REG - ITV PLC - Half Yearly Report <Origin Href="QuoteRef">ITV.L</Origin> - Part 2
28/07/2015 07:01
- Part 2: For the preceding part double click ID:nRSb2291Ua
Jimmy Rose, Home Fires, Thunderbirds Are Go and Ninja Warrior.
Off-ITV revenue was impacted by the loss of some commissions and the timing of
deliveries such as Shetland, In it to Win it and University Challenge for the
BBC. These will reverse over the full year.
As well as strengthening our position as the UK's largest commercial
production company, ITV Studios is becoming increasingly international.
Reflecting our growth and increasing scale in key production markets in Europe
and the US, 53% of ITV Studios total revenue in the first half was generated
outside the UK. As our Studios business grows internationally, foreign
currency movements have an increasing impact on our results. On a constant
currency basis, which assumes exchange rates remained consistent with 2014,
ITV Studios revenue for the first six months of 2015 would have been £5
million lower and adjusted EBITA would have been £2 million lower with the
stronger US dollar partially offset by the weakening Euro.
Studios US grew strongly in the first half, with revenue up 69% to £145
million (2014: £86 million) as we benefitted from good organic growth, up 21%,
as well as the first full year of Leftfield Entertainment, acquired in May
2014. Following this acquisition, we became the largest unscripted independent
producer in the US and we now have a strong portfolio of returning series and
formats including Hells Kitchen, Pawn Stars, Duck Dynasty, Marriage Bootcamp,
The Real Housewives of New Jersey and The Rich Kids Of Beverly Hills. In the
first half our scripted dramas aired in the US, Texas Rising, The Good Witch
and Aquarius, helping drive significant revenue growth, and The Good Witch and
Aquarius have already been recommissioned.
Studios RoW also showed strong growth, up 41% to £72 million (2014: £51
million), with organic revenue up 4%. We benefitted from two months of revenue
from Talpa Media which we acquired on 30 April 2015, significantly
strengthening our position as a leading international producer. We also saw
good growth in Australia and Norway, partly offset by a decline in Germany.
First half deliveries included I'm A Celebrity… Get Me Out Of Here! in
Australia, Germany and Denmark, The Chase in Norway, Mini Beiz, Dini Beiz in
Switzerland and A Mother's Son in France.
Global Entertainment revenue increased 18% in the period to £71 million (2014:
£60 million) as we continued to grow our portfolio of programmes and formats
to distribute internationally. First half revenue growth was supported by our
strong programme slate including new titles Poldark and Schitt's Creek, as
well as US drama Aquarius and the benefit of Thunderbirds Are Go. Thunderbirds
Are Go has now been sold to 35 countries with key territories such as the US
still to come and we expect to benefit from merchandising around the series as
we look to extend the franchise beyond the television set.
Reflecting the strong revenue growth across ITV Studios, adjusted EBITA
increased 18% to £85 million (2014: £72 million). As a result of increased
drama deliveries in the first half, which are lower margin, the adjusted EBITA
margin decreased 1% to 17%. We are financing our larger-scale scripted
projects through working capital. The production cost is partly funded by the
initial sale of the series to a broadcaster, while the deficit is recovered
through distribution revenue from selling the finished product globally to
other broadcasters and platforms. We balance our financial exposure through
our portfolio approach, with successful international dramas offsetting the
risk that we will not recover the full deficit on every show.
Overall, ITV Studios is on track to deliver strong revenue growth over the
full year, with good organic growth and our acquisitions coming through as
planned.
Acquisitions
We have built scale in our international content business, focusing our growth
in key creative markets that have a track record for creating and owning
intellectual property. Since 2012 we have acquired a number of content
businesses in the UK, US and creative locations across Europe, developing a
strong portfolio of programmes that return and travel. As we have grown in
size and expanded our network relationships and distribution capability, this
has helped to strengthen our creative talent pool and build our reputation as
a leading European producer and the largest unscripted independent production
company in the US.
We have strict criteria for evaluating potential acquisitions. Financially, we
assess ownership of intellectual property, earnings growth and valuation based
on return on capital employed and discounted cash flow. Strategically, we
ensure an acquisition target has a strong creative track record and pipeline
in content genres that return and travel, namely drama, entertainment and
factual entertainment, as well as succession planning for key individuals in
the business.
We also structure our deals with earnouts or with put and call options in
place for the remainder of the equity, capping the maximum consideration
payable. By basing a significant part of the consideration on future
performance in this way, not only can we lock in creative talent and ensure
our incentives are aligned, but we also reduce our risk by only paying for the
actual, not expected, performance delivered over time.
In April 2015 we completed the acquisition of Talpa Media, the Dutch creator
of worldwide entertainment formats, including The Voice, The Voice Kids,
Utopia, I Love My Country and Dating In The Dark. We paid an initial cash
consideration of E500 million (£362 million) for 100% of Talpa's fully diluted
share capital with further payments dependent on Talpa's future performance.
The total maximum consideration, including the initial payment, is up to E1.1
billion which is contingent on Talpa continuing to deliver significant profit
growth to 2022 as well as John de Mol's continued commitment to the business
during this time.
We also acquired a minority stake in Monumental Television in April, the UK
scripted independent producer founded by Oscar nominated film producers Alison
Owen and Debra Hayward. As part of the agreement, Global Entertainment
acquired exclusive distribution rights to all of its future television
productions.
In May we acquired the remaining 75% of Mammoth Screen, one of the UK's
leading scripted production companies, having held a 25% investment in the
producer since 2007. Its successful slate of high end drama includes Poldark
and Endeavour.
In June we completed the acquisition of Boom Supervisory Limited, the holding
company of UK based Twofour Group which produces factual entertainment and
drama programmes. We paid an initial cash consideration of £55 million for 75%
of the Group. There is a put and call option for the remaining 25% that can be
exercised at the end of 2017 and between the end of 2019 and 2021.
Additionally, Twofour has a put and call option to acquire the remaining 49%
of its subsidiary Mainstreet Pictures that can be exercised between 2018 and
2023. The total maximum consideration for Twofour and the remaining 49% of
Mainstreet Pictures is £280 million with contingent payments dependent on both
businesses delivering exceptional profit growth to £60 million in aggregate
over the payment period and key individuals remaining with the group.
Also in June we established a new label, Cats on the Roof Media, with Andrew
O'Connor, co-creator of Peep Show and Adam Adler, who created The Cube. Cats
on the Roof Media owns a number of creative labels focused on developing
entertainment and scripted comedy programmes.
We closely monitor the forecast performance of each acquisition and where
there has been a change in expectations, we adjust our view of potential
future commitments through the income statement. Where consideration paid or
contingent consideration payable in the future is employment linked it is
treated as an expense rather than capital. All consideration of this type is
excluded from adjusted profit after tax and adjusted EPS as, in our view, it
is part of capital consideration.
The total initial consideration paid for our acquisitions in 2015 to date was
£432 million. At 30 June 2015, based on our current view of performance, we
expect to pay a further £224 million, giving a total expected amount payable
for our 2015 acquisitions of £656 million, payable only if exceptional
compound earnings growth is delivered over the payment period.
Company Geography Genre Initialconsideration(£m) Expected future payments* (£m) Totalexpected consideration** (£m) Expected payment period Totalmaximum consideration*(£m)
2015
Talpa Media Netherlands Entertainment 362 186 548 2015-2019 796
Twofour Group UK Fact Ent & Drama 55 10 65 2016-2021 280
Other UK Various 15 28 43 2015-2020 81
Total for 2015 432 224 656 1,157
Total for 2012-2014 328 63 391 2016-2021 847
Total 760 287 1,047 2,004
*Undiscounted and performance related.
**Undiscounted, including the initial cash consideration and excluding working
capital adjustments. All future payments are performance related.
Net financing costs
Six months to 30 June 2015£m 2014£m
Financing costs directly attributable to loans and bonds (3) (4)
Cash-related net financing (costs)/income (1) 1
Cash-related financing costs (4) (3)
Amortisation of bonds - (1)
Adjusted financing costs (4) (4)
Mark-to-market on swaps and foreign exchange (2) (4)
Imputed pension interest (5) (9)
Losses on buybacks - (30)
Other net financial income - 9
Net financing costs (11) (38)
Adjusted financing costs were £4 million, with the additional costs associated
with our acquisitions offset by a reduction in interest for loans repaid in
the prior period. As the Talpa Media acquisition was completed at the end of
April, the financing costs associated with the acquisition will continue to
come through over the second half of the year.
Net financing costs were significantly lower in 2015 as the prior year
included losses incurred on debt buybacks.
Profit before tax
Six months to 30 June 2015£m 2014£m
Profit before tax 327 250
Production tax credits 5 -
Exceptional items (net) 30 4
Amortisation and impairment of intangible assets* 22 24
Adjustments to net financing costs 7 34
Adjusted profit before tax 391 312
* In respect of intangible assets arising from business combinations.
Adjusted profit before tax was up 25% at £391 million (2014: £312 million).
Production tax credits are recognised in adjusted profit before tax and
adjusted EPS as in our view they relate directly to the production of
programmes and reflect the way the business is managed and measured on a day
to day basis.
Net exceptional items were £30 million in the year. These are the net of £31
million operating exceptional costs and £1 million non-operating exceptional
income. Operating exceptionals relate to acquisition costs, largely employment
linked consideration paid and performance-based employment linked contingent
consideration for the acquisitions we have made. In statutory results
employment linked consideration is treated as an expense rather than a
liability. All consideration of this type is excluded from adjusted profit
after tax and adjusted EPS as, in our view, it is part of capital
consideration.
Tax
Six months to 30 June 2015£m 2014£m
Tax charge (68) (53)
Charge for exceptional items (6) (1)
Charge in respect of amortisation of intangible assets* (5) (5)
Charge in respect of adjustments to net financing costs (1) (7)
Other tax adjustments (1) 2
Adjusted tax charge (81) (64)
Effective tax rate on adjusted profits 21% 21%
* In respect of intangible assets arising from business combinations.
The total tax charge for the period was £68 million (2014: £53 million),
corresponding to an effective tax rate on adjusted profit before tax of 21%
(2014: 21%), which is broadly in line with the standard corporation tax rate
of 20.25% (2014: 21.5%).
Cash tax paid in the year was £68 million (2014: £35 million), which relates
to the tax due on taxable profits, partially offset by the tax treatment of
allowable pension contributions. Cash tax paid is higher than the previous
period due to increasing taxable profits and the decrease in utilisation of
brought forward losses. The majority of cash tax is paid in the UK.
EPS
Overall, adjusted profit after tax was up 25% at £310 million (2014: £248
million). After non-controlling interests of £2 million (2014: £2 million),
adjusted basic earnings per share was 7.7p (2014: 6.1p), up 26%. The weighted
average number of shares was broadly in line at 4,004m (2014: 4,003m). Diluted
adjusted EPS in 2015 was 7.6p (2014: 6.1p) reflecting a weighted average
diluted number of shares of 4,034 million (2014: 4,044 million).
Statutory EPS is adjusted to reflect the underlying performance of the
business providing a more meaningful comparison of how the business is managed
and measured on a day-to-day basis. Adjustments include: acquisition-related
costs such as professional fees, primarily due diligence, employment linked
consideration and performance-based employment linked contingent payments;
impairment of intangible assets; amortisation of intangible assets acquired
through business combinations including customer contracts and relationships;
net financing cost adjustments; and other tax adjustments. Amortisation of
intangible assets that are required to run our business, including software
licences, is not adjusted for. The table below reconciles basic to adjusted
EPS.
Six months to 30 June 2015 Reported£m Adjustments£m Adjusted£m
EBITA* 395 5 400
Exceptional items (operating) (31) 31 -
Amortisation and impairment of intangible assets (27) 22 (5)
Net financing costs (11) 7 (4)
Gain on sale of non-current assets and subsidiaries (non-operating exceptional items) 1 (1) -
Profit before tax 327 64 391
Tax (68) (13) (81)
Profit after tax 259 51 310
Non-controlling interests (2) - (2)
Earnings 257 51 308
Shares (million), weighted average 4,004 4,004
EPS 6.4p 7.7p
* £5 million adjustment relates to production tax credits.
Dividend per share
Reflecting our confidence in the ongoing growth and cash generation of the
business, last year the Board committed to growing the full year ordinary
dividend by at least 20% per annum for three years to 2016, by when we will
achieve a dividend cover of between 2.0 and 2.5 times adjusted earnings per
share. In line with this policy, the Board has declared an interim dividend
for 2015 of 1.9p, up 36%. The interim dividend is expected to be roughly a
third of the full year dividend.
Cash generation
Profit to cash conversion
Six months to 30 June 2015£m 2014£m
Adjusted EBITA 400 322
Decrease in programme rights and other inventory distribution rights 24 64
Decrease in receivables* 2 2
(Decrease) in payables (34) (71)
Working capital movement (8) (5)
Depreciation 13 13
Share-based compensation and pension service costs 8 8
Cash flow generated from operations before exceptional items 413 338
Acquisition of property, plant and equipment and intangible assets (25) (19)
Adjusted cash flow 388 319
Profit to cash ratio six months to 30 June 97% 99%
Profit to cash ratio 12 months rolling 92% 97%
*Includes £5 million of production tax credits.
ITV remains highly cash generative reflecting our continued tight management
of working capital balances. In the period we generated £388 million (2014:
£319 million) of operational cash from £400 million (2014: £322 million) of
adjusted EBITA, which equates to a strong profit to cash ratio of 97%. The
ratio has declined slightly from 99% in the prior period as a result of
increased investment in scripted content.
Free cash flow
Six months to 30 June 2015£m 2014£m
Adjusted cash flow 388 319
Net interest paid (8) (10)
Cash tax (68) (35)
Pension funding (66) (91)
Free cash flow 246 183
Note: Except where disclosed, management views the acquisition of operating
property, plant and equipment and intangibles as necessary ongoing investment
in the business.
After payments for interest, cash tax and pension funding, our free cash flow
also remained strong in the period, up 34% to £246 million (2014: £183
million).
Overall, after £383 million of dividends and £407 million of acquisitions as
well as pension deficit contributions of £66 million, we ended the first half
with net debt of £540 million, compared to net cash of £41 million at 31
December 2014 and net debt of £201 million at 30 June 2014.
Funding and liquidity
Debt structure and liquidity
In 2014 we obtained a committed £525 million Revolving Credit Facility
provided by a number of core relationship banks. We also entered into a £175
million bilateral financing facility and agreed a new £75m invoice discounting
facility, both of which are free of financial covenants. At 30 June 2015, £130
million was drawn on the Revolving Credit Facility.
In 2015, to fund the acquisition of Talpa Media, we entered into a 12 month
E500 million bridge loan facility provided by five of our relationship banks.
As at 30 June 2015 this facility was fully drawn.
As we enter the next phase of our strategy this financial flexibility and our
continued strong free cash flow will enable us to invest in opportunities to
grow the business and enhance shareholder value.
Leverage
Going forward our objective is to run an efficient balance sheet, and to
balance investment for further growth with attractive returns to shareholders.
Therefore we will, over time, look to increase our balance sheet leverage. We
believe that maintaining leverage below 1.5x reported net debt to adjusted
EBITDA will optimise our cost of capital, allow us to sustain our progressive
dividend policy and enable us to retain flexibility to continue to invest for
further growth. As at 30 June 2015 reported net debt to adjusted EBITDA was
0.6x on a rolling 12 month basis.
We also look at an adjusted measure of net debt, taking into consideration all
of our financial commitments which reflects how credit rating agencies look at
our balance sheet. At 30 June 2015, adjusted net debt was £1,447 million (31
December 2014: £1,078 million) reflecting an increase in expected contingent
payments on acquisitions partly offset by a reduction in the pension deficit
under IAS 19 and lower undiscounted finance lease commitments which mainly
relate to broadcast transmission contracts and property. The ratio of adjusted
net debt to adjusted EBITDA was 1.7x on a rolling 12 month basis.
2015£m 2014£m
Net debt at 30 June (540) (201)
Expected contingent payments on acquisitions (287) (117)
Pension deficit (IAS 19R) (285) (362)
Operating leases (335) (398)
Adjusted net debt at 30 June (1,447) (1,078)
Adjusted net debt to EBITDA* 1.7x 1.6x
*On a rolling 12 month basis.
Financing
We are financed using debt instruments with a range of maturities. Borrowings
at 30 June 2015 were repayable as follows:
Amount repayable £m Maturity
£78 million Eurobond 78 Oct 2015
£161 million Eurobond 161 Jan 2017
£525 million Revolving Credit Facility 130 Various
E500 million Bridge Loan 354 May 2016
Finance leases 11 Various
Other debt 7 Various
Total debt repayable on maturity 741
We expect to pay for the Eurobond that matures in October 2015 from cash
generated in the second half of the year.
Ratings
We are rated investment grade by two ratings agencies: BBB- by Standard and
Poor's and Baa3 by Moody's Investor Services. The factors that are taken into
account in assessing our credit rating include our degree of operational
gearing, exposure to the economic cycle, as well as business and geographical
diversity. Continuing to execute our strategy will strengthen our position
against all these metrics.
Pensions
IAS 19
The aggregate IAS 19 deficit of the defined benefit schemes at 30 June 2015
was £285 million (31 December 2014: £346 million). The reduction reflects
lower pension liabilities as a result of rising bond yields and deficit
funding contributions of £66 million, partly offset by investment losses on
pension scheme assets and higher inflation expectations increasing pension
liabilities. Pensions continue to be paid from the Scheme based on actual
requirements.
Actuarial valuation
The last actuarial valuation was undertaken in 2011. On the bases adopted by
the Trustee, the combined deficits as at 1 January 2011 amounted to £587
million.
The Trustee is in the process of undertaking full actuarial valuations of all
three sections of the Scheme as at 1 January 2014 with the results expected to
be finalised in due course.
Deficit funding contributions
Contributions comprise fixed and profit related payments. The fixed
contributions are now paid on a monthly basis while the profit related payment
continues to be paid as a single sum in March. Reflecting the change in
payment structure, the group's deficit funding contributions in the first half
reduced to £66 million (2014: £91 million). Over the full year we do not
expect our total deficit funding contributions to exceed those made in 2014.
Ian Griffiths
Group Finance Director
Risks & Uncertainties
Risks and uncertainties
ITV continues to apply the risk management framework outlined in the 2014
Annual Report and Accounts (pages 50-55). When preparing the Interim results
the High Impact Low Likelihood (HILL) risks and Strategic risks as reported in
the 2014 Annual Report and Accounts were reviewed to ensure they remained
appropriate and adequate. No significant new risks were identified. ITV is
currently reviewing its risk identification and monitoring processes. Below is
a summary of the key risks.
High Impact Low Likelihood (HILL) risks
HILL risks are of low inherent likelihood but there would be major consequence
were the risk to materialise. They are categorised according to risk theme.
Risk Theme HILL Risks
Financial ITV loses its credit status or lines of funding with existing lenders or there is a collapse of a major bank impacting financial arrangements/availability of credit.
There is a major collapse in investment values leading to a material impact on the pension scheme deficit.
Operational A significant event removes a number of the key management team from the business on a long-term or permanent basis.
Reputation An event with public interest that causes significant reputational and brand damage.
There is a major health and safety incident that results in a significant loss of human life.
A major incident results in ITV being unable to continue with scheduled broadcasting for a sustained period.
There is a significant or unexpected change in regulation or legislation.
Risks & Uncertainties
1 - Maximise audience and revenue share from free-to-air broadcast and VOD
business
2 - Grow international content business
3 - Build a global pay and distribution business
Strategic risks
Strategic risks are those that would impact the successful execution of the
strategy. They are categorised according to risk theme and mapped to ITV's
strategic priorities.
Risk Theme Strategic Risks Strategic Priorities
The Market There is a major decline in advertising revenue and ITV does not build sufficient non-NAR revenue streams to offset the financial impact of this decline. 1 2 3
The television market moves significantly towards pay television as a preferred model, negatively impacting ITV's free-to-air revenue. 1 3
A faster than expected shift to Video on Demand (VOD) or other new technologies causes a sustained loss of advertising revenue. 1 2 3
People ITV fails to evolve its organisational structure and culture to ensure that it is capable of delivering continued growth from the new businesses or revenue streams and fails to attract, develop and retain key creative, commercial and management talent with the skills required for the ongoing business. 1 2 3
Organisation, Structure and Processes There is significant loss of programme rights or ITV fails to identify and obtain the optimal rights packages. 1 2 3
ITV fails to create and own a sufficient number of hit programmes/formats. 1 2 3
ITV fails to resource, financially, creatively and operationally, the new growth businesses, in particular online and international content. 1 2 3
ITV loses a significant volume of personal or sensitive data. 1 2 3
ITV remains heavily reliant on legacy systems, which could potentially restrict the ability to grow the business. These systems and processes may not be appropriate for non-advertising revenue or international growth. 2 3
Technology A significant high profile incident or series of events such as transmission incidents or a major regulatory breach causes significant reputational damage. 1 2 3
ITV fails to ensure appropriate business continuity planning and resilience within its core systems, processes, platforms and technology infrastructure. 1 2 3
There is a sustained cyber/viral attack causing prolonged system denial or major reputational damage, for example the ability to broadcast our channels or the availability of ITV Player. 1 2 3
Condensed Consolidated Interim Financial Statements
In this section . . .
In preparing these condensed consolidated interim financial statements we
continue to adopt the same style as the 2014 year end accounts. Our objective
is to make ITV's financial statements less complex, more relevant to
shareholders and provide readers with a clearer understanding of what drives
financial performance of the Group. We have grouped notes under five key
headings: 'Basis of Preparation', 'Results for the Period', 'Operating Assets
and Liabilities', 'Capital Structure and Financing Costs' and 'Other Notes'.
The aim of the text in boxes is to provide commentary on each section, or
note, in plain English.
Contents
Primary statements
Condensed Consolidated Income Statement
Condensed Consolidated Statement of Comprehensive Income
Condensed Consolidated Statement of Financial Position
Condensed Consolidated Statement of Changes in Equity
Condensed Consolidated Statement of Cash Flows
Section 1: Basis of Preparation
Section 2: Results for the Year
2.1 Profit before tax
2.2 Earnings per share
Section 3: Operating Assets and Liabilities
3.1 Acquisitions
3.2 Provisions
3.3 Pensions
Section 4: Capital Structure and Financing Costs
4.1 Net (debt)/cash
4.2 Borrowings
4.3 Managing market risks: derivative financial instruments
4.4 Fair value hierarchy
Section 5: Other Notes
5.1 Related party transactions
5.2 Contingent liabilities
Responsibility Statement of the Directors in Respect of the Half-Yearly Financial Report
Independent Review Report
Adoption of Financial Reporting Standard (FRS) 101: Reduced Disclosure Framework
Condensed Consolidated Income Statement
For the six month period to 30 June Note 2015£m 2014£m
Revenue 2.1 1,356 1,225
Operating costs (1,019) (938)
Operating profit 337 287
Presented as
Earnings before interest, tax, amortisation (EBITA) and exceptional items 2.1 395 322
Operating exceptional items (31) (5)
Amortisation of intangible assets (27) (30)
Operating profit 337 287
Financing income 3 78
Financing costs (14) (116)
Net financing costs (11) (38)
Share of losses of joint ventures and associated undertakings - -
Gain on sale and impairment of subsidiaries and investments (exceptional items) 1 1
Profit before tax 327 250
Taxation (68) (53)
Profit for the period 259 197
Profit attributable to
Owners of the Company 257 195
Non-controlling interests 2 2
Profit for the period 259 197
Earnings per share
Basic earnings per share 2.2 6.4p 4.9p
Diluted earnings per share 2.2 6.4p 4.8p
Condensed Consolidated Statement of Comprehensive Income
For the six month period to 30 June 2015£m 2014£m
Profit for the period 259 197
Other comprehensive income/(cost)
Items that are or may be reclassified to profit or loss
Exchange differences on translation of foreign operations (net of hedging) (3) (7)
Net loss on cash flow hedges (6) -
Items that will never be reclassified to profit or loss
Income tax charge on items that will never be reclassified 3 (4)
Other comprehensive (cost)/income for the period, net of income tax (6) (11)
Total comprehensive income for the period 253 186
Total comprehensive income attributable to
Owners of the Company 251 184
Non-controlling interests 2 2
Total comprehensive income for the period 253 186
Condensed Consolidated Statement of Financial Position
Note 30 June 2015 £m 31 December 2014 £m 30 June 2014 £m
Non-current assets
Property, plant and equipment 251 248 253
Intangible assets 3.1 1,503 1,129 1,173
Interests in joint ventures and associates and other investments 19 14 6
Derivative financial instruments 4.3 12 16 29
Distribution rights 14 13 11
Net deferred tax asset 38 43 34
1,837 1,463 1,506
Current assets
Programme rights and other inventory 369 367 266
Trade and other receivables due within one year 492 385 406
Trade and other receivables due after more than one year 74 24 12
Trade and other receivables 566 409 418
Derivative financial instruments 4.3 4 11 -
Cash and cash equivalents 4.1 201 297 268
1,140 1,084 952
Current liabilities
Borrowings 4.2 (574) (85) (218)
Derivative financial instruments 4.3 (10) (12) (1)
Trade and other payables due within one year (798) (699) (666)
Trade payables due after more than one year (31) (27) (24)
Trade and other payables (829) (726) (690)
Current tax liabilities (52) (72) (40)
Provisions 3.2 (15) (17) (18)
(1,480) (912) (967)
Net current (liabilities)/assets (340) 172 (15)
Non-current liabilities
Borrowings 4.2 (167) (171) (251)
Derivative financial instruments 4.3 (12) (12) (19)
Defined benefit pension deficit 3.3 (285) (346) (362)
Net deferred tax liabilities (65) - -
Other payables (54) (38) (64)
Provisions 3.2 (5) (4) (5)
(588) (571) (701)
Net assets 909 1,064 790
Attributable to equity shareholders of the parent company
Share capital 403 403 403
Share premium 174 174 174
Merger and other reserves 228 228 218
Translation reserve 16 25 -
Available for sale reserve 7 7 4
Retained (losses)/earnings 30 177 (67)
Total equity attributable to equity shareholders of the parent company 858 1,014 732
Non-controlling interests 51 50 58
Total equity 909 1,064 790
Ian Griffiths
Group Finance Director
Condensed Consolidated Statement of Changes in Equity
Attributable to equity shareholders of the parent company
Items that may be reclassified to profit or loss
Sharecapital£m Sharepremium£m Mergerand otherreserves (a)£m Translationreserve£m Available for sale reserve£m Retained profits/ (losses) £m Total£m Non- controllinginterests£m Total equity£m
Balance at 1 January 2015 403 174 228 25 7 177 1,014 50 1,064
Total comprehensive income for the period
Profit for the period - - - - - 257 257 2 259
Other comprehensive income/(expense)
Net loss on cash flow hedges - - - (6) - - (6) - (6)
Exchange differences on translation of foreign operations (net of hedging) - - - (3) - - (3) - (3)
Income tax on other comprehensive income - - - - - 3 3 - 3
Total other comprehensive income - - - (9) - 3 (6) - (6)
Total comprehensive income for the period - - - (9) - 260 251 2 253
Transactions with owners, recorded directly in equity
Equity dividends - - - - - (383) (383) (1) (384)
Movements due to share-based compensation - - - - - 7 7 - 7
Purchase of own shares via employees' benefit trust - - - - - (31) (31) - (31)
Total contributions by and distributions to owners - - - - - (407) (407) (1) (408)
Total transactions with owners - - - - - (407) (407) (1) (408)
Changes in non-controlling interests - - - - - - - - -
Balance at 30 June 2015 403 174 228 16 7 30 858 51 909
Condensed Consolidated Statement of Changes in Equity
Attributable to equity shareholders of the parent company
Items that may be reclassified to profit or loss
Sharecapital£m Sharepremium£m Mergerand otherreserves (a)£m Translationreserve£m Available for sale reserve£m Retained profits/ (losses)(restated) £m Total£m Non- controllinginterests£m Total equity£m
Balance at 1 January 2014 403 174 248 7 4 22 858 31 889
Total comprehensive income for the period
Profit for the period - - - - - 195 195 2 197
Other comprehensive income
Exchange differences on translation of foreign operations - - - (7) - - (7) - (7)
Income tax on other comprehensive income - - - - - (4) (4) - (4)
Total other comprehensive cost - - - (7) - (4) (11) - (11)
Total comprehensive income for the period - - - (7) - 191 184 2 186
Transactions with owners, recorded
directly in equity
Equity dividends - - - - - (257) (257) (5) (262)
Movements due to share-based - - - - - 7 7 - 7
compensation
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