REG - WPP PLC - 2014 Interim Results <Origin Href="QuoteRef">WPP.L</Origin> - Part 2
29/10/2014 15:04
- Part 2: For the preceding part double click ID:nRSZ9634Pa
Attributable to:
Equity holders of the parent 104.6 578.9 727.0
Non-controlling interests 22.7 38.9 59.5
127.3 617.8 786.5
Unaudited condensed consolidated interim cash flow statement for the six months ended 30 June 2014
£ million Notes Six months ended 30 June 2014 Six months ended 30 June 2013 Year ended 31 December 2013
Net cash (outflow)/inflow from operating activities 10 (17.3) 175.2 1,374.2
Investing activities
Acquisitions and disposals 10 (219.7) (93.8) (201.4)
Purchase of property, plant and equipment (80.1) (128.4) (240.7)
Purchase of other intangible assets (including capitalised computer software) (15.3) (22.2) (43.8)
Proceeds on disposal of property, plant and equipment 1.1 3.5 7.3
Net cash outflow from investing activities (314.0) (240.9) (478.6)
Financing activities
Share option proceeds 6.8 16.7 42.4
Cash consideration for non-controlling interests 10 (1.8) (4.7) (19.6)
Share repurchases and buybacks 10 (390.2) (133.1) (197.0)
Net (decrease)/increase in borrowings 10 (33.8) - 436.8
Financing and share issue costs (0.2) (1.2) (19.1)
Equity dividends paid - - (397.3)
Dividends paid to non-controlling interests in subsidiary undertakings (21.7) (24.4) (53.2)
Net cash outflow from financing activities (440.9) (146.7) (207.0)
Net (decrease)/increase in cash and cash equivalents (772.2) (212.4) 688.6
Translation differences (86.3) 111.7 (164.7)
Cash and cash equivalents at beginning of period 1,883.2 1,359.3 1,359.3
Cash and cash equivalents at end of period 10 1,024.7 1,258.6 1,883.2
Reconciliation of net cash flow to movement in net debt:
Net (decrease)/increase in cash and cash equivalents (772.2) (212.4) 688.6
Cash outflow/(inflow) from decrease/(increase) in debt financing 34.0 1.2 (418.1)
Conversion of bond to equity - 390.0 449.9
Other movements 5.7 5.6 21.0
Translation differences 15.7 (80.3) (160.6)
Movement of net debt in the period (716.8) 104.1 580.8
Net debt at beginning of period (2,240.4) (2,821.2) (2,821.2)
Net debt at end of period 11 (2,957.2) (2,717.1) (2,240.4)
Unaudited condensed consolidated interim balance sheet as at 30 June 2014
£ million Notes 30 June2014 30 June2013 31 December2013
Non-current assets
Intangible assets:
Goodwill 12 9,465.7 9,938.2 9,472.8
Other 13 1,662.6 1,843.9 1,667.8
Property, plant and equipment 742.7 821.0 773.3
Interests in associates and joint ventures 755.0 886.6 792.8
Other investments 331.2 209.8 270.6
Deferred tax assets 109.7 91.3 119.4
Trade and other receivables 14 132.4 210.9 158.5
13,199.3 14,001.7 13,255.2
Current assets
Inventory and work in progress 324.9 336.9 304.5
Corporate income tax recoverable 137.9 128.8 136.0
Trade and other receivables 14 9,322.6 9,495.1 9,088.1
Cash and short-term deposits 1,208.0 1,425.3 2,221.6
10,993.4 11,386.1 11,750.2
Current liabilities
Trade and other payables 15 (10,493.3) (11,001.0) (10,710.7)
Corporate income tax payable (55.7) (64.4) (120.1)
Bank overdrafts and loans (952.5) (994.2) (941.4)
(11,501.5) (12,059.6) (11,772.2)
Net current liabilities (508.1) (673.5) (22.0)
Total assets less current liabilities 12,691.2 13,328.2 13,233.2
Non-current liabilities
Bonds and bank loans (3,212.7) (3,148.2) (3,520.6)
Trade and other payables 16 (511.3) (553.5) (457.6)
Corporate income tax payable (389.9) (402.3) (362.6)
Deferred tax liabilities (643.8) (709.3) (650.7)
Provisions for post-employment benefits (238.9) (354.1) (247.5)
Provisions for liabilities and charges (147.5) (151.0) (147.7)
(5,144.1) (5,318.4) (5,386.7)
Net assets 7,547.1 8,009.8 7,846.5
Equity
Called-up share capital 17 135.0 133.4 134.9
Share premium account 490.1 399.7 483.4
Shares to be issued 0.4 1.7 0.5
Other reserves (47.3) 898.7 317.3
Own shares (535.9) (215.7) (253.0)
Retained earnings 7,204.2 6,525.7 6,903.7
Equity share owners' funds 7,246.5 7,743.5 7,586.8
Non-controlling interests 300.6 266.3 259.7
Total equity 7,547.1 8,009.8 7,846.5
Unaudited condensed consolidated interim statement of changes in equity for the six months ended 30 June 2014
£ million Called-up Share Shares tobe issued Other Own shares Retained Total equity share owners' funds Non-controlling interests Total
share premium reserves earnings
capital account
Balance at 1 January 2014 134.9 483.4 0.5 317.3 (253.0) 6,903.7 7,586.8 259.7 7,846.5
Ordinary shares issued 0.1 6.7 (0.1) - - 0.1 6.8 - 6.8
Treasury share additions - - - - (316.2) - (316.2) - (316.2)
Treasury share allocations - - - - 0.5 (0.5) - - -
Net profit for the period - - - - - 364.8 364.8 31.4 396.2
Exchange adjustments on foreign currency net investments - - - (306.3) - - (306.3) (8.7) (315.0)
Gain on revaluation of available for sale investments - - - 46.1 - - 46.1 - 46.1
Comprehensive income - - - (260.2) - 364.8 104.6 22.7 127.3
Dividends paid - - - - - - - (21.7) (21.7)
Non-cash share-based incentive plans (including share options) - - - - - 53.8 53.8 - 53.8
Tax adjustment on share-based payments - - - - - (6.1) (6.1) - (6.1)
Net movement in own shares held by ESOP Trusts - - - - 32.8 (106.8) (74.0) - (74.0)
Recognition/remeasurement of financial instruments - - - (28.4) - (4.0) (32.4) - (32.4)
Share purchases - close period commitments - - - (76.0) - - (76.0) - (76.0)
Acquisition of subsidiaries1 - - - - - (0.8) (0.8) 39.9 39.1
Balance at 30 June 2014 135.0 490.1 0.4 (47.3) (535.9) 7,204.2 7,246.5 300.6 7,547.1
1 Acquisition of subsidiaries represents movements in retained earnings and non-controlling interests arising from
increases in ownership of existing subsidiaries and recognition of non-controlling interests on new acquisitions.
Unaudited condensed consolidated interim statement of changes in equity for the six months ended 30 June 2014 (continued)
£ million Called-up Share Shares tobe issued Other Own shares Retained Total equity share owners' funds Non-controlling interests Total
share premium reserves earnings
capital account
Balance at 1 January 2013 126.5 175.9 1.8 (4,513.0) (166.5) 11,186.3 6,811.0 249.6 7,060.6
Reclassification due to Group reconstruction1 - (176.0) - 5,133.7 - (4,957.7) - - -
Ordinary shares issued 0.3 16.4 (0.1) - - 0.1 16.7 - 16.7
Shares issued on conversion of bond 6.6 383.4 - - - - 390.0 - 390.0
Reclassification of convertible bond - - - (38.6) - 31.0 (7.6) - (7.6)
Treasury share additions - - - - (17.6) - (17.6) - (17.6)
Treasury share allocations - - - - 3.2 (3.2) - - -
Net profit for the period - - - - - 280.9 280.9 34.5 315.4
Exchange adjustments on foreign currency net investments - - - 292.5 - - 292.5 4.4 296.9
Gain on revaluation of available for sale investments - - - 5.5 - - 5.5 - 5.5
Comprehensive income - - - 298.0 - 280.9 578.9 38.9 617.8
Dividends paid - - - - - - - (24.4) (24.4)
Non-cash share-based incentive plans (including stock options) - - - - - 50.1 50.1 - 50.1
Tax adjustment on share-based payments - - - - - 23.5 23.5 - 23.5
Net movement in own shares held by ESOP Trusts - - - - (34.8) (80.7) (115.5) - (115.5)
Recognition/remeasurement of financial instruments - - - 0.3 - (2.5) (2.2) - (2.2)
Share purchases - close period commitments - - - 18.3 - - 18.3 - 18.3
Acquisition of subsidiaries2 - - - - - (2.1) (2.1) 2.2 0.1
Balance at 30 June 2013 133.4 399.7 1.7 898.7 (215.7) 6,525.7 7,743.5 266.3 8,009.8
Ordinary shares issued 0.4 25.3 (1.2) - - 1.1 25.6 - 25.6
Share issue/cancellation costs - (0.4) - - - - (0.4) - (0.4)
Shares issued on conversion of bond 1.1 58.8 - - - - 59.9 - 59.9
Reclassification of convertible bond - - - (5.9) - 5.1 (0.8) - (0.8)
Deferred tax on convertible bond - - - 9.7 - (7.8) 1.9 - 1.9
Treasury share allocations - - - - 0.1 (0.1) - - -
Net profit for the period - - - - - 655.6 655.6 41.1 696.7
Exchange adjustments on foreign currency net investments - - - (649.0) - - (649.0) (20.5) (669.5)
Gain on revaluation of available for sale investments - - - 66.5 - - 66.5 - 66.5
Actuarial gain on defined benefit pension plans - - - - - 76.2 76.2 - 76.2
Deferred tax on defined benefit pension plans - - - - - (1.2) (1.2) - (1.2)
Comprehensive income - - - (582.5) - 730.6 148.1 20.6 168.7
Dividends paid - - - - - (397.3) (397.3) (28.8) (426.1)
Non-cash share-based incentive plans (including stock options) - - - - - 55.3 55.3 - 55.3
Tax adjustment on share-based payments - - - - - 24.4 24.4 - 24.4
Net movement in own shares held by ESOP Trusts - - - - (37.4) (26.5) (63.9) - (63.9)
Recognition/remeasurement of financial instruments - - - (2.7) - 2.3 (0.4) - (0.4)
Acquisition of subsidiaries2 - - - - - (9.1) (9.1) 1.6 (7.5)
Balance at 31 December 2013 134.9 483.4 0.5 317.3 (253.0) 6,903.7 7,586.8 259.7 7,846.5
1 On 2 January 2013, pursuant to a scheme of arrangement under Article 125 of the Companies (Jersey) Law 1991, a new parent
company was introduced. Upon implementation, the Group's share premium account and merger reserve (included in other
reserves) have been transferred to retained earnings.
2 Acquisition of subsidiaries represents movements in retained earnings and non-controlling interests arising from
increases in ownership of existing subsidiaries and recognition of non-controlling interests on new acquisitions.
Notes to the unaudited condensed consolidated interim financial statements
1. Basis of accounting
The unaudited condensed consolidated interim financial statements are prepared under the historical cost convention, except
for the revaluation of certain financial instruments as disclosed in our accounting policies.
2. Accounting policies
The unaudited condensed consolidated interim financial statements comply with the recognition and measurement criteria of
International Financial Reporting Standards (IFRS) as adopted by the European Union and issued by the International
Accounting Standards Board (IASB), IAS 34 Interim Financial Reporting and with the accounting policies of the Group which
were set out on pages 191 to 199 of the 2013 Annual Report and Accounts. No changes have been made to the Group's
accounting policies in the period ended 30 June 2014.
Statutory Information and Independent Review
The unaudited condensed consolidated interim financial statements for the six months to 30 June 2014 and 30 June 2013 do
not constitute statutory accounts. The financial information for the year ended 31 December 2013 does not constitute
statutory accounts. The statutory accounts for the year ended 31 December 2013 have been delivered to the Jersey Registrar
and received an unqualified auditors' report. The interim financial statements are unaudited but have been reviewed by the
auditors and their report is set out on page 43.
The announcement of the interim results was approved by the board of directors on 26 August 2014.
3. Currency conversion
The reporting currency of the Group is pound sterling and the unaudited condensed consolidated interim financial
statements have been prepared on this basis.
The 2014 unaudited condensed consolidated interim income statement is prepared using, among other currencies, average
exchange rates of US$1.6689 to the pound (period ended 30 June 2013: US$1.5441; year ended 31 December 2013: US$1.5646) and
E1.2176 to the pound (period ended 30 June 2013: E1.1753; year ended 31 December 2013: E1.1776). The unaudited condensed
consolidated balance sheet as at 30 June 2014 has been prepared using the exchange rates on that day of US$1.7102 to the
pound (30 June 2013: US$1.5185; 31 December 2013: US$1.6566) and E1.2494 to the pound (30 June 2013: E1.1675; 31 December
2013: E1.2014).
The basis for calculating the constant currency percentage changes, shown on the face of the unaudited condensed
consolidated interim income statement, is described in the glossary attached to this appendix.
Notes to the unaudited condensed consolidated interim financial statements (continued)
4.Operating costs and share of results of associates
£ million Six months ended 30 June 2014 Six months ended 30 June 2013 Year ended 31 December 2013
Staff costs 3,192.2 3,246.4 6,477.1
Establishment costs 351.3 368.6 727.4
Other operating costs 717.1 755.5 1,461.3
Total operating costs 4,260.6 4,370.5 8,665.8
Staff costs include:
£ million Six months ended 30 June 2014 Six months ended 30 June 2013 Year ended 31 December 2013
Wages and salaries 2,198.5 2,239.7 4,481.4
Cash-based incentive plans 59.2 77.8 222.2
Share-based incentive plans 53.8 50.1 105.4
Social security costs 296.8 302.5 577.3
Pension costs 76.2 76.7 151.3
Severance 27.5 18.1 26.9
Other staff costs 480.2 481.5 912.6
3,192.2 3,246.4 6,477.1
Staff cost to net sales ratio 66.6% 66.5% 64.3%
Other operating costs include:
£ million Six months ended 30 June 2014 Six months ended 30 June 2013 Year ended 31 December 2013
Amortisation and impairment of acquired intangible assets 74.0 94.2 179.8
Goodwill impairment - - 23.3
Gains on disposal of investments (17.1) (0.3) (6.0)
Gains on re-measurement of equity interest on acquisition of controlling interest (5.9) - (30.0)
Investment write-downs - - 0.4
Restructuring costs 9.1 - 5.0
In 2014, the Group incurred restructuring costs of £9.1 million (period ended 30 June 2013: nil; year ended 31 December
2013: £5.0 million) as a result of the continuing rationalisation of its IT infrastructure, a project initiated in 2012.
Notes to the unaudited condensed consolidated interim financial statements (continued)
4. Operating costs and share of results of associates (continued)
Share of results of associates include:
£ million Six months ended 30 June 2014 Six months ended 30 June 2013 Year ended 31 December 2013
Share of profit before interest and taxation 44.7 44.1 111.0
Share of exceptional losses (2.1) (1.7) (10.7)
Share of interest and non-controlling interests (0.8) (2.2) (4.6)
Share of taxation (13.1) (12.6) (27.6)
28.7 27.6 68.1
5. Finance income, finance costs and revaluation of financial instruments
Finance income includes:
£ million Six months ended 30 June 2014 Six months ended 30 June 2013 Year ended 31 December 2013
Income from available for sale investments 11.3 - 10.1
Interest income 31.7 25.0 54.2
43.0 25.0 64.3
Finance costs include:
£ million Six months ended 30 June 2014 Six months ended 30 June 2013 Year Ended 31 December 2013
Net interest expense on pension plans 4.0 5.4 11.4
Interest on other long-term employee benefits 0.9 0.8 1.7
Interest payable and similar charges 128.5 132.1 254.8
133.4 138.3 267.9
Revaluation of financial instruments include:
£ million Six months ended 30 June 2014 Six months ended 30 June 2013 Year ended 31 December 2013
Movements in fair value of treasury instruments 19.7 (0.8) 6.3
Revaluation of put options over non-controlling interests 0.1 (7.4) (1.1)
Revaluation of payments due to vendors (earnout agreements) 1.9 7.2 15.8
21.7 (1.0) 21.0
Notes to the unaudited condensed consolidated interim financial statements (continued)
6. Segmental analysis
Reported contributions by operating sector were as follows:
£ million Six months ended 30 June 2014 Six months ended 30 June 2013 Year ended 31 December 2013
Revenue
Advertising and Media Investment Management 2,390.6 2,192.4 4,578.8
Data Investment Management 1,176.8 1,238.3 2,549.7
Public Relations & Public Affairs 435.4 457.8 920.7
Branding & Identity, Healthcare and Specialist Communications 1,465.9 1,438.2 2,970.2
5,468.7 5,326.7 11,019.4
Net sales
Advertising and Media Investment Management 2,117.9 2,144.5 4,463.6
Data Investment Management 842.5 899.3 1,843.7
Public Relations & Public Affairs 430.3 450.7 907.5
Branding & Identity, Healthcare and Specialist Communications 1,401.0 1,389.8 2,861.3
4,791.7 4,884.3 10,076.1
Headline PBIT1
Advertising and Media Investment Management 312.0 315.1 824.4
Data Investment Management 88.1 93.3 263.8
Public Relations & Public Affairs 64.7 59.4 133.8
Branding & Identity, Healthcare and Specialist Communications 157.2 169.2 439.6
622.0 637.0 1,661.6
Net sales margin2
Advertising and Media Investment Management 14.7% 14.7% 18.5%
Data Investment Management 10.5% 10.4% 14.3%
Public Relations & Public Affairs 15.0% 13.2% 14.7%
Branding & Identity, Healthcare and Specialist Communications 11.2% 12.2% 15.4%
13.0% 13.0% 16.5%
Total assets
Advertising and Media Investment Management 11,915.8 12,381.4 11,787.6
Data Investment Management 3,337.0 3,453.9 3,330.2
Public Relations & Public Affairs 1,654.9 1,855.4 1,693.7
Branding & Identity, Healthcare and Specialist Communications 5,829.4 6,051.7 5,716.9
Segment assets 22,737.1 23,742.4 22,528.4
Unallocated corporate assets3 1,455.6 1,645.4 2,477.0
24,192.7 25,387.8 25,005.4
1 Headline PBIT is defined in note 19.
2 Net sales margin is defined in note 19.
3 Unallocated corporate assets are corporate income tax recoverable, deferred tax assets and cash and short term deposits.
Notes to the unaudited condensed consolidated interim financial statements (continued)
6. Segmental analysis (continued)
Reported contributions by geographical area were as follows:
£ million Six months ended 30 June 2014 Six months ended 30 June 2013 Year ended 31 December 2013
Revenue
North America1 1,878.1 1,839.6 3,744.7
United Kingdom 783.6 668.7 1,414.0
Western Continental Europe 1,243.9 1,258.1 2,592.6
Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe 1,563.1 1,560.3 3,268.1
5,468.7 5,326.7 11,019.4
Net sales
North America1 1,677.7 1,742.6 3,547.0
United Kingdom 665.2 613.4 1,303.9
Western Continental Europe 1,052.4 1,088.8 2,217.8
Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe 1,396.4 1,439.5 3,007.4
4,791.7 4,884.3 10,076.1
Headline PBIT2
North America1 250.5 254.6 616.5
United Kingdom 90.9 85.0 204.7
Western Continental Europe 97.8 99.8 272.0
Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe 182.8 197.6 568.4
622.0 637.0 1,661.6
Net sales margin3
North America1 14.9% 14.6% 17.4%
United Kingdom 13.7% 13.9% 15.7%
Western Continental Europe 9.3% 9.2% 12.3%
Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe 13.1% 13.7% 18.9%
13.0% 13.0% 16.5%
1 North America includes the US with revenue of £1,766.9 million (period ended 30 June 2013: £1,716.3 million; year ended
31 December 2013: £3,498.1 million), net sales of £1,573.1 million (period ended 30 June 2013: £1,624.7 million; year ended
31 December 2013: £3,310.8 million) and headline PBIT of £237.5 million (period ended 30 June 2013: £239.0 million; year
ended 31 December 2013: £582.6 million).
2 Headline PBIT is defined in note 19.
3 Net sales margin is defined in note 19.
Notes to the unaudited condensed consolidated interim financial statements (continued)
7. Taxation
The headline tax rate was 20.0% (30 June 2013: 21.8%; 31 December 2013: 20.2%). The tax rate on reported PBT was 19.3% (30
June 2013: 26.2%; 31 December 2013: 21.9%).
The tax charge comprises:
£ million Six months ended 30 June 2014 Six months ended 30 June 2013 Year ended 31 December 2013
Corporation tax
Current year 98.5 118.6 359.1
Prior years 5.5 (5.1) (48.1)
104.0 113.5 311.0
Deferred tax
Current year 2.2 0.6 (9.0)
Net credit in relation to the amortisation of acquired intangible assets and other goodwill items (11.3) (2.4) (10.6)
(9.1) (1.8) (19.6)
Prior years - - (7.7)
(9.1) (1.8) (27.3)
Tax charge 94.9 111.7 283.7
The calculation of the headline tax rate is as follows:
£ million Six months ended 30 June 2014 Six months ended30 June2013 Year ended 31 December 2013
Headline PBT1 531.6 523.7 1,458.0
Tax charge 94.9 111.7 283.7
Net credit in relation to the amortisation of acquired intangible assets and other goodwill items 11.3 2.4 10.6
Headline tax charge 106.2 114.1 294.3
Headline tax rate 20.0% 21.8% 20.2%
8. Ordinary dividends
The Board has recommended an interim dividend of 11.62p (2013: 10.56p) per ordinary share. This is expected to be paid on
10 November 2014 to share owners on the register at 10 October 2014.
The Board recommended a final dividend of 23.65p per ordinary share in respect of 2013. This was paid on 7 July 2014.
1 Headline PBT is defined in note 19.
Notes to the unaudited condensed consolidated interim financial statements (continued)
9. Earnings per share
Basic EPS
The calculation of basic reported and headline EPS is as follows:
Six months ended 30 June 2014 Six months ended 30 June 2013 +/(-)% ConstantCurrency+/(-)% Year ended 31 December 2013
Reported earnings1 (£ million) 364.8 280.9 936.5
Headline earnings (£ million) (note 19) 394.0 375.1 1,088.1
Average shares used in basic EPS calculation (million) 1,318.7 1,260.5 1,293.8
Reported EPS 27.7p 22.3p 24.2 46.5 72.4p
Headline EPS 29.9p 29.8p 0.3 14.8 84.1p
Diluted EPS
The calculation of diluted reported and headline EPS is as follows:
Six months ended 30 June 2014 Six months ended 30 June 2013 +/(-)% ConstantCurrency+/(-)% Year ended 31 December 2013
Diluted reported earnings (£ million) 364.8 291.5 947.1
Diluted headline earnings (£ million) 394.0 385.7 1,098.7
Shares used in diluted EPS calculation (million) 1,349.2 1,355.9 1,360.3
Diluted reported EPS 27.0p 21.5p 25.6 47.7 69.6p
Diluted headline EPS 29.2p 28.4p 2.8 17.1 80.8p
Diluted EPS has been calculated based on the reported and headline earnings amounts above. On 19 May 2009 the Group issued
£450 million 5.75% convertible bonds due in 2014. During 2013 these bonds were converted into 76.5 million shares. For the
six months ended 30 June 2013 these convertible bonds were dilutive and earnings were consequently increased by £10.6
million (year ended 31 December 2013: £10.6 million) for the purpose of the calculation of diluted earnings.
A reconciliation between the shares used in calculating basic and diluted EPS is as follows:
million Six months ended 30 June 2014 Six months ended 30 June 2013 Year ended 31 December 2013
Average shares used in basic EPS calculation 1,318.7 1,260.5 1,293.8
Dilutive share options outstanding 5.4 6.2 6.8
Other potentially issuable shares 25.1 28.4 30.8
£450 million 5.75% convertible bonds - 60.8 28.9
Shares used in diluted EPS calculation 1,349.2 1,355.9 1,360.3
At 30 June 2014 there were 1,349,819,897 ordinary shares in issue.
1 Reported earnings is equivalent to profit for the period attributable to equity holders of the parent.
Notes to the unaudited condensed consolidated interim financial statements (continued)
10. Analysis of cash flows
The following tables analyse the items included within the main cash flow headings on page 18:
Net cash (outflow)/inflow from operating activities:
£ million Six months ended 30 June 2014 Six months ended 30 June 2013 Year ended 31 December 2013
Profit for the period 396.2 315.4 1,012.1
Taxation 94.9 111.7 283.7
Revaluation of financial instruments (21.7) 1.0 (21.0)
Finance costs 133.4 138.3 267.9
Finance income (43.0) (25.0) (64.3)
Share of results of associates (28.7) (27.6) (68.1)
Operating profit 531.1 513.8 1,410.3
Adjustments for:
Non-cash share-based incentive plans (including share options) 53.8 50.1 105.4
Depreciation of property, plant and equipment 95.8 100.5 202.0
Goodwill impairment - - 23.3
Amortisation and impairment of acquired intangible assets 74.0 94.2 179.8
Amortisation of other intangible assets 15.1 16.0 32.7
Investment write-downs - - 0.4
Gains on disposal of investments (17.1) (0.3) (6.0)
Gains on re-measurement of equity interest on acquisition of controlling interest (5.9) - (30.0)
Losses/(gains) on sale of property, plant and equipment 0.2 0.4 (0.4)
Operating cash flow before movements in working capital and provisions 747.0 774.7 1,917.5
Movements in working capital and provisions1 (539.6) (371.8) (133.4)
Cash generated by operations 207.4 402.9 1,784.1
Corporation and overseas tax paid (133.7) (129.8) (273.3)
Interest and similar charges paid (155.2) (145.4) (254.7)
Interest received 30.4 24.5 51.3
Investment income 4.4 - 10.1
Dividends received from associates 29.4 23.0 56.7
(17.3) 175.2 1,374.2
Acquisitions and disposals:
£ million Six months ended 30 June 2014 Six months ended 30 June 2013 Year ended 31 December 2013
Initial cash consideration (239.7) (69.1) (165.1)
Cash and cash equivalents acquired (net) 54.1 5.3 25.0
Earnout payments (15.3) (7.1) (27.7)
Purchase of other investments (including associates) (53.8) (22.9) (45.6)
Proceeds on disposal of investments 35.0 - 12.0
Acquisitions and disposals (219.7) (93.8) (201.4)
Cash consideration for non-controlling interests (1.8) (4.7) (19.6)
Net acquisition payments and investments (221.5) (98.5) (221.0)
1 The Group typically experiences an outflow of working capital in the first half of the financial year and an inflow in
the second half. This is primarily due to the seasonal nature of working capital flows associated with its media buying
activities on behalf of
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