REG - Tullett Prebon Plc - Final Results <Origin Href="QuoteRef">TLPR.L</Origin> - Part 2
01/03/2016 07:10
- Part 2: For the preceding part double click ID:nRSA5430Qa
when the structural and cyclical factors
currently adversely affecting the interdealer broker industry will ease, or
when the level of activity in the wholesale OTC financial markets may
increase. Our recent performance has benefited from the buoyant level of
activity in the Energy and commodities markets, particularly in oil and oil
related financial instruments, and this level of activity may not persist. We
have taken further cost improvement action and we will continue to actively
manage our cost base to reflect market conditions.
We took a number of initiatives during 2015 in pursuit of our goal to become
the world's most trusted source of liquidity in hybrid OTC markets and the
best operator in global hybrid voice broking. The agreement for the
acquisition of ICAP's global hybrid voice broking and information business
provides a unique opportunity to accelerate the delivery of our strategy, and
we are in the process of planning the integration of the two businesses to be
implemented after completion of the transaction which we expect will be during
2016.
We will continue to look for opportunities to deliver our objectives to build
revenue and raise the quality and quantity of earnings through further
diversification of the client base, continued expansion into Energy and
commodities, and building scale in the Americas and Asia Pacific, whilst
preserving the business's core franchises.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Consolidated Income Statement
for the year ended 31 December 2015
Notes Underlying Exceptionaland acquisitionrelated items Total
2015 £m £m £m
Revenue 3 796.0 - 796.0
Administrative expenses 4 (693.9) (53.3) (747.2)
Other operating income 4,5 5.8 67.3 73.1
Operating profit 107.9 14.0 121.9
Finance income 6 4.1 - 4.1
Finance costs 7 (18.3) (2.0) (20.3)
Profit before tax 93.7 12.0 105.7
Taxation (17.5) (7.5) (25.0)
Profit of consolidated companies 76.2 4.5 80.7
Share of results of associates 2.6 - 2.6
Profit for the year 78.8 4.5 83.3
Attributable to:
Equity holders of the parent 78.4 4.5 82.9
Minority interests 0.4 - 0.4
78.8 4.5 83.3
Earnings per share
Basic 8 32.2p 34.0p
Diluted 8 31.5p 33.3p
2014
Revenue 3 703.5 - 703.5
Administrative expenses 4 (607.9) (69.1) (677.0)
Other operating income 5 5.1 16.0 21.1
Operating profit 100.7 (53.1) 47.6
Finance income 6 3.6 - 3.6
Finance costs 7 (17.7) - (17.7)
Profit before tax 86.6 (53.1) 33.5
Taxation (16.9) 6.5 (10.4)
Profit of consolidated companies 69.7 (46.6) 23.1
Share of results of associates 1.9 - 1.9
Profit for the year 71.6 (46.6) 25.0
Attributable to:
Equity holders of the parent 71.2 (46.6) 24.6
Minority interests 0.4 - 0.4
71.6 (46.6) 25.0
Earnings per share
Basic 8 32.3p 11.2p
Diluted 8 32.3p 11.2p
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2015
2015 2014
£m £m
Profit for the year 83.3 25.0
Items that will not be reclassified subsequentlyto profit or loss:
Remeasurement of the defined benefit pension scheme 24.5 10.0
Taxation charge relating to item not reclassified (8.6) (3.5)
15.9 6.5
Items that may be reclassified subsequentlyto profit or loss:
Revaluation of investments 0.1 (0.5)
Effect of changes in exchange rates on translationof foreign operations 8.8 7.7
Taxation charge relating to items that may be reclassified (0.5) (0.2)
8.4 7.0
Other comprehensive income for the year 24.3 13.5
Total comprehensive income for the year 107.6 38.5
Attributable to:
Equity holders of the parent 107.1 37.8
Minority interests 0.5 0.7
107.6 38.5
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Consolidated Balance Sheet
as at 31 December 2015
Notes 2015£m 2014£m
Non-current assets
Intangible assets arising on consolidation 10 357.4 336.6
Other intangible assets 22.1 20.1
Property, plant and equipment 27.4 29.4
Interest in associates 6.0 5.0
Investments 8.5 5.2
Deferred tax assets 2.4 2.3
Defined benefit pension scheme 88.2 62.1
512.0 460.7
Current assets
Trade and other receivables 2,639.2 3,261.9
Financial assets 13 20.3 10.7
Cash and cash equivalents 13 358.9 287.1
3,018.4 3,559.7
Total assets 3,530.4 4,020.4
Current liabilities
Trade and other payables (2,666.7) (3,269.2)
Interest bearing loans and borrowings 13 (140.9) -
Current tax liabilities (17.3) (12.3)
Short term provisions (21.3) (6.6)
(2,846.2) (3,288.1)
Net current assets 172.2 271.6
Non-current liabilities
Interest bearing loans and borrowings 13 (79.3) (219.7)
Deferred tax liabilities (33.2) (24.1)
Long term provisions (7.8) (9.7)
Other long term payables (22.2) (15.3)
(142.5) (268.8)
Total liabilities (2,988.7) (3,556.9)
Net assets 541.7 463.5
Equity
Share capital 60.9 60.9
Share premium 17.1 17.1
Merger reserve 178.5 178.5
Other reserves (1,165.1) (1,173.4)
Retained earnings 1,448.6 1,378.8
Equity attributable to equity holders of the parent 540.0 461.9
Minority interests 1.7 1.6
Total equity 541.7 463.5
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Consolidated Statement of Changes in Equity
for the year ended 31 December 2015
Equity attributable to equity holders of the parent
Sharecapital Sharepremiumaccount Mergerreserve Reverseacquisitionreserve Re-valuationreserve Hedgingandtranslation Ownshares Retainedearnings Total Minorityinterests Totalequity
2015 £m £m £m £m £m £m £m £m £m £m £m
Balance at1 January 2015 60.9 17.1 178.5 (1,182.3) 1.4 7.6 (0.1) 1,378.8 461.9 1.6 463.5
Profit for the year - - - - - - - 82.9 82.9 0.4 83.3
Other comprehensiveincome for the year - - - - - 8.3 - 15.9 24.2 0.1 24.3
Total comprehensive income for the year - - - - - 8.3 - 98.8 107.1 0.5 107.6
Dividends paid - - - - - - - (41.0) (41.0) (0.4) (41.4)
Credit arising on share-basedpayment awards - - - - - - - 12.0 12.0 - 12.0
Balance at 31 December 2015 60.9 17.1 178.5 (1,182.3) 1.4 15.9 (0.1) 1,448.6 540.0 1.7 541.7
2014
Balance at1 January 2014 54.4 17.1 121.5 (1,182.3) 1.9 0.4 (0.1) 1,383.4 396.3 2.1 398.4
Profit for the year - - - - - - - 24.6 24.6 0.4 25.0
Other comprehensiveincome for the year - - - - (0.5) 7.2 - 6.5 13.2 0.3 13.5
Total comprehensive income for the year - - - - (0.5) 7.2 - 31.1 37.8 0.7 38.5
Dividends paid - - - - - - - (36.7) (36.7) (0.2) (36.9)
Issue of ordinary shares 6.5 - 58.4 - - - - - 64.9 - 64.9
Share issue costs - - (1.4) - - - - - (1.4) - (1.4)
Decrease in minority interests - - - - - - - (0.2) (0.2) (1.0) (1.2)
Credit arising on share-basedpayment awards - - - - - - - 1.2 1.2 - 1.2
Balance at 31 December 2014 60.9 17.1 178.5 (1,182.3) 1.4 7.6 (0.1) 1,378.8 461.9 1.6 463.5
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Consolidated Cash Flow Statement
for the year ended 31 December 2015
Notes 2015 2014
£m £m
Net cash from operating activities 12 144.0 52.8
Investing activities
(Purchase)/sale of financial assets (10.7) 20.6
Purchase of investments (0.4) -
Interest received 1.8 1.5
Dividends from associates 1.5 1.0
Expenditure on intangible fixed assets (9.3) (5.3)
Purchase of property, plant and equipment (4.6) (5.7)
Investment in subsidiaries (11.6) (5.5)
Cash acquired with acquisitions 1.7 17.5
Cash sold with subsidiaries (0.3) -
Net cash used in investment activities (31.9) 24.1
Financing activities
Dividends paid 9 (41.0) (36.7)
Dividends paid to minority interests (0.4) (0.2)
Equity issue costs - (1.4)
Repayment of debt - (8.5)
Debt issue and bank facility arrangement costs (4.3) -
Net cash used in financing activities (45.7) (46.8)
Net increase in cash and cash equivalents 66.4 30.1
Cash and cash equivalents at the beginning of the year 287.1 251.6
Effect of foreign exchange rate changes 5.4 5.4
Cash and cash equivalents at the end of the year 13 358.9 287.1
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Notes to the Consolidated Financial Statements
for the year ended 31 December 2015
1. General information
Tullett Prebon plc is a company incorporated in England and Wales under the
Companies Act.
2. Basis of preparation
(a) Basis of accounting
The financial information included in this document does not constitute the
Group's statutory accounts for the years ended 31 December 2015 or 2014, but
is derived from those accounts. Statutory accounts for 2014 have been
delivered to the Registrar of Companies and those for 2015 will be delivered
following the Company's Annual General Meeting. The auditor has reported on
those accounts; their reports 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 498(3) of the Companies Act 2006.
The Financial Statements have been prepared on the historical cost basis,
except for the revaluation of certain financial instruments.
The Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future.
Accordingly, the going concern basis continues to be used in preparing these
Financial Statements.
(b) Basis of consolidation
The Group's Consolidated Financial Statements incorporate the Financial
Statements of the Company and entities controlled by the Company made up to 31
December each year. Under IFRS 10 control is achieved where the Company
exercises power over an entity, is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to use its
power to affect the returns from the entity.
(c) Adoption of new and revised Accounting Standards
The following new and revised Standards and Interpretations have been adopted
in the current year although their adoption has not had any significant impact
on the Financial Statements:
· Amendments to IAS 19 'Employee Benefits' regarding employee
contributions to defined benefit plans;
· Annual Improvements to IFRSs (2010-2012 Cycle); and
· Annual Improvements to IFRSs (2011-2013 Cycle).
3. Segmental analysis
Products and services from which reportable segments derive their revenues
The Group is organised by geographic reporting segments which are used for the
purposes of resource allocation and assessment of segmental performance by
Group management. These are the Group's reportable segments under IFRS 8
'Operating Segments'.
Each geographic reportable segment derives revenue from Treasury Products,
Interest Rate Derivatives, Fixed Income, Equities, Energy, and Information
Sales and Risk Management Services.
Information regarding the Group's operating segments is reported below:
2015 2014
Revenue: £m £m
Europe and the Middle East 455.3 405.6
Americas 234.5 201.6
Asia Pacific 106.2 96.3
796.0 703.5
Operating profit:
Europe and the Middle East 81.2 80.1
Americas 14.9 10.5
Asia Pacific 11.8 10.1
Underlying operating profit 107.9 100.7
Exceptional and acquisition related items (Note 4) 14.0 (53.1)
Reported operating profit 121.9 47.6
Finance income 4.1 3.6
Finance costs (20.3) (17.7)
Profit before tax 105.7 33.5
Taxation (25.0) (10.4)
Profit of consolidated companies 80.7 23.1
Share of results of associates 2.6 1.9
Profit for the year 83.3 25.0
There are no inter-segment sales included in segment revenue.
2015 2014
Revenue by product group £m £m
Treasury Products 185.0 190.5
Interest Rate Derivatives 135.3 140.6
Fixed Income 171.2 186.5
Equities 46.3 39.5
Energy 204.3 100.0
Information Sales and Risk Management Services 53.9 46.4
796.0 703.5
4. Exceptional and acquisition related items
Exceptional and acquisition related items comprise:
2015 2014
£m £m
Net credit relating to major legal actions 64.4 3.1
Charge relating to cost improvement programmes (25.7) (46.7)
38.7 (43.6)
Acquisition costs relating to IGBB (12.1) -
Other acquisition costs (0.5) (1.8)
Acquisition related share-based payment charge (10.5) (0.9)
Amortisation of intangible assets arising on consolidation (1.2) -
Goodwill impairment - (6.8)
Loss on disposal of subsidiary undertakings (0.6) -
Adjustment to acquisition consideration 0.2 -
14.0 (53.1)
Finance costs (Note 7) (2.0) -
12.0 (53.1)
Taxation (charge)/credit on above items (7.5) 6.5
4.5 (46.6)
5. Other operating income
Other operating income represents receipts such as rental income, royalties,
insurance proceeds, settlements from competitors and business relocation
grants. Costs associated with such items are included in administrative
expenses.
6. Finance income
2015 2014
£m £m
Interest receivable and similar income 1.8 1.4
Deemed interest arising on thedefined benefit pension scheme surplus 2.3 2.2
4.1 3.6
7. Finance costs
2015 2014
Underlying Acquisitionrelated Total Total
£m £m £m £m
Interest and fees payable on bank facilities 1.6 0.6 2.2 1.5
Interest payable on Sterling NotesAugust 2014 - - - 0.4
Interest payable on Sterling NotesJuly 2016 9.9 - 9.9 9.9
Interest payable on Sterling NotesJune 2019 4.2 - 4.2 4.2
Other interest payable 0.4 - 0.4 0.5
Amortisation of debt issue and bank facility costs 1.8 1.1 2.9 1.1
Total borrowing costs 17.9 1.7 19.6 17.6
Unwind of discounted liabilities and provisions 0.4 0.3 0.7 0.1
18.3 2.0 20.3 17.7
8. Earnings per share
2015 2014
Basic - underlying 32.2p 32.3p
Diluted - underlying 31.5p 32.3p
Basic earnings per share 34.0p 11.2p
Diluted earnings per share 33.3p 11.2p
The calculation of basic and diluted earnings per share is based on the
following number of shares:
2015No.(m) 2014No.(m)
Basic weighted average shares 243.6 220.4
Contingently issuable shares 5.1 0.2
Diluted weighted average shares 248.7 220.6
The earnings used in the calculation of underlying, basic and diluted earnings
per share, are set out below:
2015 2014
£m £m
Earnings for the year 83.3 25.0
Minority interests (0.4) (0.4)
Earnings 82.9 24.6
Exceptional and acquisition related items (Note 4) (12.0) 53.1
Tax on exceptional and acquisition related items 7.5 (6.5)
Underlying earnings 78.4 71.2
9. Dividends
2015 2014
£m £m
Amounts recognised as distributions toequity holders in the year:
Interim dividend for the year ended 31 December 2015of 5.6p per share 13.6 -
Final dividend for the year ended 31 December 2014of 11.25p per share 27.4 -
Interim dividend for the year ended 31 December 2014of 5.6p per share - 12.2
Final dividend for the year ended 31 December 2013of 11.25p per share - 24.5
41.0 36.7
In respect of the current year, the Directors propose that the final dividend
of 11.25p per share amounting to £27.4m will be paid on 19 May 2016 to all
shareholders on the Register of Members on 29 April 2016. This dividend is
subject to approval by shareholders at the AGM and has not been included as a
liability in these Financial Statements. The trustees of the Tullett Prebon
plc Employee Benefit Trust 2007 have waived their rights to dividends.
10. Intangible assets arising on consolidation
Goodwill Other Total
2015 £m £m £m
At 1 January 2015 327.1 9.5 336.6
Recognised on acquisitions 14.5 1.1 15.6
Amortisation - (1.2) (1.2)
Effect of movements in exchange rates 5.9 0.5 6.4
At 31 December 2015 347.5 9.9 357.4
2014
At 1 January 2014 275.6 - 275.6
Recognised on acquisitions 55.8 9.5 65.3
Impairment (6.8) - (6.8)
Effect of movements in exchange rates 2.5 - 2.5
At 31 December 2014 327.1 9.5 336.6
11. Acquisitions
MOAB Oil, Inc.
On 28 July 2015, the Group announced the acquisition of 100% of the share
capital of MOAB Oil, Inc. ('MOAB'). Initial cash consideration of £7.9m was
paid on completion together with £3.7m for the working capital of the
business, including its cash. Deferred contingent consideration is payable
from the first anniversary of completion through to the fifth anniversary.
The amount of deferred contingent consideration is dependent upon the
performance of the business over the five year period and has an initial fair
value of £8.4m. Intangible assets arising on the consolidation of MOAB
amounted to £15.6m of which £14.5m relates to goodwill. Acquisition costs of
£0.5m have been included in administrative expenses.
This transaction has been accounted for under the acquisition method of
accounting.
Fair value
£m
Net assets acquired:
Property plant and equipment 0.7
Trade and other receivables 3.4
Cash and cash equivalents 1.7
Trade and other payables (1.4)
4.4
Intangible assets arising on consolidation:
Other intangible assets 1.1
Goodwill 14.5
Fair value of total consideration 20.0
Satisfied by:
Initial cash consideration 7.9
Working capital cash payment 3.7
Deferred consideration 8.4
20.0
Intangible assets arising on consolidation relate to the MOAB brand, £0.2m,
the value of customer relationships, £0.9m, with the balance of £14.5m
recognised as goodwill, representing the value of the established workforce
and the business's reputation.
£m
Goodwill arising on acquisition 14.5
Effect of movements in exchange rates 0.9
Goodwill at 31 December 2015 15.4
The revenue, underlying operating profit and underlying earnings for the
period since the date of the acquisition were £6.1m, £1.7m and £1.0m
respectively. Had MOAB been acquired on 1 January 2015 revenue would have
been £8.1m higher, underlying operating profit £1.4m higher and underlying
earnings £0.7m higher.
12. Reconciliation of operating result to net cash from operating
activities
2015 2014
£m £m
Operating profit 121.9 47.6
Adjustments for:
Share-based compensation expense 1.5 0.3
Pension scheme's administration costs 0.7 0.6
Depreciation of property, plant and equipment 7.7 6.5
Amortisation of intangible fixed assets 7.3 7.1
Acquisition related share-based payment charge 10.5 0.9
Amortisation of intangible assets arising on consolidation 1.2 -
Goodwill impairment - 6.8
Loss on disposal of property, plant and equipment 0.2 -
Loss on derecognition of intangible assets 0.1 -
Loss on disposal of subsidiary undertaking 0.2 -
Remeasurement of deferred consideration 0.4 -
Increase in provisions for liabilities and charges 11.5 9.7
Decrease in non-current liabilities (0.8) (1.6)
Operating cash flows before movement in working capital 162.4 77.9
Decrease in trade and other receivables 0.1 25.9
Decrease/(increase) in net settlement and trading balances 1.3 (1.1)
Increase/(decrease) in trade and other payables 16.5 (17.3)
Cash generated from operations 180.3 85.4
Income taxes paid (19.5) (15.9)
Interest paid (16.8) (16.7)
Net cash from operating activities 144.0 52.8
13. Analysis of net funds
At 1January2015£m Cashflow £m Non cashitems £m Exchangeratemovements£m At 31December2015£m
Cash 223.3 67.7 - 5.7 296.7
Cash equivalents 62.1 (1.6) - (0.3) 60.2
Client settlement money 1.7 0.3 - - 2.0
Cash and cash equivalents 287.1 66.4 - 5.4 358.9
Financial assets 10.7 10.7 - (1.1) 20.3
Total funds 297.8 77.1 - 4.3 379.2
Notes due within one year - - (140.9) - (140.9)
Notes due after one year (219.7) - 140.4 - (79.3)
(219.7) - (0.5) - (220.2)
Total net funds 78.1 77.1 (0.5) 4.3 159.0
Cash and cash equivalents comprise cash at bank and other short term highly
liquid investments with an original maturity of three months or less. As at
31 December 2015 cash and cash equivalents amounted to £358.9m (2014:
£287.1m). Cash at bank earns interest at floating rates based on daily bank
deposit rates. Short term deposits are made for varying periods of between
one day and three months depending on the immediate cash requirements of the
Group, and earn interest at the respective short term deposit rates.
Financial assets comprise short term government securities and term deposits
held with banks and clearing organisations.
OTHER INFORMATION
The Annual General Meeting of Tullett Prebon plc will be held at Level 37,
Tower 42, 25 Old Broad Street, London EC2N 1HQ on 12 May 2016 at 2.00pm.
This information is provided by RNS
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