TIDMMNZS
RNS Number : 2305H
Menzies(John) PLC
16 August 2016
16 August 2016
John Menzies plc
Interim Results Announcement
Half Year Results for the six months ended 30 June 2016
Financial Summary
2016 2016 2015
Reported Constant
currency([6])
Turnover([1]) GBP1,002.2m GBP995.3m GBP1,001.4m
Underlying operating profit([2]) GBP21.1m GBP20.4m GBP20.2m
Underlying profit before taxation([3]) GBP18.1m GBP17.4m GBP17.0m
Profit before tax GBP3.0m GBP2.3m GBP5.8m
Operating cash flow([4]) GBP31.0m --- GBP26.4m
Underlying earnings per share([5]) 20.4p --- 18.8p
Reported earnings per share (2.4)p --- 4.7p
Interim dividend proposed 5.4p --- 5.0p
Overview
-- Group has had a positive first half
-- Aviation turnover up 7%
o Clear strategy delivering benefits
o Ground handling profitability improving, particularly in the
UK
o Joint Venture with Oman Air secured
-- Distribution delivered steady performance
o Media declines offset by strong Euro 2016 stickers sales
o Diversification away from the core print media business
continues
o Secured a three-year national distribution services contract
for WHSmith
-- Favourable foreign exchange rates producing increased earnings
-- Continuing strong cash generation - robust balance sheet
-- Exceptional items charged in the period were GBP10.0m (2015:
GBP6.2m) relating to a goodwill write-down (GBP7.2m) and net
transactional costs of GBP2.8m
-- Interim dividend up 8% to 5.4p
Dr Dermot F Smurfit, Chairman of John Menzies plc said:
"I am pleased that the underlying financial performance in the
first half was ahead of 2015, reflecting the positive impact of
Aviation ground handling gains, the start-up of our acquisition in
Bermuda and the return of stable operations at London Gatwick.
"Menzies Distribution performed to expectations, with print
media declines largely mitigated by strong sticker sales associated
with the European football championships and our expanding
e-commerce business.
"The Group continues to make positive progress and the Board
expects the full year outturn to be in line with our expectations
even before allowing for the positive impact of foreign exchange
rates.
"Nevertheless, as shareholders will be aware the Group has
underperformed in the past and the Board is determined to address
historic performance shortfalls including a review of the Group
structure."
Notes
------ --------------------------------------------------------
1 Turnover is group revenue plus the group's share
of revenue from joint ventures and associates.
------ --------------------------------------------------------
2 Underlying operating profit adjusts for non-recurring
exceptional items, impairment charges associated
with goodwill, joint venture assets and other
intangibles, contract amortisation, and the group's
share of interest and tax on joint ventures and
associates to provide an appreciation of the impact
of those items on operating profit.
------ --------------------------------------------------------
3 Underlying operating profit before taxation is
underlying operating profit less net finance charges.
------ --------------------------------------------------------
4 Operating cash flow is operating profit adjusted
for depreciation, amortisation, income and dividends
from joint ventures and associates, pension and
share based payments, and movements in working
capital and provisions.
------ --------------------------------------------------------
5 Underlying earnings per share is profit after
taxation and non-controlling interest but before
intangible amortisation and impairment and exceptional
items, divided by the weighted average number
of ordinary shares in issue.
------ --------------------------------------------------------
6 Performance at constant currency has been calculated
by translating non-Sterling earnings for the period
ended 30 June 2016 into Sterling at the exchange
rates used for the same period in 2015.
------ --------------------------------------------------------
7 Additional analysis of non-GAAP measures are set
out in Note 2 of the financial statements.
------ --------------------------------------------------------
For further information:
John Menzies plc
Giles Wilson, Chief Financial Officer 0131 459 8018
John Geddes, Group Company Secretary 0131 459 8018
FTI Consulting
Jonathon Brill/Alex Beagley 0203 727 1000
Notes to Editors
1. John Menzies plc is one of Scotland's largest companies. The
group has two operating divisions, Menzies Aviation and Menzies
Distribution. Both divisions operate in sectors where success
depends on providing an efficient, high quality, time-critical
service to their customers and partners. The company was
established in 1833 and its head office is in Edinburgh. Today the
company is an international business with operations worldwide.
2. Menzies Aviation is a leading global provider of passenger,
ramp and cargo services. The Menzies Aviation business is highly
successful, operating at 149 airports in 32 countries, supported by
a team of over 20,000 highly-trained people. Menzies Aviation
serves over 500 customers, handling over 1.2 million flights and
1.5 million tonnes of cargo per annum. Customers include Air
France/KLM, Alaska Airlines, Cathay Pacific, easyJet, Etihad,
Emirates, IAG, Lufthansa, Norwegian Air Shuttle, Thai Airways and
United Airlines. Best in class safety and security is the
division's number one priority each day and every day.
3. Menzies Distribution operates one of the largest overnight
logistics networks in the UK, providing final mile delivery for
around 110 million delivery units each year serving customers in
the press, travel and third-party logistics sectors. From 43 sites
across Britain and Ireland, a team of around 3,500 employees pick,
pack and cross-dock clients' materials, driving some 150,000 miles
each day to bring them to their ultimate destination.
In addition to its core role within the UK print media supply
chain, delivering around six million magazines and newspapers every
day, the division is expanding into both UK retail logistics and
neutral consolidation within the fast-growing parcel delivery
market.
Chairman's Statement
I am delighted to make my first statement since my appointment
as Chairman on 25 July 2016. John Menzies is an exceptionally
strong brand; I believe there is a great amount of potential to be
unlocked within the Group and I will work hard with the Board and
management team to assist the Group in achieving significant growth
in the coming years.
We have delivered a good set of results with continued progress
being made at Aviation, winning and renewing contracts and
delivering against our strategy. At Distribution, we continue to
trade well in the face of continuing volume declines and the impact
of the National Living Wage.
Group structure
As Chairman, one of my tasks will be to review the structure of
the Group in order that we can maximise shareholder value. This
will include looking at whether our two operating businesses are
best placed to prosper while they are part of one Group. The
situation is complex, particularly with regard to our pension
schemes. Management have already engaged with specialist advisers
and our pension trustees, and work is underway to structure the
pension scheme in such a way as to give the Board the maximum
amount of flexibility in future. I expect this work to take up to
12 months and we will update shareholders when appropriate.
Board changes
During the period, there were a number of Board changes in
addition to my own appointment. Paul Baines, Giles Wilson and
Forsyth Black joined the Board, while Iain Napier, Jeremy Stafford
and Paula Bell stepped down.
Following the Annual General Meeting on 20 May 2016, Iain Napier
retired from his role as Chairman after eight years on the Board.
He was replaced on an interim basis by Dermot Jenkinson, a
longstanding non-executive Director. I would like to take this
opportunity to thank Iain for his time as Chairman.
On the same date, Paula Bell stepped down from her role as Chief
Financial Officer and left the business on 29 July 2016. To replace
Paula, we appointed Giles Wilson on 1 June 2016. Giles has been
with the Group for over five years in a variety of senior roles
including Finance Director of Menzies Aviation. Most recently he
had been based in Dubai as Senior Vice President of our Middle
East, India and African region. Prior to joining John Menzies plc,
Giles held a number of senior finance positions in both publically
listed and privately owned companies.
Also on 1 June 2016, Paul Baines joined the Board as a
non-executive Director, bringing with him a wealth of corporate
finance experience having held a number of senior executive posts
in the City.
On 13 January 2016 Jeremy Stafford resigned from his position as
Chief Executive Officer. On that date Forsyth Black, previously
Managing Director of Menzies Distribution, was appointed to the
Board as Managing Director of Menzies Aviation. Forsyth has been
with the Group for over 16 years in a number of senior aviation
roles and brings with him a wealth of knowledge of our
businesses.
Dividend
The Board has proposed an interim dividend of 5.4p per share
reflecting the Board's progressive dividend policy, which is
payable on 18 November 2016 to all shareholders on the register at
7 October 2016.
Outlook
The Group continues to make positive progress and the Board
expects the full year outturn to be in line with our expectations
even before allowing for the positive impact of foreign exchange
rates.
Aviation is performing well and the pipeline of opportunities is
strong. We continue to make progress in the formation of our joint
venture in Oman and expect to start operations later this year. Our
investment in infrastructure and systems is already well underway
and we anticipate tangible benefits from 2017. Since the period end
the division has been successful in securing a new contract to
handle some 22,000 turnarounds per annum for Frontier Airlines at
the Denver base, building on our existing presence in Denver with
United Airlines.
Menzies Distribution has benefitted from an increased volume of
football related sticker sales but continues to work hard to
mitigate volume declines and increased costs relating to the
National Living Wage. Away from the core business, our parcels and
trucking operations are gaining traction and we see opportunities
to further utilise our vehicle and property assets during daylight
hours in what is a rapidly expanding market place.
We continue to execute against our strategy and remain confident
in delivering long-term shareholder value. The Group will continue
to seek opportunities to grow through acquisition where these are
seen to be value adding to shareholders.
Group Performance Review
Group turnover for the period was GBP1,002.2m (H1 2015:
GBP1,001.4m). Underlying profit before tax rose to GBP18.1m (H1
2015: GBP17.0m) as a result of the favourable foreign exchange
rates and an improvement in profitability in the Aviation division.
The increase in underlying profit before tax had a consequential
impact on our underlying earnings per share which rose 8.5% to
20.4p (H1 2015: 18.8p). Profit before tax was GBP3.0m (H1 2015:
GBP5.8m), with the reduction reflecting the impact of GBP10.0m of
exceptional costs (H1 2015: GBP6.2m).
On a constant currency basis Group turnover was down 1% to
GBP995.3m (H1 2015: GBP1,001.4m) with underlying operating profit
GBP0.2m higher at GBP20.4m (H1 2015: GBP20.2m).
It is too early to know the implications of the decision to
leave the European Union, but it is probable that the UK economy
will face a period of uncertainty. We will continue to monitor the
situation closely, however, with around 80% of our Aviation
revenues generated outside of the UK, we would expect our sales and
financial performance to benefit should sterling remain at current
levels or depreciate further.
Financial Overview
Finance costs
The net underlying finance charge in the period was GBP3.0m (H1
2015: GBP3.2m). The level of cost reflects lower pension interest
charges.
Exceptional and other items
Exceptional costs of GBP10.0m in the period substantially relate
to two items. The largest of which was a non-cash cost of GBP7.2m
relating to the goodwill impairment of assets in our Netherlands
cargo business in June 2016. Additionally, net transaction related
costs of GBP2.8m were incurred in the period.
Tax and Earnings per Share
As a multinational business, the Group is liable for taxation in
multiple jurisdictions around the world. Our underlying tax charge
for the period was GBP5.8m (H1 2015: GBP5.4m), representing a
continuing effective underlying tax rate of 32% (H1 2015 and FY
2015: 32%).
Underlying earnings per share were 20.4p (H1 2015: 18.8p),
benefitting from the improvement in profits. Earnings per share
were (2.4)p (H1 2015: 4.7p), reflecting the impact of exceptional
and other items.
Defined benefit pension scheme
As at 30 June 2016, the scheme showed a deficit of GBP52.7m (H1
2015: GBP40.1m), an increase of GBP12.6m driven by lower corporate
bond yields which have resulted in the discount rate reducing from
4.0% at 30 June 2015 (4.0% at 31 December 2015) to 3.2%, partly
offset by continued additional cash payments.
Cash flow and investment
Investments in the period included initial investment of GBP3.3m
for the acquisitions of Renaissance Aviation in Bermuda and Thistle
Couriers, as well as a GBP1.3m earn-out payment relating to the
Fore Partnership. Operating cash flow was GBP31.0m (H1 2015:
GBP26.4m). Working capital management has been strong again in the
first half of 2016 and remains a key focus for the business. Free
cash flow at GBP16.4m was GBP4.8m higher than H1 2015. Net capital
expenditure totalled GBP6.9m (H1 2015: GBP8.7m).
Treasury
The Group continues to operate on a strong financial footing. We
benefit from a robust balance sheet built from strong operating
cash flows across our divisions. At the end of the period net debt
was GBP126.6m (H1 2015: GBP120.8m), reflecting a higher opening
position and an adverse currency impact, improved by lower
acquisition spend.
Our net debt to EBITDA ratio was 1.7 times and interest cover
was 9.3 times at 30 June 2016, well within our covenanted levels.
In addition, we have GBP55.5m of undrawn committed bank
facilities.
Three existing bank facilities totalling GBP65.0m are due to
expire in January 2017. The Board does not envisage any issue in
refinancing these facilities.
The majority of Menzies Aviation's stations are located outside
the UK and operate in currencies other than Sterling. The Group
attempts to minimise the volatility of transactional foreign
exchange as far as possible by using foreign exchange forward
contracts. The translation of profits from overseas trading
entities is not hedged and as a result the movement of exchange
rates directly affects the Group's reported results. In the period,
there were favourable movements on the majority of currencies,
particularly the US dollar and Czech koruna.
The Group continues to invest in infrastructure to strengthen
the existing business and build a platform for expansion. In
particular, we have invested in systems to enhance scheduling,
recruitment and training as well as the resilience of our IT
platform and risk management processes.
Menzies Aviation
Performance
Aviation performed strongly in the first half. Growth was
underpinned by higher ground handling volumes in Continental Europe
and the return to profitable operations at London Gatwick.
Underlying operating profit benefited from favourable foreign
exchange rates and was up GBP1.0m to GBP10.4m on turnover of
GBP396.6m, up GBP25.8m. On a constant currency basis, turnover was
up 5% to GBP390.3m and underlying operating profit was GBP0.3m
higher at GBP9.7m.
During the period we continued to pursue and make tangible
progress against our five strategic goals: focusing on key
customers; pursuing hubs and bases; accelerating our complementary
services offering; re-focusing on geographical investment and
expanding into emerging markets.
In the first six months of the year we handled over 600,000
flight movements, up 4% on a like-for-like basis, excluding
contracts won and lost in both periods. The most significant growth
driver was the annualisation of 2015 hub and base contract wins
with Norwegian Air Shuttle in Oslo and Copenhagen and with United
Airlines in Cincinnati, Wichita, Tucson and Lubbock. Our cargo
business handled over 750,000 tonnes of cargo in the period, a
like-for-like decline of 2%, affected by a challenging start to the
year and the strong volumes experienced in North America in the
first half of 2015 due to the West Coast seaport strikes.
We continue to review our geographical investment, and our new
presence in the Middle East has paid dividends with the signing of
a memorandum of understanding with Oman Air to form a joint venture
to handle their ground handling services at nine airports in Oman,
including their hub operation in Muscat. This is a very exciting
opportunity that represents Menzies Aviation's first significant
operational presence in the region, where we will handle some
50,000 flights per annum.
A number of significant contract gains were made during the
period. Our focus on key customers helped to deliver the award of a
five-year contract with British Airways and Iberia at Copenhagen.
There were 43 ground handling contract gains in the period, adding
over GBP24m of annualised revenue. The most significant was to
provide de-icing services to Norwegian Air Shuttle at their hub in
Oslo. This win further enhances our relationship with the airline
in their home hub. Since the period end we have also been
successful in winning a contract to provide some 22,000 annual
turnarounds for Frontier Airlines at their key hub in Denver. This
win builds on our existing business with United Airlines in
Denver.
We were successful in securing another hub operation in North
America with the award by Virgin America of a five-year contract to
provide ground handling services at Los Angeles. Virgin America is
a returning customer and this win is recognition of our focus on
service delivery. Other hub locations continue to perform well,
providing strong returns and generating excellent customer
feedback.
Our review of under-performing stations continued and we chose
to close sub scale ground handling operations in Southampton, UK
and Hamilton Island, Australia in the first half and we also gave
notice on six contracts with four airlines across the network that
were unsustainable.
During the period we won 12 cargo contracts, the largest of
which were with AirBridge Cargo at Malmo, and a four station deal
with Air Canada in Sydney, Melbourne, Brisbane and Prague. In total
the new contracts will add over GBP6.5m of annualised revenue to
the business.
At the end of 2015 we secured preferred supplier status with
Etihad Cargo. Also within cargo handling we renewed one of our key
contracts in Australia with Thai Airways at five stations.
Overall, we were net winners of 33 contracts generating some
GBP17.4m of net annualised revenue and we renewed 75 contracts
securing GBP46m of annualised revenue.
As previously announced, we acquired Renaissance Aviation, the
exclusive ground handling licence holder in Bermuda in February.
The integration is progressing smoothly and the business is trading
in line with management's expectations.
Our complementary services offering continued to grow with new
lounge facilities in Copenhagen, Windhoek and Queenstown and we now
have line maintenance operations in Bermuda, New Zealand and
Macau.
Our focus on being the best handler was supported by a
significant investment into systems, people and infrastructure.
This support has increased our ongoing contribution to our
operational excellence programme by GBP1.5m in the first half. This
investment is to ensure our airport operations run at the optimum
efficiency levels and to ensure we provide our customers with the
service levels they demand.
As previously communicated, Martinair, a subsidiary of KLM/Air
France, continue to reduce freighter volume through Amsterdam.
Martinair is our anchor customer in Amsterdam and this reduction is
impacting returns. Reductions in volume are forecast to increase in
2017 and we are working on solutions to mitigate the loss of
earnings.
AMI, our global cargo consolidation and forwarding company,
continues to perform in line with expectations, however, we still
see room for improvement. The South Africa business results were
boosted by new contracts and overall our margin continues to
benefit from a move towards international e-commerce traffic from
the more traditional airfreight wholesale model.
Menzies Distribution
Performance
Distribution performed in line with expectations in the period,
with underlying operating profit of GBP12.0m (H1 2015: GBP12.2m).
This trading performance benefitted from strong sticker sales,
boosted by the European Championships, which largely offset core
media declines and the impact of the extra week in the comparative
period.
Sales of newspapers during the period were 3.7% down on a
like-for-like basis, (adjusting for any new or lost business since
1 January 2015). We benefitted from cover price increases in the
period and from one-off events such as the EU referendum and the
home nations' performances in the European football
championships.
Sales declines of 4.7% were seen across magazine categories on a
like-for-like basis. Monthlies in particular benefitted from
successful film launches in the period, helping to offset market
wide declines.
In July we signed a five-year contract renewal with Northern
& Shell which continues our long relationship where we will
distribute their titles including Daily Express, Daily Star and OK
magazine.
Our Parcels business, where we act largely as a neutral
consolidator, continues to perform well. A year on from the
acquisition of AJG Parcels, the core parcels business is trading as
expected and is complemented by the integration of recent
acquisitions. Menzies Parcels now delivers 3.1 million parcels per
annum. We continue to establish a niche in the growing UK
e-commerce fulfilment market and look to build our position going
forward.
During the period we completed the acquisition of Thistle
Couriers. Formed in 1998, Thistle Couriers provides a UK-wide
same-day service and delivers around 1,000 overnight parcels in the
Aberdeen area.
Menzies Response, our fulfilment and brochure distribution
business, has been adversely impacted by operational challenges in
the period. Measures have been put in place to remedy these issues
and we expect that operations will return to normal early in the
third quarter. A new management team is in place and we continue to
be positive on the growth opportunities for the business.
Our trucking business expanded during the period winning a
three-year national distribution services contract for WHSmith.
This is a key contract win and represents our first national
distribution contract. The growth in this business stream is down
to our ability to utilise our vehicle and property assets during
daylight hours. Added to the existing contracts with Card Factory,
WnDirect and B2C, our trucking operation has a fleet of over 1,700
vehicles across the UK.
The new UK National Living Wage legislation commenced in April
2016 and as expected, has had a significant impact on our
Distribution business. The additional cost in 2016 is now estimated
to be GBP1.6m, and we are on track to mitigate this increase with a
number of improvement initiatives. This cost increase headwind is
likely to prevail thereafter and we will continue to seek new ways
to improve productivity to help mitigate the costs.
Independent review report to John Menzies plc
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2016 which comprises Group Income
Statement, Group Statement of Comprehensive Income, Group Balance
Sheet, Group Statement of Changes in Equity, Group Statement of
Cash Flows and the related notes 1 to 17. We have read the other
information contained in the half-yearly financial report and
considered whether it contains any apparent mis-statements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the Company in accordance with
guidance contained in the International Standard on Review
Engagements 2410 (UK and Ireland) "Review of Interim Financial
Information Performed by the Independent Auditor of the Entity"
issued by the Auditing Practices Board. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company, for our work, for this report, or
for the conclusions we have formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34 "Interim
Financial Reporting", as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of Review
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.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2016 is not prepared, in all material respects, in accordance
with International Accounting Standard 34 as adopted by the
European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
Ernst & Young LLP
Glasgow
15 August 2016
GROUP INCOME STATEMENT (unaudited)
for the half year to 30 June 2016
--------------------------------------------------------------------------------------------------------------------
Before Half Before Half
exceptional Exceptional year exceptional Exceptional year
and and to 30 and and to 30
other other June other other June
items items 2016 items items 2015
Notes GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------ ------ ------------- ------------ -------- ------------- ------------ --------
Revenue 3 956.0 - 956.0 954.1 - 954.1
Net operating
costs (939.2) (13.9) (953.1) (938.4) (9.9) (948.3)
------------------------------ ------ ------------- ------------ -------- ------------- ------------ --------
Operating profit 16.8 (13.9) 2.9 15.7 (9.9) 5.8
Share of post-tax
results of joint
ventures and
associates 4.3 (0.8) 3.5 4.5 (0.9) 3.6
------------------------------ ------ ------------- ------------ -------- ------------- ------------ --------
Operating profit
after joint ventures
and associates 3 21.1 (14.7) 6.4 20.2 (10.8) 9.4
Analysed as:
Underlying operating
profit* 3 21.1 - 21.1 20.2 - 20.2
Exceptional transaction
related and rationalisation
items 4 - (2.8) (2.8) - (1.5) (1.5)
Exceptional impairment
charges 4 - (7.2) (7.2) - (4.7) (4.7)
Contract amortisation 4 - (3.9) (3.9) - (3.7) (3.7)
Share of interest
on joint ventures
and associates - 0.3 0.3 - 0.3 0.3
Share of tax
on joint ventures
and associates - (1.1) (1.1) - (1.2) (1.2)
------------------------------ ------ ------------- ------------ -------- ------------- ------------ --------
Operating profit
after joint ventures
and associates 21.1 (14.7) 6.4 20.2 (10.8) 9.4
------------------------------ ------ ------------- ------------ -------- ------------- ------------ --------
Finance income 5 0.3 - 0.3 0.5 - 0.5
Finance charges 5 (2.4) (0.4) (2.8) (2.7) (0.4) (3.1)
Other finance
charge - pensions 14 (0.9) - (0.9) (1.0) - (1.0)
------------------------------ ------ ------------- ------------ -------- ------------- ------------ --------
Profit before
taxation 18.1 (15.1) 3.0 17.0 (11.2) 5.8
Taxation 6 (5.8) 1.1 (4.7) (5.4) 2.6 (2.8)
------------------------------ ------ ------------- ------------ -------- ------------- ------------ --------
Profit/(loss)
for the period 12.3 (14.0) (1.7) 11.6 (8.6) 3.0
------------------------------ ------ ------------- ------------ -------- ------------- ------------ --------
Attributable
to equity shareholders 12.5 (14.0) (1.5) 11.5 (8.6) 2.9
Attributable
to non-controlling
interests (0.2) - (0.2) 0.1 - 0.1
------------------------------ ------ ------------- ------------ -------- ------------- ------------ --------
12.3 (14.0) (1.7) 11.6 (8.6) 3.0
------------------------------ ------ ------------- ------------ -------- ------------- ------------ --------
Earnings per
ordinary share 8
Basic 20.4p (22.8)p (2.4)p 18.8p (14.1)p 4.7p
Diluted 20.4p (22.8)p (2.4)p 18.8p (14.1)p 4.7p
------------------------------ ------ ------------- ------------ -------- ------------- ------------ --------
*Underlying operating profit adjusts for non-recurring
exceptional items, impairment charges associated with goodwill,
joint venture assets and other intangibles, contract amortisation
and the Group's share of interest and tax on joint ventures and
associates to provide an appreciation of the impact of those items
on operating profit.
GROUP INCOME STATEMENT
For the full year to 31 December 2015
-----------------------------------------------------------------------------------
Before Exceptional Full year
exceptional and other to 31
and other items December
items 2015
Notes GBPm GBPm GBPm
--------------------------------- ------ ------------- ------------ -----------
Revenue 3 1,899.2 - 1,899.2
Net operating costs (1,862.8) (17.6) (1,880.4)
--------------------------------- ------ ------------- ------------ -----------
Operating profit 36.4 (17.6) 18.8
Share of post-tax
results of joint
ventures and associates 8.5 (1.5) 7.0
--------------------------------- ------ ------------- ------------ -----------
Operating profit
after joint ventures
and associates 3 44.9 (19.1) 25.8
Analysed as:
Underlying operating
profit* 3 44.9 - 44.9
Exceptional rationalisation
and acquisition related
items 4 - (5.8) (5.8)
Exceptional impairment
charges 4 - (4.7) (4.7)
Contract amortisation 4 - (7.1) (7.1)
Share of interest
on joint ventures
and associates - 0.7 0.7
Share of tax on joint
ventures and associates - (2.2) (2.2)
--------------------------------- ------ ------------- ------------ -----------
Operating profit
after joint ventures
and associates 44.9 (19.1) 25.8
--------------------------------- ------ ------------- ------------ -----------
Finance income 5 0.8 - 0.8
Finance charges 5 (5.6) (0.9) (6.5)
Other finance charge
- pensions 14 (1.9) - (1.9)
--------------------------------- ------ ------------- ------------ -----------
Profit before taxation 38.2 (20.0) 18.2
Taxation 6 (12.2) 3.9 (8.3)
--------------------------------- ------ ------------- ------------ -----------
Profit for the year 26.0 (16.1) 9.9
--------------------------------- ------ ------------- ------------ -----------
Attributable to equity
shareholders 26.2 (16.1) 10.1
Attributable to non-controlling
interests (0.2) - (0.2)
--------------------------------- ------ ------------- ------------ -----------
26.0 (16.1) 9.9
--------------------------------- ------ ------------- ------------ -----------
Earnings per ordinary
share 8
Basic 42.7p (26.2)p 16.5p
Diluted 42.7p (26.3)p 16.4p
--------------------------------- ------ ------------- ------------ -----------
*Underlying operating profit adjusts for non-recurring
exceptional items, impairment charges associated with goodwill,
joint venture assets and other intangibles, contract amortisation
and the Group's share of interest and tax on joint ventures and
associates to provide an appreciation of the impact of those items
on operating profit.
GROUP STATEMENT OF COMPREHENSIVE INCOME (unaudited)
for the half year to 30 June 2016
-------------------------------------------------------------------------------
Half year Half year Full year
to to to
30 June 30 June 31 December
2016 2015 2015
Note GBPm GBPm GBPm
--------------------------------- ----- ---------- ---------- -------------
(Loss)/profit for
the period (1.7) 3.0 9.9
--------------------------------- ----- ---------- ---------- -------------
Items that will not be reclassified
subsequently to profit or loss:
Actuarial (loss)/gain
on defined benefit
pensions 14 (13.8) 14.3 5.6
Income tax effect 2.6 (2.9) (1.1)
Impact of rate change
on deferred tax - - (0.9)
Items that may be reclassified subsequently
to profit or loss:
Movement on cash
flow hedges 0.2 (0.4) (0.1)
Income tax effect - 0.1 -
Movement on net investment
hedges (9.5) 3.9 (1.5)
Income tax effect - (0.8) 0.3
Exchange gain/(loss)
on translation of
foreign operations 22.2 (10.0) (3.9)
Income tax effect
of exchange loss
on foreign operations - - 0.6
--------------------------------- ----- ---------- ---------- -------------
Other comprehensive income/(loss)
for the period 1.7 4.2 (1.0)
---------------------------------------- ---------- ---------- -------------
Total comprehensive income
for the period - 7.2 8.9
---------------------------------------- ---------- ---------- -------------
Attributable to equity
shareholders 0.2 7.1 8.9
Attributable to non-controlling
interests (0.2) 0.1 -
--------------------------------- ----- ---------- ---------- -------------
- 7.2 8.9
--------------------------------- ----- ---------- ---------- -------------
GROUP BALANCE SHEET (unaudited)
as at 30 June 2016
----------------------------------------------------------------------------
30 June 30 June 31 December
2016 2015 2015
Notes GBPm GBPm GBPm
---------------------------------- ------ -------- -------- ------------
Assets
Non-current assets
Intangible assets 9 104.3 110.2 108.3
Property, plant and
equipment 119.3 113.1 114.4
Investments accounted
using the equity
method 29.6 26.0 26.4
Deferred tax assets 13.0 7.8 12.2
266.2 257.1 261.3
---------------------------------- ------ -------- -------- ------------
Current assets
Inventories 14.1 13.0 14.7
Trade and other receivables 225.7 206.2 201.9
Derivative financial
assets 12 - 4.4 0.6
Cash and cash equivalents 10 46.2 37.2 34.1
---------------------------------- ------ -------- -------- ------------
286.0 260.8 251.3
---------------------------------- ------ -------- -------- ------------
Liabilities
Current liabilities
Borrowings 10 (68.5) (7.2) (3.4)
Derivative financial
liabilities 12 (9.8) (1.1) (2.3)
Trade and other payables (233.4) (221.6) (217.3)
Current income tax
liabilities (8.8) (7.1) (10.0)
Provisions (5.5) (2.8) (4.9)
---------------------------------- ------ -------- -------- ------------
(326.0) (239.8) (237.9)
---------------------------------- ------ -------- -------- ------------
Net current (liabilities)/assets (40.0) 21.0 13.4
Total assets less
current liabilities 226.2 278.1 274.7
---------------------------------- ------ -------- -------- ------------
Non-current liabilities
Borrowings 10 (94.5) (154.1) (152.2)
Other payables (3.8) (3.3) (3.5)
Deferred tax liabilities - - (1.5)
Provisions (3.1) (2.7) (2.9)
Retirement benefit
obligation 14 (52.7) (40.1) (43.4)
---------------------------------- ------ -------- -------- ------------
(154.1) (200.2) (203.5)
---------------------------------- ------ -------- -------- ------------
Net assets 72.1 77.9 71.2
---------------------------------- ------ -------- -------- ------------
Shareholders' equity
Ordinary shares 15.4 15.4 15.4
Share premium account 20.5 20.4 20.4
Treasury shares (1.7) (1.7) (1.8)
Other reserves (8.7) (24.0) (21.6)
Retained earnings 23.6 44.4 35.6
Capital redemption
reserve 21.6 21.6 21.6
---------------------------------- ------ -------- -------- ------------
70.7 76.1 69.6
Non-controlling interest
in equity 1.4 1.8 1.6
---------------------------------- ------ -------- -------- ------------
Total equity 72.1 77.9 71.2
---------------------------------- ------ -------- -------- ------------
GROUP STATEMENT OF CHANGES IN EQUITY (unaudited)
as at 30 June 2016
-------------------------------------------------------------------------------------------------------------------------------------------
Cash
Share flow Capital Total
Ordinary premium Treasury hedge Translation Retained redemption shareholders' Non-controlling Total
shares account shares reserve reserve earnings reserve equity equity equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------- --------- -------- --------- -------- ------------ --------- ----------- -------------- ---------------- --------
At 31 December
2015 15.4 20.4 (1.8) (0.9) (20.7) 35.6 21.6 69.6 1.6 71.2
Loss for
the period - - - - - (1.5) - (1.5) (0.2) (1.7)
Other
comprehensive
income/(loss) - - - 0.2 12.7 (11.2) - 1.7 - 1.7
--------------- --------- -------- --------- -------- ------------ --------- ----------- -------------- ---------------- --------
Total
comprehensive
income/(loss) - - - 0.2 12.7 (12.7) - 0.2 (0.2) -
--------------- --------- -------- --------- -------- ------------ --------- ----------- -------------- ---------------- --------
New share
capital
issued - 0.1 - - - - - 0.1 - 0.1
Share-based
payments - - - - - 0.8 - 0.8 - 0.8
Disposal
of own
shares - - 0.1 - - (0.1) - - - -
At 30 June
2016 15.4 20.5 (1.7) (0.7) (8.0) 23.6 21.6 70.7 1.4 72.1
--------------- --------- -------- --------- -------- ------------ --------- ----------- -------------- ---------------- --------
At 31 December
2014 15.4 20.3 (2.0) (0.8) (16.0) 29.5 21.6 68.0 1.7 69.7
Profit
for the
period - - - - - 2.9 - 2.9 0.1 3.0
Other
comprehensive
(loss)/income - - - (0.3) (6.9) 11.4 - 4.2 - 4.2
--------------- --------- -------- --------- -------- ------------ --------- ----------- -------------- ---------------- --------
Total
comprehensive
(loss)/income - - - (0.3) (6.9) 14.3 - 7.1 0.1 7.2
--------------- --------- -------- --------- -------- ------------ --------- ----------- -------------- ---------------- --------
New share
capital
issued - 0.1 - - - - - 0.1 - 0.1
Share-based
payments - - - - - 0.7 - 0.7 - 0.7
Disposal
of own
shares - - 0.3 - - (0.1) - 0.2 - 0.2
--------------- --------- -------- --------- -------- ------------ --------- ----------- -------------- ---------------- --------
At 30 June
2015 15.4 20.4 (1.7) (1.1) (22.9) 44.4 21.6 76.1 1.8 77.9
--------------- --------- -------- --------- -------- ------------ --------- ----------- -------------- ---------------- --------
At 31 December
2014 15.4 20.3 (2.0) (0.8) (16.0) 29.5 21.6 68.0 1.7 69.7
Profit/(loss)
for the
year - - - - - 10.1 - 10.1 (0.2) 9.9
Other
comprehensive
(loss)/income - - - (0.1) (4.7) 3.6 - (1.2) 0.2 (1.0)
--------------- --------- -------- --------- -------- ------------ --------- ----------- -------------- ---------------- --------
Total
comprehensive
(loss)/income - - - (0.1) (4.7) 13.7 - 8.9 - 8.9
--------------- --------- -------- --------- -------- ------------ --------- ----------- -------------- ---------------- --------
New share
capital
issued - 0.1 - - - - - 0.1 - 0.1
Share-based
payments - - - - - 0.5 - 0.5 - 0.5
Dividends
paid - - - - - (8.0) - (8.0) (0.1) (8.1)
Repurchase
of own
shares - - (0.1) - - - - (0.1) - (0.1)
Disposal
of own
shares - - 0.3 - - (0.1) - 0.2 - 0.2
--------------- --------- -------- --------- -------- ------------ --------- ----------- -------------- ---------------- --------
At 31 December
2015 15.4 20.4 (1.8) (0.9) (20.7) 35.6 21.6 69.6 1.6 71.2
--------------- --------- -------- --------- -------- ------------ --------- ----------- -------------- ---------------- --------
GROUP STATEMENT OF CASH FLOWS (unaudited)
for the half year to 30 June 2016
--------------------------------------------------------------------------
Half year Half year Full year
to to to
30 June 30 June 31 December
2016 2015 2015
Notes GBPm GBPm GBPm
--------------------------- ------ ---------- ---------- -------------
Cash flows from operating
activities
Cash generated from
operations 11 20.4 13.5 35.9
Interest received 0.3 0.2 0.8
Interest paid (2.7) (2.4) (5.9)
Tax paid (5.3) (3.9) (7.7)
--------------------------- ------ ---------- ---------- -------------
Net cash flow from
operating activities 12.7 7.4 23.1
--------------------------- ------ ---------- ---------- -------------
Cash flows from investing
activities
Acquisitions (4.6) (14.4) (15.1)
Cash acquired with
subsidiaries 15 0.3 1.3 1.3
Investment in associate (0.3) - -
Purchase of property,
plant and equipment (7.9) (9.2) (22.2)
Intangible asset
additions (0.4) (0.2) (2.6)
Proceeds from sale
of property, plant
and equipment 1.4 0.7 4.5
Proceeds on redemption
of joint venture
preference shares - 0.8 0.8
Dividends received
from equity accounted
investments 1.8 2.0 6.5
--------------------------- ------ ---------- ---------- -------------
Net cash flow used
in investing activities (9.7) (19.0) (26.8)
--------------------------- ------ ---------- ---------- -------------
Cash flows from financing
activities
Proceeds from issue of
ordinary share capital 0.1 0.1 0.1
Disposal/(purchase)
of own shares - 0.2 (0.1)
Repayment of borrowings 10 (2.8) (0.1) (0.4)
Proceeds from borrowings 10 8.7 14.0 15.3
Dividends paid to
ordinary shareholders - - (8.0)
Net cash flow from
financing activities 10 6.0 14.2 6.9
--------------------------- ------ ---------- ---------- -------------
Increase in net cash
and cash equivalents 10 9.0 2.6 3.2
--------------------------- ------ ---------- ---------- -------------
Effects of exchange
rate movements 10 3.0 (1.7) (1.5)
Opening net cash
and cash equivalents 33.9 32.2 32.2
--------------------------- ------ ---------- ---------- -------------
Closing net cash
and cash equivalents* 10 45.9 33.1 33.9
--------------------------- ------ ---------- ---------- -------------
*Net cash and cash equivalents include cash at bank
and in hand and bank overdrafts.
Notes to the interim accounts
1. INTRODUCTION
These interim condensed financial statements are prepared in a
consolidated format. They relate to the half year to 30 June 2016
and are unaudited but have been formally reviewed by the Auditors
and their report to the Company is set out on page 10. They were
approved by the Board on 15 August 2016. These interim condensed
financial results do not comprise statutory accounts within the
meaning of Section 435 of the Companies Act 2006. Statutory
accounts for the year to 31 December 2015, prepared in accordance
with IFRS, have been filed with the Registrar of Companies. The
report of the Auditors included in that 2015 Annual Report was
unqualified and did not contain a statement under either Section
498(2) or Section 498(3) of the Companies Act 2006.
2. BASIS OF PREPARATION
These interim condensed financial statements have been prepared
in accordance with IAS 34 Interim Financial Reporting, as adopted
by the European Union, the Disclosure Rules and Transparency Rules
of the Financial Conduct Authority and the basis of the accounting
policies set out in the 2015 Annual Report, except for the adoption
of new standards and interpretations effective from 1 January 2016
as noted below.
These interim condensed financial statements have been prepared
on a going concern basis as the Directors, having considered the
available relevant information, have a reasonable expectation that
the Group has adequate resources to continue in operational
existence for the foreseeable future.
Changes to accounting policies
There are no immediate changes to UK financial and corporate
reporting requirements following the UK's decision to leave the
European Union on 23 June 2016.
Several new accounting standards and amendments are applicable
for the first time in 2016. However, they do not impact on the
annual consolidated financial statements or the interim condensed
financial statements of the Group. The European Markets and
Securities Authority has issued 'Guidelines on Alternative
Performance Measures' which are effective from 3 July 2016 and
which have been followed in explaining the Group's use of non-GAAP
measures in this interim statement.
-- Amendments to IAS 27: Equity Method in Separate Financial
Statements - effective date 1 January 2016
-- Amendments to IAS 1: Disclosure Initiative - effective date 1 January 2016
-- Amendments to IAS 16 and IAS 38: Clarification of Acceptable
Methods of Depreciation and Amortisation - effective date 1 January
2016
-- Amendments to IFRS 11: Accounting for Acquisitions of
Interests in Joint Operations - effective date 1 January 2016
-- Annual Improvements to IFRSs - 2012 to 2014 cycle - effective date 1 January 2016
Standards and amendments to standards that have been issued but
are not effective for 2016 and have not been early adopted are:
-- Amendments to IAS 7: Disclosure Initiative* - effective date 1 January 2017
-- Amendment to IAS 12: Recognition of Deferred Tax Assets for
Unrealised Losses* - effective date 1 January 2017
-- IFRS 9 Financial Instruments* - effective date 1 January 2018
-- IFRS 15 Revenue from Contracts with Customers* - effective date 1 January 2018
-- IFRS 16 Leases* - effective date 1 January 2019
-- IFRS 2 Classification and Measurement of Share Based Payment
Transactions* - effective date 1 January 2018
*Not yet adopted for use in the European Union.
Non-GAAP measures
Our reported interim results are prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the European Union and applied in accordance with the provisions of
the Companies Act 2006. In measuring our performance, the financial
measures that we use include those which have been derived from our
reported results in order to eliminate factors which distort
period-on-period comparisons. These are considered non-GAAP
financial measures. We believe this information, along with
comparable GAAP measurements, is useful to investors in providing a
basis for measuring our operational performance. Our management
uses these financial measures, along with the most directly
comparable GAAP financial measures, in evaluating our performance
and value creation. Non-GAAP measures should not be considered in
isolation from, or as a substitute for, financial information in
compliance with GAAP. Non-GAAP financial measures as reported by
the Group may not be comparable with similarly titled amounts
reported by other companies.
Below we set out our definitions of non-GAAP measures and
provide reconciliations to relevant GAAP measures.
Turnover
Turnover includes revenue from subsidiaries and the Group's
share of revenue from joint ventures and associates.
Half year Half year Full year
to 30 to to
June 2016 30 June 31 December
2015 2015
GBPm GBPm GBPm
----------------------------- ----------- ---------- -------------
Revenue 956.0 954.1 1,899.2
Share of joint ventures and
associates revenue 46.2 47.3 94.1
Turnover 1,002.2 1,001.4 1,993.3
----------------------------- ----------- ---------- -------------
Underlying operating profit
Underlying operating profit adjusts for non-recurring
exceptional items, impairment charges associated with goodwill,
joint venture assets and other intangibles, contract amortisation
and the Group's share of interest and tax on joint ventures and
associates to provide an appreciation of the impact of those items
on operating profit.
Underlying operating profit and the reconciliation to operating
profit are set out on the face of the Income Statement.
Underlying profit before taxation
Underlying profit before taxation is defined as underlying
operating profit less net finance charges.
Underlying profit before taxation and the reconciliation to
profit before taxation are set out on the face of the Income
Statement.
Underlying earnings per share
Underlying earnings per share is profit after taxation and
non-controlling interest, but before intangible amortisation and
impairment and exceptional items, divided by the weighted average
number of ordinary shares in issue.
The calculation of underlying earnings per share is set out in
Note 8.
Free cash flow
Free cash flow is defined as the cash generated after net
capital expenditure, interest and taxation, before special pension
contributions, acquisitions, disposals, cash raised, ordinary
dividends and net spend on shares.
Half year Half year Full year
to 30 to to
June 2016 30 June 31 December
2015 2015
GBPm GBPm GBPm
---------------------------------- ----------- ---------- -------------
Cash generated from operations 20.4 13.5 35.9
Adjusted for:
net interest paid (2.4) (2.2) (5.1)
tax paid (5.3) (3.9) (7.7)
dividends received from
equity accounted investments 1.8 2.0 6.5
purchase of property, plant
and equipment (7.9) (9.2) (22.2)
intangible asset additions (0.4) (0.2) (2.6)
proceeds from sale of property,
plant and equipment 1.4 0.7 4.5
special pension contribution 5.6 5.8 11.6
exceptional cash spend 3.2 5.1 10.8
Free cash flow 16.4 11.6 31.7
---------------------------------- ----------- ---------- -------------
Underlying operating cash flow
Underlying operating cash flow is free cash flow before net
capital expenditure, net interest paid and taxation.
Half year Half year Full year
to 30 to to
June 2016 30 June 31 December
2015 2015
GBPm GBPm GBPm
----------------------------------- ----------- ---------- -------------
Free cash flow (as set out
above) 16.4 11.6 31.7
Adjusted for:
purchase of property, plant
and equipment 7.9 9.2 22.2
intangible asset additions 0.4 0.2 2.6
proceeds from sale of property,
plant and equipment (1.4) (0.7) (4.5)
net interest paid 2.4 2.2 5.1
tax paid 5.3 3.9 7.7
Underlying operating cash
flow 31.0 26.4 64.8
----------------------------------- ----------- ---------- -------------
3. SEGMENT INFORMATION
For management purposes the Group is organised into two
operating divisions: Distribution and Aviation. The two divisions
are organised and managed separately based upon their key markets.
The Distribution segment provides newspaper and magazine
distribution services along with marketing and logistics services
across the UK and Ireland. The Aviation segment provides cargo and
passenger ground handling services across the world.
The information presented to the Board for the purpose of
resource allocation and assessment of segment performance is
focused on the performance of each division as a whole but also
contains performance information on a number of operating segments
within the Aviation division. The Board assesses the performance of
the operating segments based on a measure of adjusted segment
result before exceptional items and intangible amortisation. Net
finance income and expenditure are not allocated to segments as
this activity is managed by the central treasury function.
Segment information is presented in respect of the Group's
reportable segments together with additional geographic and Balance
Sheet information. Transfer prices between segments are set on an
arm's-length basis.
Business segment information
Revenue Pre-exceptional operating
profit/(loss)
----------------------------------- ---------------------------------
Half Half Full year Half Half Full year
year year to year year to
to to 31 December to 30 to 31 December
30 June 30 June 2015 June 30 June 2015
2016 2015 2016 2015
GBPm GBPm GBPm GBPm GBPm GBPm
----------------- --------- --------- ------------- ------- --------- -------------
Distribution 605.6 630.6 1,244.0 12.0 12.2 25.1
Aviation
Ground
Handling 271.5 240.9 490.0 2.8 0.8 4.1
Cargo
Handling 72.7 72.5 146.8 6.0 6.9 14.7
Cargo
Forwarding 52.4 57.4 112.5 1.6 1.7 4.3
396.6 370.8 749.3 10.4 9.4 23.1
Corporate - - - (1.3) (1.4) (3.3)
----------------- --------- --------- ------------- ------- --------- -------------
1,002.2 1,001.4 1,993.3 21.1 20.2 44.9
Joint
ventures
and associates (46.2) (47.3) (94.1) - - -
----------------- --------- --------- ------------- ------- --------- -------------
956.0 954.1 1,899.2 21.1 20.2 44.9
----------------- --------- --------- ------------- ------- --------- -------------
A reconciliation of segment pre-exceptional operating
profit/(loss) to profit before taxation is provided below.
Distribution Aviation Corporate Group
Half year to 30 June GBPm GBPm GBPm GBPm
2016
---------------------------- ------------- --------- ---------- ------
Operating profit/(loss) 9.9 (3.1) (3.9) 2.9
Share of post-tax
results of joint ventures
and associates 0.8 2.7 - 3.5
Operating profit/(loss)
after joint ventures
and associates 10.7 (0.4) (3.9) 6.4
Net finance expense (3.4)
---------------------------- ------------- --------- ---------- ------
Profit before taxation 3.0
---------------------------- ------------- --------- ---------- ------
Analysed as:
Pre-exceptional operating
profit/(loss)* 12.0 10.4 (1.3) 21.1
Exceptional transaction
related items (Note
4) 0.3 (0.5) (2.6) (2.8)
Exceptional impairment
charges (Note 4) - (7.2) - (7.2)
Contract amortisation
(Note 4) (1.4) (2.5) - (3.9)
Share of interest
on joint ventures
and associates - 0.3 - 0.3
Share of tax on joint
ventures and associates (0.2) (0.9) - (1.1)
---------------------------- ------------- --------- ---------- ------
Operating profit/(loss)
after joint ventures
and associates 10.7 (0.4) (3.9) 6.4
---------------------------- ------------- --------- ---------- ------
Distribution Aviation Corporate Group
Half year to 30 June
2015 GBPm GBPm GBPm GBPm
---------------------------- ------------- --------- ---------- ------
Operating profit/(loss) 10.1 (1.5) (2.8) 5.8
Share of post-tax
results of joint ventures
and associates 0.7 2.9 - 3.6
Operating profit/(loss)
after joint ventures
and associates 10.8 1.4 (2.8) 9.4
Net finance expense (3.6)
---------------------------- ------------- --------- ---------- ------
Profit before taxation 5.8
---------------------------- ------------- --------- ---------- ------
Analysed as:
Pre-exceptional operating
profit/(loss)* 12.2 9.4 (1.4) 20.2
Exceptional rationalisation
and acquisition related
items (Note 4) (0.1) - (1.4) (1.5)
Exceptional impairment
charges (Note 4) - (4.7) - (4.7)
Contract amortisation
(Note 4) (1.1) (2.6) - (3.7)
Share of interest
on joint ventures
and associates - 0.3 - 0.3
Share of tax on joint
ventures and associates (0.2) (1.0) - (1.2)
----------------------------- ------ ------ ------ ------
Operating profit/(loss)
after joint ventures
and associates 10.8 1.4 (2.8) 9.4
----------------------------- ------ ------ ------ ------
Distribution Aviation Corporate Group
Full year to 31 December GBPm GBPm GBPm GBPm
2015
Operating profit/(loss) 16.8 7.0 (5.0) 18.8
Share of post-tax results
of joint ventures and
associates 1.6 5.4 - 7.0
Operating profit/(loss)
after joint ventures
and associates 18.4 12.4 (5.0) 25.8
Net finance expense (7.6)
-------------------------------- ------------- --------- ---------- ------
Profit before taxation 18.2
-------------------------------- ------------- --------- ---------- ------
Analysed as:
Pre-exceptional operating
profit/(loss)* 25.1 23.1 (3.3) 44.9
Exceptional rationalisation
and acquisition related
items (Note 4) (3.9) (0.2) (1.7) (5.8)
Exceptional impairment
charges (Note 4) - (4.7) - (4.7)
Contract amortisation
(Note 4) (2.5) (4.6) - (7.1)
Share of interest on
joint ventures and associates - 0.7 - 0.7
Share of tax on joint
ventures and associates (0.3) (1.9) - (2.2)
-------------------------------- ------------- --------- ---------- ------
Operating profit/(loss)
after joint ventures
and associates 18.4 12.4 (5.0) 25.8
-------------------------------- ------------- --------- ---------- ------
* Pre-exceptional operating profit/(loss) is defined as
operating profit/(loss) excluding intangible amortisation and
exceptional items (both set out in Note 4) but including the
pre-tax share of results from joint ventures and associates.
Capital expenditure
Distribution Aviation Corporate Group
Half year to 30 June GBPm GBPm GBPm GBPm
2016
-------------------------- ------------- --------- ---------- ------
Property, plant and
equipment 1.3 6.5 0.1 7.9
Intangible assets 0.2 0.2 - 0.4
Half year to 30 June
2015
-------------------------- ------------- --------- ---------- ------
Property, plant and
equipment 1.2 6.6 - 7.8
Intangible assets 0.1 0.1 - 0.2
Full year to 31 December
2015
-------------------------- ------------- --------- ---------- ------
Property, plant and
equipment 4.4 16.4 - 20.8
Intangible assets 2.1 0.5 - 2.6
-------------------------- ------------- --------- ---------- ------
Geographic information Revenue
-----------------------------------------
Half year to Half year Full year
30 June 2016 to to
30 June 31 December
2015 2015
GBPm GBPm GBPm
------------------------ -------------- ---------- -------------
UK 664.0 687.8 1,363.1
Continental
Europe 100.3 85.9 171.2
USA 77.3 68.6 140.3
Rest of world 114.4 111.8 224.6
-------------------------
956.0 954.1 1,899.2
------------------------ -------------- ---------- -------------
4. EXCEPTIONAL AND OTHER ITEMS
Exceptional items are those material items which, by virtue of
their size or incidence, are presented separately in the Income
Statement to enable a full understanding of the Group's financial
performance. These exclude certain elements of intangible asset
impairment and amortisation, which are also presented separately in
the Income Statement.
Transactions which may give rise to exceptional items include
restructuring of business activities (in terms of rationalisation
costs and onerous lease provisions), gains or losses on the
disposal of businesses and transaction and other related costs
including changes in deferred consideration.
Exceptional items included in operating profit
Half year Half year Full year
to to to
30 June 2016 30 June 31 December
2015 2015
Notes GBPm GBPm GBPm
------------------------ ------- -------------- ---------- -------------
Acquisition related
earn-out adjustment (i) 0.3 0.5 (0.2)
Transaction related
costs (ii) (3.1) (0.1) (0.4)
Rationalisation
costs (iii) - (0.5) (3.5)
Management restructure
and strategic
review (iv) - (1.4) (1.7)
(2.8) (1.5) (5.8)
-------------------------------- -------------- ---------- -------------
(i) Contingent consideration relating to the acquisition
of Fore Partnership was settled for GBP1.3m being
GBP0.3m lower than anticipated at 31 December
2015 in Distribution. The credit in the prior
half year related to the settlement of contingent
consideration for Orbital Marketing Services Group
for GBP9.9m which was GBP0.5m lower than anticipated
at 31 December 2014.
(ii) Relating to the acquisition of Thistle Couriers
Ltd in February 2016 in Distribution and Renaissance
Aviation Ltd, Bermuda, in February 2016 in Aviation,
aborted disposal transactions either by the Group
or by the prospective parties of GBP0.9m, incomplete
transactions of GBP1.9m and other costs GBP0.2m.
(iii) Costs of rationalising excess capacity in the
prior half year comprised redundancy, property
and other related restructuring costs in Distribution.
(iv) Redundancy and advisory costs in the prior half
year related to the work performed to reshape
the senior management team and review the strategic
direction of the business in order to prioritise
the opportunities for growth.
Exceptional items included in finance charges
Half year to Half Full year
30 June 2016 year to
to 31 December
30 June 2015
2015
Note GBPm GBPm GBPm
----------------- ------ -------------- --------- -------------
Unwind discount (i) (0.1) (0.1) (0.2)
----------------- ------ -------------- --------- -------------
(i) Relating to deferred consideration and onerous
lease provisions.
Intangible assets amortisation and impairment included in
operating profit
Half year to Half Full year
30 June 2016 year to
to 31 December
30 June 2015
2015
Notes GBPm GBPm GBPm
----------------------- ------- -------------- --------- -------------
Contract amortisation (i) (3.9) (3.7) (7.1)
Net impairment
loss (ii) (7.2) (4.7) (4.7)
----------------------- ------- -------------- --------- -------------
(11.1) (8.4) (11.8)
------------------------------- -------------- --------- -------------
(i) Contracts capitalised as intangible assets on
the acquisition of businesses.
(ii) An impairment of goodwill of GBP7.2m triggered
by an aborted disposal transaction and recognising
the loss of volumes with key customers at the
cargo operations in Amsterdam and the impact this
has on the overall business. In the prior half
year operations were restructured in Spain following
the loss of licences. An impairment charge of
GBP4.7m was recognised representing a write-off
of intangible assets of GBP4.1m and other associated
assets of GBP0.6m.
5. FINANCE COSTS (pre-exceptional)
Underlying interest income and charges, other than the pension
charge, are:
Half year Half Full year
to year to
30 June to 31 December
2016 30 June 2015
2015
GBPm GBPm GBPm
----------------- ---------- --------- -------------
Finance income
Bank deposits 0.3 0.5 0.8
------------------ ---------- --------- -------------
Finance charges
Bank loans
and overdrafts (2.3) (2.6) (5.5)
Preference
dividends (0.1) (0.1) (0.1)
------------------ ---------- --------- -------------
(2.4) (2.7) (5.6)
----------------- ---------- --------- -------------
Net finance
costs (2.1) (2.2) (4.8)
------------------ ---------- --------- -------------
6. TAXATION
The underlying effective tax rate for the full year 2016 is
estimated at 32% (full year 2015: 32%). Therefore the underlying
effective tax rate used for the half year 2016 was 32% (half year
2015: 32%). The share of results from the joint ventures and
associates for the half year is after taxation of GBP1.1m (half
year to 30 June 2015: GBP1.2m and full year to 31 December 2015:
GBP2.2m).
The Finance Act (No 2) 2015, which was substantively enacted on
26 October 2015, includes legislation reducing the main rate of
corporation tax in the UK from 20% to 18%. This decrease is to be
phased in with a reduction to 19% effective from 1 April 2017 and a
reduction to 18% effective from 1 April 2020. The Finance Bill
2016, which has not been substantively enacted at the half year
2016, will amend and reduce the rate to 17% with effect from 1
April 2020.
The taxation effect of the exceptional and other items is GBPNil
(half year to 30 June 2015: GBP1.4m credit, full year to 31
December 2015: GBP1.7m credit).
7. DIVIDS
Half year Half Full year
to year to
30 June to 30 31 December
2016 June 2015
2015
Dividends paid on equity shares GBPm GBPm GBPm
--------------------------------------- ----------- -------- -------------
Interim paid in respect
Ordinary of 2015, 5.0p per share - - 3.0
Final paid in respect
of 2014, 8.1p per share - - 5.0
- - 8.0
----------- ----------- ----------------------------------- -------------
The 2015 final dividend of 11.8p per ordinary share, which
absorbed GBP7.2m of shareholders' funds, was paid on 1 July 2016 to
shareholders on the register of John Menzies plc at close of
business on 27 May 2016.
The Directors are proposing an interim dividend in respect of
the half year to 30 June 2016 of 5.4p per ordinary share. This will
absorb an estimated GBP3.3m of shareholders' funds. Payment will be
made on 18 November 2016 to shareholders on the register of John
Menzies plc at the close of business on 7 October 2016.
8. EARNINGS PER SHARE
Basic Underlying(i)
------------------------------- -------------------------------
Half Half Full Half Half Full
year year year year year year
to 30 to 30 to to 30 to 30 to
June June 31 December June June 31 December
2016 2015 2015 2016 2015 2015
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------------- ------- ------- ------------- ------- ------- -------------
Operating profit 2.9 5.8 18.8 2.9 5.8 18.8
Share of post-tax
results of joint
ventures and associates 3.5 3.6 7.0 3.5 3.6 7.0
add exceptional
back: items - - - 2.8 1.5 5.8
intangible
amortisation
and impairment - - - 11.1 8.4 11.8
share of interest
on joint ventures
and associates - - - (0.3) (0.3) (0.7)
share of tax
on joint ventures
and associates - - - 1.1 1.2 2.2
Net finance costs (3.4) (3.6) (7.6) (3.0) (3.2) (6.7)
-------------------------------------- ------- ------- ------------- ------- ------- -------------
Profit before taxation 3.0 5.8 18.2 18.1 17.0 38.2
Taxation (4.7) (2.8) (8.3) (4.7) (2.8) (8.3)
Tax on exceptional
items and share
of tax on joint
ventures and associates - - - (1.1) (2.6) (3.9)
Non-controlling
interests 0.2 (0.1) 0.2 0.2 (0.1) 0.2
-------------------------------------- ------- ------- ------------- ------- ------- -------------
Earnings for the
period (1.5) 2.9 10.1 12.5 11.5 26.2
-------------------------------------- ------- ------- ------------- ------- ------- -------------
Basic
Earnings per ordinary
share (pence) (2.4)p 4.7p 16.5p
Diluted earnings
per ordinary share
(pence) (2.4)p 4.7p 16.4p
Underlying
Earnings per ordinary
share (pence) 20.4p 18.8p 42.7p
Diluted earnings
per ordinary share
(pence) 20.4p 18.8p 42.7p
Number of ordinary shares
in issue
Weighted average
(million) 61.3 61.3 61.3
Diluted weighted
average (million) 61.4 61.4 61.4
-------------------------------------- ------- ------- ------------- ------- ------- -------------
(i) Underlying earnings are presented as an additional
performance measure and is stated before exceptional items and
intangible amortisation and impairment.
The weighted average number of fully paid shares in issue during
the period excludes those held by the employee share trusts. The
diluted weighted average is calculated by adjusting for all
outstanding share options that are potentially dilutive, that is
where the exercise price is less than the average market price of
the shares during the period.
9. INTANGIBLE ASSETS
Intangible assets comprise goodwill of GBP49.0m (June 2015:
GBP50.9m, December 2015: GBP52.3m), contracts of GBP45.8m (June
2015: GBP48.1m, December 2015: GBP45.5m) and capitalised software
costs of GBP9.5m (June 2015: GBP11.2m, December 2015: GBP10.5m).
Currency movements contributed to a GBP5.3m increase to intangible
assets in the period (June 2015: reduction of GBP2.9m, December
2015: reduction of GBP1.5m).
10. ANALYSIS OF CHANGES IN NET BORROWINGS
Half
31 December year Subsidiaries Currency 30 June
cash
2015 flows acquired translation 2016
GBPm GBPm GBPm GBPm GBPm
----------------------- ------------ ------- ------------- ------------ --------
Cash at bank and
in hand 34.1 8.8 0.3 3.0 46.2
Bank overdrafts (0.2) (0.1) - - (0.3)
----------------------- ------------ ------- ------------- ------------ --------
Net cash and cash
equivalents 33.9 8.7 0.3 3.0 45.9
Bank loans due
within one year (2.7) (65.1) - - (67.8)
Preference shares (1.4) - - - (1.4)
Finance leases (0.5) 0.3 (0.2) - (0.4)
Debt due after
one year (150.8) 57.7 - - (93.1)
Net derivative
(liabilities)/assets (1.7) 1.2 - (9.3) (9.8)
----------------------- ------------ ------- ------------- ------------ --------
Net debt (123.2) 2.8 0.1 (6.3) (126.6)
----------------------- ------------ ------- ------------- ------------ --------
Current borrowings of GBP68.5m in the Balance Sheet include bank
overdrafts of GBP0.3m, bank loans of GBP67.8m and finance leases of
GBP0.4m. Non-current borrowings in the Balance Sheet of GBP94.5m
include preference shares of GBP1.4m and bank debt of GBP93.1m. Net
derivative liabilities of GBP9.8m shown above include derivative
financial assets of GBPNil and derivative financial liabilities of
GBP9.8m as shown on the Balance Sheet.
11. CASH GENERATED FROM OPERATIONS
Half Half year Full year
year to 30 June to
to 30 2015 31 December
June 2015
2016
GBPm GBPm GBPm
------------------------------------ ------- ------------ -------------
Operating profit 2.9 5.8 18.8
Depreciation 10.6 11.5 21.0
Amortisation of intangible
assets 5.3 4.3 10.6
Share-based payments 0.6 0.7 0.5
Onerous lease provision - - 0.3
Cash spend on onerous leases (0.7) (0.9) (2.8)
Gain on sale of property,
plant and equipment (0.1) - (0.6)
Pension charge 1.6 1.6 3.3
Pension credit - (0.1) (1.1)
Pension contributions in cash (7.0) (7.1) (14.1)
Rationalisation and transaction
related costs 3.1 2.0 5.3
Cash spend on rationalisation
and other exceptional costs (2.5) (4.2) (8.0)
Acquisition related earn out
adjustment (0.3) (0.5) 0.2
Net impairment loss 7.2 4.7 4.7
Decrease/(increase) in inventories 0.6 - (1.8)
Increase in trade and other
receivables (23.7) (20.4) (16.2)
Increase in trade and other
payables and provisions 22.8 16.1 15.8
20.4 13.5 35.9
------------------------------------ ------- ------------ -------------
12. FINANCIAL INSTRUMENTS
Derivative financial instruments
The Group only enters into derivative financial instruments that
are designated as hedging instruments.
The fair values of foreign currency instruments are calculated
by reference to current market rates.
Fair value hierarchy
As at 30 June 2016, the Group had the following financial
instruments held at fair value. The Group uses the following
hierarchy for determining and disclosing the fair value of
financial instruments by valuation technique:
Level quoted (unadjusted) prices in active markets
1: for identical assets and liabilities.
Level other techniques for which all inputs which
2: have a significant effect on the recorded fair
value are observable, either directly or indirectly.
Level techniques which use inputs which have a significant
3: effect on the recorded fair value that are not
based on observable market data.
For financial instruments that are recognised at the fair value
on a recurring basis, the Group determines whether transfers have
occurred between levels in the hierarchy by re-assessing
categorisation (based on the lowest level input that is significant
to the fair value measurement as a whole) at the end of each
reporting period.
Derivative financial instruments at fair value through other
comprehensive income.
30 June 30 June 31 December
2016 2015 2015
Level Level Level
2 GBPm 2 GBPm 2 GBPm
------------------------------------------------------ ----------- ----------- ---------------
Financial assets:
Foreign exchange contracts -
hedged - 4.4 0.6
Financial liabilities:
Foreign exchange contracts -
hedged 9.8 1.1 2.3
------------------------------------------------------ ----------- ----------- ---------------
During the half year to 30 June 2016 there were no
transfers between Level 1 and Level 2 fair value
measurements, and no transfers into and out of Level
3 fair value measurements.
All financial assets and liabilities, with the exception
of borrowings, have a carrying value that approximates
to fair value due to their short term nature.
30 June 2016 30 June 2015 31 December 2015
Book Fair Book
Value Value Value Fair Value Book Value Fair Value
GBPm GBPm GBPm GBPm GBPm GBPm
----------------- --------- --------- ------------- ----------- ----------- ---------------
Current
borrowings 68.5 68.8 7.2 7.5 3.4 3.7
Non-current
borrowings 94.5 95.4 154.1 155.3 152.2 153.1
----------------- --------- --------- ------------- ----------- ----------- ---------------
Contingent consideration
The acquisition of PlaneBiz 2015 Ltd in 2014 includes
options in relation to the 40% shareholding owned
by a third party. These options take the form of
a put option in favour of the third party shareholders
for up to 30% of the share capital, exercisable in
2018 and 2019. Following the expiry of this put option
the Group then has a call option, exercisable for
a 60 day period, for the remaining shares that have
not been exercised under the put option. The fair
value of the put option has been calculated based
on the expected discounted cash flows of the underlying
value, which is the expected average annual EBITDA
over the preceding three years multiplied by 5.5.
The call option is considered to have a negligible
fair value.
These liabilities for contingent consideration and
other acquisition related amounts are Level 3 derivative
financial instruments under IFRS 7.
30 June 31 December
30 June 2016 2015 2015
GBPm GBPm GBPm
-------------------------------- ------------- -------- ------------
Fair value of the contingent
consideration:
Fore Partnership - 0.9 1.6
Fair value of other contingent
acquisition related amounts:
PlaneBiz 2015 Ltd 3.1 2.5 2.7
-------------------------------- ------------- -------- ------------
13. CONTINGENT LIABILITIES
In the normal course of business, the Company has guaranteed
certain trading obligations of its subsidiaries.
14. RETIREMENT BENEFIT OBLIGATION
The professional advisor undertook a valuation of the Menzies
Pension Fund (the "Fund") as at 30 June 2016 (30 June 2015 and 31
December 2015) under IAS 19.
In deriving the results the professional advisor used the
projected unit method and the following financial assumptions:
Half year Half year Full year
to to to
30 June 30 June 31 December
2016 2015 2015
% % %
------------------------------- ---------- ---------- -------------
Rate of increase in salaries 2.8 3.2 3.0
Rate of increase in pensions
prior to 1 May 2006 3.5 3.6 3.5
Rate of increase in pensions
from 1 May 2006 to 1 June
2010 2.1 2.2 2.1
Rate of increase in pensions
after 1 June 2010 1.0 1.0 1.0
Price inflation 2.8 3.2 3.0
Discount rate 3.2 4.0 4.0
------------------------------- ---------- ---------- -------------
Fair value of the Fund assets and
liabilities
GBPm GBPm GBPm
------------------------------- ---------- ---------- -------------
Total value of assets 347.0 319.4 312.4
Defined benefit obligation (399.7) (359.5) (355.8)
------------------------------- ---------- ---------- -------------
Recognised in Balance
Sheet (52.7) (40.1) (43.4)
Related deferred
tax asset 9.5 8.0 7.8
------------------------------- ---------- ---------- -------------
Net pension liabilities (43.2) (32.1) (35.6)
------------------------------- ---------- ---------- -------------
Pension expense
The components of the pension
expense are:
Half year Half year Full year
to to to
30 June 30 June 31 December
2016 2015 2015
GBPm GBPm GBPm
------------------------------------ ---------- ---------- -------------
The amounts charged/(credited)
to operating profit are:
Current service cost 0.9 1.0 2.0
Administrative costs 0.7 0.6 1.3
Effect of settlements and
curtailments - (0.1) (1.1)
------------------------------------ ---------- ---------- -------------
1.6 1.5 2.2
------------------------------------ ---------- ---------- -------------
The amounts included in finance
costs are:
Interest cost on defined
benefit obligation 7.0 6.8 13.4
Interest income on Fund assets (6.1) (5.8) (11.5)
Net financial charge 0.9 1.0 1.9
------------------------------------ ---------- ---------- -------------
Pension expense 2.5 2.5 4.1
------------------------------------ ---------- ---------- -------------
The amounts of changes in the Fund assets and liabilities
recognised in the Statement of Comprehensive Income
are:
GBPm GBPm GBPm
------------------------------------ ---------- ---------- -------------
Returns on assets excluding
amounts included in net interest 30.4 0.8 (4.9)
Changes in financial assumptions (44.2) 13.5 10.5
------------------------------------ ---------- ---------- -------------
Actuarial (loss)/gain (13.8) 14.3 5.6
------------------------------------ ---------- ---------- -------------
Changes in the Fund assets
and defined benefit obligation
The change in scheme assets
during the period is:
GBPm GBPm GBPm
------------------------------------ ---------- ---------- -------------
Fair value of assets at start
of period 312.4 312.9 312.9
Interest income 6.1 5.8 11.5
Company contributions 7.0 7.1 14.1
Employee contributions 0.3 0.6 0.7
Effect of settlements - (0.2) (2.2)
Benefits and expenses paid (9.2) (7.6) (19.7)
Returns on assets excluding
amounts included in net interest 30.4 0.8 (4.9)
------------------------------------ ---------- ---------- -------------
Fair value of assets at end
of period 347.0 319.4 312.4
------------------------------------ ---------- ---------- -------------
The actual return on scheme assets in the half year
to 30 June 2016 was a gain of GBP36.5m (half year
to 30 June 2015: GBP6.6m and full year to 31 December
2015: GBP6.6m).
The change in defined benefit
obligation during the period
is:
GBPm GBPm GBPm
------------------------------------ ---------- ---------- -------------
Defined benefit obligation
at start of period 355.8 371.9 317.9
Total service cost 1.6 1.6 3.3
Interest cost 7.0 6.8 13.4
Effect of settlements - (0.3) (3.3)
Employee contributions 0.3 0.6 0.7
Benefits and expenses paid (9.2) (7.6) (19.7)
Changes in financial assumptions 44.2 (13.5) (10.5)
------------------------------------ ---------- ---------- -------------
Defined benefit obligation
at end of period 399.7 359.5 355.8
------------------------------------ ---------- ---------- -------------
15. Acquisitions
During the period the Group acquired 100% of the share capital
of Renaissance Aviation Ltd and Thistle Couriers Ltd.
On 9 February 2016 the Group acquired Renaissance Aviation Ltd,
a ground handling company based in Bermuda. The Group has acquired
the company to develop our presence in the region. These interim
financial statements include the impact of four months' trading
results.
On 9 February 2016 the Group acquired Thistle Couriers Ltd, a
logistics company based in Scotland. The Group has acquired the
company to realise the potential of the existing UK logistics
network. These interim financial statements include the impact of
four months' trading results.
Division Aviation Distribution
Renaissance Thistle
Name Aviation Couriers Total
Ltd Ltd Total acquisitions
Half year Half year acquisitions Full year
to to Half year to
30 June 30 June to 30 31 December
2016 2016 June 2016 2015
GBPm GBPm GBPm GBPm
------------------------------ ------------ ------------- -------------- --------------
Purchase consideration
Cash paid 2.3 1.1 3.4 6.8
Deferred consideration 0.2 0.3 0.5 0.7
Total purchase consideration 2.5 1.4 3.9 7.5
Less: fair value of
net assets acquired 2.5 1.1 3.6 3.3
Goodwill - 0.3 0.3 4.2
------------------------------ ------------ ------------- -------------- --------------
Goodwill recognised with respect to Thistle Couriers Ltd is
primarily attributable to the expertise in hard-to-reach logistic
locations in the UK and synergies with the Group.
The fair values of assets and liabilities arising from the
acquisitions are:
Renaissance Thistle
Aviation Couriers Total Total
Ltd Ltd acquisitions acquisitions
Half year Half year Half year Full year
to to to to
30 June 30 June 30 June 31 December
2016 2016 2016 2015
GBPm GBPm GBPm GBPm
-------------------------------- ------------ ----------- -------------- --------------
Non-current assets
Intangible assets (contracts) 1.9 0.6 2.5 1.7
Property, plant and
equipment 0.1 0.4 0.5 1.3
Current assets 0.6 0.7 1.3 2.1
Cash 0.1 0.2 0.3 1.3
Current liabilities (0.2) (0.6) (0.8) (2.4)
Finance leases - (0.2) (0.2) (0.7)
Net assets acquired
at fair value 2.5 1.1 3.6 3.3
-------------------------------- ------------ ----------- -------------- --------------
Current assets acquired with Renaissance Aviation Ltd and
Thistle Couriers Ltd included GBP0.5m and GBP0.6m of trade
receivables at fair value respectively, the gross amount acquired.
The fair values of the net assets of both companies acquired remain
provisional pending the formal completion of the valuation
process.
The acquired businesses contributed GBP0.2m profit before
taxation and GBP2.5m revenue from acquisition date. If the
businesses had been acquired on 1 January 2016, Group revenue and
profit before taxation for continuing operations would have been
GBP956.7m and GBP3.1m respectively. Transaction fees of GBP0.1m
relating to these acquisitions were incurred and expensed during
the period.
On 4 April 2016 the Group acquired 20% of the share capital of
Hamilton Aero Maintenance Ltd for a consideration of GBP0.3m. The
company provides line maintenance and engineering support services
and is based in Hamilton, New Zealand.
Contingent and deferred consideration
As set out in Note 4, contingent consideration of GBP1.3m
relating to the Fore Partnership was settled in March 2016.
Deferred consideration of GBP0.3m relating to the acquisition of
Menzies Parcels Ltd (formerly known as AJG Parcels Ltd) was cash
settled in May 2016.
16. Related Party Transactions
At 30 June 2016 the Group owed EM News Distribution (NI) Ltd, a
joint venture company, GBP7.2m (at 30 June 2015: GBP5.0m, 31
December 2015: GBP5.0m). At 30 June 2016 the Group owed GBP3.3m to
another joint venture company EM News Distribution (Ireland) Ltd
(at 30 June 2015: GBP0.1m owed by joint venture, 31 December 2015:
GBP1.1m owed by joint venture).
17. FOREIGN CURRENCY SENSITIVITY
For the period to 30 June 2016, if Sterling had
weakened/strengthened by 10% on currencies that have a material
impact on the Group profit before tax and equity, with all other
variables held constant the effect would have been:
Half year to Full year to
30 June 2016 31 December 2015
--------------------- ------------------------
Effect Effect
on profit Effect on profit
before on before Effect
tax equity tax on equity
Changes
in rate GBPm GBPm GBPm GBPm
------------------- --------- ----------- -------- ----------- -----------
US dollar +10% 0.7 2.9 1.0 2.1
US dollar - 10% (0.6) (2.4) (0.8) (1.7)
Australian dollar +10% 0.3 1.7 0.9 1.6
Australian dollar - 10% (0.3) (1.4) (0.7) (1.3)
Indian rupee +10% 0.3 1.1 0.6 0.6
Indian rupee - 10% (0.2) (0.9 (0.5) (0.5)
Euro +10% 0.1 0.4 0.5 0.9
Euro - 10% (0.1) (0.3) (0.4) (0.7)
South African
rand +10% (0.1) 0.7 - 0.6
South African
rand - 10% - (0.5) - (0.5)
------------------- --------- ----------- -------- ----------- -----------
The impact of the Group's exposure to all other currencies is
not considered to be material to the overall results of the
Group.
risks AND UNCERTAINTIES
The principal risks and uncertainties affecting the business
activities of the Group remain those detailed in the 2015 Annual
Report, a copy of which is available on the Group website at
www.johnmenziesplc.com. The Board considers that these remain a
current reflection of the risks and uncertainties facing the
business for the remaining six months of the financial year.
Directors' Responsibility Statement in respect of the Condensed
Interim Financial Statements
The Directors confirm that this condensed set of financial
statements has been prepared in accordance with IAS 34 Interim
Financial Reporting, as adopted by the European Union, and that the
interim management report includes a fair review of the information
required by the Disclosure Rules and Transparency Rules of the
Financial Conduct Authority, paragraphs DTR 4.2.7 R and DTR 4.2.8
R. The Directors of John Menzies plc are listed in the 2015 Annual
Report. A list of current Directors is maintained on the Company
website: www.johnmenziesplc.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR AKPDQABKDOFD
(END) Dow Jones Newswires
August 16, 2016 02:00 ET (06:00 GMT)
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