REG - Inchcape PLC - Final Results <Origin Href="QuoteRef">INCH.L</Origin> - Part 2
27/02/2018 07:06
- Part 2: For the preceding part double click ID:nRSa9883Fa
of free cash flow
£m £m
Net cash generated from operating activities 389.5
Add: Payments in respect of exceptional items 32.1
Net cash generated from operating activities, before exceptional items 421.6
Purchase of property, plant and equipment (103.2)
Purchase of intangible assets (24.0)
Proceeds from disposal of property, plant and equipment 25.8
Net capital expenditure (101.4)
Dividends paid to non-controlling interests (6.3)
Free cash flow 313.9
Contact details
Inchcape plc:
Group Communications, +44 (0) 20 7546 0022
Investor Relations, +44 (0) 20 7546 8225
Instinctif Partners:
Mark Garraway +44 (0)7771 860 938
Helen Tarbet +44 (0)7825 609 737
Inchcape@instinctif.com
American Depository Receipts
Inchcape American Depositary Receipts are traded in the US on the OTC Pink
market: (OTC Pink: INCPY) http://www.otcmarkets.com/stock/INCPY/quote
Consolidated income statement
For the year ended 31 December 2017
Notes Before exceptional items 2017 £m Exceptional items (note 3) 2017 £m Total 2017 £m Before exceptional items 2016 £m Exceptional items (note 3) 2016 £m Total 2016 £m
Revenue 2 8,949.2 - 8,949.2 7,838.4 - 7,838.4
Cost of sales (7,697.1) -- (7,697.1) (6,759.3) - (6,759.3)
Gross profit 1,252.1 - 1,252.1 1,079.1 - 1,079.1
Net operating expenses (844.6) (12.6) (857.2) (720.0) (81.6) (801.6)
Operating profit 2 407.5 (12.6) 394.9 359.1 (81.6) 277.5
Share of (loss) / profit after tax of joint ventures and associates - - - (0.1) - (0.1)
Profit before finance and tax 407.5 (12.6) 394.9 359.0 (81.6) 277.4
Finance income 4 14.6 - 14.6 17.0 - 17.0
Finance costs 5 (39.6) - (39.6) (26.6) - (26.6)
Profit before tax 382.5 (12.6) 369.9 349.4 (81.6) 267.8
Tax 6 (95.8) 2.7 (93.1) (88.0) 11.5 (76.5)
Profit for the year 286.7 (9.9) 276.8 261.4 (70.1) 191.3
Profit attributable to:
- Owners of the parent 268.9 184.4
- Non-controlling interests 7.9 6.9
276.8 191.3
Basic earnings per share (pence) 7 64.6p 43.2p
Diluted earnings per share (pence) 7 63.9p 42.6p
Consolidated statement of comprehensive income
For the year ended 31 December 2017
2017 £m 2016 £m
Profit for the year 276.8 191.3
Other comprehensive (loss) / income:
Items that will not be reclassified to the consolidated income statement
Defined benefit pension scheme remeasurements 37.9 (60.3)
Current tax recognised in consolidated statement of comprehensive income - 0.1
Deferred tax recognised in consolidated statement of comprehensive income (5.5) 10.8
32.4 (49.4)
Items that may be or have been reclassified subsequently to the consolidated
income statement
Cash flow hedges 15.5 (35.3)
Effect of foreign exchange rate changes (68.1) 215.3
Deferred tax recognised in consolidated statement of comprehensive income (5.0) 10.5
(57.6) 190.5
Other comprehensive (loss) / income for the year, net of tax (25.2) 141.1
Total comprehensive income for the year 251.6 332.4
Total comprehensive income attributable to:
- Owners of the parent 243.3 324.5
- Non-controlling interests 8.3 7.9
251.6 332.4
Consolidated statement of financial position
As at 31 December 2017
2017 £m 2016 £m
Non-current assets
Intangible assets 639.5 614.5
Property, plant and equipment 802.0 778.6
Investments in joint ventures and associates 4.2 4.1
Available for sale financial assets 7.3 3.6
Trade and other receivables 44.8 50.9
Deferred tax assets 37.0 31.7
Retirement benefit asset 105.9 80.0
1,640.7 1,563.4
Current assets
Inventories 1,768.6 1,549.4
Trade and other receivables 463.5 446.0
Available for sale financial assets 0.2 0.2
Derivative financial instruments 52.4 160.1
Current tax assets 10.1 13.6
Cash and cash equivalents 926.9 645.2
3,221.7 2,814.5
Assets held for sale 13.8 3.2
3,235.5 2,817.7
Total assets 4,876.2 4,381.1
Current liabilities
Trade and other payables (2,235.5) (1,911.6)
Derivative financial instruments (21.6) (53.6)
Current tax liabilities (73.7) (68.5)
Provisions (27.2) (37.0)
Borrowings (534.5) (481.7)
(2,892.5) (2,552.4)
Non-current liabilities
Trade and other payables (22.6) (18.0)
Provisions (32.3) (32.7)
Deferred tax liabilities (78.5) (80.8)
Borrowings (361.9) (292.0)
Retirement benefit liability (33.6) (42.7)
(528.9) (466.2)
Total liabilities (3,421.4) (3,018.6)
Net assets 1,454.8 1,362.5
Equity
Share capital 41.6 42.2
Share premium 146.7 146.7
Capital redemption reserve 139.0 138.4
Other reserves (83.6) (25.6)
Retained earnings 1,190.5 1,042.2
Equity attributable to owners of the parent 1,434.2 1,343.9
Non-controlling interests 20.6 18.6
Total equity 1,454.8 1,362.5
Consolidated statement of changes in equity
For the year ended 31 December 2017
Notes Share capital £m Share premium £m Capital redemption reserve £m Retained earnings £m Equity attributable to owners of the parent £m Non- controlling interests £m Total shareholders' equity £m
Other reserves £m
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 / (loss) for the year - - - 189.5 (49.4) 140.1 1.0 141.1
Total comprehensive income for the year - - - 189.5 135.0 324.5 7.9 332.4
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 1 January 2017 42.2 146.7 138.4 (25.6) 1,042.2 1,343.9 18.6 1,362.5
Profit for the year - - - - 268.9 268.9 7.9 276.8
Other comprehensive (loss) / income for the year - - - (58.0) 32.4 (25.6) 0.4 (25.2)
Total comprehensive income / (loss) for the year - - - (58.0) 301.3 243.3 8.3 251.6
Share-based payments, net of tax - - - - 11.0 11.0 - 11.0
Share buy back programme (0.6) - 0.6 - (50.2) (50.2) - (50.2)
Net purchase of own shares by the Inchcape Employee Trust - - - - (11.1) (11.1) - (11.1)
Dividends:
- Owners of the parent 8 - - - - (102.7) (102.7) - (102.7)
- Non-controlling interests - - - - - - (6.3) (6.3)
At 31 December 2017 41.6 146.7 139.0 (83.6) 1,190.5 1,434.2 20.6 1,454.8
Share-based payments include a net tax credit of £0.8m (current tax credit of
£0.4m and a deferred tax credit of £0.4m) (2016 - net tax charge of £0.8m
(current tax credit of £0.2m and a deferred tax charge of £1.0m)).
Consolidated statement of cash flows
For the year ended 31 December 2017
Notes 2017 £m 2016 £m
Cash flows from operating activities
Cash generated from operations 9a 500.4 382.8
Tax paid (85.9) (99.5)
Interest received 14.6 12.4
Interest paid (39.6) (24.1)
Net cash generated from operating activities 389.5 271.6
Cash flows from investing activities
Acquisition of businesses, net of cash and overdrafts acquired 10 (23.7) (201.1)
Net cash inflow from sale of businesses 10 5.6 2.8
Purchase of property, plant and equipment (103.2) (71.1)
Purchase of intangible assets (24.0) (22.7)
Proceeds from disposal of property, plant and equipment 25.8 21.7
Net cash used in investing activities (119.5) (270.4)
Cash flows from financing activities
Share buy back programme (50.2) (109.8)
Net purchase of own shares by the Inchcape Employee Trust (11.1) (10.9)
Cash inflow from Private Placement loan notes 210.0 -
Repayment of Private Placement loan notes (138.5) -
Net cash (outflow) / inflow from other borrowings (119.3) 133.3
Payment of capital element of finance leases (1.4) (1.2)
Equity dividends paid 8 (102.7) (90.2)
Dividends paid to non-controlling interests (6.3) (12.2)
Net cash used in financing activities (219.5) (91.0)
Net increase / (decrease) in cash and cash equivalents 9b 50.5 (89.8)
Cash and cash equivalents at the beginning of the year 416.0 375.3
Effect of foreign exchange rate changes (49.9) 130.5
Cash and cash equivalents at the end of the year 416.6 416.0
-
2017 £m 2016 £m
Cash and cash equivalents consist of:
- Cash at bank and cash equivalents 820.0 473.7
- Short-term deposits 106.9 171.5
- Bank overdrafts (510.3) (229.2)
416.6 416.0
Notes to the financial statements
1 Basis of preparation
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 2016.
The condensed set of financial information presented for the years ended 31
December 2016 and 2017 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 2016 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 2017 and the comparative
information have been extracted from the audited consolidated financial
statements for the year ended 31 December 2017 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 2017 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 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 & 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.
Following the acquisition of the BMW Distribution operations in Estonia,
operations with similar economic characteristics in UK and Europe have been
reclassified from Retail to Distribution in the prior period comparatives for
consistency.
Distribution
2017 Australasia £m UK and Europe £m Asia £m Emerging Markets £m Total Distribution £m
Revenue
Total revenue 1,103.2 1,059.2 1,700.6 794.6 4,657.6
Inter-segment revenue (268.1) (186.1) - - (454.2)
Revenue from third parties 835.1 873.1 1,700.6 794.6 4,203.4
Results
Trading profit / (loss) 71.3 31.0 157.7 86.3 346.3
Operating exceptional items (0.1) (5.2) (0.1) (2.4) (7.8)
Operating profit / (loss) after exceptional items 71.2 25.8 157.6 83.9 338.5
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
2017 Australasia £m UK and Europe £m Emerging Markets £m Total Retail £m Total pre Central £m Central £m Total £m
Revenue
Total revenue 805.9 3,356.1 583.8 4,745.8 9,403.4 - 9,403.4
Inter-segment revenue - - - - (454.2) - (454.2)
Revenue from third parties 805.9 3,356.1 583.8 4,745.8 8,949.2 - 8,949.2
Results
Trading profit / (loss) 30.8 58.8 3.6 93.2 439.5 (32.0) 407.5
Operating exceptional items - (2.8) (1.1) (3.9) (11.7) (0.9) (12.6)
Operating profit / (loss) after exceptional items 30.8 56.0 2.5 89.3 427.8 (32.9) 394.9
Share of loss after tax of joint ventures and associates -
Profit before finance and tax 394.9
Finance income 14.6
Finance costs (39.6)
Profit before tax 369.9
Tax (93.1)
Profit for the year 276.8
Net finance costs of £25.0m 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:
2017 £m
UK 3,049.0
Rest of the world 5,900.2
Group 8,949.2
Gross profit for Distribution and Retail activities is analysed as follows:
2017 Vehicles £m Aftersales £m Total £m
Distribution 458.9 290.1 749.0
Retail 326.3 176.8 503.1
Group 785.2 466.9 1,252.1
Distribution
2017 Australasia £m UK and Europe £m Asia £m Emerging Markets £m Total Distribution £m
Segment assets and liabilities
Segment assets 170.9 282.0 341.1 282.6 1,076.6
Other current assets
Other non-current assets
Segment liabilities (362.0) (250.9) (346.2) (235.5) (1,194.6)
Other liabilities
Net assets
Segment assets include net inventory, receivables and derivative assets.
Segment liabilities include payables, provisions and derivative liabilities.
Distribution
2017 Australasia £m UK and Europe £m Asia £m Emerging Markets £m Total Distribution £m
Other segment items
Capital expenditure:
- Property, plant and equipment 11.4 9.3 9.7 17.0 47.4
- Interest in leased vehicles - 8.9 9.9 0.8 19.6
- Intangible assets 2.8 3.8 0.3 1.5 8.4
Depreciation:
- Property, plant and equipment 3.1 1.4 10.7 6.8 22.0
- Interest in leased vehicles - 1.8 4.8 0.2 6.8
Amortisation of intangible assets 1.9 0.8 2.6 0.9 6.2
Impairment of goodwill - - - - -
Impairment of other intangible assets - - - - -
Net provisions charged / (credited) to the consolidated income statement 1.0 13.1 14.3 0.2 28.6
Net provisions include inventory, trade receivables impairment and other
liability provisions.
Retail
2017 Australasia £m UK and Europe £m Emerging Markets £m Total Retail £m Total £m
Segment assets and liabilities
Segment assets 212.6 862.0 124.3 1,198.9 2,275.5
Other current assets 1,004.8
Other non-current assets 1,595.9
Segment liabilities (207.3) (843.5) (69.0) (1,119.8) (2,314.4)
Other liabilities (1,107.0)
Net assets 1,454.8
Segment assets include net inventory, receivables and derivative assets.
Segment liabilities include payables, provisions and derivative liabilities.
Retail
2017 Australasia £m UK and Europe £m Emerging Markets £m Total Retail £m Total pre Central £m Central £m Total £m
Other segment items
Capital expenditure:
- Property, plant and equipment 1.1 48.5 7.3 56.9 104.3 0.1 104.4
- Interest in leased vehicles 0.1 7.8 - 7.9 27.5 - 27.5
- Intangible assets 1.5 1.8 0.3 3.6 12.0 14.2 26.2
Depreciation:
- Property, plant and equipment 1.5 15.6 4.3 21.4 43.4 0.4 43.8
- Interest in leased vehicles - 3.6 - 3.6 10.4 - 10.4
Amortisation of intangible assets - 4.2 2.6 6.8 13.0 0.8 13.8
Impairment of goodwill - - - - - - -
Impairment of other intangible assets - - - - - - -
Net provisions charged / (credited) to the consolidated income statement 2.7 40.9 1.6 45.2 73.8 (2.0) 71.8
Net provisions include inventory, trade receivables impairment and other
liability provisions.
Distribution
2016 Australasia £m UK and Europe £m Asia £m Emerging Markets £m Total Distribution £m
Revenue
Total revenue 953.0 937.4 1,591.6 333.4 3,815.4
Inter-segment revenue (225.2) (165.8) - - (391.0)
Revenue from third parties 727.8 771.6 1,591.6 333.4 3,424.4
Results
Trading profit / (loss) 67.8 26.8 136.7 52.0 283.3
Operating exceptional items (0.5) (32.1) (11.6) (0.5) (44.7)
Operating profit / (loss) after exceptional items 67.3 (5.3) 125.1 51.5 238.6
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 £m UK and Europe £m Emerging Markets £m Total Retail £m Total pre Central £m Central £m Total £m
Revenue
Total revenue 701.3 3,291.3 421.4 4,414.0 8,229.4 - 8,229.4
Inter-segment revenue - - - - (391.0) - (391.0)
Revenue from third parties 701.3 3,291.3 421.4 4,414.0 7,838.4 - 7,838.4
Results
Trading profit / (loss) 34.6 70.3 0.4 105.3 388.6 (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 exceptional items 29.9 65.7 - 95.6 334.2 (56.7) 277.5
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 n 5 (39.6) - (39.6) (26.6) - (26.6)
Profit before tax 382.5 (12.6) 369.9 349.4 (81.6) 267.8
Tax 6 (95.8) 2.7 (93.1) (88.0) 11.5 (76.5)
Profit for the year 286.7 (9.9) 276.8 261.4 (70.1) 191.3
Profit attributable to:
- Owners of the parent 268.9 184.4
- Non-controlling interests 7.9 6.9
276.8 191.3
Basic earnings per share (pence) 7 64.6p 43.2p
Diluted earnings per share (pence) 7 63.9p 42.6p
Consolidated statement of comprehensive income
For the year ended 31 December 2017
2017 2016
£m £m
Profit for the year 276.8 191.3
Other comprehensive (loss) / income:
Items that will not be reclassified to the consolidated income statement
Defined benefit pension scheme remeasurements 37.9 (60.3)
Current tax recognised in consolidated statement of comprehensive income - 0.1
Deferred tax recognised in consolidated statement of comprehensive income (5.5) 10.8
32.4 (49.4)
Items that may be or have been reclassified subsequently to the consolidated income statement
Cash flow hedges 15.5 (35.3)
Effect of foreign exchange rate changes (68.1) 215.3
Deferred tax recognised in consolidated statement of comprehensive income (5.0) 10.5
(57.6) 190.5
Other comprehensive (loss) / income for the year, net of tax (25.2) 141.1
Total comprehensive income for the year 251.6 332.4
Total comprehensive income attributable to:
- Owners of the parent 243.3 324.5
- Non-controlling interests 8.3 7.9
251.6 332.4
Consolidated statement of financial position
As at 31 December 2017
2017 2016
£m £m
Non-current assets
Intangible assets 639.5 614.5
Property, plant and equipment 802.0 778.6
Investments in joint ventures and associates 4.2 4.1
Available for sale financial assets 7.3 3.6
Trade and other receivables 44.8 50.9
Deferred tax assets 37.0 31.7
Retirement benefit asset 105.9 80.0
1,640.7 1,563.4
Current assets
Inventories 1,768.6 1,549.4
Trade and other receivables 463.5 446.0
Available for sale financial assets 0.2 0.2
Derivative financial instruments 52.4 160.1
Current tax assets 10.1 13.6
Cash and cash equivalents 926.9 645.2
3,221.7 2,814.5
Assets held for sale 13.8 3.2
3,235.5 2,817.7
Total assets 4,876.2 4,381.1
Current liabilities
Trade and other payables (2,235.5) (1,911.6)
Derivative financial instruments (21.6) (53.6)
Current tax liabilities (73.7) (68.5)
Provisions (27.2) (37.0)
Borrowings (534.5) (481.7)
(2,892.5) (2,552.4)
Non-current liabilities
Trade and other payables (22.6) (18.0)
Provisions (32.3) (32.7)
Deferred tax liabilities (78.5) (80.8)
Borrowings (361.9) (292.0)
Retirement benefit liability (33.6) (42.7)
(528.9) (466.2)
Total liabilities (3,421.4) (3,018.6)
Net assets 1,454.8 1,362.5
Equity
Share capital 41.6 42.2
Share premium 146.7 146.7
Capital redemption reserve 139.0 138.4
Other reserves (83.6) (25.6)
Retained earnings 1,190.5 1,042.2
Equity attributable to owners of the parent 1,434.2 1,343.9
Non-controlling interests 20.6 18.6
Total equity 1,454.8 1,362.5
Consolidated statement of changes in equity
For the year ended 31 December 2017
Notes Share capital Share premium Capital redemption reserve Other reserves Retained earnings Equity attributable to owners of the parent Non- controlling interests Total
£m £m £m £m £m £m £m shareholders'
ot 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 £m Aftersales £m Total £m
Distribution 341.9 242.4 584.3
Retail 336.8 158.0 494.8
Group 678.7 400.4 1,079.1
Distribution
2016 Australasia £m UK and Europe £m Asia £m Emerging Markets £m Total Distribution £m
Segment assets and liabilities
Segment assets 129.8 228.3 372.2 276.0 1,006.3
Other current assets
Other non-current assets
Segment liabilities (354.4) (177.5) (329.4) (184.4) (1,045.7)
Other liabilities
Net assets
Segment assets include net inventory, receivables and derivative assets.
Segment liabilities include payables, provisions and derivative liabilities.
Distribution
2016 Australasia £m UK and Europe £m Asia £m Emerging Markets £m Total Distribution £m
Other segment items
Capital expenditure:
- Property, plant and equipment 12.7 4.1 21.9 5.3 44.0
- 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 1.5 8.6 4.0 16.4
- 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) to the consolidated income statement 4.0 10.3 21.9 (1.4) 34.8
Net provisions include inventory, trade receivables impairment and other
liability provisions.
Retail
2016 Australasia £m UK and Europe £m Emerging Markets £m Total Retail £m Total £m
Segment assets and liabilities
Segment assets 179.2 743.6 116.7 1,039.5 2,045.8
Other current assets 822.8
Other non-current assets 1,512.5
Segment liabilities (160.5) (736.2) (74.5) (971.2) (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 £m UK and Europe £m Emerging Markets £m Total Retail £m Total pre Central £m Central £m Total £m
Other segment items
Capital expenditure:
- Property, plant and equipment 1.1 23.7 2.1 26.9 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 15.1 3.9 21.2 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) to the consolidated income statement 3.2 28.2 0.6 32.0 66.8 (0.9) 65.9
Net provisions include inventory, trade receivables impairment and other
liability provisions.
3 Exceptional Items
2017 £m 2016 £m
Restructuring costs (10.5) (24.8)
Acquisition of businesses (2.1) (8.8)
Goodwill impairment - (24.9)
Impairment of software and associated assets - (23.1)
Total exceptional items before tax (12.6) (81.6)
Exceptional tax (see note 6) 2.7 11.5
Total exceptional items (9.9) (70.1)
During the year the Group has incurred restructuring costs of £10.5m (2016 -
£24.8m) as part of a Group-wide programme commenced in 2016 to better align
the organisation with the Ignite strategy. The costs incurred comprise
headcount reduction and costs associated with the redevelopment of the third
party Retail network in certain markets.
Exceptional costs of £2.1m (2016 - £8.8m) have been incurred in connection
with the acquisition and integration of the Subaru, Hino and associated
Distribution businesses in South America which were acquired in 2016.
In 2016, the Group made configuration changes to the iPower system to better
reflect the Ignite strategy, resulting in a non-cash impairment charge of
£23.1m, and impaired the carrying value of goodwill relating to businesses in
Lithuania and Estonia.
4 Finance income
2017 £m 2016 £m
Bank and other interest receivable 7.2 5.0
Net interest income on post-retirement plan assets and liabilities 1.4 4.2
Other finance income 6.0 7.8
Total finance income 14.6 17.0
5 Finance costs
2017 £m 2016 £m
Interest payable on bank borrowings 7.7 2.6
Interest payable on Private Placement 6.0 3.3
Interest payable on other borrowings 0.2 0.3
Fair value adjustment on Private Placement (34.3) 46.6
Fair value gain on cross currency interest rate swaps 33.1 (47.6)
Stock holding interest 24.3 20.1
Other finance costs 2.7 1.3
Capitalised borrowing costs (0.1) -
Total finance costs 39.6 26.6
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% (2016 - 2.0%).
6 TAX
2017 £m 2016 £m
Current tax:
- UK corporation tax 3.9 6.0
- Overseas tax 98.3 79.2
102.2 85.2
Adjustments to prior year liabilities:
- UK 2.2 (1.5)
- Overseas (0.5) (1.2)
Current tax 103.9 82.5
Deferred tax (10.8) (6.0)
Total tax charge 93.1 76.5
The total tax charge is analysed as follows:
- Tax charge on profit before exceptional items 95.8 88.0
- Tax credit on exceptional items (2.7) (11.5)
Total tax charge 93.1 76.5
Details of the exceptional items for the year can be found in note 3. Not all
of the exceptional items will be allowable for tax purposes. Therefore the tax
credit on exceptional items represents the total of the current and deferred
tax on only those elements that are assessed as allowable.
Factors affecting the tax expense for the year
The effective tax rate for the year after exceptional items is 25.2% (2016 -
28.6%). The underlying effective tax rate before the impact of exceptional
items is 25.0% (2016 - 25.2%). The weighted average tax rate is 24.0% (2016 -
24.1%). The weighted average tax rate comprises the average statutory rates
across the Group, weighted in proportion to accounting profits and losses.
The table below explains the differences between the expected tax expense at
the weighted average tax rate and the Group's total tax expense.
2017 £m 2016 £m
Profit before tax 369.9 267.8
Profit before tax multiplied by the weighted average tax rate of 24.0% (2016 - 88.8 64.6
24.1%)
Non-exceptional items
- Permanent differences 2.9 9.9
- Non-taxable income (3.5) (4.9)
- Prior year items (0.8) (2.2)
- Unrecognised deferred tax movement 2.1 (2.2)
- Overseas tax audits and settlements 1.3 1.5
- Taxes on undistributed earnings 5.1 3.2
- Impact of the FID Claim receipt taxed at 45% - 1.6
- Other items (including tax rate differentials) (3.2) (1.7)
Exceptional items
- Goodwill impairment - 3.9
- Restructuring costs 0.2 1.0
- Acquisition of businesses 0.2 1.8
Total tax charge 93.1 76.5
Factors affecting the tax expense of future years
Factors that could affect the Group's future tax expense include the
resolution of audits and disputes, changes in tax laws or tax rates, the
ability to utilise brought forward losses and business acquisitions and
disposals. In addition, a change in profit mix between low and high taxed
jurisdictions will impact the Group's future tax expense.
The utilisation of brought forward tax losses or the recognition of deferred
tax assets associated with such losses may also give rise to tax charges or
credits. The recognition of deferred tax assets, particularly in respect of
tax losses, is based upon an assessment of whether it is probable that there
will be sufficient and suitable taxable profits in the relevant legal entity
or tax group against which to utilise the assets in the future. Judgement is
required when determining probable future taxable profits.
During the year governments in a number of markets in which the Group operates
implemented tax reform programmes which included significant rule changes or
reductions in corporate tax rates, or both. As such the tax charge for the
year includes the estimated cost of the transition tax resulting from US tax
reforms in relation to the Group's operations in Guam and Saipan included in
"Taxes on undistributed earnings" (£1.8m). This amount is partially offset by
remeasurement of deferred tax balances at the new US corporate tax rate of 21%
included in "Other items (including tax rate differentials and changes)"
(£0.4m).
7 eARNINGS PER SHARE
2017 £m 2016 £m
Profit for the year 276.8 191.3
Non-controlling interests (7.9) (6.9)
Basic earnings 268.9 184.4
Exceptional items 9.9 70.1
Adjusted earnings 278.8 254.5
Basic earnings per share 64.6p 43.2p
Diluted earnings per share 63.9p 42.6p
Basic Adjusted earnings per share 67.0p 59.6p
Diluted Adjusted earnings per share 66.3p 58.9p
2017 number 2016 number
Weighted average number of fully paid ordinary shares in issue during the year 417,209,998 428,090,784
Weighted average number of fully paid ordinary shares in issue during the
year:
- Held by the Inchcape Employee Trust (1,181,859) (1,182,428)
Weighted average number of fully paid ordinary shares for the purposes of 416,028,139 426,908,356
basic EPS
Dilutive effect of potential ordinary shares 4,735,677 5,534,805
Adjusted weighted average number of fully paid ordinary shares in issue during 420,763,816 432,443,161
the year for the purposes of diluted EPS
Basic earnings per share is calculated by dividing the Basic earnings for the
year by the weighted average number of fully paid ordinary shares in issue
during the year, less those shares held by the Inchcape Employee Trust and
repurchased as part of the share buyback programme.
Diluted earnings per share is calculated on the same basis as the Basic
earnings per share with a further adjustment to the weighted average number of
fully paid ordinary shares to reflect the effect of all dilutive potential
ordinary shares. Dilutive potential ordinary shares comprise share options and
other share-based awards.
Basic Adjusted earnings (which excludes exceptional items) is adopted to
assist the reader in understanding the underlying performance of the Group.
Adjusted earnings per share is calculated by dividing the Adjusted earnings
for the year by the weighted average number of fully paid ordinary shares in
issue during the year, less those shares held by the Inchcape Employee Trust
and repurchased as part of the share buyback programme.
Diluted Adjusted earnings per share is calculated on the same basis as the
Basic Adjusted earnings per share with a further adjustment to the weighted
average number of fully paid ordinary shares to reflect the effect of all
dilutive potential ordinary shares. Dilutive potential ordinary shares
comprise share options and other share-based awards.
8 DIVIDENDS
The following dividends were paid by the Group:
2017 £m 2016 £m
Interim dividend for the six months ended 30 June 2017 of 7.9p per share (30 32.7 29.9
June 2016 - 7.0p per share)
Final dividend for the year ended 31 December 2016 of 16.8p per share (31 70.0 60.3
December 2015 - 14.1p per share)
102.7 90.2
A final proposed dividend for the year ended 31 December 2017 of 18.9p per
share amounting to £78.4m is subject to approval by shareholders at the
Annual General Meeting and has not been included as a liability as at 31
December 2017.
9 NOTES TO THE CONSOSOLIDATED STATEMENT OF CASH FLOWS
a. Reconciliation of cash generated from operations
2017 £m 2016 £m
Cash flows from operating activities
Operating profit 394.9 277.5
Exceptional items (see note 3) 12.6 81.6
Amortisation including non-exceptional impairment of intangible assets 13.8 14.9
Depreciation of property, plant and equipment 43.8 38.0
Profit on disposal of property, plant and equipment (10.6) (12.7)
Share-based payments charge 10.2 12.1
Increase in inventories (239.6) (110.7)
Increase in trade and other receivables (31.7) (10.2)
Increase in trade and other payables 343.2 99.0
Decrease in provisions (4.2) (9.4)
Pension contributions less than the pension charge for the year* 3.1 1.9
(Increase) / decrease in interest in leased vehicles (1.0) 2.9
Payments in respect of operating exceptional items (32.1) (3.2)
Other non-cash items (2.0) 1.1
Cash generated from operations 500.4 382.8
* Includes additional payments of £2.7m (2016 - £2.1m).
b. Reconciliation of net cash flow to movement in net funds
201 equity
£m
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 1 January 2017 42.2 146.7 138.4 (25.6) 1,042.2 1,343.9 18.6 1,362.5
Profit for the year - - - - 268.9 268.9 7.9 276.8
Other comprehensive (loss) / - - - (58.0) 32.4 (25.6) 0.4 (25.2)
income for the year
Total comprehensive income / - - - (58.0) 301.3 243.3 8.3 251.6
(loss) for the year
Share-based payments, net of tax - - - - 11.0 11.0 - 11.0
Share buy back programme (0.6) - 0.6 - (50.2) (50.2) - (50.2)
Net purchase of own shares by the Inchcape Employee Trust - - - - (11.1) (11.1) - (11.1)
Dividends:
- Owners of the parent 8 - - - - (102.7) (102.7) - (102.7)
- Non-controlling interests - - - - - - (6.3) (6.3)
At 31 December 2017 41.6 146.7 139.0 (83.6) 1,190.5 1,434.2 20.6 1,454.8
Share-based payments include a net tax credit of £0.8m (current tax credit of
£0.4m and a deferred tax credit of £0.4m)
(2016 - net tax charge of £0.8m (current tax credit of £0.2m and a deferred
tax charge of £1.0m)).
Consolidated statement of cash flows
For the year ended 31 December 2017
Notes 2017 2016
£m £m
Cash flows from operating activities
Cash generated from operations 9a 500.4 382.8
Tax paid (85.9) (99.5)
Interest received 14.6 12.4
Interest paid (39.6) (24.1)
Net cash generated from operating activities 389.5 271.6
Cash flows from investing activities
Acquisition of businesses, net of cash and overdrafts acquired 10 (23.7) (201.1)
Net cash inflow 7 £m 2016 £m
Net increase / (decrease) in cash and cash equivalents 50.5 (89.8)
Net cash outflow / (inflow) from borrowings and finance leases 49.2 (132.1)
Change in net cash and debt resulting from cash flows 99.7 (221.9)
Effect of foreign exchange rate changes on net cash and debt (47.2) 129.7
Net movement in fair value 1.2 1.0
Net loans and finance leases relating to acquisitions and disposals - (48.7)
Movement in net funds
- More to follow, for following part double click ID:nRSa9883Fc from sale of businesses 10 5.6 2.8
Purchase of property, plant and equipment (103.2) (71.1)
Purchase of intangible assets (24.0) (22.7)
Proceeds from disposal of property, plant and equipment 25.8 21.7
Net cash used in investing activities (119.5) (270.4)
Cash flows from financing activities
Share buy back programme (50.2) (109.8)
Net purchase of own shares by the Inchcape Employee Trust (11.1) (10.9)
Cash inflow from Private Placement loan notes 210.0 -
Repayment of Private Placement loan notes (138.5) -
Net cash (outflow) / inflow from other borrowings (119.3) 133.3
Payment of capital element of finance leases (1.4) (1.2)
Equity dividends paid 8 (102.7) (90.2)
Dividends paid to non-controlling interests (6.3) (12.2)
Net cash used in financing activities (219.5) (91.0)
Net increase / (decrease) in cash and cash equivalents 9b 50.5 (89.8)
Cash and cash equivalents at the beginning of the year 416.0 375.3
Effect of foreign exchange rate changes (49.9) 130.5
Cash and cash equivalents at the end of the year 416.6 416.0
-
2017 2016
£m £m
Cash and cash equivalents consist of:
- Cash at bank and cash equivalents 820.0 473.7
- Short-term deposits 106.9 171.5
- Bank overdrafts (510.3) (229.2)
416.6 416.0
Notes to the financial statements
1 Basis of preparation
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 2016.
The condensed set of financial information presented for the years ended 31
December 2016 and 2017 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 2016 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 2017 and the comparative
information have been extracted from the audited consolidated financial
statements for the year ended 31 December 2017 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 2017 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 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 & 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.
Following the acquisition of the BMW Distribution operations in Estonia,
operations with similar economic characteristics in UK and Europe have been
reclassified from Retail to Distribution in the prior period comparatives for
consistency.
Distribution
2017 Australasia UK Asia Emerging Total
£m and Europe £m Markets Distribution
£m £m £m
Revenue
Total revenue 1,103.2 1,059.2 1,700.6 794.6 4,657.6
Inter-segment revenue (268.1) (186.1) - - (454.2)
Revenue from third parties 835.1 873.1 1,700.6 794.6 4,203.4
Results
Trading profit / (loss) 71.3 31.0 157.7 86.3 346.3
Operating exceptional items (0.1) (5.2) (0.1) (2.4) (7.8)
Operating profit / (loss) after 71.2 25.8 157.6 83.9 338.5
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
2017 Australasia UK Emerging Markets Total Total pre Central Central Total
£m and Europe £m Retail £m £m £m
£m £m
Revenue
Total revenue 805.9 3,356.1 583.8 4,745.8 9,403.4 - 9,403.4
Inter-segment revenue - - - - (454.2) - (454.2)
Revenue from third parties 805.9 3,356.1 583.8 4,745.8 8,949.2 - 8,949.2
Results
Trading profit / (loss) 30.8 58.8 3.6 93.2 439.5 (32.0) 407.5
Operating exceptional items - (2.8) (1.1) (3.9) (11.7) (0.9) (12.6)
Operating profit / (loss) after 30.8 56.0 2.5 89.3 427.8 (32.9) 394.9
exceptional items
Share of loss after tax of joint ventures and associates -
Profit before finance and tax 394.9
Finance income 14.6
Finance costs (39.6)
Profit before tax 369.9
Tax (93.1)
Profit for the year 276.8
Net finance costs of £25.0m 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:
2017 £m
UK 3,049.0
Rest of the world 5,900.2
Group 8,949.2
Gross profit for Distribution and Retail activities is analysed as follows:
2017 Vehicles Aftersales Total
£m £m £m
Distribution 458.9 290.1 749.0
Retail 326.3 176.8 503.1
Group 785.2 466.9 1,252.1
Distribution
2017 Australasia UK Asia Emerging Total
£m and Europe £m Markets Distribution
£m £m £m
Segment assets and liabilities
Segment assets 170.9 282.0 341.1 282.6 1,076.6
Other current assets
Other non-current assets
Segment liabilities (362.0) (250.9) (346.2) (235.5) (1,194.6)
Other liabilities
Net assets
Segment assets include net inventory, receivables and derivative assets.
Segment liabilities include payables, provisions and
derivative liabilities.
Distribution
2017 Australasia UK Asia Emerging Total
£m and Europe £m Markets Distribution
£m £m £m
Other segment items
Capital expenditure:
- Property, plant and equipment 11.4 9.3 9.7 17.0 47.4
- Interest in leased vehicles - 8.9 9.9 0.8 19.6
- Intangible assets 2.8 3.8 0.3 1.5 8.4
Depreciation:
- Property, plant and equipment 3.1 1.4 10.7 6.8 22.0
- Interest in leased vehicles - 1.8 4.8 0.2 6.8
Amortisation of intangible assets 1.9 0.8 2.6 0.9 6.2
Impairment of goodwill - - - - -
Impairment of other intangible assets - - - - -
Net provisions charged / (credited) 1.0 13.1 14.3 0.2 28.6
to the consolidated income statement
Net provisions include inventory, trade receivables impairment and other
liability provisions.
Retail
2017 Australasia UK Emerging Markets Total Total
£m and Europe £m Retail £m
£m £m
Segment assets and liabilities
Segment assets 212.6 862.0 124.3 1,198.9 2,275.5
Other current assets 1,004.8
Other non-current assets 1,595.9
Segment liabilities (207.3) (843.5) (69.0) (1,119.8) (2,314.4)
Other liabilities (1,107.0)
Net assets 1,454.8
Segment assets include net inventory, receivables and derivative assets.
Segment liabilities include payables, provisions and
derivative liabilities.
Retail
2017 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 48.5 7.3 56.9 104.3 0.1 104.4
- Interest in leased vehicles 0.1 7.8 - 7.9 27.5 - 27.5
- Intangible assets 1.5 1.8 0.3 3.6 12.0 14.2 26.2
Depreciation:
- Property, plant and equipment 1.5 15.6 4.3 21.4 43.4 0.4 43.8
- Interest in leased vehicles - 3.6 - 3.6 10.4 - 10.4
Amortisation of intangible assets - 4.2 2.6 6.8 13.0 0.8 13.8
Impairment of goodwill - - - - - - -
Impairment of other intangible assets - - - - - - -
Net provisions charged / (credited) 2.7 40.9 1.6 45.2 73.8 (2.0) 71.8
to the consolidated income statement
Net provisions include inventory, trade receivables impairment and other
liability provisions.
Distribution
2016 Australasia UK Asia Emerging Total
£m and Europe £m Markets Distribution
£m £m £m
Revenue
Total revenue 953.0 937.4 1,591.6 333.4 3,815.4
Inter-segment revenue (225.2) (165.8) - - (391.0)
Revenue from third parties 727.8 771.6 1,591.6 333.4 3,424.4
Results
Trading profit / (loss) 67.8 26.8 136.7 52.0 283.3
Operating exceptional items (0.5) (32.1) (11.6) (0.5) (44.7)
Operating profit / (loss) after 67.3 (5.3) 125.1 51.5 238.6
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 3,291.3 421.4 4,414.0 8,229.4 - 8,229.4
Inter-segment revenue - - - - (391.0) - (391.0)
Revenue from third parties 701.3 3,291.3 421.4 4,414.0 7,838.4 - 7,838.4
Results
Trading profit / (loss) 34.6 70.3 0.4 105.3 388.6 (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 65.7 - 95.6 334.2 (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 341.9 242.4 584.3
Retail 336.8 158.0 494.8
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 129.8 228.3 372.2 276.0 1,006.3
Other current assets
Other non-current assets
Segment liabilities (354.4) (177.5) (329.4) (184.4) (1,045.7)
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 4.1 21.9 5.3 44.0
- 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 1.5 8.6 4.0 16.4
- 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 179.2 743.6 116.7 1,039.5 2,045.8
Other current assets 822.8
Other non-current assets 1,512.5
Segment liabilities (160.5) (736.2) (74.5) (971.2) (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 23.7 2.1 26.9 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 15.1 3.9 21.2 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.
3 Exceptional Items
2017 2016
£m £m
Restructuring costs (10.5) (24.8)
Acquisition of businesses (2.1) (8.8)
Goodwill impairment - (24.9)
Impairment of software and associated assets - (23.1)
Total exceptional items before tax (12.6) (81.6)
Exceptional tax (see note 6) 2.7 11.5
Total exceptional items (9.9) (70.1)
During the year the Group has incurred restructuring costs of £10.5m (2016 -
£24.8m) as part of a Group-wide programme commenced in 2016 to better align
the organisation with the Ignite strategy. The costs incurred comprise
headcount reduction and costs associated with the redevelopment of the third
party Retail network in certain markets.
Exceptional costs of £2.1m (2016 - £8.8m) have been incurred in connection
with the acquisition and integration of the Subaru, Hino and associated
Distribution businesses in South America which were acquired in 2016.
In 2016, the Group made configuration changes to the iPower system to better
reflect the Ignite strategy, resulting in a non-cash impairment charge of
£23.1m, and impaired the carrying value of goodwill relating to businesses in
Lithuania and Estonia.
4 Finance income
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