REG - Inchcape PLC - 2016 Annual Results Announcement <Origin Href="QuoteRef">INCH.L</Origin> - Part 2
01/03/2017 07:06
- Part 2: For the preceding part double click ID:nRSA1326Ya
20.9p), an increase of 13.9% vs. 2015.
Pensions
In 2016, the IAS 19 net post-retirement surplus was £37.3m (2015: £98.9m),
with the reduction in surplus driven by the reduction in discount rates
leading to an increase in pension liabilities, which has been partially offset
by experience gains and an increase in the value of pension assets. In line
with the funding programme agreed with the Trustees, the Group made additional
cash contributions to the UK pension schemes amounting to £2.1m (2015: £1.7m).
We have agreed with the Trustees that future cash contributions will continue
at broadly this level.
Acquisitions and disposals
On 22 December 2016, the Group acquired a multi-country scale Distribution
business in South America, focused on Subaru and Hino from subsidiaries and
affiliates of Empresas Indumotora S.A. for a total cash consideration of
£226.7m. The acquired business consists of Distribution operations in Chile,
Peru, Colombia and Argentina. In Light Vehicles, it includes Subaru (in all
four countries), DFSK (in Chile, Peru and Colombia) and Suzuki (in Argentina).
In Commercial Vehicles it includes Hino (in Chile and Colombia), as well as
the truck brand Mack and a number of other machinery and components brands in
Colombia. Around 1,400 employees have joined Inchcape.
The assets and liabilities acquired are largely represented by their book
values within the acquired business and will be subject to a fair value
assessment as permitted under IFRS 3 to be finalised during 2017. The
acquisition has given rise to provisional goodwill of £51.2m and intangibles
relating to the distribution contracts for Subaru and Hino (net of deferred
tax) of £112.2m.
In addition to this, during 2016 the Group acquired and disposed of sites in
the UK in relation to the optimisation of our Jaguar Land Rover footprint. The
Group also disposed of a site in Australia and finalised the liquidation of a
joint venture in Greece. Consideration for these acquisitions was £4.3m and
disposal proceeds were £2.8m.
In 2015, the Group acquired one retail centre in the UK for £5.1m and disposed
of non-core businesses in Australia and its interest in the Excelease joint
venture, generating disposal proceeds of £5.4m.
Refinancing
In December, the Group successfully concluded a US Private Placement (USPP)
transaction, raising £210m with a blended 7, 10 and 12 year tenor to refinance
existing USPP facilities maturing in May 2017. Delayed funding was arranged
for January and May 2017 and an initial £70.0m was funded on 25 January 2017.
In January 2017, the Group also successfully concluded the second one year
extension of the £400.0m Revolving Credit Facility (RCF) with all the Group's
relationship banks participating. In combination, these refinancing events
extend the Group's committed facilities at attractive financing rates.
Capital expenditure
During the year, the Group invested £72.1m (2015: £53.6m) of net capital
expenditure in the development of greenfield sites, the enhancement of
existing facilities and the continued roll-out of the iPower system. During
2016 the Group opened the new Pandan multi-story aftersales and bodyshop site
in Singapore, a significant investment behind the Ignite objective of
Delivering Full Potential on all our Revenue Streams.
Cash flow and net funds
The Group delivered free cash of £190.5m (2015: £177.6m). After the
acquisition of the Subaru and Hino Distribution businesses in Latin America,
and buying back shares at a cost of £109.8m, the Group closed the year with
net cash of £26.5m (2015: £166.4m).
Reconciliation of free cash flow
£m £m
Net cash generated from operating activities 271.6
Add: Payments in respect of exceptional items 3.2
Net cash generated from operating activities, before exceptional items 274.8
Purchase of property, plant and equipment (71.1)
Purchase of intangible assets (22.7)
Proceeds from disposal of property plant and equipment 21.7
Net capital expenditure (72.1)
Dividends paid to non-controlling interests (12.2)
Free cash flow 190.5
Consolidated income statement
For the year ended 31 December 2016
Notes Before exceptional items Exceptional items Total Before exceptional items Exceptional items Total
2016 (note 3) 2016 2015 (note 3) 2015
£m 2016 £m £m 2015 £m
£m £m
Revenue 2 7,838.4 - 7,838.4 6,836.3 - 6,836.3
Cost of sales (6,759.3) - (6,759.3) (5,847.5) - (5,847.5)
Gross profit 1,079.1 - 1,079.1 988.8 - 988.8
Net operating expenses (720.0) (81.6) (801.6) (664.1) (49.5) (713.6)
Operating profit 2 359.1 (81.6) 277.5 324.7 (49.5) 275.2
Share of (loss) / profit after tax of joint ventures and associates (0.1) - (0.1) 0.7 - 0.7
Profit before finance and tax 359.0 (81.6) 277.4 325.4 (49.5) 275.9
Finance income 4 17.0 - 17.0 14.4 - 14.4
Finance costs 5 (26.6) - (26.6) (27.7) - (27.7)
Profit before tax 349.4 (81.6) 267.8 312.1 (49.5) 262.6
Tax 6 (88.0) 11.5 (76.5) (74.9) (4.8) (79.7)
Profit for the year 261.4 (70.1) 191.3 237.2 (54.3) 182.9
Profit attributable to:
- Owners of the parent 184.4 175.8
- Non-controlling interests 6.9 7.1
191.3 182.9
Basic earnings per share (pence) 7 43.2p 39.8p
Diluted earnings per share (pence) 7 42.6p 39.4p
Consolidated statement of comprehensive income
For the year ended 31 December 2016
2016 2015
£m £m
Profit for the year 191.3 182.9
Other comprehensive income:
Items that will not be reclassified to the consolidated income statement
Defined benefit pension scheme remeasurements (60.3) (26.8)
Current tax recognised in consolidated statement of comprehensive income 0.1 -
Deferred tax recognised in consolidated statement of comprehensive income 10.8 1.2
(49.4) (25.6)
Items that may be or have been reclassified subsequently to the consolidated income statement
Cash flow hedges (35.3) 25.9
Effect of foreign exchange rate changes 215.3 (49.9)
Deferred tax recognised in consolidated statement of comprehensive income 10.5 (7.7)
190.5 (31.7)
Other comprehensive income / (loss) for the year, net of tax 141.1 (57.3)
Total comprehensive income for the year 332.4 125.6
Total comprehensive income attributable to:
- Owners of the parent 324.5 117.7
- Non-controlling interests 7.9 7.9
332.4 125.6
Consolidated statement of financial position
As at 31 December 2016
2016 2015
£m £m
Non-current assets
Intangible assets 614.5 418.4
Property, plant and equipment 778.6 644.0
Investments in joint ventures and associates 4.1 5.3
Available for sale financial assets 3.6 1.2
Trade and other receivables 50.9 47.2
Deferred tax assets 31.7 18.7
Retirement benefit asset 80.0 124.3
1,563.4 1,259.1
Current assets
Inventories 1,549.4 1,224.4
Trade and other receivables 446.0 327.8
Available for sale financial assets 0.2 0.2
Derivative financial instruments 160.1 134.5
Current tax assets 13.6 4.0
Cash and cash equivalents 645.2 473.8
2,814.5 2,164.7
Assets held for sale 3.2 4.5
2,817.7 2,169.2
Total assets 4,381.1 3,428.3
Current liabilities
Trade and other payables (1,911.6) (1,566.1)
Derivative financial instruments (53.6) (3.6)
Current tax liabilities (68.5) (70.7)
Provisions (37.0) (22.7)
Borrowings (481.7) (103.3)
(2,552.4) (1,766.4)
Non-current liabilities
Trade and other payables (18.0) (12.8)
Provisions (32.7) (26.5)
Deferred tax liabilities (80.8) (43.8)
Borrowings (292.0) (311.5)
Retirement benefit liability (42.7) (25.4)
(466.2) (420.0)
Total liabilities (3,018.6) (2,186.4)
Net assets 1,362.5 1,241.9
Equity
Share capital 42.2 43.8
Share premium 146.7 146.7
Capital redemption reserve 138.4 136.8
Other reserves (25.6) (215.1)
Retained earnings 1,042.2 1,106.8
Equity attributable to owners of the parent 1,343.9 1,219.0
Non-controlling interests 18.6 22.9
Total equity 1,362.5 1,241.9
Consolidated statement of changes in equity
For the year ended 31 December 2016
Notes Share capital Share premium Capital redemption reserve Other reserves£m Retained earnings £m Equity attributable to owners of the parent Non- controlling interests Total
£m £m £m £m £m shareholders'
equity
£m
At 1 January 2015 45.0 146.7 135.6 (182.6) 1,148.2 1,292.9 25.2 1,318.1
Profit for the year - - - - 175.8 175.8 7.1 182.9
Other comprehensive (loss) / - - - (32.5) (25.6) (58.1) 0.8 (57.3)
income for the year
Total comprehensive income / - - - (32.5) 150.2 117.7 7.9 125.6
(loss) for the year
Share-based payments, net of tax - - - - 9.8 9.8 - 9.8
Share buy back programme (1.2) - 1.2 - (91.4) (91.4) - (91.4)
Net purchase of own shares by the Inchcape Employee Trust - - - - (18.9) (18.9) - (18.9)
Dividends:
- Owners of the parent 8 - - - - (91.1) (91.1) - (91.1)
- Non-controlling interests - - - - - - (10.2) (10.2)
At 1 January 2016 43.8 146.7 136.8 (215.1) 1,106.8 1,219.0 22.9 1,241.9
Profit for the year - - - - 184.4 184.4 6.9 191.3
Other comprehensive income / - - - 189.5 (49.4) 140.1 1.0 141.1
(loss) for the year
Total comprehensive income - - - 189.5 135.0 324.5 7.9 332.4
for the year
Share-based payments, net of tax - - - - 11.3 11.3 - 11.3
Share buy back programme (1.6) - 1.6 - (109.8) (109.8) - (109.8)
Net purchase of own shares by the Inchcape Employee Trust - - - - (10.9) (10.9) - (10.9)
Dividends:
- Owners of the parent 8 - - - - (90.2) (90.2) - (90.2)
- Non-controlling interests - - - - - - (12.2) (12.2)
At 31 December 2016 42.2 146.7 138.4 (25.6) 1,042.2 1,343.9 18.6 1,362.5
Share-based payments include a net tax charge of £0.8m (current tax credit of
£0.2m and a deferred tax charge of £1.0m)
(2015 - net tax credit of £0.2m (current tax credit of £2.0m and a deferred
tax charge of £1.8m)).
Consolidated statement of cash flows
For the year ended 31 December 2016
Notes 2016 2015
£m £m
Cash flows from operating activities
Cash generated from operations 9a 382.8 328.4
Tax paid (99.5) (69.6)
Interest received 12.4 10.1
Interest paid (24.1) (27.5)
Net cash generated from operating activities 271.6 241.4
Cash flows from investing activities
Acquisition of businesses, net of cash and overdrafts acquired 10 (201.1) (5.1)
Net cash inflow from sale of businesses 10 2.8 5.4
Purchase of property, plant and equipment (71.1) (50.2)
Purchase of intangible assets (22.7) (19.0)
Proceeds from disposal of property, plant and equipment 21.7 15.6
Net cash used in investing activities (270.4) (53.3)
Cash flows from financing activities
Share buy back programme (109.8) (91.4)
Net purchase of own shares by the Inchcape Employee Trust (10.9) (18.9)
Net cash inflow from borrowings 133.3 3.7
Payment of capital element of finance leases (1.2) (0.5)
Equity dividends paid 8 (90.2) (91.1)
Dividends paid to non-controlling interests (12.2) (10.2)
Net cash used in financing activities (91.0) (208.4)
Net decrease in cash and cash equivalents 9b (89.8) (20.3)
Cash and cash equivalents at the beginning of the year 375.3 416.8
Effect of foreign exchange rate changes 130.5 (21.2)
Cash and cash equivalents at the end of the year 416.0 375.3
2016 2015
£m £m
Cash and cash equivalents consist of:
- Cash at bank and cash equivalents 473.7 335.3
- Short-term deposits 171.5 138.5
- Bank overdrafts (229.2) (98.5)
416.0 375.3
Notes to the financial statements
1. Basis of preparation and accounting policies
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by the European
Union and International Financial Reporting Interpretation Committee (IFRIC)
interpretations and with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS.
The condensed set of consolidated financial information have been prepared on
a going concern basis and have adopted accounting policies consistent with
those of the Group's Annual Report and Accounts 2015.
The condensed set of financial information presented for the years ended 31
December 2015 and 2016 do not constitute statutory accounts within the meaning
of Section 434 of the Companies Act 2006. The Group's published consolidated
financial statements for the year ended 31 December 2015 have been reported on
by the Group's auditors and filed with the Registrar of Companies. The report
of the auditors was unqualified and did not contain an emphasis of matter
paragraph or a statement under Section 498 of the Companies Act 2006. The
financial information for the year ended 31 December 2016 and the comparative
information have been extracted from the audited consolidated financial
statements for the year ended
31 December 2016 prepared under IFRS, which have not yet been approved by the
shareholders and have not yet been delivered to the Registrar. The report of
the auditors on the consolidated financial statements for 2016 was unqualified
and did not contain a statement under Section 498 (2) or (3) of the Companies
Act 2006.
2 Segmental analysis
The Group has eight reportable segments which have been identified based on
the operating segments of the Group that are regularly reviewed by the chief
operating decision maker, which has been determined to be the Executive
Committee, in order to assess performance and allocate resources. Operating
segments are then aggregated into reporting segments to combine those with
similar economic characteristics. The management and reporting of the previous
North Asia and South Asia regions has changed to encompass the combination of
these to form an Asia region, as well as moving China from the Emerging
Markets region to Asia. In addition, and reflecting the percentage of the
European region as a proportion of the Group across revenue, profit and
assets, UK and Europe has been formed as a new reporting region. The new
region encompasses the UK, Belgium, Luxembourg, Greece, Finland, Poland,
Romania, Bulgaria, Macedonia, Latvia, Lithuania and Estonia. The following
summary describes the operations of each of the Group's reportable segments:
Distribution Australasia Distribution of new vehicles and parts in Australia and New Zealand together with associated marketing and logistics operations.
UK and Europe Distribution of new vehicles and parts, together with associated marketing activities, in mature European markets.
Asia Exclusive distribution and sale of new vehicles and parts, in Asian markets, together with associated aftersales activities of service and bodyshop repairs.
Emerging Markets Distribution of new vehicles and parts, in growing markets, together with associated aftersales activities of service and bodyshop repairs.
Retail Australasia Sale of new and used vehicles in Australia together with associated aftersales activities of service, bodyshop repairs and parts sales.
UK and Europe Sale of primarily new and used premium vehicles in mature markets, together with associated aftersales activities of service, bodyshop repairs and parts sales.
Emerging Markets Sale of new and used vehicles in growing markets together with associated aftersales activities of service, bodyshop repairs and parts sales.
Central Comprises the Group's head office function and includes all central activities including the Board, finance, human resources, marketing, governance and global information services.
Distribution
2016 Australasia UK Asia Emerging Total
£m and Europe £m Markets Distribution
£m £m £m
Revenue
Total revenue 953.0 921.5 1,591.6 333.4 3,799.5
Inter-segment revenue (225.2) (176.7) - - (401.9)
Revenue from third parties 727.8 744.8 1,591.6 333.4 3,397.6
Results
Trading profit / (loss) 67.8 26.5 136.7 52.0 283.0
Operating exceptional items (0.5) (32.1) (11.6) (0.5) (44.7)
Operating profit / (loss) after 67.3 (5.6) 125.1 51.5 238.3
exceptional items
Share of loss after tax of joint ventures
and associates
Profit before finance and tax
Finance income
Finance costs
Profit before tax
Tax
Profit for the year
Retail
2016 Australasia UK Emerging Markets Total Total pre Central Central Total
£m and Europe £m Retail £m £m £m
£m £m
Revenue
Total revenue 701.3 3,318.1 421.4 4,440.8 8,240.3 - 8,240.3
Inter-segment revenue - - - - (401.9) - (401.9)
Revenue from third parties 701.3 3,318.1 421.4 4,440.8 7,838.4 - 7,838.4
Results
Trading profit / (loss) 34.6 70.6 0.4 105.6 388.6 (29.5) 359.1
Operating exceptional items (4.7) (4.6) (0.4) (9.7) (54.4) (27.2) (81.6)
Operating profit / (loss) after 29.9 66.0 - 95.9 334.2 (56.7) 277.5
exceptional items
Share of loss after tax of joint ventures and associates (0.1)
Profit before finance and tax 277.4
Finance income 17.0
Finance costs (26.6)
Profit before tax 267.8
Tax (76.5)
Profit for the year 191.3
Net finance costs of £9.6m are not allocated to individual segments.
The Group's reported segments are based on the location of the Group's assets.
Revenue earned from sales is disclosed by origin and is not materially
different from revenue by destination. Revenue is further analysed as
follows:
2016 £m
UK 3,030.7
Rest of the world 4,807.7
Group 7,838.4
Gross profit for Distribution and Retail activities is analysed as follows:
2016 Vehicles Aftersales Total
£m £m £m
Distribution 339.7 242.1 581.8
Retail 339.0 158.3 497.3
Group 678.7 400.4 1,079.1
Distribution
2016 Australasia UK Asia Emerging Total
£m and Europe £m Markets Distribution
£m £m £m
Segment assets and liabilities
Segment assets 129.8 215.2 372.2 276.0 993.2
Other current assets
Non-current assets
Segment liabilities (354.4) (168.4) (329.4) (184.4) (1,036.6)
Other liabilities
Net assets
Segment assets include net inventory, receivables and derivative assets.
Segment liabilities include payables, provisions and
derivative liabilities.
Distribution
2016 Australasia UK Asia Emerging Total
£m and Europe £m Markets Distribution
£m £m £m
Other segment items
Capital expenditure:
- Property, plant and equipment 12.7 1.6 21.9 5.3 41.5
- Interest in leased vehicles - 7.4 10.7 1.1 19.2
- Intangible assets 2.6 1.3 0.3 1.0 5.2
Depreciation:
- Property, plant and equipment 2.3 1.4 8.6 4.0 16.3
- Interest in leased vehicles - 0.9 4.7 0.9 6.5
Amortisation of intangible assets 0.3 0.9 4.1 0.1 5.4
Impairment of goodwill - 24.9 - - 24.9
Impairment of other intangible assets - 0.3 1.9 - 2.2
Net provisions charged / (credited) 4.0 10.3 21.9 (1.4) 34.8
to the consolidated income statement
Net provisions include inventory, trade receivables impairment and other
liability provisions.
Retail
2016 Australasia UK Emerging Markets Total Total
£m and Europe £m Retail £m
£m £m
Segment assets and liabilities
Segment assets 179.2 756.7 116.7 1,052.6 2,045.8
Other current assets 822.8
Non-current assets 1,512.5
Segment liabilities (160.5) (745.3) (74.5) (980.3) (2,016.9)
Other liabilities (1,001.7)
Net assets 1,362.5
Segment assets include net inventory, receivables and derivative assets.
Segment liabilities include payables, provisions and
derivative liabilities.
Retail
2016 Australasia UK Emerging Markets Total Total pre Central Central Total
£m and Europe £m Retail £m £m £m
£m £m
Other segment items
Capital expenditure:
- Property, plant and equipment 1.1 26.2 2.1 29.4 70.9 0.1 71.0
- Interest in leased vehicles - 8.1 - 8.1 27.3 - 27.3
- Intangible assets 4.3 2.4 1.2 7.9 13.1 9.3 22.4
Depreciation:
- Property, plant and equipment 2.2 15.2 3.9 21.3 37.6 0.4 38.0
- Interest in leased vehicles - 4.1 - 4.1 10.6 - 10.6
Amortisation of intangible assets - 5.6 3.2 8.8 14.2 0.7 14.9
Impairment of goodwill - - - - 24.9 - 24.9
Impairment of other intangible assets 4.0 - - 4.0 6.2 16.6 22.8
Net provisions charged / (credited) 3.2 28.2 0.6 32.0 66.8 (0.9) 65.9
to the consolidated income statement
Net provisions include inventory, trade receivables impairment and other
liability provisions.
Distribution
2015 Australasia UK Asia Emerging Total
£m and Europe £m Markets Distribution
£m £m £m
Revenue
Total revenue 761.4 740.4 1,431.9 303.8 3,237.5
Inter-segment revenue (183.7) (156.5) - - (340.2)
Revenue from third parties 577.7 583.9 1,431.9 303.8 2,897.3
Results
Trading profit / (loss) 67.0 22.8 133.4 43.8 267.0
Operating exceptional items - - - - -
Operating profit / (loss) after 67.0 22.8 133.4 43.8 267.0
exceptional items
Share of profit after tax of joint ventures
and associates
Profit before finance and tax
Finance income
Finance costs
Profit before tax
Tax
Profit for the year
Retail
2015 Australasia UK Emerging Markets Total Total pre Central Central Total
£m and Europe £m Retail £m £m £m
£m £m
Revenue
Total revenue 642.2 2,951.0 345.8 3,939.0 7,176.5 - 7,176.5
Inter-segment revenue - - - - (340.2) - (340.2)
Revenue from third parties 642.2 2,951.0 345.8 3,939.0 6,836.3 - 6,836.3
Results
Trading profit / (loss) 23.6 66.1 (2.0) 87.7 354.7 (30.0) 324.7
Operating exceptional items - - (49.5) (49.5) (49.5) - (49.5)
Operating profit / (loss) after 23.6 66.1 (51.5) 38.2 305.2 (30.0) 275.2
exceptional items
Share of profit after tax of joint ventures and associates 0.7
Profit before finance and tax 275.9
Finance income 14.4
Finance costs (27.7)
Profit before tax 262.6
Tax (79.7)
Profit for the year 182.9
Net finance costs of £13.3m are not allocated to individual segments.
The Group's reported segments are based on the location of the Group's assets.
Revenue earned from sales is disclosed by origin and is not materially
different from revenue by destination. Revenue is further analysed as
follows:
2015 £m
UK 2,725.2
Rest of the world 4,111.1
Group 6,836.3
Gross profit for Distribution and Retail activities is analysed as follows:
2015 Vehicles Aftersales Total
£m £m £m
Distribution 326.5 203.8 530.3
Retail 305.0 153.5 458.5
Group 631.5 357.3 988.8
Distribution
2015 Australasia UK Asia Emerging Total
£m and Europe £m Markets Distribution
£m £m £m
Segment assets and liabilities
Segment assets 90.9 164.2 318.1 137.6 710.8
Other current assets
Non-current assets
Segment liabilities (218.6) (120.5) (248.7) (122.3) (710.1)
Other liabilities
Net assets
Segment assets include net inventory, receivables and derivative assets.
Segment liabilities include payables, provisions and
derivative liabilities.
Distribution
2015 Australasia UK Asia Emerging Total
£m and Europe £m Markets Distribution
£m £m £m
Other segment items
Capital expenditure:
- Property, plant and equipment 1.9 0.9 13.3 6.1 22.2
- Interest in leased vehicles - 0.5 13.7 8.4 22.6
- Intangible assets 2.4 0.5 2.3 0.2 5.4
Depreciation:
- Property, plant and equipment 2.6 1.3 7.1 3.8 14.8
- Interest in leased vehicles - 0.6 3.7 0.8 5.1
Amortisation of intangible assets 0.4 0.8 3.4 0.1 4.7
Impairment of goodwill - - - - -
Net provisions charged / (credited) 6.3 4.8 6.7 1.6 19.4
to the consolidated income statement
Net provisions include inventory, trade receivables impairment and other
liability provisions.
Retail
2015 Australasia UK Emerging Markets Total Total
£m and Europe £m Retail £m
£m £m
Segment assets and liabilities
Segment assets 115.5 725.8 63.6 904.9 1,615.7
Other current assets 600.5
Non-current assets 1,212.1
Segment liabilities (115.4) (720.9) (49.5) (885.8) (1,595.9)
Other liabilities (590.5)
Net assets 1,241.9
Segment assets include net inventory, receivables and derivative assets.
Segment liabilities include payables, provisions and
derivative liabilities.
Retail
2015 Australasia UK Emerging Markets Total Total pre Central Central Total
£m and Europe £m Retail £m £m £m
£m £m
Other segment items
Capital expenditure:
- Property, plant and equipment 0.7 14.3 2.5 17.5 39.7 0.1 39.8
- Interest in leased vehicles - 11.9 - 11.9 34.5 - 34.5
- Intangible assets 0.1 3.0 1.9 5.0 10.4 8.8 19.2
Depreciation:
- Property, plant and equipment 1.7 13.8 3.9 19.4 34.2 0.3 34.5
- Interest in leased vehicles - 4.7 - 4.7 9.8 - 9.8
Amortisation of intangible assets - 5.2 3.1 8.3 13.0 1.0 14.0
Impairment of goodwill - - 49.5 49.5 49.5 - 49.5
Net provisions charged / (credited) 10.3 23.7 0.5 34.5 53.9 (1.3) 52.6
to the consolidated income statement
Net provisions include inventory, trade receivables impairment and other
liability provisions.
3 Exceptional items
2016 2015
£m £m
Goodwill impairment (24.9) (49.5)
Impairment of software and associated assets (23.1) -
Restructuring costs (24.8) -
Acquisition of businesses (8.8) -
Total exceptional items before tax (81.6) (49.5)
Exceptional tax (see note 6) 11.5 (4.8)
Total exceptional items (70.1) (54.3)
The Group has recognised an impairment charge of £24.9m in respect of goodwill
attributable to Lithuania and Estonia following a reassessment of the short
and medium term forecasts for these markets.
During the year, the Group has made configuration changes to the iPower system
to better reflect the Ignite strategy. This has resulted in a number of areas
of functionality being superseded and as such, we have recorded an
exceptional, non-cash impairment charge of £23.1m.
The restructuring costs of £24.8m represent the cost of a Group-wide programme
to better align the organisation with the Ignite strategy and comprise
headcount reduction; the associated costs of exiting surplus properties; and
costs associated with the redevelopment of the third party Retail network in
certain markets.
Exceptional costs of £8.8m related to the acquisition of businesses are the
costs incurred in acquiring the Subaru, Hino and associated Distribution
businesses from Empresas Indumotora S.A. in South America.
4 Finance income
2016 2015
£m £m
Bank and other interest receivable 5.0 3.1
Net interest income on post-retirement plan assets and liabilities 4.2 4.2
Other finance income 7.8 7.1
Total finance income 17.0 14.4
5 Finance costs
2016 2015
£m £m
Interest payable on bank borrowings 2.6 1.7
Interest payable on Private Placement 3.3 3.1
Interest payable on other borrowings 0.3 0.3
Fair value adjustment on Private Placement 46.6 6.4
Fair value gain on cross currency interest rate swaps (47.6) (7.3)
Stock holding interest 20.1 18.4
Other finance costs 1.3 5.1
Total finance costs 26.6 27.7
The Group capitalisation rate used for general borrowing costs in accordance
with IAS 23 was a weighted average rate for the year of 2.0% (2015 - 2.0%).
6 Tax
2016 2015
£m £m
Current tax:
-
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