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REG - Pennon Group PLC - Pennon Group Half Year Results 2015/16 <Origin Href="QuoteRef">PNN.L</Origin> - Part 4

- Part 4: For the preceding part double click  ID:nRSa1477Hc 

                                                                                                                                                                                                              -                                 11.9                               
                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                           
                                                                     In the six months to September 2014 an exceptional credit before tax of £14.9m was recognised relating to changes made to the Group's defined benefit pension scheme.  Changes implemented during that period capped pensionable pay for active members, reducing past service cost.  
                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                                                             
 
 
 PENNON GROUP PLC                                                    
                                                                                                                                           
 Notes to the condensed half year financial information (continued)  
                                                                                                         
 6.                                                                  Net finance costs                   
                                                                                                         Unaudited                         
                                                                                                         Half year ended                   Half year ended    
                                                                                                         30 September 2015                 30 September 2014  
                                                                                                         Finance                           Finance                    Finance  Finance          
                                                                                                         cost                              income             Total   cost     income   Total   
                                                                                                         £m                                £m                 £m      £m       £m       £m      
                                                                     Cost of servicing debt                                                                                                     
                                                                     Bank borrowings and overdrafts      (25.4)                            -                  (25.4)  (12.5)   -        (12.5)  
                                                                     Interest element of finance lease                                                                                          
                                                                                                         Rentals                           (17.4)             -       (17.4)   (18.3)   -       (18.3)  
                                                                     Other finance costs                 (2.0)                             -                  (2.0)   (1.9)    -        (1.9)   
                                                                     Interest receivable                 -                                 3.8                3.8     -        2.8      2.8     
                                                                     Interest receivable on shareholder                                                                                         
                                                                                                         loans to joint ventures           -                  5.7     5.7      -        5.6     5.6     
                                                                                                                                                                                                
                                                                                                         (44.8)                            9.5                (35.3)  (32.7)   8.4      (24.3)  
                                                                                                                                                                                                
                                                                                                                                                                                                
                                                                     Notional interest                                                                                                          
                                                                     Interest receivable on service                                                                                             
                                                                                                         concession arrangements           -                  8.3     8.3      -        5.8     5.8     
                                                                     Retirement benefit obligations      (1.2)                             -                  (1.2)   (1.7)    -        (1.7)   
                                                                     Unwinding of discounts on                                                                                                  
                                                                                                         Provisions                        (5.5)              -       (5.5)    (5.5)    -       (5.5)   
                                                                                                                                                                                                
                                                                                                         (6.7)                             8.3                1.6     (7.2)    5.8      (1.4)   
                                                                                                                                                                                                
                                                                     Net gains on non-designated                                                                                                
                                                                                                         derivative financial instruments  -                  4.2     4.2      -        4.1     4.1     
                                                                                                                                                                                                
                                                                                                         (51.5)                            22.0               (29.5)  (39.9)   18.3     (21.6)  
                                                                                                                                                                                                
                                                                                                         
                                                                                                         
                                                                                                                                                                                                              
 
 
 PENNON GROUP PLC                                                    
                                                                               
 Notes to the condensed half year financial information (continued)  
                                                                               
 7.                                                                  Taxation  
                                                                                                                                                                                                                                                                                                                                                                                          Unaudited                   
                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                          Half year     Half year       
                                                                                                                                                                                                                                                                                                                                                                                          ended         ended           
                                                                                                                                                                                                                                                                                                                                                                                          30 September  30 September    
                                                                                                                                                                                                                                                                                                                                                                                          2015          2014            
                                                                                                                                                                                                                                                                                                                                                                                          £m            £m              
                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                               Analysis of charge :                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                               Current tax charge                                                                                                                                                                                                                                                                                   3.8   7.2                         
                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                               Deferred tax charge                                                                                                                                                                                                                                                                                  18.1  14.2                        
                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                               Tax charge before exceptional items                                                                                                                                                                                                                                                                  21.9  21.4                        
                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                               Tax on exceptional items                                                                                                                                                                                                                                                                             -     3.0                         
                                                                                                                                                                                                                                                                                                                                                                                    21.9  24.4                        
                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                               UK corporation tax is calculated at 20% (2014 21%) of the estimated assessable profit for the year. The tax charge for September 2015 and September 2014 has been derived by applying the anticipated effective annual tax rate to the first half year profit before tax.                            
                                                                                                                                                                                                                                                                                                                                                                                    
                                                                               Tax on amounts included in the consolidated statement of comprehensive income, or directly in equity, is included in those statements respectively.                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                    
                                                                               The effective tax rate for the period before the impact of exceptional items was 21% (2014 21%).                                                                                                                                                                                                     
                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                               Had the Government proposals contained in the Finance (No 2) Act 2015, to reduce the rate of corporation tax by 1% for the financial year 2017 and a further 1% for the financial year 2020, been enacted at 30 September 2015 the deferred tax liability would have been approximately £27m lower.  
                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                              
 
 
 PENNON GROUP PLC                                                    
                                                                                                                                                                                                         
 Notes to the condensed half year financial information (continued)  
                                                                                                                                                                                                         
 8.                                                                  Earnings per share                                                                                                                  
                                                                                                                        
                                                                     Basic earnings per share are calculated by dividing 
                                                                     the earnings attributable to ordinary shareholders 
                                                                     by the weighted average number of ordinary shares  
                                                                     outstanding during the period, excluding those held 
                                                                     in the employee share trust which are treated as   
                                                                     cancelled.  For diluted earnings per share the     
                                                                     weighted average number of ordinary shares is      
                                                                     adjusted to include all dilutive potential ordinary 
                                                                     shares.                                            
                                                                                                                        
                                                                     The weighted average number of shares and earnings 
                                                                     used in the calculations were:                     
                                                                                                                        
                                                                                                                                       Unaudited                                                         
                                                                                                                                       Half yearended 30 September2015  Half year ended30 September2014    
                                                                     Number of shares (millions)                                                                                                         
                                                                                                                                                                                                         
                                                                     For basic earnings per share                       409.9          383.5                                                             
                                                                                                                                                                                                         
                                                                     Effect of dilutive potential ordinary shares from                                                                                   
                                                                                                                        share options  1.6                              1.7                                
                                                                                                                                                                                                         
                                                                     For diluted earnings per share                     411.5          385.2                                                             
                                                                                                                                                                                                         
                                                                     Basic and diluted earnings per ordinary share      
                                                                                                                                                                        
                                                                     Adjusted earnings per share are presented to       
                                                                     provide a more useful comparison on business trends 
                                                                     and performance.  Exceptional items are adjusted   
                                                                     for as by nature and size they can distort         
                                                                     comparison of business trends. Deferred tax is     
                                                                     adjusted for as it reflects distortive effects of  
                                                                     changes in corporation tax rates and the level of  
                                                                     long term investment.  The annual perpetual capital 
                                                                     return is recognised in full at the half year, so  
                                                                     is proportionately adjusted to allow a more useful 
                                                                     comparison at the half year.                       
                                                                                                                        
                                                                     Earnings per share have been calculated:           
                                                                                                                                                                                                                   
 
 
                                   Unaudited                  
                                                                                                                           
                                   Half year ended            Half year ended    
                                   30 September 2015          30 September 2014  
                                                              Earnings per                Earnings per    
                                   Profit                     ordinary share     Profit   ordinary share  
                                   after tax                  Basic              Diluted  after tax       Basic   Diluted  
                                   £m                         p                  p        £m              p       p        
                                                                                                                           
   Statutory earnings              68.7                       16.8               16.7     74.5            19.4    19.3     
                                                                                                                           
   Deferred tax charge                                                                                                     
                                   before exceptional items                                                                       
                                   (note 7)                   18.1               4.4      4.4             14.2    3.7      3.7    
                                                                                                                           
   Exceptional items (net of tax)                                                                                          
                                   (note 5)                   -                  -        -               (11.9)  (3.1)    (3.1)  
                                                                                                                           
   Proportionate impact of                                                                                                 
                                   perpetual capital returns                                                                      
                                   (note 12)                  8.1                2.0      2.0             8.0     2.1      2.1    
                                                                                                                           
   Adjusted earnings               94.9                       23.2               23.1     84.8            22.1    22.0     
   
   
 
 
 PENNON GROUP PLC                                                    
                                                                     
 Notes to the condensed half year financial information (continued)  
                                                                                                                                                                                                                                                                                      
 9.                                                                  Dividends to ordinary shareholders                                                                                                                                                                               
                                                                                                                                                                                                         
                                                                     Amounts recognised as distributions to ordinary shareholders in the period :                                                        
                                                                     
                                                                                                                                                                                                                    Unaudited                                                         
                                                                                                                                                                                                                    Half yearended 30 September2015  Half year ended30 September2014    
                                                                     £m                                                                                                                                  £m                                          
                                                                                                                                                                                                                                                     
                                                                     Interim dividend paid for the year ended                                                                                                                                                                         
                                                                     31 March 2015 : 9.98p (2014 9.39p) per share                                                                                        39.8       34.8                                                              
                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                                     
                                                                     Final dividend approved for the year ended                                                                                                                                                                       
                                                                     31 March 2015 : 21.82p (2014 20.92p) per                                                                                                                                                                         
                                                                     share                                                                                                                               89.7       82.2                                                              
                                                                                                                                                                                                         
                                                                     129.5                                                                                                                               117.0                                       
                                                                                                                                                                                                         
                                                                     Proposed interim dividend                                                                                                           Unaudited                                   
                                                                                                                                                                                                                    Half yearended 30 September2015  Half year ended30 September2014    
                                                                     £m                                                                                                                                  £m                                          
                                                                                                                                                                                                                                                     
                                                                     Proposed interim dividend for the year ended                                                                                                                                                                     
                                                                     31 March 2016 : 10.46p (2015 9.98p) per share                                                                                       43.1       39.8                                                              
                                                                                                                                                                                                         
                                                                                                                                                                                                         
                                                                     The proposed interim dividend of 10.46p per share will be paid on 1 April 2016 to shareholders on the register on 29 January 2016.  
                                                                                                                                                                                                         
                                                                     The proposed interim dividend has not been included as a liability in this condensed half year financial information.               
                                                                                                                                                                                                         
                                                                                                                                                                                                         
                                                                                                                                                                                                         
                                                                                                                                                                                                                                                                                                
 
 
 PENNON GROUP PLC                                                    
                                                                                                                                                                                                                                                                         
 Notes to the condensed half year financial information (continued)  
                                                                                                                                                                                                                                                                         
 10.                                                                 Share capital                                                                                                                                                                                       
                                                                                                                                                                                                                                                                         
                                                                     Allotted, called up and fully paid                                                                                                                                                                  
                                                                                                                                                                                                                               Unaudited         
                                                                     1 April 2014 to 30 September 2014                                                                                                                         Number of shares                   
                                                                                                                                                                                                                               Treasury shares   Ordinary shares  £m     
                                                                     At 1 April 2014 ordinary shares of 40.7p each                                                                                                             1,282,690         370,552,276      151.3  
                                                                                                                                                                                                                                                                         
                                                                     Shares issued in respect of the £125m                                                                                                                                                               
                                                                     convertible bond                                                                                                                                          -                 20,909,635       8.5    
                                                                                                                                                                                                                                                                         
                                                                     Shares issued under the scrip dividend  alternative                                                                                                       -                 1,982,455        0.8    
                                                                                                                                                                                                                                                                         
                                                                     Shares re-issued under the Company's                                                                                                                                                                
                                                                     Performance and Co-investment Plan                                                                                                                        (131,685)         131,685          -      
                                                                                                                                                                                                                                                                         
                                                                     For consideration of £0.8m, shares re-issued                                                                                                                                                        
                                                                     to the Pennon Employee Share Trust                                                                                                                        (104,482)         104,482          -      
                                                                                                                                                                                                                                                                         
                                                                     For consideration of £2.5m, shares re-issued                                                                                                                                                        
                                                                     under the Company's Sharesave Scheme                                                                                                                      (587,156)         587,156          -      
                                                                                                                                                                                                                                                                         
                                                                     At 30 September 2014 ordinary shares in issue of 40.7p each                                                                                               459,367           394,267,689      160.6  
                                                                                                                                                                                                                                                                         
                                                                     Shares to be issued under the scrip dividend alternative                                                                                                  -                 4,383,167        1.8    
                                                                                                                                                                                                                               459,367           398,650,856      162.4  
                                                                                                                                                                                                                                                                         
                                                                                                                                                                                                                               Unaudited         
                                                                     1 April 2015 to 30 September 2015                                                                                                                         Number of shares                   
                                                                                                                                                                                                                               Treasury shares   Ordinary shares  £m     
                                                                     At 1 April 2015 ordinary shares of 40.7p each                                                                                                             389,515           398,720,708      162.4  
                                                                                                                                                                                                                                                                         
                                                                     Shares issued in respect of the equity issuance                                                                                                           -                 12,084,337       4.9    
                                                                                                                                                                                                                                                                         
                                                                     Shares issued under the scrip dividend alternative                                                                                                        -                 236,033          0.1    
                                                                                                                                                                                                                                                                         
                                                                     Shares re-issued under the Company's                                                                                                                                                                
                                                                     Performance and Co-investment Plan                                                                                                                        (8,305)           8,305            -      
                                                                                                                                                                                                                                                                         
                                                                     For consideration of £1.1m, shares re-issued                                                                                                                                                        
                                                                     to the Pennon Employee Share Trust                                                                                                                        (143,538)         143,538          -      
                                                                                                                                                                                                                                                                         
                                                                     For consideration of £1.4m, shares re-issued                                                                                                                                                        
                                                                     under the Company's Sharesave Scheme                                                                                                                      (227,316)         227,316          -      
                                                                                                                                                                                                                                                                         
                                                                     For consideration of £1.6m, shares issued                                                                                                                                                           
                                                                     in respect of the Company's Sharesave Scheme                                                                                                              -                 280,090          0.2    
                                                                                                                                                                                                                                                                         
                                                                     At 30 September 2015 ordinary shares in issue                                                                                                                                                       
                                                                     of 40.7p each                                                                                                                                             10,356            411,700,327      167.6  
                                                                                                                                                                                                                                                                         
                                                                     Shares to be issued under the scrip dividend alternative                                                                                                  -                 524,593          0.2    
                                                                                                                                                                                                                               10,356            412,224,920      167.8  
                                                                                                                                                                                                                               
                                                                     Shares held as treasury shares may be sold, re-issued for any of the Company's share schemes, or cancelled.                                               
                                                                                                                                                                                                                               
                                                                     The weighted average market price of the Company's shares at the date of exercise of Sharesave Scheme options during the half year was 767p (2014 808p).  
                                                                     
                                                                                                                                                                                                                                                                             
 
 
 PENNON GROUP PLC                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                         
 Notes to the condensed half year financial information (continued)  
                                                                                                                                                                                                                                                                                                                                                                                                                                         
 11.                                                                 Share premium account                                                                                                                                                                                                                                                                                                                                               
                                                                                                                                                                                                                                                                                                                                                                                                                                         Unaudited                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                         £m                                                   
                                                                     1 April 2014 to September 2014                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                     At 1 April 2014                                                                                                                                                                                                                                                                                                                                                     4.9                                                  
                                                                     Convertible bond                                                                                                                                                                                                                                                                                                                                                    116.3                                                
                                                                     Adjustment for shares issued under the scrip dividend alternative                                                                                                                                                                                                                                                                                                   (2.6)                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                     At 30 September 2014                                                                        

- More to follow, for following part double click  ID:nRSa1477He

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