Financial Statements
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Financial statements Financial statements Consolidated income statement 106 Consolidated statement of comprehensive income 107 Consolidated balance sheet 108 Consolidated statement of changes in equity 109 Consolidated cash flow statement 110 Notes to the consolidated financial statements 111 Independent auditor’s report 155 Group financial summary 159 Company balance sheet 160 Statement of changes in equity 161 Notes to the Company financial statements 162 Shareholder information 166 Financial calendar 167 Glossary 168 FirstGroup Annual Report and Accounts 2016 105 Consolidated income statement For the year ended 31 March 2016 2015 Continuing Operations Notes £m £m Revenue 3,5 5,218.1 6,050.7 Operating costs (4,971.8) (5,804.9) Operating profit 5,6 246.3 245.8 Investment income 8 1.4 1.8 Finance costs 8 (134.2) (141.8) Profit before tax 113.5 105.8 Tax 9 (17.1) (20.3) Profit for the year 96.4 85.5 Attributable to: Equity holders of the parent 90.3 75.2 Non-controlling interests 6.1 10.3 96.4 85.5 Earnings per share Basic 10 7.5p 6.2p Diluted 10 7.5p 6.2p Adjusted results1 Adjusted operating profit 4 300.7 303.6 Adjusted profit before tax 4 168.3 163.9 Adjusted EPS 10 10.3p 9.8p 1 Adjusted for certain items as set out in note 4. The accompanying notes form an integral part of this consolidated income statement. 106 FirstGroup Annual Report and Accounts 2016 Consolidated statement of comprehensive income Year ended 31 March 2016 2015 £m £m Profit for the year 96.4 85.5 Items that will not be reclassified subsequently to profit or loss Actuarial (losses)/gains on defined benefit pension schemes (59.2) 33.9 Deferred tax on actuarial (losses)/gains on defined benefit pension schemes 16.1 (6.7) (43.1) 27.2 Items that may be reclassified subsequently to profit or loss Derivative hedging instrument movements (13.7) (89.9) Deferred tax on derivative hedging instrument movements 0.6 26.6 Exchange differences on translation of foreign operations 110.5 223.9 97.4 160.6 Other comprehensive income for the year 54.3 187.8 Total comprehensive income for the year 150.7 273.3 Financial statements Attributable to: Equity holders of the parent 144.6 263.0 Non-controlling interests 6.1 10.3 150.7 273.3 The accompanying notes form an integral part of this consolidated statement of comprehensive income. FirstGroup Annual Report and Accounts 2016 107 Consolidated balance sheet As at 31 March 2016 2015 Note £m £m Non-current assets Goodwill 11 1,736.3 1,659.2 Other intangible assets 12 162.2 197.0 Property, plant and equipment 13 2,142.2 2,027.1 Deferred tax assets 25 62.7 60.5 Retirement benefit assets 35 31.0 32.9 Derivative financial instruments 24 41.5 45.3 Investments 14 25.4 3.1 4,201.3 4,025.1 Current assets Inventories 16 61.4 69.9 Trade and other receivables 17 694.4 716.6 Cash and cash equivalents 20 360.1 420.5 Assets held for sale 18 3.5 1.4 Derivative financial instruments 24 16.7 15.5 1,136.1 1,223.9 Total assets 5,337.4 5,249.0 Current liabilities Trade and other payables 19 1,101.9 1,139.0 Tax liabilities 37.0 35.3 Financial liabilities 21 168.4 136.0 Derivative financial instruments 24 68.1 74.5 1,375.4 1,384.8 Net current liabilities 239.3 160.9 Non-current liabilities Financial liabilities 21 1,712.1 1,805.7 Derivative financial instruments 24 35.5 22.6 Retirement benefit liabilities 35 301.9 272.3 Deferred tax liabilities 25 17.0 40.7 Provisions 26 262.3 236.7 2,328.8 2,378.0 Total liabilities 3,704.2 3,762.8 Net assets 1,633.2 1,486.2 Equity Share capital 27 60.2 60.2 Share premium 676.4 676.4 Hedging reserve 28 (68.6) (55.5) Other reserves 28 4.6 4.6 Own shares 28 (1.4) (1.9) Translation reserve 29 352.2 241.7 Retained earnings 585.4 533.1 Equity attributable to equity holders of the parent 1,608.8 1,458.6 Non-controlling interests 24.4 27.6 Total equity 1,633.2 1,486.2 The accompanying notes form an integral part of this consolidated balance sheet. Tim O’Toole 14 June 2016 Matthew Gregory 14 June 2016 108 FirstGroup Annual Report and Accounts 2016 Consolidated statement of changes in equity Year ended 31 March Non- Share Share Hedging Other Own Translation Retained controlling Total capital premium reserve reserves shares reserve earnings Total interests equity £m £m £m £m £m £m £m £m £m £m Balance at 1 April 2014 60.2 676.4 7.8 4.6 (1.8) 17.8 446.4 1,211.4 11.6 1,223.0 Total comprehensive income for the year – – (63.3) – – 223.9 102.4 263.0 10.3 273.3 Purchase of non-controlling interests1 – – – – – – (7.0) (7.0) (4.0) (11.0) Acquisition of non-controlling interests – – – – – – – – 11.7 11.7 Non-controlling interests put option2 – – – – – – (12.8) (12.8) – (12.8) Dividends paid – – – – – – – – (2.0) (2.0) Movement in EBT and treasury shares – – – – (0.1) – (1.0) (1.1) – (1.1) Share-based payments – – – – – – 5.2 5.2 – 5.2 Deferred tax on share-based payments – – – – – – (0.1) (0.1) – (0.1) Balance at 31 March 2015 60.2 676.4 (55.5) 4.6 (1.9) 241.7 533.1 1,458.6 27.6 1,486.2 Total comprehensive income for the year – – (13.1) – – 110.5 47.2 144.6 6.1 150.7 Dividends paid – – – – – – – – (10.0) (10.0) Movement in EBT and treasury shares – – – – 0.5 – (1.3) (0.8) – (0.8) Share-based payments – – – – – – 6.4 6.4 – 6.4 Other – – – – – – – – 0.7 0.7 Financial statements Balance at 31 March 2016 60.2 676.4 (68.6) 4.6 (1.4) 352.2 585.4 1,608.8 24.4 1,633.2 1 On 14 August 2014, the Group purchased the non-controlling interests share of Hull Trains Limited for a consideration of £3.0m and on 24 March 2015, the Group purchased the non-controlling interests share of Cardinal Coach Lines UCL for a consideration of CAD$17.0m. As both of these represent a transaction with minority equity owners of the business without a change of control, they have been recognised as an equity transaction in the Group’s reserves and not as a business combination or investment. 2 On 25 August 2014, the Group completed the acquisition of a 51% share in Mile Square Transportation, Inc, a school bus transportation company based in New York. Included within the purchase agreement is a put option for the Group to purchase the remaining 49% from the non-controlling interest party for a fixed price of US$19.1m. As the put option is a contract to purchase the Group’s own equity instruments it gives rise to a financial liability for the fixed price amount in accordance with paragraph 23 in IAS 32. The financial liability has been recognised in the balance sheet and the initial recognition is treated as a reclassification from equity. The accompanying notes form an integral part of this consolidated statement of changes in equity. FirstGroup Annual Report and Accounts 2016 109 Consolidated cash flow statement Year ended 31 March 2016 2015 Note £m £m Net cash from operating activities 31 409.5 325.2 Investing activities Interest received 1.4 1.8 Proceeds from disposal of property, plant and equipment 19.5 47.5 Purchases of property, plant, equipment and software (405.2) (428.9) Acquisition of subsidiary/business – (11.0) Net cash used in investing activities (384.3) (390.6) Financing activities Dividends paid to non-controlling shareholders (10.0) (2.0) Shares purchased by Employee Benefit Trust – (1.1) Repayments under HP contracts and finance leases (80.3) (67.9) Fees for bank facility amendments and bond issues – (4.7) Net cash flow used in financing activities (90.3) (75.7) Net decrease in cash and cash equivalents before foreign exchange movements (65.1) (141.1) Cash and cash equivalents at beginning of year 420.5 553.9 Foreign exchange movements 4.7 7.7 Cash and cash equivalents at end of year per consolidated balance sheet 360.1 420.5 Cash and cash equivalents are included within current assets on the consolidated balance sheet. Note to the consolidated cash flow statement – reconciliation of net cash flow to movement in net debt 2016 2015 £m £m Net decrease in cash and cash equivalents in year (65.1) (141.1) Decrease in debt and finance leases 80.3 67.9 Fees capitalised against bank facilities and bond issues – 4.7 Net cash flow 15.2 (68.5) Foreign exchange movements (15.3) (31.7) Other non-cash movements in relation to financial instruments (2.8) (3.3) Movement in net debt in year (2.9) (103.5) Net debt at beginning of year (1,407.3) (1,303.8) Net debt at end of year (1,410.2) (1,407.3) Net debt excludes all accrued interest. The accompanying notes form an integral part of this consolidated cash flow statement. 110 FirstGroup Annual Report and Accounts 2016 Notes to the consolidated financial statements 1 General information FirstGroup plc is a company incorporated in the United Kingdom under the Companies Act 2006.