REG - Inchcape PLC - Interim Results <Origin Href="QuoteRef">INCH.L</Origin> - Part 2
28/07/2016 07:06
- Part 2: For the preceding part double click ID:nRSb4502Fa
1,219.0 22.9 1,241.9
Profit for the period ended - - - - 118.7 118.7 3.7 122.4
30 June 2016
Other comprehensive income - - - 140.9 4.1 145.0 2.5 147.5
for the period ended 30 June 2016
Total comprehensive income - - - 140.9 122.8 263.7 6.2 269.9
for the period ended 30 June 2016
Share-based payments, net of tax - - - - 4.6 4.6 - 4.6
Share buy back programme (0.8) - 0.8 - (59.3) (59.3) - (59.3)
Net purchase of own shares - - - - (9.3) (9.3) - (9.3)
by the Inchcape Employee Trust
Dividends:
- Owners of the parent 8b - - - - (60.3) (60.3) - (60.3)
- Non-controlling interests - - - - - - (6.5) (6.5)
At 30 June 2016 43.0 146.7 137.6 (74.2) 1,105.3 1,358.4 22.6 1,381.0
The notes below are an integral part of these condensed consolidated interim
financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
For the six months ended 30 June 2016
Notes Six months to Six months to Year to
30 Jun 2016 30 Jun 2015 31 Dec 2015
£m £m £m
Cash generated from operating activities
Cash generated from operations 9a 134.8 138.0 328.4
Tax paid (52.5) (39.0) (69.6)
Interest received 6.0 3.9 10.1
Interest paid (11.2) (11.6) (27.5)
Net cash generated from operating activities 77.1 91.3 241.4
Cash flows from investing activities
Acquisition of businesses, net of cash and overdrafts acquired 10 (4.6) - (5.1)
Net cash inflow from sale of businesses 10 2.0 - 5.4
Purchase of property, plant and equipment (24.2) (15.8) (50.2)
Purchase of intangible assets (8.4) (9.2) (19.0)
Proceeds from disposal of property, plant and equipment 5.2 3.3 15.6
Net cash used in investing activities (30.0) (21.7) (53.3)
Cash flows from financing activities
Share buy back programme 8a (59.3) (50.0) (91.4)
Net purchase of own shares by the Inchcape Employee Trust (9.3) (12.9) (18.9)
Net cash inflow from borrowings 9b 26.6 3.7 3.7
Payment of capital element of finance leases 9b (0.8) (0.5) (0.5)
Equity dividends paid 8b (60.3) (61.1) (91.1)
Dividends paid to non-controlling interests (6.5) (4.8) (10.2)
Net cash from financing activities (109.6) (125.6) (208.4)
Net decrease in cash and cash equivalents 9b (62.5) (56.0) (20.3)
Cash and cash equivalents at beginning of the period 375.3 416.8 416.8
Effect of foreign exchange rate changes 58.2 (28.2) (21.2)
Cash and cash equivalents at end of the period 371.0 332.6 375.3
Cash and cash equivalents consist of:
- Cash at bank and in hand 359.4 342.0 335.3
- Short term bank deposits 98.7 108.2 138.5
- Bank overdrafts (87.1) (117.6) (98.5)
371.0 332.6 375.3
The notes below are an integral part of these condensed consolidated interim
financial statements.
Notes (unaudited)
1 Basis of preparation and accounting policies
Basis of preparation
The condensed consolidated interim financial statements for the period ended
30 June 2016 have been prepared on a going concern basis in accordance with
International Accounting Standard 34 'Interim Financial Reporting' as adopted
by the European Union and the Disclosure and Transparency Rules of the
Financial Conduct Authority. These condensed consolidated interim financial
statements should be read in conjunction with the Annual Report and Accounts
2015, which have been prepared in accordance with IFRSs 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.
These condensed consolidated interim financial statements are unaudited, but
have been reviewed by the external auditors. The condensed consolidated
interim financial statements in the Interim Report 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 were approved by the Board of Directors on 14 March 2016 and
delivered to the Registrar of Companies. The report of the auditors on those
accounts was unqualified and did not contain an emphasis of matter paragraph
or a statement under section 498 of the Companies Act 2006. The condensed
consolidated interim financial statements above were approved by the Board of
Directors on 27 July 2016.
Significant accounting policies
The accounting policies adopted in the preparation of the condensed
consolidated interim financial statements are consistent with those of the
Group's Annual Report and Accounts 2015 other than taxes on income which are
accrued using the tax rate that is expected to be applicable for the full
financial year.
The following standards were in issue but were not yet effective at the
balance sheet date. These standards have not yet been early adopted by the
Group, and will be applied for the Group's financial years commencing on or
after 1 January 2017:
· IAS 7, 'Amendment to IAS 7, Cash flow statements'
· IAS 12, 'Amendment to IAS 12, Income taxes'
· IAS 27, 'Amendment to IAS 27, Separate financial statements'
· IFRS 2, 'Amendment to IFRS 2, Share-based payment'
· IFRS 9, 'Financial instruments'
· IFRS 15, 'Revenue from contracts with customers'
· IFRS 16, 'Leases'.
Management are currently reviewing the new standards to assess the impact that
they may have on the Group's reported performance and financial position.
The principal exchange rates used for translation purposes are as follows:
Average rates Period end rates
30 Jun 2016 30 Jun 2015 31 Dec 2015 30 Jun 2016 30 Jun 2015 31 Dec 2015
Australian dollar 1.94 1.96 2.04 1.79 2.04 2.02
Euro 1.29 1.37 1.38 1.20 1.41 1.36
Hong Kong dollar 11.08 11.84 11.85 10.33 12.19 11.42
Singapore dollar 1.97 2.06 2.10 1.79 2.12 2.09
Russian rouble 99.28 89.19 93.72 85.19 86.85 107.30
2 Segmental analysis
The Group has determined that the chief operating decision maker is the
Executive Committee.
Emerging markets are those countries in which the Group operates that have
started to grow but have yet to reach a mature stage of development and
accordingly are in, or are expected to return to, the growth phase of the
development cycle. These currently comprise Russia, China, the Balkans, the
Baltics, Poland, South America and Africa.
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.
Distribution comprises Vertically Integrated Retail businesses as well as
Financial Services and other businesses.
Distribution
Six months to 30 June 2016 Australasia Europe North Asia South Asia United Emerging Markets Total
£m £m £m £m Kingdom £m Distribution
£m £m
Revenue from third parties 328.7 260.5 296.3 322.2 27.5 227.3 1,462.5
Results
Segment result 34.1 9.6 27.6 33.4 4.5 25.1 134.3
Operating exceptional items - - - - - - -
Operating profit / (loss) after 34.1 9.6 27.6 33.4 4.5 25.1 134.3
exceptional items
Share of profit after tax - - - - - - -
of joint ventures and associates
Profit / (loss) before finance and tax 34.1 9.6 27.6 33.4 4.5 25.1 134.3
Distribution
Six months to 30 June 2015 Australasia Europe North Asia South Asia United Emerging Markets Total
£m £m £m £m Kingdom £m Distribution
£m £m
Revenue from third parties 282.3 235.1 363.2 219.4 34.1 188.3 1,322.4
Results
Segment result 30.2 9.2 38.3 20.6 6.5 20.1 124.9
Operating exceptional items - - - - - - -
Operating profit / (loss) after 30.2 9.2 38.3 20.6 6.5 20.1 124.9
exceptional items
Share of profit after tax - - - - - - -
of joint ventures and associates
Profit / (loss) before finance and tax 30.2 9.2 38.3 20.6 6.5 20.1 124.9
Distribution
Year to 31 December 2015 Australasia Europe North Asia South Asia United Emerging Markets Total
£m £m £m £m Kingdom £m Distribution
£m £m
Revenue from third parties 577.7 453.1 746.2 500.0 62.8 434.6 2,774.4
Results
Segment result 67.0 17.9 80.0 51.9 11.4 48.7 276.9
Operating exceptional items - - - - - - -
Operating profit / (loss) after 67.0 17.9 80.0 51.9 11.4 48.7 276.9
exceptional items
Share of profit after tax of - 0.7 - - - - 0.7
joint ventures and associates
Profit / (loss) before finance and tax 67.0 18.6 80.0 51.9 11.4 48.7 277.6
Retail
Six months to 30 June 2016 Australasia Europe United Kingdom Emerging Markets Total Total pre Central Central Total
£m £m £m £m Retail £m £m £m
£m
Revenue from third parties 339.2 54.4 1,534.6 365.5 2,293.7 3,756.2 - 3,756.2
Results
Segment result 14.1 0.9 32.3 2.1 49.4 183.7 (14.2) 169.5
Operating exceptional items - - - - - - - -
Operating profit / (loss) after 14.1 0.9 32.3 2.1 49.4 183.7 (14.2) 169.5
exceptional items
Share of profit after tax of - - - - - - - -
joint ventures and associates
Profit / (loss) before finance and tax 14.1 0.9 32.3 2.1 49.4 183.7 (14.2) 169.5
Net finance costs of £4.5m are not allocated to individual segments.
Retail
Six months to 30 June 2015 Australasia Europe United Kingdom Emerging Markets Total Total pre Central Central Total
£m £m £m £m Retail £m £m £m
£m
Revenue from third parties 335.7 45.6 1,360.2 314.5 2,056.0 3,378.4 - 3,378.4
Results
Segment result 12.1 0.3 32.0 1.6 46.0 170.9 (11.7) 159.2
Operating exceptional items - - - - - - - -
Operating profit / (loss) after 12.1 0.3 32.0 1.6 46.0 170.9 (11.7) 159.2
exceptional items
Share of profit after tax of - - - - - -- - -
joint ventures and associates
Profit / (loss) before finance and tax 12.1 0.3 32.0 1.6 46.0 170.9 (11.7) 159.2
Net finance costs of £6.2m are not allocated to individual segments.
Retail
Year to 31 December 2015 Australasia Europe United Kingdom Emerging Markets Total Total pre Central Central Total
£m £m £m £m Retail £m £m £m
£m
Revenue from third parties 642.2 88.0 2,662.4 669.3 4,061.9 6,836.3 - 6,836.3
Results
Segment result 23.6 - 52.0 2.2 77.8 354.7 (30.0) 324.7
Operating exceptional items - - - (49.5) (49.5) (49.5) - (49.5)
Operating profit / (loss) after 23.6 - 52.0 (47.3) 28.3 305.2 (30.0) 275.2
exceptional items
Share of profit after tax of - - - - - 0.7 - 0.7
joint ventures and associates
Profit / (loss) before finance and tax 23.6 - 52.0 (47.3) 28.3 305.9 (30.0) 275.9
Net finance costs of £13.3m are not allocated to individual segments.
3 Exceptional items
Six months to Six months to Year to
30 Jun 2016 30 Jun 2015 31 Dec 2015
£m £m £m
Goodwill impairment - - (49.5)
Total exceptional items before tax - - (49.5)
Exceptional tax - - (4.8)
Total exceptional items - - (54.3)
4 Finance income
Six months to Six months to Year to
30 Jun 2016 30 Jun 2015 31 Dec 2015
£m £m £m
Bank and other interest receivable 2.4 1.5 3.1
Net interest income on post-retirement plan assets and liabilities 2.2 2.2 4.2
Other finance income 4.0 2.6 7.1
Total finance income 8.6 6.3 14.4
5 Finance costs
Six months to Six months to Year to
30 Jun 2016 30 Jun 2015 31 Dec 2015
£m £m £m
Interest payable on bank borrowings 1.3 0.7 1.7
Interest payable on Private Placement 1.5 1.5 3.1
Interest payable on other borrowings 0.1 0.1 0.3
Fair value adjustment on Private Placement (31.8) (7.6) 6.4
Fair value loss / (gain) on cross-currency interest rate swaps 31.7 7.5 (7.3)
Stock holding interest 9.0 9.3 18.4
Other finance costs 1.3 1.0 5.1
Total finance costs 13.1 12.5 27.7
6 Income Tax
Six months to Six months to Year to
30 Jun 2016 30 Jun 2015 31 Dec 2015
£m £m £m
Current tax - UK 5.8 4.0 6.2
- Overseas 35.9 30.8 73.1
Adjustments to prior year liabilities - UK (0.1) - -
- Overseas (0.7) (1.5) (0.6)
Current tax 40.9 33.3 78.7
Deferred tax 1.7 3.4 (3.8)
Tax before exceptional tax 42.6 36.7 74.9
Exceptional tax - deferred tax (note 3) - - 4.8
Total tax 42.6 36.7 79.7
The taxation charge for the six months ended 30 June 2016 is based on an
estimated full year underlying effective tax rate of 25% (2015 - 24% before
exceptional items) and the tax impact relating to the Foreign Income Dividend
claim receipt. The actual effective tax rate for the period including the
impact of the Foreign Income Dividend claim receipt is 25.8%.
Franked Investment Income Group Litigation Order
The Group remains a participant in an action in the United Kingdom against HM
Revenue and Customs (HMRC) in the Franked Investment Income Group Litigation
Order (FII GLO). The action concerns the treatment for UK corporate tax
purposes of profits earned overseas and distributed to the UK. The next stage
of the test case was heard at the Court of Appeal between 16 and 30 June 2016.
The outcome of the hearing, and the impact the EU Referendum might have on the
case, remains uncertain.
During the period, the Group received a payment from HMRC in relation to the
Foreign Income Dividend element of the claim. The award under the summary
judgment was £6.5m and this has been reported within net operating expenses.
The net payment received was £3.6m after tax at 45%. This net payment is
subject to refund if HMRC were granted leave to appeal and that appeal was
successful. HMRC sought leave to appeal as part of the June 2016 hearings in
the test case.
7 Earnings per share
Six months to Six months to Year to
30 Jun 2016 30 Jun 2015 31 Dec 2015
£m £m £m
Profit for the period 122.4 116.3 182.9
Non-controlling interests (3.7) (3.6) (7.1)
Basic earnings 118.7 112.7 175.8
Exceptional items - - 54.3
Adjusted earnings 118.7 112.7 230.1
Basic earnings per share 27.6p 25.4p 39.8p
Diluted earnings per share 27.2p 25.0p 39.4p
Basic Adjusted earnings per share 27.6p 25.4p 52.1p
Diluted Adjusted earnings per share 27.2p 25.0p 51.6p
Six months to Six months to Year to
30 Jun 2016 30 Jun 2015 31 Dec 2015
number number number
Weighted average number of fully paid ordinary shares in issue during the period 431,767,646 444,866,222 442,230,291
Weighted average number of fully paid ordinary shares in issue during the period:
- Held by the Inchcape Employee Trust (1,306,439) (810,948) (753,647)
Weighted average number of fully paid ordinary shares for the purposes of basic EPS 430,461,207 444,055,274 441,476,644
Dilutive effect of potential ordinary shares 5,604,600 7,328,259 4,468,252
Adjusted weighted average number of fully paid ordinary shares in issue during the 436,065,807 451,383,533 445,944,896
period for the purposes of diluted EPS
Basic earnings per share is calculated by dividing the Basic earnings for the
period by the weighted average number of fully paid ordinary shares in issue
during the period, less those shares held by the Inchcape Employee Trust and
repurchased as part of the share buy back 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 period by the weighted average number of fully paid ordinary shares in
issue during the period, less those shares held by the Inchcape Employee Trust
and repurchased as part of the share buy back 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 Shareholders' equity
a. Issue of ordinary shares
During the period, the Group issued £nil (June 2015 - £nil, Dec 2015 - £nil)
of ordinary shares exercised under the Group's share option schemes.
Share buy back programme
During the six months ended 30 June 2016, the Company repurchased 8,393,550 of
its own shares (June 2015 - 6,439,197, Dec 2015 - 11,931,693) through
purchases on the London Stock Exchange, at a cost of £58.4m (June 2015 -
£49.7m, Dec 2015 - £90.8m). The shares repurchased during the period were
cancelled, with none held as treasury shares at the end of the reporting
period. An amount of £0.8m (June 2015 - £0.6m, Dec 2015 - £1.2m), equivalent
to the nominal value of the cancelled shares, has been transferred to the
capital redemption reserve. Costs of £0.9m (June 2015 - £0.3m, Dec 2015 -
£0.6m) associated with the transfer to the Group of the repurchased shares and
their subsequent cancellation have been charged to retained earnings.
b. Dividends
The following dividends were paid by the Group:
Six months to Six months to Year to
30 Jun 2016 30 Jun 2015 31 Dec 2015
£m £m £m
Final dividend for the year ended 31 December 2015 of 14.1p per share 60.3 61.1 61.1
(2014 - 13.8p per share)
Interim dividend for the six months ended 30 June 2015 of 6.8p per share - - 30.0
(2014 - 6.3p per share)
60.3 61.1 91.1
An interim dividend of 7.0p per share (£30.0m) for the period ending 30 June
2016 was approved by the Board on 27 July 2016 and will be paid on Friday 7
September 2016 to shareholders who are on the register at close of business on
Friday 5 August 2016.
The
Dividend Reinvestment Plan (DRIP) is available to ordinary shareholders and
the final date for receipt of elections to participate in the DRIP is 16
August 2016.
9 Notes to the statement of cash flows
a. Reconciliation of cash generated from operations
Six months to Six months to Year to
30 Jun 2016 30 Jun 2015 31 Dec 2015
£m £m £m
Cash flows from operating activities
Operating profit 169.5 159.2 275.2
Operating exceptional items - - 49.5
Amortisation of intangible assets 7.5 6.9 14.0
Depreciation of property, plant and equipment 18.7 17.1 34.5
Profit on disposal of property, plant and equipment (0.1) (0.2) (2.1)
Share-based payments charge 5.4 4.5 9.6
Decrease / (increase) in inventories 36.1 (124.3) (246.5)
Increase in trade and other receivables (31.5) (105.5) (68.5)
(Decrease) / increase in trade and other payables (67.4) 184.6 282.2
Decrease in provisions (7.5) (3.6) (4.2)
Pension contributions less than the pension charge for the period* 0.6 0.6 2.7
Decrease / (increase) in interest in leased vehicles 3.0 (2.3) (12.3)
Other non-cash items 0.5 1.0 (5.7)
Cash generated from operations 134.8 138.0 328.4
* Includes additional payments of £1.2m (June 2015 - £0.9m).
b. Reconciliation of net cash flow to movement in net funds
Six months to Six months to Year to
30 Jun 2016 30 Jun 2015 31 Dec 2015
£m £m £m
Net decrease in cash and cash equivalents (62.5) (56.0) (20.3)
Net cash inflow from borrowings and lease financing (25.8) (3.2) (3.2)
Change in net cash and debt resulting from cash flows (88.3) (59.2) (23.5)
Effect of foreign exchange rate changes on net cash and debt 57.4 (28.0) (21.2)
Net movement in fair value 0.1 0.1 0.9
Movement in net funds (30.8) (87.1) (43.8)
Opening net funds 166.4 210.2 210.2
Closing net funds 135.6 123.1 166.4
Net funds is analysed as follows:
Six months to Six months to Year to
30 Jun 2016 30 Jun 2015 31 Dec 2015
£m £m £m
Cash at bank and in hand 359.4 342.0 335.3
Short term bank deposits 98.7 108.2 138.5
Bank overdrafts (87.1) (117.6) (98.5)
Cash and cash equivalents 371.0 332.6 375.3
Bank loans (371.5) (298.3) (312.6)
Finance leases (3.1) (3.8) (3.7)
(3.6) 30.5 59.0
Fair value of cross-currency interest rate swap 139.2 92.6 107.4
Net funds 135.6 123.1 166.4
10 Acquisitions and disposals
During the period ended 30 June 2016, the Group acquired and disposed of sites
in the UK in relation to the optimisation of our Jaguar Land Rover footprint
ahead of the new combined site format being launched in the UK. The Group also
disposed of a site in Australia and finalised the liquidation of a joint
venture in Greece. Consideration for the acquisitions was £4.6m and disposal
proceeds were £2.0m.
There were no acquisitions or disposals in the period ended 30 June 2015.
11 Financial risk management
a. Financial risk factors
Exposure to financial risks comprising market risks (currency risk and
interest rate risk), funding and liquidity risk and counterparty risk arises
in the normal course of the Group's business.
During the six months to 30 June 2016, the Group has continued to apply the
financial risk management process and policies as detailed in the Group's
principal risks and risk management process included in the Annual Report and
Accounts 2015.
The condensed consolidated interim financial statements do not include all
financial risk management information and disclosures required in the annual
financial statements and further details can be found in the Annual Report and
Accounts 2015.
b. Liquidity risk
There have been no material changes to the contractual undiscounted cash flows
of the Group's liabilities during the six months to 30 June 2016.
c. Fair value measurements
In accordance with IFRS 7, disclosure is required for financial instruments
that are measured in the consolidated statement of financial position at fair
value. This requires disclosure of fair value measurements by level for the
following fair value measurement hierarchy:
· quoted prices in active markets (level 1);
· inputs other than quoted prices that are observable for the asset or
liability, either directly or indirectly (level 2); or
· inputs for the asset or liability that are not based on observable market
data (level 3).
The following table presents the Group's assets and liabilities that are
measured at fair value:
Six months to 30 June 2016 Six months to 30 June 2015 Year to 31 December 2015
Level 1 Level 2 Total Level 1 Level 2 Total Level 1 Level 2 Total
£m £m £m £m £m £m £m £m £m
Assets
Derivatives used for hedging - 211.2 211.2 - 99.9 99.9 - 134.5 134.5
Available for sale financial assets 1.6 - 1.6 1.4 - 1.4 1.4 - 1.4
1.6 211.2 212.8 1.4 99.9 101.3 1.4 134.5 135.9
Liabilities
Derivatives used for hedging - (16.1) (16.1) - (4.3) (4.3) - (3.6) (3.6)
Valuation techniques and assumptions applied in determining fair values of
each class of asset or liability are consistent with those used as at 31
December 2015 and reflect the current economic environment.
Level 2 hedging derivatives comprise forward foreign exchange contracts and
foreign exchange swaps. The fair value of these derivatives represents the
difference between the value of the outstanding contracts at their contracted
rates and a valuation calculated using the spot rates of exchange prevailing
at 30 June 2016. This valuation technique maximises the use of observable
market data where it is available and relies as little as possible on
entity-specific estimates.
There have been no transfers between any levels of the fair value hierarchy
during the six months ended 30 June 2016.
During the six months ended 30 June 2016, there were no reclassifications of
financial assets as a result of a change in the purpose or use of these
assets.
Management considers the carrying amount of trade and other receivables and
trade and other payables to approximate to their fair value.
The Group's derivative financial instruments comprise the following:
Assets Liabilities
Six months to Six months to Year to Six months to Six months to Year to
30 Jun 2016 30 Jun 2015 31 Dec 2015 30 Jun 2016 30 Jun 2015 31 Dec 2015
£m £m £m £m £m £m
Cross-currency interest rate swap 139.2 92.6 107.4 - - -
Forward foreign exchange contracts 72.0 7.3 27.1 (16.1) (4.3) (3.6)
211.2 99.9 134.5 (16.1) (4.3) (3.6)
12 Assets held for sale and disposal group
Six months to Six months to Year to
30 Jun 2016 30 Jun 2015 31 Dec 2015
£m £m £m
Assets directly associated with the disposal group - - -
Assets held for sale 1.2 7.0 4.5
Assets held for sale and disposal group 1.2 7.0 4.5
Liabilities directly associated with the disposal group - - -
As at 30 June 2016, the assets held for sale relate to a property in Australia
which is being actively marketed with a view to sale.
13 Related party disclosures
There have been no material changes to the principal subsidiaries and joint
ventures as listed in the Annual Report and Accounts for the year ended 31
December 2015.
All related party transactions arise during the ordinary course of business
and are on an arm's length basis.
There were no material transactions or balances between the Group and its key
management personnel during the six months to 30 June 2016.
INDEPENDENT REVIEW REPORT TO INCHCAPE plc
Report on the condensed consolidated interim financial statements
Our conclusion
We have reviewed the condensed consolidated interim financial statements,
defined below, in the Interim Report of Inchcape plc for the six months ended
30 June 2016. Based on our review, nothing has come to our attention that
causes us to believe that the condensed consolidated interim financial
statements are not prepared, in all material respects, in accordance with
International Accounting Standard 34 as adopted by the European Union and the
Disclosure and Transparency Rules of the United Kingdom's Financial Conduct
Authority.
This conclusion is to be read in the context of what we say in the remainder
of this report.
What we have reviewed
The condensed consolidated interim financial statements, which are prepared by
Inchcape plc, comprise:
· the consolidated statement of financial position as at 30 June 2016;
· the consolidated income statement and consolidated statement of
comprehensive income for the period then ended;
· the consolidated statement of cash flows for the period then ended;
· the consolidated statement of changes in equity for the period then ended;
and
· the explanatory notes to the condensed consolidated interim financial
statements.
As disclosed in note 1, 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.
The condensed consolidated interim financial statements included in the
Interim Report have been prepared in accordance with International Accounting
Standard 34, 'Interim Financial Reporting', as adopted by the European Union
and the Disclosure and Transparency Rules of the United Kingdom's Financial
Conduct Authority.
What a review of condensed consolidated 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 Report and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed consolidated interim
financial statements.
Responsibilities for the CONDENSED consolidated INTERIM FINANCIAL STATEMENTS
and the review
Our responsibilities and those of the directors
The Interim Report, including the condensed consolidated interim financial
statements, is the responsibility of, and has been approved by, the Directors.
The Directors are responsible for preparing the Interim Report in accordance
with the Disclosure and Transparency Rules of the United Kingdom's Financial
Conduct Authority.
Our responsibility is to express to the Company a conclusion on the condensed
consolidated interim financial statements in the Interim Report 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 and
Transparency Rules of the 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.
PricewaterhouseCoopers LLP
Chartered Accountants
27 July 2016
London
Notes:
(a) The maintenance and integrity of the Inchcape plc website is the
responsibility of the Directors; the work carried out by us does not involve
consideration of these matters and, accordingly, the auditors accept no
responsibility for any changes that may have occurred to the 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.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
Introduction
The Directors confirm that the condensed consolidated interim financial
statements in the Interim Report have been prepared in accordance with
International Accounting Standard 34, 'Interim Financial Reporting' as adopted
by the European Union and that the Interim Report includes a fair review of
the information required by Disclosure and Transparency Rules 4.2.7R and
4.2.8R, namely:
· an indication of important events that have occurred during the first six
months and their impact on the condensed consolidated interim financial
statements;
· 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 and any
material changes in the related party transactions described
in the last Annual Report.
The Directors and positions held during the period were as published in the
Annual Report and Accounts 2015, except for Richard Howes, who has been
appointed as Chief Financial Officer with effect from 11 April 2016 and Rachel
Empey who was appointed as a Non-Executive Director on 26 May 2016. A list of
current Directors is maintained on the Inchcape plc website
(www.inchcape.com).
On behalf of the Board
Stefan Bomhard
27 July 2016
Group Chief Executive
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