REG - Sage Group PLC - Final Results <Origin Href="QuoteRef">SGE.L</Origin> - Part 2
30/11/2016 07:06
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disposals which occurred close to the start of the opening comparative period where the contribution impact
would be immaterial are not adjusted.
Underlying cash conversion Underlying cash conversion is underlying cash flow from operating activities divided by underlying operating profit. Underlying cash flow from operating activities is Underlying cash conversion informs management and investors about the cash operating cycle of the business and how efficiently operating profit is converted into cash.
statutory cash flow from operating activities less net capital expenditure and adjusted for movements on foreign exchange rates and non-recurring cash items.
Underlying (as reported) Where prior period underlying measures are included without retranslation at current period exchange rates, they are labelled as underlying (as reported). This measure is used to report comparative figures for external reporting purposes where it would not be appropriate to retranslate. For instance, on the face of primary financial statements.
Revenue Type DESCRIPTION
Recurring revenue Recurring revenue is revenue earned from customers for the provision of a good or service, where risks and rewards are transferred to the customer over the term of a contract, with the customer being unable to continue to benefit from the full functionality of the good or service without ongoing payments. Recurring revenue includes both software subscription revenue and maintenance and service revenue.
Software subscription revenue Subscription revenue is revenue earned from customers for the provision of a good or service, where the risk and rewards are transferred to the customer over the term of a contract. In the event that the customer stops paying, they lose the legal right to use the software and the Company has the ability to restrict the use of the product or service. (Also known as 'Pay to play').
Software and software related services ("SSRS") SSRS revenue is for goods or services where the entire benefit is passed to the customer at the point of delivery. It comprises revenue for software or upgrades sold on a perpetual license basis and software related services, including hardware sales, professional services and training.
Processing revenue Processing revenue is revenue earned from customers for the processing of payments or where Sage colleagues process our customers' payroll.
Consolidated income statement
For the year ended 30 September 2016
Note Underlying Adjustments Statutory Underlying as reported Adjustments Statutory
2016 2016 2016 2015£m 2015 2015
£m £m £m £m £m
Revenue 2 1,569.1 - 1,569.1 1,435.5 - 1,435.5
Cost of sales (103.0) - (103.0) (86.7) - (86.7)
Gross profit 1,466.1 - 1,466.1 1,348.8 - 1,348.8
Selling and administrative expenses (1,039.1) (126.6) (1,165.7) (968.9) (82.7) (1,051.6)
Operating profit 2 427.0 (126.6) 300.4 379.9 (82.7) 297.2
Share of loss of an associate (0.4) (0.6) (1.0) - - -
Finance income 2.4 2.7 5.1 2.2 - 2.2
Finance costs (24.1) (5.9) (30.0) (23.6) - (23.6)
Profit before income tax 404.9 (130.4) 274.5 358.5 (82.7) 275.8
Income tax expense 4 (105.1) 38.2 (66.9) (90.3) 8.8 (81.5)
Profit for the period 299.8 (92.2) 207.6 268.2 (73.9) 194.3
Profit attributable to:
Owners of the parent 299.8 (92.2) 207.6 268.2 (73.9) 194.3
Earnings per share attributable to the owners of the parent (pence)
Basic 6 27.84p 19.28p 25.00p 18.11p
Diluted 6 27.67p 19.16p 24.85p 18.00p
Consolidated statement of comprehensive income
For the year ended 30 September 2016
2016£m 2015£m
Profit for the period 207.6 194.3
Other comprehensive income/(expense) for the period:
Items that will not be reclassified to profit or loss:
Actuarial loss on post-employment benefit obligations (2.2) (4.8)
Deferred tax credit on actuarial loss on post-employment benefit obligations 0.8 0.6
(1.4) (4.2)
Items that may be reclassified to profit or loss:
Deferred tax credit on foreign currency movements 2.6 -
Exchange differences on translating foreign operations 117.1 (23.2)
119.7 (23.2)
Other comprehensive income/(expense) for the period, net of tax 118.3 (27.4)
Total comprehensive income for the period 325.9 166.9
Total comprehensive income for the period attributable to:
Owners of the parent 325.9 166.9
The notes on pages 25 to 36 form an integral part of this condensed consolidated report.
Consolidated balance sheet
As at 30 September 2016
Note 2016 £m 2015£m
Non-current assets
Goodwill 7 1,658.5 1,446.0
Other intangible assets 7 109.3 105.5
Property, plant and equipment 7 123.4 122.7
Investment in an associate 9.0 -
Other financial assets 2.7 -
Deferred income tax assets 58.4 34.2
1,961.3 1,708.4
Current assets
Inventories 2.1 2.0
Trade and other receivables 419.5 320.9
Current income tax asset 7.9 -
Cash and cash equivalents (excluding bank overdrafts) 10 264.5 263.4
Assets classified as held for sale 1.0 -
695.0 586.3
Total assets 2,656.3 2,294.7
Current liabilities
Trade and other payables (350.5) (311.2)
Current income tax liabilities (20.7) (31.4)
Borrowings (43.3) (33.6)
Provisions (37.6) (9.9)
Deferred income (535.8) (436.5)
Liabilities classified as held for sale (0.4) -
(988.3) (822.6)
Non-current liabilities
Borrowings (534.4) (571.4)
Post-employment benefits (25.3) (18.7)
Deferred income tax liabilities (13.2) (7.3)
Provisions (29.4) (10.4)
Trade and other payables (7.5) -
Deferred income (4.9) (2.2)
(614.7) (610.0)
Total liabilities (1,603.0) (1,432.6)
Net assets 1,053.3 862.1
Equity attributable to owners of the parent
Ordinary shares 9 11.8 11.8
Share premium 9 544.4 541.2
Other reserves 186.6 66.9
Retained earnings 310.5 242.2
Total equity 1,053.3 862.1
Consolidated statement of changes in equity
For the year ended 30 September 2016
Attributable to owners of the parent
Ordinary shares Share premium Other reserves Retained earnings Total
£m £m £m £m £m
At 1 October 2015 11.8 541.2 66.9 242.2 862.1
Profit for the year - - - 207.6 207.6
Other comprehensive income/(expense):
Exchange differences on translating foreign operations - - 117.1 - 117.1
Deferred tax credit on foreign currency movements - - 2.6 - 2.6
Actuarial loss on post-employment benefit obligations - - - (2.2) (2.2)
Deferred tax credit on actuarial gain on post-employment obligations - - - 0.8 0.8
Total comprehensive income for the period ended 30 September 2016 - - 119.7 206.2 325.9
Transactions with owners:
Employee share option scheme:
- Proceeds from shares issued - 3.2 - - 3.2
- Value of employee services, net of deferred tax - - - 9.3 9.3
Purchase of treasury shares - - - (2.4) (2.4)
Dividends paid to owners of the parent - - - (144.8) (144.8)
Total transactions with owners for the period ended 30 September 2016 - 3.2 - (137.9) (134.7)
At 30 September 2016 11.8 544.4 186.6 310.5 1,053.3
Attributable to owners of the parent
Ordinary shares Share premium Other reserves Retained earnings Total
£m £m £m £m £m
At 1 October 2014 11.7 535.9 90.1 130.2 767.9
Profit for the year - - - 194.3 194.3
Other comprehensive (expense)/income:
Exchange differences on translating foreign operations - - (23.2) - (23.2)
Actuarial loss on post-employment benefit obligations - - - (4.8) (4.8)
Deferred tax credit on actuarial gain on post-employment obligations - - - 0.6 0.6
Total comprehensive (expense)/income for the period ended 30 September 2015 - - (23.2) 190.1 166.9
Transactions with owners:
Employee share option scheme:
- Proceeds from shares issued 0.1 5.3 - - 5.4
- Value of employee services, net of deferred tax - - - 10.1 10.1
Purchase of treasury shares - - - (14.6) (14.6)
Expenses related to the purchase of treasury shares - - - (0.1) (0.1)
Close period share buyback programme - - - 60.0 60.0
Dividends paid to owners of the parent - - - (133.5) (133.5)
Total transactions with owners for the period ended 30 September 2015 0.1 5.3 - (78.1) (72.7)
At 30 September 2015 11.8 541.2 66.9 242.2 862.1
Consolidated statement of cash flows
For the year ended 30 September 2016
Notes 2016 2015 £m
£m
Cash flows from operating activities
Cash generated from continuing operations 10 397.9 418.6
Interest paid (21.1) (19.2)
Income tax paid (92.1) (84.6)
Net cash generated from operating activities 284.7 314.8
Cash flows from investing activities
Acquisitions of subsidiaries, net of cash acquired 11 (6.4) (47.3)
Purchases of intangible assets 7 (7.7) (6.0)
Purchases of property, plant and equipment 7 (23.5) (16.4)
Purchase of investment in an associate (10.0) -
Proceeds from sale of property, plant and equipment 0.1 2.1
Interest received 2.4 2.2
Net cash generated from investing activities (45.1) (65.4)
Cash flows from financing activities
Proceeds from issuance of ordinary shares 9 3.2 5.4
Purchase of treasury shares (2.4) (17.7)
Finance lease principal payments (0.6) (1.4)
Proceeds from borrowings 69.2 481.2
Repayments of borrowings (188.8) (474.5)
Movements in cash held on behalf of customers (13.0) 12.5
Borrowing costs (1.5) (1.3)
Dividends paid to owners of the parent 5 (144.8) (133.5)
Net cash used in financing activities (278.7) (129.3)
Net (decrease)/increase in cash, cash equivalents and bank overdrafts 10 (39.1) 120.1
(before exchange rate movement)
Effects of exchange rate movement 10 35.9 (0.4)
Net (decrease)/increase in cash, cash equivalents and bank overdrafts (3.2) 119.7
Cash, cash equivalents and bank overdrafts at 1 October 10 263.4 143.7
Cash, cash equivalents and bank overdrafts at period end 10 260.2 263.4
Notes to the financial information
For the year ended 30 September 2016
1 Group accounting policies
General information
The Sage Group plc ("the Company") and its subsidiaries (together "the Group") is a leading global supplier of business
management software to Small & Medium Businesses.
The financial information set out above does not constitute the Company's Statutory Accounts for the year ended 30
September 2016 or 2015, but is derived from those accounts. Statutory Accounts for the year ended 30 September 2015 have
been delivered to the Registrar of Companies and those for 2016 will be delivered in December 2016. The auditors have
reported on both sets of accounts; their reports were unqualified and did not contain statements under section 498 (2), (3)
or (4) of the Companies Act 2006.
Whilst the financial information included in this announcement has been computed in accordance with International Financial
Reporting Standards ("IFRSs") as adopted by the European Union ("EU"), this announcement does not in itself contain
sufficient information to comply with IFRSs. The financial information has been prepared on the basis of the accounting
policies as set out in the Annual Report & Accounts for 2015.
The Company is a limited liability company incorporated and domiciled in the UK. The address of its registered office is
North Park, Newcastle upon Tyne, NE13 9AA. The Company is listed on the London Stock Exchange.
Basis of preparation
The consolidated financial statements of The Sage Group plc have been prepared in accordance with International Financial
Reporting Standards ("IFRS") as adopted by the European Union ("EU"). The consolidated financial statements have been
prepared under the historical cost convention, except where adopted IFRS require an alternative treatment. The principal
variations from the historical cost convention relate to derivative financial instruments which are measured at fair value
through profit or loss.
The financial statements of the Group comprise the financial statements of the Company and entities controlled by the
Company (its subsidiaries) prepared at the end of the reporting period. The accounting policies have been consistently
applied across the Group. Control is achieved where the Company has the power to govern the financial and operating
policies of an entity so as to benefit from its activities which is usually from date of acquisition.
Adoption of new and revised IFRSs
There are no IFRS, IAS amendments or IFRIC interpretations effective for the first time this financial year that have had a
material impact on the Group.
Critical accounting estimates and judgements
The preparation of financial statements requires the use of accounting estimates and assumptions by management. It also
requires management to exercise its judgement in the process of applying the accounting policies. We continually evaluate
our estimates, assumptions and judgements based on available information. The areas involving a higher degree of judgement
or complexity are described below.
The judgements and management's rationale in relation to these accounting estimates and judgements are assessed and, where
material in value or in risk, are discussed with the Audit and Risk Committee.
Revenue recognition
Approximately 30% of the company's revenue is generated from sales to partners rather than to end users. The key judgement
in accounting for the three principal ways in which our business partners are remunerated is determining whether the
business partner is a customer of the Group in respect of the initial product sale. The key criteria in this determination
is whether the business partner has paid for and taken on the risks and rewards of ownership of the software product from
Sage. At this point the business partner is able to sell on the licence to the end user at a price of its determination
and consequently bears the credit risk of the onward sale.
Where the business partner is a customer of Sage, there are two ways in which they can be remunerated. Firstly, there are
discounts granted as a discount from the list price. These discounts are negotiated between the Company and the business
partner prior to the sale and invoices are raised, and revenue booked is based on the discounted price. Secondly, there
are further discounts given to business partners for subsequent renewals or increased sales to the end user. These
discounts are recognised as a deduction from the incremental revenue earned.
Where the business partner is not a customer of Sage and their part in the sale has simply been in the form of a referral,
they are remunerated in the form of a commission payment. These payments are treated as a cost within selling and
administrative costs.
An additional area of judgement is the recognition and deferral of revenue on bundled products, for example the sale of a
perpetual licence with an annual maintenance and support contract. When products are bundled together for the purpose of
sale, the associated revenue, net of all applicable discounts, is allocated between the constituent parts of the bundle on
a relative fair value basis. The Group has a systematic basis for allocating relative fair values in these situations,
based upon published list prices.
Goodwill impairment
There are two key judgements in relation to goodwill impairment.
The first is the ongoing appropriateness of the cash-generating units ("CGUs") for the purpose of impairment testing. In
the current year CGUs were assessed in the context of the Group's evolving business model, the Sage strategy and the shift
to global product development. As management continues to monitor goodwill at a country level and product cash flows are
still predominantly generated
by the existing product base within each country, it was determined that the existing CGUs remain appropriate.
The other key judgement area relates to the assumptions applied in calculating the value in use of the CGUs being tested
for impairment. The key assumptions applied in the calculation relate to the future performance expectations of the
business - average medium-term revenue growth and long term growth rate - as well as the discount rate to be applied in the
calculation.
Tax provisions
The Group recognises certain provisions and accruals in respect of tax which involve a degree of estimation and uncertainty
where the tax treatment cannot finally be determined until a resolution has been reached by the relevant tax authority.
This approach resulted in providing £18.7m as at 30 September 2016 (2015: £32.8m).
The carrying amount is sensitive to the resolution of issues which is not always within the control of the Group and it is
often dependent on the efficiency of the legal processes in the relevant taxing jurisdictions in which the Group operates.
Issues can take many years to resolve and assumptions on the likely outcome have therefore been made by management.
The nature of the assumptions made by management when calculating the carrying amounts relates to the estimated tax which
could be payable as a result of decisions by tax authorities in respect of transactions and events whose treatment for tax
purposes is uncertain. In making the estimates, management's judgement was based on various factors, including:
· the status of recent and current tax audits and enquiries;
· the results of previous claims; and
· any changes to the relevant tax environments.
When making this assessment, we utilise our specialist in-house tax knowledge and experience of similar situations
elsewhere to confirm these provisions. These judgements also take into consideration specialist tax advice provided by
third party advisors on specific items.
Website
This condensed consolidated annual financial report for the year ended 30 September 2016 can also be found on our website:
www.sage.com/investors/investor-downloads
2 Segment information
In accordance with IFRS 8, "Operating Segments", information for the Group's operating segments has been derived using the
information used by the chief operating decision maker. The Group's Executive Committee has been identified as the chief
operating decision maker in accordance with their designated responsibility for the allocation of resources to operating
segments and assessing their performance, through the Quarterly Business Reviews ("QBRs") chaired by the Chief Executive
Officer and Chief Financial Officer. The Executive Committee use organic and underlying data to monitor business
performance. Operating segments are reported in a manner which is consistent with the operating segments produced for
internal management reporting.
The Group is organised into four key operating segments, with Brazil being aggregated with AAMEA with which there are
similar economic characteristics to form the International reporting segment. The UK is the home country of the parent. The
reporting segments and their main operating territories are as follows:
- Europe (France, UK & Ireland, Spain, Germany, Switzerland, Poland, Portugal and Sage Pay)
- North America (US and Canada)
- International (Brazil, Africa, Australia, Middle East and Asia)
The Africa operations are principally based in South Africa; the Middle East and Asia operations are principally based in
Singapore, Malaysia and UAE.
The revenue analysis in the table below is based on the location of the customer which is not materially different from the
location where the order is received and where the assets are located.
Revenue by segment
Year ended 30 September 2016 Change
Statutory and underlying £m Organic adjustments £m Organic £m Statutory Underlying Organic
Recurring revenue by segment
Europe 641.7 - 641.7 13.5% 10.2% 10.2%
North America 307.9 - 307.9 16.3% 8.5% 8.5%
International 143.3 (1.1) 142.2 7.7% 15.8% 16.0%
Recurring revenue 1,092.9 (1.1) 1,091.8 13.5% 10.4% 10.4%
Software and software related services ("SSRS") revenue by segment
Europe 149.1 - 149.1 (4.0%) (7.4%) (7.4%)
North America 70.5 - 70.5 (0.8%) (7.6%) (7.6%)
International 52.6 (0.8) 51.8 (18.2%) (13.5%) (12.4%)
SSRS revenue 272.2 (0.8) 271.4 (6.4%) (8.7%) (8.5%)
Processing revenue by segment
Europe 36.2 - 36.2 11.7% 11.5% 11.5%
North America 157.1 - 157.1 11.3% 2.9% 2.9%
International 10.7 - 10.7 32.1% 49.8% 49.8%
Processing revenue 204.0 - 204.0 12.3% 6.1% 6.1%
Total revenue by segment
Europe 827.0 - 827.0 9.8% 6.6% 6.6%
North America 535.5 - 535.5 12.3% 4.4% 4.4%
International 206.6 (1.9) 204.7 0.6% 7.8% 8.4%
Total revenue 1,569.1 (1.9) 1,567.2 9.3% 6.0% 6.1%
Revenue by segment (continued)
Year ended 30 September 2015
Statutory and Underlying asReported£m Impact of foreign exchange Underlying £m Organic adjustments £m Organic
£m £m
Recurring revenue by segment
Europe 565.3 17.1 582.4 - 582.4
North America 264.7 19.0 283.7 - 283.7
International 133.1 (9.3) 123.8 (1.2) 122.6
Recurring revenue 963.1 26.8 989.9 (1.2) 988.7
Software and software related services ("SSRS") revenue by segment
Europe 155.3 5.7 161.0 - 161.0
North America 71.1 5.2 76.3 - 76.3
International 64.3 (3.5) 60.8 (1.7) 59.1
SSRS revenue 290.7 7.4 298.1 (1.7) 296.4
Processing revenue by segment
Europe 32.4 0.2 32.6 - 32.6
North America 141.2 11.5 152.7 - 152.7
International 8.1 (1.0) 7.1 - 7.1
Processing revenue 181.7 10.7 192.4 - 192.4
Total revenue by segment
Europe 753.0 23.0 776.0 - 776.0
North America 477.0 35.7 512.7 - 512.7
International 205.5 (13.8) 191.7 (2.9) 188.8
Total revenue 1,435.5 44.9 1,480.4 (2.9) 1,477.5
Operating profit by segment
Year ended 30 September 2016 Change
Statutory £m Underlying adjustments £m Underlying Organic adjustments £m Organic £m Statutory Underlying Organic %
£m % %
Operating profit by segment
Europe 167.6 88.1 255.7 - 255.7 (22.6%) 12.7% 12.7%
North America 106.0 28.3 134.3 - 134.3 11.7% 15.9% 15.9%
International 26.8 10.2 37.0 (0.1) 36.9 - (25.5%) (23.4%)
Total operating profit 300.4 126.6 427.0 (0.1) 426.9 1.1% 8.8% 9.2%
Year ended 30 September 2015
Statutory £m Underlying adjustments £m Underlying as reported Impact of foreign exchange Underlying Organic adjustments Organic
£m £m £m £m £m
Operating profit by segment
Europe 216.6 6.4 223.0 3.9 226.9 - 226.9
Americas 94.9 7.5 102.4 13.5 115.9 - 115.9
International (14.3) 68.8 54.5 (5.0) 49.5 (1.3) 48.2
Total operating profit 297.2 82.7 379.9 12.4 392.3 (1.3) 391.0
Reconciliation of underlying operating profit to statutory operating profit
Year ended Year ended
30 September 2016£m 30 September 2015£m
Underlying operating profit 427.0 379.9
Amortisation of acquired intangible assets (18.2) (18.2)
Other acquisition-related items (0.7) -
Goodwill impairment and fair value adjustments - (64.5)
Non-recurring items (107.7) -
Statutory operating profit 300.4 297.2
3 Adjustments between underlying profit and statutory profit
Year ended 30 September 2016 Year ended 30 September 2016 Year ended 30 September 2016 Year ended 30 September 2015 Year ended 30 September 2015 Year ended 30 September 2015
Recurring Non-
Total
Recurring Non-
Total
£m recurring £m £m recurring £m
£m £m
Amortisation of acquired intangibles 18.2 - 18.2 18.2 - 18.2
Fair value adjustments - - - 2.2 - 2.2
Other acquisition-related items 0.7 - 0.7 - - -
Litigation related items - (2.2) (2.2) - - -
Transformation costs - 109.9 109.9 - - -
Goodwill impairment - - - - 62.3 62.3
Total adjustments made to operating profit 18.9 107.7 126.6 20.4 62.3 82.7
Fair value adjustments (2.7) - (2.7) - - -
Amortisation of acquired intangibles 0.6 - 0.6 - - -
Foreign currency movements on intercompany balances 5.9 - 5.9 - - -
Total adjustments made to profit before income tax 22.7 107.7 130.4 20.4 62.3 82.7
Recurring items
Acquired intangibles are assets which have previously been recognised as part of business combinations. These assets are
predominantly brands, customer relationships and technology rights.
Other acquisition-related items relate to completed transaction costs and include advisory, legal, accounting, valuation
and other professional or consulting services.
The fair value adjustment relates to an embedded derivative asset which relates to contractual terms agreed as part of the
US private placement debt.
Amortisation of acquired intangibles below operating profit relates to the Group's share of the amortisation of intangible
assets arising on the acquisition of an investment in an associate accounted for under the equity method.
Foreign currency movements on intercompany balances of £5.9m occurs due to retranslation of intercompany balances other
than those where settlement is not planned or likely in the foreseeable future. The balance arises in the current year due
to fluctuation in exchange rates, predominately the movement in Euro and US Dollar compared to sterling.
The prior year fair value adjustment of £2.2m relates to an accounting loss on fair valuation of the call option in
relation to the possible acquisition of Mastermaq.
Non-recurring items
Net charges in respect of non-recurring items amounted to £107.7m (2015: £62.3m).
Charges of £109.9m have been incurred in the current year as a result of the implementation of the business transformation
strategy. This is comprised of people reorganisation charges of £51.5m, net property exit costs of £39.7m and other
directly attributable costs, mainly relating to consultancy, contractor and asset write downs, of £18.7m.
The people reorganisation charges comprise severance costs of £43.8m with the remaining cost largely arising from retention
payments, transition and overlap costs whilst implementing the new operating model. The property exit costs consist of net
lease exit costs following consolidation of office space used and impairment and accelerated depreciation of leasehold
improvement assets and other related assets that are no longer in use due to the property exits. The other costs include
expenditure that is directly attributable to the implementation of the new operating model under the business
transformation strategy, including advisory, legal, accounting, valuation and other professional or consulting services.
These charges are one-off in nature and directly linked to the business transformation that is under way. Given the scale
of the change, further non-recurring costs will be incurred in the next financial year.
Total cash paid in relation to the business transformation strategy totalled £57.9m in the year.
In addition, there has been income of £2.2m in the year arising from recovery of costs relating to the Archer Capital
litigation case following its conclusion in 2015. All other litigation costs which may be incurred through the normal
course of business are charged through operating expenses.
As a result of the prior year annual goodwill impairment review, an impairment of the goodwill held in the Brazilian
business was recognised in 2015, totalling £62.3m.
4 Income tax expense
The statutory effective income tax rate for the year ended 30 September 2016 is 24% (2015: 30%), whilst the effective tax
rate on underlying profit before tax was 26% (2015: 25%). The difference between the statutory effective tax rate and the
underlying tax rate relates to non-recurring items which are deductible in countries with a tax rate higher than the UK.
The underlying effective tax rate is higher than the UK corporation tax rate applicable to the Group due to the geographic
profile of the Group. In addition, there is an obligation to account for local business taxes in the corporate tax expense.
These additional tax expenses are offset by research and development tax credits which are a government incentive in a
number of operating territories.
5 Dividends
Year ended 30 September 2016£m Year ended30 September
2015£m
Final dividend paid for the year ended 30 September 2015 of 8.65p per share 93.0 -
Final dividend paid for the year ended 30 September 2014 of 8.00p per share - 85.7
Interim dividend paid for the year ended 30 September 2016 of 4.80p per share 51.8 -
Interim dividend paid for the year ended 30 September 2015 of 4.45p per share - 47.8
144.8 133.5
In addition, the directors are proposing a final dividend in respect of the financial year ended 30 September 2016 of 9.35p
per share which will absorb an estimated £101m of shareholders' funds. It will be paid on 3 March 2017 to shareholders who
are on the register of members on 10 February 2017. These financial statements do not reflect this dividend payable.
6 Earnings per share
Basic earnings per share is calculated by dividing the profit for the year attributable to owners of the parent by the
weighted average number of ordinary shares in issue during the year, excluding those held as treasury shares, which are
treated as cancelled.
For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of
all dilutive potential ordinary shares, exercisable at the end of the year. The Group has one class of dilutive potential
ordinary shares. They are share options granted to employees, where the exercise price is less than the average market
price of the Company's ordinary shares during the year.
Underlying Underlying as reported Underlying Statutory Statutory
2016 2015 2015 2016 2015
Earnings attributable to owners of the parent (£m)
Profit for the period 299.8 268.2 274.0 207.6 194.3
Number of shares (millions)
Weighted average number of shares 1,077.0 1,073.0 1,073.0 1,077.0 1,073.0
Dilutive effects of shares 6.3 6.5 6.5 6.3 6.5
1,083.3 1,079.5 1,079.5 1,083.3 1,079.5
Earnings per share attributable to owners of the parent (pence)
Basic earnings per share 27.84 25.00 25.54 19.28 18.11
Diluted earnings per share 27.67 24.85 25.38 19.16 18.00
Reconciliation of earnings Year ended 30 September 2016£m Year ended 30 September
2015
£m
Underlying earnings attributable to owners of the parent 299.8 274.0
Impact of movement in foreign currency exchange rates - (5.8)
Underlying earnings attributable to owners of the parent (as previously reported) 299.8 268.2
Amortisation of acquired intangible assets (18.8) (18.2)
Goodwill impairment and fair value adjustments 2.7 (64.5)
Foreign currency movements on intercompany balances (5.9) -
Other acquisition-related items (0.7) -
Transformation costs and litigation related items (107.7) -
Taxation on adjustments 38.2 8.8
Net adjustments (92.2) (73.9)
Earnings statutory profit for the year 207.6 194.3
7 Non-current assets
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