Interim Results
Pendragon PLC
04 August 2005
FOR IMMEDIATE RELEASE 4 August 2005
INTERIM RESULTS TO 30 JUNE 2005
Pendragon PLC, the UK's largest motor car retailer, today reports interim
results for the six months to 30 June 2005.
Highlights:
- Turnover of £1,751 million (2004: £1,598 million)
- Profit before tax & exceptionals £36.8 million (2004: £30.8 million)
- Underlying operating margin 3.2% (2004: 2.9%)
- Adjusted earnings per share up 22% to 20.7 pence (2004: 16.9 pence)
- Interim dividend up 57% to 6.6 pence (2004: 4.2 pence)
- Gearing 95% (2004: 140%)
Trevor Finn, Chief Executive, commented:
'I am pleased with the trading performance in all parts of the group's
activities in the first half. We have increased profits and dividends whilst at
the same time reduced borrowings. These good results leave us well positioned to
achieve our full year objectives. Our range of brands and activities has enabled
us to carry on producing good results even though the trading conditions in the
UK have become tougher this year.
The performance of the group in the first half gives us confidence that we will
meet our objectives for the year. We will continue to grow our business in line
with our strategic plans and use our new technology systems to continue to
improve the efficiency of our retailing business model.'
Enquiries:
Pendragon PLC Trevor Finn, Chief Executive Tel: 01623 725 114
David Forsyth, Finance Director
Finsbury Charlotte Hepburne-Scott Tel: 0207 251 3801
Gordon Simpson
CHIEF EXECUTIVE'S OPERATIONAL REVIEW
Introduction
Trading performance across the Group has been good in the first six months of
the year. We are reporting growth in underlying earnings and a further reduction
in gearing. Whilst we have made a number of small acquisitions this year, the
main focus has continued to be on increasing efficiency through further
deployment of our own dealer management systems and the integration of the major
acquisition we made last year. We consider the integration to be complete and
achieved with no disruption to the profit generation of the Group.
Group revenues have increased by £152.8 million to £1,751.2 million mainly as a
result of two extra months of trading from businesses acquired last year. On a
like for like basis revenues were in line with last year despite a fall of 5.8%
in new car registrations in the UK market. Operating profits before one off
exceptional items were £56.7 million compared to £46.4 million last year.
Although the UK market has been more competitive we have improved the overall
Group underlying operating profit margin to 3.2% from 2.9%. This reflects the
strength of the Group over a number of brands, markets and activities.
The interim dividend is 6.6 pence per share compared to 4.2 pence last year.
This level of dividend is in line with our decision to increase the 2004 final
dividend made in the light of the contribution to earnings of our substantial
acquisition last year.
We have now adopted International Financial Reporting Standards (IFRS) and have
restated the prior year figures to reflect the changes made to our accounting
policies.
Results and Dividend
The results for the six months to 30 June 2005 are summarised as follows:
2005 2004
£m £m
-------------------------------------------------------------------------------
Revenue 1,751.2 1,598.4
-------------------------------------------------------------------------------
Underlying operating profit 56.7 46.4
-------------------------------------------------------------------------------
Exceptional operating costs (2.9) (4.3)
-------------------------------------------------------------------------------
Operating profit before other income 53.8 42.1
-------------------------------------------------------------------------------
Other income - gain on sale of fixed assets 1.4 11.6
-------------------------------------------------------------------------------
Operating profit 55.2 53.7
-------------------------------------------------------------------------------
Finance costs (19.9) (15.6)
-------------------------------------------------------------------------------
Profit before tax 35.3 38.1
-------------------------------------------------------------------------------
Earnings per share - adjusted 20.7p 16.9p
-------------------------------------------------------------------------------
Dividend per share 6.6p 4.2p
-------------------------------------------------------------------------------
Revenue has increased to £1,751.2 million from £1,598.4 million. CD Bramall was
acquired on 1 March 2004 and therefore the 2005 results include an additional
two months trading. On a like for like basis revenues have been maintained at
2004 levels. Sale of new cars account for just over half of the revenue of the
group with used cars accounting for a third. Aftersales activities account for
the balance of revenues and contributed 44% of gross profits. These percentages
are consistent with the prior period.
Operating profit, excluding exceptional costs and disposal profits, increased by
£10.3 million to £56.7 million from £46.4 million in 2004. We have benefited
from a full six months of contribution from acquisitions made in the first half
last year, good performances of certain brands in the UK, strong results in the
USA and a reduction in the level of losses in Germany.
Financing costs increased by £4.3 million to £19.9 million. This was due to a
combination of factors including higher vehicle floorplan costs, interest rate
rises and higher average borrowings compared to the first half last year. The
level of borrowings at 30 June 2005 was £20.5 million lower than that at
31 December 2004 and we are achieving our internal targets for debt reduction
following last year's major acquisition. The balance sheet gearing at 30 June
2005 was 95% compared to 112% at 31 December 2004 and 140% at 30 June 2004.
Exceptional operating costs of £2.9 million relate to write offs and costs in
respect of our Rover dealerships. Of this amount £1.2 million relates to
goodwill written off with the remainder being redundancy costs and manufacturer
and warranty debts. Of the original 16 Rover sites which we operated at the
beginning of the year, three have been closed and the properties are being sold.
Three others have been closed as Rover dealers and will be reopened under
different franchises. The remaining ten sites continue to sell Rover cars and
provide aftersales to our customers and have had additional franchises added or
will have in due course. We expect to fully recover the exceptional costs
incurred in our Rover group through the profits which will be made on the Rover
property disposals.
Underlying operating profit of £56.7 million (2004: £46.4 million) less interest
cost of £19.9 million (2004: £15.6 million) resulted in profit before tax and
exceptionals of £36.8 million (2004: £30.8 million). Adjusted earnings per share
increased by 22.5% to 20.7p from 16.9p last year.
Motor Retail Business
Our franchised motor retail activities are principally in the UK with a small
but growing business in the USA. We currently operate 258 franchised sales
points, of which 22 are overseas. We continue to represent a broad portfolio of
brands each with sufficient scale to enable efficient operations within each
franchise group. We also operate a number of franchised commercial truck
businesses.
We have progressed well with the implementation of our new dealer management
system, Pinnacle, within the group. So far we have installed systems at 63 sites
and plan a further 45 by this year end. We expect that the roll out will
continue to accelerate and with it the benefits that this technology brings to
the operational efficiency of the Group.
UK
In the UK, new car registrations reduced by 5.8% compared to the first six
months of 2004. The 2004 comparative period is the best on record whilst the UK
market in 2005 remains in line with the average achieved in the last six years.
The private sector retail sales, which tend to be more profitable, are down
11%, whilst corporate sales are down only 2.3%. The change in mix has put
pressure on margins within the sector. The latest industry forecast for 2005 is
for an annual new car market at 2.45 million, down 4.6% on 2004. This annual
forecast compares to a 7.2% fall in quarter one and reflects the cooling in
demand last year from quarter two onwards. The commercial vehicle market
continues to perform strongly. Year to date registrations of light commercial
vans and trucks are up 3% to just over 200,000 registrations.
In the UK we operate 236 franchised sales points representing specialist brands
(44%), volume and motorbikes (47%) and truck franchises (9%). The results of the
UK business can be summarised as follows:
£m Revenue Gross Profit Gross Margin % Underlying Underlying
Operating Operating
Profit Margin %
-------------------------------------------------------------------------------
Existing 1,537.8 207.8 13.5 49.1 3.2
-------------------------------------------------------------------------------
Disposed 48.0 8.0 16.6 0.3 0.6
-------------------------------------------------------------------------------
Total 2005 1,585.8 215.8 13.6 49.4 3.1
-------------------------------------------------------------------------------
Total 2004 1,470.8 198.3 13.5 39.4 2.7
-------------------------------------------------------------------------------
Revenue increased by £115.0 million. This arose principally from a combination
of an additional two months from CD Bramall dealerships less the impact of year
on year disposals.
Gross margins for dealerships we operated at 30 June 2005 were maintained at
13.5%, despite the change in mix of national new car sales towards lower margin
corporate. The split of profits from each of our activities has remained in line
with last year with 44% from the high margin aftersales area of the business.
The cost savings accruing from the increased scale of the Group this year and
some excellent performances from our Aston Martin, Porsche and DAF franchise
groups have contributed towards operating margins increasing to 3.2% from 2.7%
last year.
We had a fairly quiet first half in terms of acquisitions and disposals. We
acquired four dealerships towards the end of the first half of 2005. A Jaguar
and Volvo dealership in Plymouth, Jaguar in Solihull and Kia in Cardiff. We also
established a greenfield site in Nottingham for SAAB, and rolled out our
Cadillac sales centres to Manchester and Birmingham. We plan to open further
Cadillac centres in the second half of the year in anticipation of new model
launches early next year. The contribution to revenue from these new businesses
is not significant in the context of our UK operations although they have had
the effect of reducing margins and operating profit in the first six months of
2005.
We sold our Mercedes truck operation in June in addition to the closure of part
of our Rover Group. The demise of MG Rover car production has resulted in some
exceptional costs to the group which we expect to recover through sale of
properties from the Rover dealerships which we have closed. We expect to sell
out of our remaining new Rover and MG stock in the second half of the year and
to continue with the refranchising plans commenced last year.
USA
The overall market for new cars in the USA has improved this year by 1.9% to 8.6
million registrations. We continue to represent only a few brands in California
being Jaguar, Land Rover, Lincoln Mercury, Aston Martin and SAAB. We added the
two SAAB dealerships in January of this year. All our brands are performing well
in terms of sales volumes other than Jaguar which has suffered due to lower
X-type sales. Results of the USA business for the first half of 2005 are
summarised as follows:
£m Revenue Gross Profit Gross Margin % Underlying Underlying
Operating Operating
Profit Margin %
-------------------------------------------------------------------------------
Existing 90.3 14.2 15.8 2.8 3.1
-------------------------------------------------------------------------------
Acquired 10.2 1.1 10.6 (0.3) (2.7)
-------------------------------------------------------------------------------
Total 2005 100.5 15.3 15.2 2.5 2.5
-------------------------------------------------------------------------------
Total 2004 77.8 14.0 18.0 2.3 2.9
-------------------------------------------------------------------------------
Revenues increased, in part due to a number of large fleet deals for Lincoln
Mercury product which had the effect of diluting the gross margin. Jaguar and
Land Rover margins are also down on last year, Jaguar due to lower volumes
increasing competition and Land Rover awaiting new product launches. In June
2005 we saw an improvement in Land Rover margins with the launch of the Range
Rover Sport and the new supercharged Range Rover.
Operating profit improved at the existing businesses by 22% to £2.8 million.
This reflects the reduction in the cost base achieved of circa £0.3 million
whilst increasing revenue.
The two new SAAB dealerships acquired at the start of the new year is an
important step in both building on the relationship we enjoy with General Motors
in the UK and, also in extending the franchises we represent in the Californian
market which hitherto had been entirely with Ford brands. The margins in the new
SAAB businesses are below those of our existing dealers presenting us with the
opportunity to improve their returns.
Germany
Our German operation, representing Jaguar, Land Rover and Aston Martin in
Frankfurt and Munich has shown a marginal improvement with a reduction in
operating losses of £0.3 million. This was achieved through higher sales and an
improved gross margin. The cost base remained static after reductions made last
year.
Support Services
We provide a broad range of support services to both the Pendragon group and to
outside customers. The services are provided by a number of specialist
businesses which comprise contract hire and leasing, computer software
solutions, wholesale parts distribution and our shared services centre. The
results for the first half of 2005 are summarised as follows:
£m Revenue Gross Profit Gross Margin % Underlying Underlying
Operating Operating
Profit Margin %
-------------------------------------------------------------------------------
Total 2005 76.1 20.9 27.5 5.7 7.5
-------------------------------------------------------------------------------
Total 2004 63.8 18.2 28.5 5.9 9.2
-------------------------------------------------------------------------------
Revenue increased with a full six month contribution from the contract hire and
parts wholesale businesses that were acquired last year. As a consequence the
relative mix of sales has changed which has had the effect of reducing year on
year margins. Overall profits have fallen slightly.
Finance
Our borrowings at 30 June 2005 were £226.3 million, a reduction of £20.5 million
from the 2004 year end balance of £246.8 million. Gearing at 30 June 2005 was
95%. The level of borrowings is within the plan we set ourselves at the time of
the acquisition of CD Bramall and gearing is continuing to fall.
Operating cash inflow for the first six months was £80.9 million, which compares
with £118.6 million generated in 2004. We reduced working capital investment in
the period by £2.7 million in comparison to the reduction of £46.5 million
following the CD Bramall acquisition last year. As the new car market has slowed
this year there has been extra focus, across the group, on new and used car
stock levels to ensure they remain at appropriate levels.
Investments of £13.0 million were made in respect of business acquisitions. This
includes the acquisitions of SAAB, in the USA, Jaguar and Volvo in Plymouth,
Jaguar Solihull and Kia in Cardiff. Deferred consideration was paid for the
Citroen/Jeep business that we acquired in September 2004.
Net investment in property, plant and equipment for the six months was £24.2
million (2004: £1.0 million). This includes investment in new properties and
refurbishments plus a net increase in the contract hire fleet and service loan
cars. Proceeds from property disposals were £5.9 million (2004: £22.0 million).
In addition to this £14.0 million was raised from business disposals
(2004: £14.3 million)
Current Trading and Prospects
Current trading remains in line with expectations as we continue to absorb the
effects of the downturn in the UK new car market with minimal impact on our
profits. However, there is no doubt that had demand continued at levels
experienced during the first quarter of 2004 profitability would be much higher
this year. Compared to last year, profits continue to be more difficult to
generate. The aftersales market is stable and currently appears to
be little affected by reductions in consumer spending.
Looking forward to the remainder of the year we anticipate that trading will
remain in line with expectations. We anticipate debt reduction to continue from
strong cashflow, Pinnacle roll out to enable increased scale economies and that
our plans for growth will be achieved.
We are confident the group will continue to build upon the success we have
achieved over the last eighteen months and will meet our short term goals whilst
building for our long term future.
TREVOR FINN
Chief Executive
4 August 2005
Consolidated Income Statement
Interim Results
for the six months ended 30 June 2005
6 Months to 6 Months to 12 Months to
30.06.05 30.06.04 31.12.04
£m £m £m
-------------------------------------------------------------------------------
Revenue 1,751.2 1,598.4 3,168.2
-------------------------------------------------------------------------------
Cost of sales (1,499.8) (1,369.8) (2,718.1)
-------------------------------------------------------------------------------
Gross profit 251.4 228.6 450.1
-------------------------------------------------------------------------------
Operating expenses (197.6) (186.5) (369.0)
-------------------------------------------------------------------------------
Operating profit before other income 53.8 42.1 81.1
-------------------------------------------------------------------------------
Other income - gain on sale
of fixed assets 1.4 11.6 18.9
-------------------------------------------------------------------------------
Operating profit 55.2 53.7 100.0
-------------------------------------------------------------------------------
Operating profit before other income,
analysed as:
Before exceptional items 56.7 46.4 87.7
Goodwill impairment (1.2) - (1.9)
Closure and integration costs (1.7) (4.3) (4.7)
-------------------------------------------------------------------------------
Operating profit before other income 53.8 42.1 81.1
-------------------------------------------------------------------------------
Finance costs (note 5) (20.8) (15.8) (35.1)
Finance income (note 6) 0.9 0.2 0.5
-------------------------------------------------------------------------------
Profit before tax 35.3 38.1 65.4
Taxation (note 7) (11.0) (12.0) (19.7)
-------------------------------------------------------------------------------
Profit attributable to equity
holders of the parent 24.3 26.1 45.7
-------------------------------------------------------------------------------
Earnings per ordinary share
(note 9) 19.7p 21.3p 37.8p
Diluted earnings per ordinary share
(note 9) 19.1p 20.6p 36.0p
-------------------------------------------------------------------------------
All amounts are unaudited
Consolidated Balance Sheet
30.06.05 30.06.04 31.12.04
£m £m £m
-------------------------------------------------------------------------------
Non-current assets
Property, plant and equipment 474.0 467.8 471.7
Goodwill 164.6 190.3 172.8
Other intangible assets 1.4 2.9 1.6
Derivative financial instruments 5.7 - -
Investment in associated company - 2.3 -
-------------------------------------------------------------------------------
Total non-current assets 645.7 663.3 646.1
-------------------------------------------------------------------------------
Current assets
Inventories 471.0 422.8 446.8
Trade receivables 119.4 127.8 84.0
Other current assets 72.4 69.0 51.8
Bank balances and cash equivalents 92.9 86.2 114.3
-------------------------------------------------------------------------------
Total current assets 755.7 705.8 696.9
-------------------------------------------------------------------------------
Total assets 1,401.4 1,369.1 1,343.0
-------------------------------------------------------------------------------
Current liabilities
Bank overdrafts (22.3) - -
Short term borrowings (53.2) (24.8) (71.3)
Trade and other payables (733.4) (683.1) (657.0)
Current obligations under finance leases (1.2) (5.0) (1.1)
Current tax payable (21.2) (20.8) (18.5)
-------------------------------------------------------------------------------
Total current liabilities (831.3) (733.7) (747.9)
-------------------------------------------------------------------------------
Non-current liabilities
Long term borrowings (245.4) (338.5) (285.3)
Deferred tax (5.5) (9.1) (5.5)
Obligations under finance leases (2.8) (7.0) (3.4)
Retirement benefit obligations (76.2) (71.6) (78.3)
Long term provisions (2.1) (2.7) (2.2)
-------------------------------------------------------------------------------
Total non-current liabilities (332.0) (428.9) (374.7)
-------------------------------------------------------------------------------
Total liabilities (1,163.3) (1,162.6) (1,122.6)
-------------------------------------------------------------------------------
Net assets 238.1 206.5 220.4
-------------------------------------------------------------------------------
Shareholders' equity
Called up share capital 32.8 32.8 32.8
Share premium 56.8 56.8 56.8
Other reserves 15.1 15.1 15.1
Translation differences (0.1) 0.1 (0.3)
Profit and loss account 133.5 101.7 116.0
-------------------------------------------------------------------------------
Total shareholders' equity 238.1 206.5 220.4
-------------------------------------------------------------------------------
All amounts are unaudited
Consolidated Cash Flow Statement
6 Months to 6 Months to 12 Months to
30.06.05 30.06.04 31.12.04
£m £m £m
-------------------------------------------------------------------------------
Cash flows from operating activities
Operating profit 55.2 53.7 100.0
Profit on sale of fixed assets (1.4) (11.6) (18.9)
Depreciation and amortisation 23.0 29.9 58.7
Share based payments 0.2 0.1 0.3
Goodwill impairment 1.2 - 1.9
Decrease in working capital 2.7 46.5 45.4
-------------------------------------------------------------------------------
Cash generated from operating activities 80.9 118.6 187.4
Interest paid (20.1) (15.6) (26.4)
Tax paid (10.2) (8.6) (19.3)
-------------------------------------------------------------------------------
Net cash from operating
activities 50.6 94.4 141.7
-------------------------------------------------------------------------------
Cash flows from investing activities
Business acquisitions
(net of cash acquired) (13.0) (229.4) (232.5)
Proceeds from sale of businesses 14.0 14.3 17.9
Purchase of property, plant
and equipment (69.0) (46.9) (132.5)
Proceeds from sale of property,
plant and equipment 44.8 45.9 133.3
Receipts from sales of investments - 0.6 0.8
-------------------------------------------------------------------------------
Net cash used in investing activities (23.2) (215.5) (213.0)
-------------------------------------------------------------------------------
Cash flows from financing activities
Payment of capital element of
finance lease rentals (0.5) (1.7) (11.4)
Repayment of unsecured bank loans - (92.8) (92.2)
Repayment of loan notes (62.8) (0.5) (0.5)
Proceeds from issue of unsecured loans - 301.8 294.6
Repayment of unsecured loans (0.3) - -
Dividends paid to shareholders (7.4) (4.7) (9.8)
-------------------------------------------------------------------------------
Net cash (used in) / generated
from financing activities (71.0) 202.1 180.7
-------------------------------------------------------------------------------
Effects of exchange rate changes (0.1) - (0.3)
-------------------------------------------------------------------------------
Net (decrease) / increase in cash and
cash equivalents (43.7) 81.0 109.1
Opening cash and cash equivalents 114.3 5.2 5.2
-------------------------------------------------------------------------------
Closing cash and cash equivalents
(note 10) 70.6 86.2 114.3
-------------------------------------------------------------------------------
Consolidated Statement of Changes in Equity
Share Share Other Translation Accumulated Total
Capital Premium Reserves Differences Profit
£m £m £m £m £m £m
---------------------------------------------------------------------------------------------------------
Balance at 1 January 2004 32.8 56.8 15.1 - 77.1 181.8
Currency translation differences - - - (0.3) - (0.3)
Share based payments including tax credits - - - - 2.2 2.2
Profit attributable to equity
holders of the parent - - - - 45.7 45.7
Dividends - - - - (9.8) (9.8)
Disposal of own shares in share trusts - - - - 0.8 0.8
---------------------------------------------------------------------------------------------------------
Balance at 31 December 2004 32.8 56.8 15.1 (0.3) 116.0 220.4
Adoption of IAS 39 - - - - 0.4 0.4
---------------------------------------------------------------------------------------------------------
Balance at 1 January 2005 32.8 56.8 15.1 (0.3) 116.4 220.8
Currency translation differences - - - 0.2 - 0.2
Share based payments - - - - 0.2 0.2
Profit attributable to equity
holders of the parent - - - - 24.3 24.3
Dividends - - - - (7.4) (7.4)
---------------------------------------------------------------------------------------------------------
Balance at 30 June 2005 32.8 56.8 15.1 (0.1) 133.5 238.1
---------------------------------------------------------------------------------------------------------
Notes
1. Pendragon has previously reported its results under UK Generally Accepted
Accounting Principles (UK GAAP). Following adoption of Regulation 1606/2002
by the European Parliament in July 2002 all EU listed companies are
required to report their consolidated financial statements under
International Financial Reporting Standards (IFRS) for accounting periods
beginning on or after 1 January 2005. This interim report has been prepared
in accordance with all current IFRS (including International Financial
Reporting Interpretations Committee pronouncements) in place for reporting
to 31 December 2005. The IFRS applied are those that have been, or are
expected to be, endorsed by the European Commission by the time the group
prepares its first set of consolidated financial statements at 31 December
2005.
The changes arising to the income statement on adoption of IFRS are
relatively insignificant, whilst the net assets of the group increase by
£34.7 million as at 1 January 2004 with a restatement in the value of
assets which is in part offset by the pension fund deficit that has been
recognised and an increase in the deferred tax liability of the group. A
full report detailing the changes to Pendragon accounting policies and
their financial effect was published on 22 July 2005 and is available on
the company's website (http://www.pendragonplc.com/news.asp?newsid=612).
The principal changes the group has made to its accounting policies on
adoption of IFRS to those presented in the financial statements for the
year ended 31 December 2004 are as follows: (accounting policies that have
not changed with the introduction of IFRS have not been reproduced
below).
a) Tangible fixed assets - land and buildings have been restated to fair
value as at 1 January 2004.
b) Employee share options - the fair value of the options granted to
employees are expensed to the income statement.
c) Goodwill - is no longer amortised but is tested instead for impairment
at least once a year.
d) Intangible assets - are recognised on acquisition if they can be
separately identified and reliably measured.
e) Dividends - final dividends recognised once approved at AGM or interim
dividends when approved by directors.
f) Deferred tax - provided in full including capital gains that have been
rolled over.
g) Leases - buildings are treated as fixed assets if they are long term and
all the risks and rewards have substantially transferred to the group.
h) Revenue recognition - contract hire vehicles remain on balance sheet as
fixed assets if the group has a future repurchase commitment. Profit is
spread over the period of the lease.
i) Employee pensions - the full deficit on the pension schemes is
recognised on balance sheet, and future costs will be calculated in
accordance with the 'corridor' approach.
j) Financial instruments - asset and liability of financial derivatives are
recognised on balance sheet.
The application of IFRS has also changed the cash flow statement in terms
of its presentation and lay out.
2. The comparative results for the year ended 31 December 2004 are not the
company's statutory accounts for that financial year. Those accounts, which
were prepared under UK GAAP, have been reported on by the company's
auditors and delivered to the registrar of companies. The report of the
auditors was unqualified and did not contain a statement under s237 (2) or
(3) of the Companies Act 1985.
3. The interim report has been approved by the board of directors on
4 August 2005 and is unaudited.
4. Exceptional items incurred during the first half of 2005 total £2.9
million. This is in respect of our Rover Franchise Group, and consists of
£1.2 million impairment of goodwill and £1.7 million for redundancy costs
and non payment of manufacturer bonus and warranty debtors. Exceptional
costs incurred during the first half of 2004 of £4.3 million are in respect
of integration costs arising from the acquisition of CD Bramall PLC which
included redundancy payments made to the former directors.
5. Finance costs 6 Months 6 Months 12 Months
to 30.06.05 to 30.06.04 to 31.12.04
£m £m £m
-------------------------------------------------------------------------------
Interest payable on bank borrowings 5.9 6.1 13.2
Interest payable on loan notes 5.0 3.5 8.6
Vehicle stocking plan interest 8.3 4.3 9.4
Interest payable on finance leases 0.1 0.1 0.4
Unwinding of discounts in
contract hire residual values 1.3 1.5 2.9
Interest on pension scheme obligations 0.2 0.3 0.8
-------------------------------------------------------------------------------
20.8 15.8 35.3
Less interest capitalised - - (0.2)
-------------------------------------------------------------------------------
Total finance costs 20.8 15.8 35.1
-------------------------------------------------------------------------------
6. Finance income 6 Months 6 Months 12 Months
to 30.06.05 to 30.06.04 to 31.12.04
£m £m £m
-------------------------------------------------------------------------------
Fair value gains - interest rate swaps 0.2 - -
Interest receivable on bank deposits 0.2 0.2 0.5
Other interest receivable 0.5 - -
-------------------------------------------------------------------------------
Total finance income 0.9 0.2 0.5
-------------------------------------------------------------------------------
7. The effective tax rate for 2005 of 31.2% (2004 : 31.5%) is an estimate
based upon the anticipated charge for the full year on profit on ordinary
activities before taxation.
8. A dividend of 6.6p (2004 : 4.2p) net per ordinary share will be paid on 3
October 2005 to shareholders appearing on the register at the close of
business on 9 September 2005.
9. Earnings per share 30.06.05 30.06.04 31.12.04
pence pence pence
-------------------------------------------------------------------------------
Basic earnings per share 19.7 21.3 37.1
Effect of non trading items 1.0 (4.4) (7.1)
-------------------------------------------------------------------------------
Adjusted earnings per share 20.7 16.9 30.0
-------------------------------------------------------------------------------
Diluted earnings per ordinary share 19.1 20.6 36.0
-------------------------------------------------------------------------------
The calculation of basic, diluted
and adjusted earnings per share is
based on:
Number of shares (millions) 30.06.05 30.06.04 31.12.04
number number number
-------------------------------------------------------------------------------
Weighted average number of shares
used in basic and adjusted
earnings per share calculation 123.5 122.7 123.0
Weighted average number of
dilutive shares under option 3.8 3.9 3.9
-------------------------------------------------------------------------------
Diluted weighted average number
of shares used in diluted
earnings per share calculation 127.3 126.6 126.9
Earnings 30.06.05 30.06.04 31.12.04
£m £m £m
-------------------------------------------------------------------------------
Earnings for basic and diluted
earnings per share calculation 24.3 26.1 45.7
Non trading items:
Profit on fixed asset and
business disposals (1.4) (11.6) (18.9)
Goodwill impairment 1.2 - 1.9
Exceptional costs 1.7 4.3 4.7
Tax effect of non trading items (0.2) 1.9 3.5
-------------------------------------------------------------------------------
Earnings for adjusted earnings
per share calculation 25.6 20.7 36.9
-------------------------------------------------------------------------------
The directors consider that the adjusted earnings per share figures provide
a better measure of comparative performance.
10. Cash and cash equivalents 30.06.05 30.06.04 31.12.04
£m £m £m
-------------------------------------------------------------------------------
Bank balances and cash equivalents 92.9 86.2 114.3
Bank overdrafts (22.3) - -
-------------------------------------------------------------------------------
70.6 86.2 114.3
-------------------------------------------------------------------------------
11. Net debt 30.06.05 30.06.04 31.12.04
£m £m £m
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Cash and cash equivalents (note 10) 70.6 86.2 114.3
Short term borrowings (53.2) (24.8) (71.3)
Long term borrowings (245.4) (338.5) (285.3)
Derivative financial instruments 5.7 - -
Obligations under finance leases (4.0) (12.0) (4.5)
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(226.3) (289.1) (246.8)
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