REG - Whitbread PLC - Whitbread Interim Results <Origin Href="QuoteRef">WTB.L</Origin> - Part 2
20/10/2015 07:00
- Part 2: For the preceding part double click ID:nRST7511Ca
share-based payments - - - 13.5 - - 13.5 - 13.5
Tax on share-based payments - - - 3.1 - - 3.1 - 3.1
Equity dividends - - - (130.6) - - (130.6) - (130.6)
Additions - - - - - - - 0.4 0.4
At 26 February 2015 149.8 59.2 12.3 3,833.0 (1.4) (2,080.9) 1,972.0 5.9 1,977.9
Interim consolidated balance sheet
(Reviewed) (Reviewed) (Audited)
27 August 2015 28 August 2014 26 February 2015
Notes £m £m £m
ASSETS
Non-current assets
Intangible assets 242.4 230.3 248.1
Property, plant and equipment 3,482.3 3,019.7 3,278.4
Investment in joint ventures 31.5 26.2 30.3
Investment in associate 2.2 2.1 2.0
Derivative financial instruments 8 4.0 - 2.2
Trade and other receivables 7.8 5.6 7.3
3,770.2 3,283.9 3,568.3
Current assets
Inventories 38.2 34.8 37.1
Derivative financial instruments 8 1.0 - 1.2
Trade and other receivables 145.4 130.5 124.0
Cash and cash equivalents 7 163.9 52.7 2.1
348.5 218.0 164.4
Assets held for sale 0.3 1.5 1.1
Total assets 4,119.0 3,503.4 3,733.8
LIABILITIES
Current liabilities
Financial liabilities 7 85.2 0.2 73.1
Provisions 6.7 12.9 6.7
Derivative financial instruments 8 4.5 4.3 4.8
Income tax liabilities 46.1 42.5 35.4
Trade and other payables 473.8 423.5 464.1
616.3 483.4 584.1
Non-current liabilities
Financial liabilities 7 804.6 519.7 512.2
Provisions 38.4 31.4 27.8
Derivative financial instruments 8 10.2 23.6 13.8
Deferred income tax liabilities 69.1 53.6 43.7
Pension liability 9 430.9 489.2 553.8
Trade and other payables 18.5 19.1 20.5
1,371.7 1,136.6 1,171.8
Total liabilities 1,988.0 1,620.0 1,755.9
Net assets 2,131.0 1,883.4 1,977.9
Equity
Share capital 149.8 149.6 149.8
Share premium 59.9 56.4 59.2
Capital redemption reserve 12.3 12.3 12.3
Retained earnings 3,979.2 3,738.2 3,833.0
Currency translation reserve (4.5) (2.8) (1.4)
Other reserves (2,070.2) (2,078.0) (2,080.9)
Equity attributable to equity holders of the parent 2,126.5 1,875.7 1,972.0
Non-controlling interest 4.5 7.7 5.9
Total equity 2,131.0 1,883.4 1,977.9
Interim consolidated cash flow statement
(Reviewed) (Reviewed) (Audited)
6 months to27 August 2015 6 months to28 August 2014 Year to 26 February 2015
Notes £m £m £m
Profit for the period 196.3 188.6 366.1
Adjustments for:
Taxation charged on total operations 58.6 53.2 97.7
Net finance cost 4 19.7 19.5 37.1
Total income from joint ventures (1.2) (1.1) (2.6)
Total income from associate (0.6) (0.6) (0.8)
Loss on disposal of property, plant and equipment and property reversions 3 14.8 1.1 3.3
Depreciation and amortisation 100.4 80.7 168.4
Impairment of property, plant and equipment 3 - - (3.4)
Share-based payments 8.2 6.2 13.5
Other non-cash items 2.3 3.6 7.9
Cash generated from operations before working capital changes 398.5 351.2 687.2
Increase in inventories (1.2) (4.3) (6.6)
Increase in trade and other receivables (21.5) (12.3) (7.4)
(Decrease) / increase in trade and other payables (1.7) 23.4 41.0
Cash generated from operations 374.1 358.0 714.2
Payments against provisions (2.9) (1.7) (12.3)
Pension payments 9 (71.5) (71.2) (81.4)
Interest paid (10.2) (9.8) (18.6)
Interest received 0.4 0.2 0.3
Corporation taxes paid (35.3) (35.5) (82.8)
Net cash flows from operating activities 254.6 240.0 519.4
Cash flows from investing activities
Purchase of property, plant and equipment (281.6) (216.6) (518.5)
Purchase of intangible assets (11.6) (12.3) (27.3)
Costs from disposal of property, plant and equipment (0.4) (0.1) (0.1)
Business combinations, net of cash acquired (0.1) - (19.5)
Capital contributions and loans to joint ventures - - (0.6)
Dividends from associate 0.4 0.5 0.8
Net cash flows from investing activities (293.3) (228.5) (565.2)
Cash flows from financing activities
Proceeds from issue of share capital 0.7 0.2 3.2
(Reduction) / increase in short-term borrowings (71.2) 0.2 71.2
Proceeds from long-term borrowing 445.2 - -
(Repayments of) / increase in long-term borrowings (150.9) 84.9 63.9
Renegotiation costs of long-term borrowings (1.9) - (0.4)
Dividends paid 5 (103.4) (85.1) (130.6)
Net cash flows from financing activities 118.5 0.2 7.3
Net increase / (decrease) in cash and cash equivalents 79.8 11.7 (38.5)
Opening cash and cash equivalents 2.1 41.4 41.4
Foreign exchange differences (0.3) (0.4) (0.8)
Closing cash and cash equivalents 7 81.6 52.7 2.1
Reconciliation to cash and cash equivalents in the balance sheet
Cash and cash equivalents shown above 7 81.6 52.7 2.1
Add back overdrafts 82.3 - -
Cash and cash equivalents shown within current assets on the balance sheet 163.9 52.7 2.1
Notes to the accounts
1. Basis of accounting and preparation
The interim condensed consolidated financial statements were authorised for
issue in accordance with a resolution of the Board of Directors on 19 October
2015.
The interim condensed consolidated financial statements are prepared in
accordance with UK listing rules and with IAS 34 'Interim Financial
Reporting'. The interim financial report does not constitute statutory
accounts within the meaning of section 434 of the Companies Act 2006.
The financial information for the year ended 26 February 2015 is extracted
from the statutory accounts of the Group for that year and does not constitute
statutory accounts as defined in Section 435 of the Companies Act 2006. These
published accounts were prepared in accordance with International Financial
Reporting Standards (IFRSs) as adopted for use in the European Union, and
reported on by the auditors without qualification or statement under Sections
498(2) or (3) of the Companies Act 2006 and have been delivered to the
Registrar of Companies.
The interim condensed consolidated financial statements for the six months
ended 27 August 2015 and the comparatives to 28 August 2014 are unaudited but
have been reviewed by the auditor; a copy of their review report is included
at the end of this report.
A combination of the strong cash flows generated by the business, and the
significant available headroom on its credit facilities, support the
directors' view that the Group has sufficient funds available for it to meet
its foreseeable working capital requirements. The directors have concluded
therefore that the going concern basis of preparation remains appropriate.
The accounting policies adopted in the preparation of the interim condensed
consolidated financial statements are consistent with those followed in the
preparation of the Group's annual financial statements for the year ended 26
February 2015 except for the adoption of new Standards and Interpretations
applicable as of 27 February 2015.
The Group has adopted the following standards and interpretations which have
been assessed as having no financial impact or disclosure requirements at the
interim:
· The IASB's annual improvement process, 2010-2012;
· The IASB's annual improvement process, 2011-2013;
· IFRIC Interpretation 21 Levies (IFRIC 21); and
· IAS 19 Defined Benefit Plans: Employee Contributions - Amendment to IAS
19.
2. Segmental analysis
For management purposes, the Group is organised into two strategic business
units (Hotels & Restaurants and Costa) based upon their different products and
services:
· Hotels & Restaurants provide services in relation to accommodation and
food; and
· Costa generates income from the operation of its branded, owned and
franchised coffee outlets.
The UK and International Hotels & Restaurants segments have been aggregated on
the grounds that the International segment is immaterial.
Management monitors the operating results of its strategic business units
separately for the purpose of making decisions about allocating resources and
assessing performance. Segment performance is measured based on underlying
operating profit. Included within the unallocated and elimination columns in
the tables below are the costs of running the public company. The unallocated
assets and liabilities are cash and debt balances (held and controlled by the
central treasury function), taxation, pensions, certain property, plant and
equipment, centrally held provisions and central working capital balances.
Inter-segment revenue is from Costa to the Hotels & Restaurants segment and is
eliminated on consolidation. Transactions were entered into on an arm's
length basis in a manner similar to transactions with third parties.
The following tables present revenue and profit information and certain asset
and liability information regarding business operating segments for the six
months to 27 August 2015 and 28 August 2014 and for the full year ended 26
February 2015.
Unallocated
Hotels & and Total
Restaurants Costa elimination operations
6 months to 27 August 2015 £m £m £m £m
Revenue
Underlying revenue from external customers 926.9 512.9 - 1,439.8
Inter-segment revenue - 1.7 (1.7) -
Total revenue 926.9 514.6 (1.7) 1,439.8
Underlying operating profit 249.4 67.3 (15.1) 301.6
Underlying interest (Note 4) - - (10.3) (10.3)
Underlying profit before tax 249.4 67.3 (25.4) 291.3
Exceptional items and non underlying adjustments (Note 3):
Amortisation of acquired intangibles - (2.1) - (2.1)
IAS 19 income statement charge for pension finance cost - - (9.1) (9.1)
Net loss on disposal of property, plant and equipment and property reversions (0.8) (1.5) (12.5) (14.8)
Intangible assets accelerated amortisation (7.2) (0.9) (2.0) (10.1)
Exceptional interest - - (0.3) (0.3)
Profit before tax 241.4 62.8 (49.3) 254.9
Tax expense (58.6)
Profit for the year 196.3
Assets and liabilities
Segment assets 3,493.5 423.7 - 3,917.2
Unallocated assets - - 201.8 201.8
Total assets 3,493.5 423.7 201.8 4,119.0
Segment liabilities (298.9) (117.5) - (416.4)
Unallocated liabilities - - (1,571.6) (1,571.6)
Total liabilities (298.9) (117.5) (1,571.6) (1,988.0)
Net assets 3,194.6 306.2 (1,369.8) 2,131.0
Other segment information
Share of profit from joint ventures 1.0 0.2 - 1.2
Share of profit from associate 0.6 - - 0.6
Investment in joint ventures and associate 30.5 3.2 - 33.7
Total property rent 56.4 53.2 - 109.6
Capital expenditure:
Property, plant and equipment - cash basis 242.1 39.4 0.1 281.6
Property, plant and equipment - accruals basis 244.6 41.8 - 286.4
Intangible assets 10.8 0.8 - 11.6
Depreciation - underlying (53.3) (29.9) - (83.2)
Amortisation - underlying (4.0) (1.0) - (5.0)
(5.0)
Unallocated
Hotels & and Total
Restaurants Costa elimination operations
6 months to 28 August 2014 £m £m £m £m
Revenue
Underlying revenue from external customers 851.9 441.3 - 1,293.2
Inter-segment revenue - 1.5 (1.5) -
Total revenue 851.9 442.8 (1.5) 1,293.2
Underlying operating profit 225.0 52.4 (13.8) 263.6
Underlying interest (Note 4) - - (7.6) (7.6)
Underlying profit before tax 225.0 52.4 (21.4) 256.0
Exceptional items and non underlying adjustments (Note 3):
Amortisation of acquired intangibles - (1.2) - (1.2)
IAS 19 income statement charge for pension finance cost - - (11.5) (11.5)
Net loss on disposal of property, plant and equipment (0.1) (1.0) - (1.1)
Exceptional interest - - (0.4) (0.4)
Profit before tax 224.9 50.2 (33.3) 241.8
Tax expense (53.2)
Profit for the year 188.6
Assets and liabilities
Segment assets 3,041.7 371.8 - 3,413.5
Unallocated assets - - 89.9 89.9
Total assets 3,041.7 371.8 89.9 3,503.4
Segment liabilities (283.1) (89.1) - (372.2)
Unallocated liabilities - - (1,247.8) (1,247.8)
Total liabilities (283.1) (89.1) (1,247.8) (1,620.0)
Net assets 2,758.6 282.7 (1,157.9) 1,883.4
Other segment information
Share of profit from joint ventures 1.1 - - 1.1
Share of profit from associate 0.6 - - 0.6
Investment in joint ventures and associate 25.5 2.8 - 28.3
Total property rent 50.6 49.3 0.1 100.0
Capital expenditure:
Property, plant and equipment - cash basis 180.8 35.7 0.1 216.6
Property, plant and equipment - accruals basis 163.1 36.0 - 199.1
Intangible assets 11.2 1.0 0.1 12.3
Depreciation - underlying (49.7) (25.6) - (75.3)
Amortisation - underlying (3.2) (0.6) (0.4) (4.2)
(4.2)
Unallocated
Hotels & and Total
Restaurants Costa elimination operations
Year to 26 February 2015 £m £m £m £m
Revenue
Underlying revenue from external customers 1,659.2 948.9 - 2,608.1
Inter-segment revenue - 3.0 (3.0) -
Total revenue 1,659.2 951.9 (3.0) 2,608.1
Underlying operating profit 401.4 132.5 (29.5) 504.4
Underlying interest (Note 4) - - (16.3) (16.3)
Underlying profit before tax 401.4 132.5 (45.8) 488.1
Exceptional items and non underlying adjustments (Note 3):
Amortisation of acquired intangibles - (2.5) - (2.5)
IAS 19 income statement charge for pension finance cost - - (21.6) (21.6)
Net loss on disposal of property, plant and equipment and property reversions (0.5) (2.8) - (3.3)
Impairment (2.9) (2.3) - (5.2)
Impairment reversal 8.1 0.5 - 8.6
Share of impairment in fixed assets in joint venture (1.1) - - (1.1)
Exceptional interest - - 0.8 0.8
Profit before tax 405.0 125.4 (66.6) 463.8
Tax expense (97.7)
Profit for the year 366.1
Assets and liabilities
Segment assets 3,293.0 395.8 - 3,688.8
Unallocated assets - - 45.0 45.0
Total assets 3,293.0 395.8 45.0 3,733.8
Segment liabilities (308.7) (109.7) - (418.4)
Unallocated liabilities - - (1,337.5) (1,337.5)
Total liabilities (308.7) (109.7) (1,337.5) (1,755.9)
Net assets 2,984.3 286.1 (1,292.5) 1,977.9
Other segment information
Share of profit from joint ventures 2.6 - - 2.6
Share of profit from associate 0.8 - - 0.8
Investment in joint ventures and associate 29.3 3.0 - 32.3
Total property rent 107.5 101.0 0.2 208.7
Capital expenditure:
Property, plant and equipment - cash basis 451.1 67.4 - 518.5
Property, plant and equipment - accruals basis 449.5 71.2 - 520.7
Intangible assets 22.7 4.4 0.2 27.3
Depreciation - underlying (102.3) (53.4) - (155.7)
Amortisation - underlying (7.5) (2.0) (0.7) (10.2)
(10.2)
3. Exceptional items and non underlying adjustments
6 months to27 August 2015£m 6 months to28 August 2014£m Year to 26 February 2015 £m
Exceptional items before tax and interest:
Operating costs
Net loss on disposal of property, plant and equipment and property reversions (a) (14.8) (1.1) (3.3)
Intangible assets accelerated amortisation(b) (10.1) - -
Impairment of property, plant and equipment (c) - - (5.2)
Impairment reversal (c) - - 8.6
Exceptional operating costs (24.9) (1.1) 0.1
Share of impairment in fixed assets in joint venture - - (1.1)
Exceptional items before interest and tax (24.9) (1.1) (1.0)
Exceptional interest:
Interest on exceptional tax - - 1.6
Unwinding of discount rate on provisions (d) (0.3) (0.4) (0.8)
(0.3) (0.4) 0.8
Exceptional items before tax (25.2) (1.5) (0.2)
Non underlying adjustments made to underlying profit before tax to arrive at reported profit before tax:
Amortisation of acquired intangibles (2.1) (1.2) (2.5)
IAS 19 income statement charge for pension finance cost (9.1) (11.5) (21.6)
(11.2) (12.7) (24.1)
Items included in reported profit before tax, but excluded in arriving at underlying profit before tax (36.4) (14.2) (24.3)
6 months to27 August 2015£m 6 months to28 August 2014£m Year to 26 February 2015 £m
Tax adjustments included in reported profit after tax, but excluded in arriving at underlying profit after tax:
Tax on exceptional items 3.1 0.2 0.4
Exceptional tax items - tax base cost - - 2.0
Exceptional tax items - adjustment in respect of previous periods (2.4) - -
Tax on non underlying adjustments 2.2 2.5 4.8
2.9 2.7 7.2
(a) The Group is currently negotiating terms on a number of properties with
onerous leases, which reverted to the Group in prior years under privity of
contracts, and as a consequence has increased the provision by £12.5m to
reflect those expected terms. The balance relates to other minor disposals in
the year.
(b) As at 26 February 2015, the Group had IT software and technology assets of
£50.2m included within intangible assets. Following a review during the
period, additional amortisation of £10.1m has been recognised in the income
statement in respect of systems for which there is now no future economic
benefit.
(c) There were no indicators of impairment in the current period.
(d) The interest arising from the unwinding of the discount rate within
provisions is included in exceptional interest, reflecting the exceptional
nature of the provisions created.
4. Finance (costs)/revenue
6 months to27 August 2015£m 6 months to28 August 2014£m Year to 26 February 2015 £m
Finance costs
Bank loans and overdrafts (2.9) (2.5) (5.7)
Other loans (11.8) (7.9) (15.6)
Interest capitalised 4.0 2.6 4.3
(10.7) (7.8) (17.0)
Finance revenue
Bank interest receivable 0.3 0.1 0.1
Other interest receivable 0.1 0.1 0.1
Impact of ineffective portion of cash flow and fair value hedges - - 0.5
0.4 0.2 0.7
Underlying interest (10.3) (7.6) (16.3)
Exceptional and non underlying interest
IAS 19 income statement charge for pension finance cost (9.1) (11.5) (21.6)
Exceptional finance revenue - - 1.6
Unwinding of discount rate on provisions (Note 3) (0.3) (0.4) (0.8)
(9.4) (11.9) (20.8)
Total net interest (19.7) (19.5) (37.1)
Total finance costs (20.1) (19.7) (39.4)
Total finance revenue 0.4 0.2 2.3
Total net interest (19.7) (19.5) (37.1)
5. Dividends paid
6 months to27 August 2015£m 6 months to28 August 2014£m Year to 26 February 2015 £m
Paid in the period:
Equity dividends on ordinary shares:
Final dividend for 2014/15 - 56.95 pence 103.4 - -
Final dividend for 2013/14 - 47.00 pence - 85.1 85.1
Interim dividend for 2014/15 - 25.20 pence - - 45.5
103.4 85.1 130.6
Dividends on other shares:
B share dividend - - -
C share dividend - - -
- - -
Total dividends paid 103.4 85.1 130.6
6. Earnings per share
The basic earnings per share figures are calculated by dividing the profit for
the period attributable to parent shareholders, therefore before
non-controlling interests, by the weighted average number of ordinary shares
in issue during the period after deducting treasury shares and shares held by
an independently managed employee share ownership trust (ESOT).
The diluted earnings per share figures allow for the dilutive effect of the
conversion into ordinary shares of the weighted average number of options
outstanding during the period. Where the average share price for the period is
lower than the option price the options become anti-dilutive and are excluded
from the calculation. The number of such options for all disclosed periods was
nil.
The numbers of shares used for the earnings per share calculations are as
follows:
6 months to27 August 2015million 6 months to28 August 2014million Year to 26 February 2015million
Basic weighted average number of ordinary shares 181.3 180.6 180.7
Effect of dilution - share options 1.7 1.8 1.8
Diluted weighted average number of ordinary shares 183.0 182.4 182.5
The profits used for the earnings per share calculations are as follows:
6 months to27 August 2015£m 6 months to28 August 2014£m Year to 26 February 2015£m
Profit for the period attributable to parent shareholders 197.6 190.4 370.1
Exceptional items and non underlying adjustments - gross 36.4 14.2 24.3
Exceptional items and non underlying adjustments - taxation (2.9) (2.7) (7.2)
Exceptional items and non underlying adjustments - non-controlling interest (0.3) (0.2) (1.1)
Underlying profit for the period attributable to parent shareholders 230.8 201.7 386.1
6 months to 27 August 2015 pence 6 months to 28 August 2014 pence Year to 26 February 2015pence
Basic EPS on profit for the period 108.99 105.43 204.81
Exceptional items and non underlying adjustments - gross 20.08 7.86 13.45
Exceptional items and non underlying adjustments - taxation (1.60) (1.49) (3.98)
Exceptional items and non underlying adjustments - non-controlling interest (0.17) (0.11) (0.61)
Basic EPS on underlying profit for the period 127.30 111.69 213.67
Diluted EPS on profit for the period 107.98 104.39 202.79
Diluted EPS on underlying profit for the period 126.12 110.58 211.56
7. Movements in cash and net debt
26 February 2015 Cost of borrowings Cash flow Foreign exchange Fair value adjustments to loan capital Amortisation of premiums and discounts 27 August 2015
£m £m £m £m £m £m £m
Cash at bank and in hand 2.1 49.4
Short-term deposits - 114.5
Overdrafts - (82.3)
Cash and cash equivalents 2.1 - 79.8 (0.3) - - 81.6
Short-term bank borrowings (71.2) - 71.2 - - - -
Loan capital under one year (1.9) (2.9)
Loan capital over one year (512.2) (804.6)
Total loan capital (514.1) 1.9 (294.2) (0.1) (0.2) (0.8) (807.5)
Net debt (583.2) 1.9 (143.2) (0.4) (0.2) (0.8) (725.9)
Net debt includes US$ denominated loan notes of US$325.0m (February 2015:
US$325.0m) retranslated
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