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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 : 3556Y
Northgate PLC
05 December 2017
5 December 2017
NORTHGATE PLC
INTERIM RESULTS FOR THE SIX MONTHSED 31 OCTOBER 2017
Strong growth in Spain and slowing decline in UK of vehicles on hire with good progress against strategic initiatives.
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 2017.
We have made good progress in H1 on each of our strategic initiatives and remain on track to deliver targeted FY18 KPIs as announced at our Capital Markets Event on 4 October 2017. We are encouraged by the early stages of our turnaround in the UK, evidenced by 2.8% growth in closing vehicles on hire. This progress is in line with management expectations. We expect increased momentum as the initial investment that has been undertaken this period takes effect.
Financial highlights
-- Revenue increased 10.4% to GBP349.7m (2016 - GBP316.7m); -- Underlying profit before tax of GBP33.8m (2016 - GBP40.4m), impacted by:
o Expected decline in PPU on disposals including GBP3.1m adverse impact from previous changes in vehicle depreciation rates; and
o GBP1.0m positive effect of the strengthened Euro.
-- Profit before tax GBP31.0m (2016 - GBP40.0m); -- Underlying basic earnings per share 20.7p (2016 - 25.8p); -- Basic earnings per share 19.1p (2016 - 25.5p);
-- 7.0% increase in interim dividend to 6.1p per share (2016 - 5.7p) along with updated dividend policy with dividend cover range of 2.0x-3.0x underlying basic earnings per share;
-- Investment to support higher growth in Spain together with the effects of adverse foreign exchange impacts on Euro debt (GBP10.3m) drove net debt higher to GBP421.0m (April 2017 - GBP309.9m) and ROCE to 8.7% (2016 - 10.7%)
Operational highlights & strategic progress
Early signs of operational progress are coming through in the UK, while Spain continues to perform strongly.
Flexible and Minimum term business
-- Group average vehicles on hire (VOH) in Q2 grew 1.9% vs Q2 prior year;
-- Group closing VOH grew 5.7% since April 2017 driven by outstanding growth in Spain (up 9.3%) and growth in UK (up 2.8%, but underlying decline of 0.8% once seasonal hires are excluded); and
-- Minimum term proposition growing strongly following a relaunch in the UK and continued momentum in Spain, with gains from competitors and converting customers from vehicle ownership to rental.
Group rental margin of 14.7% compared to 15.2% in the same period last year with operational leverage improvement in Spain offset by more competitive pricing stance and other factors in UK and Ireland.
Vehicle sales
-- Total vehicle sales increased by 16.6% to 17,600 compared with 15,100 in the same period last year;
-- Average PPU declined by 44.1% to GBP600 (2016 - GBP1,073) as a result of depreciation unwind and selling younger fleet. No evidence of market residual values softening; and
-- Strong progress in the implementation of the UK Van Monster strategy including 18.8% increase in retail sales and 5 new sites opened since 30 April 2017.
UK self help actions
-- Measures to arrest decline in UK VOH gradually beginning to take effect;
-- UK executive strengthened, sales and marketing capability significantly enhanced, commercial hub established, IT migration path agreed and new system contract signed.
-- Focus remains on implementing self help actions to turn around performance including improving VOH trajectory in second half of the year.
Strategic progress
Kevin Bradshaw, Chief Executive Officer, commented:
"This has been a period of reset as we lay the foundations to enable Northgate to deliver our strategy and the targets that we set out at the Capital Markets Event on 4 October 2017.
There are already signs of the strategy working with 6% growth in closing VOH, 60% of which has been driven by minimum term products.
Our self help agenda in the UK remains firmly underway and Spain continues to outperform in its rental business justifying further investment as it accelerates its next phase of minimum term roll out.
We continue to expect our profit this year to be skewed towards the second half, with various cost savings and benefits from the implementation of our strategy starting to have an impact.
I am confident we will see further benefits of the strategy and investment coming through in subsequent reporting periods, which will generate strong growth in value for our shareholders."
There will be a presentation to analysts at 9.30am 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 Kevin Bradshaw, Chief Executive Officer David Tilston, Interim Chief Financial Officer 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, including certain 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
Group revenue was GBP349.7m (2016 - GBP316.7m) with revenue from the hire of vehicles increasing 2.1% to GBP234.5m (2016 - GBP229.6m) (0.3% decline on a constant currency basis) and revenue from the disposal of vehicles increasing 32.3% to GBP115.2m (2016 - GBP87.1m) (30.4% increase on a constant currency basis). Foreign exchange impact accounted for GBP7.6m of the increase.
Spain has grown flexible VOH by 2,100 and growth in minimum term VOH has been 1,400 net of 700 legacy returns.
UK closing VOH has increased by 1,100 (including 1,400 seasonal hires) compared to an increase of 100 in the same period last year (including 1,200 seasonal hires). The minimum term hire product was re-launched in September and progress has been encouraging with 1,300 closing VOH at the end of the period.
The effects of previous depreciation rate changes impacted profit before tax adversely by GBP3.1m but this was offset by foreign currency gains of GBP1.0m.
Underlying operating profit was GBP39.1m compared to GBP45.0m in the prior period and underlying earnings per share were 20.7p compared to 25.8p in the prior period.
Cash generated from operations before net vehicle capex in the period of GBP95.3m (2016 - GBP103.7m), stated before GBP175.5m (2016 - GBP93.7m) of net vehicle capex (after disposal proceeds) in the period. Debt levels since the year end were impacted by a GBP10.3m foreign currency revaluation. However, Euro assets shelter the balance sheet against this movement and Group facilities and debt covenants continue to show comfortable headroom.
Dividend
An interim dividend of 6.1p has been declared, which represents an increase of 7.0% on last year and reflects our confidence in delivering against the strategic objectives we have set for the business.
The interim dividend will be paid on 26 January 2018 to shareholders on the register at the close of business on 14 December 2017.
The Board understands the importance of dividends to our shareholders. In order to reflect this and the confidence in the Company's ability to deliver the strategy set out at the recent Capital Markets Event the Board is today updating its dividend policy such that underlying basic earnings per share will cover the total annual dividend within a range of 2.0x-3.0x (previously 2.5x-3.75x).
Board changes
As announced on 26 September 2017, David Tilston has been appointed Interim Chief Financial Officer.
Outlook
In the second half, we anticipate that our business in Spain will continue to trade strongly with the combined minimum term and flexible rental propositions being well received by customers. It is encouraging to see 30% of Spanish minimum term growth substituting vehicle ownership, as the potential for further growth in this segment is significant.
There are indications that the measures to arrest the decline in vehicles on hire in the UK are gradually beginning to take effect. We remain focused on implementing self help actions to turn around performance including improving the VOH trajectory during the second half.
We continue to expect our profit this year to be skewed towards the second half, with various cost savings and benefits from the implementation of our strategy due to impact in the period, albeit with a degree of caution around the level of disposal profits.
Strategic review
A summary of our vehicles on hire in the first half of the year is as follows:
Hot Features
Premium
Year
6 months ended 6 months H1 FY H1 FY
to Oct-17 Apr-17 to Oct-16 18 growth 17 growth
--------- --------- ----------- -------- ----------- ----------- -----------
Closing
VOH UK 40,600 39,500 42,500 1,100 100
Spain 41,200 37,700 36,200 3,500 500
Ireland 3,400 3,400 3,500 - 300
Group 85,200 80,600 82,200 4,600 900
3 months 3 months 3 months
to Oct-17 to Apr-17 to Oct-16
--------- --------- ----------- ----------- -----------
Average
VOH UK 39,300 39,600 41,700
Spain 40,200 36,400 36,000
Ireland 3,300 3,500 3,500
Group 82,800 79,500 81,200
Group
Our Group KPIs are explained in more detail in the divisional commentaries below and were as follows for the first half of the year:
6 months 6 months
to 31 to 31
Oct 2017 Oct 2016
-------------------------- ---------- ----------
Average VOH growth (Q2
vs Q2)(*) +1.9% -2.1%
Rental margin 14.7% 15.2%
Disposals - units sold 17,600 15,100
PPU (GBP) 600 1,073
Corporate overhead/sales 1% 1%
Group ROCE 8.7% 10.7%
(*) Average VOH growth in 3 months to 31 October 2017 compared to average VOH growth in 3 months to 31 October 2016.
UK
A summary of the UK KPIs for the first half of the year are as follows:
6 months 6 months
to 31 to 31
Oct 2017 Oct 2016
------------------------ ---------- ----------
Average VoH growth (Q2
vs Q2) (*) -5.9% -6.2%
Rental margin 13.8% 15.2%
Disposals - units sold 10,800 9,000
PPU (GBP) 326 738
(*) Average VOH growth in 3 months to 31 October 2017 compared to average VOH growth in 3 months to 31 October 2016
Rental business
UK closing VOH has grown by 1,100 (2.8%) since April 2017 with an underlying decline of 0.8% after taking account of seasonal business (1,400 vehicles). This compares to a growth of 100 in the same period last year.
Our new minimum term product continues to gain traction following its relaunch in September with growth of 1,000 VOH in the period. The product is competing well on the basis of an attractive total cost of ownership, industry leading early termination terms and the flexibility to swap a vehicle within the life of the contract all of which are aspects that are highly differentiated selling points in the industry.
We also see continued appetite on behalf of customers to trade in existing owned fleets and adopt the minimum term product in order to benefit from our customer service package and the economic benefits and flexibility afforded by our offering. To date, approximately one third of the minimum term volume signed has been from new customers. The majority of gains arose by taking share from other rental providers and by converting owners to the rental model. We have had some significant wins as a result of being able to offer a mix of minimum term and flexible hire vehicles. This has allowed us to secure sole supplier agreements with some existing customers.
Flexible rental business has declined by 1,300 (excluding seasonal hires) including returns from 4 major customers who have either taken fleet in-house or reduced fleet sizes to reflect changes in the structure of their businesses.
We expect to see continued growth from the minimum term product and ultimately a reversal of flexible rental decline with the continued application of self help measures.
Rental margin declined to 13.8% (2016 - 15.2%) due to more competitive pricing decisions and a reduction in VOH, partly offset by cost reductions achieved from site closures and other restructuring.
Disposals
Total disposals in the period were 10,800 units compared to 9,000 units in the same period last year. This represents absolute growth of 20% in units sold compared to the prior year. A total of 41% of disposals were sold via our retail channel. This growth has been supported by greater sales capacity in the Van Monster network and an improvement in defleet criteria, which has enabled more vehicles to be sold through the more profitable retail channel.
Net PPU reduced by GBP412 in the period. Of this, GBP191 is attributable to the unwind of previous depreciation rate changes and the balance is attributable to other factors including mix and condition of vehicles. We continue to review our defleet criteria to support disposal profitability.
Implementation of the Van Monster retail network expansion strategy has moved swiftly forwards. During the period five new sites have been opened and five rental sites have been closed and converted to Van Monster locations since April. These ten new sites have increased total selling capacity by 56% since the beginning of the financial year.
Self help initiatives
The UK leadership team has been strengthened with the appointment of a Managing Director, Sales Director and Marketing Director. A Fleet Director is expected to join prior to the financial year end.
Sales and marketing capabilities have been enhanced with significant progress being made with regard to the sales team, where both account implementation and sales support functions have been improved, new regional sales leaders have been appointed and talent throughout the salesforce is being upgraded. In the marketing department, investment in customer data has delivered significant improvements and this has supported more effective telesales and direct marketing campaigns. Leads generated have grown by 4.5% versus the prior year.
Since the period end, we have contracted to migrate our legacy asset management systems to a cloud based system. The system will provide significant benefits particularly in enabling us to improve both customer service and operational efficiencies. The implementation costs are anticipated to amount to approximately GBP10m and the system is expected to become operational during FY20.
Spain
6 months 6 months
to 31 to 31
Oct 2017 Oct 2016
------------------------ ---------- ----------
Average VOH growth (Q2
vs Q2) (*) 11.5% 1.6%
Rental margin 16.6% 15.6%
Disposals - units sold 6,200 5,700
PPU (EUR) 1,109 1,815
(*) Average VOH growth in 3 months to 31 October 2017 compared to average VOH growth in 3 months to 31 October 2016
Rental Business
Our minimum term and flexible rental business in Spain has grown strongly in the period supported by a stronger economy, a highly competitive product and effective sales and marketing activities.
Closing VOH in Spain has grown by 9.3% (3,500 vehicles); 3.8% (1,400 vehicles) from minimum term and 5.5% (2,100 vehicles) from flexible rental.
This minimum term growth is net of 700 legacy returns and includes both competitive displacement (1,000 units) and substituting previously owned vehicles (800 units). Additionally, it is clear that the minimum term offer is helping to on-hire greater volumes of flexible rental vehicles. Since launch we have seen approximately one quarter of new minimum term customers go on to add an equivalent number of flexible rental vehicles placing their first order, on average, after a tenure of three months with Northgate on minimum term.
We continue to monitor political developments in the Catalonia region but have not yet detected any material changes to trading patterns in that region.
We expect to see continued strong growth in the second half of the year.
Rental margins increased to 16.6% (2016 - 15.6%) as the division experienced the benefits of operational leverage as a result of increased VOH.
Disposals
Total disposals during the period were 6,200 units compared to 5,700 units in the prior period.
This growth has been supported by development and training of the rental sales team to sell used vehicles to potential rental customers who wish to remain as vehicle owners.
As expected, net PPU reduced by EUR706 in the period. Of this, EUR187 relates to the unwind of previous changes to depreciation rates and EUR519 is attributable to other factors including mix and condition of vehicles.
Continued review is underway of the decision criteria applied to defleeting vehicles in determining the most profitable sales process for them. We expect the increase in retail sales capability and continued review of defleet criteria to support disposal profitability.
Ireland
Rental Business
Overall, closing VOH has remained flat at 3,400 in the period. A successful initiative was undertaken to reduce the number of accounts with a short hire period that were disproportionately costly to serve.
Minimum term products are gaining traction in the market with 300 units on hire at the end of October 2017. Overall VOH is has stabilised and we expect to see momentum in the second half.
Disposals
Total disposals in the period were 600 units compared with 400 units in the prior period with an adjustment to depreciation for vehicles sold of GBP1.0m compared to GBP0.9m in the same period last year.
Capital management
ROCE was 8.7% during the period (October 2016 - 10.7%). The decline was split evenly between UK and Spain. Key contributors to this included significant capital expenditure in Spain to support growth and lower PPU on vehicle disposals across the Group.
We continue to keep under review how we can manage our growth whilst maintaining marginal ROCE substantially ahead of our weighted average cost of capital.
Financial review
Group
A summary of the Group's underlying financial performance for the six months to 31 October 2017 with a comparison to the prior period is shown below:
6 months to 6 months to
31 Oct 2017 31 Oct 2016 Change
GBPm GBPm
--------------------------- ----------- ----------- ------
Revenue: hire of vehicles 234.5 229.6 +2.1%
Revenue: sale of vehicles 115.2 87.1 +32.2%
Operating profit 39.1 45.0 -13.0%
Net interest expense (5.3) (4.6) +15.5%
Profit before tax 33.8 40.4 -16.2%
Profit after tax 27.6 34.3 -19.6%
Basic earnings per share 20.7p 25.8p -19.8%
Return on capital employed 8.7% 10.8% -2.0%
--------------------------- ----------- ----------- ------
At constant exchange rates revenue from the hire of vehicles was 0.3% lower than the prior period.
Profit before tax was positively impacted by GBP1.0m due to the impact of foreign exchange gains. The impact of previous changes to depreciation rates adversely affected profit before tax by GBP3.1m.
UK
The underlying results of the UK business were as follows:
6 months to 6 months to
31 Oct 2017 31 Oct 2016 Change
GBPm GBPm
-------------------------- ----------- ----------- ------
Revenue: hire of vehicles 131.8 138.4 -4.8%
Revenue: sale of vehicles 76.7 59.0 +30.0%
Operating profit 18.0 23.9 -24.6%
Operating margin 13.7% 17.3% -3.6%
Average vehicles on hire 39,400 42,000 -6.2%
Average utilisation 87.3% 87.7% -0.4%
Vehicle disposal units 10,800 9,000 +20.0%
Average VOH has reduced by 2,600 (6.2%) in the period this is mainly due to the starting position in the year being 3,000 vehicles lower than in the previous year.
Underlying operating profit was GBP5.9m lower than the previous year of which GBP2.8m related to the rental profit including a GBP1.2m impact of the lower vehicles on hire starting position. A total of GBP2.0m related to the unwind of previous depreciation rate changes and the remaining GBP1.1m was due to other factors including mix and condition of vehicles sold.
Spain
The underlying results in Spain were as follows:
6 months to 6 months to
31 Oct 2017 31 Oct 2016 Change
GBPm GBPm
-------------------------- ----------- ----------- ------
Revenue: hire of vehicles 92.9 81.2 +14.3%
Revenue: sale of vehicles 35.0 26.1 +34.1%
Operating profit 21.3 21.3 +0.2%
Operating margin 23.0% 26.2% -3.9%
Average vehicles on hire 39,400 35,900 +9.7%
Average utilisation 91.0% 90.6% +0.4%
Vehicle disposal units 6,200 5,700 +8.8%
Adjusting for the impacts of foreign currency gains, hire revenue was 14.4% higher than in the prior period and underlying operating profit was flat. Foreign currency gains favourably impacted underlying operating profit by GBP1.1m.
Average vehicles on hire increased by 3,500 in the period compared to an increase of 200 in the prior period
The adjustment to deprecation charge for vehicles sold in the period reduced operating profit by GBP3.1m this includes the adverse impact of previous depreciation rate changes of GBP1.0m. However this was offset by the favourable impact of rental operations of GBP2.0m.
Reported PPU has declined, as expected, to EUR1,109 from EUR1,815 in the period due to the unwind of previous depreciation rate changes and other factors including mix and condition of vehicles sold.
Ireland
The underlying results in Ireland are as follows:
6 months to 6 months to
31 Oct 2017 31 Oct 2016 Change
GBPm GBPm
-------------------------- ----------- ----------- ------
Revenue: hire of vehicles 10.3 10.5 -1.9%
Revenue: sale of vehicles 3.5 2.0 +75.0%
Operating profit 1.4 1.7 -17.6%
Operating margin 14.0% 16.1% -2.1%
Average vehicles on hire 3,300 3,400 -2.9%
Average utilisation 85.8% 89.3% -3.5%
Vehicle disposal units 600 400 +50.0%
After adjusting for the impact of foreign currency gains, hire revenue was GBP0.4m (4%) higher than in the same period last year and operating profit was GBP0.1m lower.
Interest and taxation
Net underlying finance charges for the six months to 31 October 2017 were GBP5.3m (2016 - GBP4.6m).
The impact of foreign currency adversely affected net finance charges by GBP0.2m. Excluding the effects of foreign currency, an increase in higher average debt has increased net finance charges by GBP0.5m.
The Group's underlying effective tax rate was 18.4% (2016 - 15.0%).
After taking account of intangible amortisation and exceptional items, the effective tax rate was 17.8% (2016 - 14.9%).
Exceptional items
During the period GBP1.9m of exceptional operating costs were incurred relating to restructuring costs in the UK and Ireland. Restructuring costs relate to the establishment of a commercial hub in Reading, rationalisation of the network, and associated headcount changes.
Cash flow and net debt
Net cash outflow was GBP100.7m (2016 - GBP6.7m) after net capital expenditure of GBP178.8m (2016 - GBP95.5m) mostly in our vehicle fleet to support growth. Before taking account of the payment of dividends, cash outflow was GBP85.4m compared to a free cash flow generation of GBP7.6m in the same period last year.
Closing net debt of GBP421.0m increased by GBP111.1m since April 2017, which included a GBP10.3m increase in debt due to the impact of changes in foreign currency rates. This increase reflects the fact that 80% 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 2017 was 1.75 times net debt to EBITDA, up from 1.31 times as at 30 April 2017 and 1.49 times as at 31 October 2016, with comfortable levels of headroom remaining against all of our debt covenant ratios.
Facility headroom at 31 October 2017 was GBP159.7m.
Balance sheet
Group return on capital employed was 8.7% compared to 10.7% in the same period last year and 10.5% in the year ended 30 April 2017.
Net tangible assets at 31 October 2017 were GBP523.1m (April 2017 - GBP509.7m), equivalent to a tangible net asset value of 393p per share (April 2017 - 383p per share).
Gearing at 31 October 2017 was 81% (April 2017 - 61%).
Foreign exchange
The average and period end exchange rates used to translate the Group's overseas operations were as follows:
October 2017 October 2016
GBP : EUR GBP : EUR
-------- ------------ ------------
Average 1.13 1.19
Closing 1.14 1.11
-------- ------------ ------------
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 2017 were set out in detail on pages 28 to 33 of the 2017 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 2017.
Glossary of terms
The following defined terms have been used throughout this document:
Term Definition
------------------ ------------------------------------------
Facility headroom Calculated as facilities of GBP582.4m
less net borrowings of GBP422.7m.
Net borrowings represent net debt
of GBP421.0m excluding unamortised
arrangement fees of GBP1.7m and
are stated after the deduction of
GBP8.4m 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 Net assets less goodwill and other
assets 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.
------------------ ------------------------------------------
ROCE Return on capital employed: calculated
as underlying operating profit divided
by average capital employed. Capital
employed being net assets excluding
net debt.
------------------ ------------------------------------------
Reconciliation of GAAP to non-GAAP measures
A reconciliation of GAAP to non-GAAP underlying measures is as follows:
Six months Six months
to 31.10.17 to 31.10.16
GBP000 GBP000
Profit before tax 31,026 39,997
Add back:
Exceptional operating expenses
(credit) 1,926 (198)
Intangible amortisation 896 948
Exceptional finance credit - (336)
----------------------------------- ------------- -------------
Underlying profit before tax 33,848 40,411
----------------------------------- ------------- -------------
Profit for the year 25,492 34,020
Add back:
Exceptional operating
expenses (credit) 1,926 (198)
Intangible amortisation 896 948
Exceptional finance
credit - (336)
Tax on exceptional
items, brand royalty
charges and intangible
amortisation (702) (99)
----------------------------------- ------------- -------------
Underlying profit
for the year 27,612 34,335
----------------------------------- ------------- -------------
Weighted average number
of Ordinary shares 133,232,518 133,232,518
--------------------------------- ------------- -------------
Underlying basic
earnings per share 20.7p 25.8p
----------------------------------- ------------- -------------
Net decrease in cash and cash
equivalents (11,455) (12,554)
Add back:
Receipt of bank
loans and other
borrowings (89,246) -
Repayments of bank loans
and other borrowings - 5,837
--------------------------------- ------------- -------------
Net cash outflow (100,701) (6,717)
----------------------------------- ------------- -------------
Add back: Dividends
paid 15,326 14,347
----------------------------------- ------------- -------------
Free cash flow (85,375) 7,630
----------------------------------- ------------- -------------
UK Spain Ireland Corporate Eliminations Group
Six Six Six Six Six months Six
months months months months to months
to 31.10.17 to 31.10.17 to to 31.10.17 to
GBP000 GBP000 31.10.17 31.10.17 GBP000 31.10.17
GBP000 GBP000 GBP000
Operating profit 15,236 18,175 1,077 1,798 - 36,286
Add back:
Restructuring
costs 1,904 - 22 - - 1,926
Brand royalty
charges - 3,113 346 (3,459) - -
Intangible
amortisation 856 40 - - - 896
------------------------ -------- ------------- ---------- ---------- ------------- ----------
Underlying
operating profit
(loss) 17,996 21,328 1,445 (1,661) - 39,108
------------------------ -------- ------------- ---------- ---------- ------------- ----------
Exclude:
Corporate costs - - - 1,661 - 1,661
Adjustments
to depreciation
charge in relation
to vehicles
sold in the
period (3,514) (6,111) (909) - - (10,534)
------------------------ -------- ------------- ---------- ---------- ------------- ----------
Rental profit 14,482 15,217 536 - - 30,235
------------------------ -------- ------------- ---------- ---------- ------------- ----------
Underlying
operating profit
(loss) 17,996 21,328 1,445 (1,661) - 39,108
Divided by:
Revenue: hire
of vehicles 131,752 92,869 10,320 - (432) 234,509
------------------------ -------- ------------- ---------- ---------- ------------- ----------
Underlying
operating margin 13.7% 23.0% 14.0% 16.7%
------------------------ -------- ------------- ---------- ---------- ------------- ----------
Rental profit 14,482 15,217 536 - - 30,235
Divided by:
Revenue: hire
of vehicles
excluding ancilliary
income 105,040 91,610 9,373 - (432) 205,591
------------------------ -------- ------------- ---------- ---------- ------------- ----------
Rental margin 13.8% 16.6% 5.7% 14.7%
------------------------ -------- ------------- ---------- ---------- ------------- ----------
UK Spain Ireland Corporate Eliminations Group
Six months Six Six Six Six months Six
to 31.10.16 months months months to months
GBP000 to to to 31.10.16 to
31.10.16 31.10.16 31.10.16 GBP000 31.10.16
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
----------------------- ------------- ---------- ---------- ---------- ------------- ----------
Exclude:
Corporate costs - - - 1,853 - 1,853
Adjustments
to depreciation
charge in relation
to vehicles
sold in the
period (6,612) (8,714) (797) - - (16,123)
----------------------- ------------- ---------- ---------- ---------- ------------- ----------
Rental profit 17,263 12,572 860 - - 30,695
----------------------- ------------- ---------- ---------- ---------- ------------- ----------
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%
----------------------- ------------- ---------- ---------- ---------- ------------- ----------
Rental profit 17,263 12,572 860 - - 30,695
Divided by:
Revenue: hire
of vehicles
excluding ancilliary
income 113,357 80,285 9,302 - (480) 202,464
----------------------- ------------- ---------- ---------- ---------- ------------- ----------
Rental margin 15.2% 15.7% 9.2% 15.2%
----------------------- ------------- ---------- ---------- ---------- ------------- ----------
Condensed consolidated income statement
for the six months ended 31 October 2017
------------------------------------------------------- ----------- ----------- ----------
Six months Six months Six months Six months Year to Year to
to 31.10.17 to 31.10.17 to 31.10.16 to 31.10.16 30.04.17 30.04.17
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) (Audited)
Underlying Statutory Underlying Statutory Underlying Statutory
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------------- ---- ----------- ----------- ----------- ----------- ---------- ---------
Revenue: hire of
vehicles 2 234,509 234,509 229,639 229,639 456,120 456,120
Revenue: sale of
vehicles 2 115,169 115,169 87,077 87,077 211,309 211,309
----------------------- ---- ----------- ----------- ----------- ----------- ---------- ---------
Total revenue 2 349,678 349,678 316,716 316,716 667,429 667,429
Cost of sales (277,610) (277,610) (237,726) (237,726) (514,446) (514,446)
----------------------- ---- ----------- ----------- ----------- ----------- ---------- ---------
Gross profit 72,068 72,068 78,990 78,990 152,983 152,983
Administrative expenses
(excluding exceptional
items and intangible
amortisation) (32,960) (32,960) (34,025) (34,025) (68,378) (68,378)
Exceptional
administrative
(expenses) credit 9 - (1,926) - 198 - (1,293)
Intangible amortisation - (896) - (948) - (1,830)
----------------------- ---- ----------- ----------- ----------- ----------- ---------- ---------
Total administrative
expenses (32,960) (35,782) (34,025) (34,775) (68,378) (71,501)
----------------------- ---- ----------- ----------- ----------- ----------- ---------- ---------
Operating profit 2 39,108 36,286 44,965 44,215 84,605 81,482
Interest income 1 1 1 1 2 2
Finance costs
(excluding exceptional
items) (5,261) (5,261) (4,555) (4,555) (9,601) (9,601)
Exceptional finance
credit 9 - - - 336 - 339
----------------------- ---- ----------- ----------- ----------- ----------- ---------- ---------
Profit before taxation 33,848 31,026 40,411 39,997 75,006 72,222
Taxation 3 (6,236) (5,534) (6,076) (5,977) (12,007) (11,321)
----------------------- ---- ----------- ----------- ----------- ----------- ---------- ---------
Profit for the period 27,612 25,492 34,335 34,020 62,999 60,901
----------------------- ---- ----------- ----------- ----------- ----------- ---------- ---------
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 9, as well as brand royalty charges, certain intangible amortisation and the taxation thereon, in order to provide a better indication of the Group's underlying business performance.
Earnings per share
Basic 420.7p 19.1p 25.8p 25.5p 47.3p 45.7p
------------------- ----- ----- ----- ----- ----- -----
Diluted 420.5p 18.9p 25.4p 25.1p 46.7p 45.1p
------------------- ----- ----- ----- ----- ----- -----
Condensed consolidated statement of comprehensive income
for the six months ended 31 October 2017
----------------------------------------------------------------------------- ----------- ----------- ----------
Six months Six months Year to
to 31.10.17 to 31.10.16 30.04.17
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
----------------------------------------------------------------------------- ----------- ----------- ----------
Amounts attributable to owners of the Parent Company
Profit attributable to owners 25,492 34,020 60,901
Other comprehensive income (expense)
Foreign exchange differences on retranslation of net assets of subsidiary
undertakings 14,964 50,171 25,952
Net foreign exchange differences on long term borrowings held as hedges (11,006) (40,326) (21,793)
Foreign exchange difference on revaluation reserve 44 157 85
Net fair value gains (losses) on cash flow hedges 537 (795) 659
Deferred tax (charge) credit recognised directly in equity relating to cash
flow hedges (102) 159 (157)
Total other comprehensive income for the period 4,437 9,366 4,746
------------------------------------------------------------------------------ ----------- ----------- ----------
Total comprehensive income for the period 29,929 43,386 65,647
------------------------------------------------------------------------------ ----------- ----------- ----------
All items will subsequently be reclassified to the consolidated income statement.
Condensed consolidated balance sheet
31 October 2017
---------
31.10.16 30.04.17
31.10.17 Restated Restated
(Unaudited) (Unaudited) (Audited)
Note GBP000 GBP000 GBP000
------------------------------------------------- ---- ----------- ----------- ---------
Non-current assets
Goodwill 3,589 3,589 3,589
Other intangible assets 3,325 3,250 3,309
Property, plant and equipment: vehicles for hire 6 829,503 756,648 731,657
Other property, plant and equipment 6 66,034 68,998 65,262
Total property, plant and equipment 6 895,537 825,646 796,919
-------------------------------------------------- ---- ----------- ----------- ---------
Deferred tax assets 16,381 16,381 13,730
-------------------------------------------------- ---- ----------- ----------- ---------
Total non-current assets 918,832 848,866 817,547
-------------------------------------------------- ---- ----------- ----------- ---------
Current assets
Inventories 37,952 26,904 33,666
Trade and other receivables 79,702 68,049 62,656
Derivative financial instrument assets 10 - - 213
Cash and bank balances 8 28,024 42,829 41,166
-------------------------------------------------- ---- ----------- ----------- ---------
Total current assets 145,678 137,782 137,701
-------------------------------------------------- ---- ----------- ----------- ---------
Total assets 1,064,510 986,648 955,248
-------------------------------------------------- ---- ----------- ----------- ---------
Current liabilities
Trade and other payables 62,700 60,971 64,913
Current tax liabilities 17,208 22,016 18,568
Short term borrowings 28,415 41,000 32,585
-------------------------------------------------- ---- ----------- ----------- ---------
Total current liabilities 108,323 123,987 116,066
-------------------------------------------------- ---- ----------- ----------- ---------
Net current assets 37,355 13,795 21,635
-------------------------------------------------- ---- ----------- ----------- ---------
Non-current liabilities
Derivative financial instrument liabilities 10 1,957 3,947 2,706
Long term borrowings 420,626 356,807 318,439
Deferred tax liabilities 3,559 1,585 1,420 Total non-current liabilities 426,142 362,339 322,565 -------------------------------------------------- ---- ----------- ----------- --------- Total liabilities 534,465 486,326 438,631 -------------------------------------------------- ---- ----------- ----------- --------- NET ASSETS 530,045 500,322 516,617 -------------------------------------------------- ---- ----------- ----------- --------- Equity Share capital 66,616 66,616 66,616 Share premium account 113,508 113,508 113,508 Revaluation reserve 1,155 1,183 1,111 Own shares (3,427) (6,087) (1,659) Merger reserve 67,463 67,463 67,463 Hedging reserve (1,585) (3,157) (2,020) Translation reserve (1,283) 444 (5,241) Capital redemption reserve 40 40 40 Retained earnings 287,558 260,312 276,799 -------------------------------------------------- ---- ----------- ----------- --------- TOTAL EQUITY 530,045 500,322 516,617 -------------------------------------------------- ---- ----------- ----------- ---------
Total equity is wholly attributable to owners of the Parent Company.
Condensed consolidated cash flow statement
for the six months ended 31 October 2017
-------------------------------------------------------------- ----- ----------- -----------
Six months Six months Year to
to 31.10.17 to 31.10.16 30.04.17
(Unaudited) (Unaudited) (Audited)
Note GBP000 GBP000 GBP000
-------------------------------------------------------------- ----- ----------- ----------- ---------
Net cash (used in) generated from operations 7 (80,141) 10,027 47,818
-------------------------------------------------------------- ----- ----------- ----------- ---------
Investing activities
Interest received 1 1 2
Proceeds from disposal of other property, plant and equipment 2,215 284 1,222
Purchases of other property, plant and equipment (4,432) (1,938) (4,878)
Purchases of intangible assets (1,059) (127) (1,133)
-------------------------------------------------------------- ----- ----------- ----------- ---------
Net cash used in investing activities (3,275) (1,780) (4,787)
-------------------------------------------------------------- ----- ----------- ----------- ---------
Financing activities
Receipt of bank loans and other borrowings 89,246 - -
Repayments of bank loans and other borrowings - (5,837) (21,369)
Dividend paid (15,326) (14,347) (21,875)
Net payments to acquire own shares for share schemes (1,959) (617) (114)
Net cash generated from (used in) financing activities 71,961 (20,801) (43,358)
-------------------------------------------------------------- ----- ----------- ----------- ---------
Net decrease in cash and cash equivalents (11,455) (12,554) (327)
Cash and cash equivalents at beginning of the period 19,637 18,748 18,748
Effect of foreign exchange movements 254 1,362 1,216
-------------------------------------------------------------- ----- ----------- ----------- ---------
Cash and cash equivalents at the end of the period 8,436 7,556 19,637
-------------------------------------------------------------- ----- ----------- ----------- ---------
Cash and cash equivalents consist of:
Cash and bank balances 8 28,024 42,829 41,166
Bank overdrafts 8(19,588) (35,273) (21,529)
-------------------------------------- -------- -------- --------
8,436 7,556 19,637
-------------------------------------- -------- -------- --------
Condensed consolidated statement of changes in
equity
for the six months ended 31 October 2017
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 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
1 November 2016 180,124 (6,087) (3,157) 444 68,686 260,312 500,322
Share options
fair value charge - - - - - 1,059 1,059
Share options
exercised - - - - - (3,925) (3,925)
Profit attributable
to owners of the
Parent Company - - - - - 26,881 26,881
Dividend paid - - - - - (7,528) (7,528)
Net purchase of
own shares - 503 - - - - 503
Transfer of shares
on vesting of
share options - 3,925 - - - - 3,925
Other comprehensive
income (expense) - - 1,137 (5,685) (72) - (4,620)
Total equity at
1 May 2017 180,124 (1,659) (2,020) (5,241) 68,614 276,799 516,617
Share options
fair value charge - - - - - 784 784
Share options
exercised - - - - (191) (191)
Profit attributable
to owners of the
Parent Company - - - - - 25,492 25,492
Dividend paid - - - - - (15,326) (15,326)
Net purchase of
own shares - (1,959) - - - - (1,959)
Transfer of shares
on vesting of
share options - 191 - - - - 191
Other comprehensive
income - - 435 3,958 44 - 4,437
Total equity at
31 October 2017 180,124 (3,427) (1,585) (1,283) 68,658 287,558 530,045
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 29 November 2017.
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 2017, 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.
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 2017. Going concern assumption Having reassessed the principal risks and the other matters discussed in connection with the viability statement in the 2017 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 2017 annual report The financial figures for the year ended 30 April 2017, 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 2017 were prepared under IFRS and were delivered to the Registrar of Companies on 22 August 2017. 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.. 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 31.10.17 to 31.10.17 to 31.10.17 to 31.10.17 to 31.10.17 to 31.10.17
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue: hire of vehicles 131,752 92,869 10,320 - (432) 234,509
Revenue: sale of vehicles 76,720 34,973 3,476 - - 115,169
Total revenue 208,472 127,842 13,796 - (432) 349,678
Underlying operating
profit (loss) * 17,996 21,328 1,445 (1,661) - 39,108
Exceptional
administrative expenses (1,926)
Intangible amortisation (896)
Operating profit 36,286
------------------------- ----------- ----------- ----------- ----------- ------------ -------------
Interest income 1
Finance costs (5,261)
Profit before taxation 31,026
------------------------- ----------- ----------- ----------- ----------- ------------ -------------
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
------------------------- ----------- ----------- ----------- ----------- ------------ -----------
2. Segmental analysis (continued)
UK Spain Ireland Corporate Eliminations Total
Year to Year to Year to Year to Year to Year to
30.04.17 30.04.17 30.04.17 30.04.17 30.04.17 30.04.17
(Audited) (Audited) (Audited) (Audited) (Audited) (Audited)
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue: hire of vehicles 272,168 163,419 21,528 - (995) 456,120
Revenue: sale of vehicles 144,043 63,241 4,025 - - 211,309
Total revenue 416,211 226,660 25,553 - (995) 667,429
Underlying operating profit (loss) * 43,886 42,607 3,233 (5,121) - 84,605
Restructuring costs (1,293)
Intangible amortisation (1,830)
Operating profit 81,482
--------------------------------------------- --------- --------- --------- --------- ------------ ----------
Interest income 2
Finance costs (excluding exceptional items) (9,601)
Exceptional finance credit 339
Profit before taxation 72,222
--------------------------------------------- --------- --------- --------- --------- ------------ ----------
* 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 2017 is based on the estimated effective rate for the year ending 30 April 2018 of 17.8% (October 2016 - 14.9%).
4. Earnings per share
Six months Six months Six months Six months Year to Year to
to 31.10.17 to 31.10.17 to 31.10.16 to 31.10.16 30.04.17 30.04.17
(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 27,612 25,492 34,335 34,020 62,999 60,901
---------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
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 1,422,769 1,422,769 2,195,780 2,195,780 1,700,849 1,700,849
Weighted average number of Ordinary
shares for the purpose
of diluted earnings per share 134,655,287 134,655,287 135,428,298 135,428,298 134,933,367 134,933,367
---------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Basic earnings per share 20.7p 19.1p 25.8p 25.5p 47.3p 45.7p ---------------------------------------- ----------- ----------- ----------- ----------- ----------- ----------- Diluted earnings per share 20.5p 18.9p 25.4p 25.1p 46.7p 45.1p ---------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
5. Dividends
In the six months to 31 October 2017, a dividend of GBP15,326,000 was paid (2016 - GBP14,347,000). The Directors have declared a dividend of 6.1p per share for the six months ended 31 October 2017 (2016 - 5.7p).
6. Property Plant and Equipment
Six Six Six Six
months Six months months months months Six months
to 31.10.17 to 31.10.17 to 31.10.17 to 31.10.16 to 31.10.16 to 31.10.16
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Other Other
Vehicles property, Vehicles property,
for plant for plant
hire & equipment Total hire & equipment Total
Net Book
Value
--------------- ------------ ------------- ------------ ------------ ------------- ------------
At 1 May 731,657 65,262 796,919 684,499 65,765 750,264
Additions 265,780 4,432 277,528 182,787 1,938 184,725
Disposals (95,279) (2,334) (104,929) (78,181) (353) (78,534)
Depreciation (85,234) (2,644) (87,878) (74,388) (3,320) (77,708)
Exchange
differences 12,579 1,318 13,897 41,931 4,968 46,899
---------------- ------------ ------------- ------------ ------------ ------------- ------------
At 31 October 829,503 66,034 895,537 756,648 68,998 825,646
---------------- ------------ ------------- ------------ ------------ ------------- ------------
7. Notes to the cash flow statement
Six months Six months Year to
to 31.10.17 to 31.10.16 30.04.17
(Unaudited) (Unaudited) (Audited)
Net cash (used in) generated from operations GBP000 GBP000 GBP000
--------------------------------------------------------- ----------- ----------- ---------
Operating profit 36,287 44,215 81,482
Adjustments for:
Depreciation of property, plant and equipment 87,878 77,708 156,291
Net impairment of property, plant and equipment - - 131
Amortisation of intangible assets 1,034 955 1,891
Loss on disposal of property, plant and equipment 143 70 199
Share options fair value charge 784 875 1,934
--------------------------------------------------------- ----------- ----------- ---------
Operating cash flows before movements in working capital 126,126 123,823 241,928
(Increase) decrease in non-vehicle inventories (512) 281 525
(Increase) decrease in receivables (10,895) 1,430 4,801
Decrease in payables (6,953) (11,953) (8,952)
--------------------------------------------------------- ----------- ----------- ---------
Cash generated from operations 107,766 113,581 238,302
Income taxes paid, net (7,499) (6,054) (12,602)
Interest paid (4,929) (3,782) (8,552)
--------------------------------------------------------- ----------- ----------- ---------
Net cash generated from operations before net capex 95,338 103,745 217,148
Purchases of vehicles (268,352) (168,155) (346,305)
Proceeds from disposal of vehicles 92,873 74,437 176,975
--------------------------------------------------------- ----------- ----------- ---------
Net cash (used in) generated from operations (80,141) 10,027 47,818
--------------------------------------------------------- ----------- ----------- ---------
8. Analysis of consolidated
net debt
----------------------------------------------------- ------------ ----------- ---------
31.10.17 31.10.16 30.04.17
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
----------------------------------------------------- ------------ ----------- ---------
Cash and bank balances (28,024) (42,829) (41,166)
Bank overdrafts 19,588 35,273 21,529
Bank loans 340,910 271,761 244,236
Loan notes 87,781 89,963 84,393
Cumulative preference shares 500 500 500
Confirming facilities 262 310 366
----------------------------------------------------- ------------ ----------- ---------
421,017 354,978 309,858
----------------------------------------------------- ------------ ----------- ---------
9. Exceptional items
During the period the Group recognised exceptional
items in the income statement as follows:
Year
Six months Six months to
to 31.10.17 to 31.10.16 30.04.17
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
---------------------------------------------------- ----------- ----------- ---------
Restructuring costs 1,926 688 2,189
Spain tax settlement - (886) (896)
Exceptional administrative
expenses (credit) 1,926 (198) 1,293
Interest refunded in relation
to Spain tax settlement - (336) (339)
Exceptional finance credit - (336) (339)
---------------------------------------------------- ----------- ----------- ---------
Total pre-tax exceptional
items 1,926 (534) 954
---------------------------------------------------- ----------- ----------- ---------
Tax (charge) credit on exceptional
items (383) (92) 95
---------------------------------------------------- ----------- ----------- ---------
10. Derivative financial instruments
At the balance sheet date, the Group held the following financial instruments at fair value:
31.10.17 31.10.16 30.04.17
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
---------------------------------------------------------------- ----------- ----------- ---------
Interest rate derivatives (1,957) (3,947) (2,706)
Cross-currency derivatives - - 213
(1,957) (3,947) (2,493)
---------------------------------------------------------------- ----------- ----------- ---------
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
David Tilston
Interim Chief Financial Officer
4 December 2017
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 2017. 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 Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.
What we have reviewed
The interim financial statements comprise:
-- The condensed consolidated statement of financial position as at 31 October 2017;
-- The condensed consolidated income statement and condensed consolidated statement of comprehensive income for the period then ended;
-- The condensed consolidated statement of cash flows for the period then ended;
-- The condensed consolidated statement of changes in equity for the period then ended; and
-- The 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 Guidance and Transparency Rules sourcebook 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 (IFRSs) 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 Guidance and Transparency Rules sourcebook 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 Guidance and Transparency Rules sourcebook 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, 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 2017
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EAPALEFXXFFF
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