Information  X 
Enter a valid email address

Amec Foster (AMFW)

  Print          Annual reports

Thursday 26 March, 2015

Amec Foster

Full year results 2014

RNS Number : 5003I
Amec Foster Wheeler PLC
26 March 2015
 



Amec Foster Wheeler plc 2014 results

 

Chief Executive Samir Brikho said:

 

"I am pleased to report that we have delivered 2014 results in line with expectations. Looking ahead, I believe our low-risk, multi-market model combined with the additional benefits from our integration and cost savings programmes, is a strong platform from which to create long-term value for shareholders."

 

Summary:

 

·      Benefits of low-risk, multi-market model evident

·      Completed transformational acquisition in November

·      Integration on track; savings target increased to $125m

·      Weak commodity pricing continues

·      Full year dividend +3%

 

2014 results:

 

Key performance measures1

£m unless stated

2014

2013

Change

Underlying

change

Continuing operations





Scope revenue

3,920

3,854

+2%

+1%

Trading profit

321

343

-6%


Trading margin

8.2%

8.9%

-70bps


Adjusted profit before tax

317

332

-5%


Trading cash flow

283

341

-17%


Cash conversion

88%

99%

-110ps


Adjusted earnings per share

79.5p

87.2p

-9%


1) Adjusted performance measures used by the Group are reconciled to the equivalent IFRS measures in the section entitled 'Performance measures'

 

Reported under IFRS

 

£m unless stated

2014

2013

Change

Continuing operations




Revenue

3,993

3,974

-

Profit before net financing expense

148

243

-39%

Profit before tax

155

255

-39%

Cash flow from operations

200

292

-32%

Diluted earnings per share

35.1p

62.5p

-44%

Dividend per share

43.3p2

42.0p

+3%

2) Includes the proposed final dividend for 2014 of 28.5p per ordinary share

 

 

Outlook statement:

 

For 2015, we expect to see a continuation of recent trends - with growth in Clean Energy, downstream and Middle Eastern Oil & Gas markets offsetting tougher conditions elsewhere. This mix of performance, together with the increased customer pricing pressure and cost saving plans, is expected to lead to a modest reduction in like-for-like trading margins.

 

On current market forecasts, the reversal of the currency headwinds we experienced in 2014 will add approximately £150 million to scope revenue.

 

 

 

 

 

Contacts:

Amec Foster Wheeler plc

 

Julian Walker (media)

Rupert Green (investors)

+ 44 (0)20 7429 7500

Brunswick Group LLP

Mike Harrison/Stuart Donnelly

+ 44 (0)20 7404 5959

 

 

 

Results presentation:

We will host a presentation on the results for analysts and investors at 8.30am today at the offices of Nomura International, One Angel Lane London EC4R 3AB. For those unable to attend, dial-in details: UK 0800 368 0649, international +44 20 3059 8125, participant password: 544565.

 

Analyst consensus estimates:

Regularly updated on our website at amecfw.com/investors/consensus_estimates.htm

 

Notes to editors:

Amec Foster Wheeler (www.amecfw.com) designs, delivers and maintains strategic and complex assets for its customers across the global energy and related sectors.

With pro-forma 2014 scope revenues of £5.5 billion and over 40,000 employees in more than 50 countries, the company operates across the whole of the oil and gas industry - from production through to refining, processing and distribution of derivative products - and in the mining, clean energy, power generation, pharma, environment and infrastructure markets.

Amec Foster Wheeler offers full life-cycle services to offshore and onshore oil and gas (conventional and unconventional, upstream, midstream and downstream) for greenfield, brownfield and asset support projects, plus leading refining technology.

Amec Foster Wheeler shares are publicly traded on the London Stock Exchange and its American Depositary Shares are traded on the New York Stock Exchange. Both trade under the ticker AMFW.



 

 

Amec Foster Wheeler pro forma results for 2014, 2013, 2012 (Unaudited)

 

Background

 

We acquired a 95.3% controlling interest in Foster Wheeler on 13 November 2014. The Group's reported results and cash flows for 2014 therefore incorporate Foster Wheeler's results only for the last seven weeks of 2014. For this short period, we continued to report the existing Foster Wheeler operating segments: E&C Services and Global Power Group.

 

With effect from 1 January 2015, the Group adopted new geographical operating segments within its E&C business: Americas; Northern Europe & CIS; and Asia, Middle East, Africa & Southern Europe. Foster Wheeler's E&C Services segment was merged into the new geographical structure. Foster Wheeler's Global Power Group continues to be reported as a separate operating segment. We will first report the Group's results under the new segment structure in the 2015 half-year results, which will include comparative segment information restated on a consistent basis.

 

In January 2015, we acquired the remaining 4.7% interest in Foster Wheeler AG.

 

In this section, we present the Group's revenue and trading results for 2014, 2013 and 2012 on a pro forma basis on the assumption that Foster Wheeler had been acquired on 1 January 2012. We also present the pro forma revenue and trading results of the Group's new operating segments for each of those years.

 

The pro forma information is provided for comparative purposes only and does not necessarily reflect what the revenue and trading results of the combined group would have been for the periods presented, nor is it necessarily indicative of the combined group's future revenue and trading results.

 

The unaudited pro forma information has been prepared based on information derived from the following:

·     the audited consolidated financial statements of Amec Foster Wheeler plc (formerly AMEC plc) for each of the three years ended 31 December 2014 prepared in accordance with IFRS;

·     the audited consolidated financial statements of Foster Wheeler for each of the two years ended 31 December 2013 and the unaudited consolidated financial information of Foster Wheeler for the period from 1 January 2014 to 12 November 2014, in each case prepared in accordance with US GAAP.

Adjustments have been made to restate Foster Wheeler's results in accordance with AMEC's accounting policies under IFRS and to convert them from US dollars into Sterling using the exchange rates that AMEC used to convert the results of its US subsidiaries from US dollars into Sterling for each of the periods presented. Foster Wheeler's results have not, however, been further adjusted to retrospectively apply the purchase accounting adjustments that were made by AMEC to Foster Wheeler's balance sheet at the acquisition date in accordance with IFRS.

 

Group summary - pro forma basis

 

    

Continuing Operations           


2014

2013

2012

Revenue

(£m)

5,800

6,086

6,221

Y-on-Y change

(%)

-4.7

-2.2


Scope revenue (1)

(£m

5,493

5,512

5,371

Y-on-Y change

(%)

-

+2.6


Trading profit (1)

(£m)

457

537

526

Y-on-Y change

(%)

-14.9

+2.1


Trading margin (1)

(%)

8.3%

9.7%

9.8%

Y-on-Y change

(bps)

-140

-10


Order book

(£bn)

6.3

6.5

5.9

Y-on-Y change

(%)

-3.1

+10.2


1) Non-IFRS measure (see 'Performance measures')

 

 

 

 

 

 

 



 

Segmental review by new business units on pro forma basis 

 

Americas

 

Americas is the largest business unit, with substantial positions in each of our four core markets: Oil and Gas, Mining, Clean Energy, and Environment and Infrastructure.

 

Americas has over 16,000 employees in over 150 offices; geographically this region covers northern Canada to southern Chile and from Vancouver Island to Newfoundland.

 

Our experts in Americas support our customers in consulting, through the EPC project lifecycle (including engineering, procurement, project management and construction), into operations & maintenance, and remediation and reinstatement. 

 

 

Segment results                 


2014

2013

2012

Revenue

(£m)

2,705

2,902

3,078

Y-on-Y change

(%)

-6.8

-5.7


Scope revenue (1)

(£m)

2,638

2,521

2,522

Y-on-Y change

(%)

+4.6

-


Trading profit (1)

(£m)

258

294

269

Y-on-Y change

(%)

-12.2

+9.3


Trading margin (1)

(%)

9.8%

11.7%

10.7%

Y-on-Y change

(bps)

-190

+100


Order book

(£bn)

2.1

2.3

1.7

Y-on-Y change

(%)

-8.7

 +35.3


 

1) Non-IFRS measure (see 'Performance measures')

 

Scope revenue by market (£m)


2014

2013

2012

Oil & Gas


1,094

1,027

957

Mining


339

428

519

Clean Energy


785

629

638

Environment & Infrastructure


420

437

408



2,638

2,521

2,522

 

Key Oil & Gas projects currently underway include oil sands work for Imperial Oil, Syncrude, CNRL, Suncor and Shell among others, and the provision of consulting and project services in US shale gas. In downstream, we continue to work on a propane dehydrogenation project in Texas for Enterprise Products and projects for LyondellBassell and Dow. In Latin America we continue to build our relationship through project activity with PEMEX in Mexico and Ecopetrol in Colombia.

 

Mining activity in project delivery include a number of copper, gold and potash EPCM projects for Codelco, Newmont, Thompson Creek, PotashCorp and K+S Potash. In E&I we are working on site remediation programmes for Honeywell and Duke.

 



 

Contract wins announced in 2014 included:

Customer

Market

Description

   Country

Shell

O&G

FEED for Canada LNG project

Canada

Pemex

O&G

EPC for delayed coking facilities at two refineries

Mexico

K+S

Mining

EPCM for Legacy project expansion

Canada

NewGold

Mining

EPCM for Rainy River gold project

Canada

Codelco

Mining

Engineering and design for secondary ore processing facility at Chuquicamata copper concentrator

Chile

US Space Fence

E&I

Design and construction of specialist facilities for Lockheed Martin/US DoD programme

US

Owens Corning

E&I

EPCM contract for new composite material facility

US

 

Northern Europe & CIS

 

Our 12,000 people operating from more than 120 locations in 15 countries in Northern Europe & CIS focus on three of our markets, Oil & Gas, Clean Energy and Environment & Infrastructure. The combination of the capabilities from both AMEC and Foster Wheeler gives us opportunities to deliver more services for our customers in all these markets. The largest exposure is to Oil & Gas, with strong positions in the North Sea and Azerbaijan. We are also one of the largest service providers to the UK nuclear industry.

 

 

Segment results                              


2014

2013

2012

Revenue

(£m)

1,705

1,716

1,428

Y-on-Y change

(%)

-

+20.2


Scope revenue (1)

(£m)

1,541

1,602

1,380

Y-on-Y change

(%)

-3.8

+16.1


Trading profit (1)

(£m)

137

104

122

Y-on-Y change

(%)

+31.7

-14.8


Trading margin (1)

(%)

8.9%

6.5%

8.8%

Y-on-Y change

(bps)

+240

-230


Order book

(£bn)

2.4

2.6

2.6

Y-on-Y change

(%)

-7.7

-


 

1) Non-IFRS measure (see 'Performance measures')

 

Scope revenue by market (£m)


2014

2013

2012

Oil & Gas


1,143

1,218

870

Mining


-

-

-

Clean Energy


344

336

450

Environment & Infrastructure


54

48

60



1,541

1,602

1,380

 

Key projects worked on during the year include a five-year call-off contract to provide brownfield engineering for Talisman, Clair Ridge project for BP, Cygnus project for GDF Suez, and multiple projects with BG and Conoco Phillips in the UK North Sea.

 

Beyond Oil & Gas projects, on-going Clean Energy projects include reactor services support work for EDF's nuclear power stations in the UK and ongoing clean-up work at the Sellafield site, as well as framework agreements with National Grid.

 

 

Contract wins announced in 2014 included:

Customer

Market

Description

   Country

 

Nexen

O&G

6-year brownfield services contract

UK North Sea

 

Chevron

O&G

FEED for Captain expansion

UK North Sea

 

ShellONE Gas

O&G

10-year brownfield engineering contract extension

UK North Sea

 

Statoil

O&G

Concept study to improve operating efficiency as part of the Snøhvit Improvement Project 2

Norway

 

BP

O&G

EPCM for Shah Deniz 2 topsides

Azerbaijan

 

OMV

O&G

5-year integrated project management framework for refineries

Austria/Germany

 

National Grid

Clean Energy

Framework design for high voltage cables and transmission lines

UK

 

PGE Polska

Clean Energy

Owners engineer role for nuclear new build programme

Poland

Sellafield

Clean Energy

EPC for Box Encapsulation Plant project for magnox waste

UK

Nugen

Clean Energy/ E&I

Environmental impact assessments for new build programme

UK

UK MOD

E&I

Framework agreement for specialist technical services

UK

 

 

Asia, Middle East, Africa & Southern Europe (AMEASE)

 

AMEASE is a diverse region with over 9,000 employees spread across more than 40 locations. We now have enhanced capabilities and significantly increased customer reach which positions us well for growth across all of our four markets - Oil & Gas, Environment & Infrastructure, Mining and Clean Energy.

 

Segment results                 


2014

2013

2012

Revenue

(£m)

1,031

1,026

1,158

Y-on-Y change

(%)

-

-11.4


Scope revenue (1)

(£m)

958

953

918

Y-on-Y change

(%)

+0.5

+3.8


Trading profit (1)

(£m)

53

85

68

Y-on-Y change

(%)

-37.6

+25.0


Trading margin (1)

(%)

5.5%

8.9%

7.4%

Y-on-Y change

(bps)

-340

+150


Order book

(£bn)

1.7

1.5

1.3

Y-on-Y change

(%)

+13.3

+15.4


 

1) Non-IFRS measure (see 'Performance measures')



 

 

Scope revenue by market (£m)


2014

2013

2012

Oil & Gas


770

774

676

Mining


114

100

144

Clean Energy


-

-

-

Environment & Infrastructure


74

79

98



958

953

918

 

Key upstream Oil & Gas projects include providing asset support for ConocoPhillips' Bayu-Udan gas facilities in the East Timor Sea, operational readiness services for Chevron's Wheatstone facility offshore Australia, and onshore turnaround and maintenance support to ENI's onshore gas treatment plant and offshore unmanned wellhead platform, also in Australia.

 

In the Middle East we are providing technical and project management services on the Upper Zakum project for Zadco, supporting KNPC's new oil refinery at Al Zour, and delivering the propylene oxide plant at Jubail for Sadara Chemical Company. Other downstream projects include the Son refinery in Vietnam, and work on the synthetic rubber plant for Lanxess Butyl in Singapore. In Mining we continue to work on the Husab Uranium project in Namibia.

 

Contract wins announced in 2014 included:

Customer

Market

Description

   Country

 

KOC

O&G

5-year renewal to provide FEED and PMC on major projects

Kuwait

 

Arrow Energy

O&G

FEED for Surat coal seam gas project

Australia

 

SOCAR

O&G

PMC for Aegean refinery project

Turkey

 

Sinopec and China Coal Energy

O&G

EPC for new pipe rack at Zhongtian Hechuang coal to gas plant

China

 

KNPC

O&G

FEED for onshore LNG import and regasification terminal

Kuwait

 

Arrow Energy

O&G

EPCM for Daandine expansion

Australia

 

Shell

O&G

2-year contract for engineering, design and procurement for the Majnoon field

Iraq

 

Nafusah

O&G

FEED for onshore oil field development in Area 47

Libya

 

Rex Minerals

Mining

Early stage project support for Hillside copper project

Australia

 

CNNC

Clean Energy

MOU for JV with CNNC to establish nuclear decommissioning and life extension services in China

China

ENEC

Clean Energy

Consultancy work on nuclear new build programme

UAE

Lockheed Martin

E&I

EPC for design and construction of facilities for Space Fence Program

Marshall Is.

 



 

Global Power Group (GPG)

 

GPG has market-leading capabilities in the design, supply and erection of circulating fluidised bed (CFB) boilers, auxiliary steam and air pollution control equipment including a wide range of aftermarket products and services. Customers include utilities, independent power producers, and industrial concerns.

 

                 


2014

2013

2012

Revenue

(£m)

454

507

611

Y-on-Y change

(%)

-10.5

-17.0


Scope revenue (1)

(£m

451

501

605

Y-on-Y change

(%)

-10.0

-17.2


Trading profit (1)

(£m)

69

109

130

Y-on-Y change

(%)

-36.7

-16.2


Trading margin (1)

(%)

15.3%

21.8%

21.5%

Y-on-Y change

(bps)

-650

+30


Order book

(£bn)

0.4

0.4

0.5

Y-on-Y change

(%)

-

-20


 

1) Non-IFRS measure (see 'Performance measures')

 

Key project activity includes the erection of the 4 x 550MWe Samcheok ultra-supercritical CFB boilers, the largest CFB units in the world.  Commercial operation is slated for early 2016. Significant proposal activity is ongoing for CFB projects predominantly in Asia and Eastern Europe.

 

Contract wins announced in 2014 included:

Customer

Description

   Country

Solvay Sodi

Design and supply 50 MWe CFB boiler

Bulgaria

Iberdrola

Design and supply for heat recovery steam generators

Mexico

Vietnam Electricity

Design and supply two pulverised coal steam generators

Vietnam

Harbin Electric

Design and supply two CFBs and flue gas scrubbers

Turkey

TSE

Design, supply and erection of SCR at Naantali unit 3

Finland




In addition, BHI Co, a licensee of the Group's technology, has won contracts to design and supply heat recovery steam generators in the US, Saudi Arabia, Thailand and South Korea during the year.

 

 

Board changes

 

There have been a number of changes to the board over the past twelve months. Tim Faithfull retired as a non-executive director after the AGM in May 2014. Following completion of the acquisition of Foster Wheeler, Stephanie Newby and Kent Masters joined the board as non-executive directors.

 

Earlier this month, we announced that Neil Carson will assume the roles of senior independent director and chairman of the remuneration committee, following Simon Thompson's decision not to seek re-election at the AGM in May 2015, when he will have served six years on the board.

 



 

Operating and financial review

 

Basis of preparation

 

Accounting policies

The Group's consolidated financial statements for the year ended 31 December 2014 have been prepared in accordance with IFRS as adopted for use in the EU and those parts of the Companies Act 2006 that are applicable to companies reporting under IFRS.  From the Group's perspective, there are no differences between IFRS as adopted for use in the EU and IFRS as issued by the IASB.

 

The Group's principal accounting policies during 2014 were unchanged compared with 2013.

 

Adjusted performance measures

We report adjusted performance measures because they provide both management and investors with useful additional information about the underlying trading performance of the business. 

 

Before we acquired Foster Wheeler, the adjusted  performance measures that we reported excluded the amortisation of intangible assets and exceptional items and, where relevant, the tax effects of those items. 

 

On the acquisition of Foster Wheeler, we assumed significant additional asbestos-related obligations in relation to claims for damages made or expected to be made by individuals who allege that they have suffered personal injury from exposure to asbestos primarily in connection with equipment allegedly manufactured by Foster Wheeler's subsidiaries during the 1970s or earlier. When Foster Wheeler's obligations are added to AMEC's existing, though much less significant, asbestos-related obligations, there is the possibility in the future that the Group's results and cash flows will be materially affected by changes in the asbestos-related obligations, or our provisions for these obligations. We have therefore additionally excluded from the non-IFRS performance measures the asbestos-related costs and interest expense (net of insurance recoveries) and, where relevant, the tax effect of those items. In previous years, asbestos-related costs incurred by AMEC were not material to the Group's trading performance and therefore there has been no restatement of the adjusted performance measures presented for 2013 and 2012.

 

Adjusted performance measures used by the Group are reconciled to the equivalent IFRS measures in the section entitled 'Performance measures'. 

 

Continuing operations

 

Revenue

Revenue for the year was broadly unchanged compared with last year at £3,993 million (2013: £3,974 million). 

 

Revenue declined by £175 million in the Americas and by £108 million Europe, but increased by £54 million in the Growth Regions. Revenue from Oil & Gas was down 13%, Mining was down 14% and E&I down 3%, but revenue from Clean Energy was up 11%. Revenue in all markets was adversely affected by the strength of sterling, particularly against the US dollar. Overall, currency exchange rate movements reduced revenue by £238 million in 2014 compared with 2013.

 

Foster Wheeler contributed £274 million to the Group's revenue during the last seven weeks of the year following its acquisition in November 2014.

 

Flow-through procurement decreased by £47 million to £73 million (2013: £120 million).

 

Excluding flow-through procurement, the effect of acquisitions and currency movements, underlying revenue increased
by 1%. Underlying revenue from Oil & Gas was down 5% and that from Mining down 6%, but Clean Energy was up 16% and E&I was up 5%.

 

Administrative expenses

Administrative expenses were £354 million (2013: £293 million), including exceptional items, intangibles amortisation and asbestos-related costs (net of insurance recoveries) totalling £135 million (2013: £65 million). 

 

Administrative expenses before intangibles amortisation, exceptional items and net asbestos-related costs declined by 4% to £219 million (2013: £228 million), principally due to the impact of currency movements and reduced share-based payment charges. Also determined on this basis, Foster Wheeler's administrative expenses following its acquisition were £26 million.

 

Corporate costs, which comprise the costs of operating central corporate functions and certain regional overheads, were
£4 million lower at £31 million (2013: £35 million).

 

 

Profit before net financing expense

Profit before net financing expense was significantly lower at £148 million (2013: £243 million), largely due to exceptional costs incurred during 2014 in relation to the acquisition of Foster Wheeler.

 

Amortisation and impairment of intangible assets

Intangible assets principally comprise goodwill and identifiable intangible assets that were recognised in relation to acquired businesses. Goodwill is not amortised but is subject to an annual impairment test. No impairment was recognised in either 2014 or 2013.

 

Intangibles amortisation was £49 million (2013: £47 million). Whilst an additional amortisation expense of £11 million was recognised on the intangible assets acquired with Foster Wheeler and there was the full-year amortisation of intangible assets recognised in acquisitions completed in 2013, the year-on-year change was reduced because the amortisation expense in 2013 included the accelerated amortisation of certain intangible assets. We expect the full-year impact of the amortisation of intangible assets acquired with Foster Wheeler to be approximately £85 million.

 

Asbestos-related costs (net of insurance recoveries)

During 2014, the Group recognised net asbestos-related costs of £8 million (2013: £nil) in profit before net financing expense, which largely related to the reduction between the acquisition date and the year-end date in the discount rate applied to the net asbestos-related liabilities assumed on the acquisition of Foster Wheeler. In addition, the Group recognised an asbestos-related interest expense of £1 million (2013: £nil).

 

Exceptional items

Net exceptional costs totalling £98 million (2013: £25 million) were recognised in arriving at profit before tax from continuing operations, as follows:

·           costs of £41 million in relation to the acquisition of Foster Wheeler (including transaction costs of £37 million within administrative expenses and acquisition-related facility fees amortisation of £4 million within net financing expense);

·           costs of £35 million relating to the integration of Foster Wheeler and AMEC (including internal staff costs associated with identifying and achieving cost synergies);

·           costs of £6 million incurred in completing the restructuring of AMEC's business onto a geographical basis;

·           a net loss of £16 million on the exit of businesses, comprising a loss of £21 million on businesses sold in the year (principally the reverse premium payable on exit from the Group's investment in the Lancashire Waste project), which was partially offset by a gain of £5 million on the release of a provision no longer required in respect of a business closed in a previous year.

Trading profit and trading margin

£m unless stated

2014

2013

Change

Underlying

change1

Revenue

3,993

3,974

0%


Flow-through procurement

(73)

(120)



Scope revenue1

3,920

3,854

+2%

+1%

Profit before net financing expense

148

243



-  Amortisation of intangibles

49

47



-  Net asbestos-related costs

8

-



-  Exceptional items

94

25



-  Share of trading profit of joint ventures

22

28



Trading profit1

321

343

-6%


Trading margin1

8.2%

8.9%

-70 bps


 

Order book 

£6.3bn

£4.1bn

+55%


1 Non-IFRS measure (see 'Performance measures')

 

Trading profit decreased by 6% to £321 million (2013: £343 million). Trading margin decreased by 70 basis points to 8.2% (2013: 8.9%).

 

In Americas, trading profit fell due to the impact of currency translation and lower levels of activity in Oil & Gas and Mining, being partially offset by increased work in Clean Energy. Trading margin declined partially due to this change in market mix towards lower margin Clean Energy and because of the timing of large contract close-outs, which were particularly favourable in 2013. In Europe, trading profit and trading margin both increased compared with last year, largely as a result of the non-recurrence of the losses from the Teesside Gas Processing Plant contract. In the Growth Regions, trading profit fell due to the impact of currency translation and a lower contribution from Clean Energy and E&I. Compared to last year, Growth Regions trading margin fell due to pricing pressure from customers and investment for growth.

 

Currency exchange rate movements reduced trading profit by £22 million in 2014 compared with 2013.

 

Net financing expense

Net financing expense was £5 million (2013: £2 million), including bank interest payable of £7 million (2013: £2 million), net foreign exchange losses of £nil (2013: £1 million), and net interest income on pension assets and liabilities of £2 million (2013: £1 million). In 2014, net financing expense also included a net expense of £1 million (2013: £nil) due to the unwinding of the discount on asbestos-related liabilities (net of insurance recoveries).

 

A net currency exchange loss of £4 million (2013: loss of £1 million) was recognised in the translation reserve in respect of foreign currency borrowings and derivatives held in designated net investment hedging relationships.

 

Share of results of joint ventures

The Group's share of joint ventures' profit for the year was £12 million (2013: £14 million).

 

Profit before tax

Profit before tax was £155 million (2013: £255 million) after intangibles amortisation of £49 million (2013: £47 million), net asbestos-related costs and interest expense of £9 million (2013: £nil million), exceptional items of £98 million
(2013: £25 million) and the Group's share of joint ventures' tax expense of £6 million (2013: £5 million). 

 

Adjusted profit before tax was 5% lower at £317 million (2013: £332 million).

 

Taxation

Our tax policy is to manage our obligations in compliance with all relevant tax laws, disclosure requirements and regulations.  We seek to ensure that our approach to tax and the tax payments that we make in all territories in which we have operations are fully consistent with local requirements, taking into account available tax incentives and allowances and are aligned with the Group's wider business strategy. We seek to develop good, open working relationships with tax authorities and to engage with them proactively, recognising that tax legislation can be complex and may be subject to differing interpretations.

 

During 2014, there was a tax credit on exceptional items of £6 million (2013: tax charge of £6 million), and a tax credit of £12 million on intangibles amortisation (2013: £20 million). In addition, there was an exceptional tax charge of £16 million in 2013.

 

The Group's share of joint ventures' income tax expense was £6 million (2013: £5 million).

 

The Group's effective tax rate on continuing operations (including its share of joint ventures' income tax expense but before exceptional items, intangibles amortisation and asbestos-related items) increased to 23.0% (2013: 21.9%). The increase principally reflected reduced prior period credits which result from agreement of historical items with various tax authorities. In addition, 2013 included a credit following a reduction in the tax rate applied to the UK pension surplus which was not repeated in 2014.

 

Profit for the year from continuing operations

Profit for the year from continuing operations was £106 million (2013: £186 million) after intangibles amortisation of
£49 million (2013: £47 million), the net asbestos-related expense of £9 million (2013: £nil), net exceptional items of
£98 million (2013: £25 million), an income tax credit on those items of £18 million (2013: charge of £2 million).

 

Adjusted profit for the year from continuing operations was 6% lower at £244 million (2013: £260 million).

 

Non-controlling interests

During 2014, there was a loss of £3 million attributable to non-controlling interests (2013: loss of £1 million). 

 

Earnings per share

Diluted EPS was 26.5p (2013: 59.8p), comprising earnings per share of 35.1p (2013: 62.5p) from continuing operations and a loss of 8.6p (2013: 2.7p) from discontinued operations.

 

Adjusted diluted EPS from continuing operations was 79.5p (2013: 87.2p), due to the decline in the profit for the year from continuing operations and the increase in the number of shares in issue as a consequence of the acquisition of Foster Wheeler.

 

Dividend

The Board recommends a final dividend of 28.5p per share, which, together with the interim dividend of 14.8p per share, results in a total dividend of 43.3p per share (2013: 42.0p), an increase of 3%. Subject to approval by shareholders at the AGM on 14 May 2015, the final dividend will be payable on 2 July 2015 to shareholders on the register at the close of business on 29 May 2015.

 

Dividend cover for 2014 is 1.8 times (2013: 2.1 times) based on adjusted diluted EPS from continuing operations. Going forward, the Board expects to maintain a progressive dividend policy whilst maintaining dividend cover at around two times adjusted diluted EPS from continuing operations.

 

 

 

 

 

Results by operating segment

 

Americas

£m unless stated

2014

2013

Change

Underlying

change1

Revenue

2,072

2,247

-8%


Flow-through procurement

(73)

(120)



Scope revenue1

1,999

2,127

-6%

+4%

Profit before net financing expense

195

211



Intangibles amortisation

17

18



Exceptional items

(6)

10



Share of trading profit of joint ventures

1

2



Trading profit1

207

241

-14%


Trading margin1

10.2%

11.3%

-110bps


Order book 

£1.2bn

£1.4bn

-14%


1 Non-IFRS measure (see 'Performance measures')

 

Revenue in Americas was £2,072 million (2013: £2,247 million), a decline of 8%. Excluding flow-through procurement, the effect of acquisitions and currency movements, underlying revenue was up 4%. Growth in underlying revenue in Clean Energy and E&I was partially offset by declines in the Oil & Gas and Mining.

 

Trading profit fell by 14% to £207 million (2013: £241 million), largely as a result of the reduced levels of activities in
Oil & Gas and Mining. Trading margin was 10.2%, down by 110 basis points compared with 2013. Trading margin declined principally due to increased weighting of lower-margin Clean Energy in the product mix and due to the timing of large contract close-outs, which were particularly favourable in 2013. 

 

Europe

£m unless stated

2014

2013

Change

Underlying

change1

Revenue

1,119

1,227

-9%

-8%

Profit before net financing expense

70

63



Intangibles amortisation

17

17



Exceptional items

3

1



Share of trading profit of joint ventures

11

12



Trading profit1

101

93

+9%


Trading margin1

9.1%

7.6%

+150bps







Order book

£1.8bn

£1.7bn

+3%


1 Non-IFRS measure (see 'Performance measures')

 

Revenue in Europe fell by 9% to £1,119 million (2013: £1,227 million), primarily due to the reduced level of Oil & Gas activity in the North Sea.  Underlying revenue declined by 8%.

 

Trading profit increased by 9% to £101 million (2013: £93 million). Trading margin was 9.1%, up 150 basis points compared with 2013, largely as a result of the non-recurrence of losses from the Teesside Gas Processing Plant.

 

Growth Regions

£m unless stated

2014

2013

Change

Underlying

change1

Revenue

590

536

+10%

+18%

Profit before net financing expense

20

10



- Intangibles amortisation

4

12



- Exceptional items

2

7



- Share of trading profit of joint ventures

4

4



Trading profit1

30

33

-9%


Trading margin1

5.1%

6.2%

-110ps







Order book

£0.9bn

£0.9bn



1 Non-IFRS measure (see 'Performance measures') 

 

Revenue in Growth Regions improved by 10% to £590 million (2013: £536 million), primarily driven by increased revenue from Oil & Gas activities in the Middle East and a partial recovery in Mining revenue in Australia. Underlying revenue increased by 18%, principally due to the exclusion of adverse currency exchange rate movements.

 

Trading profit fell by 9% to £30 million (2013: £33 million), reflecting lower contributions from Clean Energy and E&I. Trading margin was 5.1%, down 110 basis points compared with 2013, due to pricing pressure from customers and investment for growth.

 

E&C Services and Global Power Group

 

E&C Services and Global Power Group are Foster Wheeler business units and therefore contributed to the Group's performance only for the final seven weeks of the year following the acquisition of Foster Wheeler in November 2014.

 

E&C Services contributed revenue of £221 million and a trading profit of £4 million (before intangibles amortisation of £7 million). As at 31 December 2014, the value of E&C Services' order book was £2.0 billion.

 

Global Power Group contributed revenue of £53 million and a trading profit of £2 million (before intangibles amortisation of £4 million). As at 31 December 2014, the value of Global Power Group's order book was £0.4 billion.

 

Investment Services

During the periods under review, Investment Services principally comprised the Incheon Bridge PPP project in Korea and the Lancashire Waste project (which the Group exited in 2014), the Group's insurance captive, the Group's wind development activities and a range of other non-core activities. 

 

Revenue in Investment Services was £6 million (2013: £6 million). Investment Services incurred a loss before net financing expense of £16 million (2013: £3 million), after deducting an exceptional loss on disposals of businesses of £21 million (2013: £nil). Trading profit was £8 million (2012: £11 million), of which £3 million (2013: £7 million) was derived from joint ventures.

 

Discontinued operations

 

Discontinued operations represent the residual assets and retained obligations of businesses sold in prior years, together
with the UK conventional power business that was classified as a discontinued operation during 2013.

 

Discontinued operations generated a trading loss before tax of £10 million (2013: loss of £10 million) and after a tax credit of £2 million (2013: £2 million) generated a loss for the year of £8 million (2013: loss of £8 million). During 2014, negative revenue of £13 million was recognised due to the settlement of final accounts and additional provisions on certain contracts within the UK conventional power business.

 

Discontinued operations included a loss on disposals of £23 million (2013: loss £6 million) arising from additional indemnity provisions and costs associated with businesses sold in prior years. In 2014, the loss on disposals included a provision of £11 million in respect of a new claim received in the year related to a contract completed by the Built Environment business which was sold in 2007.

 

Discontinued operations generated an overall loss for the year of £27 million (2012: £8 million).  

 



 

 

Acquisitions

 

Acquisition of Foster Wheeler

On 13 November 2014, the Group acquired a 95.3% interest in Foster Wheeler AG by way of a public tender offer. Consideration payable for the interest acquired totalled £1,915 million, of which £979 million was settled in cash,
£919 million was settled by the issue of approximately 85 million of the Company's ordinary shares and £17 million was settled by the grant of replacement share options and awards.

 

Management's preliminary assessment shows that the net identifiable assets of Foster Wheeler amounted to
£362 million at the acquisition date. As at 31 December 2014, provisional goodwill of £1,583 million was recognised on the acquisition of Foster Wheeler. Acquisition costs relating to Foster Wheeler totalling £37 million were recognised within administrative expenses during 2014.

 

In January 2015, the Group acquired the remaining 4.7% interest in Foster Wheeler AG by way of a 'squeeze-out merger' under Swiss law for consideration of £85 million, of which £51 million was paid in cash and £34 million was settled by the issue of 4.3 million of the Company's ordinary shares and ADSs.

 

Further details of the acquisition of Foster Wheeler are set out in note 13 to the accompanying financial information.

 

Acquisition of Scopus

On 15 December 2014, the Group acquired the entire issued share capital of Scopus Group (Holdings) Limited for
£68 million in cash (of which payment of £1 million is deferred until the first anniversary of the acquisition).

 

Management's preliminary assessment shows that the net identifiable assets of Scopus amounted to £34 million at the acquisition date. As at 31 December 2014, provisional goodwill of £34 million was recognised on the acquisition of Scopus.

 

Cash flow

 

Trading cash flow

Trading cash flow was lower at £283 million (2013: £ 341 million), principally due to the reduction in trading profit and an increase in working capital of £31 million.

 

Cash conversion fell back to 88% (2013: 99%).

 

Cash generated from operations

Cash generated from operations was £200 million (2013: £292 million), a decrease of £92 million which was largely due to the £58 million decline in trading cash flow and the increase of £37 million in the cash outflow on exceptional items (principally acquisition-related costs).

 

Capital expenditure

Capital expenditure was £31 million (2013: £23 million).  Additionally, in 2014, purchases of computer software amounting to £33 million were financed using deferred payment arrangements.

 

Acquisitions and disposals

Cash consideration paid on the acquisition of business was £1,049 million, which comprised £982 million for Foster Wheeler (including a currency hedging loss of £3 million) and £67 million for Scopus.

 

During 2014, the net cash outflow on acquisitions was £781 million (2013: £21 million), after deducting cash and cash equivalents of £268 million (2013: £nil) held by the acquired businesses. After taking into account debt owed by the acquired businesses, the effect of acquisitions was to increase the Group's net debt by £876 million (2013: £31 million).

 

During 2014, there was a cash outflow of £23 million (2013: outflow of £4 million) in relation to businesses sold, which principally related to the reverse premium paid to exit Lancashire Waste.

 

Movement in net (debt)/cash

The movement in net (debt)/cash may be analysed as follows: 

 


2014

2013

Year ended 31 December

£ million

£ million

Trading cash flow

283

341

Net asbestos-related payments

(5)

-

Excess of retirement benefit contributions over current service cost

(2)

-

Cash outflow on exceptional items

(58)

(21)

Legacy settlements and discontinued operations

(9)

(14)

Dividends received from joint ventures

(14)

(8)

Exchange rate movements

5

(6)

Cash generated from operations

200

292

Income taxes paid (net)

(54)

(52)

Interest paid (net)

(3)

(2)

Capital expenditure (net of disposals)

(31)

(22)

Acquisitions and disposals (net)

(876)

(31)

Ordinary dividends

(124)

(108)

Net share movements

6

(40)

Exchange and other movements

7

5

Cash movement in net (debt)/cash

(875)

42

Non-cash movements

(49)

(20)

Movement in net (debt)/cash

(924)

22

Opening net (debt)/cash

121

99

Closing net (debt)/cash

(803)

121

 

Net (debt)/ cash comprised:

 


2014

2013

As at 31 December

£ million

£ million

Cash and cash equivalents

377

153

Cash deposits

139

97

Bank overdrafts

-

(9)

Bank loans (net of facility fees)

(1,258)

(120)

Finance lease obligations

(61)

-

Net (debt)/cash

(803)

121

 

 

Balance sheet

 

Goodwill and other intangibles

As at 31 December 2014, the carrying amount of goodwill was £2,390 million (2013: £757 million), with the increase during the year principally due to the addition of the goodwill recognised on the acquisition of Foster Wheeler (£1,583 million) and Scopus (£34 million).

 

As at 31 December 2014, the carrying amount of other intangibles was £929 million (2013: £150 million), which comprised acquired identifiable intangible assets of £851 million (2013: £113 million) and computer software of £78 million
(2013: £37 million). We recognised identifiable intangible assets amounting to £738 million on the acquisition of Foster Wheeler and £31 million on the acquisition of Scopus, which principally comprised customer relationships, brands and trademarks and their respective order backlogs. Whilst additions to other intangible assets were significant, the amortisation expense increased only slightly to £49 million (2013: £47 million) because both Foster Wheeler and Scopus were acquired late in 2014.

 

Property, plant and equipment

As at 31 December 2014, property, plant and equipment amounted to £157 million (2013: £39 million), with the increase during the year largely due to property amounting to £84 million and plant and equipment amounting to £34 million acquired with Foster Wheeler and Scopus. 

 

We hold the majority of the properties through which the Group operates under operating leases which are for varying periods and on differing terms. The Group has a network of over 350 offices worldwide, which range from regional hubs, with a headcount of between 1,000 and 2,500 employees, to smaller offices with more local focus.  It is expected that the number of properties that are occupied by the Group will be reduced following the integration of Foster Wheeler's businesses.

 

Due to the geographical spread of the Group's operations, there is no individual facility the loss of which would have a material adverse impact on the Group's operations. Equally, there are no plans to construct, expand or improve facilities that would, on completion or cancellation, significantly affect the Group's operations.

 

Post-retirement benefits

The Group has a number of defined benefit pension plans in a number of countries.  Following the acquisition of Foster Wheeler, there are three principal plans: two in the UK and one in the US. Each of these plans is closed to new entrants and the two Foster Wheeler plans are also closed to future service accruals.  As at 31 December 2014, the net deficit on the Group's defined benefit pension plans amounted to £86 million (2013: net surplus of £40 million). During 2014, the Group contributed £32 million (2013: £29 million) to defined benefit pension plans and expects to contribute £33 million in 2015, including special contributions of £6 million.

 

 

Further information on the Group's retirement benefit plans is provided in note 11 to the accompanying financial information.

 

 

 

Asbestos-related obligations

Both AMEC and Foster Wheeler are subject to claims by individuals who allege that they have suffered personal injury from exposure to asbestos primarily in connection with equipment allegedly manufactured by certain of their subsidiaries during the 1970s or earlier. 

 

As at 31 December 2014, the Group recognised:

·      an asbestos-related provision of £407 million (after the effect of discounting of £76 million), which included estimates of indemnity amounts and defence costs for open and yet to be asserted claims expected to be incurred in each year in the period to 2050; and

·      insurance recoveries of £107 million (after discounting of £4 million).  

 

Management expects that there will be a net cash outflow of £20 million during 2015 due to the excess of forecast indemnity payments and defence costs over insurance proceeds.

                                                                           

Other provisions

Other provisions held at 31 December 2014 amounted to £696 million (2013: £163 million), with the substantial increase during the year arising principally due to the recognition of obligations assumed on the acquisition of Foster Wheeler. Otherwise, additional provisions of £20 million were recognised in relation to businesses sold in prior years and additional provisions of £5 million were recognised in relation to the Group's insurance captive. Unutilised provisions amounting to £10 million were released during 2014.

 

Other provisions may be summarised as follows:



2014

2013

As at 31 December


£ million

£ million

Asbestos-related litigation


372

12

Legal claims and actions


120

37

Obligations relating to disposed businesses


87

71

Property-related provisions


85

1

Other provisions


32

42



696

163

 

Details of the provisions held by the Group are set out in note 10 to the accompanying financial information.  

 

Non-controlling interests

As at 31 December 2014, non-controlling interests in equity amounted to £29 million (2013: £2 million), with the increase during the year being principally due to the addition of the 4.7% non-controlling interest in Foster Wheeler AG that existed when the Group took control of Foster Wheeler in November 2014 and was subsequently acquired by the Group in
January 2015.

 

Going concern

 

Based on internal forecasts and projections that take into account reasonably possible changes in the Group's trading performance, the directors consider that the Company and the Group have adequate financial resources to continue in operation for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparing the Company's and the Group's financial statements.



 

Performance measures

 

Scope revenue

Scope revenue represents reported revenue less flow-through procurement revenue. 

Flow-through procurement revenue is recognised when we purchase materials, equipment or third-party services for our customers on a reimbursable basis. We do not recognise any profit on flow-through procurement costs. Scope revenue therefore represents the revenue that we have earned from providing services to our customers.


2014

£ million

2013

£ million

2012

£ million

Continuing operations




Revenue

3,993

3,974

4,088

Flow-through procurement revenue

(73)

(120)

(320)

Scope revenue

3,920

3,854

3,768

 

Profitability measures

We use three measures of profitability that are not recognised measures under IFRS: trading profit, trading margin and adjusted profit before tax.

As appropriate, we exclude the following specific items in arriving at these measures: exceptional items; the amortisation of intangible assets; and asbestos-related costs (net of insurance recoveries).  Exceptional items are items of income and expense that are material by their size, incidence or nature and may include, but are not restricted to: acquisition-related costs; restructuring costs; gains and losses on the disposal of fixed assets; and gains and losses on the disposal or closure of businesses. Acquisition-related costs may include transaction costs (including external advisory, legal, valuation and other professional fees and attributable internal costs), the amortisation of acquisition-related facility fees, payments to selling shareholders that are accounted for as remuneration and changes in the fair value of contingent consideration.

 

Trading profit

Trading profit represents profit before net financing expense excluding exceptional items; the amortisation of intangible assets; and asbestos-related costs (net of insurance recoveries). Trading profit includes the Group's share of the trading profit of joint ventures.


2014

£ million

2013

£ million

2012

£ million

Continuing operations




Profit before net financing expense

148

243

243

Intangibles amortisation

49

47

44

Net asbestos-related costs

8

-

Exceptional items

94

25

24

Share of trading profit of joint ventures

22

28

23

Trading profit

321

343

334

 

 

Trading margin

Trading margin represents trading profit expressed as a percentage of scope revenue.

£ million unless stated

2014

2013

2012

Continuing operations




Scope revenue

3,920

3,854

3,768

Trading profit

321

343

334

Trading margin

8.2%

8.9%

8.9%

 



 

Adjusted profit before tax

Adjusted profit before tax represents profit before tax before exceptional items, the amortisation of intangible assets, asbestos-related costs and interest expense (net of insurance recoveries), and the Group's share of tax on the results of joint ventures. 


2014

£ million

2013

£ million

2012

£ million

Continuing operations




Profit before tax

155

255

254

Exceptional items

98

25

24

Intangibles amortisation

49

47

44

Net asbestos-related costs

9

-

-

Share of income tax of joint ventures

6

5

5

 Adjusted profit before tax

317

332

327

Cash flow measures

Trading cash flow

Trading cash flow represents cash generated from operations before cash flows arising from exceptional items, asbestos-related payments (net of insurance recoveries), the difference between retirement benefits contributions and the current service cost, legacy settlements and discontinued operations, and currency translation differences on working capital, but including dividends received from joint ventures.


2014

£ million

2013

£ million

2012

£ million

Cash generated from operations

200

292

271

Net asbestos-related payments

5

-

-

Excess of pension contributions over current service cost

2

-

5

Cash outflow on exceptional items

58

21

19

Legacy settlements and discontinued operations

9

14

-

Currency translation differences

(5)

6

6

Dividends received from joint ventures

14

8

11

Trading cash flow

283

341

312

 

Cash conversion

Cash conversion represents trading cash flow expressed as a percentage of trading profit. 

£ million unless stated otherwise

2014

2013

2012

Trading cash flow

283

341

312

Trading profit

321

343

334

Cash conversion

88%

99%

93%

Other measures

Underlying change in revenue

We define the underlying change as the year-on-year change excluding the effect of exchange rate fluctuations on the translation into sterling of the results of foreign operations, flow-through procurement activities and acquisitions and disposals of businesses.


2013

£ million

Currency translation

£ million

Change in

 flow-through procurement

£ million

Acquisitions

£ million

Underlying change

£million

2014

£million

Underlying change %

Continuing operations








Americas

2,247

(193)

(70)

17

71

2,072

+4%

Europe

1,227

(8)

-

1

(101)

1,119

-8%

Growth Regions

536

(37)

-

-

91

590

+18%

Investment Services

6


-

-

-

6

0%

Intercompany eliminations

(42)

-

-

-

(26)

(68)

n/a

AMEC

3,974

(238)

(70)

18

35

3,719

+1%

E&C Services






221


Global Power Group






53


 Foster Wheeler






274


Amec Foster Wheeler






3,993


 

 

Adjusted diluted EPS

Adjusted diluted earnings per share represents profit for the year from continuing operations before exceptional items, the amortisation of intangible assets, asbestos-related costs and interest expense (net of insurance recoveries), and the tax effect of those items, divided by the diluted number of ordinary shares.

Reconciliations of adjusted diluted EPS to diluted EPS from continuing operations for each period presented are included in note 7 to the consolidated financial information.

 

Dividend cover

Dividend cover represents adjusted diluted EPS from continuing operations as a multiple of the dividend per ordinary share.


2014

2013

2012

Dividend per ordinary share

43.3p1

42.0p

36.5p

Adjusted diluted EPS from continuing operations

79.5p

87.2p

78.6p

Dividend cover

1.8x

2.1x

2.2x

1Includes the proposed final dividend for 2014 of 28.5p per ordinary share.

 

Order book

Our order book represents the total remaining value of secured projects to be executed up to any break point in the relevant contracts. Contracts are included in our order book only when they are signed and we do not include contracts won by joint ventures.

 

 

 

 



 

 

CONDENSED CONSOLIDATED INCOME STATEMENT

Year ended 31 December



2014



Before


Amortisation,






amortisation,


exceptional items






exceptional items


and asbestos






and asbestos


related items






related items


(note 4)



Total



£ million


£ million



£ million

Continuing operations
















Revenue

3

3,993 




3,993 









Cost of sales


(3,475)




(3,475)









Gross profit


518 




518 









Administrative expenses


(219)


(135)



(354)









Loss on business disposals and closures



(16)



(16)









Profit/(loss) before net financing expense


299 


(151)



148 









Financial income


11 




11 

Financial expense


(11)


(5)



(16)









Net financing expense



(5)



(5)









Share of post-tax results of joint ventures


12 




12 

















Profit/(loss) before income tax

3

311 


(156)



155 









Income tax

5

(67)


18 



(49)









Profit/(loss) for the year from continuing








operations


244 


(138)



106 









Loss for the year from discontinued








operations

6

(8)


(19)



(27)









Profit/(loss) for the year


236


(157)



79 









Attributable to:








Equity holders of the parent







82 

Non-controlling interests







(3)
















79 









Basic earnings/(loss) per share:

7







Continuing operations


81.8p





36.1p

Discontinued operations


(2.6)p





(8.9)p











79.2p





27.2p









Diluted earnings/(loss) per share:

7







Continuing operations


79.5p





35.1p

Discontinued operations


(2.5)p





(8.6)p











77.0p





26.5p

















Dividend per share:

8






43.3p



 



2013








 



Before


Amortisation,



 



amortisation


and exceptional



 



and exceptional


items



 



items


(note 3)



 



£ million


£ million



 

Continuing operations







 








 

Revenue

3

3,974 




 








 

Cost of sales


(3,431)




(3,431)

 








 

Gross profit


543 




 








 

Administrative expenses


(228)


(65)



 








 

Profit on business disposals and closures



(7)



(7)

 









 

Profit/(loss) before net financing expense


315 


(72)



 









 

Financial income


12 




12 

 

Financial expense


(14)




(14)

 









 

Net financing expense


(2)




 








 

Share of post-tax results of joint ventures


14 




 









 









 

Profit/(loss) before income tax

3

327 


(72)



 








 

Income tax

5

(67)


(2)



(69)

 









 

Profit/(loss) for the year from continuing







 

operations


260 


(74)



 








 

Loss for the year from







 

discontinued operations

6

(8)




(8)

 









 

Profit/(loss) for the year


252 


(74)



178

 









 

Attributable to:







 

Equity holders of the parent







 

Non-controlling interests







(1)

 









 








178 

 









 

Basic earnings/(loss) per share:

7






 

Continuing operations


89.0p 





 

Discontinued operations


(2.7)p





(2.7)p

 









 



86.3p 





61.1 p

 









 

Diluted earnings/(loss) per share:

7






 

Continuing operations


87.2p 





 

Discontinued operations


(2.7)p





(2.7)p

 









 



84.5p 





59.8p 

 









 








 

Dividend per share:

8






42.0p 

 

 



CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Year ended 31 December

 












2014


2013





£ million


£ million








Profit for the year




79 


178 








Other comprehensive income














Items that may be reclassified to profit and loss:














   Exchange movements:







   Exchange movements on translation of foreign subsidiaries




17 


(70)

  Net (loss)/gain on hedges of net investment in foreign subsidiaries




(4)


(1)

  Tax on exchange movements












    Cash flow hedges:







    Effective portion of changes in fair value




(1)


    Tax on effective portion of changes in fair value





(1)

    Transferred to the income statement























12 


(67)








Items that will not be reclassified to profit and loss:














Actuarial (losses)/gains on defined benefit pension schemes




(58)


40 

Tax on actuarial (losses)/gains




11 


(20)












(47)


20 








Other comprehensive income




(35)


(47)








Total comprehensive income




44 


131 








Attributable to:







  Equity holders of the parent




47 


133 

  Non-controlling interests




(3)


(2)








Total comprehensive income




44 


131 

 



CONDENSED CONSOLIDATED BALANCE SHEET

As at 31 December







Note


 2014


 2013




£ million


£ million







ASSETS






Non-current assets






Property, plant and equipment



157 


39 

Intangible assets

9


3,319 


907 

Interests in joint ventures



122 


52 

Derivative financial instruments




Retirement benefit assets

11


102 


102 

Other receivables



149 


24 

Deferred tax assets



61 


35 







Total non-current assets



3,912 


1,160 







Curent assets






Inventories



14 


Trade and other receivables



1,506 


956 

Derivative financial instruments



12 


Current tax receivable



18 


10 

Bank deposits (more than three months)



21 


18 

Cash and cash equivalents (excluding bank overdrafts)



495 


232 







Total current assets



2,066 


1,224 







Total assets



5,978 


2,384 







LIABILITIES






Current liabilities






Interest bearing loans and borrowings



(710)


(129)

Trade and other payables



(1,381)


(801)

Derivative financial instruments



(14)


(1)

Current tax payable



(132)


(73)







Total current liabilities



(2,237)


(1,004)













Non-current liabilities






Interest bearing loans and borrowings



(609)


Trade and other payables



(83)


(11)

Derivative financial instruments



(5)


Retirement benefit liabilities

11


(188)


(62)

Deferred tax liabilities



(136)


(20)

Provisions

10


(696)


(163)







Total non-current liabilities



(1,717)


(256)







Total liabilities



(3,954)


(1,260)







Net assets



2,024 


1,124 







EQUITY






Share capital



194 


152 

Share premium account



978 


101 

Hedging and translation reserves



45 


33 

Capital redemption reserve



34 


34 

Retained earnings



744 


802 







Total equity attributable to equity holders of the parent



1,995 


1,122 







Non-controlling interests



29 








Total equity



2,024 


1,124



CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Year ended 31 December 2014











Capital






Non-





Share


Share


Hedging


Transl'n


redemption


Retained




controlling


Total 



capital


premium


reserve


reserve


reserve


earnings


Total


interests


equity 



£ million


£ million


£ million


£ million


£ million


£ million


£ million


£ million


£ million 







































As at 1 Jan 2014


152


101



32 


34 


802 


1,122 



1,124 




















Profit for the



















year







82 


82 


(3)


79 




















Exchange movements



















on translation of



















foreign subsidiaries





17 




17 



17 

Net loss on hedges of



















net investment in



















foreign subsidiaries





(4)




(4)



(4)

Effective portion of



















changes in fair value of



















cash flow hedges




(1)





(1)



(1)

Actuarial losses on



















defined benefit



















pension schemes







(58)


(58)



(58)

Tax on actuarial losses







11 


11 



11 




















Other comprehensive



















income for the year




(1) 


13 



(47)


(35)



(35)




















Total comprehensive



















income for the year




(1) 


13 



35 


47 


(3)


44 




















Dividends







(124)


(124)



(124)

Equity-settled



















share-based payments







25 


25 



25 

Utilisation of treasury



















Shares










Arising on business



















Combinations









30 


30 

Shares issued


42 


877 






919 



919 




















As at 31 Dec 2014


194 


978 



45 


34 


744 


1,995 


29 


2,024 







































 



CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Year ended 31 December 2013











Capital






Non-





Share


Share


Hedging


Transl'n


redemption


Retained




controlling


Total 



capital


premium


reserve


reserve


reserve


earnings


Total


interests


equity 



£ million


£ million


£ million


£ million


£ million


£ million


£ million


£ million


£ million 







































As at 1 Jan 2013


154 


101 


(2)


101 


32 


693 


1,079 



1,083 




















Profit for the



















year







179 


179 


(1)


178 




















Exchange movements



















on translation of



















foreign subsidiaries





(69)




(69)


(1)


(70)

Net loss on hedges of



















net investment in



















foreign subsidiaries





(1)




(1)



(1)

Tax on exchange



















movements










Effective portion of



















changes in fair value of



















cash flow hedges










Tax on effective portion



















of changes in fair value



















of cash flow hedges




(1)





(1)



(1)

Cash flow hedges



















transferred to the



















income statement










Actuarial gains on



















defined benefit



















pension schemes







40 


40 



40 

Tax on actuarial gains







(20)


(20)



(20)




















Other comprehensive



















income for the year





(69)



20 


(46)


(1)


(47)




















Total comprehensive



















income for the year





(69)



199 


133 


(2)


131 




















Dividend







(108)


(108)



(108)

Equity-settled



















share-based payments







14 


14 



14 

Tax on equity settled



















share-based



















payments







(1)


(1)



(1)

Acquisition of shares



















by trustees of the



















Performance Share



















Plan







(2)


(2)



(2)

Utilisation of treasury



















shares










Acquisition of shares



















under the buyback



















programme


(2)




























As at 31 Dec 2013


152 


101 



32  


34 


802 


1,122 



1,124 









































 

 

CONDENSED CONSOLIDATED CASH FLOW STATEMENT




2014


2013


Note


£ million


£ million

Cash flow from operating activities






Profit before income tax from continuing operations



155 


255 

Loss before income tax from discontinued operations

6


(33)


(16)







Profit before income tax



122 


239 

Financial income



(11)


(12)

Financial expense



16 


14 

Share of post-tax results of joint ventures



(12)


(14)

Intangible amortisation



49 


47 

Depreciation



16 


12 

Loss on disposal of businesses



44 


Difference between contributions to retirement benefit






schemes and current service cost



(2)


Profit on disposal of property, plant and equipment




(1)

Loss on disposal of intangible assets




Equity-settled share-based payments




14 










231 


305 

Decrease in inventories




Decrease in trade and other receivables



106 


66 

Decrease in trade and other payables and provisions



(137)


(80)







Cash generated from operations



200 


292 

Tax paid



(54)


(52)







Net cash flow from operating activities



146 


240 







Cash flow from investing activities






Acquisition of businesses (net of cash acquired)



(781)


(20)

Funding of joint ventures



(1)


(7)

Purchase of property, plant and equipment



(14)


(10)

Purchase of intangible assets



(17)


(13)

Movements in bank deposits (more than three months)



(3)


(1)

Disposal of businesses (net of cash disposed of)



(2)


(4)

Disposal of joint venture



(21)


Disposal of property, plant and equipment




Interest received




Dividends received from joint ventures



14 


Amounts paid on maturity of net investment hedges



(7)


(3)







Net cash flow from investing activities



(828)


(40)







Net cash flow before financing activities


(682)


200 







Cash flow from financing activities






Proceeds from other borrowings



1,198 


100

Repayments of other borrowings



(100)


(130)

Cash flows in respect of facility arrangement fees



(13)


Interest paid



(7)


(11)

Dividend paid



(124)


(108)

Acquisition of shares for cancellation




(45)

Cash flows in respect of treasury shares (net)*




Acquisition of shares by trustees of the Performance Share Plan




(2)







Net cash flow from financing activities



960 


(189)







Increase in cash and cash equivalents



278 


11 

Cash and cash equivalents as at the beginning of the year



223 


232 

Exchange losses on cash and cash equivalents



(6)


(20)







Cash and cash equivalents as at the end of the year



495 


223 



CONDENSED CONSOLIDATED CASH FLOW STATEMENT (continued)




2014


2013




£ million


£ million

Cash and cash equivalents consist of:






Cash at bank and in hand



377 


153 

Bank deposits (less than three months)



118 


79 

Bank overdrafts




(9)







Cash and cash equivalents as at the end of the year



495 


223 

Bank deposits (more than three months)



21 


18 

Bank loans



(1,267)


(120)

Fees capitalised against bank facilities




Finance leases



(61)








Net (debt)/cash as at the end of the year



(803)


121 

 

*Net of £6 million (2013: £7 million) received from SAYE option holders on exercise of options.



 

 

 

 

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION

 

1. BACKGROUND

 

The financial information is derived from the Group's consolidated financial statements for the year ended 31 December 2014, which were approved by the Board of Directors on 26 March 2015.

 

The financial information does not constitute statutory accounts within the meaning of sections 434(3) and 435(3) of the Companies Act 2006 or contain sufficient information to comply with the disclosure requirements of International Financial Reporting Standards (IFRS).

 

The Company's auditors, Ernst & Young LLP, have given an unqualified report on the consolidated financial statements for the year ended 31 December 2014, which did not include reference to any matters to which the auditors drew attention without qualifying their report and did not contain any statement under section 498 of the Companies Act 2006.

 

The consolidated financial statements will be filed with the Registrar of Companies, subject to their approval by the Company's shareholders at the Company's Annual General Meeting on 14 May 2015.

 

2. BASIS OF PREPARATION

 

Basis of accounting

 

The Group's consolidated financial statements for the year ended 31 December 2014 have been prepared on the going concern basis in accordance with IFRS adopted for use in the European Union and those parts of the Companies Act 2006 that are applicable to companies reporting under IFRS. From the Group's perspective, there are no differences between IFRS as adopted for use in the EU and IFRS as issued by the IASB.  

 

The consolidated financial statements have been prepared under the historical cost convention, modified in respect of the revaluation to fair value of derivative financial instruments and assets held by defined benefit pension plans.

 

The Group's principal accounting policies are unchanged compared with the year ended 31 December 2013.

 

Use of estimates

 

The preparation of financial statements in accordance with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.  The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

 

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

 

Management considers that the most significant areas of judgement and estimation made in preparing the consolidated financial statements arise in relation to the accounting for long-term contracts, business combinations, defined benefit pensions and other retirement benefits and provisions (including asbestos-related liabilities), and in assessing the recoverability of goodwill and other intangible assets.

 

Use of adjusted measures

 

Management uses adjusted performance measures including trading profit, adjusted profit before tax and adjusted diluted earnings per share. Each of these measures is based on an IFRS measure of profit but excludes specific items whose inclusion in the IFRS measure hinders the comparison of the trading performance of our businesses from one period to another, with each other or with those of our competitors.

Management has identified the following specific items that are excluded in arriving at these non-IFRS measures: exceptional items; the amortisation of intangible assets; and asbestos-related costs (net of insurance recoveries). 

We do not regard these non-IFRS measures as a substitute for, or superior to, the equivalent measures calculated and presented in accordance with IFRS and it should be noted that they may not be comparable with similarly-titled measures used by other companies.

 



 

Exceptional items

Exceptional items may include, but are not restricted to: acquisition-related costs, restructuring costs, gains and losses on the disposal of fixed assets and gains and losses on the disposal and closure of businesses.  Acquisition-related costs may include transaction costs (including external advisory, legal, valuation, and other professional fees and attributable internal costs), the amortisation of acquisition-related facilities fees, payments to selling shareholders that are accounted for as remuneration and changes in the fair value of contingent consideration.

 

Discontinued operations

In the consolidated financial statements, the results, assets and liabilities and cash flows of discontinued operations are presented separately from those of continuing operations. An operation is classified as discontinued if it is a component of the Group that: has been disposed of, or meets the criteria to be classified as held for sale; and represents a separate major line of business or geographic area of operations or will be disposed of as part of a single co-ordinated plan to dispose of a separate major line of business or geographic area of operations.

 

 



 

3.  SEGMENT INFORMATION

 

Amec Foster Wheeler designs, delivers and maintains strategic and complex assets for its customers across the global energy and related sectors.

 

Segment information is presented on a consistent basis with the information presented to the Group Leadership Team for the purposes of allocating resources within the Group and assessing the performance of the Group's businesses.

 

Prior to the acquisition of Foster Wheeler in November 2014, the Group's continuing operations comprised of four operating segments: Americas, Europe, Growth Regions and Investment Services. For the short period between its acquisition and the end of 2014, Foster Wheeler's results were presented to the Group Leadership Team analysed by its existing operating segments: E&C Services and Global Power Group.

 

With effect from 1 January 2015, the Group adopted three new geographical operating segments: Americas; Northern Europe & CIS; and Asia, Middle East, Africa & Southern Europe; with Foster Wheeler's E&C Services segment being merged into these segments. Foster Wheeler's Global Power Group continues to be reported as a separate operating segment. Investment Services also continues to be reported separately.  Details of the services offered by each segment and the end markets in which they operate are given in the segmental review. 

 

The Group Leadership Team uses trading profit as the measure of the profitability of the Group's businesses. Trading profit is, therefore, the measure of segment profit presented in the Group's segment disclosures. Trading profit represents profit before net financing expense excluding exceptional items; the amortisation of intangible assets; and asbestos-related costs (net of insurance recoveries). Trading profit includes the Group's share of the trading profit of joint ventures.

 


Revenue


Profit/(loss)

Continuing operations


2014


2013


2014


2013



£ million


£ million


£ million


£ million










Americas


2,072 


2,247 


207 


241 

Europe


1,119 


1,227 


101 


93 

Growth Regions


590 


536 


30 


33 

E&C Services


221 




Global Power Group


53 




Investment Services





11 












4,061 


4,016 


352 


378 

Internal revenue


(68)


(42)












External revenue


3,993 


3,974 












Corporate costs1






(31)


(35)

Trading profit2






321 


343 

Net financing expense3






(4)


(11)

Adjusted profit before tax






317 


332 

Exceptional items






(94)


(25)

Intangibles amortisation






(49)


(47)

Net asbestos-related costs






(8)


Unwinding of discount on net asbestos-related provision




(1)


Amortisation of facility fees




(4)


Share of tax expense of joint ventures4






(6)


(5)










Profit before income tax






155 


255 










 

1   Corporate costs comprise the costs of operating central corporate functions and certain regional overheads.

2   Trading profit includes the Group's share of the trading profit of joint ventures of £22 million (2013: £28 million).

3   Net financing expense includes the Group's share of net interest payable of joint ventures of £4 million (2013: £9 million).

4   The Group's share of post-tax results of joint ventures may be analysed as follows:

 







2014


2013







£ million


£ million










      Trading profit






22 


28 

      Net financing expense






(4)


(9)

      Tax






(6)


(5)
















12 


14 

 

4.  AMORTISATION, EXCEPTIONAL ITEMS AND ASBESTOS RELATED ITEMS

 



2014


2013 



£ million


£ million 






Continuing operations:





      Administrative expenses - exceptional items


(86)


(18)

      Administrative expenses - intangible amortisation


(49)


(47)



(135)


(65)

Loss on business disposals and closures


(16)


(7)

Net financing expense


(5)




(156)


(72)

Taxation charge on restructuring



(16)

Taxation (charge)/credit on exceptional items of continuing operations



(6)

Taxation credit on intangible amortisation


12 


20 



18 


(2)

Post-tax amortisation and exceptional items





of continuing operations


(138)


(74)

Exceptional items of discontinued operations (post-tax)


(19)


Post-tax amortisation and exceptional items


(157)


(74)

 

 

Post-tax exceptional items are further analysed as follows:

 

Year ended 31 December 2014













 

 

 

Profit in

 

Loss on

 

 

 

 

 

 

 

 

 

respect of

 

business

 

Asbestos

 

Other

 

 

 

Loss on

 

business

 

disposals

 

related

 

exceptional

 

 

 

disposals

 

closures

 

and closures

 

items

 

items

 

Total

 

£ million

 

£ million

 

£ million

 

£ million

 

 £ million

 

£ million













Continuing operations

(21)



(16)


(9)


(82)


(107)

Discontinued operations

(23)



(23)




(23)

(Loss)/profit before tax

(44)



(39)


(9)


(82)


(130)

Tax on exceptional items






10 

(Loss)/profit after tax

(39)



(34)


(9)


(77)


(120)

 

 

During the year ended 31 December 2014, the group disposed of its investment in the Lancashire Waste project at a loss of £21 million mainly arising from a reverse premium payable on exit. This combined with additional indemnity provisions and costs of £23 million associated with businesses sold in prior years (and classified as discontinued) to give a pre-tax loss on disposal of £44 million. This includes a provision of £11 million in respect of a new claim received in the year related to a contract completed by the Built Environment business which was sold in 2006.

 

There was a credit of £5 million from the release of a provision no longer required in respect of a business closed in a prior year (and classified as continuing).

 

There was a charge of £8 million relating to a change in the discount rate applied to the asbestos liability and £1 million in respect of unwinding the discount.

 

Other exceptional items of £82 million includes transaction costs of £37 million relating to the acquisition of Foster Wheeler AG, £35 million relating to the costs of integrating the two businesses and £4 million of fees associated with the borrowings taken on to fund the acquisition. Integration costs include consultancy and other costs of identifying cost synergies of £18 million which includes associated internal labour costs, plus £17 million of costs of achieving cost synergies (including £14 million redundancy costs).  In addition, £6 million was incurred in completing the previously announced restructuring into geographic business units.

 

Out of the £82 million of other exceptional items £58 million was paid in cash during the year.

 



 

4.  AMORTISATION, EXCEPTIONAL ITEMS AND ASBESTOS RELATED ITEMS (continued)

 

Year ended 31 December 2013














Loss in


Loss on








respect of


business


Other




Loss on


business


disposals


exceptional




disposals


closures


and closures


items


Total


£ million


£ million


£ million


 £ million


£ million











Continuing operations


(7)


(7)


(18)


(25)

Discontinued operations

(6)



(6)



(6)

Loss before tax

(6)


(7)


(13)


(18)


(31)

Tax charge on restructuring




(16)


(16)

Tax on exceptional items




(6)


Loss after tax


(7)


(7)


(40)


(47)

 

Additional indemnity provisions of £10 million and costs in respect of businesses sold in prior years (and classified as discontinued) were offset by the release of a £5 million litigation provision and indemnity provisions no longer required, and give a pre-tax exceptional loss on disposals of £6 million.

 

There were additional litigation provisions of £9 million offset by releases of £2 million in respect of businesses closed in a prior year and classified as continuing.

 

Exceptional costs of £18 million in continuing operations includes £14 million restructuring costs associated with the management reorganisation into geographic business units and transaction costs of £4 million which, in line with IFRS 3 are charged to the income statement.

 

A tax provision of £16 million has been established for potential withholding tax following a group restructuring that resulted in a significant amount of cash being repatriated from foreign subsidiaries.

 

5.  INCOME TAX

 

The group's effective tax rate in 2014 for the continuing businesses (including tax attributable to joint venture interests) but before exceptional items and intangible amortisation was 23.0 per cent (2013: 21.9 per cent).  The forthcoming reductions in the rate of UK corporation tax have all been substantively enacted.

 

6.  LOSS FOR THE YEAR FROM DISCONTINUED OPERATIONS

 

Discontinued operations represent the residual assets and retained obligations in respect of businesses sold in prior years, as well as the UK conventional power business which was discontinued in 2013 (see note 2 for further details).

 

In accordance with IFRS 5, the post-tax results of discontinued operations are disclosed separately in the consolidated income statement. The results of the discontinued operations are as follows:

 



2014


2013



£ million


£ million

Revenue


(13)


15 

Cost of sales and net operating expenses



(25)

Loss before exceptional items and attributable tax


(10)


(10)

Attributable tax





(8)


(8)

Loss on disposal


(23)


(6)

Tax on disposals








(Loss)/profit for the year from discontinued operations


(27)


(8)






The negative revenue of £13 million and loss of £10 million before exceptional items and income tax in 2014 relates to the settlement of final accounts and additional provisions on certain contracts within the UK conventional power business.

 

The loss on disposals of £23 million (2013: £6 million) relates to additional indemnity provisions and costs associated with businesses sold in prior years.

 

7.  EARNINGS PER SHARE

 

Basic and diluted earnings per share are shown on the face of the income statement. The calculation of the average number of shares in issue has been made having deducted the shares held by the trustees of the Performance Share Plan and those held in treasury by the Company.

 







2014






2013






Weighted







Weighted







average

shares


Earnings

per





average shares


Earnings per



Earnings


number


share


Earnings


number


share



£ million


 million


pence


£ million


million


pence














Basic earnings from













continuing operations


109 


302 


36.1 


187 


293


63.8 

Share options




(0.2)



2


(0.4)

Employee share and incentive schemes




(0.8)



4


(0.9)














Diluted earnings from













continuing operations


109 


311 


35.1 


187 


299


62.5














 

 








2014







2013






Weighted







Weighted







average

shares


Earnings

per





average shares


Earnings per



Earnings


number


share


Earnings


number


share



£ million


 million


pence


£ million


million


pence



























Basic loss from discontinued operations


(27)


302 


(8.9)


(8)


293


(2.7)

Share options




0.1 



2


Employee share and incentive schemes




0.2 



4















Diluted loss from













discontinued operations


(27)


311 


(8.6)


(8)


299


(2.7)

 

 

Basic and diluted profit from continuing operations is calculated as set out below:

 



2014


2013



£ million


£ million






Profit for the year from continuing operations


106 


186

Loss attributable to non-controlling interests



1






Basic and diluted profit from continuing operations


109 


187

 



 

 

7.  EARNINGS PER SHARE (continued)

 

In order to appreciate the effects on the reported performance of intangible amortisation, exceptional items and asbestos related items, additional calculations of earnings per share are presented. 

 






2014






2013




Weighted






Weighted






average


Earnings




average


Earnings




shares


per




shares


per


Earnings


number


share


Earnings


number


share


£ million


 million


pence


£ million


million


pence













Basic earnings from continuing operations

109 


302 


36.1 


187


293 


63.8 













Exceptional items and asbestos related items (post-tax)

101 



33.4 


47



16.0 

Amortisation (post-tax)

37 



12.3 


27



9.2 












Basic earnings from continuing operations before












amortisation, exceptional items and asbestos












related items

247 


302 


81.8 


261


293


89.0 













Share options



(0.5)



2


(0.6)

Employee share and incentive schemes



(1.8)



4


(1.2)













Diluted earnings from continuing operations before












amortisation, exceptional items and asbestos related items

 

247


 

311


 

79.5 


 

261


 

299


 

87.2

 

 

 





2014






2013




Weighted






Weighted






average


Earnings




average


Earnings




shares


per




shares


per


Earnings


number


share


Earnings


number


share


£ million


 million


pence


£ million


million


pence













Basic loss from discontinued operations

(27)


302 


(8.9)


(8)


293


(2.7)













Exceptional items (post-tax)

19 



6.3 















Basic loss from discontinued operations before












exceptional items

(8)


302 


(2.6)


(8)


293


(2.7)













Share options





2


Employee share and incentive schemes



0.1 



4














Diluted loss from discontinued operations before












exceptional items

(8)


311 


(2.5)


(8)


299


(2.7)













 

8.  DIVIDENDS

 

The directors are proposing a final dividend in respect of the financial year ended 31 December 2014 of 28.5 pence per share, which will absorb an estimated £107 million of equity.  Subject to approval, it will be paid on 2 July 2015 to shareholders on the register of members on 29 May 2015.  This dividend has not been provided for and there are no income tax consequences for the company.  This final dividend together with the interim dividend of 14.8 pence (2013: 13.5 pence) per share results in a total dividend for the year of 43.3 pence per share (2013: 42.0 pence).

 




2014




2013


Pence




Pence



Dividends charged to reserves and paid

per share


£ million


per share


£ million

















Interim dividend in respect of 2013 (2013: interim

13.5


40


11.7


36

dividend in respect of 2012)
















Final dividend in respect of 2013 (2013: final dividend

28.5


84


24.8


72

in respect of 2012)

















42.0


124


36.5


108

 

9. INTANGIBLE ASSETS

 




Customer


Brands/


Order








Goodwill


relationships


trademarks


backlog


Patents


Software


Total


£ million


£ million


£million


£million


£ million


£ million


£ million















Cost:














As at 1 Jan 2014

792 


192 


23 


9 



66 


1,082 

Exchange and other movements

 

15 


 

8 


 

1 


 

1