Prior year interim results to 28 September 2014
Auto Trader Group plc ("Auto Trader", "the Company")
Prior year interim results to 28 September 2014
Auto Trader Group undertook an Initial Public Offering in March 2015, close to its year end date. Accordingly the FY15 interim results were not in the public domain when the audited 12 month results for the year ended 29 March 2015 were first published on 19 June 2015.
Ahead of publication on 13 November 2015 of its FY16 interim results for the six months ended 27 September 2015, Auto Trader Group plc today issues unaudited financial statements for the comparative six month period ended 28 September 2014.
This release today does not constitute new information about recent or current trading of the business, and is provided solely for the purposes of background information.
Enquiries
Auto Trader Group plc:
Sean Glithero
Finance Director and Company Secretary
0161 669 9888
About Auto Trader Group plc
Auto Trader Group plc is the operator of www.autotrader.co.uk the UK's largest digital automotive marketplace. The Group's primary activity is helping vehicle retailers to compete effectively on the Marketplace in order to sell vehicles. The Marketplace brings together the largest and most engaged consumer audience with the largest pool of vehicle sellers, which means the Group is able to offer the largest stock choice in the UK market.
Consolidated income statement
|
Continuing operations |
Note |
6 months to September 2014 (unaudited) £m |
Year to March 2015 £m |
|
Revenue |
2 |
127.5 |
255.9 |
|
Administrative expenses |
|
(60.0) |
(122.8) |
|
Operating profit before share-based payments, management incentive plans and exceptional items |
|
70.8 |
144.1 |
|
Share-based payments |
|
(0.6) |
(3.7) |
|
Management incentive plans |
|
(0.1) |
(1.9) |
|
Exceptional items |
3 |
(2.6) |
(5.4) |
|
Operating profit |
|
67.5 |
133.1 |
|
Finance income |
4 |
- |
0.1 |
|
Finance costs |
4 |
(54.4) |
(122.3) |
|
Finance costs - net |
|
(54.4) |
(122.2) |
|
Profit before taxation |
|
13.1 |
10.9 |
|
Taxation |
5 |
(3.6) |
(2.4) |
|
Profit for the period from continuing operations |
|
9.5 |
8.5 |
|
Discontinued operations: |
|
|
|
|
Profit for the period from discontinued operations attributable to equity holders of the parent |
|
0.4 |
1.9 |
|
Profit for the period attributable to equity holders of the parent |
|
9.9 |
10.4 |
|
Adjusted Profit Measure: |
|
|
|
|
Adjusted underlying EBITDA |
2 |
77.2 |
156.6 |
|
|
|
|
|
|
Basic earnings per share from continuing and discontinued operations |
6 |
|
|
|
From continuing operations (pence per share) |
|
0.95 |
0.85 |
|
From discontinued operations (pence per share) |
|
0.04 |
0.19 |
|
From profit for the year (pence per share) |
|
0.99 |
1.04 |
Consolidated statement of comprehensive income
|
|
6 months to September 2014 (unaudited) £m |
Year to March 2015 £m |
|
Profit for the period |
9.9 |
10.4 |
|
|
|
|
|
Other comprehensive income: |
|
|
|
Items that will not be reclassified to profit or loss |
|
|
|
IFRS 2 - share-based payments credit |
0.1 |
0.5 |
|
|
0.1 |
0.5 |
|
Items that may be subsequently reclassified to profit or loss |
|
|
|
Cash flow hedges, net of tax |
(0.1) |
0.5 |
|
Currency translation differences |
(0.4) |
(0.7) |
|
|
(0.5) |
(0.2) |
|
|
|
|
|
Other comprehensive income for the year, net of tax |
(0.4) |
0.3 |
|
|
|
|
|
Total comprehensive income for the period attributable to the equity holders of the parent |
9.5 |
10.7 |
|
Consolidated balance sheet |
|
September 2014 (unaudited) |
March 2015 |
|
|
Notes |
£m |
£m |
|
Assets |
|
|
|
|
Non-current assets |
|
|
|
|
Intangible assets |
7 |
334.4 |
330.0 |
|
Property, plant and equipment |
|
7.5 |
8.5 |
|
Deferred taxation assets |
|
4.7 |
4.6 |
|
|
|
346.6 |
343.1 |
|
Current assets |
|
|
|
|
Trade and other receivables |
8 |
55.5 |
49.0 |
|
Cash and cash equivalents |
|
20.7 |
22.1 |
|
|
|
76.2 |
71.1 |
|
Assets of disposal group classified as held for sale |
|
2.5 |
0.3 |
|
|
|
78.7 |
71.4 |
|
Total assets |
|
425.3 |
414.5 |
|
|
|
|
|
|
Equity and liabilities |
|
|
|
|
Equity attributable to equity holders of the parent |
|
|
|
|
Ordinary shares |
|
- |
1,500.0 |
|
Preference shares |
|
177.6 |
- |
|
Share premium account |
|
2.6 |
144.4 |
|
Accumulated loss |
|
(1,033.7) |
(789.1) |
|
Capital reorganisation reserve |
|
- |
(1,060.8) |
|
Other reserves |
|
95.7 |
29.4 |
|
Total equity |
|
(757.8) |
(176.1) |
|
|
|
|
|
|
Liabilities |
|
|
|
|
Non-current liabilities |
|
|
|
|
Borrowings |
10 |
1,114.9 |
540.7 |
|
Deferred taxation liabilities |
|
0.7 |
0.6 |
|
Derivative financial instruments |
|
0.3 |
- |
|
Retirement benefit obligations |
|
- |
- |
|
Provisions for other liabilities and charges |
|
3.4 |
2.3 |
|
|
|
1,119.3 |
543.6 |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Trade and other payables |
9 |
49.7 |
40.4 |
|
Current income tax liabilities |
|
8.3 |
2.7 |
|
Derivative financial instruments |
|
0.3 |
- |
|
Provisions for other liabilities and charges |
|
5.5 |
3.9 |
|
|
|
63.8 |
47.0 |
|
Total liabilities |
|
1,183.1 |
590.6 |
|
|
|
|
|
|
Total equity and liabilities |
|
425.3 |
414.5 |
Consolidated statement of changes in equity
|
|
Share capital |
Share premium account |
Accumulated loss |
Capital reorg reserve |
Other reserves |
Total equity |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
|
Balance at March 2014 |
175.8 |
1.5 |
(1,023.2) |
- |
95.3 |
(750.6) |
|
|
|
|
|
|
|
|
|
Total comprehensive income/(loss), net of tax |
- |
- |
9.9 |
- |
(0.4) |
9.5 |
|
|
|
|
|
|
|
|
|
Transactions with owners: |
|
|
|
|
|
|
|
IFRS 2 - share-based payments credit |
- |
- |
0.6 |
- |
- |
0.6 |
|
Roll up of preference share dividend |
0.1 |
- |
(0.1) |
- |
- |
- |
|
Repurchase and cancellation of ordinary share capital |
(0.1) |
- |
(20.9) |
- |
0.1 |
(20.9) |
|
Premium on ordinary share capital issued |
- |
1.1 |
- |
- |
- |
1.1 |
|
Preference share capital issued |
1.8 |
- |
- |
- |
0.7 |
2.5 |
|
Balance at September 2014 |
177.6 |
2.6 |
(1,033.7) |
- |
95.7 |
(757.8) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income/(loss), net of tax |
- |
- |
1.5 |
- |
(0.3) |
1.2 |
|
|
|
|
|
|
|
|
|
Transactions with owners: |
|
|
|
|
|
|
|
IFRS 2 - share-based payments credit |
- |
- |
3.1 |
- |
- |
3.1 |
|
Roll up of preference share dividend |
0.1 |
- |
(0.1) |
- |
- |
- |
|
Dividends paid prior to Group restructure |
- |
- |
(3.6) |
- |
- |
(3.6) |
|
Capital transaction - Group restructure, share for share exchange and issue of Auto Trader Group plc shares |
1,322.3 |
141.8 |
243.7 |
(1,060.8) |
(66.0) |
581.0 |
|
|
|
|
|
|
|
|
|
Balance at March 2015 |
1,500.0 |
144.4 |
(789.1) |
(1,060.8) |
29.4 |
(176.1) |
Consolidated statement of cash flows
|
|
|
6 months to September 2014 (unaudited) |
Year to March 2015 |
|
|
Note |
£m |
£m |
|
Cash flows from operating activities |
|
|
|
|
Cash generated from operations before exceptional operating items |
|
71.0 |
154.8 |
|
Cash flows from exceptional operating items (excluding IPO fees) - continuing |
|
(6.0) |
(9.8) |
|
Cash flows from exceptional operating items - discontinued |
|
(0.1) |
(0.2) |
|
Cash generated from operations |
11 |
64.9 |
144.8 |
|
Income tax paid |
|
(0.4) |
(4.7) |
|
Net cash generated from operating activities |
|
64.5 |
140.1 |
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
Purchases of intangible assets - financial systems |
|
(1.2) |
(1.9) |
|
Purchases of intangible assets - other |
|
(0.3) |
(0.4) |
|
Purchases of property, plant and equipment |
|
(4.7) |
(6.8) |
|
Proceeds from the sale of assets - discontinued |
|
- |
3.5 |
|
Interest received |
|
- |
0.1 |
|
Net cash used in investing activities |
|
(6.2) |
(5.5) |
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
Proceeds from issue of ordinary shares following the Group restructure |
|
- |
460.3 |
|
Proceeds from issue of ordinary shares prior to the Group restructure |
|
3.6 |
3.7 |
|
Loan to Company's shareholder prior to the Group restructure |
|
(19.3) |
(19.3) |
|
Repayment of former Senior and Junior Debt |
|
- |
(990.4) |
|
Drawdown of Syndicated Term Loan |
|
- |
550.0 |
|
Payment of the IPO costs |
|
- |
(15.3) |
|
Payment of Syndicated Term Loan arrangement fees |
|
- |
(9.4) |
|
Early repayment fees |
|
- |
(29.4) |
|
Payment former Senior and Junior Debt refinancing fees |
|
(2.1) |
(2.1) |
|
Payment of interest on borrowings and hedging instruments |
|
(32.4) |
(73.2) |
|
Net cash used in financing activities |
|
(50.2) |
(125.1) |
|
|
|
|
|
|
Net increase in cash and cash equivalents |
|
8.1 |
9.5 |
|
Cash and cash equivalents at beginning of year |
|
12.6 |
12.6 |
|
Cash and cash equivalents at end of period |
|
20.7 |
22.1 |
Notes to the condensed unaudited financial information
1 General information
Auto Trader Group plc (the "Company") is a company incorporated in the United Kingdom and its registered office is 4th floor, 1 Tony Wilson Place, Manchester, M15 4FN.
On 24 March 2015, the Company obtained control of the entire share capital of Auto Trader Holding Limited (formerly Auto Trader Group Limited) via a share for share exchange. There were no changes in rights or proportion of control exercised as a result of this transaction. Although the share for share exchange resulted in a change of legal ownership this was a common control transaction and therefore outside the scope of IFRS 3. In substance this condensed consolidated financial information reflects the continuation of the pre-existing Group, headed by Auto Trader Holding Limited (formerly Auto Trader Group Limited) and the condensed consolidated financial information has been prepared applying the principles of predecessor accounting ownership.
As a result, the financial information as at and for the 26 week financial period ("six months") ended 28 September 2014 presented in this condensed consolidated financial information is the consolidated result of Auto Trader Holding Limited (formerly Auto Trader Group Limited). The balance sheet as at September 2014 reflects the share capital structure of Auto Trader Holding Limited (formerly Auto Trader Group Limited). The balance sheet as at 29 March 2015 presents the legal change in ownership of the Group, including the share capital of Auto Trader Group plc and the capital reorganisation reserve arising as a result of the share for share exchange transaction.
The condensed consolidated interim financial information presented as at and for six months ended 28 September 2014 comprise the Company and its subsidiaries (together referred to as the Group). The consolidated financial statements of the Group as at and for the 52 week year ended 29 March 2015 are available on request from the Company's registered office and via the Company's website.
These condensed consolidated interim financial statements have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS34 Interim Financial Reporting as adopted by the EU. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the 52 week year ended 29 March 2015.
The financial information included in this interim statement of results does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006 (the "Act"). The statutory accounts for the 52 weeks ended 29 March 2015 have been reported on by the Company's auditors and will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The auditor's report was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
Certain financial data have been rounded. As a result of this rounding, the totals of data presented in this document may vary slightly from the actual arithmetic totals of such data.
Going concern
The Directors, after making enquiries and on the basis of current financial projections and facilities available, believe that the Group has adequate financial resources to continue in operation for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the condensed consolidated interim financial information.
Significant accounting policies
The accounting policies adopted in preparation of the condensed consolidated interim financial statements as at and for the six months to September 2014 are consistent with the policies applied by the Group in its consolidated financial statements as at and for the year to March 2015, except as described below:
- Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profit or loss.
The following standards and interpretations, issued by the International Accounting Standards Board or the International Financial Reporting Interpretations Committee, have been adopted by the Group with no significant impact on its consolidated financial statements:
- IAS 1 (amendment) Financial statement presentation
- IAS 12 (amendment) Income taxes
- IAS 19 (amendment) Employee benefits
- IAS 27 (revised) Separate financial statements
- IAS 27 (amendment) Separate financial statements
- IAS 28 (revised) Associates and joint ventures
- IAS 32 (amendment) Financial instruments: presentation
- IAS 36 (amendment) Impairment of assets
- IAS 39 (amendment) Financial instruments: Recognition and measurement
- IFRS 10 Consolidated financial statements
- IFRS 11 Joint arrangements
- IFRS 12 Disclosure of interests in other entities
- IFRS 13 Fair value measurement
- Amendments to IFRS 10, 11 and 12
- Annual improvements 2011
Critical accounting estimates and judgments
The preparation of the condensed consolidated interim financial statements in conformity with the Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS34 Interim Financial Reporting as adopted by the EU requires management to make judgments, estimates and assumptions concerning the future that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. These judgments are based on historical experience and management's best knowledge at the time and the actual results may ultimately differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis and revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
The estimates and assumptions that have significant risk of causing a material adjustment to the carrying value of assets and liabilities are discussed below.
Carrying value of assets relating to goodwill
Determining whether goodwill and other intangibles are impaired requires an estimation of the value in use of the cash-generating units to which goodwill and other intangible assets have been allocated. The value in use calculation requires estimation of future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value.
Share-based payments
Share-based payment arrangements in which the Group receives goods or services as consideration for its own equity instruments are accounted for as equity-settled share-based payment transactions. The fair value of services received in return for share options is calculated with reference to the fair value of the award on the date of grant. Black Scholes models have been used to calculate the fair value and the Directors have therefore made estimates with regards to the inputs to that model and the period over which the share award is expected to vest.
Capitalisation of software and website development costs
Costs incurred in developing new products are capitalised in accordance with the Group's accounting policy for software and website development costs. Determining the amounts to be capitalised requires management to make assumptions and estimates regarding the expected future cash generation of the software products or websites and the expected period of benefits.
2 Segmental information
IFRS 8, 'Operating Segments', requires the Group to determine its operating segments based on information which is provided internally. Based on the internal reporting information and management structures within the Group, it has been determined that there is only one operating segment, being the Group, as the information reported includes operating results at a consolidated group level only. This reflects the nature of the business whereby the major cost is to support the IT platforms upon which all of the Group's customers are serviced. These costs are borne centrally and not attributable to any specific customer type or revenue stream. There is also considered to be only one reporting segment, which is the Group, the results of which are shown in these consolidated statements of comprehensive income.
Revenue
To assist in the analysis of the Group's revenue generating trends, management reviews revenue from three customer types as detailed below:
· Trade - revenue from retailer customers and revenue from other products and services provided to retailers and home traders to support their online activities;
· Consumer services - revenue from individuals for vehicle advertisements on the Group's websites. This category also includes revenue derived from third-party services directed at consumers relating to their motoring needs, such as insurance and loan finance; and
· Display advertising - revenue from customers, advertising agencies and retailers for placing display advertising on the Group's websites.
The reporting information provided to management, which presents revenue by customer type, has been voluntarily disclosed.
|
|
Six months to September 2014 (unaudited) |
Year to March 2015 |
|
|
£m |
£m |
|
Trade |
106.1 |
214.8 |
|
Consumer services |
15.8 |
29.0 |
|
Display advertising |
5.6 |
12.1 |
|
Total revenue from continuing operations |
127.5 |
255.9 |
Adjusted underlying EBITDA
Operating costs, comprising administrative expenses, are managed on a group basis. Management measure the overall performance of the Group by reference to the following non-GAAP measure:
· Adjusted underlying EBITDA which is underlying operating profit (operating profit before impairment, exceptional items and non-trading items such as IFRS 2 charges in respect of share-based payments and the costs of management incentive plans) less capitalised development expenditure, excluding expenditure incurred on building the Group's financial systems and before depreciation and amortisation.
This adjusted profit measure is applied by management to understand the earnings trend of the Group and is considered the most meaningful measure under which to assess the true operating performance of the Group.
A reconciliation of the total segment operating profit to the profit before tax and discontinued operations is provided as follows:
|
|
Six months to September 2014 (unaudited) |
Year to March 2015 |
|
|
£m |
£m |
|
Total segment operating profit |
67.5 |
133.1 |
|
Finance costs - net |
(54.4) |
(122.2) |
|
Profit before tax and discontinued operations |
13.1 |
10.9 |
Management reviews the balance sheet information for the one operating segment. The segment's assets and liabilities are presented in a manner consistent with that of the financial statements.
3 Exceptional items
|
|
|
Six months to September 2014 (unaudited) |
Year to March 2015 |
|
|
|
|
|
£m |
£m |
|
|
|
Restructuring of Group operations |
|
2.6 |
3.9 |
||
|
IPO costs |
|
- |
1.5 |
||
|
Total exceptional items |
|
2.6 |
5.4 |
||
Restructuring of Group operations relates to redundancy, property and other costs for the relocation of offices in the UK and other reorganisation costs.
Exceptional IPO costs relate to costs associated with the Initial Public Offering (IPO) of Auto Trader Group plc shares on the London Stock Exchange on 24 March 2015.
Exceptional finance costs of £9.3 million for the six months to September 2014 (year to March 2015: £29.4 million) have been included separately within finance costs (note 4).
4 Finance income and finance cost
|
|
Six months to September 2014 (unaudited) |
Year to March 2015 |
|
|
£m |
£m |
|
Finance income |
|
|
|
On bank balances |
- |
0.1 |
|
Total |
- |
0.1 |
|
|
|
|
|
Finance costs |
|
|
|
On bank loans and overdrafts |
32.9 |
65.3 |
|
On shareholders' loans |
6.5 |
12.9 |
|
Net losses on derivative financial instruments |
1.4 |
2.7 |
|
Amortised debt issue costs |
4.3 |
12.0 |
|
Exceptional: early repayment premium |
9.3 |
26.2 |
|
Exceptional: settlement of derivatives |
- |
3.2 |
|
Total |
54.4 |
122.3 |
The exceptional early repayment premium was incurred in relation to the settlement of the former Junior Debt. The former GSMP Junior Debt was settled in full as part of the Group restructure on 24 March 2015.
The Group opted to settle its interest rate swap agreements as part of the Group restructure. The Group incurred a charge as a result of the transaction which was expensed in full in the year ended March 2015 and classified as exceptional.
5 Taxation
|
|
Six months to September 2014 (unaudited) |
Year to March 2015 |
|
|
£m |
£m |
|
Total taxation charge |
3.6 |
2.4 |
Income tax expense is recognised based on management's best estimate of the weighted average annual tax rate expected for the full financial year. The estimated average annual tax rate used for the six months to September 2014, was 37.9% (year to March 2015: 28.2%).
6 Earnings per share
Basic and diluted earnings per share
Basic and diluted earnings per share are calculated by dividing the profit attributable to equity holders of Auto Trader Group plc by the weighted average number of ordinary shares in issue from the date of the IPO to 29 March 2015.
|
|
Six months to September 2014 (unaudited) |
Year to March 2015 |
|
|
£m |
£m |
|
Profit from continuing operations attributable to equity holders of the parent |
9.5 |
8.5 |
|
Profit from discontinued operations attributable to equity holders of the parent |
0.4 |
1.9 |
|
Total profit attributable to equity holders of the parent |
9.9 |
10.4 |
|
Weighted average number of ordinary shares in issue (millions) |
1,000 |
1,000 |
|
|
|
|
|
Basic earnings per share (in pence) - continuing operations |
0.95 |
0.85 |
|
Basic earnings per share (in pence) - discontinued operations |
0.04 |
0.19 |
|
Basic earnings per share (in pence) |
0.99 |
1.04 |
Basic and diluted earnings per share are the same as there is no difference between the basic and the diluted number of shares. The weighted average number of shares for both the six months to September 2014 and the year to March 2015 has been stated as if the Group reorganisation had occurred at the beginning of the 2015 financial year.
Adjusted earnings per share
Adjusted basic and diluted earnings per share figures are calculated by dividing adjusted profit after tax for the year by the weighted average number of shares in issue (as above). Adjusted earnings per share are presented for continuing operations.
|
|
Six months to September 2014 (unaudited) |
Year to March 2015 |
|
Continuing operations |
£m |
£m |
|
Profit from continuing operations |
9.5 |
8.5 |
|
Share-based payments |
0.6 |
3.7 |
|
Management incentive plans |
0.1 |
1.9 |
|
Exceptional items |
2.6 |
5.4 |
|
Exceptional finance cost |
9.3 |
29.4 |
|
Tax effect |
(2.5) |
(7.7) |
|
Total adjusted profit from continuing operations |
19.6 |
41.2 |
|
Weighted average number of ordinary shares in issue from the IPO to 29 March 2015 (millions) |
1,000 |
1,000 |
|
|
|
|
|
Adjusted earnings per share from continuing operations |
1.96p |
4.12p |
7 Intangible assets
|
|
Goodwill |
Software & website development costs |
Financial systems |
Other intangible assets |
Total |
|
|
£m |
£m |
£m |
£m |
£m |
|
Opening net book value at April 2014 |
313.0 |
12.0 |
9.2 |
4.2 |
338.4 |
|
Additions |
- |
0.3 |
1.2 |
- |
1.5 |
|
Amortisation |
- |
(3.5) |
(1.0) |
(0.6) |
(5.1) |
|
Exchange differences |
(0.3) |
- |
- |
(0.1) |
(0.4) |
|
Closing net book value at September 2014 |
312.7 |
8.8 |
9.4 |
3.5 |
334.4 |
|
|
|
|
|
|
|
|
Opening net book value at April 2014 |
313.0 |
12.0 |
9.2 |
4.2 |
338.4 |
|
Additions |
- |
0.4 |
1.9 |
- |
2.3 |
|
Amortisation |
- |
(6.9) |
(1.7) |
(1.4) |
(10.0) |
|
Exchange differences |
(0.6) |
(0.1) |
- |
- |
(0.7) |
|
Closing net book value at March 2015 |
312.4 |
5.4 |
9.4 |
2.8 |
330.0 |
At September 2014, £0.1 million of software and website development costs (March 2015: £0.1 million) represented assets under construction. Amortisation of these assets will commence when they are brought into use. The amortisation charge has been charged to administrative expenses in the income statement.
8 Trade and other receivables
|
|
September 2014 (unaudited) |
March 2015 |
|
|
£m |
£m |
|
Trade receivables |
46.0 |
35.7 |
|
Less: provision for impairment of trade receivables |
(2.8) |
(2.9) |
|
Trade receivables - net |
43.2 |
32.8 |
|
Amounts owed by related parties |
3.6 |
- |
|
Other receivables |
0.2 |
0.1 |
|
Prepayments and accrued income |
8.5 |
16.1 |
|
Total |
55.5 |
49.0 |
9 Trade and other payables
|
|
September 2014 (unaudited) |
March 2015 |
|
|
£m |
£m |
|
Trade payables |
5.5 |
5.3 |
|
Other taxes and social security |
9.9 |
10.1 |
|
Other payables |
1.0 |
0.6 |
|
Accruals and deferred income |
33.3 |
24.4 |
|
Total |
49.7 |
40.4 |
10 Borrowings
|
|
September 2014 (unaudited) |
March 2015 |
|
Non-current |
£m |
£m |
|
Syndicated Term Loan gross of unamortised debt issue costs |
- |
550.0 |
|
Unamortised debt issue costs |
- |
(9.3) |
|
Syndicated Term Loan net of unamortised debt issue costs |
- |
540.7 |
|
|
|
|
|
Former Junior Debt gross of unamortised debt issue costs |
358.4 |
- |
|
Unamortised debt issue costs |
(7.7) |
- |
|
Former Junior Debt net of unamortised debt issue costs |
350.7 |
- |
|
|
|
|
|
Former Senior Debt |
632.0 |
- |
|
Series A, B and C Shareholder Loan Notes |
132.2 |
- |
|
Total |
1,114.9 |
540.7 |
The Syndicated Term Loan, the Former Senior Debt, Former Junior Debt and Shareholder Loan Notes are repayable as follows:
|
|
September 2014 (unaudited) |
March 2015 |
||
|
|
£m |
£m |
||
|
Two to five years |
764.2 |
550.0 |
||
|
Over five years |
358.4 |
- |
||
|
Total |
1,122.6 |
550.0 |
||
|
|
|
|
||
The carrying amounts of borrowings approximate their fair values.
Senior Bank Debt ("former Senior Debt") (the debt under the terms of the former Senior Facilities Agreement)
Interest on the former Senior Debt was charged at LIBOR plus a margin of between 4.25% and 4.5% based on the consolidated leverage ratio of Trader Media Group Holdings Limited. This calculation encompasses the former Junior Debt of £358.4 million described below.
On 24 March 2015 the Group repaid the full £632.0 million of the former Senior Debt (together with accrued interest, break costs and other costs payable under the terms of the former Senior Facilities Agreement) as part of the overall restructuring of the Group.
GSMP Junior Debt ("former Junior Debt") (the debt under the terms of the former GSMP Junior Debt Agreement)
Interest payable on the former Junior Debt was charged at LIBOR with a floor of 1% plus a fixed margin of 8.75%. There was no requirement to settle all or part of the debt earlier than the termination date in February 2021.
On 24 March 2015 the Group repaid the full £358.4 million of the former Junior Debt (together with accrued interest, break costs and other costs payable under the terms of the former GSMP Junior Debt Agreement) as part of the overall restructuring of the Group. A premium of £9.3 million has been recognised in finance costs in the six months to September 2014 (year to March 2015: £26.2 million).
Series A, B and C Shareholder Loan Notes
Interest was charged at LIBOR plus a margin of 9% on the Series A, B and C shareholder loan notes. Interest was payable annually in arrears in June on the anniversary of the issue date, however the interest was rolled up into the principal every year since issue.
On 24 March 2015 as part of the overall Group restructure, the Group settled the full amount of the Shareholder Loan Notes in exchange for ordinary shares in Auto Trader Holding Limited (formerly Auto Trader Group Limited).
Syndicated Term Loan (the debt under the terms of the new Senior Facilities Agreement)
On 24 March 2015, the Company and a subsidiary undertaking, Auto Trader Holding Limited (formerly Auto Trader Group Limited), entered into a £550.0 million Senior Facilities Agreement as part of the Group restructure. The first utilisation was made on 24 March 2015 when £550.0 million was drawn.
Interest on the Syndicated Term Loan is charged at LIBOR plus a margin of between 1.5% and 3.25% depending on the consolidated leverage ratio of Auto Trader Group plc. There is no requirement to settle all or part of the debt earlier than the termination date in March 2020.
Under the Senior Facilities Agreement, the lenders also made available to the Company and Auto Trader Holding Limited a £30.0 million revolving credit facility (the "RCF"). Other than an ancillary facility of £0.6 million, the RCF was undrawn at March 2015. Cash drawings under the RCF would incur interest at LIBOR, or in the case of loans in Euro, EURIBOR plus a margin of between 1.25% and 3.0% depending on the consolidated leverage of Auto Trader Group plc. A commitment fee of 35% of the margin applicable to the RCF from time to time is payable quarterly in arrears on the unutilised amounts of the RCF.
11 Cash generated from operating activities
|
|
Six months to September 2014 (unaudited) |
Year to March 2015 |
|
|
£m |
£m |
|
Profit before taxation including discontinued operations |
13.5 |
12.8 |
|
Adjustments for: |
|
|
|
Depreciation |
1.3 |
2.5 |
|
Amortisation |
5.1 |
10.0 |
|
Profit on disposal of property, plant and equipment |
- |
(1.2) |
|
Share-based payments charge |
0.6 |
3.7 |
|
Finance costs |
54.4 |
122.3 |
|
Finance income |
- |
(0.1) |
|
IPO costs |
- |
1.5 |
|
|
|
|
|
Changes in working capital (excluding the effects of disposals and exchange differences on consolidation): |
|
|
|
Trade and other receivables |
(4.1) |
(1.5) |
|
Trade and other payables |
(1.0) |
2.3 |
|
Provisions |
(4.9) |
(7.5) |
|
Cash generated from operations |
64.9 |
144.8 |
The cash flows of discontinued operations are as follows:
|
|
|
Six months to September 2014 (unaudited) |
Year to March 2015 |
|
|
|
£m |
£m |
|
Cash generated from operations |
|
- |
(0.1) |
|
Taxation |
|
- |
(0.1) |
|
Operating cash flows |
|
- |
(0.2) |
|
Investing cash flows |
|
- |
3.4 |
|
Total cash flows |
|
- |
3.2 |
12 Financial risk management and financial instruments
In the course of its business the Group is exposed to market risk (including foreign exchange risk and interest rate risk), credit risk, liquidity risk and technology risk. The Group's overall risk management strategy is to minimise potential adverse effects on the financial performance and net assets of the Group. These policies are set and reviewed by senior finance management and all significant financing transactions are authorised by the Board of Directors.
The condensed interim financial statements do not include all the financial risk management information and disclosures required in the annual financial statements. This information and the related disclosures are presented in the Group's annual financial statements as at March 2015.
(i) Fair value estimation
The Group holds a number of financial instruments that are held at fair value within the annual report and accounts. Financial instruments have been classified as level 1, level 2 or level 3 dependant on the valuation method applied in determining their fair value.
- Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).
- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).
The financial instruments held at fair value by the Group relate to interest rate swap arrangements used as derivatives for hedging. The following table presents the Group's assets and liabilities that are measured at fair value:
|
|
|
Six months to September 2014 (unaudited) |
Year to March 2015 |
|
|
|
£m |
£m |
|
Liabilities |
|
|
|
|
Interest rate swap agreements |
|
0.6 |
- |
The fair value of the following financial assets and liabilities approximate to their carrying amount:
- Trade and other receivables
- Cash and cash equivalents
- Trade and other payables
(ii) Valuation techniques used to derive fair values
Level 2 hedging derivatives comprise of interest rate swaps. Interest rate swaps are fair valued using forward interest rates extracted from observable yield curves. The effects of discounting are generally insignificant for level 2 derivatives.
13 Related party transactions
Prior to 24 March 2015 a subsidiary company Auto Trader Holding Limited (formerly Auto Trader Group Limited) was jointly controlled by Crystal A Holdco S.à r.l. and Crystal B Holdco S.à r.l.. Prior to 1 March 2014 Auto Trader Holding Limited (formerly Auto Trader Group Limited) was jointly controlled by Crystal A Holdco S.à r.l, Crystal B Holdco S.à r.l and GMG (TMG) Limited. GMG (TMG) Limited sold its entire holding of 50.1% in Auto Trader Holding Limited (formerly Auto Trader Group Limited) to Crystal A Holdco S.à.r.l., Crystal B Holdco S.à r.l. and Ed Williams.
Prior to 24 March 2015 the shareholder companies had made loans to and held preference shares in Auto Trader Holding Limited (formerly Auto Trader Group Limited). Ed Williams and Chip Perry, Directors of Auto Trader Holding Limited (formerly Auto Trader Group Limited), had also issued Shareholder Loan Notes to and held preference shares in Auto Trader Holding Limited (formerly Auto Trader Group Limited).
On 24 March 2015, as part of the overall restructuring of the Group, the shareholder loans and related accrued interest, preference shares, preference share premium and accrued dividends were converted into share capital of Auto Trader Holding Limited (formerly Auto Trader Group Limited). On 24 March 2015 all shares in Auto Trader Holding Limited (formerly Auto Trader Group Limited) were exchanged for shares in Auto Trader Group plc via a share for share exchange.
The balances at the end of the period including accrued interest, dividends payable on these debt and equity instruments and the premium on the preference shares are disclosed below:
|
|
Six months to September 2014 (unaudited) |
Year to March 2015 |
|
|
|
£m |
£m |
|
|
Shareholder loans and accrued interest |
|
|
|
|
Crystal A Holdco S.à r.l. |
(51.6) |
- |
|
|
Crystal B Holdco S.à r.l. |
(84.2) |
- |
|
|
Ed Williams |
(0.4) |
- |
|
|
Chip Perry |
(0.1) |
- |
|
|
|
|
|
|
|
Preference shares, premium and accrued dividends |
|
|
|
|
Crystal A Holdco S.à r.l. |
(92.3) |
- |
|
|
Crystal B Holdco S.à r.l. |
(150.6) |
- |
|
|
Ed Williams |
(0.7) |
- |
|
|
Chip Perry |
(0.1) |
- |
|
|
|
|
|
|
|
Interest charged to the Income Statement |
|
|
|
|
GMG (TMG) Limited |
- |
- |
|
|
Crystal A Holdco S.à r.l. |
(2.5) |
(4.9) |
|
|
Crystal B Holdco S.à r.l. |
(4.0) |
(8.0) |
|
|
Ed Williams |
- |
- |
|
|
Chip Perry |
- |
- |
|
|
|
|
|
|
The annual interest accrued on the Shareholder Loan Notes has been rolled into the principal each year since issue. Interest accrued on Shareholder Loan Notes was rolled up into the principal on 24 March 2015 prior to the Group restructure.
During the six months to September 2014 loans of £15.7 million (March 2015: £15.7 million) were made to Crystal B Holdco S.à r.l. These loans are unsecured, non-interest bearing and repayable on demand. The total loan balance of £20.9 million was waived and released as payment for the repurchase of A ordinary shares during the six months to September 2014.
During the six months to September 2014 a subsidiary undertaking, Auto Trader Holding Limited (formerly Auto Trader Group Limited), made loans of £1.4 million and £2.2 million to Crystal A Holdco S.à r.l. and Crystal B Holdco S.à r.l. respectively. These loans are unsecured, non-interest bearing and repayable on demand. On 6 March 2015 the loans were settled through the issue of a dividend in kind.
Apax Europe VIII GP Co. Limited, a fund advised by Apax Partners LLP, received £0.1 million for the provision of Directors' services to the Group during the six months to September 2014 (year to March 2015: £0.1 million). The balance outstanding at September 2014 was £nil (March 2015: £nil).
Prior to 24 March 2015 funds advised by Apax Partners LLP held £15.0 million of the Former Junior Debt. The fund receives interest and is subject to the same terms of the existing GSMP Junior Debt Agreement as all other syndicate members (note 9).
In the six months to September 2014 certain Group companies have traded with companies in which the funds advised by Apax Partners LLP have an interest. Trading was in the normal course of operations and on an arm's length basis. Transactions during the year and balances outstanding at each year end are as follows:
|
|
Six months to September 2014 (unaudited) |
Year to March 2015 |
|
|
£m |
£m |
|
Funds advised by Apax |
|
|
|
Recharges of costs |
(0.1) |
(0.1) |
|
Net balance outstanding at the period end |
- |
- |
|
|
|
|
Transactions with Directors and key management
Loans made on an arm's length basis in a previous year to certain members of key management were fully repaid in the period. The balance outstanding at September 2014 was £nil (March 2015: £nil).
On 4 July 2014 Auto Trader Holding Limited (formerly Auto Trader Group Limited) gifted 19,838 E Ordinary shares of £0.001 each to certain Directors and members of key management. The nominal value of these shares of £19.84 was fully paid up in cash by a third party individual.
On the same day the following shares were issued to certain Directors and members of key management for aggregate cash consideration of:
|
|
Number of |
Aggregate cash |
|
E Ordinary shares of £0.001 each |
11,073 |
465,665 |
|
A2 Ordinary shares of £0.001 each |
191 |
8,032 |
|
A2 Preferred Ordinary shares of £0.001 each |
15,891 |
668,282 |
|
F Ordinary shares of £700 each |
5 |
3,500 |
On 25 February 2015 Auto Trader Holding Limited (formerly Auto Trader Group Limited) gifted 196 E Ordinary shares of £0.001 each to certain Directors and members of key management. The nominal value of these shares of £0.20 was fully paid up in cash.
On 25 February 2015 Auto Trader Holding Limited (formerly Auto Trader Group Limited) issued 398 E Ordinary shares of £0.001 each to certain Directors and members of key management for cash consideration of £16,738. The nominal value of these shares of £0.40 was fully paid up in cash.
On 24 March 2015 all Directors and key management exchanged their shareholding in Auto Trader Holding Limited (formerly Auto Trader Group Limited) for shares in Auto Trader Group plc.
14. Principal risks and uncertainties
The Group has identified certain principal risks and uncertainties which could impact on our future development, performance or position which could have an impact on the business model, and strategy. The risk factors described below are not an exhaustive list or an explanation of all risks. Additional risks and uncertainties relating to the Group, including those that are not currently known to the Group or that the Group currently deems immaterial, may individually or cumulatively also have a material adverse effect on the Group's business, results of operations and/or financial condition.
A summary of the nature of the risks currently faced by the Group is as follows:
· Macroeconomic conditions; The Group derives the majority of its revenues from the UK automotive market and is thus dependent on the market and macroeconomic conditions in the UK. If the UK economy contracts or if interest rates increase, the volume of transactions in the UK automotive market could decrease and/or there could be closure of a number of automotive retailers, both of which could reduce the Group's revenue from vehicle advertising services or other services. The Group regularly reviews market conditions and indicators to assess whether any action is required to reduce costs or vary the products and services.
· Competition; The Group's share of total advertising spend in the UK digital automotive market is under constant threat from new and incumbent competitors as barriers to entry are low. Increased competition could impact the Group's ability to grow revenue due to the potential loss of audience, trade and consumer advertisers, or demand for additional services. These risks are mitigated by continual monitoring of market conditions and investment in products and marketing to ensure the Group not only delivers the best response to advertisers, but better value for money than its competitors. This allows the Group to maximise its return and maintain a strong market share.
· Brand; The protection and enhancement of the Auto Trader brand is critical to the Group's future success. Expanding the Group's business will depend largely on the ability to maintain the trust that retailers, consumers, and display advertisers place in its services and the quality and integrity of the vehicle advertisements and other content found on the marketplace. Failure to maintain and protect the brand, or negative publicity surrounding the Group's ability to retain or expand its base of retailers, consumers and advertisers, or could diminish confidence in and the use of the Group's services. The Group seeks to maintain and enhance trust through proactively monitoring for, and removing, misleading or fraudulent adverts. Brand heritage and relevance is supported through investment in marketing spend and an open dialogue with all consumer segments is maintained regarding the quality of service provided.
· New or disruptive technologies and changing consumer behaviours; The Group is exposed to the rapid pace of change in the online market, and to major changes in the way vehicles are bought and sold or owned. Failure to innovate or adopt new technologies, or a failure to adapt to changing consumer behaviour towards car buying or ownership could lead to the Group's business being adversely impacted. To mitigate this, the Group has a policy of continuous improvement and development of online services and products and continues to monitor its own and competitor performance closely.
· IT Systems and Cyber-attack; The Group's IT systems are interdependent and a failure in one system may disrupt the availability and performance of its customer platforms, and the efficiency and functioning of the Group's operations. The Group is exposed to risks of Cyber-attack to its brand, websites and services. Failure in one system could disrupt others and could impact the availability or performance of Group platforms. Security breaches as a result of malicious cyber-attacks could lead to the unavailability of services, loss of data or confidential information. Through effective use of technology solutions and strict adherence to industry standards the Group deploys tools and processes that automatically intercept, identify and effectively mitigate the vast majority of the security threats. In addition, a team of security experts continually monitor developments outside the Group to help mitigate new known threats in anticipation of an attempt on the Group's infrastructure.
This information is provided by RNS
Latest directors dealings
- 3 hours ago Luceco
- 3 hours ago Helios Towers
- 3 hours ago Wise Class A
- 3 hours ago EDX Medical Group Plc
- 4 hours ago Naked Wines