REG - Imperial Brands PLC - Half-year Report <Origin Href="QuoteRef">IMB.L</Origin> - Part 2
03/05/2017 07:05
- Part 2: For the preceding part double click ID:nRSC0055Ea
the Board's view that the principal risks and
uncertainties surrounding the Group in the second half of the financial year
remain those set out in the 2016 Annual Report and Accounts.
Statement of Directors' Responsibilities
The Directors confirm that this condensed consolidated interim financial
information has been prepared in accordance with IAS 34 as adopted by the
European Union and that the interim management report includes a fair review
of the information required by DTR 4.2.7 and DTR 4.2.8, namely: 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 financial year; and material related party transactions in
the first six months of the current financial year and any material changes in
the related-party transactions described in the last annual report.
A list of current directors is maintained on the Imperial Brands PLC website:
www.imperialbrandsplc.com.
The Directors are responsible for the maintenance and integrity of the
Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
By order of the Board
Alison Cooper Oliver Tant
Chief Executive Chief Financial Officer
SUMMARY OF KEY FOOTPRINT FINANCIALS & METRICS
Half Year Result Change
FOOTPRINT 2017 2016 Actual ConstantCurrency
Volume
Growth Markets bn SE 34.5 35.6 -3.1%
US Market bn SE 11.3 12.3 -8.3%
Returns Markets North bn SE 42.4 45.6 -7.0%
Returns Markets South bn SE 38.1 40.4 -5.8%
Returns Markets Total bn SE 80.5 86.0 -6.4%
Total Group bn SE 126.3 133.9 -5.7%
Tobacco Net Revenue
Growth Markets £m 859 707 +21.5% +1.7%
US Market £m 785 711 +10.4% -6.8%
Returns Markets North £m 1,301 1,246 +4.4% -6.5%
Returns Markets South £m 771 735 +4.9% -9.7%
Returns Markets Total £m 2,072 1,981 +4.6% -7.7%
Total Group £m 3,716 3,399 +9.3% -5.5%
Net Revenue per '000 SE
Growth Markets £ 24.89 19.84 +25.4% +5.0%
US Market £ 69.74 57.89 +20.5% +1.7%
Returns Markets North £ 30.67 27.33 +12.2% +0.5%
Returns Markets South £ 20.25 18.18 +11.4% -4.1%
Returns Markets Total £ 25.74 23.03 +11.8% -1.3%
Total Group £ 29.43 25.38 +16.0% +0.2%
Price/Mix
Growth Markets % +24.6% +4.8%
US Market % +18.7% +1.5%
Returns Markets North % +11.4% +0.5%
Returns Markets South % +10.7% -3.9%
Returns Markets Total % +11.0% -1.3%
Total Group % +15.0% +0.2%
Adjusted Tobacco Operating Profit
Growth Markets £m 211 192 +9.9% -8.9%
US Market £m 457 384 +19.0% 0.0%
Returns Markets North £m 671 676 -0.7% -9.9%
Returns Markets South £m 328 325 +0.9% -13.2%
Returns Markets Total £m 999 1,001 -0.2% -11.0%
Total Group £m 1,667 1,577 +5.7% -8.1%
Logistics
Logistics Distribution Fees £m 442 371 +19.1% +2.7%
Logistics Operating Profit £m 82 68 +20.6% +4.4%
Logistics Operating Margin % 18.6 18.3 +30 bps +30 bps
SUMMARY OF KEY PORTFOLIO FINANCIALS & METRICS
Half Year Result Change
PORTFOLIO 2017 2016 Actual ConstantCurrency
Growth Brand Volume
Growth Markets bn SE 22.3 21.3 +4.7%
US Market bn SE 2.9 2.9 +0.4%
Returns Markets North bn SE 27.1 25.5 +6.2%
Returns Markets South bn SE 20.6 21.0 -1.6%
Returns Markets Total bn SE 47.7 46.5 +2.7%
Total Group bn SE 73.0 70.7 +3.2%
Growth Brands as % of Volume
Growth Markets % 64.6 59.7 +490 bps
US Market % 26.1 23.8 +230 bps
Returns Markets North % 63.9 56.0 +790 bps
Returns Markets South % 54.2 51.8 +240 bps
Returns Markets Total % 59.3 54.0 +530 bps
Total Group % 57.8 52.8 +500 bps
Growth Brand Market Share
Growth Markets % 3.9 3.4 +50 bps
US Market % 2.4 2.3 +10 bps
Returns Markets North % 15.7 14.9 +80 bps
Returns Markets South % 16.3 15.5 +80 bps
Returns Markets Total % 15.9 15.1 +80 bps
Total Group % 8.0 7.4 +60 bps
Growth Brand Tobacco Net Revenue
Growth Markets £m 409 319 +28.2% +6.9%
US Market £m 142 133 +7.3% -9.7%
Returns Markets North £m 753 686 +9.7% -3.3%
Returns Markets South £m 378 348 +8.5% -6.5%
Returns Markets Total £m 1,131 1,034 +9.3% -4.4%
Total Group £m 1,682 1,486 +13.2% -2.5%
Growth Brands as % of Tobacco Net Revenue
Growth Markets % 47.6 45.1 +250 bps
US Market % 18.1 18.6 -50 bps
Returns Markets North % 57.9 55.1 +280 bps
Returns Markets South % 49.0 47.4 +160 bps
Returns Markets Total % 54.6 52.2 +240 bps
Total Group % 45.3 43.7 +160 bps
Specialist Brand Net Revenue
Total Group £m 561 499 +12.3% -2.0%
Specialist Brands as % of Tobacco Net Revenue
Total Group % 15.1 14.7 +40 bps
Growth & Specialist Brands as a percentage of Group Net Revenue 60.4 58.4 +200 bps
INDEPENDENT REVIEW REPORT TO IMPERIAL BRANDS PLC
Report on the condensed consolidated interim financial statements
Our conclusion
We have reviewed Imperial Brands PLC's condensed consolidated interim
financial statements (the "interim financial statements") in the Interim
Results of Imperial Brands PLC for the 6 month period ended 31 March 2017.
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with International Accounting Standard 34,
'Interim Financial Reporting', as adopted by the European Union and the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority.
What we have reviewed
The interim financial statements comprise:
§ the Consolidated Balance Sheet as at 31 March 2017;
§ the Consolidated Income Statement and Consolidated Statement of
Comprehensive Income for the period then ended;
§ the Consolidated Cash Flow Statement for the period then ended;
§ the Consolidated Statement of Changes in Equity for the period then ended;
and
§ the explanatory notes to the interim financial statements.
The interim financial statements included in the Interim Results have been
prepared in accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as adopted by the European Union and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
As disclosed in note 1 to the interim financial statements, the financial
reporting framework that has been applied in the preparation of the full
annual financial statements of the Group is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European Union.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the Directors
The Interim Results, including the interim financial statements, are the
responsibility of, and have been approved by, the Directors. The Directors are
responsible for preparing the Interim Results in accordance with the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority.
Our responsibility is to express a conclusion on the interim financial
statements in the Interim Results based on our review. This report, including
the conclusion, has been prepared for and only for the company for the purpose
of complying with the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority and for no other purpose. We
do not, in giving this conclusion, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior consent in
writing.
What a review of interim financial statements involves
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 United Kingdom. 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.
We have read the other information contained in the Interim Results and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
Bristol
3 May 2017
a) The maintenance and integrity of the Imperial Brands PLC website is the
responsibility of the Directors; the work carried out by the auditors does not
involve consideration of these matters and, accordingly, the auditors accept
no responsibility for any changes that may have occurred to the interim
financial statements since they were initially presented on the website.
b) Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
The figures and financial information for 6 months ended 31 March 2017 do not
constitute the statutory financial statements for that year. Those financial
statements have not yet been delivered to the Registrar, nor have the Auditors
yet reported on them. The financial statements have been prepared in
accordance with our accounting policies published in our financial statements
available on our website www.imperialbrandsplc.com.
CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Audited
£ million unless otherwise indicated Notes 6 months ended 31 March 2017 6 months ended 31 March 2016 Year ended 30 September 2016
Revenue 3 14,298 12,806 27,634
Duty and similar items (7,035) (6,244) (13,535)
Other cost of sales (4,173) (3,730) (8,143)
Cost of sales (11,208) (9,974) (21,678)
Gross profit 3,090 2,832 5,956
Distribution, advertising and selling costs (1,210) (1,007) (2,070)
Amortisation of acquired intangibles (554) (473) (1,005)
Restructuring costs 4 (284) (162) (307)
Other expenses (140) (188) (345)
Administrative and other expenses (978) (823) (1,657)
Operating profit 3 902 1,002 2,229
Investment income 730 290 634
Finance costs (845) (852) (1,984)
Net finance costs 5 (115) (562) (1,350)
Share of profit of investments accounted for using the equity method 17 12 28
Profit before tax 804 452 907
Tax 6 (114) (142) (238)
Profit for the period 690 310 669
Attributable to:
Owners of the parent 675 290 631
Non-controlling interests 15 20 38
Earnings per ordinary share (pence)
- Basic 8 70.7 30.4 66.1
- Diluted 8 70.6 30.4 66.0
CONSOLIDATED STATEMENT ON COMPREHENSIVE INCOME
Unaudited Unaudited Audited
£ million 6 months ended 31 March 2017 6 months ended 31 March 2016 Year ended 30 September 2016
Profit for the period 690 310 669
Other comprehensive income
Exchange movements 137 282 1,260
Items that may be reclassified to profit and loss 137 282 1,260
Net actuarial gains/(losses) on retirement benefits 155 (79) (604)
Deferred tax relating to net actuarial gains/(losses) on retirement benefits (32) 25 115
Items that will not be reclassified to profit and loss 123 (54) (489)
Other comprehensive income for the period, net of tax 260 228 771
Total comprehensive income for the period 950 538 1,440
Attributable to:
Owners of the parent 939 490 1,336
Non-controlling interests 11 48 104
Total comprehensive income for the period 950 538 1,440
RECONCILIATION FROM OPERATING PROFIT TO ADJUSTED OPERATING PROFIT
Unaudited Unaudited Audited
£ million Notes 6 months ended 31 March 2017 6 months ended 31 March 2016 Year ended 30 September 2016
Operating profit 902 1,002 2,229
Amortisation of acquired intangibles 554 473 1,005
Restructuring costs 4 284 162 307
Adjusted operating profit 1,740 1,637 3,541
RECONCILIATION FROM NET FINANCE COSTS TO ADJUSTED NET FINANCE COSTS
Unaudited Unaudited Audited
£ million Notes 6 months ended 31 March 2017 6 months ended 31 March 2016 Year ended 30 September 2016
Net finance costs (115) (562) (1,350)
Net fair value and exchange (gains)/losses on financial instruments 5 (169) 287 807
Post-employment benefits net financing cost 5 12 9 19
Adjusted net finance costs 5 (272) (266) (524)
CONSOLIDATED BALANCE SHEET
Unaudited Unaudited Audited
£ million Notes 31 March 2017 31 March 2016 30 September 2016
Non-current assets
Intangible assets 9 20,390 19,415 20,704
Property, plant and equipment 1,955 1,794 1,959
Investments accounted for using the equity method 793 651 744
Retirement benefit assets 11 59 5
Trade and other receivables 94 93 89
Derivative financial instruments 11 703 905 1,063
Deferred tax assets 557 566 631
24,503 23,483 25,195
Current assets
Inventories 3,824 3,951 3,498
Trade and other receivables 2,745 2,524 2,671
Current tax assets 46 123 45
Cash and cash equivalents 10 653 561 1,274
Derivative financial instruments 11 35 40 46
7,303 7,199 7,534
Total assets 31,806 30,682 32,729
Current liabilities
Borrowings 10 (2,760) (2,591) (1,544)
Derivative financial instruments 11 (59) (103) (118)
Trade and other payables (7,563) (7,003) (7,991)
Current tax liabilities (169) (247) (284)
Provisions 4 (206) (185) (188)
(10,757) (10,129) (10,125)
Non-current liabilities
Borrowings 10 (11,694) (11,717) (12,394)
Derivative financial instruments 11 (1,070) (1,124) (1,646)
Trade and other payables (20) (13) (17)
Deferred tax liabilities (946) (1,123) (1,034)
Retirement benefit liabilities (1,271) (1,040) (1,484)
Provisions 4 (402) (264) (287)
(15,403) (15,281) (16,862)
Total liabilities (26,160) (25,410) (26,987)
Net assets 5,646 5,272 5,742
Equity
Share capital 104 104 104
Share premium and capital redemption 5,836 5,836 5,836
Retained earnings (1,745) (1,014) (1,525)
Exchange translation reserve 1,037 (44) 896
Equity attributable to owners of the parent 5,232 4,882 5,311
Non-controlling interests 414 390 431
Total equity 5,646 5,272 5,742
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unaudited
£ million Sharecapital Sharepremiumand capitalredemption Retainedearnings Exchangetranslationreserve Equityattributableto ownersof the parent Non-controllinginterests Totalequity
At 1 October 2016 104 5,836 (1,525) 896 5,311 431 5,742
Profit for the period - - 675 - 675 15 690
Other comprehensive income - - 123 141 264 (4) 260
Total comprehensive income - - 798 141 939 11 950
Transactions with owners
Cash from employees on maturity/exercise of share schemes - - 6 - 6 - 6
Purchase of shares by Employee Share Ownership Trusts - - (1) - (1) - (1)
Costs of employees' services compensated by share schemes - - 11 - 11 - 11
Dividends paid - - (1,034) - (1,034) (28) (1,062)
At 31 March 2017 104 5,836 (1,745) 1,037 5,232 414 5,646
At 1 October 2015 104 5,836 (315) (298) 5,327 369 5,696
Profit for the period - - 290 - 290 20 310
Other comprehensive income - - (54) 254 200 28 228
Total comprehensive income - - 236 254 490 48 538
Transactions with owners
Cash from employees on maturity/exercise of share schemes - - 1 - 1 - 1
Purchase of shares by Employee Share Ownership Trusts - - (12) - (12) - (12)
Costs of employees' services compensated by share schemes - - 12 - 12 - 12
Dividends paid - - (936) - (936) (27) (963)
At 31 March 2016 104 5,836 (1,014) (44) 4,882 390 5,272
CONSOLIDATED CASH FLOW STATEMENT
Unaudited Unaudited Audited
£ million 6 months ended 31 March 2017 6 months ended 31 March 2016 Year ended 30 September 2016
Cash flows from operating activities
Operating profit 902 1,002 2,229
Dividends received from investments accounted for under the equity method 9 13 19
Depreciation, amortisation and impairment 656 612 1,244
Loss on disposal of property, plant and equipment and software - 1 6
Loss on disposal of businesses - 1 -
Post-employment benefits (90) (55) (111)
Costs of employees' services compensated by share schemes 11 14 29
Movement in provisions 134 (5) 4
Operating cash flows before movement in working capital 1,622 1,583 3,420
Increase in inventories (293) (889) (149)
(Increase)/decrease in trade and other receivables (59) 76 171
(Decrease)/increase in trade and other payables (433) (209) 116
Movement in working capital (785) (1,022) 138
Tax paid (274) (251) (401)
Net cash flows generated from operating activities 563 310 3,157
Cash flows from investing activities
Interest received 4 4 7
Loan to joint ventures (10) - (9)
Purchase of property, plant and equipment (77) (62) (164)
Proceeds from sale of property, plant and equipment 13 20 42
Purchase of intangible assets - software (21) (18) (51)
Purchase of intangibles assets - intellectual property rights (1) (7) (14)
Internally generated intellectual property rights (4) (7) (2)
Net cash used in investing activities (96) (70) (191)
Cash flows from financing activities
Interest paid (336) (368) (547)
Cash from employees on maturity/exercise of share schemes 6 1 9
Purchase of shares by Employee Share Ownership Trusts (1) (6) (7)
Increase in borrowings 2,995 1,815 897
Repayment of borrowings (2,612) (2,212) (2,637)
Cash flows relating to derivative financial instruments (75) (56) (209)
Dividends paid to non-controlling interests (28) (27) (42)
Dividends paid to owners of the parent (1,034) (936) (1,386)
Net cash used in financing activities (1,085) (1,789) (3,922)
Net decrease in cash and cash equivalents (618) (1,549) (956)
Cash and cash equivalents at the start of period 1,274 2,042 2,042
Effect of foreign exchange rates on cash and cash equivalents (3) 68 188
Cash and cash equivalents at the end of period 653 561 1,274
NOTES TO THE FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES
BASIS OF PREPARATION
The financial information comprises the unaudited results for the six months
ended 31 March 2017 and 31 March 2016, together with the audited results for
the year ended 30 September 2016.
The information shown for the year ended 30 September 2016 does not constitute
statutory accounts within the meaning of section 434 of the Companies Act
2006, and is an abridged version of the Group's published financial statements
for that year. The Auditors' Report on those statements was unqualified and
did not contain any statements under section 498 of the Companies Act 2006.
The financial statements for the year ended 30 September 2016 were approved by
the Board of Directors on 8 November 2016 and filed with the Registrar of
Companies.
This condensed set of financial statements for the six months ended 31 March
2017 has been prepared in accordance with the Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority and with IAS 34 Interim
Financial Reporting as adopted by the European Union. The condensed set of
financial statements for the six months ended 31 March 2017 should be read in
conjunction with the annual financial statements for the year ended 30
September 2016 which have been prepared in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the European Union.
The Group's principal accounting policies used in preparing this information
are as stated in the financial statements for the year ended 30 September
2016, which are available on our website www.imperialbrandsplc.com.
NEW ACCOUNTING STANDARDS AND INTERPRETATIONS
There have been no new standards or amendments which became effective for the
current reporting period, that have had a material effect on the Group.
Certain changes to IFRS will be applicable to the consolidated financial
statements in future years. IFRS 15 Revenue from Contracts with Customers
which is effective for the Group for its 2019 financial statements will result
in some items currently classified as costs being netted against revenue. It
is not expected to have material effect on the Group's net asset or results.
Management has yet to fully assess the impact of IFRS 9 Financial Instruments
which is also effective for the Group for its 2019 financial statements. Our
initial assessment of IFRS 16 Leases, effective for the Group for its 2020
financial statements, is that it will not have a material effect on the
Group's net assets or results. There are no other standards or interpretations
that are expected to have a material effect on the Group's net assets or
results.
2. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The Group makes estimates and assumptions regarding the future. Estimates and
judgements are continually evaluated based on historical experience, and other
factors, including expectations of future events that are believed to be
reasonable under the circumstances.
In the future, actual experience may deviate from these estimates and
assumptions. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and
liabilities within the current financial year are discussed in the financial
statements for the year ended 30 September 2016, with the exception of the
impairment analysis disclosed in note 9.
Actuarial valuations for the Group's retirement benefit plans are updated
annually as at 30 September. An interim update is carried out at 31 March for
the main plans. As part of this interim update, the most material plan assets
are revalued based on market data at the period end and the liabilities for
the most significant schemes are recalculated to reflect key changes in
membership data and revised actuarial assumptions.
3. SEGMENT INFORMATION
TOBACCO
Unaudited Unaudited Audited
£ million unless otherwise indicated 6 months ended 31 March 2017 6 months ended 31 March 2016 Year ended 30 September 2016
Revenue 10,783 9,762 20,890
Net revenue 3,716 3,399 7,167
Operating profit 872 979 2,126
Adjusted operating profit 1,667 1,577 3,360
Adjusted operating margin % 44.9 46.4 46.9
LOGISTICS
Unaudited Unaudited Audited
£ million unless otherwise indicated 6 months ended 31 March 2017 6 months ended 31 March 2016 Year ended 30 September 2016
Revenue 3,912 3,408 7,505
Distribution fees 442 371 809
Operating profit 39 31 98
Adjusted operating profit 82 68 176
Adjusted operating margin % 18.6 18.3 21.8
REVENUE
Unaudited Unaudited Audited
6 months ended31 March 2017 6 months ended31 March 2016 Year ended30 September 2016
£ million Totalrevenue Externalrevenue Totalrevenue Externalrevenue Total Revenue External revenue
Tobacco
Growth Markets 1,694 1,663 1,382 1,361 3,137 3,085
USA 1,513 1,513 1,424 1,424 2,942 2,942
Returns Markets North 6,396 6,382 5,851 5,837 12,537 12,504
Returns Markets South 1,180 828 1,105 776 2,274 1,598
Total Tobacco 10,783 10,386 9,762 9,398 20,890 20,129
Logistics 3,912 3,912 3,408 3,408 7,505 7,505
Eliminations (397) - (364) - (761) -
Total Group 14,298 14,298 12,806 12,806 27,634 27,634
TOBACCO NET REVENUE
Unaudited Unaudited Audited
£ million 6 months ended 31 March 2017 6 months ended 31 March 2016 Year ended 30 September 2016
Growth Markets 859 707 1,568
USA 785 711 1,477
Returns Markets North 1,301 1,246 2,645
Returns Markets South 771 735 1,477
Total Tobacco 3,716 3,399 7,167
Tobacco net revenue excludes revenue from the sale of peripheral products of
£32 million (6 months 2016: £119 million).
ADJUSTED OPERATING PROFIT AND RECONCILIATION TO PROFIT BEFORE TAX
Unaudited Unaudited Audited
£ million 6 months ended 31 March 2017 6 months ended 31 March 2016 Year ended 30 September 2016
Tobacco
Growth Markets 211 192 443
USA 457 384 823
Returns Markets North 671 676 1,439
Returns Markets South 328 325 655
Total Tobacco 1,667 1,577 3,360
Logistics 82 68 176
Eliminations (9) (8) 5
Adjusted operating profit 1,740 1,637 3,541
Amortisation of acquired intangibles - Tobacco (511) (436) (927)
Amortisation of acquired intangibles - Logistics (43) (37) (78)
Restructuring costs - Tobacco (284) (162) (307)
Operating profit 902 1,002 2,229
Net finance costs (115) (562) (1,350)
Share of profit of investments accounted for using the equity method 17 12 28
Profit before tax 804 452 907
4. RESTRUCTURING COSTS AND PROVISIONS
RESTRUCTURING COSTS
Unaudited Unaudited Audited
£ million 6 months ended 31 March 2017 6 months ended 31 March 2016 Year ended 30 September 2016
Employment related 198 80 144
Asset impairments 64 49 51
Other charges 22 33 112
284 162 307
The charge for the period of £284 million (6 months 2016: £162 million)
relates mainly to our two cost optimisation programmes (£275 million)
announced in 2013 and 2016. The balance of £9 million covers all other
restructuring activities across the Group.
In the 6 months to 31 March 2017 the cash cost of the programmes was £107
million (6 months 2016: £30 million) bringing the cumulative cash costs of
Phase I to £460 million and Phase II to £67 million. The cost optimisation
programmes Phase I and Phase II are expected to have a cash implementation
cost in the region of £600 million and £750 million, respectively. Phase I is
expected to generate savings of £300 million by 2018 and Phase II to deliver a
further £300 million of savings by 2020.
PROVISIONS
Unaudited
6 months ended 31 March 2017
£ million Restructuring Other Total
At 1 October 2016 304 171 475
Additional provisions charged to the consolidated income statement 220 16 236
Amounts used (71)
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