REG - Rentokil Initial PLC - Half Yearly Report <Origin Href="QuoteRef">RTO.L</Origin> - Part 4
29/10/2014 09:15
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1.9 6.3
Dividends received from associates - - 1.9
Operating cash flow 16.0 (24.1) 118.2
Interest received 5.3 6.9 10.6
Interest paid (39.3) (36.7) (60.9)
Interest element of finance lease payments (0.4) (0.5) (0.9)
Income tax paid (12.4) (17.6) (37.2)
Special pensions contributions - (12.5) (13.6)
Disposal of available-for-sale investments - 1.3 1.2
Free cash flow (30.8) (83.2) 17.4
Free cash flow
(30.8)
(83.2)
17.4
12. Business combinations
The group purchased 100% of the share capital or the trade and assets of 17 companies and businesses in the period. The
total consideration in respect of acquisitions was £46.1m and the cash outflow from current and past period acquisitions,
net of cash acquired was £41.7m (Current: £37.2m, past period: £4.5m).
From the dates of acquisition to 30 June 2014, these acquisitions contributed £11.1m to revenue and £2.1m to operating
profit. If the acquisitions had occurred on 1 January 2014, the revenue and operating profit of the combined entity would
have amounted to £17.1m and £2.4m respectively.
Details of goodwill and the fair value of net assets acquired are as follows:
6 months to 30 June 2014 6 months to 30 June 2013 Year to 31 December 2013
£m £m £m
Purchase consideration:
- Cash paid 36.1 2.1 7.4
- Businesses exchanged - 3.5 3.5
- Deferred consideration 10.0 0.4 2.3
Total purchase consideration 46.1 6.0 13.2
Fair value of net assets acquired (23.4) (5.4) (10.6)
Goodwill from current period acquisitions 22.7 0.6 2.6
Goodwill represents the synergies, workforce and other benefits expected as a result of combining the respective businesses. None of the goodwill recognised is expected to be deductible for tax purposes.
Deferred consideration up to a maximum of £10.0m is payable over the next two years. The group incurred acquisition related costs of £0.6m in respect of the above acquisitions.
The provisional fair value1 of assets and liabilities arising from acquisitions in the period:
6 months to 30 June 2014 6 months to 30 June 2013 Year to 31 December 2013
£m £m £m
Non-current assets
- Intangible assets 21.3 2.4 6.6
- Property, plant and equipment 3.6 2.6 3.0
Current assets 6.0 1.5 3.3
Current liabilities (4.3) (0.6) (1.6)
Non-current liabilities (3.2) (0.5) (0.7)
Net assets acquired 23.4 5.4 10.6
1 the provisional fair values will be finalised in the 2014 financial statements. The fair values are provisional as the acquisition accounting has not yet been finalised as a result of the proximity of the acquisitions to the period end.
1 the provisional fair values will be finalised in the 2014 financial statements. The fair values are provisional as the
acquisition accounting has not yet been finalised as a result of the proximity of the acquisitions to the period end.
13. Events occurring after the balance sheet date
There were no significant events occurring after the balance sheet date.
Responsibility statement of the directors in respect of the half-yearly financial report
We confirm that to the best of our knowledge:
· the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as
adopted by the EU
· the interim management report includes a fair review of the information required by:
o DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred
during the first six months of the financial year and their impact on the condensed set of financial statements; and a
description of the principal risks and uncertainties for the remaining six months of the year; and
o DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the
first six months of the current financial year and that have materially affected the financial position or performance of
the entity during that period; and any changes in the related party transactions described in the last annual report that
could do so
By Order of the Board
Andy Ransom
31 July 2014
The directors of Rentokil Initial plc are listed in the Rentokil Initial plc Annual Report for 31 December 2013. A List of
the current directors is maintained on the Rentokil Initial website: www.rentokil-initial.com
INDEPENDENT REVIEW REPORT TO RENTOKIL INITIAL PLC
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report
for the six months ended 30 June 2014 which comprises the condensed consolidated income statement, condensed consolidated
balance sheet, condensed consolidated statement of comprehensive income, condensed consolidated statement of changes in
equity, condensed consolidated cash flow statement and the related explanatory notes. We have read the other information
contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting
the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK
FCA"). Our review has been undertaken so that we might state to the company those matters we are required to state to it in
this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the company for our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are
responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by
the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the
half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for
use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in
scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does
not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an
audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial
statements in the half-yearly financial report for the six months ended 30 June 2014 is not prepared, in all material
respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FCA.
Paul Sawdon
for and on behalf of KPMG LLP,
Chartered Accountants
15 Canada Square
London
E14 5GL
31 July 2014
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