TIDMUKM
RNS Number : 6593C
UK Mail Group PLC
18 November 2009
18 November 2009
UK MAIL GROUP plc
INTERIM RESULTS (Unaudited)
FOR THE 6 MONTHS ENDED 30 SEPTEMBER 2009
Highlights
* Group revenues down 3.2% to GBP188.2m (2008: GBP194.5m)
* UK Mail revenues up 5.6% to GBP84.6m (2008: GBP80.1m)
* Group profit before tax up 18.6% to GBP7.0m (2008: GBP5.9m)
* Net cash at period end of GBP3.6m (2008: net debt GBP1.9m)
* Interim dividend of 6.4p per share (2008: 6.4p)
Guy Buswell, Chief Executive of UK Mail, said:-
"Our first half performance has been robust, despite the market challenges.
We have taken more cost out of our distribution network, already one of the most
efficient in the industry. This, together with new business wins and innovative
new products coming on stream, has increased profit by 18.6% despite a slight
revenue reduction. Our financial position is also strong, with net cash at the
period end.
Our strategy is to leverage our low-cost network in order to build competitive
advantage and drive profitable revenue growth. By bringing new products and
services to market, we aim to increase both the size of the market available to
us and our share of that market.
Whilst market conditions for the balance of the year remain hard to predict,
trading in recent weeks has been in line with our expectations, with minimal
overall impact from the recent mail strikes. We therefore remain confident
about the outcome for the full year, and about UK Mail Group's longer-term
prospects."
For further information, please contact:
+--------------------------------------------+----------------------------+
| UK Mail Group plc | |
+--------------------------------------------+----------------------------+
| Guy Buswell, Group Chief Executive | 0121 335 1111 |
+--------------------------------------------+----------------------------+
| Steven Glew, Group Finance Director | 01753 706 070 |
| | |
+--------------------------------------------+----------------------------+
| Hogarth Partnership | |
+--------------------------------------------+----------------------------+
| John Olsen | 020 7357 9477 |
| Ian Payne | |
+--------------------------------------------+----------------------------+
Introduction
The Group delivered a robust performance in the first half in the face of
considerable market challenges. Benefitting from an integrated distribution
network which is one of the most efficient in the industry, we achieved strong
profit growth of 18.6% despite a 3.2% reduction in revenue.
Our Mail and Courier businesses have grown their revenues and profit, driven by
new business wins and the actions we have taken to reduce costs in these
businesses.
Our Parcels and Pallets businesses are more closely linked to the economic
environment and saw their revenues decline. In both these businesses, however,
we have improved efficiency and reduced costs, leading to improved operating
margins which have largely offset the revenue decline.
Our financial position remains strong, with net cash at the period end of
GBP3.6m, compared to net debt of GBP1.9m as at 30 September 2008.
As well as an ongoing focus on cost reduction and efficiency gains, including
investment in further automation at our depots, we are accelerating our
development of innovative new products and services in order to increase the
size of the market available to us, and our share of that market.
Results
The results can be summarised as follows:
+----------------------------------+----------+--+---------+--+-----------+
| | Six months ending 30 September |
+----------------------------------+--------------------------------------+
| | 2009 | | 2008 | | Inc/(Dec) |
| | GBPm | | GBPm | | |
+----------------------------------+----------+--+---------+--+-----------+
| | | | | | |
+----------------------------------+----------+--+---------+--+-----------+
| Group revenue | 188.2 | | 194.5 | | (3.2%) |
+----------------------------------+----------+--+---------+--+-----------+
| | | | | | |
+----------------------------------+----------+--+---------+--+-----------+
| Operating profit | 7.1 | | 6.0 | | 18.3% |
+----------------------------------+----------+--+---------+--+-----------+
| Net finance costs | (0.1) | | (0.1) | | - |
+----------------------------------+----------+--+---------+--+-----------+
| Profit before taxation | 7.0 | | 5.9 | | 18.6% |
+----------------------------------+----------+--+---------+--+-----------+
| Taxation | (2.0) | | (4.0) | | 50.0% |
+----------------------------------+----------+--+---------+--+-----------+
| Profit after taxation | 5.0 | | 1.9 | | 163.2% |
+----------------------------------+----------+--+---------+--+-----------+
| | | | | | |
+----------------------------------+----------+--+---------+--+-----------+
| Basic earnings per share | 9.2p | | 3.5p | | 162.9% |
+----------------------------------+----------+--+---------+--+-----------+
| Adjusted earnings per share | 9.2p | | 7.6p | | 21.1% |
+----------------------------------+----------+--+---------+--+-----------+
Revenue and operating profit are analysed as follows:
+-------------------+---------+--+--------+---+---------+---+--------+--+--------+--+--------+
| | Revenue | | Operating Profit |
+-------------------+-----------------------------------+---+--------------------------------+
| | 2009 | | 2008 | | Inc/ | | 2009 | | 2008 | | Inc/ |
| | GBPm | | GBPm | | (Dec) | | GBPm | | GBPm | | |
| | | | | | % | | | | | | (Dec) |
| | | | | | | | | | | | % |
+-------------------+---------+--+--------+---+---------+---+--------+--+--------+--+--------+
| | | | | | | | | | | | |
+-------------------+---------+--+--------+---+---------+---+--------+--+--------+--+--------+
| Parcels | 80.0 | | 89.6 | | (10.7%) | | 6.3 | | 6.4 | | (1.6%) |
+-------------------+---------+--+--------+---+---------+---+--------+--+--------+--+--------+
| Mail | 84.6 | | 80.1 | | 5.6% | | 5.9 | | 5.6 | | 5.4% |
+-------------------+---------+--+--------+---+---------+---+--------+--+--------+--+--------+
| Specialist | 23.6 | | 24.8 | | (4.8%) | | 2.0 | | 1.2 | | 66.7% |
| services | | | | | | | | | | | |
+-------------------+---------+--+--------+---+---------+---+--------+--+--------+--+--------+
| Total | 188.2 | | 194.5 | | (3.2%) | | 14.2 | | 13.2 | | 7.6% |
+-------------------+---------+--+--------+---+---------+---+--------+--+--------+--+--------+
| | | | | | | | | | | | |
+-------------------+---------+--+--------+---+---------+---+--------+--+--------+--+--------+
| Central costs | | | | | | | (7.1) | | (7.2) | | 1.4% |
+-------------------+---------+--+--------+---+---------+---+--------+--+--------+--+--------+
| Operating profit | | 7.1 | | 6.0 | | 18.3% |
+-------------------+---------+--+--------+---+---------+---+--------+--+--------+--+--------+
Parcels
In Parcels, comprising the Group's business-to-business, business-to-consumer
and international parcel delivery services, revenues showed a decline compared
to the first half of last year of 10.7% to GBP80.0m (2008: GBP89.6m). The rate
of decline reduced as the period progressed, although the future level and
sustainability of this improvement will only become clear over the key
pre-Christmas trading period.
We believe we have continued to trade well compared to our competitors, through
an ongoing strong sales effort, combined with one of the lowest cost networks in
the industry which enables us to win profitable business in competitive tenders.
Our ongoing focus on efficiency has enabled us to identify further cost savings
which in turn have led to a 0.8 percentage point increase in the Parcels
operating margin. Operating profit was therefore almost unchanged at GBP6.3m
(2008: GBP6.4m).
Our plans to improve the efficiency and effectiveness of our Parcels operation
have continued during the period. A key element of this has been the
implementation of partial automation, initially into our Birmingham hub. This
project has progressed well, with the sorting machine in Birmingham going live
in October 2009, on schedule and to budget. We are confident that this GBP2m
investment will bring significant benefits, including greatly improved vehicle
utilisation. We plan to extend automation to further hubs in the future, once
the Birmingham project has been fully bedded in.
We have also invested in our IT infrastructure during the period to drive
further efficiencies.
Mail
UK Mail is, after Royal Mail, the second largest mail service provider in the
UK, collecting up to 17m items per day. The business showed further growth in
both revenues and profit, and enjoyed continued success in attracting new
business and in gaining further volume from existing customers. These gains have
more than offset the impact of the economic environment on 'discretionary
mailings', with revenues rising 5.6% to GBP84.6m (2008: GBP80.1m) at maintained
margins.
Some 70% of our mail volume is based on delivering regular statements or
statutory notifications. This aspect of our business is less exposed to
fluctuations in levels of economic activity than is the remaining 30% which
comprises 'discretionary' mail, mainly marketing type mailings. We have seen
some reductions in the level of these mailings, particularly over the summer
months.
UK Mail operating profit was up 5.4% to GBP5.9m, reflecting the good revenue
growth with the operating margin maintained at 7.0% (2008: 7.0%).
As previously advised, the overall rate of growth in mail volumes will moderate
as the deregulated market matures. However, we continue to see good growth
opportunities for our business through increasing our penetration of existing
customers and, most importantly, through product innovation that will open up
new opportunities in the mail market.
A key platform for our new product development is 'imail', which was launched in
late 2008. This is a web-to-print postal service that allows customers of any
size to electronically transmit mail items to our national network of mail
centres where it is colour printed, enveloped and sent for next-day or two-day
delivery. imail is now achieving daily volumes of some 15,000 items and the
customer base is building as we identify and focus on the markets which will
most benefit from this service. The run rate is such that we now expect imail to
exceed our original target of breakeven for the full year.
The imail service has recently been extended to include postcards and
appointment cards and we are developing a range of further products and new
markets based around the imail platform.
Specialist Services
Overall revenues in Specialist Services, comprising our nationwide palletised
goods delivery service (UK Pallets) and same-day courier activities (UK Mail -
Courier), decreased by 4.8% to GBP23.6m (2008: GBP24.8m). Operating profit
increased by 66.7% to GBP2.0m (2008: GBP1.2m).
UK Pallets performed well in a difficult market, with revenues down 8.0% to
GBP14.9m (2008: GBP16.2m). We have improved the efficiency of our operations and
reduced costs leading to an improvement in operating margin for this business
which has largely offset the revenue decline.
Revenues in our Courier business increased by 1.2% to GBP8.7m (2008: GBP8.6m).
Profits in this business are significantly ahead of last year and were the main
factor in the overall increase in Specialist Services profits. This increase has
been achieved through the development of our customer base focusing on new more
profitable areas of business. Towards the end of the last financial year we also
re-structured the operations which has allowed us to significantly reduce its
cost base.
We see further opportunities to build on the advantages that our nationwide,
efficient network gives us, and on our proven ability to support national
contracts with high service levels.
Finance costs
Net interest payable remained at GBP0.1m (2008: GBP0.1m) reflecting the decrease
in average net debt, offset by a reduction in interest income on surplus cash
balances due to the reduced interest rates.
Cash Flow and Balance Sheet
The Group has a strong balance sheet with net cash at the end of the period of
GBP3.6m (2008: net debt GBP1.9m). Net cash inflow from operating activities
totalled GBP5.1m (2008: GBP1.7m). Net cash outflow for the period was GBP7.3m
(2008: GBP9.4m), which included GBP3.1m (2008: GBP5.6m) of cash consumed in
working capital reflecting the normal first half trend in our business and which
we expect to be largely reversed in the second half.
Capital expenditure for the period was GBP4.4m (2008: GBP4.2m). This includes
GBP1.2m on computer equipment, as we continue to develop our systems
infrastructure, and GBP2.2m on plant and equipment, primarily investment of some
GBP2.0m in the partial automation of our Birmingham hub.
Dividend
The Board has declared an unchanged Interim Dividend of 6.4p (2008: 6.4p) to be
paid on 15 January 2010 to shareholders registered on 4 December 2009.
Earnings per share
Basic earnings per share, adjusted to exclude the impact of the one-off taxation
charge last year, increased 21.1% to 9.2p (2008: 7.6p). Basic earnings per share
increased 162.9% to 9.2p (2008: 3.5p).
Primary risks and uncertainties facing the business
The potential risks and uncertainties that may affect the Group's performance
were discussed on pages 67 and 68 of the Group's Annual Report and Accounts for
the 2009 financial year. These included market, credit, regulatory, price,
liquidity, capital and foreign exchange risk. It is considered that these still
remain the most likely areas of potential risk and uncertainty, with the
position unchanged from that set out in the 2009 Annual Report and Accounts.
CURRENT TRADING & OUTLOOK
Whilst market conditions for the balance of the year remain hard to predict,
trading in recent weeks has been in line with our expectations.
Parcels revenues are likely to remain under pressure in the second half, but we
are confident that our low cost network, enhanced by the introduction of
automation, will enable us to maintain a high level of competitiveness, which
will keep us well placed as the economic conditions improve.
The rate of volume growth in our Mail business will slow from the high levels
achieved during the "early stage" years of the deregulated market. However, we
continue to see very attractive growth opportunities, particularly from the
introduction and development of higher margin new products and services through
imail and other platforms.
We expect to see continued further progression in our courier business in the
second half.
With regard to the mail strikes, there was limited negative impact on our Mail
volumes, as customers delayed rather than cancelled mailings. Within our Parcels
business, volumes benefitted on the days of strike action as businesses sought
alternative methods of delivery for their mail items.
Our business model, underpinned by a strong balance sheet, remains robust. Our
strategy remains to continue to build competitive advantage and so drive
profitable revenue growth. We are achieving this by developing and investing in
our low-cost integrated network and bringing to market new products and
services. By capitalising on our leadership and differentiated positioning, we
aim to increase both the size of the market available to us and our share of
that market.
Against such a background, we are confident about the outcome for the full year,
and about UK Mail Group's longer-term prospects.
+---------+---------+---------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| Consolidated Statement of Comprehensive Income | | | | |
+--------------------------------------------------------------------------+-------------+-------------+------------+-------------+
| for the six months ended 30 September | | | | | | | |
| 2009 | | | | | | | |
+---------------------------------------+------+-------------+-------------+-------------+-------------+------------+-------------+
| | | | | | | | | | | |
+---------+---------+---------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| | | | | | | | Unaudited | | Audited | |
| | | | | | | | Restated * | | Restated * | |
| | | | | | | | Six months | | Year to | |
| | | | | | | | to | | 31 March | |
| | | | | | | | 30 | | 2009 | |
| | | | | | | | September | | GBPm | |
| | | | | | | | 2008 | | | |
| | | | | | | | GBPm | | | |
+---------+---------+---------+---------+------+-------------+-------------+ +-------------+ +-------------+
| | | | | | Unaudited | | | | | |
| | | | | | Six months | | | | | |
| | | | | | to | | | | | |
| | | | | | 30 | | | | | |
| | | | | | September | | | | | |
| | | | | | 2009 | | | | | |
| | | | | | GBPm | | | | | |
+---------+---------+---------+---------+------+ +-------------+ +-------------+ +-------------+
| | | | | | | | | | | |
+---------+---------+---------+---------+------+ +-------------+ +-------------+ +-------------+
| | | | | | | | | | | |
+---------+---------+---------+---------+------+ +-------------+ +-------------+ +-------------+
| | | | | | | | | | | |
+---------+---------+---------+---------+------+ +-------------+ +-------------+ +-------------+
| | | | |Note | | | | | | |
+---------+---------+---------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| | | | | | | | | |
+-----------------------------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| Continuing operations | | | | | | | | |
+-----------------------------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| Revenue | | 4 | 188.2 | | 194.5 | | 385.7 | |
+-----------------------------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| Cost of sales | | | (161.6) | | (168.5) | | (332.4) | |
+-----------------------------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| Gross profit | | | 26.6 | | 26.0 | | 53.3 | |
+-----------------------------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| Administrative expenses | | | (19.5) | | (20.0) | | (37.1) | |
+-----------------------------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| Operating profit before exceptional | | 7.1 | | 6.0 | | 17.3 | |
| items | | | | | | | |
+---------------------------------------+------+-------------+-------------+-------------+-------------+------------+-------------+
| Exceptional administrative | | 7 | - | | - | | (1.1) | |
| items | | | | | | | | |
+-----------------------------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| Operating profit | | 4 | 7.1 | | 6.0 | | 16.2 | |
+-----------------------------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| Finance costs | | | (0.2) | | (0.3) | | (0.5) | |
+-----------------------------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| Finance income | | | 0.1 | | 0.2 | | 0.3 | |
+-----------------------------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| Profit before taxation | | | 7.0 | | 5.9 | | 16.0 | |
+-----------------------------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| Taxation before exceptional | | 13 | (2.0) | | (1.8) | | (5.2) | |
| items | | | | | | | | |
+-----------------------------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| Exceptional taxation items | | 7 | - | | (2.2) | | (1.9) | |
+-----------------------------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| Total taxation | | 13 | (2.0) | | (4.0) | | (7.1) | |
+-----------------------------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| Profit for the period | | | 5.0 | | 1.9 | | 8.9 | |
+-----------------------------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| | | | | | | | | | | |
+---------+---------+---------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| Total comprehensive income for the | | 5.0 | | 1.9 | | 8.9 | |
| period | | | | | | | |
+---------------------------------------+------+-------------+-------------+-------------+-------------+------------+-------------+
| | | | | | | | | | | |
+---------+---------+---------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| Total comprehensive income | | | | | | | |
| attributable to: | | | | | | | |
+---------------------------------------+------+-------------+-------------+-------------+-------------+------------+-------------+
| Equity holders of the | | | 5.0 | | 1.9 | | 8.9 | |
| company | | | | | | | | |
+-----------------------------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| | | | | | | | | | | |
+---------+---------+---------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| Basic earnings per share | | 14 | 9.2p | | 3.5p | | 16.5p | |
+-----------------------------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| Diluted earnings per share | | 14 | 9.0p | | 3.4p | | 16.2p | |
+-----------------------------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| | | | | | | | | | | |
+---------+---------+---------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
| * see note 6 | |
+-------------------------------------------------------------------------------------------------------------------+-------------+
| | | | | | | | | | | |
+---------+---------+---------+---------+------+-------------+-------------+-------------+-------------+------------+-------------+
+---------+---------+---------+--------+------+-------------+--+-------------+--+------------+---+
| Consolidated Balance Sheet | | | | |
+--------------------------------------------------------------+-------------+--+------------+---+
| at 30 September 2009 | | | | | | | | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| | | | | | Unaudited | | Unaudited | | Audited | |
| | | | | | 30 | | 30 | | 31 March | |
| | | | | | September | | September | | 2009 | |
| | | | | | 2009 | | 2008 | | GBPm | |
| | | | | | GBPm | | GBPm | | | |
+---------+---------+---------+--------+------+ +--+ +--+ +---+
| | | | | | | | | | | |
+---------+---------+---------+--------+------+ +-------------+ +--+ +-------------+
| | | | | | | | | | | |
+---------+---------+---------+--------+------+ +-------------+ +--+ +-------------+
| | | | |Note | | | | | | |
+---------+---------+---------+--------+------+-------------+-------------+-------------+--+------------+-------------+
| Assets | | | | | | | | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Non-current assets | | | | | | | | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Goodwill | | 8 | 9.5 | | 9.5 | | 9.5 | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Intangible assets | | 8 | 1.9 | | 1.7 | | 2.0 | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Investment properties | | 8 | 1.0 | | 1.0 | | 1.0 | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Property, plant and | | 8 | 39.3 | | 37.6 | | 38.2 | |
| equipment | | | | | | | | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Deferred tax assets | | | 0.4 | | 0.5 | | 0.7 | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| | | | 52.1 | | 50.3 | | 51.4 | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Current assets | | | | | | | | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Inventories | | | 0.2 | | 0.2 | | 0.2 | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Trade and other receivables | | | 52.0 | | 60.9 | | 53.6 | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Cash and cash equivalents | | 11 | 10.7 | | 7.0 | | 18.0 | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| | | | 62.9 | | 68.1 | | 71.8 | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Liabilities | | | | | | | | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Current liabilities | | | | | | | | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Borrowings | | 11 | (1.7) | | (1.7) | | (1.7) | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Trade and other payables | | | (48.5) | | (52.5) | | (52.8) | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Current tax liabilities | | | (2.0) | | (1.9) | | (2.5) | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Provisions | | 12 | (0.3) | | (0.8) | | (0.6) | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| | | | (52.5) | | (56.9) | | (57.6) | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| | | | | | | | | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Net current assets | | | 10.4 | | 11.2 | | 14.2 | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| | | | | | | | | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Non-current liabilities | | | | | | | | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Borrowings | | 11 | (5.4) | | (7.2) | | (6.8) | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Deferred tax liabilities | | | (3.0) | | (3.1) | | (3.4) | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Provisions | | 12 | (0.4) | | (0.4) | | (0.5) | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| | | | (8.8) | | (10.7) | | (10.7) | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| | | | | | | | | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Net assets | | | 53.7 | | 50.8 | | 54.9 | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| | | | | | | | | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Shareholders' equity | | | | | | | | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Ordinary shares | | 9 | 5.5 | | 5.5 | | 5.5 | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Share premium | | 9 | 16.6 | | 16.6 | | 16.6 | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Retained earnings | | | 31.6 | | 28.7 | | 32.8 | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| Total shareholders' equity | | | 53.7 | | 50.8 | | 54.9 | |
+-----------------------------+--------+------+-------------+--+-------------+--+------------+---+
| | | | | | | | | |
+---------+---------+---------+--------+------+-------------+--+-------------+--+------------+---+
+------------------------------------+-----+-----+----+-------------+-------------+----------+-----+--+------------+-----+
| Consolidated Statement of Cash Flows | | |
+--------------------------------------------------------------------------------------------+---------------------+-----+
| for the six months ended 30 September 2009 | |
+------------------------------------------------------------------------------------------------------------------+-----+
| | | | | | | | |
+------------------------------------+----------------+-------------+-------------+----------------+--+------------+-----+
| | | | | | | | |
+------------------------------------+----------------+-------------+-------------+----------------+--+------------+-----+
| | | Unaudited | | Unaudited | | Audited | |
| | | Six months | | Six | | Year to | |
| | | to | | months to | | 31 March | |
| | | 30 | | 30 | | 2009 | |
| | | September | | September | | GBPm | |
| | | 2009 | | 2008 | | | |
| | | GBPm | | GBPm | | | |
+------------------------------------+----------------+ +-------------+ +--+ +-----+
| | | | | | | | |
+------------------------------------+----------------+ +-------------+ +--+ +-----+
| | | | | | | | |
+------------------------------------+----------------+ +-------------+ +--+ +-----+
| | | | | | | | |
+------------------------------------+----------------+ +-------------+ +--+ +-----+
| | Note | | | | | | |
+------------------------------------+----------------+-------------+-------------+----------------+--+------------+-----+
| Continuing operations | | | | | | | |
+------------------------------------+----------------+-------------+-------------+----------------+--+------------+-----+
| Operating activities | | | | | | |
+-----------------------------------------------------+-------------+-------------+----------------+--+------------+-----+
| Cash generated from operations | 10 | 7.8 | | 3.9 | | 25.6 | |
+------------------------------------+----------------+-------------+-------------+----------------+--+------------+-----+
| Finance income received | 0.1 | | 0.2 | | 0.3 | |
+-----------------------------------------------------+-------------+-------------+----------------+--+------------+-----+
| Finance costs paid | (0.2) | | (0.3) | | (0.5) | |
+-----------------------------------------------------+-------------+-------------+----------------+--+------------+-----+
| Taxation paid | (2.6) | | (2.1) | | (4.6) | |
+-----------------------------------------------------+-------------+-------------+----------------+--+------------+-----+
| Net cash inflow from operating activities | 5.1 | | 1.7 | | 20.8 | |
+-----------------------------------------------------+-------------+-------------+----------------+--+------------+-----+
| | | | | | | | |
+------------------------------------+----------------+-------------+-------------+----------------+--+------------+-----+
| Investing activities | | | | | | |
+-----------------------------------------------------+-------------+-------------+----------------+--+------------+-----+
| Proceeds from disposal of | 8 | - | | 0.2 | | 0.1 | |
| property, plant and equipment | | | | | | | |
+------------------------------------+----------------+-------------+-------------+----------------+--+------------+-----+
| Purchase of property, plant and | 8 | (4.0) | | (3.4) | | (6.8) | |
| equipment | | | | | | | |
+------------------------------------+----------------+-------------+-------------+----------------+--+------------+-----+
| Purchase of intangible assets | 8 | (0.4) | | (0.8) | | (1.5) | |
+------------------------------------+----------------+-------------+-------------+----------------+--+------------+-----+
| Net cash outflow from investing | (4.4) | | (4.0) | | (8.2) | |
| activities | | | | | | |
+-----------------------------------------------------+-------------+-------------+----------------+--+------------+-----+
| | | | | | | | |
+------------------------------------------+----------+-------------+-------------+----------------+--+------------+-----+
| Financing activities | | | | | | |
+-----------------------------------------------------+-------------+-------------+----------------+--+------------+-----+
| Dividends paid to shareholders | 15 | (5.9) | | (5.8) | | (9.3) | |
+------------------------------------+----------------+-------------+-------------+----------------+--+------------+-----+
| Repayment of finance lease | 11 | (0.4) | | (0.3) | | (0.7) | |
| liabilities | | | | | | | |
+------------------------------------+----------------+-------------+-------------+----------------+--+------------+-----+
| Purchase of UK Mail shares by the | 9 | (0.7) | | - | | - | |
| ESOT | | | | | | | |
+------------------------------------+----------------+-------------+-------------+----------------+--+------------+-----+
| Repayment of borrowings | 11 | (1.0) | | (1.0) | | (1.0) | |
+------------------------------------+----------------+-------------+-------------+----------------+--+------------+-----+
| Net cash outflow from financing | (8.0) | | (7.1) | | (11.0) | |
| activities | | | | | | |
+-----------------------------------------------------+-------------+-------------+----------------+--+------------+-----+
| | | | | | | | |
+------------------------------------+----------------+-------------+-------------+----------------+--+------------+-----+
| Net (decrease)/increase in cash | 11 | (7.3) | | (9.4) | | 1.6 | |
| and cash equivalents | | | | | | | |
+------------------------------------+----------------+-------------+-------------+----------------+--+------------+-----+
| Cash and cash equivalents at the | 11 | 18.0 | | 16.4 | | 16.4 | |
| start of the period | | | | | | | |
+------------------------------------+----------------+-------------+-------------+----------------+--+------------+-----+
| Cash and cash equivalents at the | 11 | 10.7 | | 7.0 | | 18.0 | |
| end of period | | | | | | | |
+------------------------------------+----------------+-------------+-------------+----------------+--+------------+-----+
| | | | | | | | |
+------------------------------------+-----+-----+----+-------------+-------------+----------+-----+--+------------+-----+
+---------------------------------+---+--+----------+-+-+--+--+-----+-+--+--+-----+-+--+-+--+-+-+-+-+
| Consolidated Statement of Changes in Shareholders' Equity (unaudited) |
+---------------------------------------------------------------------------------------------+
| for the six months ended 30 September 2009 |
+---------------------------------------------------------------------------------------------+
| | | | | | | | | |
+---------------------------------+------+--------------------+-----+-------+-----+------+--+-----+
| | | Attributable to equity holders of the company |
+---------------------------------+------+----------------------------------------------------------+
| | | Share | | Retained | | Total |
| | | premium | | earnings | | equity |
| | | | | Restated | | |
| | | | | * | | |
+---------------------------------+ + +--+ +--+ +
| | | | | | | |
+---------------------------------+---------------------+ +--+ +--+ +
| | Ordinary | | | | | |
| | shares | | | | | |
+-------------------------------------+-----------------+-------------+--+----------+--+------------+
| |Note | GBPm | | GBPm | | GBPm | | GBPm |
+---------------------------------+------+----------+---+-------------+--+----------+--+------------+
| | | | | | | | | |
+---------------------------------+------+------------+----+----------+--+----------+--+------------+
| Balance as at 1 April 2009 | | 5.5 | | 16.6 | | 32.8 | | 54.9 |
+---------------------------------+------+------------+----+----------+--+----------+--+------------+
| Dividends paid to shareholders | 15 | - | | - | | (5.9) | | (5.9) |
+---------------------------------+------+------------+----+----------+--+----------+--+------------+
| Purchase of UK Mail shares by | 9 | | | | | (0.7) | | (0.7) |
| the ESOT | | | | | | | | |
+---------------------------------+------+------------+----+----------+--+----------+--+------------+
| Employees' share option scheme: | | | | | | | | |
+---------------------------------+------+------------+----+----------+--+----------+--+------------+
| - value of employee services | | - | | - | | 0.4 | | 0.4 |
+---------------------------------+------+------------+----+----------+--+----------+--+------------+
| Profit for the period | | - | | - | | 5.0 | | 5.0 |
+---------------------------------+------+------------+----+----------+--+----------+--+------------+
| Balance as at 30 September 2009 | | 5.5 | | 16.6 | | 31.6 | | 53.7 |
+---------------------------------+------+------------+----+----------+--+----------+--+------------+
| | | | | | | | | |
+---------------------------------+------+------------+----+----------+--+----------+--+------------+
| Balance as at 1 April 2008 | | 5.5 | | 16.6 | | 31.9 | | 54.0 |
+---------------------------------+------+------------+----+----------+--+----------+--+------------+
| Dividends paid to shareholders | 15 | - | | - | | (5.8) | | (5.8) |
+---------------------------------+------+------------+----+----------+--+----------+--+------------+
| Employees' share option scheme: | | | | | | | | |
+---------------------------------+------+------------+----+----------+--+----------+--+------------+
| - value of employee services | | - | | - | | 0.7 | | 0.7 |
+---------------------------------+------+------------+----+----------+--+----------+--+------------+
| Profit for the period | | - | | - | | 1.9 | | 1.9 |
+---------------------------------+------+------------+----+----------+--+----------+--+------------+
| Balance as at 30 September 2008 | | 5.5 | | 16.6 | | 28.7 | | 50.8 |
+---------------------------------+------+------------+----+----------+--+----------+--+------------+
| | | | | | | | | |
+---------------------------------+------+------------+----+----------+--+----------+--+------------+
| * see note 6 |
+---------------------------------------------------------------------------------------------------+
| |
+---------------------------------+---+--+----------+-+-+--+--+-----+-+--+--+-----+-+--+-+--+-+-+-+-+
+----+---+--------+--------+--------+----+----+----+----+----+----+----+-----------+--+----------+
| | Notes to condensed consolidated interim financial statements |
+----+-------------------------------------------------------------------------------------------+
| | | | |
+----+---+--------+------------------------------------------------------------------------------+
| 1 | General information |
+----+-------------------------------------------------------------------------------------------+
| | | | | | |
+----+---+--------+--------+--------+------------------------------------------------------------+
| | The company is a public limited liability company incorporated and domiciled in England. |
| | The address of its registered office is 464 Berkshire Avenue, Slough, Berkshire, SL1 4PL. |
+----+-------------------------------------------------------------------------------------------+
| | | | | | |
+----+---+--------+--------+--------+------------------------------------------------------------+
| | In September 2009, the Group restructured its businesses largely through merging the |
| | business and activities of the former 'UK Mail Ltd', into the company formally known as |
| | 'Business Post Ltd'. The merged 'Business Post Ltd' subsequently changed its name to 'UK |
| | Mail Ltd', and the old 'UK Mail Ltd' changed its name to 'UK Mail Express Parcels and |
| | Mail Ltd', which is now a dormant company. |
+----+-------------------------------------------------------------------------------------------+
| | | | | | |
+----+---+--------+--------+--------+------------------------------------------------------------+
| | On 26 October 2009, the parent company changed its name from Business Post Group plc to |
| | UK Mail Group plc. |
+----+-------------------------------------------------------------------------------------------+
| | | | | | |
+----+---+--------+--------+--------+------------------------------------------------------------+
| | As a result the company UK Mail Group plc is now the holding company for two trading |
| | companies; UK Mail Ltd and UK Pallets Ltd. |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | | |
+----+---+--------+--------+--------+---------+---------+----------------------------------------+
| | The company is listed on the London Stock Exchange (LSE: UKM). |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | | | |
+----+---+--------+--------+--------+---------+---------+---------+------------------------------+
| | The condensed consolidated interim financial statements were approved for issue on 17 |
| | November 2009. |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | | | |
+----+---+--------+--------+--------+---------+---------+---------+------------------------------+
| | The condensed consolidated interim financial statements do not comprise statutory |
| | accounts within the meaning of Section 434 of the Companies Act 2006. Within the notes to |
| | these financial statements the half year periods to 30 September 2009 and 2008 are |
| | unaudited. Statutory accounts for the year ended 31 March 2009 were approved by the Board |
| | of directors on 20 May 2009 and delivered to the Registrar of Companies. The report of |
| | the auditors on those accounts was unqualified, did not contain an emphasis of matter |
| | paragraph and did not contain any statement under Section 237 of the Companies Act 1985. |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+---------+--------------------------------------------------+
| 2 | Basis of preparation |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+---------+--------------------------------------------------+
| | This condensed consolidated interim financial statements for the half-year ended 30 |
| | September 2009 has been prepared in accordance with the Disclosure and Transparency Rules |
| | of the Financial Services Authority and with IAS 34, 'Interim financial reporting' as |
| | adopted by the European Union. They do not include all of the information required for |
| | full annual financial statements, and should be read in conjunction with the consolidated |
| | annual financial statements of the Group as at and for the year ended 31 March 2009, |
| | which were prepared in accordance with IFRSs as adopted by the European Union. |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+---------+--------------------------------------------------+
| | The consolidated financial statements of the Group as at and for the year ended 31 March |
| | 2009 are available upon request from the Company's registered office at 464 Berkshire |
| | Avenue Slough, SL1 4PL or at www.ukmail.com. |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+---------+--------------------------------------------------+
| | The interim financial statements are presented in Sterling and all values are rounded to |
| | the nearest million (GBPm), except when otherwise indicated. |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | | |
+----+---+--------+--------+--------+---------+---------+----------------------------------------+
| | After making enquiries, the directors have a reasonable expectation that the Company and |
| | the Group have adequate resources to continue in operational existence for the |
| | foreseeable future. The Group meets its day to day working capital requirements through |
| | operating cash flows, with borrowings in place to fund acquisitions and capital |
| | expenditure. Movements in the Group's overall net debt position are shown in note 11. The |
| | Group also has GBP5m of undrawn committed facilities, which are in place until 31 |
| | December 2009. Accordingly they continue to adopt the going concern basis in preparing |
| | the condensed consolidated interim financial statements. |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | | |
+----+---+--------+--------+--------+---------+---------+----------------------------------------+
| 3 | Accounting policies |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | | |
+----+---+--------+--------+--------+---------+---------+----------------------------------------+
| | Except as described below, the accounting policies applied by the Group in these |
| | condensed consolidated interim financial statements are consistent with those applied by |
| | the Group in its consolidated annual financial statements as at and for the year ended 31 |
| | March 2009. |
+----+-------------------------------------------------------------------------------------------+
| | |
+----+-------------------------------------------------------------------------------------------+
| | During the period the Group has adopted the following new standards, amendments to |
| | standards or interpretations, which are mandatory for the first time for the financial |
| | year beginning 1 April 2009. |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | | |
+----+---+--------+--------+--------+---------+---------+----------------------------------------+
| | ¦ | IAS 1 (revised), 'Presentation of financial statements', effective for annual periods |
| | | beginning on or after 1 January 2009 |
+----+---+---------------------------------------------------------------------------------------+
| | | | | | | | | |
+----+---+--------+--------+--------+---------+---------+---------+------------------------------+
| | ¦ | IAS 23 (amendment), 'Borrowing costs', effective for annual periods beginning on or |
| | | after 1 January 2009 |
+----+---+---------------------------------------------------------------------------------------+
| | | | | | | | | |
+----+---+--------+--------+--------+---------+---------+---------+------------------------------+
| | ¦ | IAS 32 (amendment), 'Financial instruments: Presentation', effective for annual |
| | | periods beginning on or after 1 January 2009 |
+----+---+---------------------------------------------------------------------------------------+
| | | | | | | | | |
+----+---+--------+--------+--------+---------+---------+---------+------------------------------+
| | ¦ | IAS 36 (amendment), 'Intangible assets', effective for annual periods beginning on or |
| | | after 1 January 2009 |
+----+---+---------------------------------------------------------------------------------------+
| | | | | | | | | |
+----+---+--------+--------+--------+---------+---------+---------+------------------------------+
| | ¦ | IFRIC 13, 'Customer loyalty programmes', effective for annual periods beginning on or |
| | | after 1 July 2008 |
+----+---+---------------------------------------------------------------------------------------+
| | | | | | | | | |
+----+---+--------+--------+--------+---------+---------+---------+------------------------------+
| | ¦ | IFRIC 15, 'Agreements for the construction of real estate', effective for annual |
| | | periods beginning on or after 1 January 2009 |
+----+---+---------------------------------------------------------------------------------------+
| | | | | | | | | |
+----+---+--------+--------+--------+---------+---------+---------+------------------------------+
| | ¦ | IFRIC 16, 'Hedges of a net investment in a foreign operation', effective for annual |
| | | periods beginning on or after 1 October 2008 |
+----+---+---------------------------------------------------------------------------------------+
| | | | | | | | | |
+----+---+--------+--------+--------+---------+---------+---------+------------------------------+
| | ¦ | IFRS 1 (amendment) 'First time adoption of IFRS' and IAS 27, 'Consolidated and |
| | | separate financial statements', effective for annual periods beginning on or after 1 |
| | | January 2009 |
+----+---+---------------------------------------------------------------------------------------+
| | | | | | | | |
+----+---+--------+--------+--------+---------+---------+----------------------------------------+
| | ¦ | IFRS 2 (amendment) 'Share-based payment', effective for annual periods beginning on |
| | | or after 1 January 2009 |
+----+---+---------------------------------------------------------------------------------------+
| | | | | | | | |
+----+---+--------+--------+--------+---------+---------+----------------------------------------+
| | ¦ | IFRS 7, 'Financial Instruments: disclosures', effective for annual periods beginning |
| | | on or after 1 January 2009 |
+----+---+---------------------------------------------------------------------------------------+
| | | | | | | | |
+----+---+--------+--------+--------+---------+---------+----------------------------------------+
| | ¦ | IFRS 8, 'Operating segments', effective for annual periods beginning on or after 1 |
| | | January 2009 |
+----+---+---------------------------------------------------------------------------------------+
| | The adoption of these standards and interpretations had no material impact on the Group |
| | other than those set out below. |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | | |
+----+---+--------+--------+--------+---------+---------+----------------------------------------+
| | IAS 1 (revised) - Presentation of financial statements |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | | |
+----+---+--------+--------+--------+---------+---------+----------------------------------------+
| | The revised standard requires non-owner changes in equity to be presented in a |
| | performance statement separately from owner changes in equity. Entities can choose |
| | whether to present one performance statement (the statement of comprehensive income) or |
| | two statements (the income statement and statement of comprehensive income). The Group |
| | has elected to present a single statement of comprehensive income. The financial |
| | statements have been prepared under the revised disclosure requirements. |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | | |
+----+---+--------+--------+--------+---------+---------+----------------------------------------+
| | IFRS 2 (amendment) - Share based payment: vesting conditions and cancellations |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | | |
+----+---+--------+--------+--------+---------+---------+----------------------------------------+
| | The principal effect of this amendment is that when an award to an employee under a share |
| | option scheme lapses due to cancellation then the full cost of the award will be expensed |
| | in the period in which the option lapses. It has also been clarified that an individual |
| | ceasing to pay contributions is classified as a cancellation. Under the previous |
| | interpretation the lapsing of the award would have resulted in the fair value of the |
| | option charged being reversed in the income statement. This interpretation is required to |
| | be applied fully retrospectively, and has been accounted for as a change in accounting |
| | policy. Details of the adjustments arising in relation to the prior periods are set out |
| | in note 6. |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+---------+--------------------------------------------------+
| | IFRS 8 - Operating segments |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+---------+--------------------------------------------------+
| | IFRS 8 replaces IAS 14, 'Segment reporting'. It requires a 'management approach' under |
| | which segment information is presented on the same basis as that used for internal |
| | reporting purposes. This has resulted in an increase in the number of reportable segments |
| | presented, as the previously reported specialist services segment has been split into |
| | pallet and courier service segments. |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+---------+--------------------------------------------------+
| | Operating segments are reported in a manner consistent with the internal reporting |
| | provided to the chief operating decision-maker. The chief operating decision-maker has |
| | been identified as the Board of the company. |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+---------+--------------------------------------------------+
| | The following new standards, interpretations and amendments have been issued, but are not |
| | effective for the financial year beginning 1 April 2009 and have not been early adopted: |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+---------+--------------------------------------------------+
| | ¦ | IAS 39 (amendment), 'Recognition and measurement', effective for annual periods |
| | | beginning on or after 1 July 2009 |
+----+---+---------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+---------+--------------------------------------------------+
| | ¦ | IFRIC 17, 'Distributions of non-cash assets to owners', effective for annual periods |
| | | beginning on or after 1 July 2009 |
+----+---+---------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+---------+--------------------------------------------------+
| | ¦ | IFRIC 18, 'Transfers of assets from customers', effective for annual periods |
| | | beginning on or after 1 July 2009 |
+----+---+---------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+---------+--------------------------------------------------+
| | ¦ | IFRS 3 (revised), 'Business combinations', effective for annual periods beginning on |
| | | or after 1 July 2009 |
+----+---+---------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+---------+--------------------------------------------------+
| | ¦ | IFRS 5 (amendment), 'Non-current assets held-for-sale and discontinued operations', |
| | | effective for annual periods beginning on or after 1 July 2009 |
+----+---+---------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+---------+--------------------------------------------------+
| 4 | Segmental reporting |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+---------+--------------------------------------------------+
| | Management has determined the operating segments based on reports that are reviewed by |
| | the Board for making strategic decisions. These reports reflect the Group's defined |
| | management structure, whereby distinct managers are accountable to the Board for the |
| | results and activities of their identified segments and the different markets in which |
| | they operate. The Board considers that the Group has four reportable operating segments. |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+---------+--------------------------------------------------+
| | The Group's operating segments consist of Parcel, Mail, Pallets, and Courier Services. |
| | Central costs comprises of network costs and central support costs. |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+---------+--------------------------------------------------+
| | The Group manages its business segments on a national basis, with all its operations in |
| | the UK, as are nearly all of the customers. |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+---------+--------------------------------------------------+
| | Inter-company transactions, balances and unrealised gains on transactions between |
| | segments are eliminated. Unrealised losses are also eliminated. |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+---------+--------------------------------------------------+
| | No individual customer accounted for more than 5% of revenue in the periods included in |
| | these condensed consolidated interim financial statements. |
+----+-------------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+---------+--------------------------------------------------+
| | Six months ended 30 September 2009 (unaudited) |
+----+-------------------------------------------------------------------------------------------+
| | | | |
+----+---+--------+------------------------------------------------------------------------------+
| | | | Parcels | Mail | Pallets | Courier | | Group |
+----+---+-------------------------------+---------+---------+---------+-----------+--+----------+
| | | | GBPm | GBPm | GBPm | GBPm | | GBPm |
+----+---+-------------------------------+---------+---------+---------+-----------+--+----------+
| | Total revenue | 80.0 | 84.6 | 14.9 | 9.2 | | 188.7 |
+----+-----------------------------------+---------+---------+---------+-----------+--+----------+
| | Inter-segment revenue | - | - | - | (0.5) | | (0.5) |
+----+-----------------------------------+---------+---------+---------+-----------+--+----------+
| | Revenue (from external customers) | 80.0 | 84.6 | 14.9 | 8.7 | | 188.2 |
+----+-----------------------------------+---------+---------+---------+-----------+--+----------+
| | | | | | | | | |
+----+---+-------------------------------+---------+---------+---------+-----------+--+----------+
| | Operating profit/(loss) | 6.3 | 5.9 | 0.8 | 1.2 | | 14.2 |
+----+-----------------------------------+---------+---------+---------+-----------+--+----------+
| | Central costs | | | | | (7.1) |
+----+---------------------------------------------+---------+---------+-----------+--+----------+
| | Profit before finance costs | | | | | 7.1 |
+----+---------------------------------------------+---------+---------+-----------+--+----------+
| | Finance costs | | | | | (0.2) |
+----+---------------------------------------------+---------+---------+-----------+--+----------+
| | Finance income | | | | | 0.1 |
+----+---------------------------------------------+---------+---------+-----------+--+----------+
| | Profit before taxation | | | | | 7.0 |
+----+---------------------------------------------+---------+---------+-----------+--+----------+
| | Taxation | | | | | (2.0) |
+----+---------------------------------------------+---------+---------+-----------+--+----------+
| | Net profit attributable to equity | | | | | 5.0 |
| | shareholders | | | | | |
+----+---------------------------------------------+---------+---------+-----------+--+----------+
| | | | | | | | |
+----+---+-----------------------------------------+---------+---------+-----------+--+----------+
| | Segmental information for the periods ended 30 September 2008 and 31 March 2009 has been |
| | restated as a result of the change in accounting policy adjustment as explained in note |
| | 6. |
+----+---+--------+--------+--------+----+----+----+----+----+----+----+-----------+--+----------+
+----+---+--------+--------------------+---------+----+----+---------+-----------+--+----------+
| | Six months ended 30 September 2008 (unaudited) (restated) |
+----+-----------------------------------------------------------------------------------------+
| | | |
+----+---+-------------------------------------------------------------------------------------+
| | | | | Parcels | Mail | Pallets | Courier | | Group |
+----+---+--------+--------------------+---------+---------+---------+-----------+--+----------+
| | | | | GBPm | GBPm | GBPm | GBPm | | GBPm |
+----+---+--------+--------------------+---------+---------+---------+-----------+--+----------+
| | Revenue | 89.6 | 80.1 | 16.2 | 9.1 | | 195.0 |
+----+---------------------------------+---------+---------+---------+-----------+--+----------+
| | Inter-segment revenue | - | - | - | (0.5) | | (0.5) |
+----+---------------------------------+---------+---------+---------+-----------+--+----------+
| | Revenue (from external | 89.6 | 80.1 | 16.2 | 8.6 | | 194.5 |
| | customers) | | | | | | |
+----+---------------------------------+---------+---------+---------+-----------+--+----------+
| | | | | | | | |
+----+---------------------------------+---------+---------+---------+-----------+--+----------+
| | Operating profit/(loss) | 6.4 | 5.6 | 0.9 | 0.3 | | 13.2 |
+----+---------------------------------+---------+---------+---------+-----------+--+----------+
| | Central costs | (7.2) |
+----+------------------------------------------------------------------------------+----------+
| | Profit before finance costs | 6.0 |
+----+------------------------------------------------------------------------------+----------+
| | Finance costs | (0.3) |
+----+------------------------------------------------------------------------------+----------+
| | Finance income | 0.2 |
+----+------------------------------------------------------------------------------+----------+
| | Profit before taxation | 5.9 |
+----+------------------------------------------------------------------------------+----------+
| | Taxation | (4.0) |
+----+------------------------------------------------------------------------------+----------+
| | Net profit attributable to equity shareholders | 1.9 |
+----+------------------------------------------------------------------------------+----------+
| | | | |
+----+---+--------------------------------------------------------------------------+----------+
| | Year ended 31 March 2009 (audited) (restated) |
+----+-----------------------------------------------------------------------------------------+
| | | |
+----+---+-------------------------------------------------------------------------------------+
| | | | Parcels | Mail | Pallets | Courier | | Group |
+----+---+-----------------------------+---------+---------+---------+-----------+--+----------+
| | | | GBPm | GBPm | GBPm | GBPm | | GBPm |
+----+---+-----------------------------+---------+---------+---------+-----------+--+----------+
| | Revenue | 173.4 | 164.5 | 30.8 | 18.1 | | 386.8 |
+----+---------------------------------+---------+---------+---------+-----------+--+----------+
| | Inter-segment revenue | - | - | - | (1.1) | | (1.1) |
+----+---------------------------------+---------+---------+---------+-----------+--+----------+
| | Revenue (from external | 173.4 | 164.5 | 30.8 | 17.0 | | 385.7 |
| | customers) | | | | | | |
+----+---------------------------------+---------+---------+---------+-----------+--+----------+
| | | | | | | | |
+----+---------------------------------+---------+---------+---------+-----------+--+----------+
| | Operating profit/(loss) before | 16.8 | 11.6 | 1.5 | 1.0 | | 30.9 |
| | exceptional items | | | | | | |
+----+---------------------------------+---------+---------+---------+-----------+--+----------+
| | Exceptional items - | (0.8) | - | - | (0.3) | | (1.1) |
| | administrative expenses | | | | | | |
+----+---------------------------------+---------+---------+---------+-----------+--+----------+
| | Operating profit/(loss) | 16.0 | 11.6 | 1.5 | 0.7 | | 29.8 |
+----+---------------------------------+---------+---------+---------+-----------+--+----------+
| | Central costs | | | | | | (13.6) |
+----+---------------------------------+---------+---------+---------+-----------+--+----------+
| | Profit before finance costs | | 16.2 |
+----+------------------------------------------------+-----------------------------+----------+
| | Finance costs | | (0.5) |
+----+------------------------------------------------+-----------------------------+----------+
| | Finance income | | 0.3 |
+----+------------------------------------------------+-----------------------------+----------+
| | Profit before taxation | | 16.0 |
+----+------------------------------------------------+-----------------------------+----------+
| | Taxation | | (7.1) |
+----+------------------------------------------------+-----------------------------+----------+
| | Net profit attributable to equity | | 8.9 |
| | shareholders | | |
+----+---+--------+--------------------+---------+----+----+---------+-----------+--+----------+
+----+---+--------+--------+-----+-----+-----+-----+-----+-----+--+-------------+--+------------+
| |
+-----------------------------------------------------------------------------------------------+
| | Reportable segments' assets are reconciled to total assets and total liabilities as |
| | follows: |
+----+------------------------------------------------------------------------------------------+
| | |
+----+------------------------------------------------------------------------------------------+
| | | | 30 September | | 30 | | 31 March |
| | | | | | September | | |
+----+---+-----------------------------------+-----------------+--+-------------+--+------------+
| | | | 2009 | | 2008 | | 2009 |
| | | | | | | | |
+----+---+-----------------------------------+-----------------+--+-------------+--+------------+
| | Total segment assets | 118.6 | | 119.0 | | 119.4 |
+----+---------------------------------------+-----------------+--+-------------+--+------------+
| | Central assets | 40.4 | | 34.8 | | 35.6 |
+----+---------------------------------------+-----------------+--+-------------+--+------------+
| | Eliminations | (44.0) | | (35.4) | | (31.8) |
+----+---------------------------------------+-----------------+--+-------------+--+------------+
| | Total assets per balance sheet | 115.0 | | 118.4 | | 123.2 |
+----+---------------------------------------+-----------------+--+-------------+--+------------+
| | | | |
+----+---+--------+-----------------------------------------------------------------------------+
| | | | |
+----+---+--------+-----------------------------------------------------------------------------+
| | Total segment liabilities | | (89.7) | | (88.7) | | (85.0) |
+----+---------------------------+-----------+-----------------+--+-------------+--+------------+
| | Central liabilities | | (15.6) | | (14.3) | | (15.1) |
+----+---------------------------+-----------+-----------------+--+-------------+--+------------+
| | Eliminations | | 44.0 | | 35.4 | | 31.8 |
+----+---------------------------+-----------+-----------------+--+-------------+--+------------+
| | Total liabilities per balance sheet | (61.3) | | (67.6) | | (68.3) |
+----+---------------------------------------+-----------------+--+-------------+--+------------+
| | | | | | | | |
+----+---+-----------------------------------+-----------------+--+-------------+--+------------+
| | Segmental information for the periods ended 30 September 2008 and 31 March 2009 has been |
| | restated as a result of the change in accounting policy adjustment as explained in note |
| | 6. |
+----+ +
| | |
+----+------------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+-----------+-----------+--------------------------------------------+
| | Capital expenditure comprises additions to property, plant and equipment, investment |
| | properties and intangible assets. |
+----+------------------------------------------------------------------------------------------+
| | | | |
+----+---+--------+-----------------------------------------------------------------------------+
| | | | | | | | |
+----+---+-----------------------------------+-----------------+--+-------------+--+------------+
| | | | | | | | |
+----+---+-----------------------------------+-----------------+--+-------------+--+------------+
| | | | 30 September | | 30 | | 31 March |
| | | | 2009 | | September | | 2009 |
| | | | | | 2008 | | |
| | | | | | | | |
+----+---+-----------------------------------+-----------------+--+-------------+--+------------+
| | | | | | | | |
| | | | | | | | |
+----+---+-----------------------------------+-----------------+--+-------------+--+------------+
| | Total segment capital expenditure | 3.4 | | 2.9 | | 5.4 |
+----+---------------------------------------+-----------------+--+-------------+--+------------+
| | Central capital expenditure | 1.0 | | 1.3 | | 2.9 |
+----+---------------------------------------+-----------------+--+-------------+--+------------+
| | Total capital expenditure | 4.4 | | 4.2 | | 8.3 |
+----+---------------------------------------+-----------------+--+-------------+--+------------+
| | | | |
+----+---+--------+-----------------------------------------------------------------------------+
| | Total segment depreciation and | 2.5 | | 2.0 | | 4.3 |
| | amortisation | | | | | |
+----+---------------------------------------+-----------------+--+-------------+--+------------+
| | Central depreciation and amortisation | 0.8 | | 0.8 | | 1.6 |
+----+---------------------------------------+-----------------+--+-------------+--+------------+
| | Total depreciation and amortisation | 3.3 | | 2.8 | | 5.9 |
+----+---------------------------------------+-----------------+--+-------------+--+------------+
| | | | | |
+----+---+--------+--------+--------------------------------------------------------------------+
| 5 | Changes in accounting estimates |
+----+------------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+-----------+-----------+--------------------------------------------+
| | The preparation of the condensed consolidated interim financial statements requires |
| | management to make judgements, estimates and assumptions that affect the application of |
| | accounting policies and the reported amounts of assets and liabilities, income and |
| | expense. Actual results may differ from these estimates. |
+----+------------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+-----------+-----------+--------------------------------------------+
| | In preparing these condensed consolidated interim financial statements, the significant |
| | judgements made by management in applying the Group's accounting policies and the key |
| | sources of estimation uncertainty were the same as those applied to the consolidated |
| | financial statements as at and for the year ended 31 March 2009. |
+----+------------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+-----------+-----------+--------------------------------------------+
| | There have been no material changes in contingent liabilities during the current interim |
| | period. |
+----+---+--------+--------+-----+-----+-----+-----+-----+-----+--+-------------+--+------------+
+----+---+--------+--------+--------+--------+------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+--------+------------------------------------------+
| 6 | Adjustments arising from changes in accounting policy |
+----+----------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+--------+------------------------------------------+
| | As explained in note 3, the results for previous years have been restated to |
| | reflect the accounting required following application of the amendment to IFRS |
| | 2, 'Share-based payment', effective for accounting periods beginning on or after |
| | 1 January 2009. This requires that where an employee voluntarily withdraws from |
| | a share based incentive scheme, which in practice is usually a SAYE plan, then |
| | the remaining full accounting cost of the award is required to be expensed at |
| | that time such that the accounting treatment is the same as for any other |
| | cancellation. |
+----+---+--------+--------+--------+--------+------------------------------------------+
+----+---+--------+--------+--------+----+--+--------+----+----+--+----+----+-----+--------+----+----+----+
| | The following adjustments in respect of share based payments have been included in the |
| | statement of comprehensive income; there being no amendment required to the tax charge; |
+----+-----------------------------------------------------------------------------------------------+
| | | | | | | | | |
+----+---+--------+--------+--------+-------+--------+-----------------+-----------------------------+
| | | | | | | | | | |
+----+---+--------+--------+--------+-------+-------------+-----------------+-----+-------------+
| | | | | | | | Unaudited | | Audited |
+----+---+--------+--------+--------+-------+-------------+-----------------+-----+-------------+
| | | | | | | | Six months | | Year |
| | | | | | | | to 30 | | to |
| | | | | | | | | | |
+----+---+--------+--------+--------+-------+-------------+-----------------+-----+-------------+
| | | | | | | | September | | 31 |
| | | | | | | | 2008 | | March |
| | | | | | | | | | 2009 |
| | | | | | | | | | |
+----+---+--------+--------+--------+-------+-------------+-----------------+-----+-------------+
| | | | | | | | GBPm | | GBPm |
+----+---+--------+--------+--------+-------+-------------+-----------------+-----+-------------+
| | | | | | | | | | |
+----+---+--------+--------+--------+-------+-------------+-----------------+-----+-------------+
| | Administrative expenses as previously reported | 19.9 | | 36.7 |
+----+----------------------------------------------------+-----------------+-----+-------------+
| | Increase in share-based payment cost following | 0.1 | | 0.4 |
| | IFRS 2 amendment | | | |
+----+----------------------------------------------------+-----------------+-----+-------------+
| | Administrative expenses as restated | 20.0 | | 37.1 |
+----+----------------------------------------------------+-----------------+-----+-------------+
| | | | | | | | | | |
+----+---+--------+--------+--------+-------+-------------+-----------------+-----+-------------+
| | The statement of cash flows has been adjusted to reduce the 'profit for the period' from |
| | continuing operations by the additional share-based payment costs above and to increase the |
| | share based payment adjustment. As a result there is no net adjustment to the 'net cash |
| | inflow generated from operations' (see note 10). Additionally, there is no adjustment to the |
| | consolidated balance sheet. |
+----+----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+----+---+--------+--------+--------+-------+--------+-----------------+----------------------------------+
| | Basic and diluted earnings per share have been impacted by the restatement as detailed in |
| | note 14. |
+----+----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+----+---+--------+--------+--------+-------+--------+-----------------+----------------------------------+
| 7 | Exceptional items |
+----+----------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+----+---+--------+--------+--------+-------+--------+-----------------+----------------------------------+
| | | | | | | Unaudited | | Unaudited | | Audited |
| | | | | | | Six months to | | Six months to | | Year to |
| | | | | | | 30 September | | 30 September | | 31 March |
| | | | | | | 2009 | | 2008 | | 2009 |
| | | | | | | GBPm | | GBPm | | GBPm |
+----+---+--------+--------+--------+----+ +--+ +--------+ +
| | | | | | | | | | | |
+----+---+--------+--------+--------+----+ +--+ +--------+ +
| | | | | | | | | | | |
+----+---+--------+--------+--------+----+ +--+ +--------+ +
| | | | | | | | | | | |
+----+---+--------+--------+--------+----+ +--+ +--------+ +
| | | | | | | | | | | |
+----+---+--------+--------+--------+----+---------------------+--+---------------+--------+--------------+
| | | | | | | |
+----+-----------------------------------+---------------------+--+---------------+--------+--------------+
| | Operations restructure | - | | - | | 1.1 |
+----+-----------------------------------+---------------------+--+---------------+--------+--------------+
| | Exceptional taxation charge - | - | | - | | (0.3) |
| | relief on operations restructure | | | | | |
| | costs | | | | | |
+----+-----------------------------------+---------------------+--+---------------+--------+--------------+
| | Exceptional taxation charge - | - | | 2.2 | | 2.2 |
| | abolition of UK IBA's | | | | | |
+----+-----------------------------------+---------------------+--+---------------+--------+--------------+
| | Total exceptional taxation charge | - | | 2.2 | | 1.9 |
| | | | | | | |
+----+-----------------------------------+---------------------+--+---------------+--------+--------------+
| | Exceptional items | - | | 2.2 | | 3.0 |
+----+---+--------+--------+--------+----+--+--------+----+----+--+----+----+-----+--------+----+----+----+
+----+---+--------+--------+--------+--------+---+---+---+---+---+--+---+---+---+---+---+----------+
| | Operations restructure | | | | | |
+----+-------------------------------------------+---------------+--+-----------+-------+----------+
| | | | | | | | | | | |
+----+---+--------+--------+--------+------------+---------------+--+-----------+-------+----------+
| | During the year ended 31 March 2008, the board approved a 3 year change programme, designed |
| | to both integrate the different parts of the Group more, and to improve the network |
| | infrastructure. This resulted in a number of structural changes in operational and sales |
| | management, and the regionalisation of the customer care centres, the costs of which were |
| | GBP0.7m. |
+----+---------------------------------------------------------------------------------------------+
| | | | | | | | |
+----+---+--------+--------+--------+--------+-----------+-----------------------------------------+
| | Further structural changes were made during the year ended 31 March 2009, including the |
| | closure of a number of owned and franchised operational sites (with relevant operations |
| | transferred to nearby locations), and the restructuring of some central functions. This |
| | resulted in one-off redundancy costs of GBP0.8m and property related costs of GBP0.3m. |
+----+---------------------------------------------------------------------------------------------+
| | | |
+----+---------------------------------------------------+-----------------------------------------+
| | Exceptional taxation charge |
+----+---------------------------------------------------------------------------------------------+
| | | | | | | | |
+----+---+--------+--------+--------+--------+-----------+-----------------------------------------+
| | The exceptional taxation charge comprised of a GBP2.2m write-off of deferred taxation |
| | balances resulting from the phased abolition of UK Industrial Buildings Allowances ("IBAs") |
| | following enactment of the Finance Act 2008. At 31 March 2009, this charge was partially |
| | offset by GBP0.3m taxation relief in respect of the exceptional operations restructuring |
| | costs referred to above. |
+----+---------------------------------------------------------------------------------------------+
| | | | | | | | |
+----+---+--------+--------+--------+--------+-----------+-----------------------------------------+
| 8 | Property, plant and equipment and intangible assets |
+----+---------------------------------------------------------------------------------------------+
| | Unaudited |
| | Tangible and |
| | Intangible assets |
+---------------------------------------------------------------------------+ +
| | |
+---------------------------------------------------------------------------+ +
| | |
+---------------------------------------------------------------------------+----------------------+
| | Six months ended 30 September 2009 | | | | GBPm |
+----+-----------------------------------------------+-------+----------+-----------+--------------+
| | | | | | |
+----+-----------------------------------------------+-------+----------+-----------+--------------+
| | Opening net book value at 1 April 2009 | | | | 50.7 |
+----+-----------------------------------------------+-------+----------+-----------+--------------+
| | Additions | | | | 4.4 |
+----+-----------------------------------------------+-------+----------+-----------+--------------+
| | Disposals | | | | (0.1) |
+----+-----------------------------------------------+-------+----------+-----------+--------------+
| | Depreciation and amortisation | | | | (3.3) |
+----+-----------------------------------------------+-------+----------+-----------+--------------+
| | Closing net book value at 30 September 2009 | | | | 51.7 |
+----+-----------------------------------------------+-------+----------+-----------+--------------+
| Unaudited |
| Tangible and |
| Intangible assets |
+--------------------------------------------------------------------------------------------------+
| | Six months ended 30 September 2008 | | | | GBPm |
+----+-----------------------------------------------+-------+----------+-----------+--------------+
| | | | | | |
+----+-----------------------------------------------+-------+----------+-----------+--------------+
| | Opening net book value at 1 April 2008 | | | | 48.6 |
+----+-----------------------------------------------+-------+----------+-----------+--------------+
| | Additions | | | | 4.2 |
+----+-----------------------------------------------+-------+----------+-----------+--------------+
| | Disposals | | | | (0.2) |
+----+-----------------------------------------------+-------+----------+-----------+--------------+
| | Depreciation and amortisation | | | | (2.8) |
+----+-----------------------------------------------+-------+----------+-----------+--------------+
| | Closing net book value at 30 September 2008 | | | | 49.8 |
+----+---+--------+--------+--------+--------+---+---+---+---+---+--+---+---+---+---+---+----------+
+----+---+--------+--------+--------+--+---+--+--+--+--+--+--+-----+--+--+--+------+------------+--+--+------------+--+
| 9 | Share Capital |
+----+-------------------------------------------------------------------------------------------------------------+
| | | | | | | | |
+----+---+--------+--------+--------+---------+--+-----------------------------------------------------------------+
| | | | | | | Number of | | Ordinary | | Share | | Unaudited |
| | | | | | | | | | | | | |
+----+---+--------+--------+--------+--+------------+--+-----------------+--+-------------------+-----+------------+
| | | | | | | ordinary | | shares | | premium | | Total |
+----+---+--------+--------+--------+--+------------+--+-----------------+--+-------------------+-----+------------+
| | Capital | | | | shares | | GBPm | | GBPm | | GBPm |
+----+------------+--------+--------+--+------------+--+-----------------+--+-------------------+-----+------------+
| | | | | | | | | | | | | |
+----+---+--------+--------+--------+--+------------+--+-----------------+--+-------------------+-----+------------+
| | At 1 April 2009 and 30 | 54,674,237 | | 5.5 | | 16.6 | | 22.1 |
| | September 2009 | | | | | | | |
+----+---------------------------------+------------+--+-----------------+--+-------------------+-----+------------+
| | | | | | | | | | | | | |
+----+---+--------+--------+--------+--+------------+--+-----------------+--+-------------------+-----+------------+
| | At 1 April 2008 and 30 | 54,674,237 | | 5.5 | | 16.6 | | 22.1 |
| | September 2008 | | | | | | | |
+----+---------------------------------+------------+--+-----------------+--+-------------------+-----+------------+
| | | | | | | | | | | |
+----+---------------------+--------+--+------------+--+-----------------+--+-------------------+-----+------------+
| | The Company's Employee Share Ownership Trust ("ESOT") holds shares in the Company for |
| | subsequent transfer to employees under its incentive scheme awards. At 31 March 2009 the |
| | ESOT held a total of 624,817 shares (31 March 2008: 624,817 shares). During July 2009, |
| | 522,771 shares were issued to directors and employees, following the successful vesting |
| | of awards under the 2006 LTIP and One-off senior executive plans. Subsequently the ESOT |
| | re-acquired 248,230 shares disposed of by participants, and as a result held 350,276 |
| | shares as at 30 September 2009 (30 September 2008: 624,817 shares). The price in both |
| | transactions was 283p per share. |
+----+-------------------------------------------------------------------------------------------------------------+
| | |
+----+-------------------------------------------------------------------------------------------------------------+
| | During the six months to 30 September 2009 no share options were exercised (2008: nil). |
+----+-------------------------------------------------------------------------------------------------------------+
| | | | | | | | |
+----+---+--------+--------+--------+---------+-----------+--------------------------------------------------------+
|10 | Reconciliation of profit to net cash flow generated from operations |
+----+-------------------------------------------------------------------------------------------------------------+
| | | | | | |
+----+---+--------+--------+--------+------------------------------------------------------------------------------+
| | | | | | | | Restated | | Restated * |
| | | | | | | | * | | Audited |
| | | | | | | | Unaudited | | Year to |
| | | | | | | | Six | | 31 March |
| | | | | | | | months to | | 2009 |
| | | | | | | | 30 | | GBPm |
| | | | | | | | September | | |
| | | | | | | | 2008 | | |
| | | | | | | | GBPm | | |
+----+---+--------+--------+--------+------------------------+--------+ +---------------+ +
| | | | | | | Unaudited | | | | |
| | | | | | | Six months to | | | | |
| | | | | | | 30 September | | | | |
| | | | | | | 2009 | | | | |
| | | | | | | GBPm | | | | |
+----+---+--------+--------+--------+------+ + +---------+ +---------------+
| | | | | | | | | | | |
+----+---+--------+--------+--------+------+ + +---------+ +---------------+
| | | | | | | | | | | |
+----+---+--------+--------+--------+------+ + +---------+ +---------------+
| | | | | | | | | | | |
+----+---+--------+--------+--------+------+ + +---------+ +---------------+
| | | | | | | | | | | |
+----+---+--------+--------+--------+------+-----------------+-----------+---------+---------------+---------------+
| | Profit for the period | 5.0 | | 1.9 | | 8.9 |
+----+-------------------------------------+-----------------------+--+------------+---------------+---------------+
| | Taxation | 2.0 | | 4.0 | | 7.1 |
+----+-------------------------------------+-----------------------+--+------------+---------------+---------------+
| | Finance costs payable | 0.2 | | 0.3 | | 0.5 |
+----+-------------------------------------+-----------------------+--+------------+---------------+---------------+
| | Finance income receivable | (0.1) | | (0.2) | | (0.3) |
+----+-------------------------------------+-----------------------+--+------------+---------------+---------------+
| | Exceptional items | - | | - | | 1.1 |
+----+-------------------------------------+-----------------------+--+------------+---------------+---------------+
| | Depreciation and amortisation | 3.3 | | 2.8 | | 5.9 |
+----+-------------------------------------+-----------------------+--+------------+---------------+---------------+
| | Loss on disposal of property, | 0.1 | | - | | 0.2 |
| | plant and equipment | | | | | |
+----+-------------------------------------+-----------------------+--+------------+---------------+---------------+
| | Share-based payments | 0.4 | | 0.7 | | 1.4 |
+----+-------------------------------------+-----------------------+--+------------+---------------+---------------+
| | Decrease/(increase) in inventories | - | | 0.1 | | 0.1 |
+----+-------------------------------------+-----------------------+--+------------+---------------+---------------+
| | Decrease/(increase) in trade and | 1.6 | | (1.4) | | 5.9 |
| | other receivables | | | | | |
+----+-------------------------------------+-----------------------+--+------------+---------------+---------------+
| | (Decrease)/increase in trade and | (4.3) | | (3.9) | | (4.8) |
| | other payables | | | | | |
+----+-------------------------------------+-----------------------+--+------------+---------------+---------------+
| | (Decrease)/increase in provisions | (0.4) | | (0.4) | | (0.4) |
+----+-------------------------------------+-----------------------+--+------------+---------------+---------------+
| | Net cash inflow generated from | 7.8 | | 3.9 | | 25.6 |
| | operations | | | | | |
+----+-------------------------------------+-----------------------+--+------------+---------------+---------------+
| | * see note 6 |
+----+---+--------+--------+--------+--+---+--+--+--+--+--+--+-----+--+--+--+------+------------+--+--+------------+--+
+----+---+--------+--------+-------+--+-------------+--+----------+-------------+--+----------+--+-----------------+
|11 | Analysis of net cash/(debt) |
+----+-------------------------------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+----------+-------------+--------------------------------------------------------------+
| | | | | | Audited | | | | | | Unaudited |
| | | | | | At 1 April | | | | | | At 30 September |
| | | | | | 2009 | | | | | | 2009 |
| | | | | | GBPm | | | | | | GBPm |
+----+---+--------+--------+-------+ +----------+-------------+--+----------+--+ +
| | | | | | | | | | | | |
+----+---+--------+--------+-------+ +--+-------------+--+----------+-------------+ +
| | | | | | | | Cash flow | | Other | | |
| | | | | | | | GBPm | | GBPm | | |
+----+---+--------+--------+-------+ +--+ +--+ +-------------+ +
| | | | | | | | | | | | |
+----+---+--------+--------+-------+-------------------+--+-------------+-------------+----------+--+-----------------+
| | | | | | | | | | | | |
+----+---+--------+--------+-------+-------------------+----------+-------------+--+----------+--+-----------------+
| | Cash at bank and in hand | 18.0 | | (7.3) | | - | | 10.7 |
+----+-----------------------------+-------------------+----------+-------------+--+----------+--+-----------------+
| | Net cash and cash | 18.0 | | (7.3) | | - | | 10.7 |
| | equivalents | | | | | | | |
+----+-----------------------------+-------------------+----------+-------------+--+----------+--+-----------------+
| | | | | | | | | |
+----+-----------------------------+-------------------+----------+-------------+--+----------+--+-----------------+
| | Debt due within one year | (1.0) | | 1.0 | | (1.0) | | (1.0) |
+----+-----------------------------+-------------------+----------+-------------+--+----------+--+-----------------+
| | Debt due after one year | (4.0) | | - | | 1.0 | | (3.0) |
+----+-----------------------------+-------------------+----------+-------------+--+----------+--+-----------------+
| | Finance leases | (3.5) | | 0.4 | | - | | (3.1) |
+----+-----------------------------+-------------------+----------+-------------+--+----------+--+-----------------+
| | Net debt | (8.5) | | 1.4 | | - | | (7.1) |
+----+-----------------------------+-------------------+----------+-------------+--+----------+--+-----------------+
| | | | | | | | | |
+----+-----------------------------+-------------------+----------+-------------+--+----------+--+-----------------+
| | Net cash/(debt) | 9.5 | | (5.9) | | - | | 3.6 |
+----+-----------------------------+-------------------+----------+-------------+--+----------+--+-----------------+
| | | | | | | | | | | |
+----+---+--------+----------------+-------------------+----------+-------------+--+----------+--+-----------------+
| | | | | Audited | | | | | | Unaudited |
| | | | | At 1 April | | | | | | At 30 September |
| | | | | 2008 | | | | | | 2008 |
| | | | | GBPm | | | | | | GBPm |
+----+---+--------+----------------+ +----------+-------------+--+----------+--+ +
| | | | | | | | | | | |
+----+---+--------+----------------+ +--+-------------+--+----------+-------------+ +
| | | | | | | Cash flow | | Other | | | |
| | | | | | | GBPm | | GBPm | | | |
+----+---+--------+----------------+ +--+ +--+ +-------------+ +--+
| | | | | | | | | | | | |
+----+---+--------+----------------+-------------------+--+-------------+-------------+----------+--+-----------------+----------+
| | | | | | | | | | | |
+----+---+--------+----------------+-------------------+----------+-------------+--+----------+--+-----------------+
| | Cash at bank and in hand | 16.4 | | (9.4) | | - | | 7.0 |
+----+-----------------------------+-------------------+----------+-------------+--+----------+--+-----------------+
| | Net cash and cash | 16.4 | | (9.4) | | - | | 7.0 |
| | equivalents | | | | | | | |
+----+-----------------------------+-------------------+----------+-------------+--+----------+--+-----------------+
| | | | | | | | | |
+----+-----------------------------+-------------------+----------+-------------+--+----------+--+-----------------+
| | Debt due within one year | (1.0) | | 1.0 | | (1.0) | | (1.0) |
+----+-----------------------------+-------------------+----------+-------------+--+----------+--+-----------------+
| | Debt due after one year | (5.0) | | - | | 1.0 | | (4.0) |
+----+-----------------------------+-------------------+----------+-------------+--+----------+--+-----------------+
| | Finance leases | (4.2) | | 0.3 | | - | | (3.9) |
+----+-----------------------------+-------------------+----------+-------------+--+----------+--+-----------------+
| | Net debt | (10.2) | | 1.3 | | - | | (8.9) |
+----+-----------------------------+-------------------+----------+-------------+--+----------+--+-----------------+
| | | | | | | | | | |
+----+---+-------------------------+-------------------+----------+-------------+--+----------+--+-----------------+
| | Net cash/(debt) | 6.2 | | (8.1) | | - | | (1.9) |
+----+---+--------+--------+-------+--+-------------+--+----------+-------------+--+----------+--+-----------------+
[*** UNPARSEABLE TABLE ***]
+----+---+---+---+---+---+---+--------+---+---+---+---+------------+---+---+-------+---+--+---+---+---+---+
|13 | Income taxes |
+----+--------------------------------------------------------------------------------------------+
| | |
+----+--------------------------------------------------------------------------------------------+
| | The income tax expense recognised is based on management's best estimate of the weighted |
| | average annual income tax rate expected for the full financial year, together with the |
| | exceptional tax adjustments referred to in note 7. The estimated average annual tax rate |
| | used for the year to 31 March 2010 is 28.9% (2009: 28.9%). |
+----+--------------------------------------------------------------------------------------------+
| | |
+----+--------------------------------------------------------------------------------------------+
|14 | Earnings per share |
+----+--------------------------------------------------------------------------------------------+
| | |
+----+--------------------------------------------------------------------------------------------+
| | Earnings per share attributable to equity holders of the company arises from continuing |
| | operations as follows: |
+----+--------------------------------------------------------------------------------------------+
| | |
+----+--------------------------------------------------------------------------------------------+
| | | | | | | Six months ended |
+----+-------+-------+-------+--------+--------------------------------+------------------------------+
| | | | | | | 30 September (unaudited) |
+----+-------+-------+-------+--------+--------------------------------+------------------------------+
| | | | | | | (pence per share) |
+----+-------+-------+-------+--------+--------------------------------+------------------------------+
| | Restated |
| | * |
+-----------------------------------------------------------------------------------------+-----------+
| | 2009 | | 2008 |
+--------------------------------------------------------------------------+-------+------+-----------+
| | Earnings per share for profit from continuing operations attributable |
+--------+--------------------------------------------------------------------------------------------+
| | to the equity holders of the company | |
+--------+------------------------------------------------------------------------------------+-----------+
| | - basic | 9.2p | | 3.5p |
+--------+------------------------------------+----------------------------------------+--+-----------+
| | - diluted | 9.0p | | 3.4p |
+--------+------------------------------------+----------------------------------------+--+-----------+
| | |
+--------+--------------------------------------------------------------------------------------------+
| | Adjusted earnings per share have been calculated excluding the exceptional items and the |
| | associated tax impact (see note 7). |
+--------+--------------------------------------------------------------------------------------------+
| | | |
+--------+-------+------------------------------------------------------------------------------------+
| | Adjusted earnings per share for profit from continuing operations |
+--------+--------------------------------------------------------------------------------------------+
| | attributable to the equity holders of the company |
+--------+--------------------------------------------------------------------------------------------+
| | - basic | 9.2p | | 7.6p |
+--------+----------------------------------------+------------------------------------+--+-----------+
| | - diluted | 9.0p | | 7.5p |
+--------+----------------------------------------+------------------------------------+--+-----------+
| | * see note 6 |
+--------+--------------------------------------------------------------------------------------------+
| | | | | | | |
+--------+-------+-------+----------------+-----------+------------+----------------------------------+
| 15 | Dividends |
+--------+--------------------------------------------------------------------------------------------+
| | |
+--------+--------------------------------------------------------------------------------------------+
| | The final dividend for the year ended 31 March 2009 of 10.8p per share (2008: 10.8p) was |
| | paid on 14 August 2009. The GBP5.9m distribution (2008: GBP5.8m) is reflected in the |
| | financial statements for the six months ended 30 September 2009. |
+--------+--------------------------------------------------------------------------------------------+
| | | | | | | |
+--------+-------+-------+----------------+-----------+------------+----------------------------------+
| | In addition, the directors propose an interim dividend of 6.4p per share (2008: 6.4p per |
| | share) payable on 15 January 2010 to shareholders who are on the register at 4 December |
| | 2009. This interim dividend, amounting to GBP3.5m (2008: GBP3.5m) has not been recognised |
| | as a liability in these condensed consolidated interim financial statements. |
+----+---+---+---+---+---+---+--------+---+---+---+---+------------+---+---+-------+---+--+---+---+---+---+
+----+---+--------+--------+--------+--------+--------------------------------------------+
|16 | Commitments and contingencies |
+----+------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+--------+--------------------------------------------+
| | Group capital expenditure committed, for the purchase of property, software, plant |
| | and equipment, but not provided for in these financial statements amounted to |
| | GBP0.8m (2008: GBP0.3m). |
+----+------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+--------+--------------------------------------------+
|17 | Events occurring after the reporting period |
+----+------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+--------+--------------------------------------------+
| | There are no events occurring after the reporting period, other than the proposed |
| | dividend referred to in note 15. |
+----+------------------------------------------------------------------------------------+
| | | | | | | |
+----+---+--------+--------+--------+--------+--------------------------------------------+
|18 | Related-party transactions |
+----+------------------------------------------------------------------------------------+
| | |
+----+------------------------------------------------------------------------------------+
| | P Kane, a director of the Company, and members of his close family and certain |
| | family trusts, the beneficiaries of which are persons connected with P Kane, |
| | control directly and indirectly 45.8% of the issued share capital of the Company. |
| | In addition his brother M Kane controls a further 12.8% of the issued share |
| | capital of the Company. |
+----+------------------------------------------------------------------------------------+
| | | | | | |
+----+---+--------+--------+--------+-----------------------------------------------------+
|19 | Risks and uncertainties |
+----+------------------------------------------------------------------------------------+
| | | | | | |
+----+---+--------+--------+--------+-----------------------------------------------------+
| | The potential risks and uncertainties that may affect the Group's performance were |
| | discussed on pages 67 and 68 of the Group's Annual Report and Accounts for the |
| | 2009 financial year. These included market, credit, regulatory, price, liquidity, |
| | capital and foreign exchange risk. It is considered that these still remain the |
| | most likely areas of potential risk and uncertainty, with the position unchanged |
| | from that set out in the 2009 Annual Report and Accounts. |
+----+------------------------------------------------------------------------------------+
| | | | | | |
+----+---+--------+--------+--------+-----------------------------------------------------+
|20 | Seasonality |
+----+------------------------------------------------------------------------------------+
| | |
+----+------------------------------------------------------------------------------------+
| | Historically, the Group experiences marginally greater demand for its parcels and |
| | palletised goods collection and delivery services in the second half of the year, |
| | as consignments increase in advance of the Christmas season. Such trends are not |
| | discernible within either the mail or courier markets. |
+----+------------------------------------------------------------------------------------+
| | |
+----+---+--------+--------+--------+--------+--------------------------------------------+
+----+--------+--------+--------+--------+--------+--------+--------+--------+----------+
| Statement of directors' responsibilities |
+---------------------------------------------------------------------------------------+
| | | | | | | | | | |
+----+--------+--------+--------+--------+--------+--------+--------+--------+----------+
| The directors confirm that these condensed consolidated interim financial statements |
| have 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 and Transparency Rules ('DTR') |
| of the United Kingdom's Financial Services Authority DTR 4.2.7 and DTR 4.2.8, namely: |
+---------------------------------------------------------------------------------------+
| | | | | | | | | | |
+----+--------+--------+--------+--------+--------+--------+--------+--------+----------+
| ¦ | an indication of important events that have occurred during the first six months |
| | and their impact on the condensed consolidated interim financial statements, and |
| | a description of the principal risks and uncertainties for the remaining six |
| | months of the financial year; and |
+----+----------------------------------------------------------------------------------+
| | | | | | | | | | |
+----+--------+--------+--------+--------+--------+--------+--------+--------+----------+
| ¦ | material related-party transactions in the first six months and any material |
| | changes in the related-party transactions described in the last annual report. |
+----+----------------------------------------------------------------------------------+
| |
+---------------------------------------------------------------------------------------+
| The directors of UK Mail Group plc are listed in the Business Post Group Annual |
| Report for the year ended 31 March 2009, with the exception that the following |
| changes took place during the six months to 30 September 2009: Philip Stephens |
| retired on 15 July 2009 and Michael Findlay was appointed on 1 September 2009. A list |
| of current directors is maintained on the UK Mail Group website : www.ukmail.com. |
+---------------------------------------------------------------------------------------+
| |
+---------------------------------------------------------------------------------------+
| By order of the Board |
+---------------------------------------------------------------------------------------+
| | | | | | | | | | |
+----+--------+--------+--------+--------+--------+--------+--------+--------+----------+
| Guy Buswell, Chief Executive | | | | Steven Glew, Finance |
| | | | | Director |
+-------------------------------+--------+--------+--------+----------------------------+
| 17 November 2009 | | | | | 17 November 2009 |
+----+--------+--------+--------+--------+--------+--------+--------+--------+----------+
+--------+--------+--------+--------+--------+--------+--------+--------+--------+--------+
| Independent review report to UK Mail Group plc |
+-----------------------------------------------------------------------------------------+
| | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+--------+--------+--------+
| Introduction |
+-----------------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------------+
| We have been engaged by the company to review the condensed consolidated interim |
| financial statements for the six months ended 30 September 2009, which comprises the |
| Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, |
| Consolidated Statement of Cash Flows, Consolidated Statement of Changes in |
| Shareholders' Equity and related notes. We have read the other information contained in |
| the interim management report and considered whether it contains any apparent |
| misstatements or material inconsistencies with the information in the condensed |
| consolidated interim financial statements. |
+-----------------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------------+
| Directors' responsibilities |
+-----------------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------------+
| The interim financial report is the responsibility of, and has been approved by, the |
| directors. The directors are responsible for preparing the interim financial report in |
| accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial |
| Services Authority. |
+-----------------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------------+
| As disclosed in note 2, the annual financial statements of the Group are prepared in |
| accordance with IFRSs as adopted by the European Union. The condensed consolidated |
| interim financial statements included in this interim financial report has been |
| prepared in accordance with IAS 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 |
| consolidated interim financial statements in the interim financial report based on our |
| review. This report, including the conclusion, has been prepared for and only for the |
| company for the purpose of the Disclosure and Transparency Rules of the Financial |
| Services Authority and for no other purpose. We do not, in producing this report, |
| 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. |
+-----------------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------------+
| 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 consolidated interim financial statements in the |
| interim financial report for the six months ended 30 September 2009 is not |
| prepared, in all material respects, in accordance with IAS 34 as adopted by |
| the European Union and the Disclosure and Transparency Rules of the United |
| Kingdom's Financial Services Authority. |
+--------------------------------------------------------------------------------+
| |
+--------------------------------------------------------------------------------+
| PricewaterhouseCoopers LLP |
+--------------------------------------------------------------------------------+
| Chartered Accountants |
+--------------------------------------------------------------------------------+
| Thames Valley |
+--------------------------------------------------------------------------------+
| 17 November 2009 |
+--------------------------------------------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
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