REG - Whitbread PLC - Whitbread Interim Results <Origin Href="QuoteRef">WTB.L</Origin> - Part 3
24/10/2017 07:05
- Part 3: For the preceding part double click ID:nRSX3908Ub
(1.1) (1.2) (2.5)
Non-underlying operating costs (6.4) (38.0) (39.7)
Net finance cost:
IAS 19 pension finance cost (5.2) (5.0) (9.4)
Unwinding of discount on provisions - (0.4) (0.7)
Non-underlying net finance cost (5.2) (5.4) (10.1)
Non-underlying items before tax (11.6) (43.4) (49.8)
Tax adjustments included in reported profit after tax, but excluded in arriving at underlying profit after tax:
Tax on non-underlying items 0.3 1.0 12.3
Non-underlying tax items - tax base cost - 1.1 2.1
Deferred tax relating to UK tax rate change - - 5.2
Non-underlying tax credit 0.3 2.1 19.6
(a) During the period, the Group made a net gain of £18.5m from disposal and
development profit on sale and leaseback transactions, disposal of sites
previously held for sale and other minor disposals, offset by impairment
losses on hotel sites transferred to assets held for sale of £11.3m, and
provision for other one-off property costs of £15.2m.
(b) On 13 July 2016, the Group announced its intention to exit hotel
operations in South East Asia. In the prior year the Group recognised
impairment losses of £14.9m and a provision of £15.1m for costs of exiting
management agreements and closure of regional offices. During the current
period the Group disposed of its businesses in Thailand, India and Indonesia,
achieving net sales proceeds in excess of those assumed in the initial
impairment calculation resulting in a net credit of £6.7m in the period.
4. Finance (costs) / revenue
6 months to31 August 2017£m 6 months to1 September 2016£m Year to 2 March 2017£m
Finance cost
Bank loans and overdrafts (1.9) (2.8) (5.3)
Other loans (15.8) (15.5) (31.0)
Interest capitalised 2.9 5.5 8.9
Impact of ineffective portion of cash flow and fair value hedges (0.2) (0.1) (0.1)
(15.0) (12.9) (27.5)
Finance revenue
Bank interest receivable 0.1 0.1 0.1
Other interest receivable 0.1 0.1 0.2
0.2 0.2 0.3
Underlying net finance cost (14.8) (12.7) (27.2)
Non-underlying net finance cost
IAS 19 pension finance cost (Note 9) (5.2) (5.0) (9.4)
Unwinding of discount on provisions - (0.4) (0.7)
(5.2) (5.4) (10.1)
Total net finance cost (20.0) (18.1) (37.3)
Total finance cost (20.2) (18.3) (37.6)
Total finance revenue 0.2 0.2 0.3
Total net finance cost (20.0) (18.1) (37.3)
5. Earnings per share
The basic earnings per share (EPS) figures are calculated by dividing the net
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 to31 August 2017million 6 months to1 September 2016million Year to 2 March 2017million
Basic weighted average number of ordinary shares 182.7 182.1 182.2
Effect of dilution - share options 0.6 0.6 0.4
Diluted weighted average number of ordinary shares 183.3 182.7 182.6
The profits used for the earnings per share calculations are as follows:
6 months to31 August 2017£m 6 months to1 September 2016£m Year to 2 March 2017£m
Profit for the period attributable to parent shareholders 251.6 202.9 421.6
Non-underlying items- gross 11.6 43.4 49.8
Non-underlying items - taxation (0.3) (2.1) (19.6)
Non-underlying items - non-controlling interest (0.3) (0.4) (2.7)
Underlying profit for the period attributable to parent shareholders 262.6 243.8 449.1
6 months to 31 August 2017 6 months to 1 September 2016pence Year to 2 March 2017pence
pence
Basic on profit for the period 137.71 111.42 231.39
Non-underlying items - gross 6.35 23.83 27.33
Non-underlying items - taxation (0.16) (1.15) (10.76)
Non underlying items - non-controlling interest (0.16) (0.22) (1.48)
Basic on underlying profit for the period 143.74 133.88 246.48
Diluted on profit for the period 137.26 111.06 230.89
Diluted on underlying profit for the period 143.26 133.44 245.95
6. Dividends paid
6 months to31 August 2017 6 months to1 September 2016 Year to 2 March 2017
pence per share £m pence per share £m pence per share £m
Equity dividends on ordinary shares:
Final dividend for prior year 65.90 120.3 61.85 112.6 61.85 112.6
Interim dividend for the year - - 29.90 54.5
120.3 112.6 167.1
Dividends on other shares:
B share dividend - - 0.80 -
C share dividend - - 0.80 -
- - -
Total dividends paid 120.3 112.6 167.1
An interim dividend of 31.40p per share (2016: 29.90p) amounting to a dividend
of £57.3m (2016: £54.5m) was declared by the directors. A dividend
reinvestment plan (DRIP) alternative will be offered. These consolidated
financial statements do not reflect this dividend payable.
7. Movements in cash and net debt
2 March 2017 Cost of borrowings Cash flow Foreign exchange Fair value adjustments to loan capital Amortisation of premiums and discounts 31 August 2017
£m £m £m £m £m £m £m
Cash at bank and in hand 62.9 40.5
Short-term deposits 0.1 89.2
Overdrafts - -
Cash and cash equivalents 63.0 - 65.8 0.9 - - 129.7
Short-term bank borrowings (109.6) - 109.6 - - - -
Loan capital under one year (47.8) (18.3)
Loan capital over one year (795.6) (963.8)
Total loan capital (843.4) 0.8 (156.5) 14.7 3.0 (0.7) (982.1)
Net debt (890.0) 0.8 18.9 15.6 3.0 (0.7) (852.4)
Net debt includes US$ denominated loan notes of US$285.0m (March 2017:
US$325.0m) retranslated at period end to £223.5m (March 2017: £267.8m). These
notes have been hedged using cross-currency swaps. At maturity, £181.6m (March
2017: £208.3m) will be repaid taking into account the cross-currency swaps. If
the impact of these hedges is taken into account, reported net debt would be
£810.5m (March 2017: £830.5m).
8. Financial instruments
The Group entered into a number of cross-currency swap agreements in relation
to the US$ denominated loan notes to eliminate any foreign currency exchange
risk on interests or on the repayment of principle borrowed.
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 or
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; and
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 is calculated by discounting all
future cash flows by the market yield curve at the balance sheet date:
31 August 1 September 2 March
2017 2016 2017
£m £m £m
Financial assets
Derivative financial instruments - level 2 39.2 38.4 55.6
Financial liabilities
Derivative financial instruments - level 2 10.0 13.6 10.6
There were no transfers between levels during any period disclosed.
9. Pension liability
During the six month period to 31 August 2017, the pension liability has
decreased from £425.1m to £374.5m. The main movements in the deficit are as
follows:
£m
Pension liability at 2 March 2017 425.1
Re-measurement due to:
Changes in financial assumptions 48.2
Experience adjustments 11.3
Return on plan assets greater than discount rate (68.7)
(9.2)
Contributions from employer (48.1)
Net interest on pension liability 5.2
Administrative expenses 1.5
Pension liability at 31 August 2017 374.5
The deficit has decreased by £50.6m from 2 March 2017 driven by deficit
contributions of £48.1m and actual returns on assets being higher than the
discount rate offset by a reduction in the discount rate from 2.60% to 2.40%
10. Related party disclosure
In note 30 to the Annual Report and Accounts for the year ended 2 March 2017,
the Group identified its related parties as its key management personnel
(including directors), the Group pension schemes, its joint ventures and its
associate 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 31 August 2017 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 1
March 2018. 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:
31 August 1 September 2 March
2017 2016 2017
£m £m £m
Property, plant and equipment 208.0 191.2 156.4
Intangible assets 5.5 12.5 8.2
12. Events after the balance sheet date
On 10 October 2017 the Group announced it had acquired the non-controlling
interest in Yueda Costa (Shanghai) Food & Beverage Management Company Limited
for £35m.
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 31
August 2017 which comprise 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) 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 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 31 August 2017 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
Statutory Auditor
London, UK
23 October 2017
This information is provided by RNS
The company news service from the London Stock ExchangeRecent news on Whitbread
See all newsREG - Whitbread PLC - Director/PDMR Shareholding
AnnouncementREG - Whitbread PLC - Transaction in Own Shares
AnnouncementREG - Whitbread PLC - Director/PDMR Shareholding
AnnouncementREG - Whitbread PLC - Transaction in Own Shares
AnnouncementREG - Whitbread PLC - Transaction in Own Shares
Announcement