REG - Telecom Plus PLC - Half Yearly Report <Origin Href="QuoteRef">TEP.L</Origin> - Part 2
24/11/2015 07:01
- Part 2: For the preceding part double click ID:nRSX6766Ga
2015 2014 2015
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment 32,870 32,880 41,800
Investment property 4 9,401 - -
Intangible assets 5 203,978 215,175 209,592
Goodwill 3,742 3,742 3,742
Investment in associate 7,160 6,653 10,843
Deferred tax - 985 -
Other non-current receivables 14,027 14,351 13,929
Total non-current assets 271,178 273,786 279,906
Current assets
Inventories 1,266 874 893
Trade and other receivables 24,240 21,533 28,128
Prepayments and accrued income 64,811 64,266 104,931
Cash 23,520 5,568 16,536
Total current assets 113,837 92,241 150,488
Total assets 385,015 366,027 430,394
Current liabilities
Short term borrowings 6 (9,895) - (4,934)
Trade and other payables (22,028) (8,079) (24,885)
Current tax payable (1,456) (620) (1,086)
Deferred tax (289) - (551)
Accrued expenses and deferred income (76,028) (74,113) (115,472)
Total current liabilities (109,696) (82,812) (146,928)
Non-current liabilities
Long term borrowings 6 (59,369) (68,877) (64,139)
Deferred consideration (21,500) (21,500) (21,500)
JSOP creditor (2,476) (3,757) (1,507)
Total non-current liabilities (83,345) (94,134) (87,146)
Total assets less total liabilities 191,974 189,081 196,320
Equity
Share capital 4,014 4,008 4,011
Share premium 137,550 136,967 137,238
Treasury shares (760) (760) (760)
JSOP reserve (2,275) (2,275) (2,275)
Retained earnings 53,445 51,141 58,106
Total equity 191,974 189,081 196,320
Condensed Consolidated Interim Cash Flow Statement
Note 6 months Restated6 months Year
ended ended ended
30 September 30 September 31 March
2015 2014 2015
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Operating activities
Profit before taxation 15,240 14,522 42,059
Adjustments for:
Share of profit of associate (1,754) (1,816) (6,006)
Net financial expense 877 1,061 1,933
Depreciation of property, plant and equipment 1,712 892 1,834
Amortisation of intangible assets 5,614 5,603 11,186
Amortisation of debt arrangement fees 191 172 367
(Increase) / decrease in inventories (373) 897 878
Decrease in trade and other receivables 43,907 61,751 14,914
Decrease in trade and other payables (41,810) (65,086) (7,427)
Share incentive scheme charges / (credits) 1,641 314 (1,022)
Corporation tax paid (3,732) (4,719) (9,058)
Net cash flow from operating activities 21,513 13,591 49,658
Investing activities
Purchase of property, plant and equipment (2,183) (10,444) (20,306)
Disposal of property, plant and equipment - 46 47
Distribution from associated company 5,474 4,148 4,148
Purchase of shares in associate (36) (171) (171)
Interest received 57 92 130
Cash flow from investing activities 3,312 (6,329) (16,152)
Financing activities
Dividends paid 7 (16,734) (15,105) (30,230)
Interest paid (1,422) (1,226) (1,652)
Repayment of borrowing facilities - (30,000) (30,000)
Fees associated with borrowing facilities - (315) (315)
Issue of new ordinary shares 8 315 323 598
Purchase of own shares - (760) (760)
Cash flow from financing activities (17,841) (47,083) (62,359)
Increase/(decrease) in cash and cash equivalents 6,984 (39,821) (28,853)
Net cash and cash equivalents at the beginning of the period 16,536 45,389 45,389
Net cash and cash equivalents at the end of the period 23,520 5,568 16,536
Condensed Consolidated Interim Statement of Changes in Equity
Share Share Treasury JSOP Retained
Capital Premium Shares Shares Earnings Total
£'000 £'000 £'000 £'000 £'000 £'000
Previous balance at 1 April 2014 4,001 136,651 - (2,275) 67,589 205,966
Adjustments - - - - (11,245) (11,245)
Restated balance at 1 April 2014 4,001 136,651 - (2,275) 56,344 194,721
Profit and total comprehensive income for the period - - - - 10,789 10,789
Deferred tax on share options - - - - (1,524) (1,524)
Dividends - - - - (15,105) (15,105)
Purchase of treasury shares - - (760) - - (760)
Credit arising on share options - - - - 637 637
Issue of new ordinary shares 7 316 - - - 323
Balance at 30 September 2014 4,008 136,967 (760) (2,275) 51,141 189,081
Balance at 1 October 2014 4,008 136,967 (760) (2,275) 51,141 189,081
Profit and total comprehensive income for the period - - - - 21,512 21,512
Deferred tax on share options - - - - (337) (337)
Dividends - - - - (15,125) (15,125)
Credit arising on share options - - - - 915 915
Issue of new ordinary shares 3 271 - - - 274
Balance at 31 March 2015 4,011 137,238 (760) (2,275) 58,106 196,320
Balance at 1 April 2015 4,011 137,238 (760) (2,275) 58,106 196,320
Profit and total comprehensive income for the period - - - - 11,402 11,402
Deferred tax on share options - - - - - -
Dividends - - - - (16,734) (16,734)
Credit arising on share options - - - - 671 671
Issue of new ordinary shares 3 312 - - - 315
Balance at 30 September 2015 4,014 137,550 (760) (2,275) 53,445 191,974
Notes to the condensed interim financial statements
1. General information
The condensed consolidated interim financial
statements presented in this half-year report ("the
Half-Year Results") have been prepared in
accordance with IAS 34. The principal accounting
policies adopted in the preparation of the
condensed consolidated financial statements are
unchanged from those used in the annual report for
the year ended 31 March 2015 and are consistent
with those that the company expects to apply in its
financial statements for the year ended 31 March
2016. There are no new standards or amendments to
standards that are mandatory for the first time for
the financial year beginning 1 April 2015 that have
an impact on the Group financial statements. The
condensed consolidated financial statements for the
year ended 31 March 2015 presented in this half
-year report do not constitute the company's
statutory accounts for that period. The condensed
consolidated financial statements for that period
have been derived from the Annual Report and
Accounts of Telecom Plus Plc. The Annual Report
and Accounts of Telecom Plus Plc for the year ended
31 March 2015 were audited and have been filed with
the Registrar of Companies. The Independent
Auditors' Report on the Annual Report and Accounts
of Telecom Plus Plc for the year ended 31 March
2015 was unqualified and did not draw attention to
any matters by way of emphasis and did not contain
statements under s498(2) or (3) of the Companies
Act 2006. The financial information for the
periods ended 30 September 2015 and 30 September
2014 is unaudited but has been subject to a review
by the company's auditors.
Seasonality of business: in respect of the energy
supplied by the Group, approximately two thirds is
consumed by customers in the second half of the
financial year. The Half-Year Results were
approved for issue by the Board of Directors on 23
November 2015. 2. Judgements and estimates The
preparation of the condensed consolidated interim
financial statements requires management to make
judgements, estimates and assumptions that affect
the application of policies and reported amounts of
assets and liabilities, income and expenses. The
estimates and associated assumptions are based on
historical experience and various other factors
that are believed to be reasonable under the
circumstances, the results of which form the basis
of making judgments about carrying values of assets
and liabilities that are not readily apparent from
other sources. Actual results may differ from these
estimates. The estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period
in which the estimate is revised and in future
periods if applicable. In preparing these condensed
consolidated 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 as at and for the year ended 31 March
2015.
3. Operating segments
For management reporting purposes, the Group is currently organised into two operating divisions: Customer Management and Customer Acquisition. These divisions form the basis on which the Group reports its segment information.
6 months ended Restated6 months ended Year ended
30 September 2015 30 September 2013 31 March 2015
(unaudited) (unaudited) (audited)
Segment Segment Segment
Revenue Result Revenue Result Revenue Result
£'000 £'000 £'000 £'000 £'000 £'000
Customer Management 286,262 20,080 257,571 20,165 712,652 53,451
Customer Acquisition 7,773 (5,717) 7,884 (6,398) 16,526 (15,465)
Total 294,035 14,363 265,455 13,767 729,178 37,986
As at 30 September 2015 (unaudited) Restated As at 30 September 2014(unaudited) As at 31 March 2015 (audited)
£'000 £'000 £'000
Customer Management 377,310 358,303 421,685
Customer Acquisition 7,705 7,724 8,709
Total Assets 385,015 366,027 430,394
Customer Management (190,551) (174,469) (231,048)
Customer Acquisition (2,490) (2,477) (3,026)
Total Liabilities (193,041) (176,946) (234,074)
4. Investment property
Investment properties are properties which are held either to earn rental
income or for capital appreciation or for both. Investment properties are
stated at cost less accumulated depreciation.
Rental income from investment properties is accounted for on an accruals
basis.
During the period the operations of the Company were transferred into newly
refurbished head offices at Merit House and the former head office building,
Southon House, was vacated. Southon House is therefore now held as an
investment property and separately disclosed on the balance sheet of the
Company.
An independent valuation of Southon House was conducted at 30 September 2015
in accordance with RICS Valuation - Professional Standards UK January 2014
(revised April 2015) guidelines. The independent market value of Southon
House was determined to be £10.2 million.
5. Intangible assets
6 months ended 30 September 2015 (unaudited) 6 months ended 30 September 2014 (unaudited) Year ended 31 March 2015 (audited)
£'000 £'000 £'000
Cost
Amount brought forward 224,563 224,563 224,563
Additions - - -
Amount carried forward 224,563 224,563 224,563
Amortisation
Amount brought forward (14,971) (3,785) (3,785)
Charge for the period (5,614) (5,603) (11,186)
Amount carried forward (20,585) (9,388) (14,971)
Carrying amount 203,978 215,175 209,592
The intangible asset relates to the entering into of the energy supply
arrangements with npower on improved commercial terms through the acquisition
of Electricity Plus Supply Limited and Gas Plus Supply Limited from Npower
Limited having effect from 1 December 2013. The intangible asset is being
amortised evenly over the 20 year life of the energy supply agreement.
6. Interest bearing loans and borrowings
6 months ended 30 September 2015 (unaudited) 6 months ended 30 September 2014 (unaudited) Year ended 31 March 2015 (audited)
£'000 £'000 £'000
Bank loans 70,000 70,000 70,000
Unamortised loan arrangement fees (736) (1,123) (927)
Working capital facilities - - -
69,264 68,877 69,073
Due within one year 10,000 - 5,000
Due after one year 60,000 70,000 65,000
70,000 70,000 70,000
7. Dividends
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2015 2014 2015
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Final dividend for the year ended 31 March 2015 of 21p per share 16,734 - -
Final dividend for the year ended 31 March 2014 of 19p per share - 15,105 15,105
Interim dividend for the year ended 31 March 2015 of 19p per share (2014: 16p) - - 15,125
An interim dividend of 22.0p per share will be paid on 18 December 2015 to shareholders on the register at close of business on 4 December 2015. The estimated amount of this dividend to be paid is approximately £17.5 million and, in accordance with IFRS accounting requirements, has not been recognised in these accounts.
8. Share capital
During the period the Company issued 57,233 new ordinary shares to satisfy the
exercise of employee and distributor share options.
9. Earnings per share
6 months Restated 6 months Year
ended ended ended
30 September 30 September 31 March
2015 2014 2015
(unaudited) (unaudited) (audited)
The calculation of the basic and diluted earnings per share is based on the following data: £'000 £'000 £'000
Earnings for the purpose of basic and diluted earnings per share 11,402 10,789 32,301
Share incentive scheme charges / (credits) (net of tax) 1,502 248 (1,316)
Amortisation of intangible assets 5,614 5,603 11,186
Earnings excluding share incentive scheme charges for the purpose of adjusted basic and diluted earnings per share 18,518 16,640 42,171
Number Number Number
('000) ('000) ('000)
Weighted average number of ordinary shares for the purpose of basic earnings per share 79,679 79,538 79,581
Effect of dilutive potential ordinary shares (share options) 619 1,038 783
Weighted average number of ordinary shares for the purpose of diluted earnings per share 80,298 80,576 80,364
Adjusted basic earnings per share 23.2p 20.9p 53.0p
Basic earnings per share 14.3p 13.5p 40.6p
Adjusted diluted earnings per share1 23.1p 20.7p 52.5p
Diluted earnings per share 14.2p 13.4p 40.2p
1 In order to provide a clearer understanding of the underlying trading
performance of the Group, adjusted basic EPS excludes: (i) share incentive
scheme charges; and (ii) the amortisation of intangible assets arising on
entering into the new energy supply arrangements with npower in December 2013.
The amortisation of intangible assets has been excluded on the basis that it
represents a non-cash accounting charge.
10. Prior period restatement
A detailed review was conducted during the previous financial year of the
unbilled energy debtor previously carried on the Group's balance sheet and
which had accumulated over the seven years between April 2007 and March 2014.
As a result of this review it was concluded that a total of approximately £11
million (net of an anticipated tax credit), was not likely to be recoverable.
This primarily related to higher levels of industry-wide leakage within the
gas distribution network than had previously been anticipated.
Background
In common with other domestic energy suppliers, the majority of the Group's
customer energy invoices are prepared using estimated meter readings, as
actual meter readings are rarely available on the date that bills are
produced. This gives rise to timing differences between the estimated volumes
of energy invoiced to customers, and the actual volume of energy invoiced to
the Group by energy industry system operators, which contribute to the
unbilled energy debtor carried forward on the Group balance sheet.
A detailed assessment was undertaken of the accuracy of the estimates created
by the Group's billing system and the recoverability of the unbilled energy
debtor. This review of current and historic meter reading data that existed
at each balance sheet date provided a strong endorsement of the accuracy of
the Group's billing system in calculating customer usage, but showed that
overall leakage within the gas industry (which is ultimately not billable to
customers) had been running at a higher rate than previously expected.
It was therefore decided to write down the unbilled gas energy debtor to bring
its value in line with the amount expected to be recoverable.
Restatement
The Board has decided to restate the Group's accounts to reflect the impact of
this write-down on previous periods in order to provide stakeholders with an
accurate reflection of the historic underlying trend in the performance of the
business.
The tables below set out the impact of the restatement on each line item
affected in the prior period comparative financial statements presented in
these interim financial statements.
Condensed Consolidated Interim Statement of Comprehensive Income
6 months ended 30 September 2014Reported Restatement adjustment 6 months ended 30 September 2014Restated
£'000 £'000 £'000
Revenue 267,296 (1,841) 265,455
Cost of sales (214,351) 973 (213,378)
Taxation (3,915) 182 (3,733)
Net impact to profit after tax (686)
Adjusted basic earnings per share 21.8p (0.9)p 20.9p
Basic earnings per share 14.4p (0.9)p 13.5p
Adjusted diluted earnings per share 21.5p (0.8)p 20.7p
Diluted earnings per share 14.2p (0.8)p 13.4p
Condensed Consolidated Interim Balance Sheet
As at 30 September 2014Reported Restatement adjustment As at 30 September 2014Restated
£'000 £'000 £'000
Trade and other receivables 21,738 (205) 21,533
Prepayments and accrued income 77,170 (12,904) 64,266
Current tax payable (2,667) 2,047 (620)
Accrued expenses and deferred income (73,244) (869) (74,113)
Retained earnings 63,072 (11,931) 51,141
This information is provided by RNS
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