REG - Pennon Group PLC - Pennon Group Half Year Results 2015/16 <Origin Href="QuoteRef">PNN.L</Origin> - Part 5
27/11/2015 07:11
- Part 5: For the preceding part double click ID:nRSa1477Hd
118.6
1 April 2015 to 30 September 2015
At 1 April 2015 118.6
Equity placing 95.4
Adjustment for shares issued under the scrip dividend alternative (0.3)
Shares issued under the sharesave scheme 1.4
Equity issuance related costs (2.3)
At 30 September 2015 212.8
12. Perpetual capital securities
Unaudited
Half yearended 30 September2015 Year ended 31 March 2015
£m £m
GBP 300m 6.75% perpetual subordinated
capital securities 294.8 294.8
On 8 March 2013 the Company issued £300m perpetual capital securities. They have no fixed redemption date but the Company may, at its sole discretion, redeem all, but not part, of these securities at their principal amount on 8 March 2018 or any subsequent periodic return payment date after this.
The Company has the option to defer periodic returns on any relevant payment date, as long as a dividend on the Ordinary Shares has not been paid or declared in the previous 12 months. Deferred periodic returns shall be satisfied only on redemption or payment of dividend on Ordinary Shares, all of which only occur at the sole discretion of the Company.
As the Company paid a dividend on 2 April 2015 the periodic return of £20.3m scheduled 8 March 2016 is payable and consequently has been recognised as a liability at 30 September 2015.
PENNON GROUP PLC
Notes to the condensed half year financial information (continued)
13. Cash flow from operating activities
Reconciliation of profit to net cash inflow from operating activities:
Unaudited
Half yearended30 September2015 Half year ended30 September2014
£m £m
Cash generated from operations
Profit for the period 84.9 90.5
Adjustments for:
Share-based payments 2.4 1.9
Profit on disposal of property, plant
and equipment (4.1) (2.9)
Depreciation charge 94.6 79.4
Amortisation of intangible assets 1.8 1.3
Exceptional credit from defined benefit
pension change - (14.9)
Share of post-tax profit from joint ventures (1.0) (2.4)
Finance income (22.0) (18.3)
Finance costs 51.5 39.9
Taxation charge 21.9 24.4
Changes in working capital :
Increase in inventories (5.0) (0.1)
Decrease/(increase) in trade and other
receivables 2.3 (24.8)
Increase in service concession
arrangements receivable (13.4) (45.0)
Increase in trade and other payables 0.5 14.5
Increase in retirement benefit obligations 0.9 0.1
Decrease in provisions (8.9) (2.7)
Cash generated from operations 206.4 140.9
Unaudited
Half year ended 30 September Half year ended30 September
2015 2014
Total interest paid £m £m
Interest paid in operating activities 41.4 24.0
Interest paid in investing activities (purchases of
property, plant and equipment) 4.0 13.9
Total interest paid 45.4 37.9
PENNON GROUP PLC
Notes to the condensed half year financial information (continued)
14. Net borrowings
Unaudited
Half year ended 30 September Year ended 31 March
2015 2015
£m £m
Cash and cash deposits 805.9 771.0
Borrowings - current
Bank overdrafts (0.2) (0.2)
Other current borrowings (84.6) (81.8)
Finance lease obligations (26.6) (31.6)
Total current borrowings (111.4) (113.6)
Borrowings - non-current
Bank and other loans (1,484.0) (1,277.2)
Other non-current borrowings (250.5) (273.2)
Finance lease obligations (1,305.1) (1,304.1)
Total non-current borrowings (3,039.6) (2,854.5)
Total net borrowings (2,345.1) (2,197.1)
For the purposes of the cash flow statement cash and cash equivalents comprise:
Unaudited
Half year ended 30 September Year ended 31 March
2015 2015
£m £m
Cash and cash deposits as above 805.9 771.0
Less : deposits with a maturity of three months
or more (restricted funds) (211.1) (196.2)
594.8 574.8
Restricted funds are available to be accessed subject to being replaced by an equivalent facility.
PENNON GROUP PLC
Notes to the condensed half year financial information (continued)
15. Fair value disclosure for financial instruments
Fair value of financial instruments carried at amortised
cost
Financial assets and liabilities which are not carried
at an amount which approximates to their fair value are:
Unaudited
Half year ended Year ended
30 September 2015 31 March 2015
Book value Fair value Book value Fair value
£m £m £m £m
Non-current borrowings :
Bank and other loans 1,484.0 1,533.7 1,277.2 1,348.2
Other non-current
borrowings 250.5 230.0 273.2 250.6
Finance lease obligations 1,305.1 1,173.8 1,304.1 1,182.0
Total non-current
borrowings 3,039.6 2,937.5 2,854.5 2,780.8
Other non-current assets 285.7 362.2 291.1 364.2
Valuation hierarchy of financial instruments carried at
fair value
The Group uses the following hierarchy for determining
the fair value of financial instruments by valuation
technique:
· quoted prices (unadjusted) in active markets for
identical assets or liabilities (level 1)
· inputs other than quoted prices included within
level 1 that are observable for the asset or liability,
either directly (that is, as prices) or indirectly (that
is, derived from prices) (level 2)
· inputs for the asset or liability that are not
based on observable market data (that is, unobservable
inputs) (level 3).
The fair value of financial instruments not traded in an
active market (level 2, for example over-the-counter
derivatives) is determined by using valuation
techniques. A variety of methods and assumptions are
used based on market conditions existing at each balance
sheet date. Quoted market prices or dealer quotes for
similar instruments are used for long term debt. Other
techniques, such as estimated discounted cash flows, are
used to determine fair value for the remaining financial
instruments. The fair value of interest rate swaps is
calculated as the present value of the estimated future
cash flows.
PENNON GROUP PLC
Notes to the condensed half year financial information (continued)
15. Fair value disclosure for financial instruments (continued)
Valuation hierarchy of financial instruments carried at fair value (continued)
The Group's financial instruments are valued principally using level 2 measures:
Unaudited
Half yearended30 September Year ended31 March
2015 2015
£m £m
Level 2 inputs
Assets
Derivatives used for hedging 58.7 68.3
Liabilities
Derivatives used for hedging 44.1 52.4
Derivatives deemed held for trading 6.6 9.5
Total liabilities 50.7 61.9
Financial instruments valued using level 3 measures are valued by the counterparty using cash flows discounted at prevailing mid-market rates. The fair value of such financial instruments is not significantly sensitive to unobservable inputs.
Level 3 inputs
Assets
Derivatives deemed held for trading 0.6 -
Liabilities
Derivatives deemed held for trading - 3.6
The table below shows the summary of changes in the fair value of the Group's level 3 financial instruments:
Unaudited
Half yearended30 September Year ended31 March
2015 2015
£m £m
Asset/ (liability)
Opening balance (3.6) (2.4)
Gains and losses recognised in net
finance costs 4.2 7.8
Settlement of recognised gains - (9.0)
Closing balance 0.6 (3.6)
PENNON GROUP PLC
Notes to the condensed half year financial information (continued)
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