REG - Rank Group PLC - Final Results <Origin Href="QuoteRef">RNK.L</Origin> - Part 3

RankAnnouncement

20/08/2015 07:01

- Part 3: For the preceding part double click  ID:nRST5565Wb 

Spanish Government announced the reduction in the
corporation tax rate in Spain from 30% to 28% for financial years beginning in
2015 and to 25% for financial years beginning in 2016.  These changes were
substantively enacted in November 2014. 
 
6.   Dividends 
 
                                                                       Year ended  Year ended  
                                                                       30 June     30 June     
                                                                       2015        2014        
                                                                       £m          £m          
 Dividends paid to equity holders                                                              
 Final dividend for 2012/13 paid on 23 October 2013 - 2.85p per share  -           11.1        
 Interim dividend for 2013/14 paid on 21 March 2014 - 1.35p per share  -           5.3         
 Final dividend for 2013/14 paid on 22 October 2014 - 3.15p per share  12.3        -           
 Interim dividend for 2014/15 paid on 20 March 2015 - 1.60p per share  6.3         -           
                                                                       18.6        16.4        
 
 
A final dividend in respect of the year ended 30 June 2015 of 4.00p per share,
amounting to a total dividend of £15.6m, is to be recommended at the annual
general meeting on 15 October 2015.  The financial information does not
reflect this dividend payable. 
 
7.   Adjusted earnings per share 
 
Adjusted earnings is calculated by adjusting profit attributable to equity
shareholders to exclude discontinued operations, exceptional items, other
financial gains or losses, unwinding of the discount in disposal provisions
and the related tax effects.  Adjusted earnings is one of the business
performance measures used internally by management to manage the operations of
the business.  Management believes that the adjusted earnings measure assists
in providing a view of the underlying performance of the business. 
 
Adjusted net earnings attributable to equity shareholders is derived as
follows: 
 
                                                                 Year ended  Year ended  
                                                                 30 June     30 June     
                                                                 2015        2014        
                                                                 £m          £m          
 Profit attributable to equity shareholders                      74.8        20.2        
 Adjust for:                                                                             
 Discontinued operations (net of taxation)                       (15.8)      (2.8)       
 Exceptional items after tax on continuing operations            (2.1)       35.4        
 Other financial losses (gains)                                  0.3         (1.0)       
 Unwinding of discount in disposal provisions                    0.1         0.1         
 Taxation on adjusted items and impact of reduction in tax rate  (0.2)       (3.3)       
 Adjusted net earnings attributable to equity shareholders (£m)  57.1        48.6        
 Adjusted earnings per share (p) - basic                         14.6p       12.4p       
 Adjusted earnings per share (p) - diluted                       14.6p       12.4p       
 
 
8.   Provisions 
 
                                                Property                                                    
                                                lease       Disposal    Restructuring  Indirect tax         
                                                provisions  provisions  provisions     provision     Total  
                                                £m          £m          £m             £m            £m     
 At 1 July 2014                                 52.8        4.6         0.9            1.2           59.5   
 Exchange adjustments                           (0.1)       0.2         -              -             0.1    
 Unwinding of discount                          1.2         0.1         -              -             1.3    
 Charge to the income statement - exceptional   2.8         -           0.5            -             3.3    
 Release to the income statement - exceptional  (2.9)       -           -              -             (2.9)  
 Utilised in year                               (6.2)       (0.6)       (0.9)          -             (7.7)  
 At 30 June 2015                                47.6        4.3         0.5            1.2           53.6   
 Current                                        6.2         1.0         0.5            1.2           8.9    
 Non-current                                    41.4        3.3         -              -             44.7   
 Total                                          47.6        4.3         0.5            1.2           53.6   
 
 
Further details of the exceptional charge and release to the income statement
are provided in note 3. 
 
9.   Borrowings to net debt reconciliation 
 
Under IFRS, accrued interest and unamortised facility fees are classified as
loans and borrowings. A reconciliation of loans and borrowings disclosed in
the balance sheet to the Group's net debt position is provided below: 
 
                                    As at30 June2015  As at30 June2014  
                                    £m                £m                
 Total loans and borrowings         (143.1)           (183.9)           
 Less: accrued interest             0.7               1.1               
 Less: unamortised facility fees    (0.1)             (1.3)             
                                    (142.5)           (184.1)           
 Add: cash and short-term deposits  89.6              47.1              
 Net debt                           (52.9)            (137.0)           
 
 
10.   Cash generated from operations 
 
                                                    Year ended  Year ended  
                                                    30 June     30 June     
                                                    2015        2014        
                                                    £m          £m          
 Continuing operations                                                      
 Operating profit                                   86.1        25.9        
 Exceptional items                                  (2.1)       46.5        
 Operating profit  before exceptional items         84.0        72.4        
 Depreciation and amortisation                      42.3        43.6        
 Share based payments                               1.1         (0.5)       
 Loss on disposal of property, plant and equipment  0.3         0.3         
 Loss on disposal of intangible assets              0.5         -           
 Impairment of property, plant and equipment        0.5         -           
 Decrease in inventories                            0.3         0.2         
 Decrease (increase) in other receivables           1.8         (1.1)       
 Increase (decrease) in trade and other payables    23.7        (7.7)       
                                                    154.5       107.2       
 Cash utilisation of provisions                     (7.7)       (36.5)      
 Cash payments in respect of exceptional items      (0.2)       (9.1)       
 Cash generated from continuing operations          146.6       61.6        
 
 
11.   Contingent assets 
 
Discontinued taxation 
 
During the year the Group released an amount of £16.9m from income tax payable
(see note 5) following the successful conclusion of a tax exposure relating to
a discontinued operation in an overseas jurisdiction.  In addition, the Group
has been advised that it could receive a refund of between £2.5m to £4.0m in
respect of amounts previously paid. 
 
The Group has not recognised any gain in the financial statements at 30 June
2015 in respect of the potential refund. 
 
12.   Contingent liabilities 
 
Property leases 
 
Concurrent to the £211m sale and leaseback in 2006, the Group transferred the
rights and obligations but not the legal titles of 44 property leases to a
third party.  The Group remains potentially liable in the event of default by
the third party.  Should default occur then the Group would have recourse to
two guarantors.  It is understood that, of the original 44 leases transferred,
11 of these have not expired or been surrendered.  These 11 leases have
durations of between 17 months and 98 years and a current annual rental
obligation (net of sub-let income) of approximately £1.1m. 
 
During the prior year, the Group became aware of certain information in
respect of a change in the financial position of the third party and one of
the guarantors.  However, the Group has not to date been notified of any
default, or intention to default, in respect of the transferred leases. 
 
Stamp duty 
 
The Group has received from HMRC a determination in respect of the amount of
stamp duty payable on certain transactions undertaken by Gala Casino 1 Limited
(now Grosvenor Casinos (GC) Limited) before its acquisition by the Group on 12
May 2013.  The Group estimates the maximum potential additional stamp duty
that could be due if HMRC are successful to be £7.2m plus interest.  Under the
terms of the Sale and Purchase Agreement the vast majority of any liability
arising falls upon Gala Coral and the Group has further indemnification in the
event of default by Gala Coral. 
 
13.   Related party transactions and ultimate parent undertaking 
 
Guoco Group Limited (Guoco), a company incorporated in Bermuda, and listed on
the Hong Kong stock exchange has a controlling interest in The Rank Group Plc.
 The ultimate parent undertaking of Guoco is Hong Leong Company (Malaysia)
Berhad (Hong Leong) which is incorporated in Malaysia.  At 30 June 2015,
entities controlled by Hong Leong owned 56.1% of the Company's shares,
including 52.0% through Guoco and its wholly-owned subsidiary, Rank Assets
Limited, the Company's immediate parent undertaking. 
 
During the year, The Gaming Group Limited, a wholly owned subsidiary within
the Group, completed the purchase of a non-operating casino licence from
Clermont Leisure (UK) Limited for consideration of £0.2m (year ended 30 June
2014: £5.8m).  Clermont Leisure (UK) Limited is an entity subject to common
control.  As set out in the prior year financial statements, the valuation of
the casino licences was carried out by a third party on an arms' length
basis. 
 
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