REG - Tullett Prebon Plc - Half Yearly Report <Origin Href="QuoteRef">TLPR.L</Origin> - Part 2
06/09/2014 22:28
- Part 2: For the preceding part double click ID:nRSc5504Na
(0.1) 1,348.8 369.5 2.5 372.0
Profit for the period - - - - - - - 40.2 40.2 0.3 40.5
Other comprehensive incomefor the period - - - (0.2) - 12.2 - 16.7 28.7 (0.1) 28.6
Total comprehensive incomefor the period - - - (0.2) - 12.2 - 56.9 68.9 0.2 69.1
Dividends paid - - - - - - - (24.5) (24.5) (0.2) (24.7)
Credit arising on share-basedpayment awards - - - - - - - 0.6 0.6 - 0.6
Balance at 30 June 2013 54.4 17.1 (1,182.3) 2.2 121.5 19.9 (0.1) 1,381.8 414.5 2.5 417.0
31 December 2013
Balance at 1 January 2013 54.4 17.1 (1,182.3) 2.4 121.5 7.7 (0.1) 1,348.8 369.5 2.5 372.0
Profit for the year - - - - - - - 65.6 65.6 0.2 65.8
Other comprehensive income for the year - - - (0.5) - (7.3) - 4.7 (3.1) (0.3) (3.4)
Total comprehensive incomefor the year - - - (0.5) - (7.3) - 70.3 62.5 (0.1) 62.4
Dividends paid - - - - - - - (36.7) (36.7) (0.3) (37.0)
Credit arising on share-basedpayment awards - - - - - - - 1.0 1.0 - 1.0
Balance at 31 December 2013 54.4 17.1 (1,182.3) 1.9 121.5 0.4 (0.1) 1,383.4 396.3 2.1 398.4
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
TULLETT PREBON PLC
Condensed Consolidated Cash Flow Statement
for the six months ended 30 June 2014
Notes Six months ended30 June 2014(unaudited)£m Six months ended30 June 2013(unaudited)£m Year ended31 December2013
£m
Net cash from operating activities 12 8.5 27.5 62.1
Investing activities
Sale/(purchase) of financial assets 21.8 (2.4) (1.9)
Interest received 0.8 0.8 1.9
Dividends from associates 0.2 0.2 1.0
Expenditure on intangible fixed assets (2.1) (3.9) (6.7)
Purchase of property, plant and equipment (1.9) (4.9) (10.4)
Investment in subsidiaries (1.2) (0.4) (2.3)
Net cash from investment activities 17.6 (10.6) (18.4)
Financing activities
Dividends paid 11 (24.5) (24.5) (36.7)
Dividends paid to minority interests (0.1) (0.2) (0.3)
Repayment of debt - (30.0) (30.0)
Debt issue and bank facility arrangement costs - (1.7) (1.7)
Net cash used in financing activities (24.6) (56.4) (68.7)
Net increase/(decrease) in cash and cash equivalents 1.5 (39.5) (25.0)
Cash and cash equivalents at the beginning of the period 251.6 281.5 281.5
Effect of foreign exchange rate changes (2.7) 4.9 (4.9)
Cash and cash equivalents at the end of the period 13 250.4 246.9 251.6
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
TULLETT PREBON PLC
Notes to the Condensed Consolidated Financial Statements
for the six months ended 30 June 2014
1. General information
The condensed consolidated financial information for the six months ended 30
June 2014 has been prepared in accordance with the Disclosure and Transparency
Rules ('DTR') of the Financial Conduct Authority and with IAS 34 'Interim
Financial Reporting' as adopted by the European Union ('EU'). This condensed
financial information should be read in conjunction with the Statutory
Accounts for the year ended 31 December 2013 which were prepared in accordance
with International Financial Reporting Standards ('IFRSs') as adopted by the
EU.
The Statutory Accounts for the year ended 31 December 2013 have been reported
on by the Company's auditors, Deloitte LLP, and have been delivered to the
Registrar of Companies. The report of the auditors on those accounts was
unqualified, did not draw attention to any matters by way of emphasis and did
not contain a statement under section 498(2) or (3) of the Companies Act
2006.
The condensed consolidated financial information for the six months ended 30
June 2014 has been prepared using accounting policies consistent with IFRSs.
The interim information, together with the comparative information contained
in this report for the year ended 31 December 2013, does not constitute
statutory accounts within the meaning of section 434 of the Companies Act
2006. The financial information is unaudited but has been reviewed by the
Company's auditors, Deloitte LLP, and their report appears at the end of the
Interim Management Report.
2. Accounting policies
The Condensed Consolidated Financial Statements have been prepared on the
historical cost basis, except for the revaluation of certain financial
instruments. The Group has adequate financial resources to meet the Group's
ongoing obligations. Accordingly, the going concern basis continues to be
used in preparing these Condensed Consolidated Financial Statements. The
Condensed Consolidated Financial Statements are rounded to the nearest hundred
thousand pounds (expressed as millions to one decimal place - £m), except
where otherwise indicated.
The same accounting policies, presentation and methods of computation have
been followed in the Condensed Consolidated Financial Statements as applied in
the Group's latest annual audited Group Financial Statements for the year
ended 31 December 2013, except as described below.
The Group has adopted IFRS 10 'Consolidated Financial Statements', IFRS 11
'Joint Arrangements', IFRS 12 'Disclosures of Interests in Other Entities',
Amendments to IFRS 10, 11 and 12 regarding transitional guidance, IAS 27
'Separate Financial Statements', IAS 28 'Investments in Associates and Joint
Ventures', Amendments to IAS 32 'Financial Instruments: Presentation'
regarding offsetting financial assets and financial liabilities, Amendments to
IAS 36 'Impairment of assets' regarding recoverable amount disclosures for
non-financial assets, and Amendments to IAS 39 'Financial Instruments:
Recognition and Measurement' regarding the novation of derivatives and
continuation of hedge accounting. The adoption of these standards and
amendments has had no impact on the Condensed Consolidated Financial
Statements. The adoption of IFRS 12 will increase the disclosure of Tullett
Prebon plc's interests in other entities and will be reported in the 2014
Statutory Accounts.
3. Related party transactions
Related party transactions are described in Note 36 to the 2013 Statutory
Accounts. There have been no material changes in the nature or value of
related party transactions in the six months ended 30 June 2014.
4. Principal risks and uncertainties
Robust risk management is fundamental to the achievement of the Group's
objectives. The Group maintains a Risk Assessment Framework which identifies
risks within the following nine risk categories: Market Risk, Credit Risk,
Operational Risk, Strategic and Business Risk, Governance Risk, Regulatory,
Legal and Human Resource Risk, Reputational Risk, Liquidity Risk and Other
Financial Risks. A detailed explanation of the above risks can be found on
pages 16 to 19 of the latest Annual Report which is available at
www.tullettprebon.com. The directors do not consider that the principal risks
and uncertainties have changed since the publication of the Annual Report for
the year ended 31 December 2013. Risks and uncertainties which could have a
material impact on the Group's performance over the remaining six months of
the financial year are discussed in the Interim Management Report.
5. 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:
Analysis by geographical segment
Six months ended30 June 2014£m Six months ended30 June 2013£m Year ended31 December2013£m
Revenue
Europe and the Middle East 209.0 255.5 468.7
Americas 102.7 127.8 233.9
Asia Pacific 48.6 56.5 101.1
360.3 439.8 803.7
Operating profit
Europe and the Middle East 43.0 57.9 97.9
Americas 2.7 7.7 10.4
Asia Pacific 4.6 5.8 7.1
Underlying operating profit 50.3 71.4 115.4
Charge relating to major legal actions (4.4) (10.3) (15.2)
Charge relating to cost improvement programme (28.6) - -
Acquisition costs (1.3) - -
Reported operating profit 16.0 61.1 100.2
Finance income 1.8 1.7 3.7
Finance costs (8.9) (10.3) (19.5)
Profit before tax 8.9 52.5 84.4
Taxation (7.1) (12.9) (20.0)
Profit of consolidated companies 1.8 39.6 64.4
Share of results of associates 1.2 0.9 1.4
Profit for the period 3.0 40.5 65.8
There are no inter-segment sales included in segment revenue.
Segment assets
30 June2014£m 30 June2013£m 31 December2013
£m
Europe and the Middle East - UK 12,235.1 15,246.2 1,728.4
Europe and the Middle East - Other 25.1 31.1 29.2
Americas 6,933.6 22,688.9 4,676.7
Asia Pacific 61.1 67.8 58.0
19,254.9 38,034.0 6,492.3
Segment liabilities
30 June2014£m 30 June2013£m 31 December2013
£m
Europe and the Middle East - UK 11,982.2 14,965.6 1,465.0
Europe and the Middle East - Other 20.0 24.1 23.2
Americas 6,845.3 22,589.6 4,575.3
Asia Pacific 33.8 37.7 30.4
18,881.3 37,617.0 6,093.9
Segmental assets and liabilities exclude all inter-segment balances.
Analysis by product group
Six months ended30 June 2014£m Six months ended30 June 2013£m Year ended31 December2013£m
Revenue
Treasury products 96.9 115.4 211.4
Interest Rate Derivatives 70.6 98.1 174.2
Fixed Income 103.0 124.1 225.5
Equities 20.3 22.9 43.2
Energy 46.6 54.8 102.4
Information Sales and Risk Management Services 22.9 24.5 47.0
360.3 439.8 803.7
6. Exceptional items
Exceptional items comprise:
Six months ended30 June 2014£m Six months ended30 June 2013£m Year ended31 December2013£m
Charge relating to major legal actions 4.4 10.3 15.2
Charge relating to cost improvement programme 28.6 - -
Acquisition costs 1.3 - -
34.3 10.3 15.2
Taxation credit on exceptional items (2.2) (1.7) (2.4)
32.1 8.6 12.8
7. 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.
8. Finance income
Six months ended30 June 2014£m Six months ended30 June 2013£m Year ended31 December2013£m
Interest receivable and similar income 0.7 0.8 1.8
Deemed interest arising on the defined benefit pension scheme surplus 1.1 0.9 1.9
1.8 1.7 3.7
9. Finance costs
Six months ended30 June 2014£m Six months ended30 June 2013£m Year ended31 December2013£m
Interest and fees payable on bank facilities 0.8 0.9 1.7
Interest payable on Sterling Notes August 2014 0.3 0.3 0.6
Interest payable on Sterling Notes July 2016 4.9 4.9 9.9
Interest payable on Sterling Notes June 2019 2.1 2.1 4.2
Other interest payable 0.2 0.2 0.3
Amortisation of debt issue and bank facility costs 0.6 1.7 2.3
Total borrowing costs 8.9 10.1 19.0
Amortisation of discount on deferred consideration - 0.2 0.5
8.9 10.3 19.5
10. Earnings per share
Six months ended30 June 2014 Six months ended30 June 2013 Year ended31 December2013
Basic - underlying 16.0p 22.4p 36.0p
Diluted - underlying 16.0p 22.4p 36.0p
Basic earnings per share 1.3p 18.5p 30.1p
Diluted earnings per share 1.3p 18.4p 30.1p
The calculation of basic and diluted earnings per share is based on the
following number of shares:
Six months ended30 June 2014No. (m) Six months ended30 June 2013No. (m) Year ended31 December2013No. (m)
Basic weighted average shares 217.8 217.8 217.8
Issuable on exercise of options - 0.1 0.2
Diluted weighted average shares 217.8 217.9 218.0
The earnings used in the calculation of underlying, basic and diluted earnings
per share, are set out below:
Six months ended30 June 2014£m Six months ended30 June 2013£m Year ended31 December2013£m
Profit for the period 3.0 40.5 65.8
Minority interests (0.2) (0.3) (0.2)
Earnings 2.8 40.2 65.6
Charge relating to major legal actions 4.4 10.3 15.2
Charge relating to cost improvement programme 28.6 - -
Acquisition costs 1.3 - -
Tax on above items (2.2) (1.7) (2.4)
Underlying earnings 34.9 48.8 78.4
11. Dividends
Six months ended30 June 2014£m Six months ended30 June 2013£m Year ended31 December2013£m
Amounts recognised as distributions to equity holders in the period:
Final dividend for the year ended 31 December 2013 of 11.25p per share 24.5 - -
Interim dividend for the year ended 31 December 2013 of 5.6p per share - - 12.2
Final dividend for the year ended 31 December 2012 of 11.25p per share - 24.5 24.5
24.5 24.5 36.7
An interim dividend of 5.6p per share will be paid on 13 November 2014 to all
shareholders on the Register of Members on 24 October 2014. As at 30 June
2014 the Tullett Prebon plc Employee Benefit Trust 2007 held 202,029 ordinary
shares (2013: 202,029 ordinary shares) and has waived its rights to
dividends.
12. Reconciliation of operating result to net cash from operating activities
Six months ended30 June 2014£m Six months ended30 June 2013£m Year ended31 December2013£m
Operating profit 16.0 61.1 100.2
Adjustments for:
- Share-based compensation expense 0.2 0.6 1.0
- Pension scheme's administration costs 0.3 - -
- Depreciation of property, plant and equipment 3.2 2.7 5.5
- Amortisation of intangible fixed assets 3.5 3.4 6.4
- Loss on disposal of property, plant and equipment - 1.5 1.5
- Loss on derecognition of intangible assets - 0.1 0.1
Increase/(decrease) in provisions for liabilities and charges 3.5 (2.7) (5.1)
(Decrease)/increase in non-current liabilities (0.7) 0.4 2.8
Operating cash flows before movement in working capital 26.0 67.1 112.4
Decrease/(increase) in trade and other receivables 17.0 (20.2) 13.2
(Increase)/decrease in net settlement balances (1.0) (1.5) 0.4
Decrease in trade and other payables (20.4) (0.1) (19.6)
Cash generated from operations 21.6 45.3 106.4
Income taxes paid (9.9) (14.7) (27.5)
Interest paid (3.2) (3.1) (16.8)
Net cash from operating activities 8.5 27.5 62.1
13. Analysis of net funds
At Cash Non-cash Exchange At
1 January2014 flow items differences 30 June
£m £m £m £m 2014
£m
Cash 212.6 (10.4) - (2.6) 199.6
Cash equivalents 37.4 11.8 - (0.1) 49.1
Client settlement money 1.6 0.1 - - 1.7
Cash and cash equivalents 251.6 1.5 - (2.7) 250.4
Financial assets 31.2 (21.8) - - 9.4
Total funds 282.8 (20.3) - (2.7) 259.8
Notes due within one year (8.5) - - - (8.5)
Notes due after one year (219.1) - (0.3) - (219.4)
(227.6) - (0.3) - (227.9)
Total net funds 55.2 (20.3) (0.3) (2.7) 31.9
Cash and cash equivalents comprise cash at bank and other short term highly
liquid investments with an original maturity of three months or less. 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.
14. Allocation of other comprehensive income within Equity
Equity attributable to equity holders of the parent
Revaluationreserve Mergerreserve Hedging andtranslation Ownshares Retained earnings Total Minority interests Totalequity
£m £m £m £m £m £m £m £m
Six months ended 30 June 2014(unaudited)
Revaluation of investments 0.2 - - - - 0.2 - 0.2
Exchange differences on translation of foreign operations - - (4.7) - - (4.7) 0.1 (4.6)
Remeasurement of the net defined benefit pension scheme - - - - 3.7 3.7 - 3.7
Taxation charge on components of other comprehensive income - - (0.2) - (1.3) (1.5) - (1.5)
Other comprehensive incomefor the period 0.2 - (4.9) - 2.4 (2.3) 0.1 (2.2)
Six months ended 30 June 2013(unaudited)
Revaluation of investments (0.2) - - - - (0.2) - (0.2)
Exchange differences on translation of foreign operations - - 12.0 - - 12.0 (0.1) 11.9
Remeasurement of the net defined benefit pension scheme - - - - 25.7 25.7 - 25.7
Taxation credit /(charge) on components of other comprehensive income - - 0.2 - (9.0) (8.8) - (8.8)
Other comprehensive incomefor the period (0.2) - 12.2 - 16.7 28.7 (0.1) 28.6
Year ended 31 December 2013
Revaluation of investments (0.5) - - - - (0.5) - (0.5)
Exchange differences on translation of foreign operations - - (7.5) - - (7.5) (0.3) (7.8)
Remeasurement of the net defined benefit pension scheme - - - - 7.2 7.2 - 7.2
Taxation credit /(charge) on components of other comprehensive income - - 0.2 - (2.5) (2.3) - (2.3)
Other comprehensive incomefor the year (0.5) - (7.3) - 4.7 (3.1) (0.3) (3.4)
15. Events after the balance sheet date
The outcome of the FINRA arbitration on the claims against BGC and former
employees brought by the subsidiary companies in the United States which were
raided by BGC Partners Inc. and certain of its subsidiaries in the second half
of 2009, along with various claims asserted against those subsidiary
companies, was determined in July.
The Arbitrators have determined that BGC and certain of the raided brokers
should pay $33.3m (£19.5m) in compensatory damages to the subsidiary companies
on account of the claims against them. The Arbitrators have also determined
that the subsidiary companies should pay $6.1m (£3.5m) in compensatory damages
to a representative of the former equity holders of Chapdelaine Corporate
Securities & Co. which the Company acquired in January 2007 on account of
certain of their claims, and $0.2m (£0.1m) to one of the raided brokers.
The compensatory damages will be included as exceptional items in the income
statement in the second half of the year.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
TULLETT PREBON PLC
Directors' Responsibility Statement
for the six months ended 30 June 2014
The directors confirm, to the best of their knowledge, that the condensed set
of financial statements has been prepared in accordance with IAS 34 'Interim
Financial Reporting' as adopted by the European Union, and that the Interim
Management Report herein includes a fair review of the information required by
DTR 4.2.7R and DTR 4.2.8R.
The directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the United Kingdom governing the preparation and dissemination
of financial information differs from legislation in other jurisdictions.
By order of the Board
Terry Smith
Chief Executive
29 July 2014
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Independent Review Report to Tullett Prebon plc
Introduction
We have been engaged by the Company to review the condensed set of financial
statements in the half year report for the six months ended 30 June 2014 which
comprises the Condensed Consolidated Income Statement, the Condensed
Consolidated Statement of Comprehensive Income, the Condensed Consolidated
Balance Sheet, the Condensed Consolidated Cash Flow Statement, the Condensed
Consolidated Statement of Changes in Equity and related Notes 1 to 15. We
have read the other information contained in the half year report and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
This report is made solely to the Company in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 'Review of Interim
Financial Information Performed by the Independent Auditor of the Entity'
issued by the Auditing Practices Board. Our work has been undertaken so that
we might state to the Company those matters we are required to state to them
in an independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone
other than the Company for our review work, for this report, or for the
conclusions we have formed.
Directors' responsibilities
The half year report is the responsibility of, and has been approved by, the
directors. The directors are responsible for preparing the half year report
in accordance with the Disclosure and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
As disclosed in Note 1, the annual financial statements of the Group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half year report has
been prepared in accordance with International Accounting Standard 34 'Interim
Financial Reporting', as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half year report based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half year report
for the six months ended 30 June 2014 is not prepared, in all material
respects, in accordance with International Accounting Standard 34 as adopted
by the European Union and the Disclosure and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
Deloitte LLP
Chartered Accountants and Statutory Auditor
London, UK
29 July 2014
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