REG - Rentokil Initial PLC - Preliminary Results 31.12.14 <Origin Href="QuoteRef">RTO.L</Origin> - Part 3
27/02/2015 07:01
- Part 3: For the preceding part double click ID:nRSa0302Gb
0.2 0.3
Central and divisional 1.5 1.0
21.2 23.6
Tax effect (6.8) (6.5)
After tax effect 14.4 17.1
1 excluding computer software
2. Segmental information (continued)
Restructuring costs and one-off items - operating Restructuring costs2014 One off items2014 Restructuring costs2013 One off items2013
£m £m £m £m
Europe
Restructuring costs - France 2.4 - 9.9 -
Restructuring costs - Benelux 0.8 - 7.1 -
Restructuring costs - Germany - - 4.9 -
Restructuring costs - Other Europe 0.8 - 1.9 -
Gain on sale - Spain Medical - (2.4) - -
One-off items - Europe - 1.4 - 1.1
Total - Europe 4.0 (1.0) 23.8 1.1
UK & Rest of World
Restructuring costs - UK & Ireland 0.8 - 5.7 -
Restructuring costs - Rest of World - - 1.7 -
One-off items - UK - (0.2) - -
One-off items - Rest of World - 1.1 - -
Total - UK & Rest of World 0.8 0.9 7.4 -
Asia
Restructuring costs - Asia 0.2 - 0.4 -
One-off items - Asia - 0.2 - -
Loss on disposal - South Korea - - - 0.2
Total - Asia 0.2 0.2 0.4 0.2
North America
Restructuring costs - US 1.5 - - -
One-off items - US - 0.2 - 2.5
Release of unpaid contingent consideration - (0.4) - (0.4)
Total - North America 1.5 (0.2) - 2.1
Pacific
Restructuring costs - Australia 1.1 - 2.3 -
Restructuring costs - New Zealand 0.2 - - -
One-off items - Australia/New Zealand - 0.1 - -
Total - Pacific 1.3 0.1 2.3 -
Central and divisional overheads
Restructuring costs - Central and divisional overheads 1.0 - 13.5 -
One-off items - 0.8 - -
Impairment of computer software - 2.3 - -
Gain on sale of investment properties - (2.4) - -
Vacant property provisions - (0.6) - 1.2
Total - Central and divisional overheads 1.0 0.1 13.5 1.2
Total 8.8 0.1 47.4 4.6
Tax effect (1.7) 0.3 (11.9) (0.2)
Total after tax effect 7.1 0.4 35.5 4.4
3. Interest payable and similar charges
2014 Restated 2013
£m £m
Hedged interest payable on medium term notes issued1 40.7 54.0
Interest payable on bank loans and overdrafts1 1.2 0.9
Interest and fees payable on revolving credit facility1 1.4 4.1
Interest payable on foreign exchange swaps 9.9 10.1
Interest payable on finance leases 0.8 0.9
Amortisation of discount on provisions 1.1 0.3
Foreign exchange loss on translation of foreign denominated loan2 0.2 -
Fair value loss on other derivatives3,4 0.9 0.2
Total interest payable and similar charges 56.2 70.5
1interest expense on financial liabilities held at amortised cost2comprises retranslation loss on financing instruments of £195.1m offset by gains of £194.9m (2013: gains of £59.7m offset by losses of £59.4m (see note 4))3loss on financial assets/liabilities at fair value through the income statement4the fair value loss on other derivatives includes fair value losses relating to interest rate swaps of £0.9m (2013: £0.2m)
4. Interest receivable
2014 2013
£m £m
Bank interest1 2.0 1.5
Interest receivable on foreign exchange swaps 8.3 8.7
Foreign exchange gain on translation of foreign denominated assets and liabilities - 0.3
Fair value gain on other derivatives2,3 0.6 0.4
Total interest receivable 10.9 10.9
1interest income on loans and receivables2gain on financial assets/liabilities at fair value through the income statement3the fair value gain on other derivatives includes fair value gains/(losses) relating to interest rate swaps of £0.6m (2013: £0.4m)
5. Income tax expense
Restated
2014 2013
£m £m
Analysis of charge in the period
UK Corporation tax at 21.5%* (2013: 23.25%) 1.7 1.9
Overseas taxation 32.6 28.8
Adjustment in respect of previous periods 5.1 3.6
Total current tax 39.4 34.3
Deferred tax (2.3) (5.4)
Total income tax expense 37.1 28.9
*the statutory mainstream rate of corporation tax was 23.0% for the year ended 31 March 2014 and reduced to 21.0% for the
year ending 31 March 2015. This gives rise to a hybrid tax rate of 21.5% for the year ending 31 December 2014 (three months
at 23.0% and nine months at 21.0%)
A deferred tax asset of £24.7m (2013: £16.0m) has been recognised in respect of UK tax losses carried forward as at 31
December 2014. This amount has been calculated by estimating the future UK taxable profits for 2015 to 2017, against which
the UK tax losses will be utilised, and applying the tax rates (substantively enacted as at the balance sheet date)
applicable for each year. Remaining UK tax losses of £199.1m have not been recognised as at 31 December 2014.
As a substantial proportion of profits are generated outside the UK, the standard rate of tax has been determined as the
weighted average of the standard rates of tax in each of the different countries where profits are generated. The relevant
rates were approximately 26% (2013: 27%).
The 2014 Budget on 20 March 2014 announced that the UK corporation tax rate will reduce to 20% (effective from 1 April
2015) and this rate change was substantively enacted on 2 July 2014. This will reduce the Company's future current tax
charge accordingly. The deferred tax liability at 31 December 2014 has been calculated based on the rate of 20%
substantively enacted at the balance sheet date.
6. Discontinued operations and disposals
On 18 March 2014 the group sold the Initial Facilities division. The division was not previously classified as held for
sale or as a discontinued operation. Management committed to a plan to sell this division early in 2014, following a
decision to concentrate on the group's core international businesses in pest control, hygiene and workwear. The comparative
consolidated income statement has been re-presented to show the discontinued operation separately from continuing
operations.
On 26 April 2013 the group sold the City Link division. The comparative consolidated income statement shows the
discontinued operation separately from continuing operations.
During the year the group also disposed of two smaller businesses that are not classified as discontinued operations.
The results of the discontinued operations are as follows:
2014 2013
£m £m
Revenue 85.3 630.5
Operating expenses (84.9) (633.9)
Operating profit/(loss) 0.4 (3.4)
Interest payable - (0.4)
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