Half-year Report
6 December 2016
NORTHGATE PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 OCTOBER 2016
Full year trading in line with expectations, increase in dividend and good momentum into the second half of the year
Northgate plc ("Northgate", the "Company" or the "Group"), the UK, Spain and Ireland's leading specialist in light commercial vehicle hire, announces its interim results for the half year ended 31 October 2016.
Financial highlights
As expected, profitability was held back in the first half of the year, largely due to the lower opening vehicles on hire in the UK.
The UK business has now stabilised and has grown closing vehicles on hire in the period. This, alongside a more settled political environment in Spain, provides momentum going into the second half of the year, meaning that full year results remain in line with expectations.
· Underlying profit before tax £40.4m (2015 - £45.9m), impacted by:
o £2.5m adverse impact from previous changes in vehicle depreciation rates;
o £2.9m positive effect of the strengthened Euro;
· Profit before tax £40.0m (2015 - £42.8m);
· Underlying basic earnings per share 25.8p (2015 - 27.1p);
· Basic earnings per share 25.5p (2015 - 25.4p);
· 12% increase in interim dividend to 5.7p per share (2015 - 5.1p);
· Net debt £355.0m (April 2016 - £309.9m), including £38.3m adverse effect of the strengthened Euro.
Strategic progress
The Group has made good progress across the renewed areas of strategic focus which were outlined in our full year results in June:
Optimise the core business
· Group closing vehicles on hire grew by 900 in the first six months of the year, compared to a decline of 900 in the same period last year.
|
Closing vehicles on hire (reduction) growth |
Q1 |
Q2 |
Total |
|
Year ending 30 April 2017 |
(100) |
1,000 |
900 |
|
Year ended 30 April 2016 |
(500) |
(400) |
(900) |
· After strengthening of the UK management team vehicles on hire have stabilised, with growth of 100 in closing vehicles on hire in the six month period compared to a 1,200 reduction in the same period last year;
· Spain closing vehicles on hire increased by 600 since April 2016, despite the planned return of 900 vehicles from expiring legacy contracts. This compared to a 100 vehicle increase in the same period last year; and
· Ireland closing vehicles on hire increased by 200 vehicles since April 2016.
Expand addressable markets
· Successful trial from June of fixed term product in Spain, expanding our business into an adjacent addressable market. Contracts for 1,500 vehicles have been signed, with 1,000 vehicles on hire as at the end of October; and
· Following the success in Spain, the trial has been extended to the UK and Ireland in November.
Maximising end of life value
· Proportion of UK vehicles sold through retail channels increased to 41% (2015 - 31%); and
· Successful pilot of vehicle sales purchased from third parties in order to extend the range of vehicles sold in Van Monster.
Bob Contreras, Chief Executive, commented:
"As indicated previously, profitability in the first half of the year has been impacted by the reduction in vehicles on hire experienced in the UK throughout the previous financial year.
We are pleased to see some early signs of progress from our renewed strategic focus which has led to a stabilisation of the UK business in the first half of the year. Spain continues to develop well and Ireland has grown steadily in the period. A more stable political environment in Spain will provide impetus for growth amongst our larger customer accounts.
Our fundamental strategy of expanding our addressable markets is progressing well. The key is using our existing strengths to provide a compelling proposition.
We move into the second half with good momentum in all countries and continue to build a solid platform which will drive the medium and long term performance of the business. We expect the full year results to be more weighted towards the second half as the changes implemented continue to gain traction and therefore we continue to expect to see full year results in line with expectations."
There will be a presentation to analysts at 10.30am today at Numis, 5th floor, London Stock Exchange building, 10 Paternoster Square, London EC4M 7LT. If you have not already registered for attendance then please contact MHP Communications on the number below. A live webcast of the presentation will be available to view via a link on the Company's website: www.northgateplc.com
For further information, please contact:
|
Northgate plc 01325 467558 |
|
Bob Contreras, Chief Executive Paddy Gallagher, Group Finance Director |
|
MHP Communications 020 3128 8100 |
|
Andrew Jaques |
|
Barnaby Fry |
|
Simon Hockridge Ollie Hoare |
Notes to Editors:
Northgate plc is the leading light commercial vehicle hire business in the UK, Ireland and Spain by fleet size and has been operating in the sector since 1981.
Northgate's core business is the hire of light commercial vehicles to businesses on a flexible or term basis, giving customers the ability to manage their vehicle fleet requirements in a way which can adapt to changing business needs without the requirement to enter into a long term commitment.
Further information regarding Northgate plc can be found on the Company's website:
www.northgateplc.com
GAAP reconciliation and glossary of terms
Throughout this report we refer to underlying results and measures. The underlying measures allow management and other stakeholders to better compare the performance of the Group between the current and prior period, without the effects of one-off or non-operational items.
Underlying measures exclude certain one-off items such as those arising from restructuring activities and recurring non-operational items, namely intangible amortisation. A reconciliation of GAAP to non-GAAP underlying measures and a glossary of terms used in this document is outlined beneath the Financial review.
Business review
Overview
During the period we have made good progress across a number of areas, including commencing work on our renewed areas of strategic focus, discussed in more detail below.
Underlying profit before tax was £40.4m compared to £45.9m and underlying earnings per share were 25.8p compared to 27.1p in the prior period. As expected, profitability was impacted by the lower starting position of vehicles on hire in the UK. However, encouragingly, closing vehicles on hire have grown by 900 in the period compared to a reduction of 900 in the same period last year, with good momentum in all territories which gives us confidence going into the second half.
The effects of previous depreciation rate changes impacted profit before tax adversely by £2.5m but this was offset by foreign currency gains of £2.9m.
The Group continues to be cash generative, with free cash flow in the half year of £7.6m (2015 - £8.1m). Debt levels since the year end were impacted by a £38.3m foreign currency revaluation. However, Euro assets shelter the balance sheet against this movement and debt covenants continue to show healthy headroom.
Dividend and capital allocation
An interim dividend of 5.7p will be paid which reflects our ongoing commitment to maintaining a progressive dividend policy, with dividend cover in the range of 3.75 to 2.5 times earnings.
The interim dividend will be paid on 16 January 2017 to shareholders on the register at the close of business on 16 December 2016.
Our objective is to build shareholder value by generating returns above our cost of capital. We will allocate capital within our business in accordance with the framework outlined below, with our first priority being to allocate capital to support our growth ambitions:
1. Investment for growth in existing network
2. Investment in new sites
3. Provide regular returns to shareholders
4. Acquisitions
5. Return of surplus cash
We will continue to maintain our balance sheet within the target leverage range of 1.25 to 1.85 times net debt to EBITDA, although we are prepared to move temporarily outside of this range if circumstances warrant it. This is consistent with our objective of maintaining a balance sheet that is efficient in terms of providing long term returns to shareholders and safeguards the Group's financial position through economic cycles.
Board changes
As separately announced today, Bob Contreras will be standing down as Chief Executive of Northgate and will be succeeded by Kevin Bradshaw. Bob will step down as Chief Executive and from the Board on 11 January 2017. Kevin will join the Board as CEO on 11 January 2017.
Outlook
As indicated previously, profitability in the first half of the year has been impacted by the reduction in vehicles on hire experienced in the UK throughout the previous financial year.
We are pleased to see some early signs of progress from our renewed strategic focus which has led to a stabilisation of the UK business in the first half of the year. Spain continues to develop well and Ireland has grown steadily in the period. A more stable political environment in Spain will provide impetus for growth amongst our larger customer accounts.
Our fundamental strategy of expanding our addressable markets is progressing well. The key is using our existing strengths to provide a compelling proposition.
We move into the second half with good momentum in all countries and continue to build a solid platform which will drive the medium and long term performance of the business. We expect the full year results to be more weighted towards the second half as the changes implemented continue to gain traction and therefore we continue to expect to see full year results in line with expectations.
Strategic review
At our full year results in June we announced our renewed areas of strategic focus, namely:
· To optimise our core business;
· To expand our addressable markets; and
· To maximise end of life value.
Optimise core business
Group closing vehicles on hire grew by 900 in the first six months of the year, compared to a reduction of 900 in the same period last year as follows:
|
Closing vehicles on hire (reduction) growth |
Q1 |
Q2 |
Total |
|
Year ending 30 April 2017 |
(100) |
1,000 |
900 |
|
Year ended 30 April 2016 |
(500) |
(400) |
(900) |
Focussing mainly on the UK business, we appointed a new senior team at the start of the calendar year and their priority has centred on sales and marketing activity.
We have delivered greater clarity around how we sell flexible rental within our existing markets, supported by refreshed national marketing campaigns.
Customers have been re-segmented as follows:
|
Micro SME |
· Generally sub-five vehicle requirement · Managed through telesales team |
|
SME |
· Large SME accounts · Managed through regionally based sales teams |
|
Large accounts |
· Customers with national vehicle requirements · Generally with fleet sizes greater than 100 vehicles · Managed through a specialised team |
Using telesales is a more efficient way of interacting with smaller customers as they can now have instant access to an account manager. Inbound leads from marketing campaigns are also dealt with more effectively.
Regionally based sales teams are now entirely focussed on exploring larger opportunities without the time commitment of managing small accounts.
We now also have a specialised team in place to address the need for a more consultative approach towards large accounts and who are capable of tailoring a bespoke offering which also covers our extended product offering outlined below. This approach has succeeded in delivering a significant national account win which will alone contribute up to 500 additional vehicles on hire over the next 12 months.
Expanding our addressable markets
As discussed in June, our core flexible rental product accounts for only 5% of the LCV market. It is our intention to offer a wider range of products and services which can meet all of the needs of existing customers and will enable us to access new customers not currently using flexible rental.
The first stage of this strategy is to provide a range of fixed term offerings from 12 to 48 months, accompanied by the same service level that is delivered through flexible rental. We believe that this is an area not adequately covered by existing providers.
This offering has been successfully trialled in Spain in the period, with full training of sales teams. Contracts have been signed for 1,500 vehicles and 1,000 incremental vehicles on hire have been delivered as at the end of October 2016.
Following the success in Spain, the trial has been extended to the UK and Ireland in November 2016.
We will also continue to investigate widening our vehicle product range where there is commercial and financial opportunity to do so. This includes exploring refrigerated transport and electric and utility specification vehicles, particularly in Spain.
Maximising end of life value
A key part of our business model is our ability to maximise the end of rental life vehicle proceeds through Van Monster, our retail sales channel.
In the UK we continue to progress with our objective of increasing the proportion of vehicles sold through this more profitable retail channel with 41% sold through this route in the period compared to 31% in the same period last year.
The trialling of the sale of third party sourced vehicles has progressed with 260 sold in the period. This has helped to widen the product range and footfall to Van Monster sites.
In Spain we took the decision to de-prioritise Van Monster. The reason was that strong trade pricing currently erodes the benefit of retail sales given the refurbishment costs we bear if selling through retail. We expect this to persist for the next year or so and anticipate that retail will grow when the market normalises.
Financial review
Group
A summary of the Group's underlying financial performance for the six months to 31 October 2016 with a comparison to the prior period is shown below:
|
|
6 months to |
6 months to |
|
|
|
31 Oct 2016 |
31 Oct 2015 |
Change |
|
|
£m |
£m |
|
|
Revenue: hire of vehicles |
229.6 |
225.7 |
+1.8% |
|
Revenue: sale of vehicles |
87.1 |
87.5 |
-0.4% |
|
Operating profit |
45.0 |
51.6 |
-12.8% |
|
Net interest expense |
(4.6) |
(5.7) |
-19.7% |
|
Profit before tax |
40.4 |
45.9 |
-11.9% |
|
Profit after tax |
34.3 |
36.1 |
-4.8% |
|
Basic earnings per share |
25.8p |
27.1p |
-4.8% |
|
Return on capital employed |
10.9% |
12.0% |
-1.1% |
At constant exchange rates revenue from the hire of vehicles was 4.1% lower than the prior period.
Profit before tax benefitted by £2.9m due to the impact of foreign exchange gains. The impact of previous changes to depreciation rates adversely affected profit before tax by £2.5m.
UK
The underlying results of the UK business were as follows:
|
|
6 months to |
6 months to |
|
|
|
31 Oct 2016 |
31 Oct 2015 |
Change |
|
|
£m |
£m |
|
|
Revenue: hire of vehicles |
138.4 |
149.8 |
-7.7% |
|
Revenue: sale of vehicles |
59.0 |
62.8 |
-6.0% |
|
Operating profit |
23.9 |
31.8 |
-25.0% |
|
Operating margin |
17.3% |
21.2% |
-3.9% |
|
|
|
|
|
|
Average vehicles on hire |
42,000 |
44,800 |
-6.3% |
|
Average utilisation |
87.7% |
87.7% |
- |
|
Vehicle disposal units |
9,000 |
10,400 |
-13.5% |
|
|
|
|
|
The UK has gone through a period of stabilisation with a growth in closing vehicles on hire of 100 in the six months to October 2016, compared to a 1,200 reduction in the same period last year. The starting position in the year was 3,300 vehicles lower than at the same point in the previous year, which has led to a 6.3% lower average vehicles on hire across the period.
Underlying operating profit was £8.0m lower than the previous year of which £4.5m related to rental profit impacted by lower vehicles on hire starting position. A total of £1.7m related to the unwind of previous depreciation rate changes and the remaining £1.8m was the impact of selling fewer vehicles than in the previous period.
Including the impact of depreciation rate changes, vehicle disposals led to a reduction in the depreciation charge in the period of £6.6m (2015 - £10.1m). This equates to a PPU of £738 compared to £977 in the prior period.
Spain
The underlying results in Spain were as follows:
|
|
6 months to |
6 months to |
|
|
|
31 Oct 2016 |
31 Oct 2015 |
Change |
|
|
£m |
£m |
|
|
Revenue: hire of vehicles |
81.2 |
68.6 |
+18.4% |
|
Revenue: sale of vehicles |
26.1 |
22.9 |
+13.7% |
|
Operating profit |
21.3 |
20.3 |
+4.7% |
|
Operating margin |
26.2% |
29.6% |
-3.4% |
|
|
|
|
|
|
Average vehicles on hire |
35,900 |
35,700 |
+0.6% |
|
Average utilisation |
90.6% |
90.8% |
-0.2% |
|
Vehicle disposal units |
5,700 |
5,300 |
+7.5% |
|
|
|
|
|
Adjusting for the impacts of foreign currency gains, hire revenue was 1.4% higher than in the prior period and underlying operating profit was £2.1m lower (10.3%). Foreign currency gains favourably impacted underlying operating profit by £3.1m.
On a constant currency basis, the impact of previous depreciation rate changes adversely impacted underlying operating profit in the period by £0.7m. Of the remaining reduction, £1.1m was due to rental operations and £0.3m related to vehicle disposals.
Including the impact of foreign currency gains and depreciation rate changes, vehicle disposals led to an £8.7m reduction in the depreciation charge (2015 - £8.5m). In Euros, this equates to a PPU of €1,815 compared to €2,211 in the prior period.
Closing vehicles on hire increased by 600 in the period compared to an increase of 100 in the prior period. A planned return of 900 vehicles from the run out of legacy contracts means that the underlying growth was 1,500 vehicles. This included 1,000 vehicles under the new fixed term product offering. Government related business has also been hampered by the difficulties in forming a coalition over the last year. Now that a government has been formed, we expect to see vehicles on hire increase as new budgets are approved.
Ireland
The underlying results in Ireland are as follows:
|
|
6 months to |
6 months to |
|
|
|
31 Oct 2016 |
31 Oct 2015 |
Change |
|
|
£m |
£m |
|
|
Revenue: hire of vehicles |
10.5 |
7.8 |
+35.2% |
|
Revenue: sale of vehicles |
2.0 |
1.8 |
+13.4% |
|
Operating profit |
1.7 |
1.6 |
+6.6% |
|
Operating margin |
15.7% |
20.0% |
-4.3% |
|
|
|
|
|
|
Average vehicles on hire |
3,400 |
3,000 |
+13.3% |
|
Average utilisation |
89.3% |
90.3% |
-1.0% |
|
Vehicle disposal units |
400 |
300 |
+33.3% |
|
|
|
|
|
After adjusting for the impact of foreign currency, hire revenue was 15.8% higher than in the same period last year and operating profit was £0.1m lower.
Ireland has grown closing vehicles on hire by 10% in the period. Profitability was held back due to a significant amount of demand originating in the south of the country which is less well serviced by Northgate workshop facilities. Going forward we will invest in the network infrastructure in order to facilitate more internal work throughout the southern region.
Interest and taxation
Net underlying finance charges for the six months to 31 October 2016 were £4.6m (2015 - £5.7m).
The impact of foreign currency adversely affected net finance charges by £0.3m. Excluding the effects of foreign currency, a decrease in lower average debt and favourable pricing compared to the prior period has reduced net finance charges by £0.8m. An interest refund of £0.6m was also received in the period in relation to an historical tax claim in Spain that was settled in favour of the Group.
The Group's underlying effective tax rate was 15% (2015 - 21%). This was impacted in the year by the £1.7m release of a provision in relation to a previously disputed tax position.
After taking account of intangible amortisation and exceptional items, the effective tax rate was also 15% (2015 - 21%).
Exceptional items
During the period £0.7m of exceptional operating costs were incurred relating to restructuring costs in the UK. A net refund of £0.9m was received in relation to an historical tax claim in Spain which was settled in favour of the Group.
The exceptional finance credit of £0.3m was received in relation to the above mentioned tax settlement in Spain.
Cash flow and net debt
Net cash outflow was £6.7m (2015 - £5.3m) after net capital expenditure of £95.5m (2015 - £92.7m). Before taking account of the payment of dividends, free cash flow generation was £7.6m compared to £8.1m in the same period last year.
Closing net debt of £355.0m increased by £45.1m since April 2016, which included a £38.3m increase in debt due to the impact of changes in foreign currency rates. This increase reflects the fact that 81% of the Group's debt is denominated in Euros. However, this debt is held against Euro assets of the Group, sheltering the balance sheet from exchange rate movements.
Debt leverage cover at 31 October 2016 was 1.49 times net debt to EBITDA with comfortable levels of headroom remaining against all of our debt covenant ratios.
Facility headroom at 31 October 2016 was £231.9m.
Balance sheet
Group return on capital employed was 10.9% compared to 12.0% in the same period last year and 12.2% in the year ended 30 April 2016.
Net tangible assets at 31 October 2016 were £493.5m (April 2016 - £463.4m), equivalent to a tangible net asset value of 370p per share (April 2016 - 348p per share).
Gearing at 31 October 2016 was 72% (April 2016 - 67%).
Foreign exchange
The average and period end exchange rates used to translate the Group's overseas operations were as follows:
|
|
October 2016 |
October 2015 |
|
|
£ : € |
£ : € |
|
Average |
1.19 |
1.39 |
|
Closing |
1.11 |
1.39 |
Risks and uncertainties
The Board and the Group's management have clearly defined responsibility for identifying the major business risks facing the Group and for developing systems to mitigate and manage those risks.
The principal risks and uncertainties facing the Group at 30 April 2016 were set out in detail on pages 40 and 41 of the 2016 annual report, a copy of which is available at www.northgateplc.com, and were identified as:
· Economic environment;
· Competition and hire rates;
· Vehicle holding costs;
· Employees and the working environment;
· IT systems; and
· Access to capital.
These principal risks have not changed since the last annual report and continue to be those that could impact the Group during the second half of the current financial year.
In addition to the risks outlined above, the going concern assumption is considered in Note 1 to the condensed interim financial statements for the six months ended 31 October 2016.
Glossary of terms
The following defined terms have been used throughout this document:
|
Term |
Definition |
|
Facility headroom |
Calculated as facilities of £589.2m less net borrowings of £357.3m. Net borrowings represent net debt of £355.0m excluding unamortised arrangement fees of £2.3m and are stated after the deduction of £7.6m of cash balances which are available to offset against borrowings. |
|
Gearing |
Calculated as net debt divided by net tangible assets (as defined below) |
|
LCV |
Light commercial vehicle: the official term used within the European Union for a commercial vehicle with a gross vehicle weight of not more than 3.5 tonnes |
|
Net tangible assets |
Net assets less goodwill and other intangible assets |
|
PPU |
Profit per unit/loss per unit - this is a non-GAAP measure used to describe the adjustment in the depreciation charge made in the year for vehicles sold at an amount different to their net book value at the date of sale (net of attributable selling costs), divided by the number of vehicles sold |
|
SME |
Small and medium sized enterprise |
Reconciliation of GAAP to non-GAAP measures
A reconciliation of GAAP to non-GAAP underlying measures is as follows:
|
|
Six months to 31.10.16 £000 |
Six months to 31.10.15 £000 |
|
|
|
|
|
Profit before tax |
39,997 |
42,832 |
|
Add back: |
|
|
|
Exceptional operating (credit) expenses |
(198) |
493 |
|
Intangible amortisation |
948 |
1,003 |
|
Exceptional finance (credit) costs |
(336) |
1,561 |
|
Underlying profit before tax |
40,411 |
45,889 |
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the year |
|
|
|
34,020 |
33,865 |
|
Add back: |
|
|
|
|
|
|
Exceptional operating (credit) expenses |
|
|
|
(198) |
493 |
|
Intangible amortisation |
|
|
|
948 |
1,003 |
|
Exceptional finance (credit) costs |
|
|
|
(336) |
1,561 |
|
Tax on exceptional items, brand royalty charges and intangible amortisation |
|
|
|
(99) |
(845) |
|
Underlying profit for the year |
|
|
|
34,335 |
36,077 |
|
Weighted average number of Ordinary shares |
|
|
133,232,518 |
133,232,518 |
|
|
Underlying basic earnings per share |
|
|
|
25.8p |
27.1p |
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents |
|
(12,554) |
(6,348) |
||
|
Add back: |
|
|
|
||
|
Receipt of bank loans and other borrowings |
|
|
|
- |
(70,410) |
|
Repayments of bank loans and other borrowings |
|
|
5,837 |
71,448 |
|
|
Net cash outflow |
|
|
|
(6,717) |
(5,310) |
|
Add back: Dividends paid |
|
|
|
14,347 |
13,389 |
|
Free cash flow |
|
|
|
7,630 |
8,079 |
|
|
UK Six months to 31.10.16£000 |
Spain Six months to 31.10.16 £000 |
Ireland Six months to 31.10.16 £000 |
Corporate Six months to 31.10.16 £000 |
Eliminations Six months to 31.10.16 £000 |
Group Six months to 31.10.16 £000 |
|||||||
|
Operating profit |
22,275 |
19,411 |
1,305 |
1,224 |
- |
44,215 |
|
||||||
|
Add back: |
|
|
|
|
|
|
|
||||||
|
Restructuring costs |
688 |
- |
- |
- |
- |
688 |
|
||||||
|
Spain tax settlement |
- |
(886) |
- |
- |
- |
(886) |
|
||||||
|
Brand royalty charges |
- |
2,725 |
352 |
(3,077) |
- |
- |
|
||||||
|
Intangible amortisation |
912 |
36 |
- |
- |
- |
948 |
|
||||||
|
Underlying operating profit (loss) |
23,875 |
21,286 |
1,657 |
(1,853) |
- |
44,965 |
|
||||||
|
|
|
|
|
|
|
|
|
||||||
|
Underlying operating profit (loss) |
23,875 |
21,286 |
1,657 |
(1,853) |
- |
44,965 |
|
||||||
|
Divided by: Revenue: hire of vehicles |
138,372 |
81,223 |
10,524 |
- |
(480) |
229,639 |
|
||||||
|
Underlying operating margin |
17.3% |
26.2% |
15.7% |
|
|
19.6% |
|
||||||
|
|
UK Six months to 31.10.15£000 |
Spain Six months to 31.10.15 £000 |
Ireland Six months to 31.10.15 £000 |
Corporate Six months to 31.10.15 £000 |
Eliminations Six months to 31.10.15 £000 |
Group Six months to 31.10.15 £000 |
|||||||
|
Operating profit |
30,389 |
17,998 |
1,295 |
380 |
- |
50,062 |
|
||||||
|
Add back: |
|
|
|
|
|
|
|
||||||
|
Restructuring costs |
493 |
- |
- |
- |
- |
493 |
|
||||||
|
Brand royalty charges |
- |
2,306 |
261 |
(2,567) |
- |
- |
|
||||||
|
Intangible amortisation |
958 |
30 |
- |
15 |
- |
1,003 |
|
||||||
|
Underlying operating profit (loss) |
31,840 |
20,334 |
1,556 |
(2,172) |
- |
51,558 |
|
||||||
|
|
|
|
|
|
|
|
|
||||||
|
Underlying operating profit (loss) |
31,840 |
20,334 |
1,556 |
(2,172) |
- |
51,558 |
|
||||||
|
Divided by: Revenue: hire of vehicles |
149,843 |
68,624 |
7,782 |
- |
(561) |
225,688 |
|
||||||
|
Underlying operating margin |
21.2% |
29.6% |
20.0% |
|
|
22.8% |
|
||||||
|
Condensed consolidated income statement |
|
|
|
|
|||||||||||
|
for the six months ended 31 October 2016 |
|
|
|
|
|||||||||||
|
|
|
Six months |
Six months |
Six months |
Six months |
Year to |
Year to |
||||||||
|
|
|
to 31.10.16 |
to 31.10.16 |
to 31.10.15 |
to 31.10.15 |
30.04.16 |
30.04.16 |
||||||||
|
|
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Audited) |
(Audited) |
||||||||
|
|
|
Underlying |
Statutory |
Underlying |
Statutory |
Underlying |
Statutory |
||||||||
|
|
Note |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
||||||||
|
Revenue: hire of vehicles |
2 |
229,639 |
229,639 |
225,688 |
225,688 |
447,134 |
447,134 |
||||||||
|
Revenue: sale of vehicles |
2 |
87,077 |
87,077 |
87,459 |
87,459 |
171,154 |
171,154 |
||||||||
|
Total revenue |
2 |
316,716 |
316,716 |
313,147 |
313,147 |
618,288 |
618,288 |
||||||||
|
Cost of sales |
|
(237,726) |
(237,726) |
(230,637) |
(230,637) |
(459,286) |
(459,286) |
||||||||
|
Gross profit |
|
78,990 |
78,990 |
82,510 |
82,510 |
159,002 |
159,002 |
||||||||
|
Administrative expenses (excluding exceptional items and intangible amortisation) |
|
(34,025) |
(34,025) |
(30,952) |
(30,952) |
(64,683) |
(64,683) |
||||||||
|
Exceptional administrative credit (expenses) |
8 |
- |
198 |
- |
(493) |
- |
(1,777) |
||||||||
|
Intangible amortisation |
|
- |
(948) |
- |
(1,003) |
- |
(1,979) |
||||||||
|
Total administrative expenses |
|
(34,025) |
(34,775) |
(30,952) |
(32,448) |
(64,683) |
(68,439) |
||||||||
|
Operating profit |
2 |
44,965 |
44,215 |
51,558 |
50,062 |
94,319 |
90,563 |
||||||||
|
Interest income |
|
1 |
1 |
1 |
1 |
3 |
3 |
||||||||
|
Finance costs (excluding exceptional items) |
|
(4,555) |
(4,555) |
(5,670) |
(5,670) |
(11,373) |
(11,373) |
||||||||
|
Exceptional finance credit (costs) |
8 |
- |
336 |
- |
(1,561) |
- |
(1,561) |
||||||||
|
Profit before taxation |
|
40,411 |
39,997 |
45,889 |
42,832 |
82,949 |
77,632 |
||||||||
|
Taxation |
3 |
(6,076) |
(5,977) |
(9,812) |
(8,967) |
(17,599) |
(16,153) |
||||||||
|
Profit for the period |
|
34,335 |
34,020 |
36,077 |
33,865 |
65,350 |
61,479 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
Profit for the period is wholly attributable to owners of the Parent Company. All results arise from continuing operations. |
|||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
Underlying profit excludes exceptional items as set out in Note 8, as well as brand royalty charges, intangible amortisation and the taxation thereon, in order to provide a better indication of the Group's underlying business performance. |
|||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
Earnings per share |
|
|
|
|
|
|
|
||||||||
|
Basic |
4 |
25.8p |
25.5p |
27.1p |
25.4p |
49.0p |
46.1p |
||||||||
|
Diluted |
4 |
25.4p |
25.1p |
26.7p |
25.0p |
48.3p |
45.5p |
||||||||
|
Condensed consolidated statement of comprehensive income |
|
|
|
|
|
for the six months ended 31 October 2016 |
|
|
|
|
|
|
|
Six months |
Six months |
Year to |
|
|
|
to 31.10.16 |
to 31.10.15 |
30.04.16 |
|
|
|
(Unaudited) |
(Unaudited) |
(Audited) |
|
|
|
£000 |
£000 |
£000 |
|
Amounts attributable to owners of the Parent Company |
|
|
|
|
|
Profit attributable to owners |
|
34,020 |
33,865 |
61,479 |
|
Other comprehensive income (expense) Foreign exchange differences on retranslation of net assets of subsidiary undertakings |
|
50,171 |
(3,353) |
22,775 |
|
Net foreign exchange differences on long term borrowings held as hedges |
|
(40,326) |
2,943 |
(18,347) |
|
Foreign exchange difference on revaluation reserve |
|
157 |
(11) |
70 |
|
Recycling of hedging reserve items |
|
- |
- |
649 |
|
Net fair value (losses) gains on cash flow hedges |
|
(795) |
1,399 |
(1,428) |
|
Deferred tax credit (charge) recognised directly in equity relating to cash flow hedges |
|
159 |
(297) |
285 |
|
Total other comprehensive income for the period |
|
9,366 |
681 |
4,004 |
|
Total comprehensive income for the period |
|
43,386 |
34,546 |
65,483 |
All items will subsequently be reclassified to the consolidated income statement.
|
Condensed consolidated balance sheet |
|
|
|
|
|
|
31 October 2016 |
|
|
|
|
|
|
|
|
|
31.10.16
|
31.10.15 Restated |
30.04.16 Restated |
|
|
|
|
(Unaudited) |
(Unaudited) |
(Audited) |
|
|
|
Note |
£000 |
£000 |
£000 |
|
Non-current assets |
|
|
|
|
|
|
Goodwill |
|
|
3,589 |
3,589 |
3,589 |
|
Other intangible assets |
|
|
3,250 |
4,985 |
4,054 |
|
|
|
|
|
|
|
|
Property, plant and equipment: vehicles for hire |
|
|
756,648 |
676,461 |
684,499 |
|
Other property, plant and equipment |
|
|
68,998 |
64,711 |
65,765 |
|
Total property, plant and equipment |
|
|
825,646 |
741,172 |
750,264 |
|
Deferred tax assets |
|
|
16,381 |
14,042 |
15,256 |
|
Total non-current assets |
|
|
848,866 |
763,788 |
773,163 |
|
Current assets |
|
|
|
|
|
|
Inventories |
|
|
26,904 |
22,306 |
23,109 |
|
Trade and other receivables |
|
|
68,049 |
71,515 |
63,499 |
|
Cash and bank balances |
|
|
42,829 |
31,907 |
55,248 |
|
Total current assets |
|
|
137,782 |
125,728 |
141,856 |
|
Total assets |
|
|
986,648 |
889,516 |
915,019 |
|
Current liabilities |
|
|
|
|
|
|
Trade and other payables |
|
|
60,971 |
52,323 |
53,183 |
|
Current tax liabilities |
|
|
22,016 |
16,727 |
19,350 |
|
Short term borrowings |
|
|
41,000 |
40,950 |
46,515 |
|
Total current liabilities |
|
|
123,987 |
110,000 |
119,048 |
|
Net current assets |
|
|
13,795 |
15,728 |
22,808 |
|
Non-current liabilities |
|
|
|
|
|
|
Derivative financial instrument liabilities |
|
9 |
3,947 |
325 |
3,152 |
|
Long term borrowings |
|
|
356,807 |
329,641 |
318,610 |
|
Deferred tax liabilities |
|
|
1,585 |
4,011 |
3,184 |
|
Total non-current liabilities |
|
|
362,339 |
333,977 |
324,946 |
|
Total liabilities |
|
|
486,326 |
443,977 |
443,994 |
|
NET ASSETS |
|
|
500,322 |
445,539 |
471,025 |
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Share capital |
|
|
66,616 |
66,616 |
66,616 |
|
Share premium account |
|
|
113,508 |
113,508 |
113,508 |
|
Revaluation reserve |
|
|
1,183 |
945 |
1,026 |
|
Own shares |
|
|
(6,087) |
(9,568) |
(8,157) |
|
Merger reserve |
|
|
67,463 |
67,463 |
67,463 |
|
Hedging reserve |
|
|
(3,157) |
(926) |
(2,522) |
|
Translation reserve |
|
|
444 |
(14,238) |
(9,400) |
|
Capital redemption reserve |
|
|
40 |
40 |
40 |
|
Retained earnings |
|
|
260,312 |
221,699 |
242,451 |
|
TOTAL EQUITY |
|
|
500,322 |
445,539 |
471,025 |
Total equity is wholly attributable to owners of the Parent Company.
|
|
|
|
|
|
|
|
Condensed consolidated cash flow statement |
|
|
|
||
|
for the six months ended 31 October 2016 |
|
|
|
|
|
|
|
|
Six months |
Six months |
Year to |
|
|
|
|
to 31.10.16 |
to 31.10.15 |
30.04.16 |
|
|
|
|
(Unaudited) |
(Unaudited) |
(Audited) |
|
|
|
Note |
£000 |
£000 |
£000 |
|
|
Net cash generated from operations |
6 |
10,027 |
17,721 |
73,726 |
|
|
Investing activities |
|
|
|
|
|
|
Interest received |
|
1 |
1 |
3 |
|
|
Proceeds from disposal of other property, plant and equipment |
284 |
307 |
1,001 |
||
|
Purchases of other property, plant and equipment |
(1,938) |
(2,241) |
(4,503) |
||
|
Purchases of intangible assets |
|
(127) |
(1,648) |
(1,682) |
|
|
Net cash used in investing activities |
|
(1,780) |
(3,581) |
(5,181) |
|
|
Financing activities |
|
|
|
|
|
|
Receipt of bank loans and other borrowings |
- |
70,410 |
70,410 |
||
|
Repayments of bank loans and other borrowings |
(5,837) |
(71,448) |
(107,653) |
||
|
Debt issue costs paid |
|
- |
(1,675) |
(1,675) |
|
|
Dividend paid |
(14,347) |
(13,389) |
(20,114) |
||
|
Net payments to acquire own shares for share schemes |
|
(617) |
(2,825) |
(2,366) |
|
|
Termination of financial instruments |
|
- |
(1,561) |
(1,561) |
|
|
Net cash used in financing activities |
|
(20,801) |
(20,488) |
(62,959) |
|
|
Net (decrease) increase in cash and cash equivalents |
|
(12,554) |
(6,348) |
5,586 |
|
|
Cash and cash equivalents at beginning of the period |
|
18,748 |
9,676 |
9,676 |
|
|
Effect of foreign exchange movements |
|
1,362 |
(343) |
3,486 |
|
|
Cash and cash equivalents at the end of the period |
|
7,556 |
2,985 |
18,748 |
|
|
Cash and cash equivalents consist of: |
|
|
|
|
|
Cash and bank balances |
|
42,829 |
31,907 |
55,248 |
|
Bank overdrafts |
|
(35,273) |
(28,922) |
(36,500) |
|
|
|
7,556 |
2,985 |
18,748 |
|
Condensed consolidated statement of changes in equity for the six months ended 31 October 2016 |
|
||||||
|
|
Share capital and share premium |
Own shares |
Hedging reserve |
Translation reserve |
Other reserves |
Retained earnings |
Total |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Total equity at 1 May 2015 |
180,124 |
(8,812) |
(2,028) |
(13,828) |
68,459 |
202,441 |
426,356 |
|
Share options fair value charge |
- |
- |
- |
- |
- |
851 |
851 |
|
Share options exercised |
- |
- |
- |
- |
- |
(2,069) |
(2,069) |
|
Profit attributable to owners of the Parent Company |
- |
- |
- |
- |
- |
33,865 |
33,865 |
|
Dividend paid |
- |
- |
- |
- |
- |
(13,389) |
(13,389) |
|
Net purchase of own shares |
- |
(2,825) |
- |
- |
- |
- |
(2,825) |
|
Transfer of shares on vesting of share options |
- |
2,069 |
- |
- |
- |
- |
2,069 |
|
Other comprehensive income (expense) |
- |
- |
1,102 |
(410) |
(11) |
- |
681 |
|
Total equity at 1 November 2015 |
180,124 |
(9,568) |
(926) |
(14,238) |
68,448 |
221,699 |
445,539 |
|
Share options fair value charge |
- |
- |
- |
- |
- |
815 |
815 |
|
Share options exercised |
- |
- |
- |
- |
- |
(952) |
(952) |
|
Profit attributable to owners of the Parent Company |
- |
- |
- |
- |
- |
27,614 |
27,614 |
|
Dividend paid |
- |
- |
- |
- |
- |
(6,725) |
(6,725) |
|
Net purchase of own shares |
- |
459 |
- |
- |
- |
- |
459 |
|
Transfer of shares on vesting of share options |
- |
952 |
- |
- |
- |
- |
952 |
|
Other comprehensive (expense) income |
- |
- |
(1,596) |
4,838 |
81 |
- |
3,323 |
|
Total equity at 1 May 2016 |
180,124 |
(8,157) |
(2,522) |
(9,400) |
68,529 |
242,451 |
471,025 |
|
Share options fair value charge |
- |
- |
- |
- |
- |
875 |
875 |
|
Share options exercised |
- |
- |
- |
- |
- |
(2,687) |
(2,687) |
|
Profit attributable to owners of the Parent Company |
- |
- |
- |
- |
- |
34,020 |
34,020 |
|
Dividend paid |
- |
- |
- |
- |
- |
(14,347) |
(14,347) |
|
Net purchase of own shares |
- |
(617) |
- |
- |
- |
- |
(617) |
|
Transfer of shares on vesting of share options |
- |
2,687 |
- |
- |
- |
- |
2,687 |
|
Other comprehensive (expense) income |
- |
- |
(635) |
9,844 |
157 |
- |
9,366 |
|
Total equity at 31 October 2016 |
180,124 |
(6,087) |
(3,157) |
444 |
68,686 |
260,312 |
500,322 |
|
|
|
|
|
|
|
|
|
|
Other reserves comprise the capital redemption reserve, revaluation reserve and merger reserve. |
|
||||||
Unaudited Notes |
|
|
|
|
|
|
|
|
|
|
||
|
1. Basis of preparation and accounting policies |
|
|
|
|
|
|
|
|
|
|||
|
Northgate plc is a Company incorporated in England and Wales under the Companies Act 2006.
The condensed financial statements are unaudited and were approved by the Board of Directors on 5 December 2016.
The interim financial information for the six months ended 31 October 2016, including comparative financial information, has been prepared on the basis of the accounting policies set out in the last annual report and accounts, except for income taxes, which are accrued using the tax rate that is expected to be applicable for the full year, and in accordance with IAS 34 'Interim Financial Reporting', as issued by the International Accounting Standards Board and adopted by the European Union.
Various new accounting standards and amendments came into force and others were issued during the period, none of which are expected to have any significant impact on the Group and effects will principally relate to amendment and extension of current disclosures. As a result of the clarification of an accounting standard, cash and cash equivalents and bank overdrafts are now shown gross, even where accounts have a right of offset within the same banking facility. The comparatives as at 30 April 2016 have been restated by £36,500,000 and comparatives as at 31 October 2015 have been restated by £28,922,000.
In preparing the interim financial statements, the significant judgements made by management in applying the Group's accounting policies and key sources of estimation uncertainty were the same, in all material respects, as those applied to the consolidated financial statements for the year ended 30 April 2016.
Going concern assumption Having reassessed the principal risks and the other matters discussed in connection with the viability statement in the 2016 annual report and accounts the Directors considered it appropriate to adopt the going concern basis of accounting in preparing the interim financial statements.
Information extracted from 2016 annual report The financial figures for the year ended 30 April 2016, as set out in this report, do not constitute statutory accounts but are derived from the statutory accounts for that financial year. The statutory accounts for the year ended 30 April 2016 were prepared under IFRS and have been delivered to the Registrar of Companies. The audit report was unqualified, did not draw attention to any matters by way of emphasis and did not include a statement under Section 498(2) or 498(3) of the Companies Act 2006. |
|
|
||||||||||
2. Segmental analysis
Management has determined the operating segments based upon the information provided to the Board of Directors, which is considered to be the chief operating decision maker. The Group is managed, and reports internally, on a basis consistent with its three main operating divisions, UK, Spain and Ireland. This is the first period in which Ireland has been reported as a separate segment. Previously the results were included in the UK business. The principal activities of these divisions are set out in the Business review, Strategic review and Financial review.
|
|
|
UK |
Spain |
Ireland |
Corporate |
Eliminations |
Total |
|
|
|
Six months |
Six months |
Six months |
Six months |
Six months |
Six months |
|
|
|
to 31.10.16 |
to 31.10.16 |
to 31.10.16 |
to 31.10.16 |
to 31.10.16 |
to 31.10.16 |
|
|
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Revenue: hire of vehicles |
|
138,372 |
81,223 |
10,524 |
- |
(480) |
229,639 |
|
Revenue: sale of vehicles |
|
59,020 |
26,071 |
1,986 |
- |
- |
87,077 |
|
Total revenue |
|
197,392 |
107,294 |
12,510 |
- |
(480) |
316,716 |
|
|
|
|
|
|
|
|
|
|
Underlying operating profit (loss) * |
|
23,875 |
21,286 |
1,657 |
(1,853) |
- |
44,965 |
|
Exceptional administrative expenses |
|
|
|
|
|
|
198 |
|
Intangible amortisation |
|
|
|
|
|
|
(948) |
|
Operating profit |
|
|
|
|
|
|
44,215 |
|
Interest income |
|
|
|
|
|
|
1 |
|
Finance costs (excluding exceptional items) |
|
|
|
|
|
|
(4,555) |
|
Exceptional finance credit |
|
|
|
|
|
|
336 |
|
Profit before taxation |
|
|
|
|
|
|
39,997 |
|
|
|
UK |
Spain |
Ireland |
Corporate |
Eliminations |
Total |
|
|
|
Six months |
Six months |
Six months |
Six months |
Six months |
Six months |
|
|
|
to 31.10.15 |
to 31.10.15 |
to 31.10.15 |
to 31.10.15 |
to 31.10.15 |
to 31.10.15 |
|
|
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Revenue: hire of vehicles |
|
149,843 |
68,624 |
7,782 |
- |
(561) |
225,688 |
|
Revenue: sale of vehicles |
|
62,783 |
22,925 |
1,751 |
- |
- |
87,459 |
|
Total revenue |
|
212,626 |
91,549 |
9,533 |
- |
(561) |
313,147 |
|
|
|
|
|
|
|
|
|
|
Underlying operating profit (loss) * |
|
31,840 |
20,334 |
1,555 |
(2,171) |
- |
51,558 |
|
Exceptional administrative expenses |
|
|
|
|
|
|
(493) |
|
Intangible amortisation |
|
|
|
|
|
|
(1,003) |
|
Operating profit |
|
|
|
|
|
|
50,062 |
|
Interest income |
|
|
|
|
|
|
1 |
|
Finance costs (excluding exceptional items) |
|
|
|
|
|
|
(5,670) |
|
Exceptional finance costs |
|
|
|
|
|
|
(1,561) |
|
Profit before taxation |
|
|
|
|
|
|
42,832 |
2. Segmental analysis (continued)
|
|
|
UK |
Spain |
Ireland |
Corporate |
Eliminations |
Total |
|
|
|
Year to |
Year to |
Year to |
Year to |
Year to |
Year to |
|
|
|
30.04.16 |
30.04.16 |
30.04.16 |
30.04.16 |
30.04.16 |
30.04.16 |
|
|
|
(Audited) |
(Audited) |
(Audited) |
(Audited) |
(Audited) |
(Audited) |
|
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Revenue: hire of vehicles |
|
290,714 |
140,781 |
16,691 |
- |
(1,052) |
447,134 |
|
Revenue: sale of vehicles |
|
123,401 |
44,110 |
3,643 |
- |
- |
171,154 |
|
Total revenue |
|
414,115 |
184,891 |
20,334 |
- |
(1,052) |
618,288 |
|
|
|
|
|
|
|
|
|
|
Underlying operating profit (loss) * |
|
55,392 |
41,267 |
2,759 |
(5,099) |
- |
94,319 |
|
Restructuring costs |
|
|
|
|
|
|
(1,777) |
|
Intangible amortisation |
|
|
|
|
|
|
(1,979) |
|
Operating profit |
|
|
|
|
|
|
90,563 |
|
Interest income |
|
|
|
|
|
|
3 |
|
Finance costs (excluding exceptional items) |
|
|
|
|
|
|
(11,373) |
|
Exceptional finance costs |
|
|
|
|
|
|
(1,561) |
|
Profit before taxation |
|
|
|
|
|
|
77,632 |
* Underlying operating profit (loss) stated before royalty charges, amortisation and exceptional items is the measure used by the Board of Directors to assess segment performance.
3. Taxation
The charge for taxation for the six months to 31 October 2016 is based on the estimated effective rate for the year ending 30 April 2017 of 15% (2015 - 21%).
|
4. Earnings per share
|
|
|
|
|
|
|
|
|
Six months |
Six months |
Six months |
Six months |
Year to |
Year to |
|
|
to 31.10.16 |
to 31.10.16 |
to 31.10.15 |
to 31.10.15 |
30.04.16 |
30.04.16 |
|
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Audited) |
(Audited) |
|
|
Underlying |
Statutory |
Underlying |
Statutory |
Underlying |
Statutory |
|
Basic and diluted earnings per share |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
|
|
|
|
|
|
|
The calculation of basic and diluted earnings per share is based on the following data: |
|
|
|
|
|
|
|
Earnings |
|
|
|
|
|
|
|
Earnings for the purposes of basic and diluted earnings per share, |
|
|
|
|
|
|
|
being profit attributable to owners of the Parent Company |
34,335 |
34,020 |
36,077 |
33,865 |
65,350 |
61,479 |
|
|
|
|
|
|
|
|
|
Number of shares |
Number |
Number |
Number |
Number |
Number |
Number |
|
Weighted average number of Ordinary shares for the purpose |
|
|
|
|
|
|
|
of basic earnings per share |
133,232,518 |
133,232,518 |
133,232,518 |
133,232,518 |
133,232,518 |
133,232,518 |
|
Effect of dilutive potential Ordinary shares: |
|
|
|
|
|
|
|
- share options |
2,195,780 |
2,195,780 |
2,066,430 |
2,066,430 |
1,990,249 |
1,990,249 |
|
Weighted average number of Ordinary shares for the purpose |
|
|
|
|
|
|
|
of diluted earnings per share |
135,428,298 |
135,428,298 |
135,298,948 |
135,298,948 |
135,222,767 |
135,222,767 |
|
Basic earnings per share |
25.8p |
25.5p |
27.1p |
25.4p |
49.0p |
46.1p |
|
Diluted earnings per share |
25.4p |
25.1p |
26.7p |
25.0p |
48.3p |
45.5p |
|
|
|
|
|
|
|
|
5. Dividends
In the six months to 31 October 2016, a dividend of £14,347,000 was paid (2015 - £13,389,000). The Directors have declared a dividend of 5.7p per share for the six months ended 31 October 2016 (2015 - 5.1p).
6. Notes to the cash flow statement
|
|
|
|
|
|
|
Six months |
Six months |
Year to |
|
|
to 31.10.16 |
to 31.10.15 |
30.04.16 |
|
|
(Unaudited) |
(Unaudited) |
(Audited) |
|
Net cash generated from operations |
£000 |
£000 |
£000 |
|
Operating profit |
44,215 |
50,062 |
90,563 |
|
Adjustments for: |
|
|
|
|
Depreciation of property, plant and equipment |
77,708 |
69,781 |
144,272 |
|
Amortisation of intangible assets |
955 |
1,003 |
1,979 |
|
Loss on disposal of property, plant and equipment |
70 |
35 |
122 |
|
Share options fair value charge |
875 |
851 |
1,666 |
|
Operating cash flows before movements in working capital |
123,823 |
121,732 |
238,602 |
|
Decrease in non-vehicle inventories |
281 |
523 |
866 |
|
Decrease in receivables |
1,430 |
1,271 |
10,157 |
|
Decrease in payables |
(11,953) |
(9,021) |
(6,825) |
|
Cash generated from operations |
113,581 |
114,505 |
242,800 |
|
Income taxes paid |
(6,054) |
(2,315) |
(8,259) |
|
Interest paid |
(3,782) |
(5,381) |
(10,527) |
|
Net cash generated from operations |
103,745 |
106,809 |
224,014 |
|
Purchases of vehicles |
(168,155) |
(164,464) |
(296,165) |
|
Proceeds from disposal of vehicles |
74,437 |
75,376 |
145,877 |
|
Net cash generated from operations |
10,027 |
17,721 |
73,726 |
|
7. Analysis of consolidated net debt
|
|
|
|
|
|
|
31.10.16 |
31.10.15 |
30.04.16 |
|
|
|
(Unaudited) |
(Unaudited) |
(Audited) |
|
|
|
£000 |
£000 |
£000 |
|
|
Cash and bank balances |
(42,829) |
(31,907) |
(55,248) |
|
|
Bank overdrafts |
35,273 |
28,922 |
36,500 |
|
|
Bank loans |
271,761 |
269,101 |
249,742 |
|
|
Loan notes |
89,963 |
71,718 |
77,930 |
|
|
Cumulative preference shares |
500 |
500 |
500 |
|
|
Confirming facilities |
310 |
350 |
453 |
|
|
|
354,978 |
338,684 |
309,877 |
|
|
8. Exceptional items |
|
|
|
|
|
||||||
|
|
|
||||||||||
|
During the period the Group recognised exceptional items in the income statement as follows: |
|
||||||||||
|
|
|
||||||||||
|
|
|
Six months |
Six months |
Year to |
|
||||||
|
|
|
to 31.10.16 |
to 31.10.15 |
30.04.16 |
|
||||||
|
|
|
(Unaudited) |
(Unaudited) |
(Audited) |
|
||||||
|
|
|
£000 |
£000 |
£000 |
|
||||||
|
Restructuring costs |
|
688 |
493 |
1,777 |
|
||||||
|
Spain tax settlement |
|
(886) |
- |
- |
|
||||||
|
Exceptional administrative (credit) expenses |
|
(198) |
493 |
1,777 |
|
||||||
|
|
|
|
|
|
|
||||||
|
Termination of interest rate swaps |
|
- |
1,561 |
1,561 |
|
||||||
|
Interest refunded in relation to Spain tax settlement |
|
(336) |
- |
- |
|
||||||
|
Exceptional finance (credit) costs |
|
(336) |
1,561 |
1,561 |
|
||||||
|
Total pre-tax exceptional items |
|
(534) |
2,054 |
3,338 |
|
||||||
|
|
|
|
|
|
|
||||||
|
Tax (charge) credit on exceptional items |
|
(92) |
641 |
668 |
|
||||||
Exceptional administrative expenses
All of the restructuring costs arose in the UK. The Spain tax settlement followed the resolution of an historic tax case with the Spanish tax authorities.
Exceptional finance credit
This relates to interest refunded by the Spanish tax authorities on the settlement of the case disclosed above.
|
9. Derivative financial instruments |
|
|
|
|
|
||||||
|
|
|
||||||||||
|
At the balance sheet date, the Group held the following financial instruments at fair value: |
|
||||||||||
|
|
|
||||||||||
|
|
|
31.10.16 |
31.10.15 |
30.04.16 |
|
||||||
|
|
|
(Unaudited) |
(Unaudited) |
(Audited) |
|
||||||
|
|
|
£000 |
£000 |
£000 |
|
||||||
|
Non-current derivative financial instrument liabilities |
|
3,947 |
325 |
3,152 |
|
||||||
The derivative financial instruments above all have fair values which are calculated by reference to observable inputs (i.e. classified as level 2 in the fair value hierarchy). They are valued using the discounted cash flow technique with an appropriate adjustment for counterparty credit risk. The valuations incorporate the following inputs:
· interest rates and yield curves observable at commonly quoted intervals;
· commonly quoted spot and forward foreign exchange rates; and
· observable credit spreads.
The carrying value of financial assets and liabilities recorded at amortised cost in the financial statements are approximately equal to their fair value.
Interim announcement - Statement of the Directors
We confirm that to the best of our knowledge:
· the condensed set of financial statements has been prepared in accordance with IAS 34;
· the interim management report includes a fair review of the information required by DTR 4.2.7 (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and
· the interim management report includes a fair review of the information required by DTR 4.2.8 (disclosure of related party transactions and changes therein).
By order of the Board
Paddy Gallagher
Group Finance Director
5 December 2016
Independent review report to Northgate plc
Report on the consolidated interim financial statements
Our conclusion
We have reviewed Northgate plc's consolidated interim financial statements (the 'interim financial statements') in the half-yearly report of Northgate plc for the 6 month period ended 31 October 2016. Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Rules and Transparency Rules of the United Kingdom's Financial Conduct Authority.
What we have reviewed
The interim financial statements comprise:
· the condensed consolidated balance sheet as at 31 October 2016;
· the condensed consolidated income statement and condensed consolidated statement of comprehensive income for the period then ended;
· the condensed consolidated cash flow statement for the period then ended;
· the condensed consolidated statement of changes in equity for the period then ended; and
· the unaudited explanatory notes to the interim financial statements.
The interim financial statements included in the half-yearly report have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Rules and Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in Note 1 to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Group is applicable law and International Financial Reporting Standards (IFRS) as adopted by the European Union.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the Directors
The half-yearly report, including the interim financial statements, is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly report in accordance with the Disclosure Rules and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Our responsibility is to express a conclusion on the interim financial statements in the half-yearly report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Rules and Transparency Rules of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
What a review of interim financial statements involves
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity', issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the half-yearly report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
Leeds
5 December 2016
This information is provided by RNS
Latest directors dealings
- 4 hours ago Luceco
- 5 hours ago Helios Towers
- 5 hours ago Wise Class A
- 5 hours ago EDX Medical Group Plc
- 5 hours ago Naked Wines