REG - Connect Group Plc - Preliminary Results for the y/e 31 August 2016 <Origin Href="QuoteRef">CNCTC.L</Origin> - Part 2
18/10/2016 07:06
- Part 2: For the preceding part double click ID:nRSR7687Ma
Financial and operational metrics are considered along with risk assessments and impact on management before decisions are made. Performance to plans are reviewed monthly
with post investment analysis producing a more thorough review of each acquisition within 12 months after completion. Detailed integration process, governance and support
framework ensures effective and timely adoption of standards and process into acquisitions.
Legislative changes or interpretation impacting the engagement of employees and delivery contractors result in an increase in the number of employees and/or costs, including the uncertainty of the impact of Brexit. Increased number of employees or cost per employee increases the cost base and potentially creates greater redundancy liabilities from future efficiency programmes. Brexit uncertainty over the continued availability of EU workforce and/or treatment of current EU workers in the UK could result in the short and medium term shortage of labour and/or increased labour costs. Self-employed delivery contractors have clearly articulated agreements defining tasks they are contracted to provide to News & Media with annually set commercial terms.
The introduction of the National Living Wage (and future anticipated increases) impacts only a limited proportion of employees, when assessed across the Group as a whole.
The associated knock-on impact of the National Living Wage to maintain wage differentials across grades will continue to be monitored. Regular checks are carried out by
Internal Audit across the Group network ensuring understanding and compliance.
Breach of airside security at DMD exposes the business to penalties and/or reputational impact, leading to increased costs and potentially loss of contracts. Costs could increase through additional security requirements and/or penalties, with severe reputational damage potentially causing the loss of contracts for our media business. External security advice supports internal staff to review DMD's exposure, measure effectiveness of controls and recommend new controls if required. In addition,
insurance is taken out to cover the Group from major risks.
Major business disruption incurred through operational events (e.g. contractor / employee disputes, increasing reliance on centralised system solutions and complex operations, including single sites) are not supported by robust Business Continuity Planning and Disaster Recovery solutions to prevent disruption outside of expected tolerances. Trading capability, customer experience and sales/margin performance impacted through inability to operate due to systems outages, location access or employee/contractor strikes. Investment is made to provide disaster recovery capability across the Group for all essential systems. Expertise is used to provide guidance and the Group operates an
external disaster recovery facility. In addition, a programme led centrally ensures business continuity planning procedures and standards are embedded across the
divisions.
Loss of key executives and subsequent loss of knowledge and skills impacts current and future business performance. Loss of key skills and leadership impacts the capability of the Group to deliver its strategic goals. Performance and capability management processes are in place, reviewed by the Remuneration Committee and Group Executive. Succession planning for critical roles and
development plans for key individuals is also reviewed by the Nominations Committee.
3 year strategic business plan is jeopardised by constraints on capacity and/or increasing costs of divisional premises and equipment/systems to meet growth plans. Inability of warehousing / operational / IT and support systems to meet growth expectations of the Group, creates poor customer experience, increased investment costs and reduced profitability. The annual business and strategic planning process ensures appropriate investment is budgeted to ensure growth targets are achieved.
Effort required for organisational change in new and established organisations is increased due to lack of appropriate skills. Creates excessive demands on new and existing staff. Results in loss of key people, lack of engagement and loss of in-depth knowledge and specialist skills impacting both current and future business performance. Management's focus on current business operations and performance is distracted by organisational change and new initiatives. Management become overstretched and demotivated by demands of the Group and exit, taking valuable skills and knowledge with them. Organisational and cultural change is a key imperative, leading to investment in resources and skills that are required to deliver the successful integration and
development of new businesses and business critical initiatives, including investment in expert skills in change management and project management.
Failure to embed and promote health and safety standards in current and recently acquired businesses, results in serious injury to employees and/or the public. Reputational impact and breach in regulatory standards leads to loss of operating license, significant financial and personal penalties. Health and safety practices are not embedded within the Group resulting in serious incidents, reputational impact and/or loss of regulatory licences (e.g. operator's licence). Group oversight is led by the Group Head of Health & Safety to ensure good practice standards are embedded across the divisions as standard operating practices. Current
strategies exist for divisions to manage/train health and safety standards, with dedicated roles assigned. The Parcel Freight division continue to focus on execution of
key deliverables and areas identified for further improvement, with clear action plans and dedicated resources allocated. Significant continued investment is budgeted for
health and safety improvements across the estate in FY2017.
DIRECTORS' RESPONSIBILITIES STATEMENT
The responsibility statement has been prepared in connection to the Company's full Annual Report for the year ended 31
August 2016. Certain parts of the Annual Report are not included in this announcement, as described in note 1.
Responsibility statement
We confirm that to the best of our knowledge:
· the financial statements, prepared in accordance with the relevant financial reporting framework, give a true and
fair view of the assets, liabilities, financial position and profit or loss of the company and the undertakings included in
the consolidation taken as a whole;
· the Operating Review and Financial Review includes a fair review of the development and performance of the business
and the position of the company and the undertakings included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they face; and
This responsibility statement was approved by the board of directors on 18 October 2016 and is signed on its behalf by:
Mark Cashmore David Bauernfeind
Group Chief Executive Chief Financial Officer
Connect Group PLC
Group Income Statement for the year ended 31 August 2016
£m 2016 2015
Note Adjusted* Adjustments Total Adjusted* Adjustments Total
Revenue 2 1,906.5 - 1,906.5 1,875.1 - 1,875.1
Operating profit 2,3 67.7 (18.8) 48.9 63.8 (27.5) 36.3
Finance costs 6 (7.0) - (7.0) (7.3) - (7.3)
Profit before tax 60.7 (18.8) 41.9 56.5 (27.5) 29.0
Income tax expense 7 (12.4) 3.9 (8.5) (11.1) 3.5 (7.6)
Profit for the year 48.3 (14.9) 33.4 45.4 (24.0) 21.4
Profit attributable to equity shareholders 48.3 (14.9) 33.4 45.5 (24.0) 21.5
Loss attributable to non-controlling interest - - - (0.1) - (0.1)
48.3 (14.9) 33.4 45.4 (24.0) 21.4
Earnings per share
Basic 9 19.8p 13.7p 19.7p 9.3p
Diluted 9 19.5p 13.5p 19.0p 9.0p
Equity dividends per share (paid and proposed) 8 9.5p 9.2p
* Adjusted before Exceptional items.
All amounts are derived from continuing operations.
Group Statement of Comprehensive Income for the year ended 31 August 2016
£m Note 2016 2015
Items that will not be reclassified to the Group Income Statement
Actuarial (loss)/gain on defined benefit pension scheme 5 (2.0) 53.5
Impact of IFRIC 14 on defined benefit pension scheme 5 (6.5) (52.8)
Tax relating to components of other comprehensive income that will not be reclassified 7 1.7 (0.1)
(6.8) 0.6
Items that may be subsequently reclassified to the Group Income Statement
Loss on cash flow hedges 17 (1.2) (0.6)
Currency translation differences 0.6 (0.1)
Tax relating to components of other comprehensive income that may be reclassified 7 (0.3) -
(0.9) (0.7)
Other comprehensive income for the year (7.7) (0.1)
Profit for the year 33.4 21.4
Total comprehensive income for the year 25.7 21.3
Total comprehensive income attributable to equity shareholders 25.7 21.4
Total comprehensive income attributable to non-controlling interest - (0.1)
Group Balance Sheet at 31 August 2016
£m Note 2016 2015
Non-current assets
Intangible assets 10 164.8 174.8
Property, plant and equipment 50.3 44.6
Interest in jointly controlled entities 4.1 4.5
Retirement benefit assets 5 0.3 0.4
Deferred tax assets 7.7 7.5
227.2 231.8
Current assets
Inventories 42.3 42.0
Trade and other receivables 139.2 147.3
Derivative financial instruments 0.1 -
Cash and cash equivalents 11 9.1 10.9
190.7 200.2
Total assets 417.9 432.0
Current liabilities
Trade and other payables (198.8) (203.5)
Current tax liabilities (6.9) (5.4)
Bank loans and other borrowings 11 (61.0) (56.5)
Obligations under finance leases 12 (3.0) (2.9)
Retirement benefit obligations 5 (4.1) (3.3)
Provisions 13 (8.5) (10.4)
(282.3) (282.0)
Non-current liabilities
Retirement benefit obligations 5 (17.4) (15.2)
Bank loans and other borrowings 11 (79.1) (98.4)
Obligations under finance leases 12 (7.7) (6.5)
Derivative financial instruments (1.5) (0.2)
Other non-current liabilities (1.1) (1.0)
Deferred tax liabilities (10.9) (13.5)
Non-current provisions 13 (4.9) (6.0)
(122.6) (140.8)
Total liabilities (404.9) (422.8)
Total net assets 13.0 9.2
£m Note 2016 2015
Equity
Called up share capital 16(a) 12.3 12.2
Share premium account 16(c) 59.2 55.2
Demerger reserve 17(a) (280.1) (280.1)
Own shares reserve 17(b) (3.5) (4.1)
Hedging & translation reserve 17(c) (1.1) (0.5)
Retained earnings 226.2 226.5
Total shareholders' equity 13.0 9.2
The accounts were approved by the Board of Directors and authorised for issue on 18 October 2016 and were signed on its
behalf by:
Registered number - 05195191
Mark Cashmore David Bauernfeind
Group Chief Executive Chief Financial Officer
Group Statement of Changes in Equity for the year ended 31 August 2016
£m Note Share capital Share premium account Demerger reserve Own shares reserve Hedging & translation reserve Retained earnings Non- controlling interests in equity Total
Balance at 31 August 2014 9.5 5.3 (280.1) (5.2) (0.3) 228.5 0.2 (42.1)
Profit/(loss) for the year - - - - - 21.5 (0.1) 21.4
Loss on cash flow hedges - - - - (0.6) - - (0.6)
Actuarial gain on defined benefit pension scheme - - - - - 53.5 - 53.5
Impact of IFRIC 14 on defined benefit pension scheme - - - - - (52.8) - (52.8)
Currency translation differences - - - - (0.1) - - (0.1)
Tax relating to components of other comprehensive income - - - - - (0.1) - (0.1)
Total comprehensive income for the year - - - - (0.7) 22.1 (0.1) 21.3
Issue of share capital 16 2.7 49.9 - - - - - 52.6
Reclassification between reserves - - - - 0.5 (0.5) - -
Purchase of own shares - - - (4.2) - - - (4.2)
Dividends paid 8 - - - - - (21.4) - (21.4)
Employee share schemes - - - 5.3 - (5.3) - -
Adjustment arising from change in NCI - - - - - (5.1) (0.1) (5.2)
Recognition of share based payments net of tax - - - - - 8.2 - 8.2
Balance at 31 August 2015 16,17 12.2 55.2 (280.1) (4.1) (0.5) 226.5 - 9.2
Profit for the year - - - - - 33.4 - 33.4
Loss on cash flow hedges - - - - (1.2) - - (1.2)
Actuarial loss on defined benefit pension scheme - - - - - (2.0) - (2.0)
Impact of IFRIC 14 on defined benefit pension scheme - - - - - (6.5) - (6.5)
Currency translation differences - - - - 0.6 - - 0.6
Tax relating to components of other comprehensive income - - - - - 1.4 - 1.4
Total comprehensive income for the year - - - - (0.6) 26.3 - 25.7
Issue of share capital 16 0.1 4.0 - - - - - 4.1
Purchase of own shares - - - (1.1) - - - (1.1)
Dividends paid 8 - - - - - (22.7) - (22.7)
Employee share schemes - - - 1.7 - (1.7) - -
Recognition of share based payments net of tax - - - - - (2.2) - (2.2)
Balance at 31 August 2016 16,17 12.3 59.2 (280.1) (3.5) (1.1) 226.2 - 13.0
Group Cash Flow Statement for the year ended 31 August 2016
£m Note 2016 2015
Net cash inflow from operating activities 15 58.2 46.5
Investing activities
Dividends received from associates 0.7 0.2
Acquisitions - (105.7)
Purchase of property, plant and equipment (9.1) (4.7)
Purchase of intangible assets (4.8) (4.5)
Net cash used in investing activities (13.2) (114.7)
Financing activities
Interest paid (4.9) (5.8)
Dividend paid 8 (22.7) (21.4)
Purchase of equity in subsidiary - (5.1)
Repayments of obligations under finance leases (3.5) (2.9)
Proceeds on issue of shares 0.4 52.6
Net outflow on purchase of shares for Employee Benefit Trust (1.1) (4.2)
New bank loans raised - 50.0
Decrease in borrowings (15.5) (4.4)
Net cash(used in)/from financing activities (47.3) 58.8
Net decrease in cash and cash equivalents (2.3) (9.4)
Effect of foreign exchange rate changes 0.5 (0.1)
(1.8) (9.5)
Opening net cash and cash equivalents 10.9 20.4
Closing net cash and cash equivalents 11 9.1 10.9
Analysis of net debt
£m Note 2016 2015
Cash and cash equivalents 11 9.1 10.9
Current borrowings 11 (61.0) (56.5)
Non-current borrowings 11 (79.1) (98.4)
Net borrowings (131.0) (144.0)
Finance lease liabilities 12 (10.7) (9.4)
Net debt (141.7) (153.4)
The year on year movement in net borrowings includes £0.7m amortisation of bank fees.
Notes to the accounts
1. Basis of preparation
The Results are based on the Company's financial statements which are prepared in accordance with International Financial
Reporting Standards (IFRS) adopted for use in the European Union (EU) and therefore comply with Article 4 of the EU IAS
legislation and with those parts of the Companies Act 2006 that are applicable to companies reporting under IFRS.
There have been no significant changes in accounting policies from those set out in the accounting policies set out in the
accounting policies section of the Connect Group PLC Annual Report and Accounts 2016. The accounting policies have been
applied consistently throughout the years ended 31 August 2016 and 31 August 2015.
The following Standards have been adopted without any significant impact on the amounts reported in these financial
statements:
· IAS19 (amended) 'Defined Benefit Plans: Employee Contributions' (effective February 2015)
The financial information set out in these results does not constitute the Group's statutory accounts for the years ended
31 August 2016 and 31 August 2015 but is derived from those accounts. Statutory accounts for Connect Group PLC for the year
ended 31 August 2015 have been delivered to the Registrar of Companies and those for the year ended 31 August 2016 will be
delivered following the Company's Annual General Meeting. The auditor's reports on the 2015 and the 2016 accounts were
unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain a
statement under section 498(2) or (3) of the Companies Act 2006.
The Company intends to publish the Annual Report and Accounts that comply with IFRSs. The Annual Report and Accounts will
be available for shareholders in December 2016 at www.connectgroupplc.com.
These results were approved by the Board of Directors on 18 October 2016.
2. Segmental analysis
In accordance with IFRS 8 'Operating Segments', Group management has identified its operating segments. The performance of
these operating segments is reviewed, on a monthly basis, by the Board. The Board monitors the tangible, intangible and
financial assets attributable to each segment to determine the allocation of resources and the performance of each
segment.
These operating segments are:
Connect News & Media: News Distribution (also referred to as Smiths News) The UK market leading distributor of newspapers and magazines to 30,000 retailers across England and Wales from 42 distribution centres.
Connect News & Media: Media(also referred to as DMD) A supplier of newspaper and magazines to airlines and a provider of inflight services.
Connect Parcel Freight(also referred to as Tuffnells) A leading provider of next day B2B delivery of mixed parcel freight consignments.
Connect Education and Care(also referred to as The Consortium) A leading distributor of education and care consumable products servicing 30,000 customers across the UK.
Connect Books(also referred to as Bertrams, Dawson Books and Wordery) A leading UK distributor of physical and digital books to high street and on-line retailers, public libraries, academic institutions and direct to consumers with a strong international presence, supplying 100 countries.
The following is an analysis of the Group's revenue and results by reportable segment:
Revenue
£m 2016 2015
Connect News & Media: News Distribution 1,443.8 1,479.3
Connect News & Media: Media 27.6 25.4
Connect Parcel Freight 174.4 114.4
Connect Education and Care 64.8 65.9
Connect Books 195.9 190.1
Total Group 1,906.5 1,875.1
2016 2015
£m Adjusted operating profit Exceptional items Statutory operating profit Adjusted operating profit Exceptional items Statutory operating profit
Connect News & Media: News Distribution 40.0 (5.9) 34.1 41.4 (18.2) 23.2
Connect News & Media: Media 2.4 (0.4) 2.0 2.3 (0.4) 1.9
Connect Parcel Freight 15.0 (8.9) 6.1 9.7 (4.6) 5.1
Connect Education and Care 7.8 (1.1) 6.7 7.8 (2.1) 5.7
Connect Books 2.5 (2.5) - 2.6 (2.2) 0.4
Total group 67.7 (18.8) 48.9 63.8 (27.5) 36.3
Net finance expense (7.0) (7.3)
Profit before taxation 41.9 29.0
Information about major customers
Included in revenues arising from newspaper and magazine wholesaling are revenues of approximately £156.8m
(2015: £155.1m) which arose from sales to the Group's largest customer. No other single customer contributed 8% or more of
the Group's revenue in either 2016 or 2015.
Segment assets and liabilities
Assets Liabilities Net assets/(liabilities)
£m 2016 2015 2016 2015 2016 2015
Connect News & Media: News 89.4 93.1 (280.4) (293.0) (191.0) (199.9)
Connect News & Media: Media 20.5 18.9 (7.6) (7.2) 12.9 11.7
Connect Parcel Freight 175.9 176.5 (49.0) (40.5) 126.9 136.0
Connect Education and Care 57.4 63.6 (20.4) (18.9) 37.0 44.7
Connect Books 74.7 79.9 (47.5) (63.2) 27.2 16.7
Consolidated assets/(liabilities) 417.9 432.0 (404.9) (422.8) 13.0 9.2
Segment depreciation, amortisation and non-current asset additions
Depreciation Amortisation Additions to non-current assets
£m 2016 2015 2016 2015 2016 2015
Connect News & Media: News (4.5) (4.2) (2.3) (1.8) 5.2 8.0
Connect News & Media: Media (0.1) (0.1) (0.4) (0.4) 0.3 0.2
Connect Parcel Freight (3.3) (1.8) (7.1) (4.7) 11.1 131.8
Connect Education and Care (0.4) (0.5) (2.2) (2.0) 1.5 1.8
Connect Books (0.6) (0.7) (2.7) (2.5) 1.2 1.9
Consolidated total (8.9) (7.3) (14.7) (11.4) 19.3 143.7
Additions to non-current assets includes intangible assets and property, plant and equipment.
Geographical analysis
£m Revenue by destination Non-current assets by location of operation
2016 2015 2016 2015
United Kingdom 1,823.6 1,791.9 218.9 223.7
Europe 47.5 48.8 0.3 0.2
Rest of World 35.4 34.4 - -
Consolidated total 1,906.5 1,875.1 219.2 223.9
Non-current assets in the table above exclude retirement benefit assets, deferred tax assets and derivative financial
instruments.
3. Operating profit
The Group's results are analysed as follows:
£m 2016 2015
Note Adjusted Exceptional items Total Adjusted Exceptional items Total
Revenue 1,906.5 - 1,906.5 1,875.1 - 1,875.1
Cost of inventories recognised as an expense (1,531.5) - (1,531.5) (1,562.1) - (1,562.1)
Write down of inventories recognised as an expense (0.1) - (0.1) (0.1) - (0.1)
Other cost of sales (118.5) - (118.5) (76.0) - (76.0)
Cost of sales (1,650.1) - (1,650.1) (1,638.2) - (1,638.2)
Gross profit 256.4 - 256.4 236.9 - 236.9
Distribution costs (106.5) - (106.5) (92.3) - (92.3)
Administrative expenses (76.3) (8.6) (84.9) (76.3) (12.9) (89.2)
Share-based payment expense (1.7) - (1.7) (1.3) (6.7) (8.0)
Amortisation of intangibles 10 (4.5) (10.2) (14.7) (3.5) (7.9) (11.4)
Administrative expenses (82.5) (18.8) (101.3) (81.1) (27.5) (108.6)
Share of profits from jointly controlled entities 0.3 - 0.3 0.3 - 0.3
Operating profit 67.7 (18.8) 48.9 63.8 (27.5) 36.3
The operating profit is stated after charging/(crediting):
£m Note 2016 2015
Depreciation on property, plant & equipment 8.9 7.3
Amortisation of intangible assets 10 14.7 11.4
Operating lease charges
· occupied land and buildings 11.0 9.3
· equipment and vehicles 19.4 12.1
Operating lease rental income - land and buildings (0.4) (0.1)
Loss on disposal of fixed assets - 0.2
Staff costs 153.7 136.5
Included in administrative expenses are amounts payable to Deloitte LLP and their associates by the Company and its
subsidiary undertakings in respect of audit and non-audit services which are as follows:
£m 2016 2015
Fees payable to the Company's auditor for the audit of the Company's annual accounts 0.2 0.2
Fees payable to the Company's auditor for the audit of the Company's subsidiaries 0.2 0.2
Total audit fees 0.4 0.4
Other services - 0.2
Total non-audit fees - 0.2
Total fees 0.4 0.6
In the prior year the Group incurred £0.2m of non-audit fees with Deloitte relating to acquisition/transaction support,
remuneration advice and other advisory services.
4. Exceptional items
£m 2016 2015
Network and re-organisation costs (a) (4.4) (4.5)
Acquisition and disposal costs (b) (3.8) (15.1)
Pension credit (c) 1.1 -
Amortisation of acquired intangibles (d) (10.2) (7.9)
Legal provision - potential health and safety offences (e) (1.5) -
Total before taxation (18.8) (27.5)
Income tax expense 3.9 3.5
Total after taxation (14.9) (24.0)
The Group incurred a total of £14.9m (2015: £24.0m) in exceptional items, after tax.
This comprises:
(a) Network re-organisation costs
Network and re-organisation costs of £4.4m are predominantly rationalisation costs to drive efficiency savings in Smiths
News. They also include costs incurred in the reorganisation of the Books international divisions and of operations within
Education & Care.
(b) Acquisition and disposal costs
Acquisition costs include £1.9m in relation to deferred contingent consideration payable conditional on the financial
performance and on continued employment of former owners of Tuffnells £1.1m and the acquisition of Wordery £0.8m. The
remaining £1.9m related to professional fees on acquisition and disposal activity.
In the prior year acquisition related costs for the Tuffnells acquisition included £3.5m for deal expenses and cost of
integration plus £11.6m of deferred contingent consideration payable conditional on the financial performance and on
continued employment of former owners. A further £3.1m of equity raise expenses were charged directly to reserves.
(c) Pension credit
The pension credit is associated with the impact of the Trustees decision to cease payment of discretionary increases on
pre 97 pension rights within The Consortium Care scheme which results in a past service credit.
(d) Amortisation of acquired intangibles
Amortisation of acquired intangibles of £10.2m (FY2015: £7.9m) has been incurred relating to acquisitions amortised over
their expected economic lives for which there is no ongoing cash impact. The amortisation charge has increased compared to
the prior year due to the acquisition of Tuffnells. The net book value of acquired intangibles of £55.2m will be amortised
over future years.
(e) Legal provision - potential health and safety offences
Potential fine and legal costs arising from the outcome of the HSE investigation into the fatality at Parcel Freight's
Brierley Hill depot in January 2016. See note 13 for further details.
5. Retirement benefit obligation
Defined benefit pension schemes
The Group operates four defined benefit schemes, of which the WH Smith Pension Trust (the 'Pension Trust') represents 92%
of the total obligation at 31 August 2016. As part of the acquisition of The Consortium, the Group acquired the assets and
liabilities in respect of two other defined benefit schemes (the 'Consortium CARE' and 'Platinum' schemes). The Group
acquired the assets and liabilities of Tuffnells Parcels Express Pension Scheme on its acquisition of The Big Green Parcel
Holding Company Limited on 19 December 2014.
The Group's defined benefit pension plans are final salary pension plans, which provide benefits to members in the form of
a guaranteed level of pension payable for life. The level of benefits provided depends on members' length of service and
their salary in the final years leading up to retirement. Benefits are paid to members from trustee-administered funds. The
trustees are responsible for ensuring that the plan is sufficiently funded to meet current and future benefit payments. If
investment experience is worse than expected, the Group's obligations are increased.
The trustees must agree a funding plan with the sponsoring company such that any funding shortfall is expected to be met by
additional contributions and investment performance. In order to assess the level of contributions required, triennial
valuations are carried out with plan's obligations measured using prudent assumptions (relative to those used to measure
accounting liabilities). The trustees' other duties include managing the investment of plan assets, administration of plan
benefits and exercising of discretionary powers.
The amounts recognised in the balance sheet are as follows:
£m WH Smith Pension Trust Consortium CARE Platinum Tuffnells Parcels Express 2016 WH Smith Pension Trust Consortium CARE Platinum Tuffnells Parcels Express 2015
Present value of defined benefit obligation (490.2) (24.0) (1.6) (15.7) (531.5) (401.2) (18.7) (0.8) (11.3) (432.0)
Fair value of assets 641.5 15.8 1.9 12.7 671.9 536.8 14.7 1.2 10.6 563.3
Net surplus/ (loss) 151.3 (8.2) 0.3 (3.0) 140.4 135.6 (4.0) 0.4 (0.7) 131.3
Amounts not recognised due to asset limit (151.3) - - - (151.3) (135.6) - - - (135.6)
- (8.2) 0.3 (3.0) (10.9) - (4.0) 0.4 (0.7) (4.3)
Additional liability recognised due to minimum funding requirements (10.3) - - - (10.3) (13.8) - - - (13.8)
Pension liability (10.3) (8.2) - (3.0) (21.5) (13.8) (4.0) - (0.7) (18.5)
Pension asset - - 0.3 - 0.3 - - 0.4 - 0.4
The primary defined benefit pension scheme (the Smiths News Section of the WH Smith Pension Trust) has an IAS 19 surplus of
£151.3m at 31 August 2016 (2015: £135.6m surplus) which the Group does not recognise in the accounts as the investment
policy being used means that the amount available on a reduction of future contributions is expected to be £nil (2015:
£nil). The valuation of the defined benefit schemes for the IAS 19 disclosures have been carried out by independent
qualified actuaries based on updating the most recent funding valuations of the respective schemes, adjusted as appropriate
for membership experience and changes in the actuarial assumptions.
The actuarial valuation for funding purposes produces a scheme deficit due to different assumptions and calculation
methodologies used compared to those under IAS 19, most notably the use of a discount rate that reflects the actual
investment strategy, rather than corporate bond yields as required under IAS 19.
WH Smith Pension Trust
The actuarial valuation of the Smiths News section of the WH Smith Pension Trust, at June 2013 was a deficit of £23.0m.
Future cash contributions by the Group to the pension
- More to follow, for following part double click ID:nRSR7687McRecent news on Smiths News
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