Carphone Warehouse 2016 Annual Report Download - page 29

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Dixons Carphone plc Annual Report and Accounts 2015/16
Strategic Report
27
Funding – pro forma basis
2015
/
16
£million
2014/15
£million
Free Cash Flow – pro forma basis 202 89
Dividends (106) (52)
Merger transaction costs — (90)
A
cquisitions and disposals including
discontinued operations (82) 2
Pension contributions (35) (28)
Other items 14 —
Movement in net funds / (debt) –
pro forma basis (7) (79)
Opening net funds / (debt) – pro forma
basis(1) (260) (181)
Closing net (debt) (267) (260)
(1) Opening net debt in the current period reflects the consolidated
net debt of the Group at 2 May 2015 including net funds
recognised within assets held for sale of £53 million. Opening net
debt in the comparative reflects net debt for Carphone Warehouse
at 29 March 2014 and for Dixons Retail at 30 April 2014.
At 30 April 2016 the Group had net debt of £267 million,
broadly flat year-on-year to net debt of £260 million in the
comparative period. Free cash flow was an inflow of
£202 million (2014/15: £89 million) for the reasons
described above.
Merger transaction costs in the previous year reflected
professional and banking fees, the cash cost of share option
exercises as a result of the Merger and the cost of redeeming
the bonds previously held by Dixons Retail. Net cash outflows
from acquisitions and disposals in the current year were
£82 million primarily comprising the final deferred payment for
the CPW Europe Acquisition, the acquisitions of Simplifydigital
and InfoCare, and discontinued operations.
The increase in pension contributions reflects the agreed
contribution profile following the 2013 triennial valuation.
On 8 October 2015 the Group signed a new multi-currency
revolving credit facility for £800 million, which matures in
October 2020 and replaced the multi-currency term and
revolving credit facility which was previously in place.
Statutory results
The explanation of the Group’s results presented above is on a
pro forma Headline basis for the comparative period. Group
results as reported in the financial information are prepared on
a statutory basis, with the comparative period consolidating
the results of Dixons Retail from 6 August 2014. These results
are summarised below:
Income statement – continuing operations
2015/16
£million
2014/15
£million
Revenue 9,738 8,255
EBIT 304 324
Net finance costs (41) (37)
Profit before tax 263 287
Tax (84) (76)
Profit after tax 179 211
Basic EPS 15.6p 22.0p
Diluted EPS 15.1p 21.2p
Revenue increased 18% to £9,738 million reflecting the
inclusion of a full 12 months’ earnings from Dixons Retail in the
current year (prior period results from 6 August 2014 to 2 May
2015) offset by the additional month trading for the Carphone
Warehouse businesses in the prior period.
Profit before tax reduced from £287 million to £263 million in
the current period, largely due to non-Headline costs incurred
in the current year in relation to the Merger and property
rationalisation costs, which are explained later in this report.
Net finance costs have increased due to the inclusion of a full
12 months of Dixons Retail, resulting in higher finance lease
and pension-related interest.
The tax charge increased from £76 million to £84 million
reflecting certain non-deductible non-Headline items in the
current year.
Basic EPS has reduced from 22.0p to 15.6p for the period due
to the lower profit after tax and the increase in the number of
shares of the Group as part of the Merger.
Non-Headline items
Statutory profit before tax of £263 million (2014/15: £287
million) includes Non-Headline charges of £184 million
(2014/15: £89 million). These charges are analysed below and
are reported on a statutory basis with the Dixons Retail
business only consolidated from completion of the Merger on
6 August 2014.
2015/16
£million
2014/15
£million
Merger-related costs (52) (41)
A
mortisation of acquisition intangibles (40) (35)
Property rationalisation costs (70) —
A
cquisition-related costs (6) —
Net pension interest (16) (13)
(184) (89)
Costs incurred in relation to the Merger relate to integration
costs primarily being professional fees, employee severance
and property costs associated with the integration process
(2014/15: £32 million). In addition, during 2014/15 transaction
costs of £9 million were incurred, predominantly reflecting
banking and professional fees. Merger-related costs also
includes the write-off of £4 million deferred facility fees which
00_DC 2016 Annual Report.pdf 27 11/07/2016 18:34