Final Results

Released : 29 Jun 2011

RNS Number : 3100J
Stagecoach Group PLC
29 June 2011
 



29 June 2011

 

Stagecoach Group plc - Preliminary results for the year ended 30 April 2011

 

Business highlights

·      Strong Group performance delivering good returns for shareholders

Adjusted earnings per share* up 27.3% to 23.8p

Full year dividend up 9.2% to 7.1p

·      Completing review of capital structure - will report conclusions in August 2011

·      Further megabus.com expansion driving revenue growth in North America

·      Sector-leading profit margin and good passenger volume growth trends at UK Bus

·      UK Rail underpinned by operational delivery and customer satisfaction

·      Shortlisted for Greater Anglia and West Coast rail franchises; Virgin Rail Group in discussions about a franchise extension at West Coast

·      Positive outlook for the Group's greener, smarter public transport services

 

Financial summary

 

Year ended 30 April

Results excluding intangible asset expenses and exceptional items*

Reported results


2011

2010

2011

2010






Revenue (£m)

2,389.8

2,164.4

2,389.8

2,164.4






Total operating profit (£m)

240.2

192.0

225.0

179.1

Non-operating exceptional items (£m)

-

-

0.7

(2.0)

Net finance costs (£m)

(34.5)

(30.7)

(34.5)

(51.2)

Profit before taxation - continuing operations (£m)

205.7

161.3

191.2

125.9

Discontinued operations (£m)

-

-

18.5

3.9

Profit before taxation (£m)

205.7

161.3

209.7

129.8






Earnings per share (pence)

23.8p

18.7p

24.6p

15.6p

Proposed final dividend (pence)

4.9p

Nil

4.9p

Nil

Full year dividend (pence)

7.1p

6.5p

7.1p

6.5p

 

* See definitions in note 25 to the condensed financial statements

 

Commenting on the results, Chief Executive, Sir Brian Souter, said: 

 

"We are seeing growing demand for our bus and rail services in the UK and North America, with further evidence of modal shift as consumers look for better value and more convenient transport alternatives to the rising cost of motoring and increasing road congestion.

 

"The strong results we have achieved across the Group are the result of our successful organic growth strategy. We are focused on providing value-for-money products, continuing to invest heavily in our networks, and harnessing the power of the Internet, new technology and social media to attract new customers and make it easier for people to access our services.

 

"We look forward with confidence to the year ahead. Public transport is central to supporting economic growth and meeting the global challenge of climate change.  In the UK, high quality public transport will be at the heart of the successful delivery of the London 2012 Olympic and Paralympic Games.  We believe the outlook for our bus and rail services is positive."


Enquiries to:

 

Analysts

Martin Griffiths, Group Finance Director                                              +44 (0) 1738 442111

Ross Paterson, Director of Finance & Company Secretary                  +44 (0) 1738 442111

 

Media

Steven Stewart, Director of Corporate Communications                     +44 (0) 1738 442111

                                                                                                            or +44 (0) 7764 774680

Smithfield Consultants

John Kiely                                                                                           +44 (0) 20 7360 4900

 

Copies of this announcement are available on the Stagecoach Group website at

www.stagecoachgroup.com/scg/ir/finanalysis/reports/2011

 

 

Chairman's statement

 

I am delighted to report that the Group has continued its good performance. We have achieved revenue growth in all of our divisions in the UK and North America as a result of our focus on safe, good value, high quality bus and rail travel.

 

The Group's success is underpinned by the quality and breadth of its management team which, as well as reducing costs in responding to changing circumstances, has continued to pursue new opportunities whether those be new, fast-growing services such as megabus.com or acquisitions such as the October 2010 purchase of the under-performing East London bus business.  At the same time, management has maintained a focus on strong operational delivery and customer satisfaction.

 

We took forward-looking decisions during the economic downturn to continue to invest heavily in our services, and to maintain focus on operational performance, customer service and offering value-for-money travel options to our passengers. This has supported organic growth across our transport operations as economic conditions have improved.

 

Positive trends in the first half of the year have continued and the Group has achieved good revenue and profit growth in the full year. Revenue for the year to 30 April 2011 was £2,389.8m (2010: £2,164.4m).  Total operating profit (before intangible asset expenses and exceptional items) was up 25.1% at £240.2m (2010: £192.0m), reflecting increased profit in all divisions.  Earnings per share before intangible asset expenses and exceptional items were 27.3% higher at 23.8p (2010: 18.7p).

 

In line with the Group's good performance, the Directors have proposed a final dividend of 4.9p per share, giving a total dividend per share for the year up 9.2% at 7.1p (2010: 6.5p). The proposed final dividend is payable to shareholders on the register at 2 September 2011 and will be paid on 5 October 2011.

 

The Group is well funded and its net debt has reduced during the year ended 30 April 2011.  This is a further tangible sign of the Group's success.  We are completing our review of the Group's capital structure and we expect to announce the conclusions of our review at or before the Group's Annual General Meeting at the end of August 2011.

 

Stagecoach has made a good start to the financial year ending 30 April 2012 and current trading remains in line with our expectations. 

 

I would like to pay tribute to our former Chairman Bob Speirs, who retired from the Board on 31 December 2010 after almost 16 years as a director.  His insight, experience and wise advice have been invaluable to the business and I would like to extend to him the gratitude and best wishes of the Board for the future.

 

In May 2011, Will Whitehorn joined the Board as a non-executive director of the Company. His background in brand development, together with his wide-ranging experience across a range of business sectors will bring valuable insight as we look to expand the reach of our products and services. 

 

On behalf of the Board, I would like to congratulate Sir Brian Souter, the Group's Chief Executive, on being awarded a knighthood in the recent Queen's Birthday honours list for his service to transport and the voluntary sector.

 

Political support and the environment for public transport are strong, and the Group is in a good position to benefit from significant opportunities ahead. Our employees, who serve the millions of customers we welcome on board our bus and rail services every day, are a key part of our success and are critical to our future. I would like to thank them for their strong contribution over the past year and I am confident that the Group will continue to deliver for our customers and shareholders.

 

Sir George Mathewson

Chairman                                                                                                              29 June 2011



Chief Executive's review

 

The Group has achieved continued strong financial and operational performance in the year ended 30 April 2011. All divisions have reported increased revenue and operating profit.

 

Revenue by division is summarised below:

 

REVENUE

2011

2010

Functional currency

2011

2010

Growth

 

£m

£m


Functional currency

(m)

%

Continuing Group operations







UK Bus (regional operations)

893.6

875.4

£

893.6

875.4

2.1%

UK Bus (London)

133.6

Nil

£

133.6

Nil

-

North America

295.1

266.1

US$

461.7

426.3

8.3%

UK Rail

1,070.0

1,026.7

£

1,070.0

1,026.7

4.2%

Intra-Group revenue

(2.5)

(3.8)

£

(2.5)

(3.8)

(34.2)%

Group revenue

2,389.8

2,164.4





 

Operating profit by division is summarised below:

 

OPERATING PROFIT

2011

2010


2011

2010


£m

% margin

£m

% margin

Functional currency

Functional currency (m)

Continuing Group operations

UK Bus (regional operations)

 

153.1

 

17.1%

 

126.1

 

14.4%

 

£

 

153.1

 

126.1

UK Bus (London)

(5.9)

(4.4)%

Nil

-

£

(5.9)

Nil

North America

19.3

6.5%

9.1

3.4%

US$

30.2

14.6

UK Rail

48.4

4.5%

41.6

4.1%

£

48.4

41.6

Group overheads

(11.3)


(11.6)





Restructuring costs

(2.9)


(1.2)





Total operating profit from continuing Group operations

200.7


164.0





 

Joint ventures - share of profit/(loss) after tax








Virgin Rail Group

28.4


19.2





Citylink

1.8


1.2





New York Splash Tours

Nil


(0.9)





Twin America

9.3


8.5





Total operating profit before intangible asset expenses and exceptional items

240.2


192.0





Intangible asset expenses

(15.2)


(11.1)





Exceptional items

Nil


(1.8)





Total operating profit: Group operating profit and share of joint ventures' profit after taxation

225.0


179.1





 

The Group has had a good year, attracting more people to our greener, smarter bus and rail services. We are seeing growing evidence of modal shift as consumers look for better value and more convenient transport alternatives to the rising cost of motoring and increasing road congestion.

 

We are focused on providing value-for-money products, continuing to invest in our networks, and harnessing the power of the Internet, new technology and social media to attract new customers and make it easier for people to access our services.  The strong growth of megabus.com highlights the potential to continue to grow the market for public transport. The skill and commitment of our people at all levels of the business have been key to our success.

 

Across the Group, we are progressing well with our sustainability strategy to deliver more energy and carbon efficient businesses. Our investment in environmental management systems, regenerative braking on trains, our leading position on hybrid electric buses, and the introduction of eco-driving bus technology are reducing our carbon footprint and supporting our focus on cost control.

 

The core strength of our business means we have been able to manage the impact of reduced public spending on transport, ensuring we continue to offer attractive fares and networks.

 

UK Bus (regional operations)

 

Our UK Bus regional operations connect communities in more than 100 towns and cities across the UK on networks stretching from the Highlands and Islands of Scotland to south-west England.  These include major city bus operations in Liverpool, Newcastle, Hull, Manchester, Oxford, Sheffield and Cambridge.

 

Financial performance

 

The financial performance of the UK Bus (regional operations) division for the year ended 30 April 2011 is summarised below:

 

 

2011

2010

Change

 

£m

£m

 

Revenue

893.6

875.4

2.1%

Like-for-like revenue*

883.0

864.7

2.1%

Operating profit

153.1

126.1

21.4%

Operating margin

17.1%

14.4%

270bp

 

* See definitions in note 25 to the condensed financial statements 

 

Revenue from our UK Bus regional operations for the year ended 30 April 2011 was up 2.1% to £893.6m, compared to £875.4m in the prior year.  Like-for-like revenue growth was 2.1%.  Operating profit was up 21.4% at £153.1m (2010: £126.1m) which includes the benefit of a £14.3m year-on-year reduction in fuel costs.  Operating margin was 17.1%, compared to 14.4% in 2010. 

 

Passenger revenue growth

 

We have delivered further revenue and passenger volume growth at our UK Bus regional operations. Over many years, our UK Bus (regional operations) volume growth and profit margins have been amongst the best in the sector and we also offer the best value fares of any major operator. We have seen increasing signs of modal shift from car to local bus services as road congestion, the high price of fuel and Government "green taxes" impact on the cost of motoring. Consumers are seeing the convenience and financial benefits of switching to a better value and more sustainable mode of transport. Revenue growth in the year was consistent with our plan for modest fare rises.  Like-for-like passenger volume growth for the year was 0.9%. Our value fares strategy and focus on organic growth has ensured we have a vibrant bus business in the UK and we believe the environment for public transport will support continued modal shift to bus and coach travel.

 

Cost control

 

Reduced public sector spending is resulting in reductions in concessionary revenue, and cuts by local authorities in tendered services. All bus operators have also faced increasing pressure on fuel and energy costs and from April 2012, will see a reduction in Bus Service Operators' Grant (BSOG). However, we have maintained a strong commercial bus network through a mixture of fare increases at or below inflation and some limited mileage reductions.  We will continue to manage the impact on our business proactively and take these factors into account in future decisions on bus services, tenders and fares, while working hard to minimise the effect on our passengers.


 

Regulatory developments

 

The Group continues to respond to the Competition Commission on its consideration of the local bus market in the UK (excluding London and Northern Ireland).  The Commission published its Provisional Findings and Possible Remedies in May 2011. Local bus services in the UK have been subject to detailed and unprecedented scrutiny by the competition authorities for more than eighteen months and we note that the Commission is not proposing any fundamental change to the regulatory structure of the industry. At this stage, the Commission has ruled out both price controls and forced divestments of bus operations. In addition, the Commission has acknowledged that there are existing agencies, mechanisms and legislation, which can address a number of its recommendations.

 

Outlook

 

UK Bus operators undoubtedly face a number of challenges in the months ahead.  We forecast that in the year ending 30 April 2012, concessionary revenue and tendered revenue will reduce by around £15m and that fuel costs will increase.  However, we remain positive on the prospects for the Division.  The flexibility we have on fares and service patterns, the rising cost of running a private car and the strength of our management team, mean that the Division is well positioned to at least deliver operating profit in the year to 30 April 2012 at a level similar to that of the year to 30 April 2011.  Whilst fares will increase at a higher average rate than the previous year, our services will remain good value.

 

UK Bus (London)

 

We are the third largest operator in the London bus market, with an estimated 15% share of that market.  The business operates bus services under contract to Transport for London, receiving a fixed fee (subject to adjustment for certain inflation indices) and taking the cost and capital risk.  The business operates from 10 depots and has a fleet of around 1,250 buses serving routes in and around east and south-east London.

 

Financial performance

 

The financial performance of UK Bus (London) since the Group acquired it in October 2010 to 30 April 2011 is summarised below:

 


14 October 2010 to

30 April 2011


£m

Revenue

133.6

Operating loss

(5.9)

Operating margin

(4.4)%

 

The reported operating loss of £5.9m is after taking account of (i) a £3.2m release from the provision that was recorded as at acquisition in respect of acquired customer contracts and (ii) £9.9m of costs in relation to re-basing staff terms and conditions.

 

In October 2010, the Group completed the acquisition of the bus business formerly owned by East London Bus Group Limited (in administration), acquiring four companies that together operate the business. The cash paid in respect of the acquisition was £59.5m, inclusive of amounts to settle inter-company liabilities payable by the acquired business to its former parent company.  The closing enterprise value (being the aggregate of the consideration paid and the net debt assumed with the acquisition) on the date of completion was £56.0m, taking account of the cash in the acquired business at completion. We operated a successful and profitable bus business in London for several years and are pleased to re-enter the London bus market at an attractive price. 

 

We have made significant progress in restructuring the acquired business to both maximise synergies with the wider Group and tackle the structurally high cost base.  Our first step was to put in place a new management team, comprising experienced Stagecoach personnel from other areas and also incumbent members of the London management team.  The head office accounting and administration structure of the business was then reduced, with all accounting functions being integrated with our Shared Service Centre in Stockport.

 

We have held discussions with the employee trade union representatives and are pleased with the constructive response to our plans to improve employee productivity and reduce unit costs significantly, and in doing so secure the business and jobs for the future.  The results include the financial cost of implementing these changes in working terms and conditions and we will see material reductions in future payroll costs.

 

We have also undertaken a full review of the integrity of the financial models supporting the contract costing and budgeting for bids and set realistic return criteria for future tenders.  As we have previously reported, it will take some time for existing low margin contracts to work through to re-tender, and the business has already lost some sizeable contracts which will impact from the year to 30 April 2012.

 

We have recently announced the planned closure of one of the ten bus depots from which the business operates.  This property rationalisation plan recognises the significant extra capacity that the business has and will allow it to improve efficiency by better spreading overheads yet leaving sufficient capacity for future requirements.

 

In the next six months our focus remains on the cost base of the business, in particular fleet maintenance costs and working practices, where we anticipate further economies and efficiency improvements can be achieved.

 

As a sign of our confidence in the future of the business, in January 2011 we announced plans to lease more than 160 new state-of-the-art vehicles for our London operations. Our long-term aspirations are for mid to upper single-digit operating margins. While we do not underestimate the challenges we face in improving the financial performance of the acquired business, our plans are firmly on track and we remain confident we can deliver a good return to shareholders from the acquisition.

 

Outlook

 

As we anticipated when we acquired the London Bus Division, the annual rate of revenue is likely to fall in the year ending 30 April 2012 but there is good potential to generate a small operating profit by reducing costs and relinquishing some under-performing contracts.



 

North America

 

Stagecoach provides a range of transport services in North America.  Our businesses include the budget coach brand, megabus.com, commuter/transit services, inter-city services, tour and charter, and school bus operations.

 

Financial performance

 

The financial performance of the North America division and North America joint ventures for the year ended 30 April 2011 is summarised below:

 


2011

2010

Change


US$m

US$m


Revenue




Wholly owned

461.7

426.3

8.3%

Share of joint ventures

67.7

64.1

5.6%

Total

529.4

490.4

8.0%

Like-for-like revenue

457.0

421.1

8.5%

Operating profit




Wholly owned

30.2

14.6

106.8%

Share of joint ventures

15.2

12.8

18.8%

Total

45.4

27.4

65.7%

Operating margin

8.6%

5.6%

300bp

 

Revenue from our wholly owned North American operations for the year to 30 April 2011 was up 8.3% at US$461.7m (2010: US$426.3m), and the equivalent like-for-like revenue was up by 8.5%.  Operating profit was US$30.2m (2010: US$14.6m), resulting in an operating margin of 6.5%, compared to 3.4% the previous year.  The increased profit and margin reflects the benefits of revenue growth and reduced fuel costs.  Converted to sterling, revenue for the 12 months to 30 April 2011 was £295.1m (2010: £266.1m). Operating profit for the 12 months was £19.3m (2010: £9.1m). 

 

megabus.com

 

megabus.com revenue in the year ended 30 April 2011 was US$75.4m (2010: US$45.1m) and it continues to be the growth engine of our business in North America. Passenger demand is strong and we are continuing to expand our range of destinations. megabus.com now covers around 60 cities from hubs in Chicago, New York, Philadelphia, Washington D.C and Pittsburgh. Our strategy of using transport hubs has helped support the rapid expansion of the product, maximise the productivity of our fleet and control start-up costs.  The market for budget travel has bucked the trend of the wider economy and we have created more than 250 jobs over the past two years.  Moving forward, we expect megabus.com to account for an increasing proportion of our North American business and we are now focusing on the best strategy to exploit further growth opportunities in other parts of North America.

 

Other operations

 

We continue to take steps to match services to demand in the non-megabus.com parts of our business, as well as focusing on cost control. We have a flexible business model and have taken action to reduce costs and miles operated, with vehicles in charter operations redeployed as part of our megabus.com growth strategy. The economic environment has improved and in the second half of the year we have seen positive revenue trends.

 

Outlook

 

We are looking to grow megabus.com revenue from US$75.4m in the year ended 30 April 2011 to over US$110m in the year to 30 April 2012.  This will still largely be served by our existing depot infrastructure but we are already working on the further expansion of megabus.com beyond April 2012, which might involve new partnerships and/or infrastructure.  New megabus.com routes are expected to be loss-making initially, which partly masks the success of the established routes.

 

Although megabus.com offers the greatest potential to grow the North American business, the remainder of the business is well positioned to offset higher fuel costs.  The rate at which megabus.com is rolled out to new locations will have a bearing on the North America operating profit for the year to 30 April 2012 with a more rapid roll-out resulting in higher start-up losses.   Overall, however, the Division remains well placed to deliver a good operating profit in the year ending 30 April 2012.

 

 

UK Rail

 

The Group has major rail operations in the UK, operating both the South Western and East Midlands rail franchises. South Western incorporates the South West Trains and Island Line networks. South West Trains runs around 1,700 train services a day in south-west England out of London Waterloo railway station, while Island Line operates on the Isle of Wight. The South Western franchise is expected to run until February 2017. The East Midlands Trains franchise comprises main line train services running to London St Pancras, regional rail services in the East Midlands area and inter-regional services between Norwich and Liverpool. The franchise is expected to run until 31 March 2015.

 

Financial performance

 

The financial performance of the UK Rail division for the year ended 30 April 2011 is summarised below:

 

 


2011

2010

Change


£m

£m


Revenue

1,070.0

1,026.7

4.2%

Like-for-like revenue, excluding tram

1,026.9

968.9

6.0%

Operating profit

48.4

41.6

16.3%

Operating margin

4.5%

4.1%

40bp

 

Revenue from our UK Rail subsidiaries for the year to 30 April 2011 was up by 4.2% to £1,070.0m (2010: £1,026.7m).  On a like-for-like basis, revenue excluding our tram operations is up 6.0%.  Operating profit was £48.4m (2010: £41.6m), giving an operating margin of 4.5% (2010: 4.1%).  We have benefitted from improving passenger volume trends at our South Western Trains and East Midlands Trains franchises.  South Western Trains, which makes premium payments to the Department for Transport ("DfT"), qualifies for revenue support payments under the terms of its contract as revenues remain below that forecast when the contract was originally awarded.  The first revenue support payment was received in March 2011, which covered the period from 1 April 2010.  As expected, East Midlands Trains has made a loss during the year.  It qualifies for revenue support from November 2011.



 

Operational performance

 

Operational performance at our East Midlands Trains and South Western Trains franchises is consistently amongst the highest of the UK train operators.  East Midlands Trains continues to run the most punctual trains of any long distance franchised train operator in the UK. For the year to 31 March 2011, punctuality1 on East Midlands Trains was 92.1%, compared to 87.7% for long-distance operators.  South Western Trains recorded a record punctuality figure of 93.7% for the same period. The average for London and South East operators was 91.1% and was 90.9% for all UK franchised rail operators.

 

1  Punctuality is measured on the basis of the Department for Transport’s Public Performance Measure, being the percentage of trains that arrive at their final destination within 5 minutes (or 10 minutes for inter-city services) of their scheduled arrival time having called at all scheduled stations.

 

Customer satisfaction

 

Satisfaction amongst our passengers also remains high.  The latest National Passenger Survey, carried out during Autumn 2010, shows South West Trains passengers are amongst the most satisfied in the London and South East region. Overall satisfaction was 87% compared to the London and South East average of 83%.  At East Midlands Trains, satisfaction is at its highest ever level, with 88% of passengers satisfied, compared to a long-distance average of 87%, marking the biggest improvement of any UK rail operator.  Satisfaction with punctuality continues to be rated highly on both franchises.

 

Policy & regulatory developments

 

The Group has engaged extensively with the DfT and Sir Roy McNulty on the way forward for reform of the rail industry. The final report by Sir Roy McNulty on value for money in the UK Rail industry was published in May 2011, and we believe its recommendations are a major opportunity to unlock further growth in the years ahead and deliver a more efficient, more passenger-focused railway. We are supportive of efforts to reduce industry costs and we believe our achievements at our own franchises demonstrate our ability to drive out efficiencies in areas under our control, whilst maintaining high levels of performance and customer satisfaction. We would welcome radical reform to deliver greater alignment of track and train, which we believe would benefit all stakeholders in the UK rail network. Our vision of vertical integration does not necessarily envisage the train operator taking ownership of the infrastructure or delivering major infrastructure projects but rather it foresees the train operator having responsibility for infrastructure maintenance and renewals thereby improving accountability and efficiency.  We would relish the opportunity to participate in a pilot of such vertical integration.  We look forward to working with the Government to improve the railway for the benefit of passengers, taxpayers and our shareholders.

 

As part of the Comprehensive Spending Review, the Government retained the Retail Price Index ("RPI") +1% formula for regulated fare increases for January 2011. However, this will change to RPI +3% from January 2012 as part of a wider policy to shift the funding of the railways more towards the passenger, so that the taxpayer pays less. All additional income raised by the decision will be passed through by train operating companies to Government. Regulated fares account for roughly half of all rail journeys and we will continue to offer a range of good value fares to suit the different budgets of our customers.

 

Rail franchising

 

The Government announced in December 2010 its early thoughts on rail franchise reform and its intention for the tendering of specific franchises.  We look forward to seeing its detailed proposals for reform and we will continue to evaluate franchise opportunities as they emerge in light of these policy decisions.

 

As a major rail operator with a good track record of delivery, we were pleased to have been shortlisted for the Greater Anglia rail franchise and, in partnership with Virgin, for the new West Coast franchise. The Greater Anglia franchise is expected to commence in February 2012 and will run for between 17 and 29 months. The current West Coast franchise is due to end on 31 March 2012.  However, the start of the new West Coast franchise has been delayed until 9 December 2012.  Virgin Rail Group has entered into bilateral negotiations with the DfT to agree acceptable terms for the extension of the current franchise to 8 December 2012.  The new West Coast franchise is expected to commence in December 2012 and will run for 14 years. Greater Anglia and West Coast are very different franchises, each with their own specific challenges, priorities and opportunities. We will continue to work with local communities and other stakeholders to develop sustainable bids to deliver the Government's specification, improve rail services for customers, and ensure value for money for taxpayers.

 

The new Greater Anglia franchisee will not take significant passenger revenue risk, consistent with the short-term nature of the franchise.  It will, however, take cost risk and will operate the train service during the London 2012 Olympics.

 

The new West Coast franchise will likely include a risk-sharing mechanism based on GDP rather than revenue and will give the train operator some increased flexibility to change timetables and fares.

 

Outlook

 

Operating profit in the UK Rail Division has been expected for some time to reduce in the year ending 30 April 2012 and this remains the case given the change in the premium payments to Government.  Thereafter, the availability of revenue support should help limit the risk of profit falling short of expectations but the scope to significantly increase UK Rail profit (new franchise wins excepted) is already recognised as being limited.

 

Joint Ventures

 

Virgin Rail Group

 

The Group has a 49% shareholding in Virgin Rail Group ("VRG"), which operates the West Coast Trains rail franchise. The other shareholder in VRG is the Virgin Group of Companies. The current franchise runs through until 2012.

 

Financial performance

 

The Group's share of the financial performance of Virgin Rail Group for the year ended 30 April 2011 is summarised below:

 


2011

2010

Change


£m

£m


49% share of Revenue

392.7

355.3

10.5%

Operating profit

39.5

25.5

54.9%

Net finance income

0.2

0.2

-

Taxation

(11.3)

(6.5)

73.8%

Profit after tax

28.4

19.2

47.9%

Operating margin

10.1%

7.2%

290bp

 

Our share of VRG's profit after tax for the 12-month period was £28.4m (2010: £19.2m).  Our share of operating profit was £39.5m (2010: £25.5m), our share of finance income was £0.2m (2010: £0.2m) and our share of taxation charges was £11.3m (2010: £6.5m).

 

Passenger revenue growth

 

VRG has continued to achieve strong passenger revenue growth. Improved journey times, more frequent services, and good value deals, have all had a positive impact on passenger trends. Passenger volume growth has been well ahead of other long-distance train operators, and Business and First Class traffic has grown in particular as the economy has improved and better infrastructure performance has delivered more reliable services. 

 

Business development

 

VRG has a proven track record over the last 14 years of providing better rail services for customers, including the renewal of the entire train fleet and the introduction of a high-frequency timetable. In the last six years alone, annual passenger numbers have doubled from 14 million to over 28 million and Virgin is now delivering industry-leading levels of customer satisfaction. VRG is negotiating an extension to its existing West Coast franchise and has been shortlisted for the new West Coast franchise, as explained in the UK Rail section above. VRG is committed to submitting a strong bid to retain the West Coast franchise, building on the investment and customer improvements made in recent years and working with local communities along the route, as well as other stakeholders, to develop these plans.

 

Outlook

 

VRG's profit in the year ended 30 April 2011 benefited from some contractual settlements with Network Rail that will not repeat in the year to 30 April 2012.  While this might mean a fall in short-term profit, the main strategic focus of VRG is now on the opportunities presented by the potential franchise extension and the new franchise which VRG is bidding for.

 

Twin America

 

In North America, Stagecoach operates a joint venture, Twin America LLC, with CitySights NY. The joint venture, which was established on 31 March 2009, operates sightseeing services in New York under both the Gray Line and CitySights brands. The Group holds 60% of the economic rights and 50% of the voting rights in the joint venture. Twin America LLC is headed by a Chief Executive and overseen by a joint Board.

 

Financial performance

 


2011

2010

Change


US$m

US$m


60% share of Revenue

67.7

63.6

6.4%

Operating profit

15.2

14.2

7.0%

Taxation

(0.6)

(0.6)

-

Profit after tax

14.6

13.6

7.4%

Operating margin

22.5%

22.3%

20bp

 

We are pleased by the strong financial performance of our Twin America joint venture in the year ended 30 April 2011.  The business has benefited from an increased number of visitors to New York City.  Our share of operating profit for the year increased to US$15.2m (2010: US$14.2m).  The tax treatment of our share of profit is such that the joint venture's own profit is partially taxed but an additional tax charge falls on the joint venture partners and the effect of that on the Group is included within "taxation" in the consolidated income statement.

 

Twin America was notified by the United States Surface Transportation Board ("STB") in February 2011 that its application for formal approval of the joint venture had not been approved.  The STB confirmed that the joint venture, as currently structured, did require its approval and therefore, having decided not to approve the joint venture, the STB gave Twin America the option of separating the business, assets and management of the joint venture. Alternatively, the joint venture could divest its interstate services, which account for around 1% of the joint venture's revenues. The latter option would remove the transaction from STB jurisdiction and place it within the authority of the New York State Attorney General. The Chairman of the STB agreed on 9 March 2011 to grant an application for a stay of the February decision pending a forthcoming decision by the STB on Twin America's request to undertake a further detailed review of the case.  Twin America believes customers have benefitted from good quality, high value, and better co-ordinated services, while the joint venture has achieved cost savings and other synergies. We will continue to assist the STB should it move forward with a fresh consideration of this matter and are prepared to present any further evidence as appropriate to help inform any future decision.

 

Twin America continues to look for opportunities to expand both in its current market and beyond New York.  On 17 May 2011, Twin America commenced a joint venture in Los Angeles offering open top double deck, hop on hop off, sightseeing bus services and on 1 June 2011, it started to offer sightseeing tours by boat on the River Hudson around Manhattan.  We believe the outlook for Twin America remains positive and we are confident of further growth in its revenue and profit.

 

Depreciation and intangible asset expenses

 

Earnings before interest, taxation, depreciation, intangible asset expenses and exceptional items (pre-exceptional EBITDA) amounted to £330.5m (2010: £283.9m) including the Group's share of its joint ventures' profit after tax. Depreciation, including non-exceptional impairment charges, for the year was £90.3m (2010: £91.9m). The income statement charge for intangible assets increased from £11.1m to £15.2m, of which £5.1m (2010: £5.1m) related to joint ventures. The year on year increase reflects amortisation of intangible assets acquired during the year, primarily as part of acquiring the East London Bus business.

 

Exceptional items

 

The following exceptional items, before taxation, arose in the year ended 30 April 2011:

 

•        A loss of £0.1m in relation to the disposal of land and buildings.

 

•        A gain of £4.6m being the revision to the estimated insurance provision in relation to pre-acquisition liabilities.

 

•        A loss of £0.6m being expenses incurred in relation to the acquisition of our UK Bus (London) operations.

 

•        A loss of £3.2m in relation to the disposal of certain operations in the United Kingdom.

 

•        A gain of £18.5m on the release of a liability related to previous disposals of businesses.

 

The net effect of exceptional items was a pre-tax profit of £19.2m (2010: loss of £20.4m), of which a gain of £18.5m (2010: £3.9m) was reported as profit from discontinued operations. A tax charge of £1.3m (2010: credit of £7.4m) arose in respect of exceptional items resulting in a net after-tax gain from exceptional items of £17.9m (2010: loss of £13.0m).

 

Net finance costs

 

Pre-exceptional net finance costs increased from £30.7m to £34.5m. The ratio of pre-exceptional EBITDA to net finance costs was 9.6 times for the year ended 30 April 2011 (2010: 9.2 times), reflecting increased profit.

 

Taxation

 

The tax charge is analysed below:

 

 

Year ended 30 April 2011

Year ended 30 April 2010

Summary of tax on profit

 

Pre-tax profit

£m

Tax

£m

Rate

%

Pre-tax profit

£m

Tax

£m

Rate

%

Excluding intangible asset expenses and exceptional items

218.1

(47.5)

21.8%

168.7

(34.6)

20.5%

Intangible asset expenses

(15.2)

3.1

20.4%

(11.1)

1.7

15.3%


202.9

(44.4)

21.9%

157.6

(32.9)

20.9%

Exceptional items

0.7

(1.3)

185.7%

(24.3)

7.4

30.5%


203.6

(45.7)

22.4%

133.3

(25.5)

19.1%

Reclassify joint venture taxation for reporting purposes

(12.4)

12.4

n/a

(7.4)

7.4

n/a

Reported in income statement

191.2

(33.3)

17.4%

125.9

(18.1)

14.4%

 

 

Earnings per share

 

Earnings per share before intangible asset expenses and exceptional items were 23.8p, compared to 18.7p in 2010. Basic earnings per share increased from 15.6p to 24.6p.

 

Fuel Costs

 

The Group's operations as at 30 April 2011 consume approximately 370m litres of diesel fuel per annum. As a result, the Group's profit is exposed to movements in the underlying price of fuel.

 

The proportion of the Group's projected fuel usage that is currently hedged using fuel swaps is as follows:

 

Year ending 30 April:

2012

2013

2014

2015






UK Bus (regional operations)

96%

51%

-

-

UK Bus (London)

50%

38 %

25%

13%

North America

77%

28%

-

-

UK Rail

76%

61%

5%

-

 

The Group has no fuel hedges in place for periods beyond 30 April 2015.

 

The Group's fuel costs include the costs of delivery and duty as well as the costs of the underlying product. Accordingly, not all of the cost varies with movements in oil prices.

 

The Group's like-for-like diesel fuel costs for the year ending 30 April 2012 are likely to be higher than for the year ended 30 April 2011 because after taking account of the fuel hedges in place, the average fuel cost per litre will be higher.

 

Cash flows

 

The strong cash generative nature of the Group is once again highlighted by net cash from operating activities after tax of £231.8m (2010: £216.4m). Net cash outflows from investing activities were £198.2m (2010: £37.2m) and net cash used in financing activities was £49.7m (2010: £79.9m).

 

Net debt

 

Net debt (as analysed in note 19 to the condensed financial statements) reduced from £296.7m at 30 April 2010 to £280.9m at 30 April 2011.

 

The Group's net debt at 30 April 2011 is further analysed below:

 

 


Fixed rate

£m

Floating rate

£m

Total

£m

 

Unrestricted cash

Nil

174.9

174.9

Cash held within train operating companies

Nil

163.1

163.1

Restricted cash

Nil

20.3

20.3

Total cash and cash equivalents

Nil

358.3

358.3





Sterling bond

(244.8)

(150.0)

(394.8)

Sterling hire purchase

(8.4)

(168.5)

(176.9)

US dollar finance leases

(40.4)

Nil

(40.4)

Canadian dollar finance leases

(3.4)

Nil

(3.4)

Loan notes

Nil

(21.1)

(21.1)

Preference shares

Nil

(2.6)

(2.6)

Net debt

(297.0)

16.1

(280.9)

 



 

Net cash from operating activities before tax for the year ended 30 April 2011 was £252.2m (2010: £217.1m) and can be further analysed as follows:

 


2011

£m

2010

£m




Operating profit of Group companies

190.6

156.2

Depreciation

90.3

77.2

Intangible asset expenses

10.1

6.0

Impairment of plant and equipment

Nil

14.7

EBITDA of Group companies

291.0

254.1

Loss on disposal of plant and equipment

0.9

2.0

Equity-settled share based payment expense

4.7

6.3

Working capital movements

(22.7)

(10.7)

Net interest paid

(30.1)

(53.1)

Dividends from joint ventures

28.8

35.7

Net cash from operating activities before excess pension contributions

272.6

234.3

Pension contributions in excess of pension costs

(20.4)

(17.2)

Net cash inflow from operating activities before taxation

252.2

217.1

 

The impact of purchases of property, plant and equipment for the year on net debt was £164.4m (2010: £154.9m). This comprised cash outflows of £156.3m (2010: £89.2m) and new hire purchase and finance lease debt of £8.1m (2010: £65.7m). £14.7m (2010: £53.0m) was received from the disposal of property, plant and equipment.

 

Liquidity

 

The Group has comfortably complied with all of its banking covenants throughout the financial year. The Group is subject to certain market standard banking covenants, which include a limit on the level of net debt compared to EBITDA and a minimum level of EBITDA to interest, in each case as defined in the relevant agreements.

 

Our strong financial position is evidenced by:

 

•        The ratio of net debt at 30 April 2011 to pre-exceptional EBITDA for the year ended 30 April 2011 was 0.8 times (2010: 1.0 times).

 

•        Pre-exceptional EBITDA for the year ended 30 April 2011 was 9.6 times (2010: 9.2 times) pre-exceptional net finance costs.

 

•        Undrawn, committed bank facilities analysed below totalled £491.5m at 30 April 2011 (2010: £345.9m). This included £67.9m (2010: £24.9m) that is only available for non-cash utilisation. In addition, the Group continues to secure new asset finance.

 

•        In February 2011, the Group saw strong appetite from banks for the refinancing of its core bank facilities and entered into £510.0m of new five-year committed facilities.

 

•        The three main credit rating agencies continue to assign investment grade credit ratings to the Group.

 

•        The Group is cash generative and has the flexibility to vary capital expenditure and other cash outflows where appropriate.



 

The Group's principal lines of credit have been arranged on a bi-lateral basis with a group of relationship banks which provide bank facilities for general corporate purposes. These arranged lines of credit allow cash drawdowns to finance the Group and also include facilities which are dedicated to issuing performance/season ticket bonds, guarantees and letters of credit.

 

The Group's committed bank facilities and related surety arrangements as at 30 April 2011 are analysed below:

 

Expiring in

Facility

£m

Performance Bonds, guarantees, etc. drawn

£m

Available for non-cash utilisation only

£m

Available for cash drawings

£m

MAIN GROUP FACILITIES





    - 2016

510.0

(66.9)

(33.0)

410.1

    - 2014

42.0

(34.8)

(7.2)

Nil

    - 2013

80.7

(70.8)

(9.9)

Nil

    - 2012

69.6

(51.8)

(17.8)

Nil


702.3

(224.3)

(67.9)

410.1

LOCAL & SHORT-TERM FACILITIES





    - Various

15.7

(2.2)

Nil

13.5


718.0

(226.5)

(67.9)

423.6

 

 

The Group's main bank facilities are committed through to 2016. The Group issued a £400m 5.75% bond in December 2009, which matures in December 2016.

 

The Group also maintains facilities in relation to asset finance ("Asset Finance Facilities"). Asset Finance Facilities are typically agreed in principle one year in advance and are arranged for the purpose of funding bus vehicle expenditure and for specific UK Rail operating assets. Asset Finance Facilities include finance leases, hire purchase agreements and operating leases. The terms of Asset Finance Facilities are dependent on the underlying assets and typically range between five and ten years.

 

Although there is an element of seasonality in the Group's bus and rail operations, the overall impact of seasonality on working capital and liquidity is not considered significant.

 

The rail operations maintain cash balances to meet working capital requirements and the franchise agreements restrict the transfer of this cash. Unless DfT consent is obtained, cash can only be transferred by loan or dividend to the extent that the relevant train operating company has distributable profits, and the franchise is compliant with the liquidity covenants specified in its franchise agreement.

 

Capital expenditure

 

Additions to property, plant and equipment for the year were:

 


2011

£m

2010

£m

 




UK Bus (regional operations)

85.1

97.1

UK Bus (London)

17.0

Nil

North America

31.4

14.5

UK Rail

34.2

45.1

Other

0.1

Nil


167.8

156.7

 

 

Business combinations

 

On 14 October 2010, Stagecoach Bus Holdings Limited ("SBHL"), a Group subsidiary, completed the acquisition of the bus business formerly owned by East London Bus Group Limited (in administration). SBHL acquired 100% of the voting equity interests in four companies that together operate the acquired business.

 

The cash paid in respect of the acquisition was £59.5m, comprising £5.4m for the entire share capital of the acquired companies and £54.1m to settle inter-company liabilities payable by the acquired companies to their former parent company.  Further details are given in note 14 to the condensed financial statements.

 

The Group has made no other material acquisitions in the year ended 30 April 2011.

 

Shares in issue

 

The weighted average number of ordinary shares during the year used to calculate basic earnings per share was 717.5m (2010: 716.2m). The number of ordinary shares ranking for dividend at 30 April 2011 was 717.9m (2010: 717.8m), with a further 2.2m (2010: 2.3m) of ordinary shares held by employee trusts and not ranking for dividend.

 

Net assets

 

Net assets at 30 April 2011 were £246.2m (2010: £12.7m) with the increase primarily reflecting the strong results for the year, movements on cash flow hedges of £23.4m after tax and actuarial gains on Group defined benefit pension schemes of £52.5m after tax.

 

Retirement benefits

 

The reported net assets of £246.2m (2010: £12.7m) that are shown on the consolidated balance sheet are after taking account of net retirement benefit liabilities of £97.1m (2010: £202.1m) as analysed in note 15 to the condensed financial statements.

 

The Group recognised pre-tax actuarial gains of £76.5m (2010: losses of £138.7m) on Group defined benefit pension schemes in the year ended 30 April 2011.

 

Capital

 

The Group regards its capital as comprising its equity, cash, gross debt and any similar items. As at 30 April 2011, the Group's capital comprised:

 


2011

£m

2010

£m




Market value of ordinary shares in issue

1,778.0

1,418.6

Cash

358.3

375.7

Gross debt

(639.2)

(672.4)

Net debt

(280.9)

(296.7)

 

The Group manages its capital centrally. Its objective in managing capital is to optimise the returns to its shareholders whilst safeguarding the Group's ability to continue as a going concern and as such its ability to continue to generate returns for its shareholders. The Group also takes account of the interests of other stakeholders when making decisions on its capital structure.


 

Current trading and outlook

 

I firmly believe the improving trends mean the Group can look forward with confidence to the year ahead. We will continue to consider opportunities in the transport sector to create value for our shareholders. The strong fundamentals of the Group ensure we are well positioned to take advantage of emerging opportunities for growth.

 

Public transport is central to supporting economic growth and meeting the global challenge of climate change. In the UK, high quality public transport will be at the heart of the successful delivery of the London 2012 Olympic and Paralympic Games.  We believe the outlook for our bus and rail services is positive. I believe we have the people, the products and the passion for public transport that will deliver for our customers and our shareholders.

 

 

Sir Brian Souter

Chief Executive                                                                                                         29 June 2011



CONSOLIDATED INCOME STATEMENT

 



Audited



Year ended 30 April 2011

Year ended 30 April 2010



Performance pre intangibles and exceptional items

Intangibles and exceptional items

(note 4)

Results for the year

Performance pre intangibles and exceptional items

Intangibles and exceptional items

(note 4)

Results for the year


 








Notes

£m

£m

£m

£m

£m

£m

CONTINUING OPERATIONS








Revenue

3(A)

2,389.8

Nil

2,389.8

2,164.4

Nil

2,164.4

Operating costs


(2,066.7)

(10.1)

(2,076.8)

(1,947.2)

(7.8)

(1,955.0)

Other operating expense

5

(122.4)

Nil

(122.4)

(53.2)

Nil

(53.2)

Operating profit of Group companies

3(B)

200.7

(10.1)

190.6

164.0

(7.8)

156.2

Share of profit of joint ventures after finance income and taxation

3(C)

39.5

(5.1)

34.4

28.0

(5.1)

22.9

Total operating profit: Group operating profit and share of joint ventures' profit after taxation

 

3(B)

240.2

(15.2)

225.0

192.0

(12.9)

179.1

Non-operating exceptional items

4

Nil

0.7

0.7

Nil

(2.0)

(2.0)

Profit before interest and taxation


240.2

(14.5)

225.7

192.0

(14.9)

177.1

Finance costs

6

(39.9)

Nil

(39.9)

(41.5)

(20.5)

(62.0)

Finance income

6

5.4

Nil

5.4

10.8

Nil

10.8

Profit before taxation


205.7

(14.5)

191.2

161.3

(35.4)

125.9

Taxation

7

(35.1)

1.8

(33.3)

(27.2)

9.1

(18.1)

Profit for the year from continuing operations


170.6

(12.7)

157.9

134.1

(26.3)

107.8

DISCONTINUED OPERATIONS








Profit for the year from discontinued operations


Nil

18.5

18.5

Nil

3.9

3.9

TOTAL OPERATIONS








Profit after taxation for the year attributable to equity shareholders of the parent


170.6

5.8

176.4

134.1

(22.4)

111.7

Earnings per share from continuing and discontinued operations








   -  Adjusted basic/Basic

9

23.8p


24.6p

18.7p


15.6p

   -  Adjusted diluted/Diluted

9

23.5p


24.3p

18.5p


15.4p

Earnings per share from continuing operations








   -  Adjusted basic/Basic

9

23.8p


22.0p

18.7p


15.1p

   -  Adjusted diluted/Diluted

9

23.5p


21.7p

18.5p


14.9p

Dividends per ordinary share








   -  Interim paid

8



2.2p



6.5p

   -  Final proposed

8



4.9p



Nil

 

The accompanying notes form an integral part of this consolidated income statement.

 

Interim dividends of £15.8m were paid during the year ended 30 April 2011 (2010: £46.6m).  A final dividend of 4.9 pence per share has been proposed in respect of the year ended 30 April 2011 (2010: Nil).


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

 


Audited

Year ended

30 April 2011

£m

Audited

Year ended

30 April 2010

£m

Profit for the year attributable to equity shareholders of the parent

176.4

111.7

 



Other comprehensive income/(expense)



Foreign exchange differences on translation of foreign operations (net of hedging)

(5.4)

6.0

Actuarial gains / (losses) on Group defined benefit pension schemes

76.5

(138.7)

Share of actuarial (losses) / gains on joint ventures' defined benefit pension schemes

(0.7)

0.2

Share of other comprehensive (expense)/income on joint ventures' cash flow hedges

(0.1)

1.8

Net fair value gains on cash flow hedges

52.6

38.3

Net fair value losses on available for sale investments

Nil

(0.2)


122.9

(92.6)

Transfers to the income statement



Cash flow hedges reclassified and reported in profit for the year

(21.8)

61.8




Tax on items taken directly to or transferred from equity



Tax on foreign exchange differences on translation of foreign operations (net of hedging)

(0.4)

Nil

Tax effect of actuarial (gains) / losses on Group defined benefit pension schemes

(24.0)

38.8

Tax effect of share of actuarial losses / (gains) on joint ventures' defined benefit pension schemes

0.2

(0.1)

Tax effect of share of fair value losses / (gains) on joint ventures' cash flow hedges

Nil

(0.5)

Tax effect of share based payments

Nil

0.7

Tax effect of cash flow hedges

(7.4)

(28.0)


(31.6)

10.9




Total comprehensive income for the year attributable to equity shareholders of the parent

245.9

91.8

 



CONSOLIDATED BALANCE SHEET (STATEMENT OF FINANCIAL POSITION)

 


Notes

Audited

As at 30 April 2011

£m

Audited

As at 30 April  2010

£m

ASSETS




Non-current assets




Goodwill

10

95.3

99.4

Other intangible assets

11

24.2

16.1

Property, plant and equipment

12

924.3

796.2

Interests in joint ventures

13

58.1

56.7

Available for sale and other investments


2.1

1.9

Derivative instruments at fair value


20.7

5.5

Retirement benefit asset

15

23.7

Nil

Deferred tax asset


Nil

1.3

Other receivables


19.4

17.6

 


1,167.8

994.7

Current assets




Inventories


26.6

24.1

Trade and other receivables


221.5

200.3

Derivative instruments at fair value


50.8

25.7

Foreign tax recoverable


1.4

1.4

Cash and cash equivalents


358.3

375.7

 


658.6

627.2

 

Total assets


 

1,826.4

 

1,621.9

 




LIABILITIES




Current liabilities




Trade and other payables


529.6

524.6

Current tax liabilities


20.4

19.1

Borrowings


62.5

50.8

Derivative instruments at fair value


0.1

4.0

Provisions


56.9

46.6

 


669.5

645.1

Non-current liabilities




Other payables


24.3

20.4

Borrowings


592.1

626.1

Derivative instruments at fair value


0.1

7.3

Deferred tax liabilities


46.8

19.2

Provisions


126.6

89.0

Retirement benefit obligations

15

120.8

202.1

 


910.7

964.1

 

Total liabilities


 

1,580.2

 

1,609.2

 




Net assets


246.2

12.7

 




EQUITY




Ordinary share capital

16

7.1

7.1

Share premium account


9.8

9.8

Retained earnings


(217.4)

(433.5)

Capital redemption reserve


416.3

415.6

Own shares


(14.6)

(13.3)

Translation reserve


1.7

7.1

Cash flow hedging reserve


43.3

19.9

Total equity


246.2

12.7

 

The retained earnings deficit of £217.4m (2010: £433.5m) is the consolidated position.  The holding company's distributable reserves as at 30 April 2011 under UK GAAP were £453.4m (2010: £376.8m).

 

The accompanying notes form an integral part of this consolidated balance sheet.


 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 


Notes

Ordinary share capital

 

 

 

£m

Share premium

account

 

 

 

£m

Retained earnings

 

 

 

 

£m

Capital redemption reserve

 

 

 

£m

Own shares

 

 

 

 

 

£m

Translation reserve

 

 

 

 

£m

Available for sale reserve

 

 

 

 

£m

Cash flow hedging reserve

 

 

 

£m

Total

equity

 

 

 

 

£m

Balance at 30 April 2009 and 1 May 2009


7.1

9.5

(374.9)

413.5

(13.9)

1.1

0.2

(52.2)

(9.6)

Profit for the year


-

-

111.7

-

-

-

-

-

111.7

Other comprehensive income/(expense), net of tax


-

-

(97.8)

-

-

6.0

(0.2)

72.1

(19.9)

Total comprehensive income/(expense)


-

-

13.9

-

-

6.0

(0.2)

72.1

91.8

Own ordinary shares purchased


-

-

-

-

(0.2)

-

-

-

(0.2)

Own ordinary shares sold


-

-

-

-

0.8

-

-

-

0.8

Preference shares redeemed


-

-

(2.1)

2.1

-

-

-

-

-

Arising on new ordinary share issues


-

0.3

-

-

-

-

-

-

0.3

Credit in relation to equity-settled share based payments


-

-

6.3

-

-

-

-

-

6.3

Dividends paid on ordinary shares

8

-

-

(76.7)

-

-

-

-

-

(76.7)

Balance at 30 April 2010 and 1 May 2010


7.1

9.8

(433.5)

415.6

(13.3)

7.1

-

19.9

12.7

Profit for the year


-

-

176.4

-

-

-

-

-

176.4

Other comprehensive income/(expense), net of tax


-

-

51.5

-

-

(5.4)

-

23.4

69.5

Total comprehensive income/(expense)


-

-

227.9

-

-

(5.4)

-

23.4

245.9

Own ordinary shares purchased


-

-

-

-

(1.8)

-

-

-

(1.8)

Own ordinary shares sold


-

-

-

-

0.5

-

-

-

0.5

Preference shares redeemed


-

-

(0.7)

0.7

-

-

-

-

-

Credit in relation to equity-settled share based payments


-

-

4.7

-

-

-

-

-

4.7

Dividends paid on ordinary shares

8

-

-

(15.8)

-

-

-

-

-

(15.8)

Balance at 30 April 2011


7.1

9.8

(217.4)

416.3

(14.6)

1.7

-

43.3

246.2

 

The accompanying notes form an integral part of this consolidated statement of changes in equity.


 

CONSOLIDATED STATEMENT OF CASH FLOWS

 


Notes

Audited

Year ended

30 April 2011

£m

Audited

Year ended

30 April 2010

£m

 




Cash flows from operating activities




Cash generated by operations

17

253.5

234.5

Interest paid


(35.6)

(58.5)

Interest received


5.5

5.4

Dividends received from joint ventures


28.8

35.7

Net cash flows from operating activities before tax


252.2

217.1

Tax paid


(20.4)

(0.7)

Net cash from operating activities after tax


231.8

216.4

Cash flows from investing activities




Acquisition of subsidiaries, net of cash acquired

14

(57.0)

(2.5)

Disposals and closures of subsidiaries and other businesses, net of cash disposed of


 

1.2

 

1.6

Purchase of property, plant and equipment


(156.3)

(89.2)

Disposal of property, plant and equipment


14.7

53.0

Purchase of intangible assets


(0.4)

(0.9)

Purchase of other investments


(0.4)

(0.6)

Movement in loans to joint ventures


Nil

1.4

Net cash outflow from investing activities


(198.2)

(37.2)

Cash flows from financing activities




Issue of ordinary shares for cash


Nil

0.3

Redemption of 'B' shares


(0.7)

(2.1)

Investment in own ordinary shares by employee share ownership trusts


(1.8)

(0.2)

Sale of own ordinary shares by employee share ownership trusts


0.5

0.8

Repayments of hire purchase and lease finance


(24.1)

(58.7)

Proceeds of sale and leaseback transaction


Nil

3.6

Movement in other borrowings


(5.1)

53.3

Dividends paid on ordinary shares

8

(15.8)

(76.7)

Sale of tokens


1.4

3.2

Redemption of tokens


(4.1)

(3.4)

Net cash used in financing activities


(49.7)

(79.9)

Net (decrease) / increase in cash and cash equivalents


(16.1)

99.3

Cash and cash equivalents at the beginning of the year


375.7

277.3

Exchange rate effects


(1.3)

(0.9)

Cash and cash equivalents at the end of the year


358.3

375.7

 

Cash and cash equivalents for the purposes of the consolidated cash flow statement comprise cash at bank and in hand and other short-term highly liquid investments with maturities at the balance sheet date of twelve months or less.

 

The accompanying notes form an integral part of this consolidated cash flow statement.



NOTES

 

1

BASIS OF PREPARATION

 

These results are extracts of consolidated financial statements that have been prepared in accordance with International Financial Reporting Standards ("IFRS") and International Financial Reporting Interpretations Committee ("IFRIC") interpretations as adopted by the European Union (that therefore comply with Article 4 of the EU IAS Regulation), and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.  The accounting policies and methods of computation adopted are consistent with those used in the last set of published financial statements, with the exception of those highlighted below.

 

The following new standard has been applied by the Group for the first time for the financial year beginning 1 May 2010:

 

·      IFRS 3 (revised), 'Business combinations'.  The revised standard continues to apply the acquisition method to business combinations but with some significant changes compared with the previous version of IFRS 3.  For example, all acquisition-related costs should be expensed.  The standard was applied to the acquisition of the East London bus business on 14 October 2010.  Acquisition-related costs of £0.6m have been recognised in the consolidated income statement, which previously would have been included in the consideration for the business combination.

 

The following new standards, amendments to standards and interpretations are mandatory for the first time for the financial year beginning 1 May 2010, but do not have any significant effect on the consolidated financial statements of the Group:

 

·      Amendments resulting from April 2009 Annual Improvements to IFRSs

·      IFRS 1 (revised), 'First time adoption of IFRSs - revised and restructured'

·      IFRS 1 (amended), 'First time adoption of IFRSs - amendments relating to oil and gas assets and determining whether an arrangement contains a lease'

·      IFRS 2 (amended), 'Share-based payment - amendments relating to group cash-settled share-based payment transactions.

·      IAS 27 (amended), 'Consolidated and separate financial statements - consequential amendments arising from amendments to IFRS 3'

·      IAS 28 (amended), 'Investments in associates - consequential amendments arising from amendments to IFRS 3'

·      IAS 31 (amended), 'Investments in joint ventures - consequential amendments arising from amendments to IFRS 3'

·      IAS 32 (amended), 'Financial instruments: presentation - amendments relating to classification of rights issues'

·      IAS 39 (amended), 'Financial instruments: recognition and measurement - amendments for eligible hedged items'

·      IAS 39 (amended), 'Financial instruments: recognition and measurement - amendments for embedded derivatives when reclassifying financial instruments'

·      IFRIC 17, 'Distributions of non-cash assets to owners'

·      IFRIC 18, 'Transfers of assets from customers'

 

Where appropriate, comparative figures for the previous year have been adjusted to conform to changes in presentation.  These changes have no impact on the consolidated income statement or on consolidated net assets.

 

The Board of Directors approved this announcement on 29 June 2011. 

 



 

2

FOREIGN CURRENCIES

 

The principal rates of exchange used to translate the results of foreign operations are as follows:

 

Principal rates of exchange

2011

2010

US Dollar:



Year end rate

1.6680

1.5307

Average rate

1.5646

1.6020

Canadian Dollar:



Year end rate

1.5827

1.5504

Average rate

1.5823

1.7189

 

 

3

SEGMENTAL INFORMATION

 

Management has determined the operating segments based on the reports reviewed by the Board of Directors that are used to make strategic decisions.  The Group is managed, and reports internally, on a basis consistent with its four continuing operating segments, being UK Bus (regional operations), UK Bus (London), North America and UK Rail.  The Group's IFRS accounting policies are applied consistently, where appropriate, to each segment.

 

The segmental information provided in this note is on the basis of four operating segments as follows:

 

Segment name

Service operated

Country of operations

UK Bus (regional operations)

Coach and bus operations

United Kingdom

UK Bus (London)

Bus operations

United Kingdom

North America

Coach and bus operations

USA and Canada

UK Rail

Rail operations

United Kingdom

 

The basis of segmentation is consistent with the Group's last annual financial statements for the year ended 30 April 2010, except that the new UK Bus (London) operating segment consists of the East London Bus business acquired by the Group in October 2010.  Management has determined that the East London Bus business should be treated as a separate operating segment as it is managed separately to our UK Bus regional operations and is reported separately to the Board of Directors, reflecting the different risk profile of the business.

 

The Group has interest in three trading joint ventures, Virgin Rail Group that operates in UK Rail, Citylink that operates in UK Bus (regional operations) and Twin America LLC that operates in North America.  The results of these joint ventures are shown separately in note 3(c).  The Group has an interest in a non-trading joint venture, New York Splash Tours LLC, which operated in North America until trading ceased in the year ended 30 April 2010.



 

3

SEGMENTAL INFORMATION (CONTINUED)

 

(A)

REVENUE

 

Due to the nature of the Group's business, the origin and destination of revenue is the same in all cases.  As the Group sells bus and rail services to individuals, it has few customers that are individually "major".  Its major customers are typically public bodies that subsidise or procure transport services - such customers include local authorities, transport authorities, Transport for London and the UK Department for Transport.

 


Audited

Year ended

30 April 2011

Audited

Year ended

30 April 2010


£m

£m




Continuing operations



UK Bus (regional operations)

893.6

875.4

UK Bus (London)

133.6

Nil

North America

295.1

266.1

Total bus continuing operations

1,322.3

1,141.5

UK Rail

1,070.0

1,026.7

Total Group revenue

2,392.3

2,168.2

Intra-Group revenue

(2.5)

(3.8)

Reported Group revenue

2,389.8

2,164.4

 

 

(B)

OPERATING PROFIT

 


Audited

Year ended 30 April 2011

Audited

Year ended 30 April 2010

 


Notes

Performance pre intangibles and exceptional items

Intangibles and exceptional items

Results for the year

Performance pre intangibles and exceptional items

Intangibles and exceptional items

Results for

the year











£m

£m

£m

£m

£m

£m

Continuing operations








UK Bus (regional operations)


153.1

Nil

153.1

126.1

(2.6)

123.5

UK Bus (London)


(5.9)

Nil

(5.9)

Nil

Nil

Nil

North America


19.3

Nil

19.3

9.1

Nil

9.1

Total bus continuing operations


166.5

Nil

166.5

135.2

(2.6)

132.6

UK Rail


48.4

Nil

48.4

41.6

Nil

41.6

Total continuing operations


214.9

Nil

214.9

176.8

(2.6)

174.2

Group overheads


(11.3)

Nil

(11.3)

(11.6)

Nil

(11.6)

Intangible asset expenses


Nil

(10.1)

(10.1)

Nil

(6.0)

(6.0)

Restructuring costs

 
(2.9)

Nil

(2.9)
(1.2)

0.8

(0.4)

Total operating profit of continuing Group companies


200.7

(10.1)

190.6

164.0

(7.8)

156.2

Share of profit of joint ventures after finance income and taxation

 

3(C)

 

39.5

 

(5.1)

 

34.4

 

28.0

 

(5.1)

 

22.9

Total operating profit: Group operating profit and share of joint ventures' profit after taxation


 

 

240.2

 

 

(15.2)

 

 

225.0

 

 

192.0

 

 

(12.9)

 

 

179.1

 



 

3

SEGMENTAL INFORMATION (CONTINUED)

 

(C)

JOINT VENTURES

 

 


Audited

Year ended 30 April 2011

Audited

Year ended 30 April 2010


Performance pre intangibles and exceptional items

Intangibles and exceptional items

Results for the year

Performance pre intangibles and exceptional items

Intangibles and exceptional items

Results for

the year









£m

£m

£m

£m

£m

£m

Continuing







Virgin Rail Group (UK Rail)







Operating profit

39.5

Nil

39.5

25.5

Nil

25.5

Finance income (net)

0.2

Nil

0.2

0.2

Nil

0.2

Taxation

(11.3)

Nil

(11.3)

(6.5)

Nil

(6.5)


28.4

Nil

28.4

19.2

Nil

19.2

Goodwill charged on investment in continuing joint ventures

Nil

(5.1)

(5.1)

Nil

(5.1)

(5.1)


28.4

(5.1)

23.3

19.2

(5.1)

14.1

Citylink (UK Bus, regional operations)







Operating profit

2.5

Nil

2.5

1.7

Nil

1.7

Taxation

(0.7)

Nil

(0.7)

(0.5)

Nil

(0.5)


1.8

Nil

1.8

1.2

Nil

1.2

New York Splash Tours LLC (North America)







Operating loss

Nil

Nil

Nil

(0.9)

Nil

(0.9)


Nil

Nil

Nil

(0.9)

Nil

(0.9)

Twin America LLC (North America)







Operating profit

9.7

Nil

9.7

8.9

Nil

8.9

Taxation

(0.4)

Nil

(0.4)

(0.4)

Nil

(0.4)


9.3

Nil

9.3

8.5

Nil

8.5








Share of profit of joint ventures after finance income and taxation

39.5

(5.1)

34.4

28.0

(5.1)

22.9

 



 

3

SEGMENTAL ANALYSIS (CONTINUED)

 

(D)

GROSS ASSETS AND LIABILITIES

 


As at April 2011


Gross assets

Gross liabilities

Net assets / (liabilities)






£m

£m

£m





UK Bus (regional operations)

733.9

(240.0)

493.9

UK Bus (London)

146.0

(92.1)

53.9

North America

266.9

(76.3)

190.6

UK Rail

232.5

(411.6)

(179.1)


1,379.3

(820.0)

559.3

Central functions

29.3

(38.4)

(9.1)

Joint ventures

58.1

Nil

58.1

Borrowings and cash

358.3

(654.6)

(296.3)

Taxation

1.4

(67.2)

(65.8)

Total

1,826.4

(1,580.2)

246.2

 

 


As at April 2010


Gross assets

Gross liabilities

Net assets / (liabilities)






£m

£m

£m





UK Bus (regional operations)

693.3

(323.9)

369.4

North America

271.7

(83.7)

188.0

UK Rail

196.6

(416.6)

(220.0)


1,161.6

(824.2)

337.4

Central functions

25.2

(69.8)

(44.6)

Joint ventures

56.7

Nil

56.7

Borrowings and cash

375.7

(676.9)

(301.2)

Taxation

2.7

(38.3)

(35.6)

Total

1,621.9

(1,609.2)

12.7

 

 

Central assets and liabilities include the token provision, interest payable and receivable and other net assets of the holding company and other head office companies.

 

Segment assets and liabilities are determined by identifying the assets and liabilities that relate to the business of each segment but excluding intra-Group balances, cash, borrowings, taxation, interest payable, interest receivable and the token provision.

 



 

4

EXCEPTIONAL ITEMS AND INTANGIBLE ASSET EXPENSES

 

The Group highlights amounts before intangible asset expenses and exceptional items as well as clearly reporting the results in accordance with IFRS.  Exceptional items are as defined in note 25.

 

The items shown in the column headed "Intangibles and exceptional items" on the face of the consolidated income statement for the year ended 30 April 2011 can be further analysed as follows:

 


Audited


Year ended 30 April 2011


Exceptional

items

£m

Intangible asset

expenses

£m

Intangibles and exceptional items

£m

Operating costs




Intangible asset expenses

Nil

(10.1)

(10.1)









Share of profit of joint ventures




Goodwill charged on investment in joint ventures

Nil

(5.1)

(5.1)





Non-operating exceptional items - continuing operations




Loss on disposal of properties

(0.1)

Nil

(0.1)

Revision to the estimated insurance provision relating to pre-acquisition liabilities

 

4.6

 

Nil

 

4.6

Expenses incurred in relation to acquisition of East London bus business

(0.6)

 

Nil

(0.6)

Loss on disposal of operations

(3.2)

Nil

(3.2)

Non-operating exceptional items - continuing operations

0.7

Nil

0.7





Intangible asset expenses and exceptional items - continuing operations

 

0.7

 

(15.2)

 

(14.5)

Tax effect

(1.3)

3.1

1.8

Intangible asset expenses and exceptional items after taxation - continuing operations

 

(0.6)

 

(12.1)

 

(12.7)





Resolution of certain liabilities re disposals - discontinued operations

 

18.5

 

Nil

 

18.5

 



 

4

EXCEPTIONAL ITEMS AND INTANGIBLE ASSET EXPENSES (CONTINUED)

 

The items shown in the column headed "Intangibles and exceptional items" on the face of the consolidated income statement for the prior year comparatives can be further analysed as follows:

 


Audited


Year ended 30 April 2010


Exceptional

items

£m

Intangible asset

expenses

£m

Intangibles and exceptional items

£m

Operating costs




Restructuring costs - release of unutilised provision

0.8

Nil

0.8

Cost of participation in the Competition Commission study of the UK local bus market

 

(2.6)

 

Nil

 

(2.6)

Intangible asset expenses

Nil

(6.0)

(6.0)

 

(1.8)

(6.0)

(7.8)

Share of profit of joint ventures




Goodwill charged on investment in joint ventures

Nil

(5.1)

(5.1)

 




Non operating exceptional items - continuing operations




Gain on sale of properties

4.3

Nil

4.3

Loss on disposal of operations

(3.2)

Nil

(3.2)

Loss on exit from certain operations

(0.8)

Nil

(0.8)

Expenses incurred in relation to proposal to acquire certain businesses of, or merge with, National Express Group plc

 

(2.3)

 

Nil

 

(2.3)

Non operating exceptional items - continuing operations

(2.0)

Nil

(2.0)

 


Nil


Exceptional finance costs


Nil


Loss on ineffective interest rate swaps following issuance of sterling bond

 

(20.5)

 

Nil

 

(20.5)

 




Intangible asset expenses and exceptional items - continuing operations

 

(24.3)

 

(11.1)

 

(35.4)

Tax effect of intangible asset expenses and exceptional items - continuing operations

 

7.4

 

1.7

 

9.1

Intangible asset expenses and exceptional items after taxation - continuing operations

 

(16.9)

 

(9.4)

 

(26.3)

 




Resolution of certain liabilities re disposals - discontinued operations

 

3.9

 

Nil

 

3.9



 

5

OTHER OPERATING EXPENSE

 


Audited

Year ended

30 April 2011

Audited

Year ended

30 April 2010


£m

£m




Miscellaneous revenue

94.3

87.7

Rail franchise premia

(284.8)

(148.7)

Rail revenue support

68.1

7.8


(122.4)

(53.2)

 

Miscellaneous revenue comprises revenue incidental to the Group's principal activities.  It includes commissions receivable, advertising income, maintenance income, railway station access income, railway depot access income, fuel sales and property income.

 

Rail franchise premia is the amount of financial premia payable to the DfT in respect of the operation of UK passenger rail franchises.

 

Rail revenue support is the amount of additional financial support receivable from the DfT in certain circumstances where a train operating company's revenue is below target.

 

6

FINANCE COSTS AND INCOME

 


Audited

Year ended

30 April 2011

£m

Audited

Year ended

30 April 2010

£m

Finance costs:



Interest payable and other facility costs on bank loans, loan notes and overdrafts

5.7

4.5

Hire purchase and finance lease interest payable

6.8

7.3

Interest payable and other finance costs on bonds

23.5

16.1

Fair value losses on financial instruments not qualifying as hedges



    - Foreign exchange derivative contracts

Nil

5.1

Unwinding of discount on provisions

3.9

3.7

Interest payable on interest rate swaps qualifying as cashflow hedges

Nil

4.8


39.9

41.5

Finance income:



Interest receivable

(2.2)

(4.0)

Interest receivable on interest rate swaps qualifying as fair value hedges

(3.2)

(1.3)

Exchange gain on retranslation of US$ bonds

Nil

(5.5)


(5.4)

(10.8)

Net finance costs before exceptional items

34.5

30.7

Exceptional item:



Ineffective interest rate swaps

Nil

20.5

Net finance costs

34.5

51.2

 

No interest (2010: £Nil) was capitalised during the year.

 

At 1 May 2009, the US$293.1m of US$ notes, and a US$20.0m foreign currency derivative contract, were designated as a hedge of overseas net investments. On 7 July 2009, this hedge relationship was de-designated. On the same day, the Group took out US$ derivative contracts, with notional amounts totalling US$342.0m, to give certainty of the sterling value of the redemption payment that would be made by the Group when the US$ notes matured on 16 November 2009. Exchange gains on the US$ notes in the period from 7 July 2009 to 16 November 2009 of £5.5m are included within finance income above. The notional value of the derivative contracts exceeded the outstanding US$ notes in order to take account of the tax effect of the transactions.

 

7

TAXATION

 

The taxation charge comprises:

 


Audited

Year ended 30 April 2011

Audited

Year ended 30 April 2010


Performance pre intangibles and exceptional items

Intangibles  and exceptional items

Results for the year

Performance pre intangibles and exceptional items

Intangibles  and exceptional items

Results for the year


£m

£m

£m

£m

£m

£m

Current tax:







UK corporation tax at 27.8% (2010: 28%)

26.3

(1.8)

24.5

12.7

(9.1)

3.6

Prior year over provision for corporation tax

(2.2)

Nil

(2.2)

(0.9)

Nil

(0.9)

Foreign tax (current year)

0.4

Nil

0.4

0.4

Nil

0.4

Foreign tax (adjustments in respect of prior years)

(0.2)

Nil

(0.2)

1.0

Nil

1.0

Total current tax

24.3

(1.8)

22.5

13.2

(9.1)

4.1

Deferred tax:







Origination and reversal of temporary differences

 

7.4

 

Nil

 

7.4

 

14.9

 

Nil

 

14.9

Adjustments in respect of prior years

3.4

Nil

3.4

(0.9)

Nil

(0.9)

Total deferred tax

10.8

Nil

10.8

14.0

Nil

14.0

Total tax on profit

35.1

(1.8)

33.3

27.2

(9.1)

18.1

 

 

8

DIVIDENDS

 

Dividends payable in respect of ordinary shares are shown below.  Dividends payable in respect of 'B' shares are included as an expense in finance costs. 

 


Audited

Year ended

30 April 2011

Audited

Year ended

30 April

2010

Audited

Year ended

30 April 2011

Audited

Year ended

30 April

2010


pence per share

pence per share

£m

£m

Amounts recognised as distributions in the year





Dividends on ordinary shares





Final dividend in respect of the previous year

Nil

4.2

Nil

30.1

Interim dividend in respect of the current year

6.5

15.8

46.6

Amounts recognised as distributions to equity holders in the year

2.2

10.7

15.8

76.7






Dividends proposed but neither paid nor included as liabilities in the financial statements





Dividends on ordinary shares





Final dividend in respect of the current year

Nil

Nil

 

 

The Company declared and paid two interim dividends in respect of the year ended 30 April 2010, totalling 6.5 pence per share.  No final dividend was proposed in respect of the year ended 30 April 2010.

 

The dividends proposed or declared and the actual dividends recognised as distributions can differ slightly due to the number of shares at the balance sheet date being different to the number outstanding at the record date.

 

 

9

EARNINGS PER SHARE

 

Basic earnings per share ("EPS") have been calculated by dividing the profit attributable to equity shareholders by the weighted average number of ordinary shares in issue during the year, excluding any ordinary shares held by employee share ownership trusts.

 

The diluted earnings per share was calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares in relation to share options and long-term incentive plans.  In respect of share options, a calculation was done to determine the number of ordinary shares that could have been acquired at fair value (determined based on the average annual market share price of the Company's ordinary shares) based on the monetary value of the subscription rights attached to outstanding share options.  The number of ordinary shares calculated as above is compared with the number of ordinary shares that would have been issued assuming the exercise of the share options.  The difference is added to the denominator as an issue of ordinary shares for no consideration and no adjustment is made to earnings (numerator).

 


Audited

Year ended

30 April 2011

Audited

Year ended

30 April 2010


No. of shares

million

No. of shares

million




Basic weighted average number of ordinary shares

717.5

716.2

Dilutive ordinary shares



   -  Executive Share Option Scheme

0.3

0.6

   -  Long Term Incentive Plan

3.2

3.1

   -  Executive Participation Plan

4.1

3.7

Diluted weighted average number of ordinary shares

725.1

723.6

 


£m

£m







Profit after taxation including discontinued operations (for basic EPS calculation)

 

176.4

 

111.7

Intangible asset expenses (see note 4)

15.2

11.1

Exceptional items before tax (see note 4)

(0.7)

24.3

Tax effect of intangible asset expenses and exceptional items (see note 4)

(1.8)

(9.1)

Profit for the year from discontinued operations (see note 4)

(18.5)

(3.9)

Profit for adjusted EPS calculation

170.6

134.1

 



 

9

EARNINGS PER SHARE (CONTINUED)

 

Earnings per share before intangible asset expenses and exceptional items is calculated by adding back intangible asset expenses and exceptional items after taking account of taxation, as shown on the consolidated income statement.  This has been presented to allow shareholders to gain a further understanding of the underlying performance.  The basic and diluted earnings per share can be further analysed as follows:

 


Audited

Audited


Year ended 30 April 2011

Year ended 30 April 2010


Earnings

Weighted average number of shares

Earnings per share

Earnings

Weighted average number of shares

Earnings per share


£m

Million

pence

£m

Million

pence








Basic







-   Continuing operations

157.9

717.5

22.0

107.8

716.2

15.1

-   Discontinued operations

18.5

717.5

2.6

3.9

716.2

0.5


176.4

717.5

24.6

111.7

716.2

15.6

Adjusted basic







-   Continuing operations

170.6

717.5

23.8

134.1

716.2

18.7

-   Discontinued operations

Nil

717.5

Nil

Nil

716.2

Nil


170.6

717.5

23.8

134.1

716.2

18.7

Diluted







-   Continuing operations

157.9

725.1

21.7

107.8

723.6

14.9

-   Discontinued operations

18.5

725.1

2.6

3.9

723.6

0.5


176.4

725.1

24.3

111.7

723.6

15.4

Adjusted diluted







-   Continuing operations

170.6

725.1

23.5

134.1

723.6

18.5

-   Discontinued operations

Nil

725.1

Nil

Nil

723.6

Nil


170.6

725.1

23.5

134.1

723.6

18.5

 

 

10

GOODWILL

 


Audited

Year ended

30 April 2011

Audited

Year ended

30 April 2010


£m

£m




Cost and net book value at beginning of year

99.4

99.9

Acquired through business combinations

3.7

1.7

Disposals

(2.5)

Nil

Foreign exchange movements

(5.3)

(2.2)

At end of year

95.3

99.4



 

11

OTHER INTANGIBLE ASSETS

 


Audited

Year ended

30 April 2011

Audited

Year ended

30 April 2010


£m

£m




Cost at beginning of year

52.7

55.9

Additions

0.4

0.9

Acquired through business combinations

17.8

0.5

Disposals

(0.3)

(4.1)

Foreign exchange movements

(0.4)

(0.5)

At end of year

70.2

52.7

 

Accumulated amortisation at beginning of year

(36.6)

(31.4)

Amortisation charged to income statement

(10.1)

(6.0)

Disposals

0.3

0.6

Foreign exchange movements

0.4

0.2

At end of year

(46.0)

(36.6)




Net book value at beginning of year

16.1

24.5

Net book value at end of year

24.2

16.1

 

 

12

PROPERTY, PLANT AND EQUIPMENT

 


Audited

Year ended

30 April 2011

Audited

Year ended

30 April 2010


£m

£m




Cost at beginning of year

1,400.5

1,349.1

Additions

167.8

156.7

Acquired through business combinations

82.2

1.1

Disposal of subsidiaries

(7.7)

Nil

Disposals

(82.6)

(111.5)

Transferred from assets held for sale

Nil

4.8

Foreign exchange movements

(24.1)

0.3

At end of year

1,536.1

1,400.5

 

Depreciation at beginning of year

(604.3)

(563.4)

Depreciation charged to income statement

(90.3)

(77.2)

Impairment charged to income statement

Nil

(14.7)

Disposal of subsidiaries

4.2

Nil

Disposals

66.1

52.8

Transferred from assets held for sale

Nil

(2.4)

Foreign exchange movements

12.5

0.6

At end of year

(611.8)

(604.3)




Net book value at beginning of year

796.2

785.7

Net book value at end of year

924.3

796.2

 

 



 

13

INTERESTS IN JOINT VENTURES

 


Audited

Year ended

30 April 2011

Audited

Year ended

30 April 2010


£m

£m




Cost at beginning of year

104.9

111.8

Share of recognised profit

39.5

28.9

Share of actuarial (losses) / gains on defined benefit pension schemes, net of tax

 

(0.5)

 

0.1

Share of net fair value (losses) / gains on cash flow hedges, net of tax

 

(0.1)

 

1.3

Dividends received in cash

(28.8)

(35.7)

Foreign exchange movements

(3.6)

(1.5)

At end of year

111.4

104.9

 

Amounts written off at beginning of year

(48.2)

(43.1)

Goodwill charged to income statement

(5.1)

(5.1)

At end of year

(53.3)

(48.2)




Net book value at beginning of year

56.7

68.7

Net book value at end of year

58.1

56.7

 

In addition to the above interests in joint ventures, a loan receivable from New York Splash Tours LLC of £2.8m (2010: £3.1m) is included within non-current assets under the caption of 'Other receivables'.  New York Splash Tours LLC had net liabilities at 30 April 2011 of £3.5m (2010: £3.8m).  The Group has not recognised its share of the net liabilities but has assessed the loan receivable for impairment and a provision for impairment of £2.8m (2010: £3.1m) was held against the receivable.

 

A loan payable to Scottish Citylink Limited of £1.7m (2010: £1.7m) is included in current trade and other payables.



 

 

14

BUSINESS COMBINATIONS

 

 

(i)

East London Bus

 

On 14 October 2010, Stagecoach Bus Holdings Limited ("SBHL"), a Group subsidiary, completed the acquisition of the bus business formerly owned by East London Bus Group Limited (in administration). SBHL acquired 100% of the voting equity interests in four companies that together operate the acquired business. The acquired business is the third largest bus operator in the London market, and has an estimated 15% share of that market. 99% of its revenue is from Transport for London. The business operates bus services under contract to Transport for London whereby it receives a fixed fee (subject to adjustment for certain inflation indices) for operating the services and takes the cost and capital risk.

 

The cash paid in respect of the acquisition was £59.5m, comprising £5.4m for the entire share capital of the acquired companies and £54.1m to settle inter-company liabilities payable by the acquired companies to their former parent company. The consideration payable was calculated on the basis that the acquired business had aggregate cash balances of approximately £6.7m at close of business on the day prior to completion, giving a transaction enterprise value of £52.8m.  The consideration was fully paid in cash and there is no contingent consideration. The aggregate cash balances at acquisition were £3.5m, with the movement of £3.2m reflecting net payments on the day of acquisition.  These payments were in line with the Group's expectations.

 

Following the disposal by SBHL of the East London bus business in 2006, the divested business experienced a decline in profitability but maintained a strong share of the London bus market. The Group believes that there is a compelling rationale for acquiring the business at the price paid. There is an opportunity to add value through a turnaround of the under-performing business and through synergies with the wider Group.

 

Goodwill of £3.6m arose on the acquisition of the East London bus business and represents:

 

·      the benefits that the Group expects to obtain from synergies with its other businesses;

·      the benefits that the Group expects to obtain from applying its own management expertise to improve the operational and financial performance of the acquired business;

·      the value of the assembled workforce of the East London bus business and;

·      the value of the arrangements with Transport for London, over and above the existing contracts for particular bus services, but which cannot be reliably valued as a separate asset.

None of the goodwill arising from the acquisition is deductible for tax purposes.

 

The revenue and loss of the acquired business recognised in the consolidated income statement for the period from the acquisition date of 14 October 2010 to 30 April 2011 is shown in note 3.

 

The consolidated revenue for the period of the Group for the year ended 30 April 2011 would have been £2,503.3m had the acquisition occurred on 1 May 2010.  The equivalent consolidated profit for the period would not have been materially different from the actual reported profit.



 

14

BUSINESS COMBINATIONS (CONTINUED)

 

(i)

East London Bus (continued)

 

The assets and liabilities acquired were as follows:

 


Initial book value

Restatement to fair value

Fair value to the Group


£m

£m

£m

Intangible assets

   - Customer contracts

 

Nil

 

17.8

 

17.8

Property, plant and equipments

   - Land and buildings

   - Passenger service vehicles

   - Other plant and equipment

 

46.7

63.2

2.2

 

(7.0)

(22.2)

(0.7)

 

39.7

41.0

1.5

Retirement benefit asset

7.8

Nil

7.8

Deferred tax (liability) / asset

(0.8)

14.8

14.0

Inventory

0.8

Nil

0.8

Cash

3.5

Nil

3.5

Trade and other receivables

15.1

Nil

15.1

Trade and other payables

(27.7)

(0.2)

(27.9)

Intercompany payables

(54.1)

Nil

(54.1)

Provisions




   - Insurance provisions

(14.5)

(3.1)

(17.6)

   - Environmental provisions

(0.3)

Nil

(0.3)

   - Acquired customer contracts

Nil

(39.5)

(39.5)

Net assets / (liabilities) acquired, excluding goodwill

41.9

(40.1)

1.8

Goodwill arising on acquisition

Nil

3.6

3.6

Total consideration (settled in cash)

41.9

(36.5)

5.4

 

There are no material receivables that are considered to be uncollectable as at the date of acquisition.

 

(ii)

Other business combinations

 

One business acquisition has been made by our UK Bus (regional operations) division during the year ended 30 April 2011.  £0.1m was paid to acquire the assets and goodwill of a small bus business.

 

(iii)

Effect on consolidated net debt and goodwill

 

The effect of the above acquisitions on consolidated net debt was:

 


Audited

Year ended

30 April 2011

Audited

Year ended

30 April 2010


£m

£m

Fair value to Group

Intangible fixed assets (excluding goodwill)

 

17.8

 

0.5

Property, plant and equipment

82.2

1.1

Other net liabilities

(98.2)

(1.8)

Net assets/(liabilities) acquired, excluding goodwill

1.8

(0.2)

Goodwill arising on acquisition

3.7

1.7

Consideration

5.5

1.5

Costs of acquisitions in year

0.6

0.1

Add: deferred consideration paid in respect of businesses acquired in prior years

0.3

0.6

Intercompany debt assumed and re-financed

54.1

Nil

Net cash and cash equivalents acquired (including overdrafts)

(3.5)

0.3

Net cash outflow

57.0

2.5

 



 

15

RETIREMENT BENEFITS

 

The Group contributes to a number of pension schemes.  The principal defined benefit occupational benefit schemes are as follows:

 

·

Stagecoach Pension Schemes ("SPS") comprising the Stagecoach Group Pension Scheme and the East London Bus Group Pension Scheme;

 

·

The South West Trains section of the Railways Pension Scheme ("RPS");

 

·

The Island Line section of the Railways Pension Scheme ("RPS");

 

·

The East Midlands Trains section of the Railways Pension Scheme ("RPS"); and

 

·

A number of UK Local Government Pension Schemes ("LGPS");

 

The Directors believe that separate consideration should be given to RPS as the Group has no rights or obligations in respect of sections of the scheme following expiry of the related franchises.  In addition, under the terms of the RPS, any fund deficit or surplus is shared by the employers (60%) and the employees (40%) in accordance with the shared cost nature of the RPS.  The employees' share of the deficit (or surplus) is reflected as an adjustment to the RPS liabilities (or assets).  Therefore the liability (or asset) recognised for the relevant sections of RPS reflects that part of the net deficit (or surplus) of each section that the employer is obliged to fund (or expected to recover) over the life of the franchise to which the section relates.  The "franchise adjustment" is the portion of the deficit that is expected to exist at the end of the franchise and for which the Group will not be obliged to fund.

 

In addition, the Group contributes to a number of defined contribution schemes covering UK and non-UK employees.

 

The consolidated balance sheet shows retirement benefit assets of £23.7m (2010: £Nil) and retirement benefit obligations of £120.8m (2010: £202.1m).  The net liability of £97.1m (2010: £202.1m) is analysed below.

 

The movements in the net pre-tax retirement benefit assets/(liabilities) recognised in the balance sheet were as follows:

 


Funded Plans

Unfunded



SPS

£m

RPS

£m

LGPS

£m

Other

£m

Plans

£m

Total

£m

At 1 May 2009

(11.6)

(28.2)

(33.9)

(2.5)

(4.4)

(80.6)

Current service cost

(19.3)

(20.6)

(1.7)

(0.6)

Nil

(42.2)

Curtailments

Nil

0.7

Nil

Nil

Nil

0.7

Interest cost

(40.3)

(23.5)

(16.8)

(0.2)

Nil

(80.8)

Expected return on plan assets

42.0

21.9

16.0

0.1

Nil

80.0

Unwinding of franchise adjustment

Nil

2.7

Nil

Nil

Nil

2.7

Employers' contributions and settlements

27.6

24.8

4.1

Nil

0.3

56.8

Actuarial (losses) / gains

(94.5)

(16.7)

(27.3)

0.3

(0.5)

(138.7)

As at 30 April 2010 and 1 May 2010

(96.1)

(38.9)

(59.6)

(2.9)

(4.6)

(202.1)

Acquisitions

7.8

Nil

Nil

Nil

Nil

7.8

Current service cost

(24.9)

(28.1)

(1.9)

(1.0)

Nil

(55.9)

Interest cost

(51.3)

(29.3)

(16.5)

(0.2)

Nil

(97.3)

Expected return on plan assets

62.0

28.2

19.2

0.1

Nil

109.5

Unwinding of franchise adjustment

Nil

6.3

Nil

Nil

Nil

6.3

Employers' contributions and settlements

27.2

26.1

4.2

Nil

0.3

57.8

Actuarial gains / (losses)

53.8

(10.7)

32.7

0.6

0.1

76.5

Disposals

Nil

Nil

0.1

Nil

Nil

0.1

Foreign exchange movements

Nil

Nil

Nil

0.2

Nil

0.2

At 30 April 2011

(21.5)

(46.4)

(21.8)

(3.2)

(4.2)

(97.1)



 

16

ORDINARY SHARE CAPITAL

 

The ordinary share capital of the Company was as follows:

 


Audited

Year ended

30 April 2011

Audited

Year ended

30 April 2010


No. of shares

£m

No. of shares

£m

Allotted, called-up and fully-paid





ordinary shares of 56/57 pence each





At beginning of year

720,066,186

7.1

719,478,434

7.1

Allotted to employees and former employees under share option schemes

58,764

-

587,752

-

At end of year

720,124,950

7.1

720,066,186

7.1

 

The balance on the share capital account shown above represents the aggregate nominal value of all ordinary shares in issue. 

 

The Group operates two Employee Share Ownership Trusts: the Stagecoach Group Qualifying Employee Share Ownership Trust ("QUEST") and the Stagecoach Group Employee Benefit Trust ("EBT").  Shares held by these trusts are treated as a deduction from equity in the Group's financial statements.  Other assets and liabilities of the trusts are consolidated in the Group's financial statements as if they were assets and liabilities of the Group.  As at 30 April 2011, the QUEST held 333,372 (2010: 333,372) ordinary shares in the Company and the EBT held 1,854,213 (2010: 2,003,075) ordinary shares in the Company.  The trusts have waived dividends on the shares they hold.

 

The Group had 4,087,302 (2010: 5,187,055) redeemable 'B' shares of 63 pence each at 30 April 2011.  The Group had the right to redeem all of the remaining 'B' shares at any time and redeemed the remaining shares on 31 May 2011. 

 

The 'B' shares that remained in issue are classified as liabilities and the dividends payable on such shares are classified in the consolidated income statement within finance costs.



 

17

RECONCILIATION OF OPERATING PROFIT TO CASH GENERATED BY OPERATIONS

 


Audited

Year ended

30 April 2011

Audited

Year ended

30 April 2010


£m

£m




Operating profit of Group companies

190.6

156.2

Depreciation

90.3

77.2

Loss on disposal of plant and equipment

0.9

2.0

Intangible asset expenses

10.1

6.0

Impairment of plant and equipment

Nil

14.7

Equity-settled share based payment expense

4.7

6.3

Operating cashflows before working capital movements

296.6

262.4

Increase in inventories

(2.1)

(1.9)

(Increase)/decrease in receivables

(13.4)

0.5

Decrease in payables

(4.4)

(7.4)

Decrease in provisions

(2.8)

(1.9)

Differences between employer pension contributions and amounts recognised in the income statement

 

(20.4)

 

(17.2)

Cash generated by operations

253.5

234.5

 

 

During the year, the Group entered into hire purchase and finance lease arrangements in respect of new assets with a total capital value at inception of the contracts of £8.9m (2010: £72.4m).  After taking account of deposits paid up-front and other financing transactions of £Nil (2010: £3.6m), new hire purchase and finance lease liabilities of £8.1m (2010: £69.3m) were recognised.



 

18

RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT

 


Audited

Audited


Year ended

30 April 2011

£m

Year ended

30 April 2010

£m

(Decrease) / increase in cash

(16.1)

99.3

Cash inflow from movement in borrowings

29.9

3.9


13.8

103.2

New hire purchase and finance leases

(8.1)

(65.7)

Debt of acquired subsidiaries

Nil

(0.4)

Foreign exchange movements

10.8

7.1

Other movements

(0.7)

(0.8)

Increase in net debt

15.8

43.4

Opening net debt (as defined in note 25)

(296.7)

(340.1)

Closing net debt (as defined in note 25)

(280.9)

(296.7)

 

 

19

ANALYSIS OF NET DEBT

 

The analysis provided below shows an analysis of net debt as defined in note 25.  The analysis below further shows the other items classified as net borrowings in the consolidated balance sheet.

 


Opening

Cashflows

New hire purchase/

finance leases

Foreign exchange movements

Other movements

Closing


£m

£m

£m

£m

£m

£m








Cash

309.9

29.4

Nil

(1.3)

Nil

338.0

Cash collateral

65.8

(45.5)

Nil

Nil

Nil

20.3

Hire purchase and finance lease obligations

(240.5)

24.1

(8.1)

3.8

 

Nil

(220.7)

Bank loans and loan stock

(26.2)

5.1

Nil

Nil

Nil

(21.1)

Bonds

(402.4)

Nil

Nil

8.3

(0.7)

(394.8)

'B' preference shares

(3.3)

0.7

Nil

Nil

Nil

(2.6)

Net debt

(296.7)

13.8

(8.1)

10.8

(0.7)

(280.9)

Accrued interest on bonds and preference shares

(8.6)

23.0

Nil

Nil

(23.0)

(8.6)

Effect of fair value hedges on carrying value of borrowings

(1.3)

Nil

Nil

Nil

(2.6)

(3.9)

Foreign exchange derivatives not included in borrowings in balance sheet

5.4

Nil

Nil

(8.3)

Nil

(2.9)

Net borrowings (IFRS)

(301.2)

36.8

(8.1)

2.5

(26.3)

(296.3)

 

 

The cash collateral balance as at 30 April 2011 of £20.3m (2010: £65.8m) comprises balances held in respect of insurance letters of credit of £Nil (2010: £40.2m), balances held in trust in respect of loan notes of £18.9m (2010: £23.8m), and North America restricted cash balances of £1.4m (2010: £1.8m).  In addition, cash includes train operating company cash of £163.1m (2010: £182.8m).  Under the terms of the franchise agreements, train operating companies can only distribute cash out of retained earnings and only to the extent they do not breach franchise liquidity ratios.

 

The cash amounts shown above include £25.0m on 12 month deposit maturing by March 2012, £52.0m on 3 month deposit maturing by May 2011, £65.0m on 3 month deposit maturing by June 2011 and £35.0m deposited on 30 day notice accounts (2010: £169.0m on 3 month deposit maturing by June 2010, £32.0m on 30 day notice accounts and £10.4m deposited in a 7 day notice account). The remaining amounts are accessible to the Group within one day (2010: one day).



 

20

CONTINGENT LIABILITIES

 

(i)

The following bonds and guarantees were in place relating to the Group's rail operations:

 

 


Audited

Audited


As at

30 April

2011

£m

As at

30 April

2010

£m

Performance bonds backed by bank facilities



- Stagecoach South Western Trains

53.3

59.9

- East Midlands Trains

17.5

20.8

Season ticket bonds backed by bank facilities



- Stagecoach South Western Trains

46.8

45.2

- East Midlands Trains

5.0

5.0

Inter-company loan facilities and guarantees



- Stagecoach South Western Trains

25.0

25.0

- East Midlands Trains

55.0

35.0

 

These contingent liabilities are not expected to crystallise, except that the inter-company loan facilities will be used from time to time but eliminate on consolidation.

 

(ii)

 

The Group and its joint venture, Virgin Rail Group Holdings Limited, have in the normal course of business, entered into a number of long-term supply contracts.  The most significant of these relate to track, station and depot access facilities, together with new train lease and maintenance arrangements.

 

(iii)

 

Under UK Rail franchise agreements, the Group and its joint venture, Virgin Rail Group Holdings Limited, have agreed with the UK's Department for Transport annual amounts receivable or payable in respect of the operation of rail franchises for future periods.  Under these agreements, there is a requirement to comply with a number of obligations.  Failure to comply with these obligations would be a breach of the relevant franchise.  The Group has assessed whether a provision for onerous contracts is required in respect of its rail franchises.  The Group has discounted the expected future cash flows related to its rail franchises to determine whether it is probable that the benefits to be derived by the Group from the franchises will be lower than the unavoidable costs of meeting its obligations under the franchises. Estimates of cash flows are consistent with management's plans and forecasts.  The Group has determined that no provision is necessary.  The estimate of future cash flows and the discount rate involves a significant degree of judgement.  Actual results can differ from those assumed and there can be no absolute assurance that the assumptions used will hold true.

 

(iv)

 

The Group and the Company are from time to time party to legal actions arising in the ordinary course of business.  Liabilities have been recognised in the financial statements for the best estimate of the expenditure required to settle obligations arising under such legal actions.  As at 30 April 2011, the accruals in the consolidated financial statements for such claims total £2.0m (2010: £5.4m).

 

(v)

 

The Group provides details of guarantees and other financial commitments in its Annual Report.

 



 

21

CAPITAL COMMITMENTS

 

Capital commitments are as follows:

 


Audited

Audited


As at

30 April

2011

£m

As at

30 April

2010

£m

Contracted for but not provided:

For delivery in one year

 

119.8

 

11.1

 

 

22

RELATED PARTY TRANSACTIONS

 

Details of major related party transactions during the year ended 30 April 2011 are provided below, except for those relating to the remuneration of the Directors and management.

 

(i)

Virgin Rail Group Holdings Limited - Non-Executive Directors


 

Two of the Group's managers are non-executive directors of Virgin Rail Group Holdings Limited.  During the year ended 30 April 2010, the Group earned fees of £60,000 (2010: £60,000) from Virgin Rail Group Holdings Limited in this regard.

 

(ii)

 

West Coast Trains Limited


 

West Coast Trains Limited is a subsidiary of Virgin Rail Group.  For the year ended 30 April 2011, East Midlands Trains had purchases totalling £0.3m (2010: £0.8m) and sales totalling £Nil (2010: £0.5m) from/to West Coast Trains Limited.  East Midlands Trains has a payable of £Nil (2010: £27,000) owed to West Coast Trains Limited as at 30 April 2011. 

 

(iii)

 

Noble Grossart Limited


 

Ewan Brown (Non-Executive Director) is a former executive director and current non-executive director of Noble Grossart Limited that provided advisory services to the Group.  Total fees payable to Noble Grossart Limited in respect of the year ended 30 April 2011 amounted to £Nil (2010: £13,333).  At 30 April 2011, Noble Grossart Investments Limited, a subsidiary of Noble Grossart Limited, held 4,084,999 (2010: 4,084,999) ordinary shares in the Company, representing 0.6% (2010: 0.6%) of the Company's issued ordinary share capital. 

 

(iv)

 

Alexander Dennis Limited


Sir Brian Souter (Chief Executive) and Ann Gloag (Non-Executive Director) collectively hold 37.9% (2010: 37.9%) of the shares and voting rights in Alexander Dennis Limited.  Noble Grossart Investments Limited (see (iii) above) controls a further 28.4% (2010: 28.4%) of the shares and voting rights of Alexander Dennis Limited.  None of Sir Brian Souter, Ann Gloag or Ewan Brown is a director of Alexander Dennis Limited nor do they have any involvement in the management of Alexander Dennis Limited.  Furthermore, they do not participate in deciding on and negotiating the terms and conditions of transactions between the Group and Alexander Dennis Limited.

 

For the year ended 30 April 2011, the Group purchased £87.1m (2010: £48.9m) of vehicles from Alexander Dennis Limited and £5.7m (2010: £3.4m) of spare parts and other services. As at 30 April 2011, the Group had £1.3m (2010: £0.4m) payable to Alexander Dennis Limited.



 

22

RELATED PARTY TRANSACTIONS (CONTINUED)

 

 

(v)

 

Pension Schemes


Details of contributions made to pension schemes are contained in note 15.

 

(vi)

 

Robert Walters plc


Martin Griffiths (Finance Director) is a non-executive director and is Senior Independent Director of Robert Walters plc and received remuneration of £58,927 (2010: £56,120) in respect of his services for the year ended 30 April 2011.  Martin Griffiths holds 20,000 (2010: 20,000) shares in Robert Walters plc, which represents 0.03% (2010: 0.03%) of the issued share capital.  During the year ended 30 April 2011, the Group paid Robert Walters plc £5,286 (2010: £Nil) for recruitment services.

 

(vii)

 

Troy Income & Growth Trust plc


Martin Griffiths (Finance Director) became a non-executive director of Troy Income & Growth Trust plc (formerly Glasgow Income Trust plc) on 8 November 2007 and resigned from the role on 30 September 2010.  He received £5,833 (2010: £14,000) in respect of his services for the year ended 30 April 2011.

 

(viii)

 

AG Barr plc


Martin Griffiths (Finance Director) became a non-executive director of AG Barr plc on 1 September 2010 and received remuneration of £25,125 (2010: £Nil) in respect of his services for the period ended 30 April 2011.  Martin Griffiths holds 1,800 shares in AG Barr plc which represents less than 0.1% of the issued share capital.

 

(ix)

 

Loan to New York Splash Tours LLC


A net interest bearing long-term loan of £2.8m (2010: £3.1m) was outstanding from New York Splash Tours LLC as at 30 April 2011.

 

(x)

 

Scottish Citylink Coaches Limited


A non interest bearing loan of £1.7m (2010: £1.7m) was due to Scottish Citylink Coaches Limited as at 30 April 2011.  The Group received £16.0m (2010: £14.9m) in the year ended 30 April 2011 in respect of the operation of services subcontracted by Scottish Citylink Coaches Limited.  As at 30 April 2011, the Group had a net £1.6m (2010: £3.6m) receivable from Scottish Citylink Coaches Limited, excluding the loan referred to above.

 

(xi)

 

Argent Energy Group Limited


Sir Brian Souter (Chief Executive) and Ann Gloag (Non-Executive Director) collectively hold 39.3% (2010: 39.3%) of the shares and voting rights in Argent Energy Group Limited.  Neither Sir Brian Souter nor Ann Gloag is a director of Argent Energy Group Limited nor do they have any involvement in the management of Argent Energy Group.  Furthermore, they do not participate in deciding on and negotiating the terms and conditions of transactions between the Group and Argent Energy Group.

 

For the year ended 30 April 2011, the Group purchased £2.0m (2010: £0.4m) of biofuel from Argent Energy Group.  As at 30 April 2011, the Group had £0.2m (2010: £Nil) payable to Argent Energy Group.

 

 

23

POST BALANCE SHEET EVENTS

 

All of the remaining 4,087,302 redeemable 'B' preference shares were redeemed on 31 May 2011.

 



 

24

STATUTORY FINANCIAL STATEMENTS

 

The financial information set out in the preliminary announcement does not constitute the Group's statutory financial statements for the year ended 30 April 2011 within the meaning of section 434 of the Companies Act 2006 and has been extracted from the full financial statements for the years ended 30 April 2011 and 30 April 2010 respectively.

 

Statutory financial statements for the year ended 30 April 2010, which received an unqualified audit report, have been delivered to the Registrar of Companies.

 

The reports of the auditors on the financial statements for each of the years ended 30 April 2010 and 2011 were unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.  The financial statements for the year ended 30 April 2011 will be delivered to the Registrar of Companies and forwarded to all shareholders in due course.  These financial statements will also be available on the Group's website and from the registered office of the Company at 10 Dunkeld Road, Perth PH1 5TW.

 

The Board of Directors approved this announcement on 29 June 2011.

25

DEFINITIONS

 

The following definitions are used in this document:

 

·           Adjusted earnings per share is calculated by dividing profit after taxation excluding intangible asset 
expenses  and exceptional items by the basic weighted average number of shares in issue in the period.

 

·           Like-for-like amounts are derived, on a constant currency basis, by comparing the relevant year-to-date 
amount with the equivalent prior year period for those businesses and individual operating units that have been part of the Group throughout both periods.

 

·           Operating profit or loss for a particular business unit or division within the Group refers to profit or loss 
before net finance income/costs, taxation, intangible asset expenses, exceptional items and restructuring costs.

 

·           Operating margin for a particular business unit or division within the Group means operating profit or 
loss as a percentage of revenue.

 

·           Exceptional items means items which individually or, if of a similar type, in aggregate need to be 
disclosed by virtue of their nature, size or incidence in order to allow a proper understanding of the underlying financial performance of the Group.

 

·           Gross debt is borrowings as reported on the consolidated balance sheet, adjusted to exclude accrued 
interest and the effect of fair value hedges on the carrying value of borrowings, and to include the effect of foreign exchange derivatives that synthetically convert an element of borrowings from one currency to another.

 

·           Net debt (or net funds) is the net of cash and gross debt.


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
FR SEUFMAFFSEDM