REG - Connect Group Plc - Unaudited Interim Results for 6mths ended 29/2/16 <Origin Href="QuoteRef">CNCTC.L</Origin> - Part 2
19/04/2016 07:06
- Part 2: For the preceding part double click ID:nRSS5683Va
potentially significant financial impact and work continues to review net impact after mitigating actions including;On-going assessment of impact and sensitivity on wage
related matters e.g. NLW and Pension costs. FY16 mitigating considerations included in re-forecasting process. NLW, greater impact in FY17 and FY18, cost and mitigating
actions to be incorporated into business planning process.
Breach of airside security at DMD exposes company to penalties and 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.
Increasing reliance on centralised system solutions and complex operations are not supported by robust enough Business Continuity Planning & 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. Investment is made by the organisation to provide Disaster Recovery capability across the Group for all essential systems. External expertise is used to provide guidance
and a Disaster Recovery facility. In addition, a programme led centrally ensures Business Continuity Planning procedures and standards are embedded across the business
divisions.
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. 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. Key imperatives identified for organisational and cultural change, leading to investment in resources and skills that are required to deliver the successful integration /
development of new businesses and business critical initiatives, including investment in expert skills in change management and project management.
3 year strategic business plan put at risk from constraints on capacity 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. FY15 Business Planning process has considered this risk and has ensured appropriate investment is budgeted to ensure growth targets are achieved, including a capital
expenditure budget of circa £20m.
Condensed Consolidated Income Statement (Unaudited)
For the 6 months to 29 February 2016
6 months to Feb 2016 6 months to Feb 2015 Audited12 months to Aug 2015
£m Note
Adjusted Non-recurring and other items Total Adjusted Non-recurring and other items Total Adjusted Non-recurring and other items Total
Revenue 3 948.4 - 948.4 909.9 - 909.9 1,875.1 - 1875.1
Operating profit 3 30.6 (8.0) 22.6 27.7 (10.0) 17.7 63.8 (27.5) 36.3
Finance costs (3.4) - (3.4) (3.6) - (3.6) (7.3) - (7.3)
Profit before tax 3 27.2 (8.0) 19.2 24.1 (10.0) 14.1 56.5 (27.5) 29.0
Taxation 6 (5.7) 1.8 (3.9) (4.9) 1.2 (3.7) (11.1) 3.5 (7.6)
Profit for the period 21.5 (6.2) 15.3 19.2 (8.8) 10.4 45.4 (24.0) 21.4
Profit attributable to equity shareholders 21.5 (6.2) 15.3 19.0 (8.8) 10.2 45.5 (24.0) 21.5
Profit attributable to non-controlling interests - - - 0.2 - 0.2 (0.1) - (0.1)
Profit for the period 21.5 (6.2) 15.3 19.2 (8.8) 10.4 45.4 (24.0) 21.4
Earnings per share
Basic 8 8.9p 6.3p 8.6p 4.6p 19.7p 9.3p
Diluted 8 8.6p 6.1p 8.4p 4.5p 19.0p 9.0p
Equity dividends per share 7 3.0p 2.9p
Condensed Consolidated Statement of Comprehensive Income (Unaudited)
For the 6 months to 29 February 2016
£m Note 6 months toFeb 2016 6 months toFeb 2015 Audited 12 monthsto Aug 2015
Items that will not be reclassified to the Group Income Statement:
Actuarial gains on defined benefit pension scheme 5 0.8 4.9 53.5
Effect of asset limit on defined benefit pension scheme 5 0.4 (5.2) (52.8)
Tax relating to components of other comprehensive income that will not be reclassified - 0.1 (0.1)
1.2 (0.2) 0.6
Items that may be reclassified to the Group Income Statement:
(Loss)/ gain on cash flow hedges (0.9) (0.3) (0.6)
Currency translation differences 0.3 (0.2) (0.1)
Tax relating to components of other comprehensive income (0.1) - -
Other comprehensive income (0.7) (0.5) (0.7)
Total Other comprehensive income for the period 0.5 (0.7) (0.1)
Profit for the period 15.3 10.4 21.4
Total comprehensive income for the period 15.8 9.7 21.3
Total comprehensive income attributable to equity shareholders 15.8 9.5 21.4
Total comprehensive income attributable to non-controlling interest 15.8 0.2 (0.1)
Total comprehensive income for the period was fully attributable to the equity
holders of the parent company.
Condensed Consolidated Balance Sheet (Unaudited)
As at 29 February 2016
£m Note As atFeb 2016 As atFeb 2015 Audited as atAug 2015
Non-current assets
Intangible assets 11 168.8 172.9 174.8
Property, plant and equipment 45.1 47.5 44.6
Interest in joint venture and associate 4.5 4.3 4.5
Retirement benefit assets 5 0.4 0.3 0.4
Deferred tax assets 7.1 8.2 7.5
225.9 233.2 231.8
Current assets
Inventories 41.9 43.7 42.0
Trade and other receivables 135.3 124.2 147.3
Derivative financial instruments 14 0.1 - -
Cash and cash equivalents 13 4.6 12.7 10.9
181.9 180.6 200.2
Total assets 407.8 413.8 432.0
Current liabilities
Trade and other payables (183.9) (183.5) (203.5)
Current tax liabilities (7.2) (7.6) (5.4)
Obligations under finance leases (2.6) (2.4) (2.9)
Bank overdrafts and other borrowings 13 (66.6) (64.5) (56.5)
Provisions 15 (5.2) (6.6) (10.4)
Retirement benefits obligation 5 (4.1) (4.1) (3.3)
(269.6) (268.7) (282.0)
Non-current liabilities
Bank loans and other borrowings 13 (88.7) (98.0) (98.4)
Retirement benefit obligation 5 (11.1) (17.5) (15.2)
Deferred tax liabilities (12.2) (13.3) (13.5)
Long-term provisions 15 (6.0) (5.9) (6.0)
Obligations under finance leases (7.6) (5.7) (6.5)
Derivative financial instruments 14 (1.3) - (0.2)
Other non-current liabilities (0.9) (1.9) (1.0)
(127.8) (142.3) (140.8)
Total liabilities (397.4) (411.0) (422.8)
Total net assets 10.4 2.8 9.2
Equity
Called up share capital 16 12.3 12.2 12.2
Share premium account 16 59.1 55.1 55.2
Other reserves (285.1) (286.4) (284.7)
Retained earnings 224.1 221.5 226.5
Total shareholders' equity 10.4 2.4 9.2
Non-controlling interests in equity - 0.4 -
Total equity 10.4 2.8 9.2
Condensed Consolidated Statement of Changes in Equity (Unaudited)
For the 6 months to 29 February 2016
£m Share Capital Share Premium Account Other Reserves Retained Earnings Total shareholders equity Non-controlling interests in equity Total equity
Balance at 31 August 2014 9.5 5.3 (285.6) 228.5 (42.3) 0.2 (42.1)
Profit for the period - - - 10.2 10.2 0.2 10.4
Loss on cash flow hedges - - (0.3) - (0.3) - (0.3)
Currency translation differences - - (0.2) - (0.2) - (0.2)
Actuarial gain on defined benefit pension scheme - - - 4.9 4.9 - 4.9
Impact of IFRIC 14 on defined benefit pension scheme - - - (5.2) (5.2) - (5.2)
Tax relating to components of other comprehensive income - - - 0.1 0.1 - 0.1
Total comprehensive income for the period - - (0.5) 10.0 9.5 0.2 9.7
Issue of share capital 2.7 49.8 - - 52.5 - 52.5
Dividends paid - - - (14.4) (14.4) - (14.4)
Purchase of own shares - - (4.4) - (4.4) - (4.4)
Employee share schemes - - 4.1 (4.1) - - -
Recognition of share based payments - - - 1.5 1.5 - 1.5
Balance at 28 February 2015 12.2 55.1 (286.4) 221.5 2.4 0.4 2.8
Profit for the period - - - 11.3 11.3 (0.3) 11.0
Loss on cash flow hedges - - (0.3) - (0.3) - (0.3)
Actuarial gain on defined benefit pension scheme - - - 48.6 48.6 - 48.6
Impact of IFRIC 14 on defined benefit pension scheme - - - (47.6) (47.6) - (47.6)
Currency translation differences - - 0.1 - 0.1 - 0.1
Tax relating to components of other comprehensive income - - - (0.2) (0.2) - (0.2)
Total comprehensive income for the period - - (0.2) 12.1 11.9 (0.3) 11.6
Issue of share capital - 0.1 - - 0.1 - 0.1
Purchase of own shares - - 0.2 - 0.2 - 0.2
Reclassification between reserves - - 0.5 (0.5) - - -
Dividends paid - - - (7.0) (7.0) - (7.0)
Employee share schemes - - 1.2 (1.2) - - -
Adjustment arising from change in NCI - - - (5.1) (5.1) (0.1) (5.2)
Recognition of share based payments net of tax - - - 6.7 6.7 - 6.7
Balance at 31 August 2015 12.2 55.2 (284.7) 226.5 9.2 - 9.2
Profit for the period - - - 15.3 15.3 - 15.3
Loss on cash flow hedges - - (0.9) - (0.9) - (0.9)
Currency translation differences - - 0.3 - 0.3 - 0.3
Actuarial gain on defined benefit pension scheme - - - 0.8 0.8 - 0.8
Impact of IFRIC 14 on defined benefit pension scheme - - - 0.4 0.4 - 0.4
Tax relating to components of other comprehensive income - - - (0.1) (0.1) - (0.1)
Total comprehensive income for the period - - (0.6) 16.4 15.8 - 15.8
Issue of share capital 0.1 3.9 - - 4.0 - 4.0
Dividends paid - - - (15.4) (15.4) - (15.4)
Purchase of own shares - - (1.3) - (1.3) - (1.3)
Employee share schemes - - 1.5 (1.5) - - -
Recognition of share based payments - - - (1.9) (1.9) - (1.9)
Balance at 29 February 2016 12.3 59.1 (285.1) 224.1 10.4 - 10.4
-
10.4
Condensed Consolidated Group Cash Flow Statement (Unaudited)
For the 6 months to 29 February 2016
£m Note 6 months toFeb 2016 6 months toFeb 2015 Audited 12months toAug 2015
Net cash from operating activities 9 19.7 18.6 46.5
Investing activities
Dividends from associates - - 0.2
Acquisitions 12 - (105.3) (105.7)
Proceeds on disposal of property, plant and equipment - 0.2 -
Purchase of property, plant and equipment (4.9) (2.0) (4.7)
Purchase of intangible assets (0.8) (2.0) (4.5)
Net cash used in investing activities (5.7) (109.1) (114.7)
Financing activities
Interest paid (2.5) (3.3) (5.8)
Dividends paid (15.3) (14.4) (21.4)
Purchase of equity in subsidiary - - (5.1)
Repayments of obligations under finance leases (1.7) (1.0) (2.9)
Proceeds on issue of shares 0.3 52.5 52.6
Purchase of shares for Employee Benefit Trust (1.3) (4.4) (4.2)
New bank loans raised - 50.0 50.0
Increase/ (decrease) in short term borrowings - 3.6 (4.4)
Net cash from financing activities (20.5) 83.0 58.8
Net decrease in cash and cash equivalents (6.5) (7.5) (9.4)
Effect of foreign exchange rate changes 0.2 (0.2) (0.1)
(6.3) (7.7) (9.5)
Opening net cash and cash equivalents 10.9 20.4 20.4
Closing net cash and cash equivalents 4.6 12.7 10.9
10.9
Analysis of net debt
As at As at Auditedas at
£m Note Feb 2016 Feb 2015 Aug 2015
Cash and cash equivalents 13 4.6 12.7 10.9
Current borrowings 13 (66.6) (64.5) (56.5)
Non-current borrowings 13 (88.7) (98.0) (98.4)
Finance lease liabilities (10.2) (8.1) (9.4)
Net debt (160.9) (157.9) (153.4)
(153.4)
Notes to the Condensed Unaudited Interim Financial Statements
For the 6 months to 29 February 2016
1 General Information
These Interim Financial Statements are unaudited and not reviewed.
The information for the year ended 31 August 2015 does not constitute
statutory accounts as defined in section 434 of the Companies Act 2006. A copy
of the statutory accounts for that year has been delivered to the Registrar of
Companies. The auditors' report on those accounts was not qualified, did not
draw attention to any matters by way of emphasis and did not contain
statements under section 498(2) or (3) of the Companies Act 2006.
Going Concern
The Group meets its day to day working capital requirements through its
committed bank facility of £250m which runs until November 2018.
The Group's forecasts, taking into account the Board's future expectations of
the Group's performance, indicate that there is substantial headroom within
these bank facilities and the Group is expected to continue to operate well
within the covenants attaching to those facilities. Those bank facilities
together with renewed long term contracts with a number of publishers mean
that the Group is well placed to manage its business risks successfully.
As a result the directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the foreseeable
future. Thus, they continue to adopt the going concern basis in preparing the
condensed consolidated interim financial information.
The Group's principal areas of estimation and judgement remain unchanged since
the year end and are set out in note 1 (c) on page 73 of the Annual Report for
the year ended 31 August 2015.
2 Significant Accounting Policies
The unaudited condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with
International Accounting Standard 34 'Interim Financial Reporting', as adopted
by the European Union. The same accounting policies, presentation and methods
of computation are followed in these unaudited condensed financial statements
as were applied in the preparation of the Group's financial statements for the
year ended 31 August 2015.
3 Segmental Analysis of Results
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:
News & Media: News distribution (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.
News & Media: Media(referred to as DMD) A supplier of newspaper and magazines to airlines and an emerging player in inflight entertainment.
Books(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 101 countries.
Education & Care(referred to as The Consortium) A leading distributor of education and care consumable products servicing 30,000 customers.
Parcel Freight(referred to as Tuffnells) A leading provider of next day B2B delivery of mixed parcel freight consignments.
The following is an analysis of the Group's revenue and results by reportable
segment:
Revenue Operating profit
£m 6 months to Feb 2016 6 months to Feb 2015 12 months to Aug 2015 6 months to Feb 2016 6 months to Feb 2015 12 months to Aug 2015
News & Media: News distribution 717.7 733.9 1,479.3 19.9 20.5 41.4
News & Media: Media 13.2 12.7 25.4 1.0 1.0 2.3
Books 103.5 103.4 190.1 1.9 1.9 2.6
Education & Care 31.6 31.5 65.9 2.8 2.8 7.8
Parcel Freight 82.4 28.4 114.4 5.0 1.5 9.7
Total group - adjusted 948.4 909.9 1,875.1 30.6 27.7 63.8
Non-recurring and other items - - - (8.0) (10.0) (27.5)
Total group - statutory 948.4 909.9 1,875.1 22.6 17.7 36.3
Net finance expense - - - (3.4) (3.6) (7.3)
Profit before taxation - - - 19.2 14.1 29.0
Segment assets and liabilities
Assets Liabilities Net (liabilities) /assets
£m HY2016 HY2015 FY2015 HY2016 HY2015 FY2015 HY2016 HY2015 FY2015
News & Media: News distribution 79.3 102.3 93.1 (265.6) (291.9) (293.0) (186.3) (189.6) (199.9)
News & Media: Media 22.4 20.0 18.9 (9.8) (8.2) (7.2) 12.6 11.8 11.7
Books 82.8 85.8 79.9 (65.7) (62.5) (63.2) 17.1 23.3 16.7
Education & Care 57.5 56.3 63.6 (17.2) (14.2) (18.9) 40.3 42.1 44.7
Parcel Freight 165.8 149.4 176.5 (39.1) (34.2) (40.5) 126.7 115.2 136.0
Consolidated assets/ (liabilities) 407.8 413.8 432.0 (397.4) (411.0) (422.8) 10.4 2.8 9.2
Segment depreciation, amortisation and non-current asset additions
Depreciation Amortisation Additions to non-currentassets
£m HY2016 HY2015 FY2015 HY2016 HY2015 FY2015 HY2016 HY2015 FY2015
News & Media: News distribution (2.2) (2.1) (4.2) (1.1) (0.8) (1.8) 1.8 117.3 8.0
News & Media: Media (0.1) (0.1) (0.1) (0.2) (0.2) (0.4) 0.1 - 0.2
Books (0.3) (0.3) (0.7) (1.3) (1.2) (2.5) 0.6 0.5 1.9
Education & Care (0.3) (0.3) (0.5) (1.1) (1.0) (2.0) 0.3 1.0 1.8
Parcel Freight (1.5) (0.5) (1.8) (3.5) (1.1) (4.7) 2.0 0.6 131.8
Consolidated total (4.4) (3.3) (7.3) (7.2) (4.3) (11.4) 4.8 119.4 143.7
Geographical analysis
Revenue by destination Non-current assets bylocation of operation
£m 6 months to Feb 2016 6 months to Feb 2015 12 months to Aug 2015 6 months to Feb 2016 6 months to Feb 2015 12 months to Aug 2015
United Kingdom 905.8 869.1 1,791.9 218.0 224.5 223.7
Europe 26.6 26.3 48.8 0.4 0.2 0.2
Rest of World 16.0 14.5 34.4 - - -
Consolidated total 948.4 909.9 1,875.1 218.4 224.7 223.9
4 Non-Recurring and Other Items
£m 6 months to Feb 2016 6 months to Feb 2015 12 months to Aug 2015
Integration costs - (0.2) -
Network and re-organisation costs (1.1) (0.8) (4.4)
Acquisition costs (1.8) (6.3) (15.1)
Release of property provisions - - (0.1)
Amortisation of acquired intangibles (5.1) (2.7) (7.9)
Interest - - -
Total before tax (8.0) (10.0) (27.5)
Taxation 1.8 1.2 3.5
Total after taxation (6.2) (8.8) (24.0)
Non-recurring and other items for the period totalled £6.2m after tax for the
period, compared to £8.8m in the prior year.
Network and reorganisation costs
During the period we have incurred £1.1m of network and reorganisation costs,
which includes network rationalisation in News, redundancies following the
office consolidation of our Shrewsbury teams into Trowbridge in Education &
Care, reorganisation of our European libraries operations in Books and for the
cost of senior management changes in Parcel Freight.
Acquisition costs
Acquisition costs incurred in the period to 29 February 2016 relates fully to
deferred consideration arising on the acquisition of Tuffnells and on the
remaining 49% of shares in Magpie Investments Limited (Wordery) in August
2015.
In the period to 28 February 2015, the costs incurred related to the
acquisition costs arising on the acquisition of Tuffnells which also included
£2.8m deferred consideration.
Amortisation of acquired intangibles
Amortisation of £5.1m in the period to 29 February 2016 is higher than in the
period to 28 February 2015 reflecting the amortisation of acquired intangibles
which arose on acquisition of Tuffnells for a full six month period.
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 93% of the total obligation at 29
February 2016 (28 February 2015: 93%). On 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 amounts recognised in the balance sheet are as follows:
£m As at Feb 2016 As at Feb 2015 As at Aug 2015
Present value of defined benefit obligation (403.8) (487.9) (432.0)
Fair value of assets 540.8 566.6 563.3
Net surplus 137.0 78.7 131.3
Amounts not recognised due to asset limit (139.9) (84.4) (135.6)
Additional liability recognised due to minimum funding requirements (11.9) (15.6) (13.8)
Pension liability (15.2) (21.6) (18.5)
Pension asset 0.4 0.3 0.4
The primary defined benefit pension scheme (the Smiths News Section of the WH
Smith Pension Trust) has an IAS 19 surplus of £139.9m at 29 February 2016
(FY2015: £135.6m surplus) which the Group does not recognise in the accounts
as the investment policy adopted means that the amount available on a
reduction of future contributions is expected to be £nil (FY2015: £nil). The
valuation of the defined benefit schemes for the IAS 19 (revised) 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.
The process to complete the triennial valuation as at 31 March 2015 is
underway and scheduled to report during 2016. 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 address the deficit will be £4.1m
per annum, through to March 2019. The Group recognises the present value of
these agreed contributions as a pension liability of £11.9m (FY2015 £13.8m).
Other defined benefit schemes
The actuarial valuation for funding purposes of the Consortium CARE scheme as
at 31 December 2013 was a scheme deficit of £1.5m. The Platinum scheme's 31
December 2013 funding valuation showed no deficit. The triennial actuarial
valuation of the Tuffnells Parcels Express scheme as at 1 April 2015 was a
scheme deficit of £4.1m. Guaranteed Minimum Pension ("GMP") equalisation is
expected to lead to an increase in scheme liabilities at some future date on
the Consortium Care and Tuffnells Parcels Express Scheme.
The principal long-term assumptions used to calculate scheme liabilities on
all Group schemes are:
% p.a. 6 months to Feb 2016 6 months to Feb 2015 12 months to Aug 2015
Discount rate 3.80% 3.40% 3.80%
Inflation assumptions - CPI 2.00% 2.05% 2.25%
Inflation assumptions - RPI 3.00% 3.05% 3.25%
A summary of the movements in the net balance sheet asset /(liability) and
amounts recognised in the Group Income Statement and Other Comprehensive
Income are as follows:
£m Fair value of scheme assets Defined benefit obligation Impact of IFRIC 14 on defined benefit pension schemes Total
At 31 August 2014 522.7 (450.7) (93.0) (21.0)
Current service cost and administrative expenses - (0.1) - (0.1)
Interest cost 9.7 (8.2) (1.8) (0.3)
Total amount recognised in income statement 9.7 (8.3) (1.8) (0.4)
Return on plan assets excluding amounts included in net interest 29.2 - - 29.2
Actuarial gains/ (losses) on scheme liabilities 0.2 (24.5) - (24.3)
Change in surplus not recognised - - (5.2) (5.2)
Amount recognised in other comprehensive income 29.4 (24.5) (5.2) (0.3)
Employer contributions 2.3 - - 2.3
Benefit payments (8.1) 8.1 - -
Amounts included in cash flow statement (5.8) 8.1 - 2.3
Acquisition of subsidiaries 10.6 (12.5) - (1.9)
At 28 February 2015 566.6 (487.9) (100.0) (21.3)
Current service cost (0.5) 0.1 - (0.4)
Interest cost 10.3 (9.0) (1.8) (0.5)
Total amount recognised in income statement 9.8 (8.9) (1.8) (0.9)
Return on plan assets excluding amounts included in net interest (0.5) - - (0.5)
Actuarial gains/(losses) on scheme liabilities (0.2) 49.3 - 49.1
Change in surplus not recognised excluding amounts recognised in net interest - - (47.6) (47.6)
Amount recognised in other comprehensive income (0.7) 49.3 (47.6) 1.0
Employer contributions 3.0 0.1 - 3.1
Employee contributions 0.1 (0.1) - -
Benefit payments (15.5) 15.5 - -
Amounts included in cash flow statement (12.4) 15.5 - 3.1
At 31 August 2015 563.3 (432.0) (149.4) (18.1)
£m Fair value of scheme assets Defined benefit obligation Surplus not recognised Total
At 31 August 2015 563.3 (432.0) (149.4) (18.1)
Current service cost (0.1) (0.1) - (0.2)
Interest cost 10.5 (8.0) (2.8) (0.3)
Total amount recognised in income statement 10.4 (8.1) (2.8) (0.5)
Return on plan assets excluding amounts included in net interest (14.1) - - (14.1)
Actuarial gains/ (losses) on scheme liabilities - 14.9 - 14.9
Change in surplus not recognised - - 0.4 0.4
Amount recognised in other comprehensive income (14.1) 14.9 0.4 1.2
Employer contributions 2.6 - - 2.6
Employee contributions - - - -
Benefit payments (21.4) 21.4 - -
Amounts included in cash flow statement (18.8) 21.4 - 2.6
At 29 February 2016 540.8 (403.8) (151.8) (14.8)
Included within Non-current assets 0.4
Included within Current liabilities (4.1)
Included within Non-current liabilities (11.1)
6 Income Tax Expense
£m 6 months to Feb 2016 6 months to Feb 2015 12 months to Aug 2015
Adjusted Non-recurring and other items Total Adjusted Non-recurring and other items Total Adjusted Non-recurring and other items Total
Current tax 5.8 (0.4) 5.4 5.5 (0.5) 5.0 12.4 (2.3) 10.1
Adjustment in respect of prior year UK corporation tax (0.1) - (0.1) (0.4) (0.3) (0.7) (1.1) (0.9) (2.0)
Total current tax charge 5.7 (0.4) 5.3 5.1 (0.8) 4.3 11.3 (3.2) 8.1
Deferred tax - current period (0.2) (0.8) (1.0) (0.2) (0.4) (0.6) (0.2) (0.3) (0.5)
Deferred tax- impact of rate change 0.2 (0.6) (0.4) - - - - - -
Total tax on profit 5.7 (1.8) 3.9 4.9 (1.2) 3.7 11.1 (3.5) 7.6
Effective tax rate 21.0% 20.4% 20.5% 27.1% 19.7% 26.3%
The effective adjusted income tax rate for the period was 21.0% (Feb 2015:
20.5%). After adjusting for the impact of non-recurring and other items of
£1.8m (Feb 2015: £1.2m), the effective statutory income tax rate was 20.4%
(Feb 2015: 27.1%).
Reconciliation of the tax charge
£m 6 months to Feb 2016 6 months to Feb 2015 12 months to Aug 2015
Profit before tax 19.2 14.1 29.0
Tax on profit at the standard rate of UK corporation tax 20.0% (Aug 2015: 20.6%, Feb 2015: 20.6%) 3.8 2.9 5.9
Permanent differences 0.5 1.4 3.5
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