REG - SSE Plc - Half Yearly Report <Origin Href="QuoteRef">SSE.L</Origin> - Part 5
12/11/2014 08:01
- Part 5: For the preceding part double click ID:nRSL7750Wd
(591.6) - (591.6)
Scrip dividend related share issue 5.9 (5.9) - - - 174.0 174.0 - 174.0
Distributions to hybrid capital holders - - - - - - - (11.7) (11.7)
Issue of shares 0.1 1.0 - - - - 1.1 - 1.1
Credit in respect of employee share awards - - - - - 7.5 7.5 - 7.5
Investment in own shares - - - - - (4.3) (4.3) - (4.3)
At 30 September 2014 493.4 856.6 22.0 (43.6) (36.3) 1,398.1 2,690.2 2,186.8 4,877.0
Statement of changes in equity Sharecapital Share premiumaccount Capital redemptionreserve Hedge reserve Translationreserve Retained earnings Total attributable to ordinary shareholders Hybrid capital Total
£m £m £m £m £m £m £m £m £m
At 1 April 2013 482.1 857.9 22.0 5.8 11.6 1,982.7 3,362.1 2,186.8 5,548.9
Profit for the period - - - - - 371.9 371.9 12.5 384.4
Other comprehensive income/(loss) - - - (35.3) (4.2) (6.9) (46.4) - (46.4)
Share of joint ventures and associates other comprehensive income/(loss) - - - 4.4 - (24.0) (19.6) - (19.6)
Total comprehensive loss/(income) for the period - - - (30.9) (4.2) 341.0 305.9 12.5 318.4
Dividends to shareholders - - - - - (568.6) (568.6) - (568.6)
Scrip dividend related share issue 0.6 (0.6) - - - 17.8 17.8 - 17.8
Distributions to hybrid capital holders - - - - - - - (12.5) (12.5)
Issue of shares - 0.2 - - - - 0.2 - 0.2
Credit in respect of employee share awards - - - - - 7.3 7.3 - 7.3
Investment in own shares (4.2) (4.2) (4.2)
At 30 September 2013 482.7 857.5 22.0 (25.1) 7.4 1,776.0 3,120.5 2,186.8 5,307.3
Consolidated Statement of Changes in Equity (continued)
for the period 1 April 2014 to 30 September 2014
Statement of changes in equity Sharecapital Share premiumaccount Capital redemptionreserve Hedge reserve Translationreserve Retained earnings Total attributable to ordinary shareholders Hybrid capital Total
£m £m £m £m £m £m £m £m £m
At 1 April 2013 482.1 857.9 22.0 5.8 11.6 1,982.7 3,362.1 2,186.8 5,548.9
Profit for the year - - - - - 323.1 323.1 122.9 446.0
Other comprehensive income/(loss) - - - (42.7) (10.1) (9.6) (62.4) - (62.4)
Share of joint ventures and associates other comprehensive income/(loss) - - - 9.9 - (23.0) (13.1) - (13.1)
Total comprehensive (loss)/income for the year - - - (32.8) (10.1) 290.5 247.6 122.9 370.5
Dividends to shareholders - - - - - (819.6) (819.6) - (819.6)
Scrip dividend related share issue 4.8 (4.8) - - - 130.2 130.2 - 130.2
Distributions to hybrid capital holders - - - - - - - (122.9) (122.9)
Issue of shares 0.5 8.4 - - - - 8.9 - 8.9
Credit in respect of employee share awards - - - - - 15.5 15.5 - 15.5
Investment in own shares - - - - - (12.0) (12.0) - (12.0)
At 31 March 2014 487.4 861.5 22.0 (27.0) 1.5 1,587.3 2,932.7 2,186.8 5,119.5
Consolidated Cash Flow Statement
for the period 1 April 2014 to 30 September 2014
Yearended 31 March 2014 Note Six months ended 30 September 2014 Sixmonths ended 30 September 2013
Restated (note 3) Restated (note 3)
£m £m £m
2,134.2 Cash generated from operations before working capital movements 12 599.9 616.8
(104.1) (Increase)/decrease in inventories (90.8) (132.5)
312.4 Decrease/(increase) in receivables 1,281.0 1,595.7
174.9 Decrease/(increase) in payables (652.7) (830.8)
(18.9) (Decrease)/increase in provisions (67.2) 9.4
2,498.5 Cash generated from operations 1,070.2 1,258.6
104.1 Dividends received from joint ventures and associates 2.2 3.0
113.8 Interest received 49.7 56.0
(284.1) Interest paid (129.5) (161.8)
(147.1) Income taxes paid (57.7) (37.8)
(26.4) Payment for consortium relief (3.7) (18.7)
2,258.8 Net cash from operating activities 931.2 1,099.3
Cash flows from investing activities
(1,433.8) Purchase of property, plant and equipment (645.9) (689.1)
(403.8) Purchase of other intangible assets (134.6) (140.4)
7.2 Deferred income received 3.6 6.6
158.6 Proceeds from sale of property, plant and equipment 14.1 0.1
3.2 Proceeds from sale of business and subsidiaries 52.6 -
- Proceeds from sale of fixed asset investments 12.6 -
(83.9) Loans to joint ventures and associates (17.1) (47.7)
(109.6) Purchase of businesses and subsidiaries (66.0) (109.6)
19.4 Loans and equity repaid by joint ventures 9.6 11.2
(10.0) Investment in associates and joint ventures (15.5) (4.1)
(0.7) Increase in other investments (0.3) -
(1,853.4) Net cash flows from investing activities (786.9) (973.0)
Cash flows from financing activities
8.9 Proceeds from issue of share capital 1.1 0.2
(689.4) Dividends paid to company's equity holders (417.6) (550.8)
(122.9) Hybrid capital dividend payments (11.7) (12.5)
(12.0) Employee share awards share purchase (4.3) (4.2)
1,815.8 New borrowings 104.1 1,186.1
(1,514.8) Repayment of borrowings (30.2) (758.9)
(514.4) Net cash flows from financing activities (358.6) (140.1)
(109.0) Net decrease in cash and cash equivalents (214.3) (13.8)
567.6 Cash and cash equivalents at the start of period 458.6 567.6
(109.0) Net decrease in cash and cash equivalents (214.3) (13.8)
- Effect of foreign exchange rate changes - 0.1
458.6 Cash and cash equivalents at the end of period 244.3 553.9
Notes on the Condensed Interim Statements
for the period 1 April 2013 to 30 September 2014
1. Condensed Financial Statements
SSE plc (the Company) is a company domiciled in Scotland. The condensed interim statements comprise those of the Company
and its subsidiaries (together referred to as the Group).
The financial information set out in these condensed interim statements does not constitute the Group's statutory accounts
for the periods ended 30 September 2014, 31 March 2014 or 30 September 2013 within the meaning of Section 435 of the
Companies Act 2006. Statutory accounts for the year ended 31 March 2014, which were prepared in accordance with
International Financial Reporting Standards as adopted by the EU (adopted IFRS), have been reported on by the Group's
auditors and delivered to the Registrar of Companies. The financial information set out in these interim statements has
been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and IAS 34
Interim Financial Reporting as adopted by the EU.
The report of the auditors was (i) unqualified (ii) did not include reference to any matters to which the auditors drew
attention by way of emphasis without qualifying their report and (iii) did not contain statements under section 498 (2) or
(3) of the Companies Act 2006. The interim financial information is unaudited but has been formally reviewed by the
auditors and their report to the Company is set out on page 81.
These interim statements were authorised by the Board on 11 November 2014.
2. Basis of preparation
These condensed interim statements for the period to 30 September 2014 and the comparative information for the period to 30
September 2013 have been prepared applying the accounting policies and presentation used in the Group's consolidated
financial statements for the year ended 31 March 2014, with the exception of the newly effective accounting standards,
amendments and interpretations described at note 3 and the change in reportable segments described at note 4.
3. Standards, amendments and interpretations
3.1 Effective in financial year ended 31 March 2015
(ii) IFRIC 21
The Group has adopted IFRIC 21: 'Levies' in the current financial year. The interpretation clarifies that an entity should
recognise liabilities for qualifying levies on the occurrence of an activity that triggers an obligation to the relevant
authority. Qualifying levies fall within the scope of IAS 37 'Provisions, contingent liabilities and contingent assets' but
not within the scope of IAS 12 'Income taxes' or other standards. The adoption of the interpretation has had no effect on
the consolidated interim statements for the period ended 30 September 2014 and is not expected to impact the results of the
Group for the financial year ending 31 March 2015. The interpretation may have an impact in relation to certain aspects of
the Electricity Market Reform (EMR) proposals and the Group will consider its accounting policies in relation to any levy
obligations arising from that legislation in future periods.
(ii) IFRS 10, 11 and 12
IFRS 10: 'Consolidated financial statements', IFRS 11: 'Joint arrangements', IFRS 12: 'Disclosures of interests in other
entities', and revisions to IAS 27: 'Separate financial statements' and IAS 28: 'Investments in associates and joint
ventures' have been adopted by the Group in the current financial year. The adoption of these standards will result in
additional disclosures in the Group's financial statements for the year to 31 March 2015.
The most significant impact for the Group relates to the adoption of IFRS 11. Under this standard, the Group has assessed
its joint arrangements in order to identify those which require to be classified as joint operations rather than joint
ventures. Joint operations arise where the venturers are deemed to have joint control and have rights to the assets and
obligations for the liabilities of the arrangement as opposed to having rights to the net assets of the arrangement.
Accordingly, a joint operator will recognise its share of the operation's assets, liabilities, revenue and expenses in the
consolidated financial statements rather than its net share of the result of the venture. The Group has assessed that its
investment in Greater Gabbard Offshore Winds Limited falls within this category under the standard but that all other joint
arrangements held by the Group are classified as joint ventures, which will continue to be equity accounted.
This has resulted in the restatement of the Group's Consolidated Income Statement, Consolidated Balance Sheet, Consolidated
Statement of Comprehensive Income and Consolidated Cash Flow Statements for the year to 31 March 2014 and the period to 30
September 2013. These restatements are summarised at Notes 3.2 and 3.3 respectively.
It should be noted that as the Group currently reports its adjusted profit measures including its respective shares of
operating profit, interest and tax of the affected investments, no change arises in respect of the measures reported
internally and in the Annual Report in respect of underlying performance.
(iii) Other standards, amendments and interpretations
Other amendments to effective IFRSs will not have a material impact on the Group's accounts for the financial year ending
31 March 2015.
Notes on the Condensed Interim Statements
for the period 1 April 2014 to 30 September 2014
3. Standards, amendments and interpretations (continued)
3.2 Restatements of 31 March 2014 financial information
Extract of the Consolidated Income Statement
Year ended 31 March 2014
As Reported IFRS 11 Restated
£m £m £m
Operating profit before joint ventures and associates 611.0 79.8 690.8
Joint ventures and associates:
Share of operating profit 371.0 (79.8) 291.2
Share of interest (147.9) 10.4 (137.5)
Share of movement on derivatives 3.1 - 3.1
Share of tax 11.6 17.2 28.8
Share of profit/(loss) on joint ventures and associates 237.8 (52.2) 185.6
Operating profit 848.8 27.6 876.4
Finance income 133.1 (10.4) 122.7
Finance costs (406.6) - (406.6)
Profit before taxation 575.3 17.2 592.5
Taxation (129.3) (17.2) (146.5)
Profit for the year 446.0 - 446.0
Extract of the Consolidated Balance Sheet
As at 31 March 2014
As Reported IFRS 11 Restated
£m £m £m
Property, plant and equipment 10,316.6 768.6 11,085.2
Equity investments in associates and joint ventures 1,543.5 (716.8) 826.7
Loans to associates and joint ventures 521.6 - 521.6
Cash and cash equivalents (including bank overdraft) 442.5 16.4 458.9
Deferred tax liabilities (709.6) (47.9) (757.5)
Provisions (395.7) (52.0) (447.7)
Other balance sheet items (6,599.4) 31.7 (6,567.7)
Net assets 5,119.5 - 5,119.5
Extract of the Consolidated Cash Flow Statement
Year ended 31 March 2014
As Reported IFRS 11 Restated
£m £m £m
Cash generated from operations 2,408.1 90.4 2,498.5
Dividends received from joint ventures and associates 364.3 (260.2) 104.1
Other items (344.0) 0.2 (343.8)
Net cash from operating activities 2,428.4 (169.6) 2,258.8
Purchase of property, plant and equipment (1,432.3) (1.5) (1,433.8)
Proceeds from sale of property, plant and equipment - 158.6 158.6
Other items (578.2) - (578.2)
Net cash flows from investing activities (2,010.5) 157.1 (1,853.4)
Net cash flows from financing activities (514.4) - (514.4)
Net decrease in cash and cash equivalents (96.5) (12.5) (109.0)
Cash and cash equivalents at start of the year 538.7 28.9 567.6
Net decrease in cash and cash equivalents (96.5) (12.5) (109.0)
Cash and cash equivalents at the end of the year 442.2 16.4 458.6
Notes on the Condensed Interim Statements
for the period 1 April 2014 to 30 September 2014
3. Standards, amendments and interpretations (continued)
3.3 Restatements of 30 September 2013 financial information
Extract of the Consolidated Income Statement
Period ended 30 September 2013
As Reported IFRS 11 Restated
£m £m £m
Operating profit before joint ventures and associates 311.5 33.1 344.6
Joint ventures and associates:
Share of operating profit 195.4 (33.1) 162.3
Share of interest (78.3) 6.7 (71.6)
Share of movement on derivatives 1.0 - 1.0
Share of tax 39.3 1.0 40.3
Share of profit/(loss) on joint ventures and associates 157.4 (25.4) 132.0
Operating profit 468.9 7.7 476.6
Finance income 75.8 (6.7) 69.1
Finance costs (208.3) - (208.3)
Profit before taxation 336.4 1.0 337.4
Taxation 48.0 (1.0) 47.0
Profit for the period 384.4 - 384.4
Extract of the Consolidated Balance Sheet
As at 30 September 2013
As Reported IFRS 11 Restated
£m £m £m
Property, plant and equipment 10,320.1 870.0 11,190.1
Equity investments in joint ventures and associates 1,045.8 (139.3) 906.5
Loans to joint ventures and associates 1,280.7 (781.7) 499.0
Cash and cash equivalents (including bank overdraft) 477.9 76.0 553.9
Deferred tax liabilities (715.3) - (715.3)
Provisions (299.0) (9.0) (308.0)
Other balance sheet items (6,802.9) (16.0) (6,818.9)
Net assets 5,307.3 - 5,307.3
Extract of the Consolidated Cash Flow Statement
Period ended 30 September 2013
As Reported IFRS 11 Restated
£m £m £m
Cash generated from operations 1,189.0 69.6 1,258.6
Dividends received from joint ventures and associates 3.0 - 3.0
Other items (154.9) (7.4) (162.3)
Net cash from operating activities 1,037.1 62.2 1,099.3
Purchase of property, plant and equipment (674.0) (15.1) (689.1)
Proceeds from sale of property, plant and equipment 0.1 - 0.1
Other items (284.0) - (284.0)
Net cash flows from investing activities (957.9) (15.1) (973.0)
Net cash flows from financing activities (140.1) - (140.1)
Net (decrease)/increase in cash and cash equivalents (60.9) 47.1 (13.8)
Cash and cash equivalents at start of the year 538.7 28.9 567.6
Net (decrease)/increase in cash and cash equivalents (60.9) 47.1 (13.8)
Effect of foreign exchange rate changes 0.1 - 0.1
Cash and cash equivalents at the end of the period 477.9 76.0 553.9
Notes on the Condensed Interim Statements
for the period 1 April 2014 to 30 September 2014
3. Standards, amendments and interpretations (continued)
3.4 Effective in financial years ended after 31 March 2015
The Group is continuing to assess the impact that the following issued standards which have not yet been adopted by the
Group may have on its future financial statements:
IFRS 15 'Revenue from contracts with customers' is effective on 1 January 2017 subject to European Union (EU) endorsement;
the amendments to IFRS 11 'Accounting for acquisitions of interests in joint operations' which are effective on 1 January
2016, subject to EU endorsement, and; IFRS 9: 'Financial instruments' which will be effective on 1 January 2018, subject to
EU endorsement.
4. Change of Reportable Segments
Following changes to the structure of the Group's internal organisation, and subsequent changes to the way in which
financial and management information is presented to both the Board and the Executive Committee, the composition of the
Group's Reportable Segments has changed.
The change to the Group's organisation structure has been the establishment of the Enterprise business which brings
together a number of activities under new leadership. The objective of the change is to allow the energy and related needs
of the Group's industrial and commercial customers in competitive markets to be better met through an integrated approach.
The services being provided to these customers include electrical contracting, private energy networks, lighting services
and telecoms capacity and bandwidth.
As a result of this change, activities previously reported under Other Networks have been combined with electrical
contracting, previously reported under Energy-related Services, to derive the reported revenue and operating profit of the
Enterprise segment. As these are customer-facing businesses in competitive markets, these results will be reported as part
of the Retail business. In the year to 31 March 2014, this Enterprise segment delivered adjusted operating profit of
£56.8m, including £27.8m in the six months to 30 September 2013. The remaining part of the Energy-related Services segment
(metering, home services and other products), which will also continue to be reported under Retail, delivered adjusted
operating profit of £24.1m in the year to 31 March 2014, including £16.2m in the six months to 30 September 2013.
The changes to reported segments can be summarised as follows:
(a) Revenue by segment
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