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RNS Number:7364M
Stagecoach Group PLC
25 June 2003
25 June 2003
STAGECOACH GROUP PLC
Preliminary results for the year ended 30 April 2003
Financial highlights
* Turnover #2,077m (2002- #2,111m)
* Total operating profit* #146m (2002 - #167m)
* Profit before tax* #113m (2002 - #107m)
* #575m of exceptional write-downs from Coach USA review resulting in a
statutory loss before tax of #500m (2002 - profit of #42m)
* Earnings per share* 6.4p; up from 6.3p
* Free cash flow up 18% to #218m
* Net debt down #215m to #560m
* Full year dividend of 2.6p (2002 - 2.6p)
* excluding goodwill amortisation and exceptional items
Business highlights
* Continued profitability in all four key operating divisions
* Good progress in restructuring Coach USA
* c. #300m of disposals announced post year-end
* Terms of new franchise at South West Trains finalised
* Improved operational performance benefiting Rail Division
* Margin improvement at UK Bus
* Strong revenue and volume growth in New Zealand
Stagecoach Chief Executive Brian Souter said: "We have a clear strategy for the
Group and are on schedule with our sales programme and restructuring at Coach
USA. The Group is in a strong financial position as a result of our decisive
action to de-risk our portfolio and we continue to reduce net debt.
"We will focus on maximising shareholder value from our existing portfolio,
which will be dominated by our strong UK bus and rail businesses, and we see
further potential for organic growth across our UK, US and New Zealand
operations."
ENDS
Enquiries to:
Martin Griffiths, Stagecoach Group - 01738 442111
Steven Stewart, Stagecoach Group - 01738 442111
John Kiely, Smithfield Financial - 020 7360 4900
Note to Editors:
High resolution photographs are available to the media free of charge at
www.newscast.co.uk (telephone +44 (0) 207 608 1000).
CHAIRMAN'S STATEMENT
Stagecoach Group has made positive progress this year towards achieving its key
strategic objectives despite challenging issues within the transport sector and
a difficult economic environment.
Across the Group, we are seeing strong cash generation from each of our four key
operating divisions and all are trading profitably. In the UK, our bus division
has had a successful year and is delivering increased operating margins with
solid revenue and passenger volume growth. We have agreed terms with the
Strategic Rail Authority ("SRA") for a new three-year franchise at South West
Trains, which is one of the UK's largest rail franchises. We are awaiting final
approval of this new franchise agreement from the Government. Restructuring of
our Coach USA division is progressing well. Earlier this month, we completed the
disposal of our Citybus business in Hong Kong, while our New Zealand bus
business continues to deliver strong growth.
The Group's strong cash flow generation, coupled with the favourable movement in
exchange rates, has allowed us to reduce debt for the long-term benefit of the
business. Net debt reduced by #214.6m in the year ended 30 April 2003, from
#774.6m to #560.0m. Subsequent to the year-end we have announced disposals with
a gross consideration of approximately #300m. Of these proceeds, approximately
#20m relates to deferred consideration and the remainder will initially be used
to reduce Group debt.
Turnover for the year ended 30 April 2003 was #2,076.6m (2002 - #2,111.4m).
Total operating profit before goodwill amortisation and exceptional items was
#146.4m (2002 - #166.6m). Earnings per share on an equivalent basis were up at
6.4p (2002 - 6.3p).
The Board of Directors is recommending that the total dividend for the year is
2.6p per share (2002 - 2.6p). This comprises the interim dividend of 0.8p (2002
- 1.3p) and a proposed final dividend of 1.8p per share (2002 - 1.3p). The Board
has firm confidence in the future prospects for the Group and, based on
continued strong and stable cash flows and profits within the business, we will
look to increase the dividend each year.
Our two key priorities in recent months have been the restructuring of our Coach
USA operations following a comprehensive business review and finalising the new
South West Trains franchise. Focused management action on both of these issues
will deliver greater stability and certainty.
At Coach USA we remain on course to deliver on our key restructuring objectives
within the 12 to 18 month timetable we set out in December 2002 and this will
produce a smaller but nevertheless substantial and more robust business.
We believe the financial and commercial terms we have agreed with the SRA for
the new franchise at South West Trains will deliver a good and predictable
return for our shareholders.
Virgin Rail Group (in which we have a 49% interest) is continuing to work with
the SRA with a view to negotiating new long-term commercial arrangements for
both the West Coast and CrossCountry franchises. Both franchises are presently
receiving SRA funding on the basis of a one year budget set by the SRA for the
period to February 2004. We remain confident that new franchise terms can be
agreed that will secure shareholder value for Stagecoach.
Our UK Bus operations are producing revenue and passenger volume growth, most
notably where we work closely with forward-looking local authorities. We have
been particularly successful in the London market. We are also pleased that the
Government has taken forward our "Kick Start" proposals for targeted funding to
support the introduction of new services and help reinvigorate the UK Bus
network.
In the Overseas Bus division, performance at our New Zealand businesses, where
we are seeing strong growth, continues to be very satisfactory. Citybus, our
Hong Kong bus operation, has been an excellent investment for the Group since
1999. However, the Board received an approach for the business and felt it was
appropriate to review the strategic options for Stagecoach Group in the region.
In view of the limited opportunities to develop significantly elsewhere in other
Pacific Rim countries and the long-term prospects for the business in Hong Kong,
we believe the offer was a good one and that selling the business at this time
was in the best interests of shareholders.
We have a clear strategy for the Group and are on schedule with our sales
programme and restructuring at Coach USA. The sale of Citybus has put the Group
in a strong financial position, further de-risking the Group's portfolio and
will allow management to focus on developing our UK bus and rail businesses, a
smaller but more robust North American business and our successful New Zealand
operations. The Group continues to be a leading international transport company
with a strong portfolio of cash generative businesses.
Following the business review in North America, I was delighted to announce six
months ago that Brian Souter had taken up the position of Chief Executive on a
permanent basis. His energy and entrepreneurial vision have been the driving
force behind the Group and the considerable work he has done in restructuring
our US operations is laying firm foundations for a stronger North American
business.
I was happy to accept the invitation, in December 2002, to continue as Chairman
of the Board. We have been working closely to refocus the company and I am
confident Stagecoach Group has a dedicated senior management team and a
committed Board that will ensure the Group continues to thrive and deliver
shareholder value.
Robert Speirs
Chairman
CHIEF EXECUTIVE'S OPERATING AND FINANCIAL REVIEW
Management has been clearly focused on the twin priorities of restructuring
Coach USA and securing the new franchise at South West Trains. I have been
particularly pleased at the progress we have made and this will give greater
certainty to shareholders.
We are seeing steady performance benefits across the Group as a result of our
concentration on operationally led management. I believe this has reinvigorated
the entrepreneurial approach of management and we are well placed to deliver
growth in our operations, despite the worldwide economic slowdown.
Overall financial results
The financial results for the year ended 30 April 2003 reflect the strong
underlying cash flow generation of the Group and the continued trading
profitability of our four key operating divisions. Turnover for the year was
#2,076.6m (2002 - #2,111.4m). Total operating profit before goodwill
amortisation and exceptional items was #146.4m (2002 - #166.6m). Adjusted
earnings per share (before goodwill amortisation and exceptional items)
increased from 6.3 pence to 6.4 pence.
The turnover and operating loss is further analysed as follows:
Turnover Operating
profit/(loss)
2003 2002 2003 2002
#m #m #m #m
UK Bus 598.4 567.9 67.0 62.7
Overseas Bus 183.7 194.7 30.3 33.4
Coach USA 603.0 682.3 14.0 38.4
Rail 413.6 402.8 38.2 31.0
Virgin Rail Group 276.1 261.2 7.2 10.8
thetrainline.com 11.0 11.7 (4.3) (4.4)
Virgin Rail Group/trainline eliminations (9.2) (9.2) - -
Group overheads - - (9.4) (10.8)
Restructuring costs - - (6.3) (6.6)
Road King - - 10.5 12.9
Other joint ventures and - - (0.8) (0.8)
associates -------- -------- -------- --------
Total before goodwill
amortisation
and exceptional items 2,076.6 2,111.4 146.4 166.6
Goodwill amortisation - - (37.6) (50.5)
Coach USA exceptional items - - (575.0) (19.6)
-------- -------- -------- --------
2,076.6 2,111.4 (466.2) 96.5
-------- -------- -------- --------
Coach USA
I am pleased to report that we remain on course to restructure our Coach USA
division and to meet our strategic aims for the business within the 12 to 18
month timetable we outlined in December 2002. We have already announced the
disposals of Coach USA's Transit division, New England, West, and South Central
regions and a number of its taxi businesses. Together, the gross consideration
for these amounts to over US$220m.
We intend to retain the North East and North Central regions, which together
accounted for around one-third of Coach USA's turnover in the year ended 30
April 2003. We are developing the businesses within the Coach USA portfolio that
perform well and have predictable revenue streams, as well as reducing our
exposure to charter and leisure-related businesses. In addition, we have
successfully retained key management and further reduced our corporate and
regional overhead base. Trading at Coach USA, as we predicted, remains
challenging and we have not seen any major improvement in the trading
environment. Nevertheless, Coach USA remains cash generative and profitable. We
have many strong performing businesses in the residual Coach USA portfolio and
we are continuing to redeploy existing assets to maximise asset utilisation and
to eliminate unnecessary capital expenditure.
Coach USA's turnover for the year was #603.0m, compared to #682.3m in the
previous year. Operating profit was #14.0m*, compared to #38.4m in 2002,
representing a reduction in operating margin from 5.6% to 2.3%. The reduction in
operating margin reflects a fall of 0.4% in like for like revenues in our coach
and bus operations, increased insurance costs and a significant fall in taxicab
utilisation and sales. Action is continuing to maintain strict controls on our
cost base and improve operating efficiency.
Rail
We have now agreed financial and commercial terms with the SRA for a new
three-year franchise at South West Trains. The deal, which has been recommended
to the Department for Transport and the Treasury by the SRA Board, is currently
awaiting final approval. Together with the current one-year extension this would
result in a franchise for the period until February 2007. This will cement our
leading position within the UK rail market and combines the right balance of
risk and return for our shareholders.
Our Rail division has delivered a strong operating profit for the year. At South
West Trains, our concentration on driving up operational performance has
resulted in significant improvements and we are progressing well with the
planned introduction of our new #1bn Desiro train fleet. At Virgin Rail Group,
the business is benefiting from the focus on service delivery and significant
investment in new trains. The replacement of the entire CrossCountry fleet has
been completed with the introduction of new Virgin Voyagers, while the first of
the new state-of-the-art Pendolino trains are also in service.
Network infrastructure difficulties remain a concern, however, and we have
implemented a range of measures to mitigate the effects on our operation as well
as working closely with Network Rail and the Strategic Rail Authority.
Turnover for our wholly-owned rail subsidiaries in the year was up 2.7% at
#413.6m (2002: #402.8m). Operating profit was #38.2m (2002: #31.0m),
representing an operating margin of 9.2% (2002: 7.7%). This includes liquidated
damages of #8.5m in relation to late delivery and reliability of new Class 458
trains. Rail profits are stated after the costs of bidding for new franchises.
Passenger volumes at South West Trains increased by 2.1%, or 0.9% after
excluding the periods affected by industrial action in the prior year.
Our share of Virgin Rail Group's turnover for the year amounted to #276.1m (2002
- #261.2m) and our share of operating profits before exceptional items was #7.2m
(2002 - #10.8m). Passenger volumes for the year are 4.7% above the prior year.
* References to the operating profit of a particular business unit refer to
operating profit before restructuring costs, goodwill amortisation and
exceptional items.
UK Bus
Our UK Bus division, the traditional core of the Group, is performing well. We
are benefiting from revenue and passenger growth in provincial towns where we
are working in partnership with forward-looking local authorities. We have been
particularly successful in the London market, where we have retained and won a
number of tenders. New tenders and the operation of additional vehicles on
behalf of Transport for London have added #14.6m in revenue in the year ended 30
April 2003. Passenger volumes in London are up 8.8% and we see further
opportunities for growth following the introduction of congestion charging
earlier this year.
We are taking an industry lead in generating new ideas and believe our "Kick
Start" proposal, which is now being taken forward by the UK Government, can
benefit communities across the country. The proposal is that the Government sets
aside funds, which are used to give short-term impetus for the introduction of
new services with the aim that such services would become commercially viable
within three years from their commencement. It can deliver more comprehensive
bus services, reduced road congestion, better value for the taxpayer, with
important environmental and social inclusion benefits. As well as bidding for
Government funding in this area, we will continue with our own "Kick Start"
programme of investment in buses for routes identified as having organic growth
potential and we are also looking at the development of a number of new products
and ideas targeted for growth in the next twelve months.
Turnover in our UK Bus division has increased by 5.4% to #598.4m (2002:
#567.9m). Operating profit was #67.0m, compared to #62.7m in the previous year,
and this is after taking account of increases in insurance costs and labour
costs, including an increase in pension costs. The operating profit figure is
stated after the financing element of vehicle operating leases, which amounted
to #0.5m. This represents an operating margin of 11.2% (2002: 11.0%) and
reflects the benefits from a wide range of local initiatives to grow revenue,
despite a continuing fall in the cost of car ownership. Across the UK, we have
invested in new buses with a total capital value of #40.7m during the year to
develop our on-the-road product. Total passenger volumes across our UK Bus
business have increased by 3.2%.
Overseas Bus
In New Zealand, where we are the biggest bus operator, our operations have
delivered further strong growth. We continue to work in close partnership with
national and local government to improve bus services, investing heavily in our
operation. "Kick Start" pump-priming funding has helped enhance services on key
corridors and bus passenger growth in Auckland has continued to be strong. In
addition, we remain actively interested in running the suburban rail networks in
both Wellington and Auckland.
Under our ownership since 1999, our Hong Kong Citybus operation has produced
strong organic growth in passenger volumes and a significant reduction in
operating costs. Following an approach for the business, we reviewed the
strategic options for Stagecoach Group in the region. It was our view that there
were limited opportunities to develop significantly elsewhere in other Pacific
Rim countries and the long-term prospects for the business in Hong Kong were
uncertain. A number of factors were assessed in coming to a decision, including
the future economic climate in Hong Kong, the growing levels of regulation and
the inability to grow profit without very significant investment or critical
mass synergies. While the outbreak of Severe Acute Respiratory Syndrome ("SARS")
earlier this year continues to impact the profitability of the Hong Kong
business, our assessment of the sale was based on a long-term view of the
profitability and capital requirements of the business and not the immediate
trading conditions. The market for franchised bus operations is competitive and
the purchaser already had an interest in a significant franchised bus operation.
The proposed combination will benefit from synergies and economies of scale and
this will give a solid platform for the further investment that is required in
the Hong Kong franchised bus market. On that basis, we believe the sale of
Citybus was in the best interests of the business and Stagecoach shareholders,
and it will allow Stagecoach management to continue to deliver our strategy as a
leading international transport provider.
Turnover for the year in Overseas Bus was #183.7m, compared to #194.7m in the
previous year. Operating profit was #30.3m, compared to #33.4m in the previous
year. This represents an operating margin of 16.5% (2002 - 17.2%). The reduction
in operating profit reflects the disposals of operations in Australia and
Portugal, movements in foreign exchange rates applied in translating overseas
profits to sterling and the impact of SARS and a sluggish economy on our Hong
Kong operations.
The results for Overseas Bus include turnover in respect of Citybus of #132.3m
(2002: #148.6m) and operating profit of #19.1m (2002: #25.2m).
Joint ventures and associates
Our share of joint ventures' and associates' operating profits (before goodwill
amortisation and exceptional items) was #12.6m compared to #18.5m in the prior
year. The reduction reflects reduced profitability at Virgin Rail Group, a
reduction in certain minimum income undertakings from joint ventures at Road
King and movements in foreign exchange rates applied in translating overseas
profits to sterling. In addition to Virgin Rail Group (profit #7.2m; 2002 -
#10.8m), the results include our share of thetrainline.com's operating losses
which was #4.3m (2002 - #4.4m), our share of profits in Road King of #10.5m
(2002 - #12.9m) and our share of operating losses of #0.8m (2002 - #0.8m) from
our other joint ventures and associates.
Restructuring costs
Restructuring costs of #6.3m (2002 - #6.6m) have been charged against operating
profits, of which #3.0m relates to the restructuring at Coach USA, #1.8m relates
to UK Bus and #1.5m relates to redundancy costs incurred in our other divisions.
Depreciation and amortisation
Total depreciation decreased from #112.7m to #105.3m, reflecting the impairment
of Coach USA's tangible fixed assets recorded as at 31 October 2002, the effect
of foreign exchange movements on the translation of US$ and HK$ charges and a
reduction in capital expenditure. The annual goodwill amortisation charge was
#37.6m compared to #50.5m in 2002, reflecting the fact that we have recorded a
goodwill impairment loss of #386.8m in the year.
Exceptional items
Net exceptional charges before tax of #575.5m (2002- #14.3m) were reported.
These include charges of #575.0m associated with the impairment review of Coach
USA which comprised an impairment of goodwill totalling #386.8m, an impairment
of tangible fixed assets of #162.7m, a write-down of current assets to net
realisable value totalling #17.8m and a provision for losses on operations to be
closed or sold of #7.7m. The results also include a net loss on the sale of
properties of #0.5m.
Finance charges
Net interest and financing charges decreased from #59.8m to #33.5m as a result
of the favourable interest rate environment and gains of #15.1m on the
repurchase of bonds. EBITDA before exceptional items to interest cover was 7.5
times compared to 4.7 times in 2002. This is based on EBITDA before exceptional
items of #251.7m (2002 - #279.3m).
Acquisitions and disposals
We have not completed any significant acquisitions or disposals in the 12 months
ended 30 April 2003. Details of material disposals announced since 30 April 2003
are given in note 9 to the preliminary financial statements.
Taxation
Before taking account of the exceptional write-offs in Coach USA of #575.0m,
profit before tax for the year was #74.8m. The tax charge of #25.0m represents
an effective rate of 33.4% on this profit (2002 - 35.7%).
The decrease in the effective tax rate this year is principally due to changes
in the mix of profits from the various parts of the business.
Cash flows
Cash generation across the Group remained strong with free cash flows amounting
to #217.8m. This compares to #184.3m last year. Free cash flow per share
increased from 14.1 pence to 16.6 pence.
At 30 April 2003 net cash balances were #164.7m, an increase of #14.7m from 30
April 2002. The Group remains in a net borrowing position and surplus cash
balances are used to repay debt where possible.
Capital Expenditure
Additions to tangible fixed assets during the year were as follows:
2003 2002
#m #m
----------- -----------
UK Bus 34.4 50.5
Coach USA 21.5 40.1
Overseas Bus 13.3 9.2
Rail 1.9 3.5
----------- -----------
Total 71.1 103.3
----------- -----------
In addition, new operating leases were entered into during the year by the UK
Bus division for vehicles with a capital value of #19.6m.
Balance sheet
Net assets have decreased by 65.1% from #909.1m to #317.1m principally due to
the exceptional write-offs of #575.0m at Coach USA. Net debt at 30 April 2003
decreased by 27.7% to #560.0m compared to #774.6m as at 30 April 2002. Based on
net assets of #317.1m and net debt of #560.0m, book gearing is 176.6% in
comparison to last year's level
of 85.2%. After taking account of proceeds in relation to disposals announced
post year-end, pro-forma net debt would reduce to #268.4m. The disposals have a
minimal impact on net assets, and therefore would result in pro-forma gearing of
84.6%.
Pensions
The Group continues to account for pensions on the basis of SSAP 24, "Accounting
for pension costs". Under SSAP 24, total pension costs in the year ended 30
April 2003 were #31.2m (2002 - #18.0m). The increase in costs principally
relates to the rail division.
The Group will provide in its Annual Report the transitional disclosures
required under FRS 17, "Retirement Benefits". Under FRS 17, the defined benefit
pension schemes in respect of the Group's UK Bus and head office employees
showed a net liability at 30 April 2003 of #156.2m after taking account of
deferred tax. In addition, the defined benefit pension schemes in respect of the
Group's UK Rail employees showed a net liability of #24.3m, after deferred tax.
We believe that the Rail deficit needs to be considered separately as the
franchise payments under the new South West Trains franchise take account of
increased contribution levels to fund the deficit and we understand that the
Group has no liability beyond the end of the franchise.
The defined benefit pension schemes are already benefiting from increased
contributions from the Group and from the employees. In the year ended 30 April
2003, the cash contributions from the Group to the various pension schemes
increased by #7.4m, of which #5.5m relates to the rail division. We have already
planned for increased cash contributions for the year ending 30 April 2004. We
remain committed to retaining defined benefit pension arrangements in the UK and
continue to have constructive discussions regarding future contribution rates
and other aspects of the defined benefit pension schemes.
Current trading
While still early in the new financial year, the Group has started the year well
and is trading in line with our expectations.
Our People
I am delighted with the contribution our people across the globe have made in
meeting the challenges of the past year and I would like to thank them and our
customers for their continued support. I am certain we can deliver better
services, more value to shareholders, and continued security for our employees.
Brian Souter
Chief Executive
Consolidated Profit and Loss Account
Audited Audited
Year ended 30 April 2003 Year ended 30 April 2002
Performance Goodwill Performance Goodwill
pre goodwill and pre goodwill and
and exceptional Results for and exceptional Results for
exceptionals items the year exceptionals items the year
Notes #m #m #m #m #m #m
----------------------------------------------------------------------------------------------------
Turnover:
Group and
share of
joint
ventures 1 2,076.6 Nil 2,076.6 2,111.4 Nil 2,111.4
Less: Share
of joint
ventures'
turnover (277.9) Nil (277.9) (263.7) Nil (263.7)
-----------------------------------------------------------------------------------------
Group
turnover 1 1,798.7 Nil 1,798.7 1,847.7 Nil 1,847.7
Operating
costs
(including
asset
impairment) (1,752.6) (603.6) (2,356.2) (1,753.8) (61.3) (1,815.1)
Other
operating
income 2 87.7 Nil 87.7 54.2 Nil 54.2
-----------------------------------------------------------------------------------------
Operating
(loss)/
profit of
Group
companies 1 133.8 (603.6) (469.8) 148.1 (61.3) 86.8
Share of
operating
loss of
joint
ventures 2.6 (8.7) (6.1) 6.1 (8.4) (2.3)
Share of
operating
profit from
interest in
associates 10.0 (0.3) 9.7 12.4 (0.4) 12.0
-----------------------------------------------------------------------------------------
Total
operating
(loss)/
profit:
Group and
share
of joint
ventures and
associates 1 146.4 (612.6) (466.2) 166.6 (70.1) 96.5
(Loss)/
profit on
sale of
properties Nil (0.5) (0.5) Nil 0.5 0.5
Profit on
disposal of
overseas
operations Nil Nil Nil Nil 4.8 4.8
-----------------------------------------------------------------------------------------
(Loss)/
profit on
ordinary
activities
before
interest and
taxation 146.4 (613.1) (466.7) 166.6 (64.8) 101.8
Finance
charges
(net) (33.5) Nil (33.5) (59.8) Nil (59.8)
(Loss)/
profit on
ordinary
activities
before
taxation 112.9 (613.1) (500.2) 106.8 (64.8) 42.0
Taxation on
(loss)/
profit on
ordinary
activities 5 (28.8) 3.8 (25.0) (24.2) 9.2 (15.0)
-----------------------------------------------------------------------------------------
(Loss)/ 84.1 (609.3) (525.2) 82.6 (55.6) 27.0
profit on
ordinary
activities
after
taxation
Dividends 8 (34.3) Nil (34.3) (34.1) Nil (34.1)
-----------------------------------------------------------------------------------------
Retained
loss for the
year 49.8 (609.3) (559.5) 48.5 (55.6) (7.1)
-----------------------------------------------------------------------------------------
(Loss)/
earnings per
share: - Adjusted/
Basic 3 6.4p (40.0)p 6.3p 2.1p
- Diluted 3 6.4p (40.0)p 6.3p 2.1p
-----------------------------------------------------------------------------------------
The accompanying notes form an integral part of this consolidated profit and
loss account.
All operations in the years ended 30 April 2003 and 30 April 2002 are classed as
continuing.
Consolidated Balance Sheet
Audited Audited
As at As at
30 April 2003 30 April 2002
Notes #m #m
----- --------------------------------
Fixed Assets
Intangible assets 206.9 665.4
Tangible assets 851.6 1,108.9
Investments
- Investment in joint ventures
Goodwill 72.7 81.4
Share of gross assets 167.5 136.7
Share of gross liabilities (122.0) (97.4)
Shareholder loan notes 10.4 10.0
--------------------------------
128.6 130.7
--------------------------------
- Investment in associates 70.0 72.8
- Other investments 2.7 3.2
--------------------------------
1,259.8 1,981.0
--------------------------------
Current Assets
Stocks 38.1 50.9
Debtors and prepaid charges -due within one year 192.3 228.5
-due after more than one year 59.9 54.2
Cash at bank and in hand 164.7 150.0
--------------------------------
455.0 483.6
Creditors: Amounts falling due within one year (504.2) (524.0)
--------------------------------
Net current liabilities (49.2) (40.4)
--------------------------------
Total assets less current liabilities 1,210.6 1,940.6
Creditors: Amounts falling due after more than one year (640.7) (808.1)
Provisions for liabilities and charges
- Joint venture -thetrainline.com
Share of gross assets 5.3 5.1
Share of gross liabilities (27.9) (21.8)
- Other provisions (230.2) (206.7)
--------------------------------
Net Assets 317.1 909.1
--------------------------------
Capital and reserves
Equity share capital 6.6 6.6
Share premium account 386.1 384.4
Profit and loss account (77.3)* 514.8
ESOP distribution reserve Nil 1.6
Capital redemption reserve 1.7 1.7
--------------------------------
Shareholders' Funds - Equity 6 317.1 909.1
--------------------------------
The accompanying notes form an integral part of this consolidated balance sheet.
* The profit and loss reserve deficit of #77.3m is the consolidated position
after taking account of cumulative goodwill of #113.8m that was written off
against reserves in periods prior to the adoption of FRS 10, "Goodwill and
Intangible Assets". The holding company's distributable reserves as at 30 April
2003 were #57.5m (2002 - #670.1m).
Consolidated Cash Flow Statement
Audited Audited
Year ended Year ended
30 April 2003 30 April 2002
Notes #m #m
----- -----------------------------
Net cash inflow from operating activities 7 272.2 256.9
Dividends from joint ventures and associates 5.3 5.0
-----------------------------
Returns on investments and servicing of finance
Interest paid (52.6) (61.7)
Interest element of hire purchase and lease finance (4.7) (7.6)
Interest received 5.4 8.4
-----------------------------
Net cash outflow from returns on investments and
servicing of finance (51.9) (60.9)
-----------------------------
Taxation (7.8) (16.7)
-----------------------------
Capital expenditure and financial investment
Purchase of tangible fixed assets (52.9) (82.4)
Sale of tangible fixed assets 20.1 5.4
-----------------------------
Net cash outflow from capital expenditure and
financial investment (32.8) (77.0)
-----------------------------
Acquisitions and disposals
Acquisition of subsidiaries 7 (10.1) (25.2)
Net cash acquired with subsidiaries Nil 0.3
Purchase of goodwill (0.8) (0.1)
Purchase of investments in joint ventures and associates (0.9) (1.5)
Purchase of other investments Nil (0.3)
Cash of disposed subsidiaries 7 Nil (0.8)
Disposal of subsidiaries and other businesses 7 7.0 16.1
Disposal of other investments Nil 2.0
-----------------------------
Net cash outflow from acquisitions and disposals (4.8) (9.5)
-----------------------------
Equity dividends paid (27.6) (49.8)
-----------------------------
Net cash inflow before financing 152.6 48.0
-----------------------------
Financing
Sale of tokens 12.9 14.8
Redemption of tokens (10.8) (13.4)
Issue of share capital for cash Nil 1.3
(Increase)/decrease in collateral balances (32.1) 38.2
Decrease in borrowings (90.9) (12.2)
Repayments of hire purchase and lease finance (44.4) (48.2)
-----------------------------
Net cash outflow from financing (165.3) (19.5)
-----------------------------
(Decrease)/increase in cash during the year 7 (12.7) 28.5
-----------------------------
Free cash flow 217.8 184.3
-----------------------------
Free cash flow per share 16.6p 14.1p
-----------------------------
Free cash flow comprises net cash inflow from operating activities, dividends
from joint ventures and associates, net cash outflow from returns on investments
and servicing of finance, and taxation.
The accompanying notes form an integral part of this consolidated cash flow
statement.
Consolidated Statement of Total Recognised Gains and Losses
Audited Audited
Year ended Year ended
30 April 2003 30 April 2002
#m #m
----------- -----------
(Loss)/profit for the financial year (525.2) 27.0
Translation differences on foreign currency net investments (26.6) (5.5)
UK tax effect of translation differences on foreign
currency net investments (6.4) (4.8)
Share of other recognised gains and losses of associates (0.1) (0.2)
----------------------------
Total recognised gains and losses relating to the year (558.3) 16.5
----------------------------
There are no recognised gains and losses of joint ventures other than the
Group's share of their profits or losses for each financial year.
Notes to the Preliminary Statement
1 Segmental Analysis
(a) Turnover
Audited Audited
Year ended Year ended
30 April 2003 30 April 2002
#m #m
----------------------------
Continuing operations
UK Bus 598.4 567.9
Overseas Bus 183.7 194.7
Coach USA 603.0 682.3
----------------------------
Total bus continuing operations 1,385.1 1,444.9
Rail 413.6 402.8
----------------------------
Group turnover - continuing operations 1,798.7 1,847.7
Share of joint ventures' turnover
- Train operating companies 276.1 261.2
- thetrainline.com 11.0 11.7
- Elimination of inter-segment turnover (9.2) (9.2)
----------------------------
Group turnover and share of joint ventures' turnover 2,076.6 2,111.4
----------------------------
Turnover of #183.7m (2002 - #194.7m) for the continuing Overseas Bus segment
includes amounts of #132.3m (2002 - #148.6m) in relation to Citybus, which was
disposed of after 30 April 2003
Due to the nature of the Group's business, the origin and destination of
turnover is the same in all cases.
1 Segmental Analysis (continued)
(b) (i) Operating (loss)/profit
Audited Audited
Year ended 30 April 2003 Year ended 30 April 2002
Restated (see below)
Performance Goodwill Performance Goodwill
pre goodwill and pre goodwill and
and exceptional Results for and exceptional Results for
exceptionals items the year exceptionals items the year
#m #m #m #m #m #m
-----------------------------------------------------------------------------------
Continuing operations
UK Bus 67.0 Nil 67.0 62.7 Nil 62.7
Overseas Bus 30.3 Nil 30.3 33.4 Nil 33.4
Coach USA 14.0 (575.0) (561.0) 38.4 (19.6) 18.8
-----------------------------------------------------------------------------------
Total bus
continuing
operations 111.3 (575.0) (463.7) 134.5 (19.6) 114.9
Rail 38.2 Nil 38.2 31.0 Nil 31.0
-----------------------------------------------------------------------------------
Total continuing
operations 149.5 (575.0) (425.5) 165.5 (19.6) 145.9
Group overheads (9.4) Nil (9.4) (10.8) Nil (10.8)
Annual goodwill Nil (28.6) (28.6) Nil (41.7) (41.7)
amortisation
Redundancy/
restructuring
costs
- Continuing
operations (6.3) Nil (6.3) (6.6) Nil (6.6)
-----------------------------------------------------------------------------------
Total operating
(loss)/profit of
Group companies 133.8 (603.6) (469.8) 148.1 (61.3) 86.8
Share of operating
profit/(loss) of
joint ventures
- Train operating
companies 7.2 Nil 7.2 10.8 Nil 10.8
-thetrainline.com (4.3) Nil (4.3) (4.4) Nil (4.4)
- Other (0.3) Nil (0.3) (0.3) Nil (0.3)
Goodwill amortised
on investment in
joint ventures Nil (8.7) (8.7) Nil (8.4) (8.4)
Share of operating
profit/(loss) of
associates
- Road King 10.5 Nil 10.5 12.9 Nil 12.9
- Other (0.5) Nil (0.5) (0.5) Nil (0.5)
Goodwill amortised
on investment in
associates Nil (0.3) (0.3) Nil (0.4) (0.4)
-----------------------------------------------------------------------------------
Total operating
(loss)/profit:
Group, joint
ventures and
associates 146.4 (612.6) (466.2) 166.6 (70.1) 96.5
-----------------------------------------------------------------------------------
Operating profit of #30.3m (2002 - #33.4m) for the continuing Overseas Bus
segment includes amounts of #19.1m (2002 - #25.2m) in relation to Citybus, which
was disposed of after 30 April 2003.
Goodwill amortisation of #28.6m (2002: #41.7m) is analysed as UK Bus #0.8m
(2002: #0.7m), Overseas Bus #8.6m (2002: #9.2m) and Coach USA #19.2m (2002:
#31.8m).
Restructuring costs of #6.3m (2002 - #6.6m) are analysed as UK Bus #1.8m (2002 -
#1.5m), Overseas Bus #0.1m (2002 - #Nil), Coach USA #3.0m (2002 - #4.9m), Rail
#0.6m (2002 - #Nil) and costs incurred centrally #0.8m (2002 - #0.2m).
The above segmental analysis of operating profit has been restated by applying
certain costs that were previously classified within "Group overheads" against
the operating profits of particular operating divisions. This has been done to
align the segmental analysis with the way management now monitors the business
and to achieve greater comparability with other companies.
For completeness, we have also presented operating profit segmented using the
previous basis on the next page.
1 Segmental Analysis (continued)
(b) (ii) Operating (loss)/profit
Audited Audited
Year ended 30 April 2003 Year ended 30 April 2002
Performance Goodwill Performance Goodwill
pre goodwill and pre goodwill and
and exceptional Results for and exceptional Results for
exceptionals items the year exceptionals items the year
#m #m #m #m #m #m
-----------------------------------------------------------------------------------
Continuing
operations
UK Bus 76.0 Nil 76.0 71.1 Nil 71.1
Overseas Bus 30.3 Nil 30.3 34.1 Nil 34.1
Coach USA 16.6 (575.0) (558.4) 41.2 (19.6) 21.6
-----------------------------------------------------------------------------------
Total bus
continuing
operations 122.9 (575.0) (452.1) 146.4 (19.6) 126.8
Rail 38.2 Nil 38.2 31.3 Nil 31.3
-----------------------------------------------------------------------------------
Total continuing
operations 161.1 (575.0) (413.9) 177.7 (19.6) 158.1
Group overheads (21.0) Nil (21.0) (23.0) Nil (23.0)
Annual goodwill
amortisation Nil (28.6) (28.6) Nil (41.7) (41.7)
Redundancy/
restructuring
costs
- Continuing
operations (6.3) Nil (6.3) (6.6) Nil (6.6)
-----------------------------------------------------------------------------------
Total operating 133.8 (603.6) (469.8) 148.1 (61.3) 86.8
(loss)/profit of
Group companies
Share of operating
profit/(loss) of
joint ventures
- Train operating
companies 7.2 Nil 7.2 10.8 Nil 10.8
- thetrainline.com (4.3) Nil (4.3) (4.4) Nil (4.4)
- Other (0.3) Nil (0.3) (0.3) Nil (0.3)
Goodwill amortised
on investment in
joint ventures Nil (8.7) (8.7) Nil (8.4) (8.4)
Share of operating
profit/(loss) of
associates
- Road King 10.5 Nil 10.5 12.9 Nil 12.9
- Other (0.5) Nil (0.5) (0.5) Nil (0.5)
Goodwill amortised
on investment in
associates Nil (0.3) (0.3) Nil (0.4) (0.4)
-----------------------------------------------------------------------------------
Total operating
(loss)/profit:
Group, joint
ventures and
associates 146.4 (612.6) (466.2) 166.6 (70.1) 96.5
-----------------------------------------------------------------------------------
2 Other Operating Income
Audited Audited
Year ended Year ended
30 April 2003 30 April 2002
#m #m
----------- -----------
Miscellaneous revenue 47.9 47.5
Liquidated damages received 8.5 Nil
Losses on disposal of assets, other than properties (2.7) (0.1)
Rail franchise support 34.0 6.8
----------- -----------
87.7 54.2
----------- -----------
Miscellaneous revenue comprises revenue incidental to the Group's principal
activity. It includes advertising income, maintenance income and property
income.
The liquidated damages received of #8.5m (2002 - #Nil) relate to 24 new class
458 trains, which are now in service at South West Trains, a subsidiary of the
Group. A number of problems were experienced with the late delivery and
reliability of the new trains and the liquidated damages were received in
respect of these issues.
Rail franchise support totalled #34.0m (2002 - #6.8m). The increase mainly
reflects the deed of amendment agreed with the UK's Strategic Rail Authority in
respect of South West Trains and is offset by increased operating costs.
3 (Loss)/earnings per share
(Loss)/earnings per share have been calculated in accordance with FRS 14
"Earnings per Share" by calculating Group (loss)/profit on ordinary activities
after tax, divided by the weighted average number of shares in issue during the
year based on the following:
Audited Audited
Year ended 30 April 2003 Year ended 30 April 2002
Weighted Weighted
average (Loss)/ average (Loss)/
(Loss)/ number earnings (Loss)/ number earnings
earnings of shares per share earnings of shares per share
#m Million pence #m Million pence
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Basic (525.2) 1,314.4 (40.0) 27.0 1,309.9 2.1
----------------------------------------------------------------------------
Adjusted
(pre
goodwill
and
exceptional
items) 84.1 1,314.4 6.4 82.6 1,309.9 6.3
Dilutive
shares -
Executive
Share
Option
Scheme - 2.3 Nil - 0.1 Nil
- Employee
SAYE
Scheme - Nil Nil - 0.2 Nil
----------------------------------------------------------------------------
Diluted
excluding
goodwill
and
exceptional
items 84.1 1,316.7 6.4 82.6 1,310.2 6.3
----------------------------------------------------------------------------
Include
goodwill
and
exceptional
items (55.6) - (4.2)
----------------------------------------------------------------------------
Diluted 27.0 1,310.2 2.1
----------------------------------------------------------------------------
(Loss)/earnings per share before goodwill and exceptional items is calculated
after adding back goodwill amortisation and exceptional items after taking
account of taxation, as shown on the consolidated profit and loss account. This
has been presented to allow shareholders to gain a clearer understanding of the
underlying performance.
In accordance with FRS 14, share options are only treated as dilutive in the
calculation of diluted earnings per share if their exercise would result in the
issue of ordinary shares at less than fair value. Potential ordinary shares are
only treated as dilutive where the effect is to reduce earnings per share or
increase loss per share. Accordingly, the basic loss per share for 2003 has not
been adjusted for the dilutive shares as the effect would be to reduce the loss
per share.
4 Exceptional items
The following items have been treated as exceptional:
Audited Audited
Year ended Year ended
30 April 2003 30 April 2002
#m #m
----------------------------
Provision for losses on operations to be
terminated or sold at Coach USA (7.7) (9.9)
Impairment of tangible fixed assets at Coach USA (162.7) (9.7)
Write-down of current assets to net realisable
value at Coach USA (17.8) Nil
Impairment of goodwill at Coach USA (386.8) Nil
Profit on disposal of overseas operations Nil 4.8
(Loss)/profit on sale of properties (0.5) 0.5
----------------------------
(575.5) (14.3)
Tax effect of exceptional items Nil 5.6
----------------------------
(575.5) (8.7)
----------------------------
As at 30 April 2002, the Group undertook an impairment review of Coach USA. The
Directors concluded that at that time, no impairment write-down was required but
announced that a review of Coach USA's business would be undertaken. The
recovery in revenues for the six months ended 31 October 2002 was less than
expected and trading conditions in North America continued to be difficult. As a
result of the change in strategy for Coach USA and the absence of a significant
recovery in revenues, the Group undertook a further review of the carrying value
of Coach USA's assets as at 31 October 2002. The commercial assumptions used in
reviewing the carrying value of Coach USA at that time are consistent with the
current strategic plans for that business.
The carrying values of current assets within Coach USA were also reviewed to
ensure those were properly valued. Appropriate write-downs were recorded in the
six months ended 31 October 2002. These write-downs included adjustments to the
carrying value of taxicab inventory and receivables, where the realisable value
had fallen reflecting market conditions at that time.
The remaining goodwill and tangible fixed assets of Coach USA were reviewed for
impairment. In accordance with FRS 11, "Impairment of fixed assets and
goodwill", Coach USA was divided into appropriate "Income Generating Units" or
"IGUs". The carrying value of each IGU as at 31 October 2002 was compared to its
estimated recoverable amount, being the higher of its value in use and net
realisable value to the Group. The value in use of each IGU was derived from
discounted cash flow projections that covered the period to 30 April 2007. After
30 April 2007, the projections used a long-term growth rate compatible with
projections for the US economy. The average discount rate used to arrive at the
value in use was 13.0% on a pre-tax basis. The remaining tangible fixed assets
and goodwill of each IGU are being amortised over their estimated useful
economic lives, which in the case of goodwill is 16.25 years from 30 April 2003.
The Group closed a number of businesses in the USA as a consequence of the
review. Specific provision has been made for losses associated with the closure
of these businesses over and above the write-down of asset values described
above. These additional losses include employee redundancy payments, operating
lease termination payments and professional fees directly attributable to the
closures.
To the extent the written-down values as at 31 October 2002 were based on
projected cash flows, the actual cash flows for the six months ended 30 April
2003 have been compared to the projections. Actual cash flows were not
significantly different to those projected.
4 Exceptional items (continued)
The aggregate exceptional charges across all of the IGUs were as follows:
Year ended
30 April 2003
#m
-----------
Provision for losses on operations to be terminated (7.7)
Write-downs of current assets to net realisable value (17.8)
Impairment of tangible fixed assets (162.7)
Impairment of goodwill (386.8)
-----------
(575.0)
-----------
The residual written down values of Coach USA's net assets as at 30 April 2003
were as follows:
As at
30 April 2003
#m
-----------
Goodwill 108.0
Tangible fixed assets 231.0
Net current liabilities (8.5)
-----------
Net assets before debt and tax balances 330.5
-----------
5 Taxation on (loss)/profit on ordinary activities
Audited Audited
Year ended 30 April 2003 Year ended 30 April 2002
Performance Goodwill Performance Goodwill
pre goodwill and pre goodwill and
and exceptional Results for and exceptional Results for
exceptionals items the year exceptionals items the year
#m #m #m #m #m #m
----------------------------------------------------------------------------------------
Current tax:
UK
Corporation
tax at 30%
(2002: 30%) 24.7 Nil 24.7 12.6 Nil 12.6
Share of
joint
ventures'
current tax 2.4 Nil 2.4 0.2 Nil 0.2
Share of
associates'
current tax 0.3 Nil 0.3 3.1 Nil 3.1
Foreign tax
(current
year) 3.2 Nil 3.2 2.8 Nil 2.8
Foreign tax
(adjustments
in respect
of
prior
periods) (3.6) Nil (3.6) (0.3) Nil (0.3)
----------------------------------------------------------------------------------------
Total current
tax 27.0 Nil 27.0 18.4 Nil 18.4
----------------------------------------------------------------------------------------
Deferred tax:
Origination
and reversal
of timing
differences (0.2) (3.8) (4.0) 7.4 (9.2) (1.8)
Adjustments
in respect of
prior
periods 2.0 Nil 2.0 (1.6) Nil (1.6)
----------------------------------------------------------------------------------------
Total
deferred
tax 1.8 (3.8) (2.0) 5.8 (9.2) (3.4)
----------------------------------------------------------------------------------------
Tax on (loss)
/profit on
ordinary
activities 28.8 (3.8) 25.0 24.2 (9.2) 15.0
----------------------------------------------------------------------------------------
6 Reconciliation of Movements in Consolidated Shareholders' Funds
Audited Audited
Year ended Year ended
30 April 2003 30 April 2002
#m #m
------------------------------
(Loss)/profit for the financial year (525.2) 27.0
Dividends (34.3) (34.1)
------------------------------
(559.5) (7.1)
Goodwill sold, previously written off
to reserves 0.5 3.7
Other recognised gains and losses
relating to the year (33.1) (10.5)
Share capital issued less costs 1.7 2.9
ESOP distribution reserve decrease (1.6) (0.2)
------------------------------
Net reduction in shareholders' funds (592.0) (11.2)
------------------------------
Opening shareholders' funds 909.1 920.3
------------------------------
Closing shareholders' funds 317.1 909.1
------------------------------
7 Consolidated cash flows
(a) Reconciliation of operating (loss)/profit to net cash flow from operating
activities
Audited Audited
Year ended Year ended
30 April 2003 30 April 2002
#m #m
------------------------------
Operating (loss)/profit of Group
companies (469.8) 86.8
Depreciation 105.3 112.7
Impairment of tangible fixed assets at
Coach USA 162.7 9.7
Impairment of goodwill at Coach USA 386.8 Nil
Loss on sale of tangible fixed assets,
other than properties 2.7 0.1
Goodwill amortisation 28.6 41.7
Provision for losses on operations to
be terminated or sold 7.7 9.9
Decrease/(increase) in stocks 11.7 (3.1)
Decrease/(increase) in debtors 13.6 (6.6)
ESOP provided for 0.2 1.8
Decrease in creditors (1.7) (4.1)
Increase in provisions 24.4 8.0
------------------------------
Net cash inflow from operating
activities 272.2 256.9
------------------------------
7 Consolidated cash flows (continued)
(b) Reconciliation of net cash flow to movement in net debt
Audited Audited
Year ended Year ended
30 April 2003 30 April 2002
#m #m
------------------------------
(Decrease)/increase in cash (12.7) 28.5
Bond repayments 40.0 77.7
------------------------------
Cash flow from decrease/(increase) in
debt and
lease financing 95.3 (17.3)
------------------------------
122.6 88.9
Loans and finance leases of acquired/
disposed subsidiaries Nil 0.5
Other movements 59.9 (40.1)
Movement in cash collateral 32.1 (38.2)
------------------------------
Decrease in net debt 214.6 11.1
Opening net debt (774.6) (785.7)
------------------------------
Closing net debt (560.0) (774.6)
------------------------------
(c) Analysis of net debt
Opening Cash Cash Other Closing
flows collateral Movements
#m #m #m #m #m
--------------------------------------------------------
Cash 107.5 (12.7) Nil (4.7) 90.1
Cash
collateral 42.5 38.9 (6.8) Nil 74.6
HP and lease
obligations (106.5) 44.4 Nil (18.5) (80.6)
Bank loans
and loan
stock (314.0) 44.1 6.8 23.1 (240.0)
Bonds (504.1) 40.0 Nil 60.0 (404.1)
--------------------------------------------------------
Totals (774.6) 154.7 Nil 59.9 (560.0)
--------------------------------------------------------
The net total of cash and cash collateral of #164.7m (2002 - #150.0m) is
classified in the balance sheet as #164.7m (2002 - #150.0m) in cash at bank and
in hand.
(d) Restricted cash
The cash collateral balance as at 30 April 2003 of #74.6m (2002 - #42.5m)
comprises balances held in trust in respect of loan notes of #34.3m (2002 -
#41.1m) and Coach USA letter of credit cash and insurance collateral cash of
#40.3m (2002 - #1.4m). In addition, cash includes train operating company cash
of #42.9m (2002 - #56.4m). Under the terms of the franchise agreements, train
operating companies can only distribute cash out of retained profits.
7 Consolidated cash flows (continued)
(e) Purchase of subsidiary undertakings
Coach USA UK Total
#m #m #m
-----------------------------------
Net assets acquired at fair
value 1.3 2.3 3.6
Goodwill 1.5 Nil 1.5
-----------------------------------
2.8 2.3 5.1
-----------------------------------
Consideration
Cash and acquisition expenses
paid in year 2.8 Nil 2.8
Deferred consideration Nil 2.3 2.3
-----------------------------------
2.8 2.3 5.1
-----------------------------------
The cash paid during the year in respect of the purchase of #m
subsidiary undertakings was as follows:
Cash paid in respect of acquisitions in year (see above) 2.8
Deferred consideration in respect of Coach
USA acquisitions 7.3
-----------
10.1
-----------
Companies acquired in the year did not have a material impact on cash flows.
(f) Disposal of subsidiaries and other businesses
Coach Other
USA Overseas Total
#m #m #m
-----------------------------------
Net assets disposed 4.3 1.6 5.9
Provisions for losses on
operations to
be sold or terminated (7.7) Nil (7.7)
Unutilised provision as at 30
April 2003 4.6 Nil 4.6
Closure costs 4.1 Nil 4.1
Goodwill previously written off
to reserves Nil 0.5 0.5
-----------------------------------
Proceeds on disposal 5.3 2.1 7.4
-----------------------------------
Satisfied by:
Cash 4.9 2.1 7.0
Deferred consideration 0.4 Nil 0.4
-----------------------------------
Net cash inflows in respect of
the disposals comprised:
Cash consideration 4.9 2.1 7.0
Cash at bank and in hand on
disposal Nil Nil Nil
-----------------------------------
4.9 2.1 7.0
-----------------------------------
8 Dividend
Subject to shareholder approval, a final dividend of 1.8p per ordinary share is
proposed (2002 - 1.3p). This dividend will be paid on 8 October 2003 to all
those shareholders on the register at 5 September 2003. The total dividend for
the year including the proposed final dividend is 2.6p per ordinary share (2002
- 2.6p).
9 Post balance sheet events
(i) Disposal of Citybus
On 9 June 2003, the Group announced the disposal of Citybus to Delta Pearl
Limited, a 100% indirect subsidiary of Chow Tai Fook Enterprises Limited, the
privately owned company of the Cheng Yu Tung family and the major shareholder in
New World Development Company Limited which in turn has an interest in New World
First Bus Services Limited, one of Hong Kong's major bus operators. The sale was
completed on 23 June 2003.
The gross consideration for the disposal is HK$2,200m. The net cash amount
received was HK$1,646m, which represented the gross consideration less the
amount of net third party debt as at 30 April 2003, being HK$554m. The purchaser
assumed all of the net third party debt of Citybus.
The purchaser also assumed capital commitments of approximately HK$239m relating
mainly to the completion of a new depot for Citybus at Chaiwan in Hong Kong.
Further details on the disposal were given in the Group's announcement on 9 June
2003.
(ii) Disposal of businesses at Coach USA
Since 30 April 2003, the Group has announced the disposals of a number of parts
of Coach USA in line with the restructuring plan for Coach USA announced in
December 2002. The disposals announced were as follows:
* On 6 June 2003, the Group announced that it had agreed terms for the
sale of the South Central and West Regions of Coach USA to a newly
formed affiliate of Kohlberg & Co., LLC. Completion of the transaction
is subject to regulatory approval, final confirmation of financing and
normal closing conditions. The gross consideration for the sale is
US$155m, to be satisfied by cash of US$128.5m and an interest-bearing
loan note receivable of US$26.5m repayable no later than 63 months from
date of close.
* On 2 June 2003, the Group announced that it had completed the sale to
Peter Pan Bus Lines of the business and assets of the New England Region
of Coach USA. The business has been sold for a consideration of US$40m,
satisfied by cash of US$33m and loan notes receivable of US$5m and US$2m
repayable after three years and four years respectively, both interest
bearing.
* On 22 May 2003, the Group announced that it had agreed terms for the
sale to First Transit, a US subsidiary of First Group plc, of the
business and assets of the Transit Division of Coach USA. The
transaction is subject to normal commercial closing conditions,
including approval from affected public authorities, with completion
anticipated before 30 June 2003. The consideration for the transaction
is US$22.5m, satisfied by cash.
These transactions will not result in a material gain or loss on disposal in the
consolidated accounts of Stagecoach Group plc. Further details on the disposals
were given in the Group's announcements of each disposal.
10 Statutory Accounts
The financial information set out in the preliminary announcement does not
constitute the Group's statutory accounts within the meaning of Section 240 of
the Companies Act 1985 and has been extracted from the full accounts for the
years ended 30 April 2003 and 30 April 2002 respectively.
Statutory accounts for 2002, which received an unqualified audit report have
been delivered to the Registrar of Companies.
The report of the auditors on the accounts for the year ended 30 April 2003 is
unqualified and does not contain a statement under either section 237(2) or
section 237(3) of the Companies Act 1985. The accounts for the year ended 30
April 2003 will be delivered to the Registrar of Companies and forwarded to all
shareholders in due course. These accounts will also be available on the Group's
website and from the registered office of the company, 10 Dunkeld Road, Perth
PH1 5TW.
The Board of Directors approved this preliminary announcement on 25 June 2003.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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