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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Redde Northgate Plc | LSE:NTG | London | Ordinary Share | GB00B41H7391 | ORD 50P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 250.00 | 249.00 | 250.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMNTG
RNS Number : 0220R
Northgate PLC
06 December 2016
6 December 2016
NORTHGATE PLC
INTERIM RESULTS FOR THE SIX MONTHSED 31 OCTOBER 2016
Full year trading in line with expectations, increase in dividend and good momentum into the second half of the year
Northgate plc ("Northgate", the "Company" or the "Group"), the UK, Spain and Ireland's leading specialist in light commercial vehicle hire, announces its interim results for the half year ended 31 October 2016.
Financial highlights
As expected, profitability was held back in the first half of the year, largely due to the lower opening vehicles on hire in the UK.
The UK business has now stabilised and has grown closing vehicles on hire in the period. This, alongside a more settled political environment in Spain, provides momentum going into the second half of the year, meaning that full year results remain in line with expectations.
-- Underlying profit before tax GBP40.4m (2015 - GBP45.9m), impacted by:
o GBP2.5m adverse impact from previous changes in vehicle depreciation rates;
o GBP2.9m positive effect of the strengthened Euro;
-- Profit before tax GBP40.0m (2015 - GBP42.8m); -- Underlying basic earnings per share 25.8p (2015 - 27.1p); -- Basic earnings per share 25.5p (2015 - 25.4p); -- 12% increase in interim dividend to 5.7p per share (2015 - 5.1p);
-- Net debt GBP355.0m (April 2016 - GBP309.9m), including GBP38.3m adverse effect of the strengthened Euro.
Strategic progress
The Group has made good progress across the renewed areas of strategic focus which were outlined in our full year results in June:
Optimise the core business
-- Group closing vehicles on hire grew by 900 in the first six months of the year, compared to a decline of 900 in the same period last year.
Closing vehicles on hire Q1 Q2 Total (reduction) growth --------------------------- ------ ------ ------ Year ending 30 April 2017 (100) 1,000 900 --------------------------- ------ ------ ------ Year ended 30 April 2016 (500) (400) (900) --------------------------- ------ ------ ------
-- After strengthening of the UK management team vehicles on hire have stabilised, with growth of 100 in closing vehicles on hire in the six month period compared to a 1,200 reduction in the same period last year;
-- Spain closing vehicles on hire increased by 600 since April 2016, despite the planned return of 900 vehicles from expiring legacy contracts. This compared to a 100 vehicle increase in the same period last year; and
-- Ireland closing vehicles on hire increased by 200 vehicles since April 2016.
Expand addressable markets
-- Successful trial from June of fixed term product in Spain, expanding our business into an adjacent addressable market. Contracts for 1,500 vehicles have been signed, with 1,000 vehicles on hire as at the end of October; and
-- Following the success in Spain, the trial has been extended to the UK and Ireland in November.
Maximising end of life value
-- Proportion of UK vehicles sold through retail channels increased to 41% (2015 - 31%); and
-- Successful pilot of vehicle sales purchased from third parties in order to extend the range of vehicles sold in Van Monster.
Bob Contreras, Chief Executive, commented:
"As indicated previously, profitability in the first half of the year has been impacted by the reduction in vehicles on hire experienced in the UK throughout the previous financial year.
We are pleased to see some early signs of progress from our renewed strategic focus which has led to a stabilisation of the UK business in the first half of the year. Spain continues to develop well and Ireland has grown steadily in the period. A more stable political environment in Spain will provide impetus for growth amongst our larger customer accounts.
Our fundamental strategy of expanding our addressable markets is progressing well. The key is using our existing strengths to provide a compelling proposition.
We move into the second half with good momentum in all countries and continue to build a solid platform which will drive the medium and long term performance of the business. We expect the full year results to be more weighted towards the second half as the changes implemented continue to gain traction and therefore we continue to expect to see full year results in line with expectations."
There will be a presentation to analysts at 10.30am today at Numis, 5th floor, London Stock Exchange building, 10 Paternoster Square, London EC4M 7LT. If you have not already registered for attendance then please contact MHP Communications on the number below. A live webcast of the presentation will be available to view via a link on the Company's website: www.northgateplc.com
For further information, please contact:
Northgate plc 01325 467558 Bob Contreras, Chief Executive Paddy Gallagher, Group Finance Director MHP Communications 020 3128 8100 Andrew Jaques Barnaby Fry Simon Hockridge Ollie Hoare
Notes to Editors:
Northgate plc is the leading light commercial vehicle hire business in the UK, Ireland and Spain by fleet size and has been operating in the sector since 1981.
Northgate's core business is the hire of light commercial vehicles to businesses on a flexible or term basis, giving customers the ability to manage their vehicle fleet requirements in a way which can adapt to changing business needs without the requirement to enter into a long term commitment.
Further information regarding Northgate plc can be found on the Company's website:
www.northgateplc.com
GAAP reconciliation and glossary of terms
Throughout this report we refer to underlying results and measures. The underlying measures allow management and other stakeholders to better compare the performance of the Group between the current and prior period, without the effects of one-off or non-operational items.
Underlying measures exclude certain one-off items such as those arising from restructuring activities and recurring non-operational items, namely intangible amortisation. A reconciliation of GAAP to non-GAAP underlying measures and a glossary of terms used in this document is outlined beneath the Financial review.
Business review
Overview
During the period we have made good progress across a number of areas, including commencing work on our renewed areas of strategic focus, discussed in more detail below.
Underlying profit before tax was GBP40.4m compared to GBP45.9m and underlying earnings per share were 25.8p compared to 27.1p in the prior period. As expected, profitability was impacted by the lower starting position of vehicles on hire in the UK. However, encouragingly, closing vehicles on hire have grown by 900 in the period compared to a reduction of 900 in the same period last year, with good momentum in all territories which gives us confidence going into the second half.
The effects of previous depreciation rate changes impacted profit before tax adversely by GBP2.5m but this was offset by foreign currency gains of GBP2.9m.
The Group continues to be cash generative, with free cash flow in the half year of GBP7.6m (2015 - GBP8.1m). Debt levels since the year end were impacted by a GBP38.3m foreign currency revaluation. However, Euro assets shelter the balance sheet against this movement and debt covenants continue to show healthy headroom.
Dividend and capital allocation
An interim dividend of 5.7p will be paid which reflects our ongoing commitment to maintaining a progressive dividend policy, with dividend cover in the range of 3.75 to 2.5 times earnings.
The interim dividend will be paid on 16 January 2017 to shareholders on the register at the close of business on 16 December 2016.
Our objective is to build shareholder value by generating returns above our cost of capital. We will allocate capital within our business in accordance with the framework outlined below, with our first priority being to allocate capital to support our growth ambitions:
1. Investment for growth in existing network 2. Investment in new sites 3. Provide regular returns to shareholders 4. Acquisitions 5. Return of surplus cash
We will continue to maintain our balance sheet within the target leverage range of 1.25 to 1.85 times net debt to EBITDA, although we are prepared to move temporarily outside of this range if circumstances warrant it. This is consistent with our objective of maintaining a balance sheet that is efficient in terms of providing long term returns to shareholders and safeguards the Group's financial position through economic cycles.
Board changes
As separately announced today, Bob Contreras will be standing down as Chief Executive of Northgate and will be succeeded by Kevin Bradshaw. Bob will step down as Chief Executive and from the Board on 11 January 2017. Kevin will join the Board as CEO on 11 January 2017.
Outlook
As indicated previously, profitability in the first half of the year has been impacted by the reduction in vehicles on hire experienced in the UK throughout the previous financial year.
We are pleased to see some early signs of progress from our renewed strategic focus which has led to a stabilisation of the UK business in the first half of the year. Spain continues to develop well and Ireland has grown steadily in the period. A more stable political environment in Spain will provide impetus for growth amongst our larger customer accounts.
Our fundamental strategy of expanding our addressable markets is progressing well. The key is using our existing strengths to provide a compelling proposition.
We move into the second half with good momentum in all countries and continue to build a solid platform which will drive the medium and long term performance of the business. We expect the full year results to be more weighted towards the second half as the changes implemented continue to gain traction and therefore we continue to expect to see full year results in line with expectations.
Strategic review
At our full year results in June we announced our renewed areas of strategic focus, namely:
-- To optimise our core business; -- To expand our addressable markets; and -- To maximise end of life value.
Optimise core business
Group closing vehicles on hire grew by 900 in the first six months of the year, compared to a reduction of 900 in the same period last year as follows:
Closing vehicles on hire Q1 Q2 Total (reduction) growth --------------------------- ------ ------ ------ Year ending 30 April 2017 (100) 1,000 900 --------------------------- ------ ------ ------ Year ended 30 April 2016 (500) (400) (900) --------------------------- ------ ------ ------
Focussing mainly on the UK business, we appointed a new senior team at the start of the calendar year and their priority has centred on sales and marketing activity.
We have delivered greater clarity around how we sell flexible rental within our existing markets, supported by refreshed national marketing campaigns.
Customers have been re-segmented as follows:
Hot Features
Premium
Micro SME
* Generally sub-five vehicle requirement
* Managed through telesales team
--------------- -----------------------------------------------------------------
SME
* Large SME accounts
* Managed through regionally based sales teams
--------------- -----------------------------------------------------------------
Large accounts
* Customers with national vehicle requirements
* Generally with fleet sizes greater than 100 vehicles
* Managed through a specialised team
--------------- -----------------------------------------------------------------
Using telesales is a more efficient way of interacting with smaller customers as they can now have instant access to an account manager. Inbound leads from marketing campaigns are also dealt with more effectively.
Regionally based sales teams are now entirely focussed on exploring larger opportunities without the time commitment of managing small accounts.
We now also have a specialised team in place to address the need for a more consultative approach towards large accounts and who are capable of tailoring a bespoke offering which also covers our extended product offering outlined below. This approach has succeeded in delivering a significant national account win which will alone contribute up to 500 additional vehicles on hire over the next 12 months.
Expanding our addressable markets
As discussed in June, our core flexible rental product accounts for only 5% of the LCV market. It is our intention to offer a wider range of products and services which can meet all of the needs of existing customers and will enable us to access new customers not currently using flexible rental.
The first stage of this strategy is to provide a range of fixed term offerings from 12 to 48 months, accompanied by the same service level that is delivered through flexible rental. We believe that this is an area not adequately covered by existing providers.
This offering has been successfully trialled in Spain in the period, with full training of sales teams. Contracts have been signed for 1,500 vehicles and 1,000 incremental vehicles on hire have been delivered as at the end of October 2016.
Following the success in Spain, the trial has been extended to the UK and Ireland in November 2016.
We will also continue to investigate widening our vehicle product range where there is commercial and financial opportunity to do so. This includes exploring refrigerated transport and electric and utility specification vehicles, particularly in Spain.
Maximising end of life value
A key part of our business model is our ability to maximise the end of rental life vehicle proceeds through Van Monster, our retail sales channel.
In the UK we continue to progress with our objective of increasing the proportion of vehicles sold through this more profitable retail channel with 41% sold through this route in the period compared to 31% in the same period last year.
The trialling of the sale of third party sourced vehicles has progressed with 260 sold in the period. This has helped to widen the product range and footfall to Van Monster sites.
In Spain we took the decision to de-prioritise Van Monster. The reason was that strong trade pricing currently erodes the benefit of retail sales given the refurbishment costs we bear if selling through retail. We expect this to persist for the next year or so and anticipate that retail will grow when the market normalises.
Financial review
Group
A summary of the Group's underlying financial performance for the six months to 31 October 2016 with a comparison to the prior period is shown below:
6 months to 6 months to
31 Oct 2016 31 Oct 2015 Change
GBPm GBPm
--------------------------- ----------- ----------- ------
Revenue: hire of vehicles 229.6 225.7 +1.8%
Revenue: sale of vehicles 87.1 87.5 -0.4%
Operating profit 45.0 51.6 -12.8%
Net interest expense (4.6) (5.7) -19.7%
Profit before tax 40.4 45.9 -11.9%
Profit after tax 34.3 36.1 -4.8%
Basic earnings per share 25.8p 27.1p -4.8%
Return on capital employed 10.9% 12.0% -1.1%
--------------------------- ----------- ----------- ------
At constant exchange rates revenue from the hire of vehicles was 4.1% lower than the prior period.
Profit before tax benefitted by GBP2.9m due to the impact of foreign exchange gains. The impact of previous changes to depreciation rates adversely affected profit before tax by GBP2.5m.
UK
The underlying results of the UK business were as follows:
6 months to 6 months to
31 Oct 2016 31 Oct 2015 Change
GBPm GBPm
-------------------------- ----------- ----------- ------
Revenue: hire of vehicles 138.4 149.8 -7.7%
Revenue: sale of vehicles 59.0 62.8 -6.0%
Operating profit 23.9 31.8 -25.0%
Operating margin 17.3% 21.2% -3.9%
Average vehicles on hire 42,000 44,800 -6.3%
Average utilisation 87.7% 87.7% -
Vehicle disposal units 9,000 10,400 -13.5%
The UK has gone through a period of stabilisation with a growth in closing vehicles on hire of 100 in the six months to October 2016, compared to a 1,200 reduction in the same period last year. The starting position in the year was 3,300 vehicles lower than at the same point in the previous year, which has led to a 6.3% lower average vehicles on hire across the period.
Underlying operating profit was GBP8.0m lower than the previous year of which GBP4.5m related to rental profit impacted by lower vehicles on hire starting position. A total of GBP1.7m related to the unwind of previous depreciation rate changes and the remaining GBP1.8m was the impact of selling fewer vehicles than in the previous period.
Including the impact of depreciation rate changes, vehicle disposals led to a reduction in the depreciation charge in the period of GBP6.6m (2015 - GBP10.1m). This equates to a PPU of GBP738 compared to GBP977 in the prior period.
Spain
The underlying results in Spain were as follows:
6 months to 6 months to
31 Oct 2016 31 Oct 2015 Change
GBPm GBPm
-------------------------- ----------- ----------- ------
Revenue: hire of vehicles 81.2 68.6 +18.4%
Revenue: sale of vehicles 26.1 22.9 +13.7%
Operating profit 21.3 20.3 +4.7%
Operating margin 26.2% 29.6% -3.4%
Average vehicles on hire 35,900 35,700 +0.6%
Average utilisation 90.6% 90.8% -0.2%
Vehicle disposal units 5,700 5,300 +7.5%
Adjusting for the impacts of foreign currency gains, hire revenue was 1.4% higher than in the prior period and underlying operating profit was GBP2.1m lower (10.3%). Foreign currency gains favourably impacted underlying operating profit by GBP3.1m.
On a constant currency basis, the impact of previous depreciation rate changes adversely impacted underlying operating profit in the period by GBP0.7m. Of the remaining reduction, GBP1.1m was due to rental operations and GBP0.3m related to vehicle disposals.
Including the impact of foreign currency gains and depreciation rate changes, vehicle disposals led to an GBP8.7m reduction in the depreciation charge (2015 - GBP8.5m). In Euros, this equates to a PPU of EUR1,815 compared to EUR2,211 in the prior period.
Closing vehicles on hire increased by 600 in the period compared to an increase of 100 in the prior period. A planned return of 900 vehicles from the run out of legacy contracts means that the underlying growth was 1,500 vehicles. This included 1,000 vehicles under the new fixed term product offering. Government related business has also been hampered by the difficulties in forming a coalition over the last year. Now that a government has been formed, we expect to see vehicles on hire increase as new budgets are approved.
Ireland
The underlying results in Ireland are as follows:
6 months to 6 months to
31 Oct 2016 31 Oct 2015 Change
GBPm GBPm
-------------------------- ----------- ----------- ------
Revenue: hire of vehicles 10.5 7.8 +35.2%
Revenue: sale of vehicles 2.0 1.8 +13.4%
Operating profit 1.7 1.6 +6.6%
Operating margin 15.7% 20.0% -4.3%
Average vehicles on hire 3,400 3,000 +13.3%
Average utilisation 89.3% 90.3% -1.0%
Vehicle disposal units 400 300 +33.3%
After adjusting for the impact of foreign currency, hire revenue was 15.8% higher than in the same period last year and operating profit was GBP0.1m lower.
Ireland has grown closing vehicles on hire by 10% in the period. Profitability was held back due to a significant amount of demand originating in the south of the country which is less well serviced by Northgate workshop facilities. Going forward we will invest in the network infrastructure in order to facilitate more internal work throughout the southern region.
Interest and taxation
Net underlying finance charges for the six months to 31 October 2016 were GBP4.6m (2015 - GBP5.7m).
The impact of foreign currency adversely affected net finance charges by GBP0.3m. Excluding the effects of foreign currency, a decrease in lower average debt and favourable pricing compared to the prior period has reduced net finance charges by GBP0.8m. An interest refund of GBP0.6m was also received in the period in relation to an historical tax claim in Spain that was settled in favour of the Group.
The Group's underlying effective tax rate was 15% (2015 - 21%). This was impacted in the year by the GBP1.7m release of a provision in relation to a previously disputed tax position.
After taking account of intangible amortisation and exceptional items, the effective tax rate was also 15% (2015 - 21%).
Exceptional items
During the period GBP0.7m of exceptional operating costs were incurred relating to restructuring costs in the UK. A net refund of GBP0.9m was received in relation to an historical tax claim in Spain which was settled in favour of the Group.
The exceptional finance credit of GBP0.3m was received in relation to the above mentioned tax settlement in Spain.
Cash flow and net debt
Net cash outflow was GBP6.7m (2015 - GBP5.3m) after net capital expenditure of GBP95.5m (2015 - GBP92.7m). Before taking account of the payment of dividends, free cash flow generation was GBP7.6m compared to GBP8.1m in the same period last year.
Closing net debt of GBP355.0m increased by GBP45.1m since April 2016, which included a GBP38.3m increase in debt due to the impact of changes in foreign currency rates. This increase reflects the fact that 81% of the Group's debt is denominated in Euros. However, this debt is held against Euro assets of the Group, sheltering the balance sheet from exchange rate movements.
Debt leverage cover at 31 October 2016 was 1.49 times net debt to EBITDA with comfortable levels of headroom remaining against all of our debt covenant ratios.
Facility headroom at 31 October 2016 was GBP231.9m.
Balance sheet
Group return on capital employed was 10.9% compared to 12.0% in the same period last year and 12.2% in the year ended 30 April 2016.
Net tangible assets at 31 October 2016 were GBP493.5m (April 2016 - GBP463.4m), equivalent to a tangible net asset value of 370p per share (April 2016 - 348p per share).
Gearing at 31 October 2016 was 72% (April 2016 - 67%).
Foreign exchange
The average and period end exchange rates used to translate the Group's overseas operations were as follows:
October 2016 October 2015
GBP : EUR GBP : EUR
-------- ------------ ------------
Average 1.19 1.39
Closing 1.11 1.39
-------- ------------ ------------
Risks and uncertainties
The Board and the Group's management have clearly defined responsibility for identifying the major business risks facing the Group and for developing systems to mitigate and manage those risks.
The principal risks and uncertainties facing the Group at 30 April 2016 were set out in detail on pages 40 and 41 of the 2016 annual report, a copy of which is available at www.northgateplc.com, and were identified as:
-- Economic environment; -- Competition and hire rates; -- Vehicle holding costs; -- Employees and the working environment; -- IT systems; and -- Access to capital.
These principal risks have not changed since the last annual report and continue to be those that could impact the Group during the second half of the current financial year.
In addition to the risks outlined above, the going concern assumption is considered in Note 1 to the condensed interim financial statements for the six months ended 31 October 2016.
Glossary of terms
The following defined terms have been used throughout this document:
Term Definition
-------------------- -------------------------------------------------------
Facility headroom Calculated as facilities of GBP589.2m less
net borrowings of GBP357.3m. Net borrowings
represent net debt of GBP355.0m excluding unamortised
arrangement fees of GBP2.3m and are stated
after the deduction of GBP7.6m of cash balances
which are available to offset against borrowings.
-------------------- -------------------------------------------------------
Gearing Calculated as net debt divided by net tangible
assets (as defined below)
-------------------- -------------------------------------------------------
LCV Light commercial vehicle: the official term
used within the European Union for a commercial
vehicle with a gross vehicle weight of not
more than 3.5 tonnes
-------------------- -------------------------------------------------------
Net tangible assets Net assets less goodwill and other intangible
assets
-------------------- -------------------------------------------------------
PPU Profit per unit/loss per unit - this is a non-GAAP
measure used to describe the adjustment in
the depreciation charge made in the year for
vehicles sold at an amount different to their
net book value at the date of sale (net of
attributable selling costs), divided by the
number of vehicles sold
-------------------- -------------------------------------------------------
SME Small and medium sized enterprise
-------------------- -------------------------------------------------------
Reconciliation of GAAP to non-GAAP measures
A reconciliation of GAAP to non-GAAP underlying measures is as follows:
Six months Six months
to 31.10.16 to 31.10.15
GBP000 GBP000
Profit before tax 39,997 42,832
Add back:
Exceptional operating (credit) expenses (198) 493
Intangible amortisation 948 1,003
Exceptional finance (credit) costs (336) 1,561
----------------------------------------- ------------- -------------
Underlying profit before tax 40,411 45,889
----------------------------------------- ------------- -------------
Profit for the year 34,020 33,865
Add back:
Exceptional operating
(credit) expenses (198) 493
Intangible amortisation 948 1,003
Exceptional finance (credit)
costs (336) 1,561
Tax on exceptional items,
brand royalty charges
and intangible amortisation (99) (845)
---------------------------------------------- ------------ ------------
Underlying profit for
the year 34,335 36,077
---------------------------------------------- ------------ ------------
Weighted average number of Ordinary
shares 133,232,518 133,232,518
-------------------------------------------- ------------ ------------
Underlying basic earnings
per share 25.8p 27.1p
---------------------------------------------- ------------ ------------
Net decrease in cash and cash equivalents (12,554) (6,348)
Add back:
Receipt of bank loans
and other borrowings - (70,410)
Repayments of bank loans and
other borrowings 5,837 71,448
-------------------------------------------- ------------ ------------
Net cash outflow (6,717) (5,310)
---------------------------------------------- ------------ ------------
Add back: Dividends paid 14,347 13,389
---------------------------------------------- ------------ ------------
Free cash flow 7,630 8,079
---------------------------------------------- ------------ ------------
UK Spain Ireland Corporate Eliminations Group
Six months Six months Six months Six months Six months Six months
to to 31.10.16 to 31.10.16 to 31.10.16 to 31.10.16 to 31.10.16
31.10.16GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Operating profit 22,275 19,411 1,305 1,224 - 44,215
Add back:
Restructuring
costs 688 - - - - 688
Spain tax
settlement - (886) - - - (886)
Brand royalty
charges - 2,725 352 (3,077) - -
Intangible
amortisation 912 36 - - - 948
------------------ --------------- ------------ ------------ ------------ ------------- -------------
Underlying
operating
profit (loss) 23,875 21,286 1,657 (1,853) - 44,965
------------------ --------------- ------------ ------------ ------------ ------------- -------------
Underlying
operating
profit (loss) 23,875 21,286 1,657 (1,853) - 44,965
Divided by:
Revenue:
hire of vehicles 138,372 81,223 10,524 - (480) 229,639
------------------ --------------- ------------ ------------ ------------ ------------- -------------
Underlying
operating
margin 17.3% 26.2% 15.7% 19.6%
------------------ --------------- ------------ ------------ ------------ ------------- -------------
UK Spain Ireland Corporate Eliminations Group
Six months Six months Six months Six months Six months Six months
to to 31.10.15 to 31.10.15 to 31.10.15 to 31.10.15 to 31.10.15
31.10.15GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Operating profit 30,389 17,998 1,295 380 - 50,062
Add back:
Restructuring
costs 493 - - - - 493
Brand royalty
charges - 2,306 261 (2,567) - -
Intangible
amortisation 958 30 - 15 - 1,003
------------------ --------------- ------------ ------------ ------------ ------------- -------------
Underlying
operating
profit (loss) 31,840 20,334 1,556 (2,172) - 51,558
------------------ --------------- ------------ ------------ ------------ ------------- -------------
Underlying
operating
profit (loss) 31,840 20,334 1,556 (2,172) - 51,558
Divided by:
Revenue:
hire of vehicles 149,843 68,624 7,782 - (561) 225,688
------------------ --------------- ------------ ------------ ------------ ------------- -------------
Underlying
operating
margin 21.2% 29.6% 20.0% 22.8%
------------------ --------------- ------------ ------------ ------------ ------------- -------------
Condensed consolidated income statement
for the six months ended 31 October 2016
----------------------------------------------------------------------- ----------- ---------- ---------
Six months Six months Six months Six months Year to Year to
to 31.10.16 to 31.10.16 to 31.10.15 to 31.10.15 30.04.16 30.04.16
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) (Audited)
Underlying Statutory Underlying Statutory Underlying Statutory
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------------- ----- ----------- ----------- ------------- ----------- ---------- -----------
Revenue: hire of
vehicles 2 229,639 229,639 225,688 225,688 447,134 447,134
Revenue: sale of
vehicles 2 87,077 87,077 87,459 87,459 171,154 171,154
----------------------- ----- ----------- ----------- ------------- ----------- ---------- -----------
Total revenue 2 316,716 316,716 313,147 313,147 618,288 618,288
Cost of sales (237,726) (237,726) (230,637) (230,637) (459,286) (459,286)
----------------------- ----- ----------- ----------- ------------- ----------- ---------- -----------
Gross profit 78,990 78,990 82,510 82,510 159,002 159,002
Administrative expenses
(excluding exceptional
items and intangible
amortisation) (34,025) (34,025) (30,952) (30,952) (64,683) (64,683)
Exceptional
administrative credit
(expenses) 8 - 198 - (493) - (1,777)
Intangible amortisation - (948) - (1,003) - (1,979)
----------------------- ----- ----------- ----------- ------------- ----------- ---------- -----------
Total administrative
expenses (34,025) (34,775) (30,952) (32,448) (64,683) (68,439)
----------------------- ----- ----------- ----------- ------------- ----------- ---------- -----------
Operating profit 2 44,965 44,215 51,558 50,062 94,319 90,563
Interest income 1 1 1 1 3 3
Finance costs
(excluding exceptional
items) (4,555) (4,555) (5,670) (5,670) (11,373) (11,373)
Exceptional finance
credit (costs) 8 - 336 - (1,561) - (1,561)
----------------------- ----- ----------- ----------- ------------- ----------- ---------- -----------
Profit before taxation 40,411 39,997 45,889 42,832 82,949 77,632
Taxation 3 (6,076) (5,977) (9,812) (8,967) (17,599) (16,153)
----------------------- ----- ----------- ----------- ------------- ----------- ---------- -----------
Profit for the period 34,335 34,020 36,077 33,865 65,350 61,479
Profit for the period is wholly attributable to owners of the Parent Company. All results
arise from continuing operations.
Underlying profit excludes exceptional items as set out in Note 8, as well as brand royalty
charges, intangible amortisation and the taxation thereon, in order to provide a better indication
of the Group's underlying business performance.
Earnings per share
Basic 4 25.8p 25.5p 27.1p 25.4p 49.0p 46.1p
Diluted 4 25.4p 25.1p 26.7p 25.0p 48.3p 45.5p
----------------------- ----- ----------- ----------- ------------- ----------- ---------- -----------
Condensed consolidated statement of comprehensive income
for the six months ended 31 October 2016
----------------------------------------------------------------------------- ----------- ----------- ----------
Six months Six months Year to
to 31.10.16 to 31.10.15 30.04.16
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
----------------------------------------------------------------------------- ----------- ----------- ----------
Amounts attributable to owners of the Parent Company
Profit attributable to owners 34,020 33,865 61,479
Other comprehensive income (expense)
Foreign exchange differences on retranslation of net assets of subsidiary
undertakings 50,171 (3,353) 22,775
Net foreign exchange differences on long term borrowings held as hedges (40,326) 2,943 (18,347)
Foreign exchange difference on revaluation reserve 157 (11) 70
Recycling of hedging reserve items - - 649 Net fair value (losses) gains on cash flow hedges (795) 1,399 (1,428) Deferred tax credit (charge) recognised directly in equity relating to cash flow hedges 159 (297) 285 Total other comprehensive income for the period 9,366 681 4,004 ------------------------------------------------------------------------------ ----------- ----------- ---------- Total comprehensive income for the period 43,386 34,546 65,483 ------------------------------------------------------------------------------ ----------- ----------- ----------
All items will subsequently be reclassified to the consolidated income statement.
Condensed consolidated balance sheet
31 October 2016
31.10.15 30.04.16
31.10.16 Restated Restated
(Unaudited) (Unaudited) (Audited)
Note GBP000 GBP000 GBP000
------------------------------------------------- ---- ----------- ----------- ---------
Non-current assets
Goodwill 3,589 3,589 3,589
Other intangible assets 3,250 4,985 4,054
Property, plant and equipment: vehicles for hire 756,648 676,461 684,499
Other property, plant and equipment 68,998 64,711 65,765
Total property, plant and equipment 825,646 741,172 750,264
-------------------------------------------------- ---- ----------- ----------- ---------
Deferred tax assets 16,381 14,042 15,256
-------------------------------------------------- ---- ----------- ----------- ---------
Total non-current assets 848,866 763,788 773,163
-------------------------------------------------- ---- ----------- ----------- ---------
Current assets
Inventories 26,904 22,306 23,109
Trade and other receivables 68,049 71,515 63,499
Cash and bank balances 42,829 31,907 55,248
-------------------------------------------------- ---- ----------- ----------- ---------
Total current assets 137,782 125,728 141,856
-------------------------------------------------- ---- ----------- ----------- ---------
Total assets 986,648 889,516 915,019
-------------------------------------------------- ---- ----------- ----------- ---------
Current liabilities
Trade and other payables 60,971 52,323 53,183
Current tax liabilities 22,016 16,727 19,350
Short term borrowings 41,000 40,950 46,515
-------------------------------------------------- ---- ----------- ----------- ---------
Total current liabilities 123,987 110,000 119,048
-------------------------------------------------- ---- ----------- ----------- ---------
Net current assets 13,795 15,728 22,808
-------------------------------------------------- ---- ----------- ----------- ---------
Non-current liabilities
Derivative financial instrument liabilities 9 3,947 325 3,152
Long term borrowings 356,807 329,641 318,610
Deferred tax liabilities 1,585 4,011 3,184
Total non-current liabilities 362,339 333,977 324,946
-------------------------------------------------- ---- ----------- ----------- ---------
Total liabilities 486,326 443,977 443,994
-------------------------------------------------- ---- ----------- ----------- ---------
NET ASSETS 500,322 445,539 471,025
-------------------------------------------------- ---- ----------- ----------- ---------
Equity
Share capital 66,616 66,616 66,616
Share premium account 113,508 113,508 113,508
Revaluation reserve 1,183 945 1,026
Own shares (6,087) (9,568) (8,157)
Merger reserve 67,463 67,463 67,463
Hedging reserve (3,157) (926) (2,522)
Translation reserve 444 (14,238) (9,400)
Capital redemption reserve 40 40 40
Retained earnings 260,312 221,699 242,451
-------------------------------------------------- ---- ----------- ----------- ---------
TOTAL EQUITY 500,322 445,539 471,025
-------------------------------------------------- ---- ----------- ----------- ---------
Total equity is wholly attributable to owners of the Parent Company.
Condensed consolidated cash flow statement
for the six months ended 31 October 2016
--------------------------------------------------------- ------- ----------- ------------------- ---------
Six months Six months Year to
to 31.10.16 to 31.10.15 30.04.16
(Unaudited) (Unaudited) (Audited)
Note GBP000 GBP000 GBP000
--------------------------------------------------------- ------- ----------- ------------------- ---------
Net cash generated from operations 6 10,027 17,721 73,726
--------------------------------------------------------- ------- ----------- ------------------- ---------
Investing activities
Interest received 1 1 3
Proceeds from disposal of other property, plant and equipment 284 307 1,001
Purchases of other property, plant and equipment (1,938) (2,241) (4,503)
Purchases of intangible assets (127) (1,648) (1,682)
-------------------------------------------------------------- ----------- ------------------- ---------
Net cash used in investing activities (1,780) (3,581) (5,181)
-------------------------------------------------------------- ----------- ------------------- ---------
Financing activities
Receipt of bank loans and other borrowings - 70,410 70,410
Repayments of bank loans and other borrowings (5,837) (71,448) (107,653)
Debt issue costs paid - (1,675) (1,675)
Dividend paid (14,347) (13,389) (20,114)
Net payments to acquire own shares for share schemes (617) (2,825) (2,366)
Termination of financial instruments - (1,561) (1,561)
-------------------------------------------------------------- ----------- ------------------- ---------
Net cash used in financing activities (20,801) (20,488) (62,959)
-------------------------------------------------------------- ----------- ------------------- ---------
Net (decrease) increase in cash and cash equivalents (12,554) (6,348) 5,586
Cash and cash equivalents at beginning of the period 18,748 9,676 9,676
Effect of foreign exchange movements 1,362 (343) 3,486
-------------------------------------------------------------- ----------- ------------------- ---------
Cash and cash equivalents at the end of the period 7,556 2,985 18,748
-------------------------------------------------------------- ----------- ------------------- ---------
Cash and cash equivalents consist of:
Cash and bank balances 42,829 31,907 55,248
Bank overdrafts (35,273) (28,922) (36,500)
--------------------------------------- -------- -------- --------
7,556 2,985 18,748
-------------------------------------- -------- -------- --------
Condensed consolidated statement of changes in equity
for the six months ended 31 October 2016
Share
capital
and share Own Hedging Translation Other Retained
premium shares reserve reserve reserves earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------ ----------- ------------- --------- ------------ ---------- ---------------- ---------
Total equity at 1
May 2015 180,124 (8,812) (2,028) (13,828) 68,459 202,441 426,356
Share options fair
value charge - - - - - 851 851
Share options exercised - - - - - (2,069) (2,069)
Profit attributable
to owners of the
Parent
Company - - - - - 33,865 33,865
Dividend paid - - - - - (13,389) (13,389)
Net purchase of own
shares - (2,825) - - - - (2,825)
Transfer of shares
on vesting of share
options - 2,069 - - - - 2,069
Other comprehensive
income (expense) - - 1,102 (410) (11) - 681
Total equity at 1
November 2015 180,124 (9,568) (926) (14,238) 68,448 221,699 445,539
Share options fair
value charge - - - - - 815 815
Share options exercised - - - - - (952) (952)
Profit attributable
to owners of the
Parent
Company - - - - - 27,614 27,614
Dividend paid - - - - - (6,725) (6,725)
Net purchase of own
shares - 459 - - - - 459
Transfer of shares
on vesting of share
options - 952 - - - - 952
Other comprehensive
(expense) income - - (1,596) 4,838 81 - 3,323
Total equity at 1
May 2016 180,124 (8,157) (2,522) (9,400) 68,529 242,451 471,025
Share options fair
value charge - - - - - 875 875
Share options exercised - - - - - (2,687) (2,687)
Profit attributable
to owners of the
Parent
Company - - - - - 34,020 34,020
Dividend paid - - - - - (14,347) (14,347)
Net purchase of own
shares - (617) - - - - (617)
Transfer of shares
on vesting of share
options - 2,687 - - - - 2,687
Other comprehensive
(expense) income - - (635) 9,844 157 - 9,366
Total equity at 31
October 2016 180,124 (6,087) (3,157) 444 68,686 260,312 500,322
Other reserves comprise the capital redemption reserve, revaluation
reserve and merger reserve.
Unaudited Notes
1. Basis of preparation and
accounting policies
Northgate plc is a Company incorporated in England and Wales
under the Companies Act 2006.
The condensed financial statements are unaudited and were approved
by the Board of Directors on 5 December 2016.
The condensed financial statements have been reviewed by the
auditor and the independent review report is set out in this
document.
The interim financial information for the six months ended
31 October 2016, including comparative financial information,
has been prepared on the basis of the accounting policies set
out in the last annual report and accounts, except for income
taxes, which are accrued using the tax rate that is expected
to be applicable for the full year, and in accordance with
IAS 34 'Interim Financial Reporting', as issued by the International
Accounting Standards Board and adopted by the European Union.
Various new accounting standards and amendments came into force
and others were issued during the period, none of which are
expected to have any significant impact on the Group and effects
will principally relate to amendment and extension of current
disclosures. As a result of the clarification of an accounting
standard, cash and cash equivalents and bank overdrafts are
now shown gross, even where accounts have a right of offset
within the same banking facility. The comparatives as at 30
April 2016 have been restated by GBP36,500,000 and comparatives
as at 31 October 2015 have been restated by GBP28,922,000.
In preparing the interim financial statements, the significant
judgements made by management in applying the Group's accounting
policies and key sources of estimation uncertainty were the
same, in all material respects, as those applied to the consolidated
financial statements for the year ended 30 April 2016.
Going concern assumption
Having reassessed the principal risks and the other matters
discussed in connection with the viability statement in the
2016 annual report and accounts the Directors considered it
appropriate to adopt the going concern basis of accounting
in preparing the interim financial statements.
Information extracted from 2016 annual report
The financial figures for the year ended 30 April 2016, as
set out in this report, do not constitute statutory accounts
but are derived from the statutory accounts for that financial
year.
The statutory accounts for the year ended 30 April 2016 were
prepared under IFRS and have been delivered to the Registrar
of Companies. The audit report was unqualified, did not draw
attention to any matters by way of emphasis and did not include
a statement under Section 498(2) or 498(3) of the Companies
Act 2006.
2. Segmental analysis
Management has determined the operating segments based upon the information provided to the Board of Directors, which is considered to be the chief operating decision maker. The Group is managed, and reports internally, on a basis consistent with its three main operating divisions, UK, Spain and Ireland. This is the first period in which Ireland has been reported as a separate segment. Previously the results were included in the UK business. The principal activities of these divisions are set out in the Business review, Strategic review and Financial review.
UK Spain Ireland Corporate Eliminations Total
Six months Six months Six months Six months Six months Six months
to 31.10.16 to 31.10.16 to 31.10.16 to 31.10.16 to 31.10.16 to 31.10.16
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue: hire of vehicles 138,372 81,223 10,524 - (480) 229,639
Revenue: sale of vehicles 59,020 26,071 1,986 - - 87,077
Total revenue 197,392 107,294 12,510 - (480) 316,716
Underlying operating profit (loss) * 23,875 21,286 1,657 (1,853) - 44,965
Exceptional administrative expenses 198
Intangible amortisation (948)
Operating profit 44,215
------------------------------------- ----------- ----------- ----------- ----------- ------------ -----------
Interest income 1
Finance costs (excluding exceptional
items) (4,555)
Exceptional finance credit 336
Profit before taxation 39,997
------------------------------------- ----------- ----------- ----------- ----------- ------------ -----------
UK Spain Ireland Corporate Eliminations Total
Six months Six months Six months Six months Six months Six months
to 31.10.15 to 31.10.15 to 31.10.15 to 31.10.15 to 31.10.15 to 31.10.15
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue: hire of vehicles 149,843 68,624 7,782 - (561) 225,688
Revenue: sale of vehicles 62,783 22,925 1,751 - - 87,459
Total revenue 212,626 91,549 9,533 - (561) 313,147
Underlying operating profit (loss) * 31,840 20,334 1,555 (2,171) - 51,558
Exceptional administrative expenses (493)
Intangible amortisation (1,003)
Operating profit 50,062
------------------------------------- ----------- ----------- ----------- ----------- ------------ -----------
Interest income 1
Finance costs (excluding exceptional
items) (5,670)
Exceptional finance costs (1,561)
Profit before taxation 42,832
------------------------------------- ----------- ----------- ----------- ----------- ------------ -----------
2. Segmental analysis (continued)
UK Spain Ireland Corporate Eliminations Total
Year to Year to Year to Year to Year to Year to
30.04.16 30.04.16 30.04.16 30.04.16 30.04.16 30.04.16
(Audited) (Audited) (Audited) (Audited) (Audited) (Audited)
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue: hire of vehicles 290,714 140,781 16,691 - (1,052) 447,134
Revenue: sale of vehicles 123,401 44,110 3,643 - - 171,154
Total revenue 414,115 184,891 20,334 - (1,052) 618,288
Underlying operating profit (loss) * 55,392 41,267 2,759 (5,099) - 94,319
Restructuring costs (1,777)
Intangible amortisation (1,979)
Operating profit 90,563
--------------------------------------------- --------- --------- --------- --------- ------------ ----------
Interest income 3
Finance costs (excluding exceptional items) (11,373)
Exceptional finance costs (1,561)
Profit before taxation 77,632
--------------------------------------------- --------- --------- --------- --------- ------------ ----------
* Underlying operating profit (loss) stated before royalty charges, amortisation and exceptional items is the measure used by the Board of Directors to assess segment performance.
3. Taxation
The charge for taxation for the six months to 31 October 2016 is based on the estimated effective rate for the year ending 30 April 2017 of 15% (2015 - 21%).
4. Earnings per share
Six months Six months Six months Six months Year to Year to
to 31.10.16 to 31.10.16 to 31.10.15 to 31.10.15 30.04.16 30.04.16
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) (Audited)
Underlying Statutory Underlying Statutory Underlying Statutory
Basic and diluted earnings per share GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
The calculation of basic and diluted
earnings per share is based on the
following data:
Earnings
Earnings for the purposes of basic and
diluted earnings per share,
being profit attributable to owners of
the Parent Company 34,335 34,020 36,077 33,865 65,350 61,479
---------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Number of shares Number Number Number Number Number Number
---------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Weighted average number of Ordinary
shares for the purpose
of basic earnings per share 133,232,518 133,232,518 133,232,518 133,232,518 133,232,518 133,232,518
Effect of dilutive potential Ordinary
shares:
- share options 2,195,780 2,195,780 2,066,430 2,066,430 1,990,249 1,990,249
Weighted average number of Ordinary
shares for the purpose
of diluted earnings per share 135,428,298 135,428,298 135,298,948 135,298,948 135,222,767 135,222,767
---------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Basic earnings per share 25.8p 25.5p 27.1p 25.4p 49.0p 46.1p
---------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Diluted earnings per share 25.4p 25.1p 26.7p 25.0p 48.3p 45.5p
---------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
5. Dividends
In the six months to 31 October 2016, a dividend of GBP14,347,000 was paid (2015 - GBP13,389,000). The Directors have declared a dividend of 5.7p per share for the six months ended 31 October 2016 (2015 - 5.1p).
6. Notes to the cash flow statement
Six months Six months Year to
to 31.10.16 to 31.10.15 30.04.16
(Unaudited) (Unaudited) (Audited)
Net cash generated from operations GBP000 GBP000 GBP000
--------------------------------------------------------- ----------- ---------------- ---------
Operating profit 44,215 50,062 90,563
Adjustments for:
Depreciation of property, plant and equipment 77,708 69,781 144,272
Amortisation of intangible assets 955 1,003 1,979
Loss on disposal of property, plant and equipment 70 35 122
Share options fair value charge 875 851 1,666
--------------------------------------------------------- ----------- ---------------- ---------
Operating cash flows before movements in working capital 123,823 121,732 238,602
Decrease in non-vehicle inventories 281 523 866
Decrease in receivables 1,430 1,271 10,157
Decrease in payables (11,953) (9,021) (6,825)
--------------------------------------------------------- ----------- ---------------- ---------
Cash generated from operations 113,581 114,505 242,800
Income taxes paid (6,054) (2,315) (8,259)
Interest paid (3,782) (5,381) (10,527)
--------------------------------------------------------- ----------- ---------------- ---------
Net cash generated from operations 103,745 106,809 224,014
Purchases of vehicles (168,155) (164,464) (296,165)
Proceeds from disposal of vehicles 74,437 75,376 145,877
--------------------------------------------------------- ----------- ---------------- ---------
Net cash generated from operations 10,027 17,721 73,726
--------------------------------------------------------- ----------- ---------------- ---------
7. Analysis of consolidated net debt
------------------------------------- ----------- ----------- ---------
31.10.16 31.10.15 30.04.16
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
------------------------------------- ----------- ----------- ---------
Cash and bank balances (42,829) (31,907) (55,248)
Bank overdrafts 35,273 28,922 36,500
Bank loans 271,761 269,101 249,742
Loan notes 89,963 71,718 77,930
Cumulative preference shares 500 500 500
Confirming facilities 310 350 453
------------------------------------- ----------- ----------- ---------
354,978 338,684 309,877
------------------------------------- ----------- ----------- ---------
8. Exceptional items
During the period the Group recognised exceptional items in the income statement as follows:
Six months Six months Year to
to 31.10.16 to 31.10.15 30.04.16
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
--------------------------------------------------- ---- ------------- ------------- ---------
Restructuring costs 688 493 1,777
Spain tax settlement (886) - -
Exceptional administrative (credit) expenses (198) 493 1,777
Termination of interest rate swaps - 1,561 1,561
Interest refunded in relation to Spain tax
settlement (336) - -
Exceptional finance (credit) costs (336) 1,561 1,561
--------------------------------------------------- ---- ------------- ------------- ---------
Total pre-tax exceptional items (534) 2,054 3,338
--------------------------------------------------- ---- ------------- ------------- ---------
Tax (charge) credit on exceptional items (92) 641 668
--------------------------------------------------- ---- ------------- ------------- ---------
Exceptional administrative expenses
All of the restructuring costs arose in the UK. The Spain tax settlement followed the resolution of an historic tax case with the Spanish tax authorities.
Exceptional finance credit
This relates to interest refunded by the Spanish tax authorities on the settlement of the case disclosed above.
9. Derivative financial instruments
At the balance sheet date, the Group held the following financial instruments at fair value:
31.10.16 31.10.15 30.04.16
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
--------------------------------------------------- ---- ------------- ------------- ---------
Non-current derivative financial instrument
liabilities 3,947 325 3,152
--------------------------------------------------- ---- ------------- ------------- ---------
The derivative financial instruments above all have fair values which are calculated by reference to observable inputs (i.e. classified as level 2 in the fair value hierarchy). They are valued using the discounted cash flow technique with an appropriate adjustment for counterparty credit risk. The valuations incorporate the following inputs:
-- interest rates and yield curves observable at commonly quoted intervals; -- commonly quoted spot and forward foreign exchange rates; and -- observable credit spreads.
The carrying value of financial assets and liabilities recorded at amortised cost in the financial statements are approximately equal to their fair value.
Interim announcement - Statement of the Directors
We confirm that to the best of our knowledge:
-- the condensed set of financial statements has been prepared in accordance with IAS 34;
-- the interim management report includes a fair review of the information required by DTR 4.2.7 (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and
-- the interim management report includes a fair review of the information required by DTR 4.2.8 (disclosure of related party transactions and changes therein).
By order of the Board
Paddy Gallagher
Group Finance Director
5 December 2016
Independent review report to Northgate plc
Report on the consolidated interim financial statements
Our conclusion
We have reviewed Northgate plc's consolidated interim financial statements (the 'interim financial statements') in the half-yearly report of Northgate plc for the 6 month period ended 31 October 2016. Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Rules and Transparency Rules of the United Kingdom's Financial Conduct Authority.
What we have reviewed
The interim financial statements comprise:
-- the condensed consolidated balance sheet as at 31 October 2016;
-- the condensed consolidated income statement and condensed consolidated statement of comprehensive income for the period then ended;
-- the condensed consolidated cash flow statement for the period then ended; -- the condensed consolidated statement of changes in equity for the period then ended; and -- the unaudited explanatory notes to the interim financial statements.
The interim financial statements included in the half-yearly report have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Rules and Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in Note 1 to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Group is applicable law and International Financial Reporting Standards (IFRS) as adopted by the European Union.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the Directors
The half-yearly report, including the interim financial statements, is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly report in accordance with the Disclosure Rules and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Our responsibility is to express a conclusion on the interim financial statements in the half-yearly report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Rules and Transparency Rules of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
What a review of interim financial statements involves
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.
We have read the other information contained in the half-yearly report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
Leeds
5 December 2016
This information is provided by RNS
The company news service from the London Stock Exchange
END
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