non-current assets
Intangible assets 344 14,582 14,926
Property, plant and equipment 122 - 122
Deferred tax 348 - 348
Current assets
Inventories 255 (92) 163
Trade and other receivables 1,030 2 1,032
Cash and cash equivalents 42 - 42
Total assets 2,141 14,492 16,633
Current liabilities
Trade and other payables (1,120) (9) (1,129)
Provisions - (36) (36)
Corporation tax (2) 2 -
Non-current liabilities
Deferred Tax - (3,707) (3,707)
Total liabilities (1,122) (3,750) (4,872)
Net assets of businesses acquired 1,019 10,742 11,761
Initial cash consideration paid 13,144
Initial cash consideration repayable (239)
Contingent purchase consideration paid into escrow 6,558
Contingent purchase consideration estimated to be paid 14,787
Total consideration 34,250
Goodwill arising on acquisition 22,489
On 16 December 2015 the Group acquired the entire share capitals of Visiometrics S.L., located outside Barcelona, Spain, and Visual Performance Diagnostics, Inc.,located in California, USA, collectively Visiometrics. Initial consideration paid for the company was E18,000,000 (£13,144,000) adjustable for the final agreed value of net tangible assets and cash at closing, for which E327,000 (£239,000) is owed to the Group at the balance sheet date. E9,000,000 (£6,558,000) was paid on closing into escrow;
E6,300,000 to be released to the vendors immediately on reaching E2,000,000 EBITDA in any 12 month period ending December 2016 (the EBITDA Reserve Goal); and the remaining E2,700,000, less any indemnity claim, released to the vendors in March 2018 dependent on reaching the EBITDA Reserve Goal. Management's current best estimate is that the EBITDA Reserve Goal will be met. Further contingent consideration is payable based on two elements; Royalty and the Core earn-out. The Royalty is payable annually over
five years to December 2020 at a percentage of the gross margin on sales made to one customer. The estimated payable is E10,242,000 (£7,453,000). The Core earn-out is payable annually over three years to December 2018 based on a multiple of EBITDA over a target threshold. The estimated payable for the Core earn-out is E11,114,000 (£8,088,000). The undiscounted total estimated contingent consideration payable for the EBITDA Reserve Goal, Royalty and Core earn-outs is therefore E30,356,000 (£22,099,000). The
fair value of contingent consideration payable is estimated based on performance observed to date and the expectation of likely future cash flows, and is discounted at the Group's forecast cost of borrowing over the earn-out period. The fair value recognised is E29,294,000 (£21,345,000). The maximum contingent consideration payable is E109,000,000 subject to a maximum total consideration of E125,000,000.Visiometrics designs, manufactures and markets ophthalmic diagnostic instruments. It is part of the
Medical sector, which includes devices used to assess eye health, assist with eye surgery and primary care applications. The CEO and management team will continue to operate the business out of its current locations.The excess of the fair value of the consideration paid over the fair value of the assets acquired is represented by customer related intangibles of £12,110,000; and technology related intangibles of £2,716,000; with residual goodwill arising of £22,489,000. The residual goodwill represents: a)
the technical expertise of the acquired workforce;b) the opportunity to leverage this expertise across some of Halma's businesses; and c) the opportunity to develop new technologies and products to support future growth.The Visiometrics acquisition contributed £861,000 of revenue and £260,000 of profit after tax for the year ended 2 April 2016. If this acquisition had been held since the start of the financial year, it is estimated that the Group's reported revenue and profit after tax would have
been £2,649,000 higher and £45,000 lower respectively.
(E) CenTrak, Inc. Book value Fair value adjustments Total
£000 £000 £000
Non-current assets
Intangible assets 103 49,364 49,467
Investment 14 (14) -
Property, plant and equipment 252 (36) 216
Deferred tax 6 148 154
Current assets
Inventories 4,943 1,463 6,406
Trade and other receivables 5,782 15 5,797
Cash and cash equivalents 1,681 - 1,681
Total assets 12,781 50,940 63,721
Current liabilities
Trade and other payables (6,773) (1) (6,774)
Provisions (78) (134) (212)
Non-current liabilities
Provisions (5,573) - (5,573)
Deferred tax - (18,035) (18,035)
Total liabilities (12,424) (18,170) (30,594)
Net assets of businesses acquired 357 32,770 33,127
Initial cash consideration paid 98,554
Additional consideration payable 986
Total consideration 99,540
Goodwill arising on acquisition 66,413
On 3 February 2016 the Group acquired the entire share capital of CenTrak, Inc., located in Newtown, Pennsylvania, USA. Initial consideration paid for the company was US$140,000,000 (£97,317,000) plus an initial payment for the estimated value of net tangible assets and cash at closing of US$1,780,000 (£1,237,000). This was subsequently further increased by US$1,418,000 (£986,000) which is owed by the Group at the balance sheet date. No contingent consideration is payable. CenTrak designs and manufactures
sensors and proprietary communication technology that provides precise and reliable location data for the healthcare market. It is part of the Group's Medical sector which includes a range of healthcare device companies serving niche applications in global markets. It will continue to operate out of its current facilities and existing management will remain in place.The excess of the fair value of the consideration paid over the fair value of the assets acquired is represented by customer related
intangibles of £21,615,000; and technology related intangibles of £24,287,000; with residual goodwill arising of £66,413,000. The residual goodwill represents:a) the technical expertise of the acquired workforce;b) the opportunity to leverage this expertise across some of Halma's businesses; and c) the ability to exploit the Group's existing customer base.The CenTrak acquisition contributed £4,220,000 of revenue and £333,000 of profit after tax for the year ended 2 April 2016. If this acquisition
had been held since the start of the financial year, it is estimated that the Group's reported revenue and profit after tax would have been £23,947,000 and £2,621,000 higher respectively.
9 Disposal of operations The total profit on disposal of operations of £556,000 comprises a charge of £34,000 related to the disposal of Monitor Elevator Products, Inc. (Monitor) in the prior year arising from a claim under the warranty arrangement, and £590,000 credit for the partial disposal of shares in the Group's associate, Optomed Oy (Optomed) on 26 August 2015. The Group disposed of 9,176 shares in Optomed, representing 8.8% of its ownership interest in the associate. Consideration received was
E1,236,000 (£907,000). The Group's residual interest in Optomed after the disposal was 28.6%, reducing to 26.7% by the year-end. The total profit on disposal of operations shown in the prior year of £1,430,000 comprises £1,076,000 for the disposal of Monitor, £223,000 for the partial disposal of shares in Optomed and £131,000 for the fair value gain recognised in relation to the disposal of PSRM. The £4,248,000 cash inflow represents the £3,180,000, £695,000 and £610,000 proceeds from the sale of the shares
in Monitor, Optomed, and PSRM respectively plus the £36,000 overdraft in Monitor less the disposal costs of £273,000. Further details are provided on page 149 of the Annual Report and Accounts 2015.
9 Disposal of operations
The total profit on disposal of operations of £556,000 comprises a charge of £34,000 related to the disposal of Monitor
Elevator Products, Inc. (Monitor) in the prior year arising from a claim under the warranty arrangement, and £590,000
credit for the partial disposal of shares in the Group's associate, Optomed Oy (Optomed) on 26 August 2015. The Group
disposed of 9,176 shares in Optomed, representing 8.8% of its ownership interest in the associate. Consideration received
was E1,236,000 (£907,000). The Group's residual interest in Optomed after the disposal was 28.6%, reducing to 26.7% by the
year-end. The total profit on disposal of operations shown in the prior year of £1,430,000 comprises £1,076,000 for the
disposal of Monitor, £223,000 for the partial disposal of shares in Optomed and £131,000 for the fair value gain recognised
in relation to the disposal of PSRM. The £4,248,000 cash inflow represents the £3,180,000, £695,000 and £610,000 proceeds
from the sale of the shares in Monitor, Optomed, and PSRM respectively plus the £36,000 overdraft in Monitor less the
disposal costs of £273,000. Further details are provided on page 149 of the Annual Report and Accounts 2015.
10 Notes to the Consolidated Cash Flow Statement 53 weeks to2 April 2016 52 weeks to 28 March 2015
£000 £000
Reconciliation of profit from operations to net cash inflow from operating activities:
Profit on continuing operations before finance income and expense, share of results of associate and profit on disposal of operations 142,943 137,063
Depreciation of property, plant and equipment 15,245 14,005
Amortisation of computer software 1,348 1,211
Amortisation of capitalised development costs and other intangibles 5,202 5,505
Impairment of capitalised development costs - 236
Amortisation of acquired intangible assets 23,103 19,954
Share-based payment expense in excess of amounts paid 1,899 3,803
Additional payments to pension plans (7,728) (6,560)
Profit on sale of property, plant and equipment and computer software (1,345) (590)
Operating cash flows before movement in working capital 180,667 174,627
Increase in inventories (4,809) (1,097)
Increase in receivables (8,786) (10,656)
Increase in payables and provisions 7,844 5,801
Revision to estimate of, and exchange differences arising on, contingent consideration payable 1,543 (620)
Cash generated from operations 176,459 168,055
Taxation paid (27,186) (30,824)
Net cash inflow from operating activities 149,273 137,231
53 weeks to2 April 2016 52 weeks to 28 March 2015
£000 £000
Analysis of cash and cash equivalents
Cash and bank balances 53,938 41,230
Overdrafts (included in current borrowings) (4,412) (1,705)
Cash and cash equivalents 49,526 39,525
At 28 March 2015 Reclass£000 Cash flow Cash acquired £000 Loan notesrepaid/ (issued)£000 Exchange adjustments At 2 April 2016
£000 £000 £000 £000
Analysis of net debt
Cash and bank balances 41,230 - 8,894 1,830 - 1,984 53,938
Overdrafts (1,705) - (2,707) - (4,412)
Cash and cash equivalents 39,525 - 6,187 1,830 - 1,984 49,526
Loan notes falling due within one year - (367) - - 31 - (336)
Loan notes falling due after more than one year (657) 367 - - (167,425) (4,397) (172,112)
Bank loans falling due after (139,762) - 22,212 - - (6,246) (123,796)
more than one year
Total net debt (100,894) - 28,399 1,830 (167,394) (8,659) (246,718)
The net cash outflow from bank loans comprised repayments of £97,000,000 offset by drawdowns of £74,788,000. The net cash inflow from loan notes comprised £167,473,000 from the drawdown of a United States Private Placement, and £288,000 from the issue of loan notes in respect of the Advanced acquisition in the prior year, offset by £367,000 repayment of existing Advanced loan notes. The sum of the above £6,187,000 cash inflow and £1,830,000 net cash acquired is equal to the increase in cash and cash
equivalents of £8,017,000 in the Consolidated Cash Flow Statement.
11 Non-GAAP measures The Board uses certain non-GAAP measures to help it effectively monitor the performance of the Group. These measures include Return on Total Invested Capital, Return on Capital Employed, Organic growth at constant currency, Adjusted operating profit and Adjusted operating cash flow.
11 Non-GAAP measures
The Board uses certain non-GAAP measures to help it effectively monitor the performance of the Group. These measures
include Return on Total Invested Capital, Return on Capital Employed, Organic growth at constant currency, Adjusted
operating profit and Adjusted operating cash flow.
Return on Total Invested Capital 2 April 2016 28 March 2015
£000 £000
Post-tax profit before adjustments* 129,641 117,912
Total shareholders' funds 646,340 548,948
Add back retirement benefit obligations 52,323 66,790
Less associated deferred tax assets (9,619) (13,085)
Cumulative amortisation of acquired intangible assets 112,478 83,958
Historical adjustments to goodwill** 89,549 89,549
Total Invested Capital 891,071 776,160
Average Total Invested Capital 833,616 721,255
Return on Total Invested Capital (ROTIC) 15.6% 16.3%
Return on Capital Employed 2 April 2016 28 March 2015
£000 £000
Operating profit before adjustments*, but after share of results of associate 173,066 158,564
Computer software costs within intangible assets 3,215 2,835
Capitalised development costs within intangible assets 23,540 15,865
Other intangibles within intangible assets 903 450
Property, plant and equipment 96,562 86,303
Inventories 105,318 79,734
Trade and other receivables 183,619 156,464
Trade and other payables (122,791) (102,717)
Current provisions (4,437) (11,746)
Net tax liabilities (14,968) (12,385)
Non-current trade and other payables (10,153) (3,756)
Non-current provisions (18,510) (1,549)
Add back contingent purchase consideration
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