REG - Whitbread PLC - Whitbread Interim Results <Origin Href="QuoteRef">WTB.L</Origin> - Part 3

WhitbreadAnnouncement

20/10/2015 07:00

- Part 3: For the preceding part double click  ID:nRST7511Cb 

at period end to £214.9m (February 2015: £214.7m).
These notes have been hedged using cross currency swaps. At maturity, £208.3m
(February 2015: £208.3m) will be repaid taking into account the cross currency
swaps. If the impact of these hedges are taken into account, reported net debt
would be £719.3m (February 2015: £576.8m). 
 
8. Financial instruments 
 
The Group entered into a number of cross-currency swap agreements in relation
to the US$ denominated loan notes to eliminate any foreign currency exchange
risk on interests or on the repayment of principle borrowed. There are also
£50.0m of swaps (February 2015: £50.0m) with maturity beyond the life of the
revolving credit facility (2019), which are in place to hedge against the core
level of debt the Group will hold. 
 
IFRS 13 requires that the classification of financial instruments measured at
fair value be determined by reference to the source of inputs used to derive
the fair value. The classification uses the following three-level hierarchy: 
 
Level 1 - Quoted prices (unadjusted) in active markets for identical assets
and liabilities. 
 
Level 2 - Other techniques for which all inputs, which have a significant
effect on the recorded fair value, are observable, either directly or
indirectly. 
 
Level 3 - Techniques which use inputs, which have a significant effect on the
recorded fair value, that are not based on observable market data. 
 
The fair value of derivative instruments disclosed below is calculated by
discounting all future cash flows by the market yield curve at the balance
sheet date using level 2 techniques: 
 
 As at 27 August 2015              Level 1£m  Level 2£m  Level 3£m  Total £m  
 Financial assets                                                             
 Derivative financial instruments  -          5.0        -          5.0       
 Financial liabilities                                                        
 Derivative financial instruments  -          14.7       -          14.7      
 
 
 As at 28 August 2014              Level 1£m  Level 2£m  Level 3£m  Total £m  
 Financial assets                                                             
 Derivative financial instruments  -          -          -          -         
 Financial liabilities                                                        
 Derivative financial instruments  -          27.9       -          27.9      
 
 
 As at 26 February 2015            Level 1£m  Level 2£m  Level 3£m  Total £m  
 Financial assets                                                             
 Derivative financial instruments  -          3.4        -          3.4       
 Financial liabilities                                                        
 Derivative financial instruments  -          18.6       -          18.6      
 
 
There were no transfers between levels during any period disclosed. 
 
9. Pension liability 
 
During the six month period to 27 August 2015, the pension liability has
decreased from £553.8m to £430.9m.  The main movements in the deficit are as
follows: 
 
                                                            £m      
 Pension liability at 26 February 2015                      553.8   
 Re-measurement due to:                                             
 Changes in financial assumptions                  (136.6)          
 Experience adjustments                            (10.3)           
 Return on plan assets lower than discount rate    84.9             
                                                            (62.0)  
 Contributions from employer                                (71.5)  
 Net interest on pension liability                          9.1     
 Administrative expenses                                    1.5     
 Pension liability at 27 August 2015                        430.9   
 
 
The deficit has reduced by £122.9m from 26 February 2015 driven by a
contribution of £71.5m and an increase in the discount rate from 3.30% to
3.80%. These gains have been offset by an increase in the Retail Price Index
(RPI) inflation assumption from 2.90% to 3.10%. 
 
10. Related party disclosure 
 
In note 32 to the Annual Report and Accounts for the year ended 26 February
2015, the Group identified its key management personnel (including directors),
the Group pension schemes, its joint ventures and its associate as related
parties for the purpose of IAS 24 'Related Party Disclosure'. There have been
no significant changes in those related parties identified at the year end and
there have been no transactions with those related parties during the six
months to 27 August 2015 that have materially effected, or are expected to
materially effect, the financial position or performance of the Group during
this period. Details of the relevant relationships with those related parties
will be disclosed in the Annual Report and Accounts for the year ending 3
March 2016. All transactions with subsidiaries are eliminated on
consolidation. 
 
11. Capital expenditure commitments 
 
Capital expenditure commitments for which no provision has been made are set
out in the table below: 
 
                                27 August  28 August  26 February  
                                2015       2014       2015         
                                £m         £m         £m           
 Property, plant and equipment  141.5      80.2       123.5        
 Intangible assets              4.6        6.9        4.2          
 
 
12. Events after the balance sheet date 
 
An interim dividend of 28.50p per share (2014: 25.20p) amounting to a dividend
of £51.7m (2014: £45.5m) was declared by the directors.  A dividend
reinvestment plan (DRIP) alternative will be offered.  These consolidated
financial statements do not reflect this dividend payable. 
 
As at 27 August 2015, the Group had a revolving credit facility ("RCF") with a
total available credit of £650m which ran until November 2019. As part of the
review of the long-term financing requirements of the business, on 7 September
2015, the terms and tenure of the RCF was renegotiated with both existing and
new banking partners. The revised terms give a total available credit of £950m
which runs until September 2020 with options over two one-year extensions,
subject to agreement by the banking partners, that will potentially extend the
maturity to September 2022. 
 
Independent review report to Whitbread PLC 
 
Introduction 
 
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 27
August 2015 which comprises the interim consolidated income statement, the
interim consolidated statement of comprehensive income, the interim
consolidated statement of changes in equity, the interim consolidated balance
sheet, the interim consolidated cash flow statement and the related notes 1 to
12.  We have read the other information contained in the half-yearly financial
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 it 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-yearly financial report is the responsibility of, and has been
approved by, the directors.  The directors are responsible for preparing the
half-yearly financial report in accordance with the Disclosure and
Transparency Rules of the United Kingdom's Financial Conduct Authority. 
 
As disclosed in the accounting policies, 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-yearly
financial 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-yearly financial 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 enquiries, 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-yearly
financial report for the six months ended 27 August 2015 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 
 
19 October 2015 
 
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