REG - Irish Continental - Half Yearly Report <Origin Href="QuoteRef">IR5B_u.I</Origin> - Part 2
29/10/2014 15:47
- Part 2: For the preceding part double click ID:nRSb1693Qa
0.8
At 30 June 2013 0.8
8. Finance lease receivable
30 Jun 30 Jun 31 Dec
2014 2013 2013
Em Em Em
Current finance lease receivable - 3.0 3.1
Non-current finance lease receivable - 16.3 14.7
- 19.3 17.8
Opening balance 17.8 20.7 20.7
Finance income recognised in Revenue 0.3 0.7 1.4
Amounts received (18.1) (2.1) (4.3)
- 19.3 17.8
In April 2014, the Group received, in full settlement, all amounts due under
the terms of the Bareboat Hire Purchase Agreement relating to the sale of the
vessel 'Bilbao' which was concluded in 2010. Under the Agreement, the finance
lease receivable was originally to have been received in instalments from the
Russian company, St. Peter Line, over the period to September 2016. The funds
were utilised towards the reduction of net debt.
9. Net debt and cash
Cash Overdrafts Loans Leases Total
Em Em Em Em Em
At 1 January 2014
Current assets 18.5 - - - 18.5
Creditors due within one year - - (16.0) (0.7) (16.7)
Creditors due after one year - - (92.3) (2.9) (95.2)
18.5 - (108.3) (3.6) (93.4)
Cash flow (7.2) - - - (7.2)
Foreign exchange rate changes - - - (0.1) (0.1)
Drawdown - (1.8) - (0.4) (2.2)
Repayment - - 30.6 0.4 31.0
(7.2) (1.8) 30.6 (0.1) 21.5
At 30 June 2014
Current assets 11.3 - - - 11.3
Creditors due within one year - (1.8) (13.0) (0.8) (15.6)
Creditors due after one year - - (64.7) (2.9) (67.6)
11.3 (1.8) (77.7) (3.7) (71.9)
At 30 June 2013
Current assets 23.0 - - - 23.0
Creditors due within one year - - (15.5) (0.5) (16.0)
Creditors due after one year - - (110.2) (2.2) (112.4)
23.0 - (125.7) (2.7) (105.4)
The loan drawdown and repayments have been made under the Group's loan
facilities.
Cash and cash equivalents
For the purposes of the statement of cash flows, cash and cash equivalents
include cash on hand and in banks net of outstanding bank overdrafts. Cash and
cash equivalents at the end of the reporting period as shown in the statement
of cash flows can be reconciled as follows:
30 Jun 30 Jun 31 Dec
2014 2013 2013
Em Em Em
Cash and bank balances 11.3 23.0 18.5
Bank overdraft (1.8) - -
Cash and cash equivalents 9.5 23.0 18.5
10. Tax
Corporation tax for the interim period is estimated based on the best
estimates of the weighted average annual corporation tax rate expected to
apply to each taxable entity for the full financial year.
The Company and subsidiaries that are within the EU approved Tonnage Tax
jurisdictions have elected to be taxed under the tonnage tax scheme. Under the
tonnage tax scheme, taxable profit on eligible activities is calculated on a
specified notional profit per day related to the tonnage of the ships
utilised.
11. Financial instruments and risk management
The Groups activities expose it to a variety of financial risks including
interest rate risk, foreign currency risk, liquidity risk and credit risk. The
Group's funding, liquidity and exposure to interest and foreign exchange rate
risks are managed by the Group's treasury and accounting departments. A
combination of derivative financial instruments and treasury management
techniques are used to manage these underlying risks. These interim condensed
financial statements do not include all financial risk management information
and disclosures required in the annual financial statements, and should be
read in conjunction with the 2013 Annual Report. There have been no changes to
the risk management procedures or policies since the 2013 year end.
Fair value hierarchy
The Group has adopted the following fair value measurement hierarchy for
financial instruments:
• Level 1: quoted (unadjusted) prices in active markets for identical
assets and liabilities.
• Level 2: other techniques for which all inputs that have a significant
effect on the recorded fair value are observable, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
• Level 3: techniques that use inputs which have a significant effect on
the recorded fair value that are not based on observable market data.
The fair value of financial assets and financial liabilities are classified in
"Level 2" fair value hierarchy as market observable inputs (forward rates and
yield curves) are used in arriving at fair values.
11. Financial instruments and risk management - continued
Fair value of financial assets and financial liabilities measured at amortised
cost
At 30 June 2014 the fair value of borrowings was E78.8 million (31 December
2013: E107.0 million)
The fair value of the following financial assets and financial liabilities
approximate their carrying value:
· Trade and other receivables
· Cash and bank balances
· Trade and other payables
Fair value of derivative financial instruments
Derivative financial instruments are measured in the Statement of Financial
Position at fair value. The fair values of derivative financial instruments
are based on market price calculations using financial models.
The fair value of derivative financial instruments was a liability of E0.6
million as at 30 June 2014 (31 December 2013: Enil). The derivative financial
instruments at 30 June 2014 consisted of interest rate swaps and forward
foreign exchange contracts. All cash flow hedges were effective and fair value
losses of E0.7 million (31 December 2013: gains of E0.2 million) were recorded
in other comprehensive income and net settlements amounted to E0.1 million (31
December 2013: E0.4 million).
The Group utilised interest rate swaps during the period ended 30 June 2014
and year ended 31 December 2013 whereby it swapped its entire EURIBOR floating
interest rate exposure under the amortising term loan facility for fixed
interest rates. The notional capital amount outstanding of this contract at 30
June 2014 was E70.2 million (31 December 2013: E93.3 million) and the notional
amounts for all future periods match the amortising schedule of the loan
agreement. The estimated fair value has been accumulated in equity and will be
subsequently recognised in the Consolidated Income Statement in the same
period as the hedge expense.
The Group utilises currency derivatives to hedge future cash flows in the
management of its exchange rate exposures. At 30 June 2014 the fair value of
outstanding forward foreign currency contracts amounted to an asset of
E49,000. At 31 December 2013 there were no material outstanding forward
foreign exchange contracts.
12. Retirement benefit schemes
Retirement benefit scheme valuations have been updated at the half year.
Scheme assets have been valued as per investment managers valuations at 30
June 2014. In consultation with the actuary to the principal group defined
benefit pension schemes, the discount rate used in relation to the pension
scheme liabilities is 2.90% for Euro liabilities (31 December 2013: 3.60%) and
4.20% for Sterling liabilities (31 December 2013: 4.35%).
At 30 June 2014 the Groups total obligation in respect of defined benefit
schemes totals E287.9 million (31 December 2013: E267.2 million). The schemes
held assets of E243.4 million (31 December 2013: E230.5 million), giving a net
pension deficit of E44.5 million (31 December 2013: E36.7 million). The
increase in the total obligation was primarily due to a decrease in the
discount rate.
The principal assumptions used for the purpose of the actuarial valuations
were as follows:
Half year ended Year ended
30 Jun 2014 30 Jun 2013 31 Dec 2013
Sterling Euro Sterling Euro Sterling Euro
Discount rate 4.20% 2.90% 4.60% 3.80% 4.35% 3.60%
Inflation rate 3.40% 1.80% 3.30% 2.00% 3.55% 2.00%
Rate of increase of
pensions in payment 3.10% 1.60% - 1.80% 3.05% 1.80% - 2.00% 3.20% 1.80% - 2.00%
Rate of general
salary increases 3.90% 2.80% 4.30% 3.00% 4.05% 3.00%
Half year Half year Year
ended ended ended
30 Jun 2014 30 Jun 2013 31 Dec 2013
Em Em Em
Opening deficit (36.7) (54.6) (54.6)
Current service cost (1.0) (0.9) (1.9)
Employer contributions paid 1.2 2.8 5.6
Past service credit 0.8 0.5 2.1
Net interest cost (0.7) (1.0) (2.0)
Actuarial (loss) / gain (8.2) 2.0 14.3
Other 0.1 (0.1) (0.2)
Net deficit (44.5) (51.3) (36.7)
Schemes in surplus 4.7 4.0 4.7
Schemes in deficit (49.2) (55.3) (41.4)
Net deficit (44.5) (51.3) (36.7)
13. Net cash from operating activities
30 Jun 30 Jun 31 Dec
2014 2013 2013
Em Em Em
Operating activities
Profit for the year 2.4 3.0 26.8
Adjustments for:
Finance costs (net) 2.5 3.1 6.3
Income tax expense 0.3 0.3 0.4
Retirement benefit obligation - service cost 1.0 0.9 1.9
Retirement benefit obligation - payments (1.2) (2.8) (5.6)
Retirement benefit obligation - past service credit (0.8) (0.5) (2.1)
Depreciation of property, plant and equipment 8.7 9.3 19.0
Amortisation of intangible assets 0.2 0.2 0.3
Amortisation of deferred grant (0.1) (0.1) (0.1)
Share-based payment expense 0.1 - 0.1
Non-trading item: Gain on disposal of subsidiary - - (3.5)
Gain on disposal of property, plant and equipment - (0.1) (0.4)
Increase in other provisions - - -
Operating cash flow before movements in
working capital 13.1 13.3 43.1
(Increase) / decrease in inventories (0.4) 0.1 -
Increase in receivables (11.1) (6.4) (1.5)
Increase / (decrease) in payables 22.9 16.1 (1.3)
Cash generated from operations 24.5 23.1 40.3
Income taxes paid (0.8) (0.1) (0.2)
Interest paid (1.9) (2.2) (4.5)
Net cash generated from operating activities 21.8 20.8 35.6
At 30 June 2014 and 2013 the increase in payables is due to the seasonality of
the business, giving rise to an increase in deferred revenue, as at 30 June
2014 and 2013.
14. Related party transactions
Transactions between the company and its subsidiaries, which are related
parties, have been eliminated on consolidation.
During the six months ended 30 June 2014 there were no material changes to, or
material transactions between Irish Continental Group plc and its key
management personnel or members of their close family, other than in respect
of remuneration.
15. Contingent assets / liabilities
There have been no material changes in contingent assets or liabilities as
reported in the Group's financial statement for the year ended 31 December
2013.
16. Impairment
Under IFRS, goodwill and other indefinite-lived intangible assets are required
to be tested at least annually for impairment. As the Group does not have
these assets no impairment review is required.
In relation to assets other than those listed above, the Group assessed those
assets to determine if there were any indications of impairment. No internal
or external indications of impairment were identified and consequently no
impairment review was performed.
17. Composition of the entity
There have been no changes in the composition of the entity during the period
ended 30 June 2014.
18. Subsequent events
There have been no material subsequent events, outside the ordinary course of
business, to report since the period ended 30 June 2014.
19. Board approval
This interim report was approved by the Board of Directors of Irish
Continental Group plc on 27 August 2014.
This information is provided by RNS
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