REG - Savills PLC - Half-year Report <Origin Href="QuoteRef">SVS.L</Origin> - Part 2
09/08/2016 07:06
- Part 2: For the preceding part double click ID:nRSI5964Ga
(7.6) - (7.6)
Total comprehensive (loss)/income for the period - - - (7.3) 24.2 16.9 0.2 17.1
Transactions with owners:
Employee share option scheme:
- Value of services provided - - - - 5.4 5.4 - 5.4
Purchase of treasury shares - - - - (14.8) (14.8) - (14.8)
Shares issued - 0.9 (12.0) 12.0 - 0.9 - 0.9
Dividends - - - - (25.0) (25.0) - (25.0)
Transactions with non-controlling interests - - - - (0.6) (0.6) (0.2) (0.8)
Balance at 30 June 2015 (unaudited) 3.4 91.0 22.9 27.2 167.8 312.3 0.8 313.1
Attributable to owners of the parent
Share capital Share premium Shares to be issued Other reserves Retained earnings Total Non-controlling interests Total equity
£m £m £m £m £m £m £m £m
Balance at 1 January 2015 3.4 90.1 34.9 22.5 178.6 329.5 0.8 330.3
Profit for the year - - - - 64.3 64.3 0.6 64.9
Other comprehensive income/(loss):
Remeasurement of defined benefit pension scheme obligation - - - - (3.5) (3.5) - (3.5)
Fair value gain on available-for-sale investments - - - 0.4 - 0.4 - 0.4
Tax on items directly taken to reserves - - - - 3.2 3.2 - 3.2
Currency translation differences - - - 4.2 - 4.2 - 4.2
Total comprehensive income for the year - - - 4.6 64.0 68.6 0.6 69.2
Transactions with owners:
Employee share option scheme:
- Value of services provided - - - - 11.1 11.1 - 11.1
Purchase of treasury shares - - - - (14.9) (14.9) - (14.9)
Shares issued - 1.0 (12.0) 12.0 - 1.0 - 1.0
Dividends - - - - (30.3) (30.3) (0.4) (30.7)
Transactions with non-controlling interests - - - - (0.7) (0.7) (0.3) (1.0)
Balance at 31 December 2015 3.4 91.1 22.9 39.1 207.8 364.3 0.7 365.0
Notes 1 to 18 are an integral part of these condensed interim financial
statements.
Savills plc
Condensed interim consolidated statement of cash flows
for the period ended 30 June 2016
Six months to 30 June 2016 (unaudited) Six months to 30 June 2015 (unaudited) Year ended 31 December 2015 (audited)
Notes £m £m £m
Cash flows from operating activities
Cash (used in)/generated from operations 11 (55.7) (47.1) 140.5
Interest received 0.8 0.7 2.0
Interest paid (0.9) (0.4) (0.6)
Income tax paid (8.0) (11.3) (19.9)
Net cash (used in)/generated from operating activities (63.8) (58.1) 122.0
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 0.1 - 0.2
Proceeds from sale of available-for-sale investments 1.5 - -
Proceeds from sale of interests in joint ventures and associates 1.1 - 5.3
Dividends received from joint ventures and associates 2.9 2.2 4.8
Repayment of loans by joint ventures and associates 1.2 - -
Acquisition of subsidiaries, net of cash acquired 13 (3.5) (26.0) (24.4)
Deferred consideration paid in relation to current and prior year acquisitions (7.9) (39.2) (40.3)
Purchase of property, plant and equipment (6.0) (9.4) (20.0)
Purchase of intangible assets (2.8) (0.7) (1.7)
Purchase of investment in joint ventures, associates and available-for-sale investments (11.9) (5.2) (6.0)
Net cash used in investing activities (25.3) (78.3) (82.1)
Cash flows from financing activities
Proceeds from issue of share capital - 0.9 1.0
Proceeds from borrowings 15 113.0 139.0 139.3
Repayments of borrowings 15 (12.5) (22.6) (112.0)
Purchase of own shares for Employee Benefit Trust (15.3) (14.8) (14.9)
Purchase of non-controlling interests 12 - (0.7) (1.0)
Dividends paid 9 (29.4) (25.0) (30.7)
Net cash received from/(used in) financing activities 55.8 76.8 (18.3)
Net (decrease)/increase in cash, cash equivalents and bank overdrafts (33.3) (59.6) 21.6
Cash, cash equivalents and bank overdrafts at beginning of period 182.2 158.1 158.1
Effect of exchange rate fluctuations on cash held 17.6 (2.5) 2.5
Cash, cash equivalents and bank overdrafts at end of period 166.5 96.0 182.2
Notes 1 to 18 are an integral part of these condensed interim financial
statements.
NOTES
1. General information
The Company is a public limited company incorporated and domiciled in England
and Wales. The address of its registered office is 33 Margaret Street, London
W1G 0JD.
This condensed consolidated interim financial information was approved for
issue by the Board of Directors on 8 August 2016.
This condensed consolidated interim financial information does not comprise
statutory financial statements within the meaning of section 434 of the
Companies Act 2006. Statutory financial statements for the year ended 31
December 2015 were approved by the Board of Directors on 9 March 2016 and
delivered to the Registrar of Companies. The auditors' report on these
accounts was unqualified, did not contain an emphasis of matter paragraph and
did not contain a statement under section 498 of the Companies Act 2006.
This condensed consolidated interim financial information has been reviewed,
not audited.
2. Basis of preparation
This condensed consolidated interim financial information for the half-year
ended 30 June 2016 has been prepared in accordance with the Disclosure and
Transparency Rules of the Financial Conduct Authority and with IAS 34,
'Interim financial reporting' as adopted by the European Union. The condensed
consolidated interim financial information should be read in conjunction with
the annual financial statements for the year ended 31 December 2015, which
have been prepared in accordance with IFRSs as adopted by the European Union.
Going concern
The Group's forecasts and projections, taking account of reasonably possible
changes in trading performance, show that the Group should be able to operate
within the level of its agreed facilities. Having reassessed the principal
risks, the Directors considered it appropriate to adopt the going concern
basis of accounting in preparing the interim financial information.
3. Accounting policies
Except as described below, the accounting policies applied are consistent with
those of the annual financial statements for the year ended 31 December 2015,
as described in those financial statements.
Taxes on income in the interim periods are accrued using the tax rate that
would be applicable to expected total annual profit or loss.
Standards, amendments and interpretations effective for the first time for the
financial year beginning 1 January 2016 are not relevant to the Group.
Use of non-GAAP measures
The Group believes that the consistent presentation of underlying profit
before tax, underlying effective tax rate, underlying basic earnings per share
and underlying diluted earnings per share provides additional useful
information to shareholders on the underlying trends and comparable
performance of the Group over time. They are used by Savills for internal
performance analysis and incentive compensation arrangements for employees.
These terms are not defined terms under IFRS and may therefore not be
comparable with similarly titled profit measures reported by other companies.
They are not intended to be a substitute for, or superior to, GAAP measures.
The term 'underlying' refers to the relevant measure of profit, earnings or
taxation being reported excluding the following items:
- amortisation of acquired intangible assets (excluding software);
- the difference between IFRS 2 charges related to in year profit
related performance compensation subject to deferral and the opportunity cash
cost of such compensation (refer to Note 7 for further explanation);
- items that are considered exceptional by size or nature including
restructuring costs, impairments of goodwill, intangible assets and
investments and profits or losses arising on disposals of subsidiaries and
other investments; and
- significant acquisition costs related to business combinations.
A reconciliation between GAAP items and underlying results are set out in Note
7.
The underlying effective tax rate represents the underlying effective income
tax expense expressed as a percentage of underlying profit before tax. The
underlying effective income tax expense is the income tax expense excluding
the tax effect of the adjustments made to arrive at underlying profit before
tax and other tax effects related to these adjustments.
The Group presents results on a constant currency basis which is a non-GAAP
measure. Constant currency results are calculated by translating foreign
currency results using the prior period exchange rate. This measure allows the
Group to assess the results of the current period compared to the prior
period.
4. Estimates
The preparation of interim financial statements requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expense. Actual results may differ from these estimates.
In preparing these condensed interim financial statements, the significant
judgements made by management in applying the Group's accounting policies and
the key sources of estimation uncertainty were the same as those that applied
to the consolidated financial statements for the year ended 31 December 2015,
with the exception of changes in estimates that are required in determining
the provision for income taxes.
5. Financial risk management
Financial risk factors
The Group's activities expose it to a variety of financial risks including
foreign exchange risk, interest rate risk, credit risk and liquidity risk. The
condensed interim financial statements do not include all financial risk
management information and disclosures as required in the annual financial
statements; they should be read in conjunction with the Group's annual
financial statements as at 31 December 2015. There have been no changes in any
risk management policies since the year end.
Fair value estimation
The table below analyses financial instruments carried at fair value, by
valuation method. The different levels have been defined as follows:
- Quoted prices (unadjusted) in active markets for identical assets and
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 following table presents the Group's assets and liabilities that are
measured at fair value at 30 June 2016:
£m Level 1 Level 2 Level 3 Total
2016
Assets
Available-for-sale investments
- Unlisted - 22.9 - 22.9
Derivative financial instruments - 0.1 - 0.1
Total assets - 23.0 - 23.0
Liabilities
Deferred consideration - - 69.7 69.7
Derivative financial instruments - 0.2 - 0.2
Total liabilities - 0.2 69.7 69.9
The following table presents the Group's assets and liabilities that are
measured at fair value at 31 December 2015:
£m Level 1 Level 2 Level 3 Total
2015
Assets
Available-for-sale investments
- Unlisted - 13.2 - 13.2
Derivative financial instruments - 0.1 - 0.1
Total assets - 13.3 - 13.3
Liabilities
Deferred consideration - - 56.8 56.8
Derivative financial instruments - 0.2 - 0.2
Total liabilities - 0.2 56.8 57.0
There were no transfers between levels of the fair value hierarchy in the
period.
There were no changes in valuation techniques during the period.
The fair value of all other financial assets and liabilities approximate their
carrying amount.
Valuation techniques
Level 1 instruments are those whose fair values are based on quoted market
prices. The Group has no Level 1 instruments.
Level 2 instruments include investment funds, the fair value of these funds
are based on underlying asset values determined by the Fund Manager's audited
annual financial statements. The fair value of other unlisted investments also
included as level 2 are based on price earnings models.
If one or more of the significant inputs is not based on observable market
data, the instrument is included in Level 3. No material change to the fair
value recognised is expected.
6. Segment analysis
Six months to 30 June 2016 Trans-action Advisory Consult-ancy Property and Facilities Manage-ment Invest-ment Manage-ment Other Total
(unaudited) £m £m £m £m £m £m
Revenue
United Kingdom
- commercial 32.1 61.0 61.1 11.7 - 165.9
- residential 57.2 20.1 12.6 - - 89.9
Total United Kingdom 89.3 81.1 73.7 11.7 - 255.8
Continental Europe 22.4 7.6 17.3 15.8 - 63.1
Asia Pacific
- commercial 48.7 16.4 128.0 - - 193.1
- residential 16.3 - - - - 16.3
Total Asia Pacific 65.0 16.4 128.0 - - 209.4
North America 94.4 - - - - 94.4
Total revenue 271.1 105.1 219.0 27.5 - 622.7
Underlying profit/(loss) before tax
United Kingdom
- commercial 2.7 4.6 4.2 2.6 (2.8) 11.3
- residential 7.4 2.6 0.7 - - 10.7
Total United Kingdom 10.1 7.2 4.9 2.6 (2.8) 22.0
Continental Europe (1.2) 0.8 (1.0) 1.3 - (0.1)
Asia Pacific
- commercial 3.6 0.2 6.3 - - 10.1
- residential 3.0 - - - - 3.0
Total Asia Pacific 6.6 0.2 6.3 - - 13.1
North America 7.8 - - - - 7.8
Underlying profit/(loss) before tax 23.3 8.2 10.2 3.9 (2.8) 42.8
Six months to 30 June 2015 Trans-action Advisory Consult-ancy Property and Facilities Manage-ment *Invest-ment Manage-ment Other Total
(unaudited) £m £m £m £m £m £m
Revenue
United Kingdom
- commercial 41.9 56.0 42.8 8.3 - 149.0
- residential 51.8 18.6 11.6 - - 82.0
Total United Kingdom 93.7 74.6 54.4 8.3 - 231.0
Continental Europe 19.0 6.8 12.9 5.7 - 44.4
Asia Pacific
- commercial 46.1 15.0 111.1 - - 172.2
- residential 12.7 - - - - 12.7
Total Asia Pacific 58.8 15.0 111.1 - - 184.9
North America 86.7 - - - - 86.7
Total revenue 258.2 96.4 178.4 14.0 - 547.0
Underlying profit/(loss) before tax
United Kingdom
- commercial 5.9 4.0 3.1 1.8 (3.9) 10.9
- residential 5.4 2.1 0.2 - - 7.7
Total United Kingdom 11.3 6.1 3.3 1.8 (3.9) 18.6
Continental Europe (0.1) 0.7 (1.8) 0.7 - (0.5)
Asia Pacific
- commercial 4.5 1.0 6.2 - - 11.7
- residential 1.1 - - - - 1.1
Total Asia Pacific 5.6 1.0 6.2 - - 12.8
North America 7.5 - - - - 7.5
Underlying profit/(loss) before tax 24.3 7.8 7.7 2.5 (3.9) 38.4
*Following the acquisition of SEB Asset Management AG in August 2015 the
investment management segment has been split between the United Kingdom and
Continental Europe.
Year ended to 31 December 2015 Trans-action Advisory Consult-ancy Property and Facilities Manage-ment Invest-ment Manage-ment Other Total
(audited) £m £m £m £m £m £m
Revenue
United Kingdom
- commercial 98.8 138.3 107.1 16.7 - 360.9
- residential 127.9 44.5 26.8 - - 199.2
Total United Kingdom 226.7 182.8 133.9 16.7 - 560.1
Continental Europe 56.4 16.5 29.1 27.8 - 129.8
Asia Pacific
- commercial 111.9 31.0 227.7 - - 370.6
- residential 30.5 - - - - 30.5
Total Asia Pacific 142.4 31.0 227.7 - - 401.1
North America 192.5 - - - - 192.5
Total revenue 618.0 230.3 390.7 44.5 - 1,283.5
Underlying profit/(loss) before tax
United Kingdom
- commercial 16.9 15.4 9.2 4.3 (12.2) 33.6
- residential 17.8 6.4 1.7 - 25.9
Total United Kingdom 34.7 21.8 10.9 4.3 (12.2) 59.5
Continental Europe 4.0 0.7 (2.4) 6.6 - 8.9
Asia Pacific
- commercial 16.3 2.2 12.6 - - 31.1
- residential 3.1 - - - - 3.1
Total Asia Pacific 19.4 2.2 12.6 - - 34.2
North America 18.8 - - - - 18.8
Underlying profit/(loss) before tax 76.9 24.7 21.1 10.9 (12.2) 121.4
Operating segments reflect internal management reporting to the Group's chief
operating decision maker, defined as the Group Executive Board ('GEB'). The
GEB assess the performance of operating segments based on a measure of
underlying profit before tax which adjusts reported pre-tax profit by
amortisation of intangibles (excluding software), share-based payment
adjustments, exceptional items that are considered non-operational in nature
and significant acquisition costs related to business combinations. Segmental
assets and liabilities are not measured or reported to the GEB.
The Other segment includes costs and other expenses at holding company and
subsidiary levels, which are not directly attributable to the operating
activities of the Group's business segments.
A reconciliation of underlying profit before tax to reported profit before tax
is provided in Note 7.
7. Underlying profit before tax
The Directors seek to present a measure of underlying performance which is not
impacted by exceptional items or items considered non-operational in nature.
Consistently applied in each accounting period, this measure of profit is
described as 'underlying' and is used by management to measure and monitor
performance.
Six months to 30 June 2016 (unaudited) Six months to 30 June 2015 (unaudited) Year ended 31 December 2015 (audited)
£m £m £m
Reported profit before tax 25.5 26.4 98.6
Adjustments:
- Amortisation of intangible assets (excluding software) 2.1 1.5 3.6
- Impairment of available-for-sale investment 0.4 - -
- Share-based payment adjustment (1.4) (0.6) (2.8)
- Profit on disposal of available-for-sale investments, joint ventures and associates (0.5) - (2.9)
- Restructuring costs 1.7 0.5 1.6
- Acquisition related costs 15.0 10.6 23.3
Underlying profit before tax 42.8 38.4 121.4
The adjustment for share-based payment relates to the impact of the accounting
standard for share-based compensation. The annual bonus is paid in a mixture
of cash and deferred shares and the proportions can vary from one year to
another. Under IFRS the deferred share element is amortised to the income
statement over the vesting period whilst the cash element is expensed in the
year. The adjustment above addresses this by deducting from profit the
difference between the IFRS 2 charge and the effective value of the annual
share award in order better to match the underlying staff costs in the year
with the revenue recognised in the same period.
Acquisition-related costs include £9.7m of provisions for the future payments
in relation to the acquisition of Studley, Inc. which are expensed through the
income statement in line with IFRS 3 (revised), to reflect the requirement for
the recipients to remain actively engaged in the business at the payment date.
Acquisition-related costs also include £3.7m for payments in relation to
Savills Investment Management's acquisition of Merchant Capital (Japan) in May
2014 and £1.6m of provisions for future payments relating to acquisitions in
the United Kingdom (primarily Smiths Gore), North America and Continental
Europe.
8. Income tax expense
The income tax expense has been calculated on the basis of the underlying rate
in each jurisdiction adjusted for any disallowable charges.
Six months to 30 June 2016 (unaudited) Six months to 30 June 2015 (unaudited) Year ended 31 December 2015 (audited)
£m £m £m
United Kingdom
- Current tax 3.8 4.2 13.2
- Deferred tax (0.4) (0.9) (0.8)
Foreign tax
- Current tax 3.7 4.3 14.7
- Deferred tax 2.0 2.7 6.6
Income tax expense 9.1 10.3 33.7
The forecast Group effective tax rate is 35.7% (30 June 2015: 39.0% and 31
December 2015: 34.2%), which is higher (30 June 2015 and 31 December 2015:
higher) than the UK standard effective annual rate of corporation tax of 20.0%
(30 June 2015 and 31 December 2015: 20.25%). This reflects permanent
disallowable expenses, including acquisition costs. The Group underlying
effective tax rate was 29.0% (30 June 2015: 28.6% and 31 December 2015:
28.3%).
9. Dividends
Six months to 30 June 2016 (unaudited) Six months to 30 June 2015 (unaudited) Year ended 31 December 2015 (audited)
£m £m £m
Amounts recognised as distribution to equity holders in the year:
Ordinary final dividend of 8.0p per share (2015: 7.25p) 10.7 9.4 9.4
Supplemental interim dividend of 14.0p per share (2015: 12.0p) 18.7 15.6 15.6
Interim dividend of 4.0p per share - - 5.3
29.4 25.0 30.3
Proposed interim dividend for the six months ended 30 June 2016 6.1 5.3
The Board has declared an interim dividend for the six months ended 30 June
2016 of 4.4p per ordinary share (30 June 2015: 4.0p) to be paid on 5 October
2016 to shareholders on the register on 9 September 2016. The interim dividend
has not been recognised in these interim financial statements. It will be
recognised in equity in the year to 31 December 2016.
10(a). Basic and diluted earnings per share
2016 2016 2016 2015 2015 2015
Earnings Shares EPS Earnings Shares EPS
Six months to 30 June £m million pence £m million pence
Basic earnings per share 16.0 137.4 11.6 15.9 136.2 11.7
Effect of additional shares issuable under option - 2.9 (0.2) - 3.0 (0.3)
Diluted earnings per share 16.0 140.3 11.4 15.9 139.2 11.4
2015 2015 2015
Earnings Shares EPS
Year to 31 December £m million pence
Basic earnings per share 64.3 136.8 47.0
Effect of additional shares issuable under option - 1.9 (0.6)
Diluted earnings per share 64.3 138.7 46.4
10(b). Underlying basic and diluted earnings per share
2016 2016 2016 2015 2015 2015
Earnings Shares EPS Earnings Shares EPS
Six months to 30 June £m million pence £m million pence
Basic earnings per share 16.0 137.4 11.6 15.9 136.2 11.7
- Amortisation of intangible assets (excluding software) after tax 1.2 - 0.9 0.8 - 0.6
- Impairment of available-for-sale investment after tax 0.4 - 0.3 - - -
- Share-based payment adjustment after tax (1.1) - (0.8) (0.5) - (0.4)
- Restructuring costs after tax 1.5 - 1.1 0.5 - 0.4
- Profit on disposal of available-for-sale investments, joint ventures and associates after tax (0.5) - (0.4) - - -
- Acquisition related costs after tax 14.6 - 10.6 10.5 - 7.7
- Forecast annual tax rate adjustment (2.1) - (1.5) - - -
Underlying basic earnings per share 30.0 137.4 21.8 27.2 136.2 20.0
Effect of additional shares issuable under option - 2.9 (0.4) - 3.0 (0.5)
Underlying diluted earnings per share 30.0 140.3 21.4 27.2 139.2 19.5
2015 2015 2015
Earnings Shares EPS
Year to 31 December £m million pence
Basic earnings per share 64.3 136.8 47.0
- Amortisation of intangibles (excluding software) after tax 2.0 - 1.5
-Impairment of available-for-sale investment after tax - - -
- Share-based payment adjustment after tax (2.2) - (1.6)
- Restructuring costs after tax 1.5 - 1.1
- Profit on disposal of available-for-sale investments, joint ventures and associates after tax (1.9) - (1.4)
- Acquisition related costs after tax 22.7 - 16.6
Underlying basic earnings per share 86.4 136.8 63.2
Effect of additional shares issuable under option - 1.9 (0.9)
Underlying diluted earnings per share 86.4 138.7 62.3
11. Cash (used in)/generated from operations
Six months to 30 June 2016 (unaudited) Six months to 30 June 2015 (unaudited) Year ended 31 December 2015 (audited)
£m £m £m
Profit for the period 16.4 16.1 64.9
Adjustments for:
Income tax (Note 8) 9.1 10.3 33.7
Depreciation 6.2 4.8 11.2
Amortisation of intangible assets 3.5 2.4 5.7
Loss on sale of property, plant and equipment - 0.1 -
Profit on disposal of available-for-sale investments, joint ventures and associates (0.5) - (2.9)
Net finance cost/(income) 0.4 0.1 (0.5)
Share of post-tax profit from joint ventures and associates (2.9) (2.4) (6.9)
Decrease in employee and retirement obligations (3.2) (2.1) (5.5)
Exchange movements on operating activities 1.9 (1.1) (0.8)
Decrease in provisions (1.7) (2.3) (2.8)
Impairment of available-for-sale investment included within other operating expenses 0.4 - -
Charge for share-based compensation 4.4 5.4 11.1
Operating cash flows before movements in working capital 34.0 31.3 107.2
Decrease/(Increase) in work in progress 1.1 (0.5) (0.9)
Decrease/(increase) in trade and other receivables 57.4 29.8 (47.3)
(Decrease)/increase in trade and other payables (148.2) (107.7) 81.5
Cash (used in)/generated from operations (55.7) (47.1) 140.5
12. Transactions with non-controlling interests
There were no transactions with non-controlling interests during the six
months ended 30 June 2016.
13. Acquisition of subsidiaries
US acquisitions
In June 2016, Savills Studley, Inc. acquired the assets of Cresa Partners
Charlotte, Inc., a U.S. based commercial brokerage firm in the North Carolina
region. Total acquisition consideration is provisionally determined at £1.9m
and is comprised of deferred consideration which is payable in instalments by
the 5th and 7th anniversary of completion subject to the achievement of
certain revenue targets. As at the reporting date it is expected that these
targets will be achieved.
Further to this, up to £4.2m is also payable to certain key staff. £2.8m was
paid at closing and £1.4m is payable on the 1st anniversary of completion
subject to certain employment conditions. As required by IFRS 3 (revised)
these payments are expensed to the income statement over the relevant period
of employment.
Goodwill of £1.8m has been provisionally determined and is attributable to the
experience, reputation and expertise of key staff and is not expected to be
deductible for tax purposes.
14. Retirement and employee benefit obligations
Defined benefit plans
The Group operates two defined benefit plans.
The Pension Plan of Savills (the 'UK Plan') is a UK-based plan which provided
final salary pension benefits to some employees, but was closed with regard to
future service-based benefit accrual with effect from 31 March 2010. From 1
April 2010, pension benefits for former members of the UK Plan are provided
through the Group's defined contribution Personal Pension Plan.
The pension plan of Savills Fund Management GMBH (the 'SFM Plan'), was
acquired as part of the acquisition of SEB in August 2015. The plan provides
final salary benefits to 26 active employees and 92 former employees. The plan
is closed to future service-based benefit accrual.
Significant actuarial pension assumptions are detailed in the Group's Annual
Report and Accounts 2015 and are the same as at 31 December 2015 except for
the following:
SFM Plan UK Plan
Six months to 30 June 2016 Six months to 30 June 2015 Year ended 31 December 2015 Six months to 30 June 2016 Six months to 30 June 2015 Year ended 31December 2015
Expected rate of salary increases 2.50% - 2.50% 3.85% 3.85% 3.85%
Projection of social security contribution ceiling 2.25% - 2.25% - - -
Discount rate 1.70% - 2.60% 2.80% 3.80% 3.70%
Inflation assumption 1.75% - 1.75% 3.00% 3.40% 3.30%
Rate of increase to pensions in payment
- Pension promise before 1 January 1986 2.25% - 2.25% - - -
- Pension promise after 1 January 1986 1.75% - 1.75% - - -
- accrued before 6 April 1997 - - - 3.00% 3.00% 3.00%
- accrued after 5 April 1997 - - - 3.00% 3.30% 3.20%
- accrued after 5 April 2005 - - - 2.20% 2.30% 2.20%
Rate of increase to pensions in deferment
- accrued before 6 April 2001 - - - 5.00% 5.00% 5.00%
- accrued after 5 April 2001 - - - 1.90% 2.30% 2.20%
- accrued after 5 April 2009 - - - 1.90% 2.30% 2.20%
The amounts recognised in the statement of financial position are as follows:
UK Plan 30 June 2016£m 30 June2015£m 31 December 2015£m
Present value of funded
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