18th November
2015
UK MAIL GROUP plc
UNAUDITED INTERIM
RESULTS
For the 6 months ended 30
September 2015
Highlights
· Results in line with previous guidance
· Relocation of national hub from Birmingham to Ryton completed
in July 2015
· Group revenues of £237.6m up 4.5% on the previous year (2014:
£227.5m)
· Group profit before tax (pre-exceptional) £4.9m (2014:
£11.2m)
· Group profit before tax (post-exceptional) £2.2m (2014:
£12.0m)
· Net exceptional costs of £2.7m (2014: net exceptional income
of £0.8m), including hub relocation costs of £7.3m, partly offset
by HS2 compensation of £6.8m
· Net debt at period end of £12.7m (2014: net cash of £9.5m),
reflecting significant investment in new hub and
automation
· Final HS2 compensation payment of £10.3m agreed, to be
received in December 2015
· Interim dividend of 5.5p per share (2014: 7.3p)
The results stated above are for
continuing operations and exclude the prior results of UK Pallets
which ceased operation in March 2015.
Guy Buswell, Chief Executive
Officer of UK Mail, said:-
"The current period of major
investment and transition will deliver significant long term
benefits. However, as we advised in August, it has become
clear that the near-term challenges associated with the transition
have been more significant than first anticipated.
"Trading in the initial weeks of
the second half, and overall trends within our individual
businesses, have been in line with our revised expectations.
Our expectations for the current year therefore remain in
line with previous guidance. However, due to the timescales
required to fully resolve the challenges, our expectations for the
next financial year have softened slightly.
"Whilst this is disappointing, the
strategic rationale for the transformation we are undertaking is as
compelling as ever, and we are confident both of our ability to
restore our parcels business to previous levels of profitability
and to build from there. The medium term operational and
financial benefits will place us amongst the most efficient and
competitive operators in our market."
For further information, please
contact:
UK Mail Group plc
|
|
Guy Buswell, Chief Executive
Officer
Steven Glew, Group Finance
Director
|
0175 370 6070
|
MHP Communications
|
|
John Olsen
Giles Robinson
Gina Bell
|
0203 128 8100
|
Introduction
The Group remains in the midst of
a period of major investment and transition, having completed the
move of its Birmingham hub and head office to a new, automated
facility in Ryton in July 2015.
This transition, as the single
most significant strategic development in the Group's history, will
deliver significant long term opportunities but was always expected
to be challenging in the short-term. However, as we advised the
market in August 2015, it has become clear that the near-term
challenges and their impact on the current year's performance have
been more significant than anticipated.
These challenges, relating to
inefficiencies both in the new hub and in our transport network,
are discussed in more detail below. A detailed plan is
underway to address the issues and return our Parcels business to
its target levels of profitability, and service levels are already
back where they should be. In the meantime, we will be managing our
customer acquisition and overall volumes very carefully as we
approach the peak Christmas period, with an absolute focus on
profitability and maintaining high service levels.
It will take longer than
originally anticipated to resolve the issues but we expect to
achieve this over the next 12 months. We remain confident that the
stated medium term operational and financial benefits from the new
hub will place us amongst the most efficient and competitive
operators in our market.
The impact of these issues on our
profitability, despite continued good volume and revenue growth,
means that the financial performance of the Group for the first
half has been very disappointing.
Reported Group revenues for the
first half (for continuing operations) increased by 4.5% compared
to the same period last year. Group
profit before tax and exceptional items (for continuing operations)
decreased by 55.5%, or £6.3m, to £4.9m (2014: £11.2m).
In our Parcels business (52% of
group revenues) revenues grew by 5.3%. Our Parcels business
now includes our Courier business. This revenue growth was
supported by average daily volume growth of 9.0%, reflecting some
important new customer wins and weighted towards B2C customers,
related to the growth in online shopping. The impact of the
sales mix effect combined with the increased operating costs we
have incurred as a result of the relocation of our operations, has
meant that the parcels operating margin reduced to 6.3% (2014:
10.7%), and the operating profit decreased to £7.9m (2014:
£12.6m).
Revenues in our Mail business (48%
of group revenues) increased by 3.6%. Our daily mail volumes
increasing by 8.1% in the half year, compared to a market that saw
an overall volume decline of some 5.0%. This volume growth
was driven by strong customer retention and new customer
wins. The mail market is highly competitive and this has
meant that the operating profit decreased by 16.6% to £5.1m
(2014: £6.2m) with the operating margin reducing to 4.5%,
back within our target range after a strong 5.6% in H1 2014, which
benefitted from a particularly favourable product mix. Our
Mail business remains well positioned in its market with a healthy
pipeline of new business opportunities. We continue to see
good progress from imail and related new product
innovations.
The Group remains in a sound
financial position. Whilst net debt at the period end was
£12.7m (2014: net cash £9.5m) the period of substantial investment
in the hub and automation is now complete. We have agreed a
final compensation payment from HS2 of £10.3m which will be
received in December 2015.
However, due to the longer than
expected timescales required to fully resolve the operational cost
issues in our Parcels network and the consequential impact on
earnings this year and next, the Board considers it prudent to
rebase the dividend at this time. We would expect to return to
prior levels of dividend cover in due course as our earnings
grow.
The Board has therefore declared
an Interim Dividend of 5.5p per share (2014: 7.3p).
Results
The results can be summarised as
follows:
|
Six months ended 30th
September
|
Continuing Operations
|
Unaudited
2015
£m
|
|
Unaudited
2014
£m
|
|
Inc/(Dec) %
|
|
|
|
|
|
|
Group revenue
|
237.6
|
|
227.5
|
|
4.5%
|
|
|
|
|
|
|
Operating profit (before
exceptional items)
|
5.2
|
|
11.2
|
|
(53.4)%
|
Net finance costs
|
(0.3)
|
|
-
|
|
-
|
Profit before tax (before
exceptional items)
|
4.9
|
|
11.2
|
|
(55.5)%
|
Net exceptional items
|
(2.7)
|
|
0.8
|
|
-
|
Profit before tax (after
exceptional items)
|
2.2
|
|
12.0
|
|
(81.2)%
|
Taxation
|
(0.5)
|
|
(2.7)
|
|
(80.0)%
|
Profit after taxation
|
1.7
|
|
9.3
|
|
(81.6)%
|
|
|
|
|
|
|
Basic earnings per
share
|
3.1p
|
|
17.0p
|
|
(82.0)%
|
Underlying basic earnings per
share *
|
7.1p
|
|
15.9p
|
|
(55.3)%
|
* - excludes exceptional
items
Revenue and operating profit
(before exceptional items) are analysed as follows:
|
Revenue
|
|
Operating Profit
(before exceptional
items)
|
|
2015
£m
|
|
2014
£m
|
|
Inc/
(Dec)
%
|
|
2015
£m
|
|
2014
£m
|
|
Inc/
(Dec)
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Parcels
|
124.0
|
|
117.8
|
|
5.3%
|
|
7.9
|
|
12.6
|
|
(37.6)%
|
Mail
|
113.6
|
|
109.7
|
|
3.6%
|
|
5.1
|
|
6.2
|
|
(16.6)%
|
Total
|
237.6
|
|
227.5
|
|
4.5%
|
|
13.0
|
|
18.8
|
|
(30.6)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Central costs
|
|
|
|
|
|
|
(7.8)
|
|
(7.6)
|
|
(2.9)%
|
Operating profit before
exceptional items
|
|
5.2
|
|
11.2
|
|
(53.4)%
|
Parcels
Revenues in Parcels, which
comprises the Group's business-to-business (B2B),
business-to-consumer (B2C) international parcel delivery service
and courier operations, were up 5.3% to £124.0m (2014:
£117.8m).
Parcels average daily volumes
increasing by 9.0% compared to last year, with volume growth in
both the B2B and B2C market segments. We continue to see an
on-going volume mix change towards the lower margin B2C
segment.
The Parcels operating margin for
the period reduced to 6.3% (2014: 10.7%), resulting in operating
profit for the period reducing to £7.9m (2014:
£12.6m).
Both the rate of volume growth and
the operating margin have been impacted by the operational issues
related to our move to the new hub. The profit reduction is
primarily due to the temporary increase in operating costs
associated with this and also due to a magnified mix effect as a
result of the increased customer churn we experienced in the
period.
Following a detailed review, it is
clear that the automated sortation equipment is working well and is
fully capable of delivering the anticipated benefits over the
medium term. However, we are facing a number of challenges as
a result of a combination of inefficiencies in the new hub and in
our transport network. This, combined with the volumes of
non-machinable and incompatible freight that cannot be handled by
our automated sortation equipment, has placed added pressures on
the new facility. As a result we have experienced additional
costs, a temporary reduction in service levels (now restored) and a
greater level of customer churn than anticipated, impacting our
parcels revenue mix.
A detailed plan is underway to
address these issues and therefore to restore our Parcels business
to its previous levels of profitability and to build from
there. There are a number of near-term initiatives that have
already eased the pressures on the hub, including securing
additional, short term, hub capacity to ease the pressure on the
main hub whilst the wider issues are being addressed. The
efficiency of the hub will also improve as certain new larger
customers come on board whose volumes arrive at the new hub
throughout the day rather than just in the peak hours.
More widely, our plan involves
re-engineering our line haul template to fully align it with the
efficiency of the new hub, and a new operational plan for
incompatible freight volumes. Peter Fuller joins as
Operations Director in early 2016 and will be instrumental in the
execution of this plan. Peter has substantial experience in
parcels distribution and specifically in managing automated
facilities, most recently at Parcelforce where he has been
Operations Director since 2011.
Some progress has already been
made. The sortation equipment is operating at target
efficiency, we saw an improving trend of volume performance in the
latter weeks of the half, service levels are now back to where they
should be, and we have a number of significant potential customers
keen to use the services available through our new hub.
However, we will be managing our customer acquisition and overall
volumes very carefully as we approach the peak Christmas period,
with an absolute focus on profitability and maintaining high
service levels.
We continue to make good progress
with our product innovations in this division. These include
Retail Today, our same day delivery service combining our parcels
and courier operations, and ipostparcels, which represents one of
the lowest-cost and most user-friendly online collection and
delivery services available in the UK. Revenues and profits
grew well for these operations, and we continue to invest in
further enhancing our services in these areas.
Key to our parcels market position
is the provision of value added services that customers
increasingly demand. Our enhanced next day delivery service,
which offers advance-notice one-hour delivery and collection
windows, is now fully operational and is consistently achieving
strong service levels of over 95%. In addition, our sales
initiative, carrier of contingency, is proving successful, with
three major retailers already won. We are also progressing Parcel
drop-off and collection points, with a trial in place with a
national multi-site retailer.
Mail
Mail revenues increased by 3.6% to
£113.6m (2014: £109.7m).
Our daily Mail volumes increased
by 8.1% compared to the same period last year, while the overall UK
mail market has seen a decline in transactional volumes of some 5%
per annum, demonstrating further market share gains.
Mail operating profits decreased
by 16.6% to £5.1m (2014: £6.2m). The operating margin
decreased to 4.5% (2014: 5.6%).
Mail operating margin in the first
half of last year was strong, reflecting a particularly favourable
product mix. The operating margin we have achieved in the
first half of this year is within our target range for this
business, reflecting the competitive pricing
environment.
There are a number of substantial
competitor accounts currently out for tender, and we are seeing a
significant success rate in these, albeit with some pricing
pressures.
imail, our web-to-print postal
service, continues to show good revenue growth. We continue
to invest to increase our capacity and provide additional
services. 'imailprint' has now been successfully
launched. This provides a specialist printing service which,
rather than being purely mailed as with our current service, can
produce printed documents for general usage. We see this as a
medium-term low risk growth opportunity using our existing
infrastructure.
A key growth element of the Access
Mail market is the rising popularity of packets; a segment that we
estimate currently represents some £200m of the total Access Mail
market of £1.5bn. Whilst we have made some progress in this
area in recent years, our share of the Access packets market
remains very low and we are now reinvigorating this business,
investing in specialist automated packets sortation equipment and
increasing the size of our sales team and we expect to see an
impact from early FY 2016. We continue to believe that this
area will be key to growing our Mail revenues and profitability in
the future.
UK Mail remains a market leader
with an operational template ideally suited to the evolving demands
of the mail market. We remain focused on growing our business
by handling additional mail for existing customers and winning
volumes from other Access operators. We continue to invest
for the future, and see substantial growth opportunities for the
medium and longer term.
Central costs
Central costs for the period
increased by 2.9% to £7.8m (2014: £7.6m). We continue to
invest in I.T., although this spend has been partially offset by
savings in other areas.
Net Finance cost
Net finance cost for the period
was £0.3m (2014: £nil). The investment in our new hub and
automation was largely completed in the period.
HS2
In December 2013 we reached
agreement with the Secretary of State for Transport concerning the
relocation of our Birmingham National hub and head office as a
result of the proposed High Speed Two (HS2) railway. This
involved the sale of our Birmingham site to the Department for
Transport (DfT) and the relocation to a newly constructed facility
at Ryton near Coventry. This contract completed on 10 August
2015.
We have agreed specific
compensation payments with the DfT and HS2 Ltd. Of these
amounts, £11.9m was received in the period (2014: £2.7m) and a
final compensation payment of £10.3m has been agreed with HS2 which
is to be paid in December 2015.
The costs of the move to the new
site, including the I.T. data centre move and related staff costs
have now been largely incurred. The costs we have incurred to
reinstate our existing capability have been fully compensated by
the DfT and HS2.
Exceptional Items
Our results include a net
exceptional charge as
follows:
|
|
£m
|
|
|
|
Profit on sale of national
hub
|
|
1.1
|
HS2 compensation
|
|
6.8
|
Exceptional income
|
|
7.9
|
|
|
|
Cost of automation
implementation
|
|
(0.7)
|
National hub relocation
costs
|
|
(6.7)
|
Impairment of intangible
assets
|
|
(3.2)
|
Exceptional costs
|
|
(10.6)
|
|
|
|
Net exceptional costs
|
|
2.7
|
The profit on sale of the national
hub represents the profit on sale following the compulsory
acquisition of the National hub and offices at Birmingham by the
DfT and HS2 Ltd, as a result of the proposed HS2
railway.
The amounts received from HS2
relate to agreed compensation for the impact of HS2 on our
business. The final compensation payment of £10.3m has now
been agreed with HS2 and will be recognised as exceptional income
in the second half of the financial year.
The cost of automation
implementation represents the cost incurred as we implement and
roll out the new automation equipment. The costs primarily
relate to asset write-offs of equipment no longer
required.
National hub relocation costs
represent disturbance costs associated with the relocation of our
National hub and offices to Ryton. These costs have now been
largely incurred, we expect the remaining balance of some £0.6m
will be incurred in the second half, and this will be recognised as
an exceptional cost.
The impairment of intangible
assets charge represents the impairment cost recognised following a
comprehensive strategic review of the Group's I.T. systems which
identified a number of software assets that did not fit within the
medium and long term strategic goals of the Group, and which
therefore offered no future economic value. We do not believe
this change in strategy has a prior year impact.
Financial Position
The Group's financial position
remains sound. Despite the significant investment in our new
hub and in automation - details of which are set out below - we had
net debt at the end of the period of £12.7m (2014: net cash of
£9.5m).
The group invested a further £2.8m
(net of HS2 compensation) in the new hub and automation in the
period, taking the total investment to £52.2m. The final
payments for the new hub and automation will be made in the second
half year to an expected value of some £1.3m. The investment
in the period has been offset by capital payments received from HS2
relating to the hub move of £5.4m.
Net cash inflow from operations
totalled £5.7m (2014: £11.0m), including £5.3m (2014: £10.7m) from
continuing operations.
The total consolidated net cash
inflow for the period was £1.9m (2014: outflow £17.9m) which
included £4.2m cash consumed in working capital (2014: £4.8m), and
a net £5.7m (after allowing for the deferred compensation received
from HS2) expended on capital additions (2014: £17.6m).
The Group paid £7.9m (2014: £7.8m)
in dividends during the period.
To provide funding for the
investment in the new hub and automation the Group agreed a £25m
five year revolving credit facility with Lloyds Bank plc in May
2014. This facility which supports the cash requirements of
the investment programme, was £14.4m drawn at 30 September
2015.
A final compensation payment for
HS2 of £10.3m has been agreed which will be received in December
2015.
The Group has in place further
funding facilities to support our investment programme and to
provide adequate working capital facilities. These comprise
asset lease funding and overdraft facilities.
Capital Additions
Capital additions for the period
included our underlying business capital expenditure combined with
the initial investment in our new hub and in automation.
This can be summarised as
follows:
|
6 months to 30
September
|
|
Year to 31 March
|
|
2015
£m
|
|
2014
£m
|
|
2015
£m
|
|
|
|
|
|
|
Underlying capital
additions
|
4.1
|
|
5.4
|
|
12.0
|
Investment in new hub
|
1.3
|
|
12.1
|
|
26.8
|
Investment in
automation
|
1.5
|
|
3.2
|
|
13.5
|
Total gross capital
additions
|
6.9
|
|
20.7
|
|
52.3
|
Compensation from DfT and
HS2
|
(5.4)
|
|
(4.0)
|
|
(4.2)
|
Net capital additions
|
1.5
|
|
16.7
|
|
48.1
|
The underlying capital additions
includes £2.6m on I.T. as we continue to develop our system
infrastructure, and £1.5m on our network.
The investment in the new hub and
head office in the period comprises the continuing payments for
their construction. The new hub and head office were
completed in February 2015. Final payments are expected to be made
in the second half of the financial year of £0.7m. The
cumulative total expected to be spent on the land and buildings
over the period to March 2016 is £35.1m, which is in line with our
original budget of £35.0m. We expect our cash contribution to the
building of the new hub and head office, after the contribution
from the DfT and HS2, will be £12.4m which covers the enhancement
of the site and building beyond the scale of the previous
facility.
The automation equipment was
placed live in May 2015. The investment in automation
reflects the payments for the development, installation and
commissioning of the hub and network automation equipment.
Final payments are expected to be made in the second half of the
financial year of £0.6m. The total capital spent on the
introduction of automation will be £18.4m, compared to the original
budget of £20.0m.
Earnings per share
Underlying basic earnings per
share decreased by 55.3% to 7.1p (2014: 15.9p). Basic earnings per
share decreased 28.8% to 2.9p (2014: 4.1p).
Dividend
Due to the longer than expected
timescales required to fully resolve the operational cost issues in
our Parcels network and the consequential impact on earnings this
year and next, the Board considers it prudent to rebase the
dividend at this time. We would expect to return to prior levels of
dividend cover in due course as our earnings grow.
The Board has therefore declared
an Interim Dividend of 5.5p per share (2014: 7.3p), payable on 15
January 2016 to shareholders on the register on 4 December
2015.
CURRENT TRADING AND
OUTLOOK
Trading in the initial weeks of
the second half, and overall trends within our individual
businesses, have been in line with our revised expectations, albeit
with our peak trading weeks still to come. It will take
longer than originally anticipated
to resolve the operational cost issues relating
to the new hub but we are confident of achieving this over the next
12 months.
As a result, our expectations for
the current year remain in line with previous guidance, but our
expectations for the next financial year have softened
slightly.
Whilst this is disappointing, the
strategic rationale for the transformation we are undertaking is as
compelling as ever, and we are confident both of our ability to
restore our parcels business to previous levels of profitability
and to build from there. The medium term operational and
financial benefits will place us amongst the most efficient and
competitive operators in our market.
Guy Buswell
Chief Executive Officer
ADDITIONAL DISCLOSURES
Principal risks and uncertainties
facing the business
UK Mail's business and share price
may be affected by a number of risks, not all of which are within
our control. The process UK Mail has in place for identifying,
assessing and managing risks is set out in the Corporate Governance
Report on page 34 of the 2015 Annual Report and Accounts. The
specific principal risks and uncertainties that may affect the
Group's performance, together with relevant mitigating factors as
identified by the Group's risk management process were discussed on
page 22 of the Group's 2015 Annual Report and Accounts. These
included risks relating to national hub, IT systems, competition,
business continuity, legislation and regulation and fuel factors,
in addition to financial risks (details of which can be found in
note 25 of the 2015 Annual Report and Accounts) including credit
risk. It is considered that these still remain the most likely
areas of potential risk and uncertainty, with the position
unchanged from that set out in the 2015 Annual Report and
Accounts.
Cautionary statement
This interim announcement contains
certain forward-looking statements, which have been made by the
directors in good faith based on the information available to them
up to the time of the approval of this report and such information
should be treated with caution due to the inherent uncertainties,
including both economic and business risk factors, underlying any
such forward-looking information. Nothing in this report should be
construed as a profit forecast.
Going concern
As stated in note 2 to the
condensed consolidated interim financial statements, the Directors
are satisfied that the Group has sufficient resources to continue
in operation for the foreseeable future. Accordingly, they continue
to adopt the going concern basis in preparing the condensed
consolidated interim financial statements.
Related-party
transactions
As stated in note 18 to the
condensed consolidated interim financial statements, there were no
transactions with related parties during the six months ended 30
September 2015 which have had a material effect on the results or
the financial position of the Group. The nature of the related
party transactions has not changed from those described in the
Group's 2015 Annual Report and Accounts.
Consolidated Statement of
Comprehensive Income
|
|
for the six months ended 30
September 2015
|
|
|
|
|
|
|
Unaudited
Six months to 30
September
2015
|
Unaudited
Six months to 30
September
2014 (1)
|
Audited
Year to
31 March
2015
|
Continuing operations
|
Note
|
£m
|
£m
|
£m
|
|
|
|
|
|
Revenue
|
6
|
237.6
|
227.5
|
485.1
|
Cost of sales
|
|
(213.2)
|
(198.6)
|
(428.3)
|
Gross profit
|
|
24.4
|
28.9
|
56.8
|
Administrative expenses
|
|
(19.2)
|
(17.7)
|
(35.8)
|
Operating profit before
exceptional items
|
5.2
|
11.2
|
21.0
|
HS2 compensation
|
7
|
6.8
|
0.8
|
2.0
|
Profit on sale of national
hub
|
7
|
1.1
|
-
|
-
|
National hub relocation
costs
|
7
|
(6.7)
|
-
|
(2.5)
|
Automation
implementation
|
7
|
(0.7)
|
-
|
(0.4)
|
Impairment of intangible
assets
|
7
|
(3.2)
|
-
|
-
|
Exceptional items -
(cost)/income
|
(2.7)
|
0.8
|
(0.9)
|
Operating profit
|
2.5
|
12.0
|
20.1
|
Finance costs
|
|
(0.3)
|
-
|
-
|
Profit before taxation
|
2.2
|
12.0
|
20.1
|
Taxation - on profit before
exceptional items
|
13
|
(1.1)
|
(2.5)
|
(4.4)
|
Taxation - on exceptional
items
|
0.6
|
(0.2)
|
0.2
|
Total taxation
|
13
|
(0.5)
|
(2.7)
|
(4.2)
|
Profit for the period from
continuing operations
|
1.7
|
9.3
|
15.9
|
Loss for the period from
discontinued operations
|
(0.1)
|
(7.1)
|
(10.8)
|
Profit for the period
|
1.6
|
2.2
|
5.1
|
|
|
|
|
|
|
Total comprehensive income
attributable to:
|
|
|
|
- Continuing operations
|
|
1.7
|
9.3
|
15.9
|
- Discontinued
operations
|
|
(0.1)
|
(7.1)
|
(10.8)
|
Total comprehensive income
attributable to equity holders of the company
|
1.6
|
2.2
|
5.1
|
|
|
|
|
|
|
Earnings/(loss) per share from
continuing and discontinued operations
|
|
|
|
Basic earnings per
share
|
|
|
|
From continuing
operations
|
14
|
3.1p
|
17.0p
|
29.0p
|
From discontinued
operations
|
14
|
(0.2)p
|
(12.9)p
|
(19.8)p
|
Total basic earnings per
share
|
2.9p
|
4.1p
|
9.2p
|
|
|
|
|
Diluted earnings per
share
|
|
|
|
From continuing
operations
|
14
|
3.1p
|
15.9p
|
28.9p
|
From discontinued
operations
|
14
|
(0.2)p
|
0.3p
|
(19.7)p
|
Total diluted earnings per
share
|
2.9p
|
16.2p
|
9.2p
|
|
|
|
|
(1)
|
Restated for the reclassification
of UK Pallets to discontinued operations as detailed in note
2.
|
|
The notes on the following pages
form an integral part of these condensed consolidated interim
financial statements.
|
|
|
|
|
|
|
|
|
|
Consolidated Balance
Sheet
|
|
|
|
as at 30 September 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
30 September
2015
|
|
|
Unaudited
30 September
2014
|
|
|
Audited
31 March
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note
|
£m
|
|
|
£m
|
|
|
£m
|
|
Assets
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
Goodwill
|
|
9
|
1.6
|
|
2.2
|
|
1.6
|
Intangible assets
|
|
9
|
7.7
|
|
10.2
|
|
11.6
|
Investment properties
|
|
9
|
1.7
|
|
1.7
|
|
1.7
|
Property, plant and
equipment
|
|
9
|
74.4
|
|
60.9
|
|
85.4
|
Deferred tax assets
|
|
|
0.6
|
|
0.8
|
|
0.7
|
|
|
|
86.0
|
|
75.8
|
|
101.0
|
Current assets
|
|
|
|
|
|
|
|
Inventories
|
|
|
0.2
|
|
0.2
|
|
0.2
|
Trade and other
receivables
|
|
|
70.5
|
|
70.0
|
|
76.2
|
Cash and cash
equivalents
|
|
11
|
6.5
|
|
9.5
|
|
4.6
|
Current tax assets
|
|
|
0.1
|
|
-
|
|
-
|
|
|
|
77.3
|
|
79.7
|
|
81.0
|
Liabilities
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
Borrowings
|
|
11
|
(14.6)
|
|
-
|
|
(9.8)
|
Trade and other
payables
|
|
|
(79.5)
|
|
(82.7)
|
|
(101.1)
|
Current tax liabilities
|
|
|
-
|
|
(2.5)
|
|
(0.2)
|
Provisions
|
|
12
|
(0.8)
|
|
(0.6)
|
|
(1.5)
|
|
|
|
(94.9)
|
|
(85.8)
|
|
(112.6)
|
|
|
|
|
|
|
|
|
Net current liabilities
|
|
|
(17.6)
|
|
(6.1)
|
|
(31.6)
|
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
Borrowings
|
|
11
|
(4.6)
|
|
-
|
|
-
|
Deferred tax
liabilities
|
|
|
(2.9)
|
|
(1.7)
|
|
(2.6)
|
Provisions
|
|
12
|
(0.7)
|
|
(0.7)
|
|
(0.7)
|
|
|
|
(8.2)
|
|
(2.4)
|
|
(3.3)
|
|
|
|
|
|
|
|
|
Net assets
|
|
|
60.2
|
|
67.3
|
|
66.1
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
|
|
|
|
|
|
Ordinary shares
|
|
10
|
5.5
|
|
5.5
|
|
5.5
|
Share premium
|
|
10
|
15.6
|
|
15.3
|
|
15.3
|
Retained earnings
|
|
|
39.1
|
|
46.5
|
|
45.3
|
Total shareholders'
equity
|
|
|
60.2
|
|
67.3
|
|
66.1
|
|
|
|
|
|
|
|
|
Consolidated Cash Flow
Statement
|
|
|
|
for the six months ended 30
September 2015
|
|
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
30 September 2015
|
30 September 2014
1
|
31 March 2015
|
Continuing operations
|
Note
|
£m
|
£m
|
£m
|
|
|
|
|
|
Profit for the period
|
|
1.7
|
9.3
|
15.9
|
Adjustments for:
|
|
|
|
|
Net exceptional items
|
7
|
2.7
|
(0.8)
|
0.9
|
Depreciation and
amortisation
|
9
|
4.4
|
3.7
|
7.9
|
Share-based payment
expense
|
|
0.2
|
0.6
|
0.6
|
Loss on sale of property, plant
and equipment
|
|
0.1
|
0.1
|
0.1
|
Finance costs
|
|
0.3
|
-
|
-
|
Taxation
|
13
|
0.5
|
2.7
|
4.2
|
Operating profit before changes in
working capital
|
|
9.9
|
15.6
|
29.6
|
|
|
|
|
|
Decrease/(increase) in
inventories
|
|
-
|
0.1
|
-
|
Decrease/(increase) in trade and
other receivables
|
|
4.1
|
(0.9)
|
(10.1)
|
(Decrease)/increase in trade and
other payables
|
|
(8.4)
|
(4.0)
|
8.5
|
(Decrease)/increase in
provisions
|
|
(0.3)
|
(0.1)
|
0.2
|
Total cash flow from changes in
working capital - continuing operations
|
|
(4.6)
|
(4.9)
|
(1.4)
|
|
|
|
|
|
Cash generated from continuing
operations
|
|
5.3
|
10.7
|
28.2
|
|
|
|
|
|
Discontinued operations
|
|
|
|
|
(Loss)/profit for the
year
|
|
(0.1)
|
(7.1)
|
(10.8)
|
Adjustments for:
|
|
|
|
|
Exceptional items
|
7
|
0.1
|
7.3
|
10.4
|
Depreciation and
amortisation
|
|
-
|
-
|
0.1
|
Taxation
|
|
-
|
-
|
(0.7)
|
Operating profit before changes in
working capital
|
|
-
|
0.2
|
(1.0)
|
|
|
|
|
|
Decrease/(increase) in trade and
other receivables
|
|
1.4
|
3.3
|
6.6
|
(Decrease)/increase in trade and
other payables
|
|
(0.7)
|
(3.2)
|
(5.8)
|
(Decrease)/increase in
provisions
|
|
(0.3)
|
-
|
0.6
|
Total cash flow from working
capital - discontinued operations
|
|
0.4
|
0.1
|
1.4
|
|
|
|
|
|
Cash generated from continuing
operations
|
|
5.3
|
10.7
|
28.2
|
Cash generated from discontinued
operations
|
|
0.4
|
0.3
|
0.4
|
Total cash generated from
operations
|
|
5.7
|
11.0
|
28.6
|
|
|
|
|
|
Income taxes paid
|
|
(0.5)
|
(2.8)
|
(5.0)
|
Finance costs paid
|
|
(0.2)
|
-
|
-
|
|
|
|
|
|
Net cash flow from continuing
operating activities
|
|
4.6
|
7.9
|
23.2
|
Net cash flow from discontinued
operating activities
|
|
0.4
|
0.3
|
0.4
|
Total net cash flow from operating
activities
|
|
5.0
|
8.2
|
23.6
|
|
|
|
|
|
Investing activities
|
|
|
|
|
Purchase of property, plant and
equipment
|
|
(8.5)
|
(16.7)
|
(39.1)
|
Purchase of intangible
assets
|
|
(2.6)
|
(2.9)
|
(6.4)
|
Deferred compensation
|
7
|
5.4
|
2.0
|
2.0
|
Proceeds from sale of property,
plant and equipment
|
7
|
0.8
|
-
|
-
|
Net cash flow from investing
activities - continuing operations
|
|
(4.9)
|
(17.6)
|
(43.5)
|
Net cash flow from investing
activities - discontinued operations
|
|
-
|
(0.3)
|
(0.4)
|
Total net cash flow from investing
activities
|
|
(4.9)
|
(17.9)
|
(43.9)
|
|
|
|
|
|
Financing activities
|
|
|
|
|
Proceeds from re-financing under
finance leases
|
|
13.7
|
-
|
-
|
Repayment of finance
leases
|
|
(8.7)
|
(0.4)
|
(0.4)
|
Dividends paid to
shareholders
|
15
|
(7.9)
|
(7.8)
|
(11.8)
|
Net proceeds from issue of
ordinary share capital
|
|
0.3
|
-
|
-
|
Draw down of revolving credit
facility
|
|
4.4
|
-
|
10.0
|
Facility arrangement costs
paid
|
|
-
|
-
|
(0.3)
|
Net cash flow from financing
activities - continuing operations
|
|
1.8
|
(8.2)
|
(2.5)
|
Net cash flow from financing
activities - discontinued operations
|
|
-
|
-
|
-
|
Total net cash flow from financing
activities
|
|
1.8
|
(8.2)
|
(2.5)
|
|
|
|
|
|
Net increase/(decrease) in cash
and cash equivalents
|
|
1.9
|
(17.9)
|
(22.8)
|
Cash and cash equivalents at the
beginning of the period
|
|
4.6
|
27.4
|
27.4
|
Cash and cash equivalents at the
end of the period
|
11
|
6.5
|
9.5
|
4.6
|
|
|
|
|
|
(1)
|
Restated for the reclassification
of UK Pallets to discontinued operations as detailed in note
2.
|
|
|
|
|
|
|
Consolidated Statement of Changes
in Equity (unaudited)
for the six months ended 30
September 2015
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to equity holders of
the company
|
|
|
Ordinary
shares
|
|
Share
premium
|
|
Retained
earnings
|
|
|
Total
equity
|
|
|
|
|
|
|
|
Note
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
|
|
|
|
|
|
|
|
Balance as at 1 April
2015
|
|
5.5
|
|
15.3
|
|
45.3
|
|
66.1
|
|
Profit for the period
|
|
-
|
|
-
|
|
1.6
|
|
1.6
|
Total comprehensive income for the
period
|
-
|
|
-
|
|
1.6
|
|
1.6
|
|
Dividends paid to
shareholders
|
15
|
-
|
|
-
|
|
(7.9)
|
|
(7.9)
|
Employees' share option
scheme:
|
|
|
|
|
|
|
|
|
- share-based payments
|
|
-
|
|
-
|
|
0.2
|
|
0.2
|
- exercise of share
options
|
|
-
|
|
0.3
|
|
-
|
|
0.3
|
- tax charged directly to
equity
|
|
-
|
|
-
|
|
(0.1)
|
|
(0.1)
|
Total transactions with
shareholders recorded directly in equity
|
|
-
|
|
0.3
|
|
(7.8)
|
|
(7.5)
|
|
|
|
|
|
|
|
|
|
Balance as at 30 September
2015
|
|
5.5
|
|
15.6
|
|
39.1
|
|
60.2
|
|
|
|
|
|
|
|
|
|
Balance as at 1 April
2014
|
|
5.5
|
|
15.3
|
|
51.5
|
|
72.3
|
|
|
|
|
|
|
|
|
|
Profit for the period
|
|
-
|
|
-
|
|
2.2
|
|
2.2
|
Total comprehensive income for the
period
|
-
|
|
-
|
|
2.2
|
|
2.2
|
|
|
|
|
|
|
|
|
|
Dividends paid to
shareholders
|
15
|
-
|
|
-
|
|
(7.8)
|
|
(7.8)
|
Employees' share option
scheme:
|
|
|
|
|
|
|
|
|
- share based payments
|
|
-
|
|
-
|
|
0.6
|
|
0.6
|
Total transactions with
shareholders recorded directly in equity
|
|
-
|
|
-
|
|
(7.2)
|
|
(7.2)
|
|
|
|
|
|
|
|
|
|
Balance as at 30 September
2014
|
|
5.5
|
|
15.3
|
|
46.5
|
|
67.3
|
|
|
|
|
|
|
|
|
|
Balance as at 1 April
2014
|
|
5.5
|
|
15.3
|
|
51.5
|
|
72.3
|
|
|
|
|
|
|
|
|
|
Profit for the year
|
|
-
|
|
-
|
|
5.1
|
|
5.1
|
Total comprehensive income for the
year
|
-
|
|
-
|
|
5.1
|
|
5.1
|
|
|
|
|
|
|
|
|
|
Dividends paid to
shareholders
|
15
|
-
|
|
-
|
|
(11.8)
|
|
(11.8)
|
Employees' share option
scheme:
|
|
|
|
|
|
|
|
|
- share-based payments
|
|
-
|
|
-
|
|
0.6
|
|
0.6
|
- tax charged directly to
equity
|
|
-
|
|
-
|
|
(0.1)
|
|
(0.1)
|
Total transactions with
shareholders recorded directly in equity
|
|
-
|
|
-
|
|
(11.3)
|
|
(11.3)
|
|
|
|
|
|
|
|
|
|
Balance as at 31 March
2015
|
|
5.5
|
|
15.3
|
|
45.3
|
|
66.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to condensed consolidated
interim financial statements
|
|
|
|
|
1
|
General information
|
|
|
|
|
|
|
|
UK Mail Group Plc ('the Company')
and its subsidiaries (together 'the Group') are engaged in the
provision of parcels, mail and logistical service
solutions.
|
|
|
|
|
|
|
|
The Company (registration
02800218) is a public limited company incorporated and domiciled in
England. The address of its registered office is 120 Buckingham
Avenue, Slough, SL1 4LZ. The Company is listed on the London Stock
Exchange (LSE: UKM).
|
|
|
|
|
|
|
|
The condensed consolidated interim
financial statements were approved for issue on 17 November
2015.
|
|
|
|
|
|
|
|
|
|
|
The condensed consolidated interim
financial statements do not comprise statutory accounts within the
meaning of Section 434 of the Companies Act 2006. Within the notes
to these financial statements, the half year periods to 30
September 2015 and 2014 are unaudited. Statutory accounts for the
year ended 31 March 2015 were approved by the Board of directors on
19 May 2015 and delivered to the Registrar of Companies. The
report of the auditors on those accounts was unqualified, did not
contain an emphasis of matter paragraph and did not contain any
statement under Section 498(2) or (3) of the Companies Act
2006.
|
|
|
|
|
|
|
|
2
|
Basis of preparation
|
|
|
|
|
|
|
|
|
The condensed consolidated interim
financial statements for the half year ended 30 September 2015 have
been prepared in accordance with the Disclosure and Transparency
Rules ('DTR') of the Financial Conduct Authority and with IAS 34,
'Interim financial reporting' as adopted by the European Union.
They do not include all of the information and disclosures required
for full annual financial statements, and should be read in
conjunction with the consolidated annual financial statements of
the Group as at and for the year ended 31 March 2015, which were
prepared in accordance with IFRSs as adopted by the European
Union.
|
|
|
|
|
|
|
|
|
The consolidated financial
statements of the Group as at and for the year ended 31 March 2015
are available upon request from the Company's registered office at
120 Buckingham Avenue, Slough, SL1 4LZ or at
www.ukmail.com.
|
|
|
|
|
|
|
|
|
The condensed consolidated interim
financial statements are presented in Sterling.
|
|
|
|
As a result of the discontinuation
of operations in UK Pallets in March 2015, the prior period figures
for the six months ended 30 September 2014 in the consolidated
statement of comprehensive income and the consolidated cash flow
statement have been restated, together with any associated
notes.
|
|
|
|
|
|
|
|
|
|
After making enquiries, the
directors have a reasonable expectation that the Company and the
Group have adequate resources to continue in operational existence
for the foreseeable future. The Group meets its day to day working
capital requirements through operating cash flows, with borrowings
to fund acquisitions and capital expenditure, as necessary.
Movements in the Group's overall net (debt)/funds position are
shown in note 11. The Group has committed bank facilities in place,
comprising of a five year £25m revolving credit facility available
until 31 May 2019, and a £20m overdraft facility available until 30
December 2015. Accordingly they continue to adopt the going concern
basis in preparing the condensed consolidated interim financial
statements.
|
|
|
|
|
|
|
|
|
3
|
Accounting policies
|
|
|
|
|
|
|
|
|
|
The accounting policies applied by
the Group in these condensed consolidated interim financial
statements are consistent with those applied by the Group in its
consolidated annual financial statements as at and for the year
ended 31 March 2015.
|
|
|
|
Adoption of new standards, and
amendments to standards or interpretations, which are mandatory for
the first time for the financial year beginning 1 April 2015, have
had no material impact on the financial position and performance of
the Group.
|
4
|
Changes in accounting
estimates
|
|
|
|
|
|
|
|
|
The preparation of the condensed
consolidated interim financial statements requires management to
make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of
assets and liabilities, income and expense. Actual results may
differ from these estimates.
|
|
|
|
|
|
|
|
|
In preparing these condensed
consolidated interim financial statements, the significant
judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the
same as those applied to the consolidated financial statements as
at and for the year ended 31 March 2015.
|
|
|
|
|
|
|
|
|
There have been no material
changes in contingent liabilities during the current interim
period.
|
|
|
5
|
Financial instruments
|
|
|
|
The activities of the Group
exposes it to a number of financial risks, including credit risk,
market risk, price risk, interest risk, liquidity risk and capital
risk.
|
|
|
|
These condensed consolidated
interim financial statements do not include all of the financial
risk management information and disclosures required in the annual
financial statements, and should be read in conjunction with the
Group's 2015 Annual Report and Accounts.
|
|
|
|
There have been no changes in the
Group's financial risk management policies since the year end 31
March 2015.
|
6
|
Segmental information
|
|
|
|
|
|
|
|
|
Management has determined the
operating segments based on reports that are reviewed by the Board
for making strategic decisions. These reports reflect the Group's
defined management structure, whereby distinct managers are
accountable to the Board for the results and activities of their
identified segments and the different markets in which they
operate. The Board, which is the Group's chief operating decision
maker, considers that the Group has two reportable operating
segments following the integration of the Courier operations into
Parcels and the cessation of trading of UK Pallets Ltd in March
2015.
|
|
|
|
|
|
|
|
|
The Group's operating segments
consist of Mail and Parcels (which are shown as continuing
operations). In recent years the Courier business has been
undergoing a period of transition away from a traditional same-day
courier operation towards an operation which provides specialist
service support to our Parcels business. Consequently results for
the comparative periods have been restated to reflect the
integration of the Courier operations into Parcels.
The Board assesses the performance
of the operating segments based on a measure of operating profit
before net finance costs and taxation.
Central costs comprises of network
costs and central support costs. Central assets comprise mainly of
corporate
assets, cash, current and deferred
tax balances.
|
|
|
|
|
|
|
|
|
The Group manages its business
segments on a national basis, with all its operations in the UK, as
are nearly all of the customers.
|
|
|
|
Inter-company transactions, (which
are conducted on an arm's length basis), balances and unrealised
gains on transactions between segments are eliminated. Unrealised
losses are also eliminated.
|
|
|
|
|
|
|
|
|
No individual customer accounted
for more than 7% of revenue in the periods included in these
condensed consolidated interim financial statements.
|
|
Six months ended 30 September 2015
(unaudited)
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
|
Parcels
|
Mail
|
Central
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
Segmental revenue
|
124.0
|
113.6
|
-
|
237.6
|
|
|
|
|
|
|
|
Operating profit/(loss) before
exceptional items
|
7.9
|
5.1
|
(7.8)
|
5.2
|
|
Exceptional items - administrative
expenses
|
0.9
|
(0.2)
|
(3.4)
|
(2.7)
|
|
Operating profit
|
8.8
|
4.9
|
(11.2)
|
2.5
|
|
Finance costs
|
|
|
|
(0.3)
|
|
Profit before taxation
|
|
|
|
2.2
|
|
Taxation
|
|
|
|
(0.5)
|
|
Profit attributable to equity
shareholders
|
|
|
|
1.7
|
|
|
|
|
|
|
|
Intangible assets
|
0.2
|
2.0
|
7.1
|
9.3
|
|
Property, plant and
equipment
|
68.2
|
3.0
|
4.9
|
76.1
|
|
Deferred tax assets
|
-
|
-
|
0.5
|
0.5
|
|
Inventories
|
0.2
|
-
|
-
|
0.2
|
|
Cash and cash
equivalents
|
0.2
|
2.5
|
3.8
|
6.5
|
|
Current tax assets
|
-
|
-
|
0.1
|
0.1
|
|
Trade and other
receivables
|
34.6
|
39.7
|
1.1
|
75.4
|
|
Intercompany
eliminations
|
-
|
(4.9)
|
-
|
(4.9)
|
|
Total assets
|
103.4
|
42.3
|
17.5
|
163.2
|
|
Six months ended 3 September 2014
(unaudited)
|
|
|
|
|
|
|
Continuing operations
(restated)
|
|
|
|
|
Parcels 1
|
Mail
|
Central 2
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
Segmental revenue
|
117.8
|
109.7
|
-
|
227.5
|
|
|
|
|
|
|
|
Operating profit/(loss) before
exceptional items
|
12.6
|
6.2
|
(7.6)
|
11.2
|
|
Exceptional items - administrative
expenses
|
0.8
|
-
|
-
|
0.8
|
|
Operating profit
|
13.4
|
6.2
|
(7.6)
|
12.0
|
|
Finance income/(costs)
|
|
|
|
-
|
|
Profit before taxation
|
|
|
|
12.0
|
|
Taxation
|
|
|
|
(2.7)
|
|
Profit attributable to equity
shareholders
|
|
|
|
9.3
|
|
|
|
|
|
|
|
Intangible assets
|
0.1
|
0.6
|
10.6
|
11.3
|
|
Property, plant and
equipment
|
54.2
|
2.5
|
5.9
|
62.6
|
|
Deferred tax assets
|
-
|
-
|
0.7
|
0.7
|
|
Inventories
|
0.2
|
-
|
-
|
0.2
|
|
Cash and cash
equivalents
|
1.6
|
3.2
|
5.2
|
10.0
|
|
Trade and other
receivables
|
33.4
|
39.1
|
2.2
|
74.7
|
|
Intercompany
eliminations
|
-
|
(9.6)
|
-
|
(9.6)
|
|
Total assets
|
89.5
|
35.8
|
24.6
|
149.9
|
|
|
|
|
|
|
|
Year ended 31 March 2015
(audited)
|
Continuing operations
(restated)
|
|
|
|
|
|
Parcels 1
|
Mail
|
Central
|
Total
|
|
|
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
Segmental revenue
|
244.6
|
240.5
|
-
|
485.1
|
|
|
|
|
|
|
|
Operating profit/(loss) before
exceptional items
|
23.6
|
12.5
|
(15.1)
|
21.0
|
|
Exceptional items - administrative
expenses
|
(0.9)
|
-
|
-
|
(0.9)
|
|
Operating profit
|
22.7
|
12.5
|
(15.1)
|
20.1
|
|
Finance income
|
|
|
|
-
|
|
Finance costs
|
|
|
|
-
|
|
Profit before taxation
|
|
|
|
20.1
|
|
Taxation
|
|
|
|
(4.2)
|
|
Profit attributable to equity
shareholders
|
|
|
|
15.9
|
|
|
|
|
|
|
|
Intangible assets
|
0.2
|
1.6
|
11.4
|
13.2
|
|
Property, plant and
equipment
|
76.5
|
2.4
|
8.2
|
87.1
|
|
Deferred tax assets
|
-
|
-
|
0.6
|
0.6
|
|
Inventories
|
0.2
|
-
|
-
|
0.2
|
|
Cash and cash
equivalents
|
2.0
|
4.3
|
-
|
6.3
|
|
Trade and other
receivables
|
36.0
|
52.1
|
30.7
|
118.8
|
|
Intercompany
eliminations
|
-
|
(14.2)
|
(29.9)
|
(44.1)
|
|
Total assets
|
114.9
|
46.2
|
21.0
|
182.1
|
|
|
|
|
|
|
1 Restated for the integration of
the Courier operation into Parcels
2 The impairment charge for UK
Pallets in the six month period to 30 September 2014 has been
reclassified within discontinued operations
7
|
Exceptional items -
Income/(cost)
|
Unaudited
30 September 2015
|
Unaudited
30 September 2014
|
Audited
31 March 2015
|
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
Profit on sale of national
hub
|
1.1
|
-
|
-
|
|
HS2 compensation
|
6.8
|
0.8
|
2.0
|
|
Exceptional income - continuing
items
|
7.9
|
0.8
|
2.0
|
|
|
|
|
|
|
Cost of automation
implementation
|
(0.7)
|
-
|
(0.4)
|
|
National Hub relocation
costs
|
(6.7)
|
-
|
(2.5)
|
|
Impairment of intangible
assets
|
(3.2)
|
-
|
-
|
|
Exceptional costs - continuing
operations
|
(10.6)
|
-
|
(2.9)
|
|
|
|
|
|
|
Net exceptional income/(costs) -
continuing operations (*)
|
(2.7)
|
0.8
|
(0.9)
|
|
|
|
|
|
|
Impairment charges (including
goodwill)
|
-
|
(7.3)
|
(9.0)
|
|
Closure costs
|
(0.1)
|
-
|
(1.4)
|
|
Exceptional costs - discontinued
operations (**)
|
(0.1)
|
(7.3)
|
(10.4)
|
|
|
|
|
|
|
Net Exceptional items
|
(2.8)
|
(6.5)
|
(11.3)
|
* Presented on the face of the
Income Statement
** Presented within the loss for
the period from discontinued operations
|
Profit on sale of national
hub
|
|
|
|
This represents the profit on sale
following the compulsory acquisition of our National hub and
offices at Birmingham by the DfT and HS2 Ltd, as a result of the
proposed High Speed Two ('HS2') railway.
|
|
|
|
HS2 compensation
|
|
|
|
HS2 compensation comprises of £6.8m
(2014: £0.8m) of disturbance and other costs reimbursed from the
Department of Transport ('DfT') and HS2 Ltd under the Compensation
Code.
|
|
|
|
Cost of automation
implementation
|
|
|
|
The cost of automation
implementation represents the costs incurred largely in the March -
April 2015 period as the Group moved towards the implementation and
roll-out of new automation equipment. These costs comprise of £0.5m
(2014:£nil) asset write-offs and £0.2m (2014:£nil) of contract
termination costs.
|
|
|
|
National hub relocation
costs
|
|
|
|
These comprise of £3.7m (2014:
£nil) of disturbance costs (including recruitment and redundancy
costs), £2.5m (2014: £nil) dual running costs (largely property
costs relating to running two sites whilst relocating), £0.3m
(2014:£nil) compensation paid to customers following a temporary
deterioration in service performance, and £0.2m (2014: £nil) in
relation to the loss of profit resulting from the delay in
increasing the hub's extended capacity.
|
|
|
|
Impairment of intangible
assets
|
|
|
|
The Group undertook a comprehensive
strategic review of its IT systems during the period which
identified a number of software assets that did not fit within the
medium- and long-term strategic goals of the Group, and which
therefore offered no future economic value to the Group. As a
result an impairment charge of £3.2m (2014: £nil) was
recognised.
|
|
|
|
Discontinued operations -
Impairment charges (including goodwill)
|
|
|
|
In the six month period to 30
September 2014, a £7.3m goodwill impairment charge was recognised
following deterioration in the trading performance of UK Pallets
Ltd.
As reported in the 2015 Annual
Report and Accounts, and following a decision to close the business
the remaining goodwill was written-off. Consequently, the results
of UK Pallets Ltd have therefore been reclassified within
discontinued operations for the six months to 30 September
2014.
|
|
|
|
Discontinued operations - Closure
costs
|
|
|
|
As detailed above, a decision was
taken to close the business of UK Pallets in January 2015, and
consequently recognised £1.4m of closure costs in the financial
statements to 31 March 2015 (details of which can be found in the
2015 Annual Report and Accounts). A further £0.1m (2014: £nil) of
costs have been recognised in the six month period to 30 September
2015 as the Group administers the company's voluntary
liquidation.
|
|
|
8
|
Discontinued operations
|
Unaudited
30 September 2015
|
Unaudited
30 September 2014 1
|
Audited
31 March 2015
|
|
|
£m
|
£m
|
£m
|
|
The results of discontinued
operations were as follows:
|
|
|
|
|
|
|
|
|
|
Revenue
|
-
|
13.9
|
22.8
|
|
Cost of sales
|
-
|
(12.8)
|
(22.0)
|
|
Gross profit
|
-
|
1.1
|
0.8
|
|
Administrative expenses
|
-
|
(0.9)
|
(1.9)
|
|
Operating (loss)/profit before
exceptional items
|
-
|
0.2
|
(1.1)
|
|
Exceptional items
|
(0.1)
|
(7.2)
|
(10.4)
|
|
Operating (loss)/profit
|
(0.1)
|
(7.0)
|
(11.5)
|
|
Taxation on (loss)/profit before
exceptional items
|
-
|
(0.1)
|
0.2
|
|
Taxation on exceptional
items
|
-
|
-
|
0.5
|
|
Total taxation
|
-
|
(0.1)
|
0.7
|
|
(Loss)/profit for the
period
|
(0.1)
|
(7.1)
|
(10.8)
|
1 The impairment charge for UK
Pallets in the six month period to 30 September 2014 has been
reclassified within discontinued operations
These represent the results of UK
Pallets Ltd which ceased trading in March 2015.
9
|
Property, plant and equipment,
intangible assets, goodwill and investment properties
|
|
|
|
Six months ended 30 September
2015
|
Unaudited
|
|
|
Note
|
£m
|
|
|
|
|
|
Opening net book value at 1 April
2015
|
|
100.3
|
|
Additions
|
|
6.9
|
|
Disposals
|
|
(12.0)
|
|
HS2 Compensation
|
|
(5.4)
|
|
Depreciation and
amortisation
|
|
(4.4)
|
|
Closing net book value at 30
September 2015
|
|
85.4
|
|
|
|
|
|
|
Six months ended 30 September
2014
|
|
Unaudited
£m
|
|
|
|
|
|
Opening net book value at 1 April
2014
|
|
69.4
|
|
Additions
|
|
16.7
|
|
Disposals
|
|
(0.1)
|
|
Impairment of goodwill
|
7
|
(7.3)
|
|
Depreciation and
amortisation
|
|
(3.7)
|
|
Closing net book value at 30
September 2014
|
|
75.0
|
|
Year ended 31 March 2015
|
|
Audited
£m
|
|
|
|
|
|
Opening net book value at 1 April
2014
|
|
69.4
|
|
Additions
|
|
48.2
|
|
Disposals
|
|
(1.3)
|
|
Impairment of goodwill
|
7
|
(7.9)
|
|
Depreciation and
amortisation
|
|
(8.1)
|
|
Closing net book value at 31 March
2015
|
|
100.3
|
|
|
Unaudited
30 September
|
|
Unaudited
30 September
|
|
Audited
31 March
|
|
|
2015
|
|
2014
|
|
2015
|
|
£m
|
|
£m
|
|
£m
|
|
|
|
|
|
|
|
Total segment capital
expenditure
|
0.7
|
|
12.9
|
|
38.7
|
|
Central capital
expenditure
|
0.8
|
|
3.5
|
|
9.0
|
|
Total capital
expenditure
|
1.5
|
|
16.4
|
|
47.7
|
|
|
|
|
|
Total segment depreciation and
amortisation
|
2.8
|
|
2.0
|
|
4.5
|
|
Central depreciation and
amortisation
|
1.6
|
|
1.7
|
|
3.4
|
|
Total depreciation and
amortisation
|
4.4
|
|
3.7
|
|
7.9
|
|
|
|
|
|
|
|
|
|
|
10
|
Share capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
Ordinary
|
|
Share
|
|
Unaudited
|
|
|
|
|
|
|
ordinary
|
|
shares
|
|
premium
|
|
Total
|
|
Capital
|
|
|
|
shares
|
|
£m
|
|
£m
|
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 April 2015
|
54,740,618
|
|
5.5
|
|
15.3
|
|
20.8
|
|
Allotted under SAYE
schemes
|
174,199
|
|
-
|
|
0.3
|
|
0.3
|
|
At 30 September 2015
|
54,914,817
|
|
5.5
|
|
15.6
|
|
21.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 April 2014
|
54,734,482
|
|
5.5
|
|
15.3
|
|
20.8
|
|
Allotted under SAYE
schemes
|
2,123
|
|
-
|
|
-
|
|
-
|
|
At 30 September 2014
|
54,736,605
|
|
5.5
|
|
15.3
|
|
20.8
|
|
|
|
|
|
|
|
|
|
|
The Company's Employee Share
Ownership Trust ('ESOT') holds shares in the Company for subsequent
transfer to employees under its incentive scheme awards. Shares
held by the ESOT are not voted at shareholder meetings and do not
accrue dividends. At 30 September 2015 the trust held a total
of 6,801 shares (30 September 2014: 6,801 shares and 31 March 2015:
6,801 shares)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11
|
Analysis of net
(debt)/cash
|
|
|
|
|
|
|
|
|
|
|
|
|
Audited
1 April
2015
|
|
|
|
|
|
Unaudited
30 September 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow
|
|
Other
|
|
|
|
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at bank and in hand
|
4.6
|
|
1.9
|
|
-
|
|
6.5
|
|
Total cash
|
4.6
|
|
1.9
|
|
-
|
|
6.5
|
|
|
|
|
|
|
|
|
|
|
Revolving credit
facility
|
(10.0)
|
|
(4.4)
|
|
-
|
|
(14.4)
|
|
RCF arrangement fee
|
0.2
|
|
-
|
|
-
|
|
0.2
|
|
Finance leases due within one
year
|
-
|
|
(0.4)
|
|
-
|
|
(0.4)
|
|
Finance leases due after more than
one year
|
-
|
|
(4.6)
|
|
-
|
|
(4.6)
|
|
Total debt
|
(9.8)
|
|
(9.4)
|
|
-
|
|
(19.2)
|
|
|
|
|
|
|
|
|
|
|
Net (debt)/cash
|
(5.2)
|
|
(7.5)
|
|
-
|
|
(12.7)
|
|
|
|
|
Audited
1 April
2014
|
|
|
|
|
|
Unaudited
30 September
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow
|
|
Other
|
|
|
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at bank and in hand
|
27.4
|
|
(17.9)
|
|
-
|
|
9.5
|
|
Total cash
|
27.4
|
|
(17.9)
|
|
-
|
|
9.5
|
|
|
|
|
|
|
|
|
|
|
Finance leases
|
(0.4)
|
|
0.4
|
|
-
|
|
-
|
|
Total debt
|
(0.4)
|
|
0.4
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Net cash/(debt)
|
27.0
|
|
(17.5)
|
|
-
|
|
9.5
|
|
|
|
Audited
1 April
2014
|
|
Cash flow
|
|
Other
|
|
Audited
31
March 2015
|
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
|
|
|
|
|
|
|
|
|
Cash at bank and in hand
|
27.4
|
|
(22.8)
|
|
-
|
|
4.6
|
|
Total cash
|
27.4
|
|
(22.8)
|
|
-
|
|
4.6
|
|
|
|
|
|
|
|
|
|
Revolving credit
facility
|
-
|
|
(10.0)
|
|
-
|
|
(10.0)
|
|
RCF arrangement fee
|
-
|
|
0.3
|
|
(0.1)
|
|
0.2
|
|
Finance leases
|
(0.4)
|
|
0.4
|
|
-
|
|
-
|
|
Total debt
|
(0.4)
|
|
(9.4)
|
|
(0.1)
|
|
(9.8)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash/(debt)
|
27.0
|
|
(32.2)
|
|
(0.1)
|
|
(5.2)
|
|
|
|
|
|
|
|
|
|
|
|
12
|
Provisions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|
|
|
|
|
Automation
|
Closure costs
|
Lease dilapidations
|
Restructuring
|
Total
Provisions
|
|
Six months ended 30 September
2015
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
At 1 April 2015
|
0.2
|
0.3
|
1.5
|
0.2
|
2.2
|
|
Provided in the year
|
-
|
-
|
0.1
|
-
|
0.1
|
|
Utilised during the
period
|
(0.2)
|
(0.3)
|
(0.2)
|
(0.1)
|
(0.8)
|
|
At 30 September 2015
|
-
|
-
|
1.4
|
0.1
|
1.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|
|
Automation
|
Closure costs
|
Lease dilapidations
|
Restructuring
|
Total
Provisions
|
|
Six months ended 30 September
2014
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
At 1 April 2014
|
-
|
-
|
1.1
|
0.3
|
1.4
|
|
Utilised during the
period
|
-
|
-
|
-
|
(0.1)
|
(0.1)
|
|
At 30 September 2014
|
-
|
-
|
1.1
|
0.2
|
1.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audited
|
Audited
|
Audited
|
Audited
|
Audited
|
|
|
Automation
|
Closure costs
|
Lease dilapidations
|
Restructuring
|
Total
Provisions
|
|
Year ended 31 March 2015
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
At 1 April 2014
|
-
|
-
|
1.1
|
0.3
|
1.4
|
|
Provided during the
period
|
0.4
|
0.3
|
0.6
|
-
|
1.3
|
|
Utilised during the
period
|
(0.2)
|
-
|
(0.2)
|
(0.1)
|
(0.5)
|
|
At 31 March 2015
|
0.2
|
0.3
|
1.5
|
0.2
|
2.2
|
|
|
|
|
|
|
|
|
|
|
The automation provision largely
relates to the early termination costs of exiting existing
contracts as a result of the roll-out of a programme of large scale
automation within the network.
|
|
The closure costs relate to UK
Pallets and largely relate to redundancy payments and contractual
cancellation charges.
|
|
Lease dilapidations represent the
anticipated expenditure resulting from the Group's contractual
obligations to make good properties prior to reversion of the
building to the landlord in respect of leases expiring within one
year and up to 14 years. The timing of outflows is variable, and is
dependent not only on property lease expiry dates, and
opportunities to surrender leases, but repair programmes and the
results of negotiation.
|
|
Restructuring relates to provisions
arising following a change programme initiated in the financial
year ended 31 March 2012 and relates to onerous property lease
costs, which are expected to be utilised within one year and up to
two years.
|
13
|
Taxation
|
|
|
|
Taxation is provided based on
management's best estimate of the effective tax rate expected for
the full financial year. The estimated annual tax rate
(pre-exceptional items) used for the six months to 30 September
2015 is 21.7% (Six months to 30 September 2014: 21.9%).
This reduction reflects the
reduction in the UK Corporation tax rate from 21% to 20% on 1 April
2015.
The deferred tax asset/liability at
30 September 2015 has been calculated based on the rate of 20%
substantively enacted at the balance sheet date.
Reductions in the UK corporation
tax rate from 20% to 19% (effective from 1 April 2017) and to 18%
(effective 1 April 2020) were substantively enacted on 26 October
2015. This will reduce the company's future current tax charge
accordingly and reduce the deferred tax liability at 30 September
2015, which has been calculated based on the rate of 20%
substantively enacted at the balance sheet date.
|
14
|
Earnings per share
|
|
|
|
The basic, diluted and underlying
earnings per share are calculated based on the following
data:
|
|
|
|
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
|
|
Six months to
30 September 2015
|
Six months to 30 September
2014
|
Year to
31 March 2015
|
|
|
|
|
|
(restated)
|
|
|
|
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
Profit after taxation - continuing
operations
|
1.7
|
9.3
|
15.9
|
|
(Loss)/profit after taxation -
discontinued operations
|
(0.1)
|
(7.1)
|
(10.8)
|
|
|
1.6
|
2.2
|
5.1
|
|
|
|
|
|
|
The weighted average number of
shares used in the calculations are as follows;
|
|
|
|
|
|
|
|
No. of shares
|
No. of shares
|
No. of shares
|
|
|
|
|
|
|
Weighted average number of shares
in issue
|
54,762,072
|
54,728,824
|
54,729,788
|
|
Dilutive effect of
options
|
335,533
|
200,026
|
182,336
|
|
Diluted weighted average number of
shares
|
55,097,605
|
54,928,850
|
54,912,124
|
|
|
|
|
|
|
|
|
The Group has two classes of
dilutive potential ordinary shares: those share options granted to
employees where the exercise price is less than the average market
price of the Company's ordinary shares during the year, and the
contingency issuable shares under the Group's Long Term Incentive
Plan.
|
|
|
|
|
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
Six months to
30 September 2015
|
Six months to 30 September
2014
|
Year to
31 March 2015
|
|
|
|
(restated)
|
|
|
|
|
|
|
|
Basic earnings per share -
continuing operations
|
3.1p
|
17.0p
|
29.0p
|
|
Basic (loss)/earnings per share -
discontinued operations
|
(0.2)p
|
(12.9)p
|
(19.8)p
|
|
Basic earnings per share
|
2.9p
|
4.1p
|
9.2p
|
|
|
|
|
|
|
Basic earnings per share is
calculated by dividing the profit for the year (the 'earnings')
attributable to ordinary shareholders by the weighted average
number of ordinary shares during the year, excluding those held in
the ESOT (note 10), which are treated as cancelled.
|
|
|
|
|
|
|
Diluted earnings per share -
continuing operations
|
3.1p
|
15.9p
|
28.9p
|
|
Diluted (loss)/earnings per share -
discontinued operations
|
(0.2)p
|
0.3p
|
(19.7)p
|
|
Diluted earnings per
share
|
2.9p
|
16.2p
|
9.2p
|
|
|
|
|
|
|
For diluted earnings per share, the
weighted average number of shares is adjusted to assume conversion
of all dilutive potential ordinary shares.
|
|
Underlying earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
30 September 2015
|
Unaudited
30 September 2014
|
Audited
31 March 2015
|
|
|
|
|
(restated)
|
|
|
|
Note
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
Profit before taxation - continuing
operations
|
|
2.2
|
12.0
|
20.1
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
Exceptional administrative items -
continuing operations
|
|
2.7
|
(0.8)
|
0.9
|
|
Underlying profit before taxation -
continuing operations
|
|
4.9
|
11.2
|
21.0
|
|
Taxation - continuing
operations
|
|
(1.1)
|
(2.5)
|
(4.4)
|
|
Underlying profit
after taxation - continuing operations
|
|
3.8
|
8.7
|
16.6
|
|
|
|
|
|
|
|
Underlying earnings per
share
|
|
|
|
|
|
Basic
|
|
7.1p
|
15.9p
|
30.3p
|
|
Diluted
|
|
7.1p
|
15.8p
|
30.1p
|
|
|
|
|
|
|
|
The directors consider that the
underlying EPS more accurately reflects the underlying performance
of the business.
|
|
|
|
The figures for the six month
period to 30 September 2014 have been restated to reflect the
reclassification of UK Pallets to discontinued operations as
detailed in note 2.
|
15
|
Dividends
|
|
|
|
The final dividend for the year
ended 31 March 2015 of 14.5p per share (2014: 14.2p) was paid on 28
August 2015. The £7.9m distribution (2014: £7.8m) is reflected in
the financial statements for the six months ended 30 September
2015.
|
|
|
|
|
|
|
|
|
In addition, the Directors propose
an interim dividend of 5.5p per share (2014: 7.3p per share)
payable on 15 January 2016 to shareholders who are on the register
at 4 December 2015. This interim dividend, amounting to £3.0m
(2014: £4.0m) has not been recognised as a liability in these
condensed consolidated interim financial statements.
|
16
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
Contingent assets
|
|
|
|
As reported in the 2015 Annual
Report and Accounts, the Group was required to relocate the
Birmingham National hub and offices to a newly constructed facility
at Ryton, near Coventry, given the site was situated on land
required for the proposed HS2 railway.
Consequently, the Group incurred
significant costs largely resulting from the construction of a new
National hub and offices, installation of automation equipment, and
staff relocation and redundancy costs; a large proportion of which
are the subject of a claim against the DfT and HS2 Ltd under the
Compensation Code.
As at the balance sheet date, (and
as detailed in Note 7), the Group has received partial
reimbursement of these costs, but remained to agree the final
claim. Consequently, no recoverable asset has been recognised as at
30 September 2015.
Following the period end, a final
settlement was agreed as detailed in Note 17.
|
|
|
|
Contingent liabilities
|
|
|
|
The Company has guaranteed bank and
other borrowings of subsidiary undertakings in a cross-guarantee
agreement of an undrawn Group borrowing facility amounting to £20m
(2014: £12m).
As reported in the 2015 Annual
Report and Accounts, the Group has further contingent liabilities
in respect of bank guarantees and documentary credit facilities
entered into during the normal course of business, and is subject
to litigation from time to time as a result of its activities, in
respect of which no loss is expected.
|
|
|
|
Group capital expenditure
committed, for the purchase of property, software, plant and
equipment, but not provided for in these financial statements
amounted to £1.4m (2014: £17.2m).
|
|
|
|
|
|
|
|
17
|
Events occurring after the
reporting period
|
|
|
|
|
|
|
|
|
In November 2015 a final
compensation payment of £10.3m was contractually agreed with the
DfT and HS2 Ltd, with funds anticipated to be received within
calendar 2015.
|
|
|
|
There are no material events
occurring after the reporting period, other than the proposed
dividend referred to in note 15.
|
|
|
|
|
|
|
|
18
|
Related-party
transactions
|
|
|
|
The nature of the related party
transactions of the Group has not changed from those described in
the Groups' 2015 Annual Report and Accounts. There were no
transactions with related parties during the six months ended 30
September 2015 which have had a material effect on the results or
the financial position of the Group.
Transactions between the Company
and its subsidiaries, which are related parties, have been
eliminated on consolidation and are not disclosed in this
note.
|
|
|
19
|
Risks and uncertainties
|
|
|
|
|
|
|
|
The specific principal risks and
uncertainties that may affect the Group's performance, together
with relevant mitigating factors as identified by the Group's risk
management process were discussed on page 22 of the Group's 2015
Annual Report and Accounts. These included risks relating to the
relocation of the National hub, IT systems, competition, business
continuity, legislation and regulation, and fuel factors, in
addition to financial risks (details of which can be found in Note
25 of the 2015 Annual Report and Accounts) including credit risk.
It is considered that these still remain the most likely areas of
potential risk and uncertainty, with the position unchanged from
that set out in the 2015 Annual Report and Accounts.
|
|
|
20
|
Seasonality
|
|
|
|
Historically, the Group experiences
marginally greater demand for its parcel collection and delivery
services in the second half of the year, as consignments increase
in advance of the Christmas season. Such trends are not
discernible within the mail market.
|
|
|
Statement of directors'
responsibilities
|
|
|
|
|
|
|
|
|
|
|
The Interim report is the
responsibility of, and has been approved by, the directors of UK
Mail Group plc. The directors are responsible for preparing the
Interim report in accordance with the Disclosure and Transparency
Rules of the United Kingdom's Financial Conduct Authority. The
Disclosure and Transparency Rules require that the accounting
policies and presentation applied to the half-yearly figures must
be consistent with those applied in the latest published annual
accounts, except where the accounting policies and presentation are
to be changed in the subsequent annual accounts, in which case the
new accounting policies and presentation should be followed, and
the changes and the reasons for the changes should be disclosed in
the Interim report, unless the United Kingdom Financial Conduct
Authority agrees otherwise.
|
|
The directors confirm that these
condensed consolidated interim financial statements have been
prepared in accordance with IAS 34, 'Interim financial reporting',
as adopted by the European Union, and that the interim management
report includes a fair review of:
|
|
|
|
|
|
|
|
|
|
|
■
|
the important events that have
occurred during the first six months and their impact on the
condensed consolidated interim financial statements, and a
description of the principal risks and uncertainties for the
remaining six months of the financial year as required by DTR
4.2.7; and
|
|
|
|
|
|
|
|
|
|
|
■
|
related-party transactions that
have taken place in the first six months of the current financial
year and changes in the related-party transactions described in the
last annual report that have materially affected the financial
position or performance of the group during the first six months of
the current financial year as required by DTR 4.2.8.
|
|
The directors of UK Mail Group plc
are as those listed in the UK Mail Group Annual Report for the year
ended 31 March 2015, save for Carl Moore who resigned on 8 October
2015. A list of current directors is maintained on the UK Mail
Group website: www.ukmail.com.
|
|
By order of the Board
|
|
|
|
|
|
|
|
|
|
|
Guy Buswell, Chief
Executive
|
|
|
|
Steven Glew, Group Finance
Director
|
17 November 2015
|
|
|
|
|
17 November 2015
|
Independent review report to UK
Mail Group Plc
Report on the condensed
consolidated interim financial statements
Our
conclusion
We have reviewed UK Mail Group
Plc's condensed consolidated interim financial statements (the
"interim financial statements") in the interim results of UK Mail
Group Plc for the 6 month period ended 30 September 2015. Based on
our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in
all material respects, in accordance with International Accounting
Standard 34, 'Interim Financial Reporting', as adopted by the
European Union and the Disclosure Rules and Transparency Rules of
the United Kingdom's Financial Conduct Authority
What we have reviewed
The interim financial statements
comprise:
· the
consolidated balance sheet as at 30 September 2015;
· the
consolidated statement of comprehensive income for the period then
ended;
· the
consolidated cash flow statement for the period then
ended;
· the
consolidated statement of changes in equity for the period then
ended; and
· the
explanatory notes to the interim financial statements.
The interim financial statements
included in the interim results have been prepared in accordance
with International Accounting Standard 34, 'Interim Financial
Reporting', as adopted by the European Union and the Disclosure
Rules and Transparency Rules of the United Kingdom's Financial
Conduct Authority.
As disclosed in note 2 to the
interim financial statements, the financial reporting framework
that has been applied in the preparation of the full annual
financial statements of the Group is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by
the European Union.
Responsibilities for the condensed consolidated
interim financial statements and the review Our responsibilities and those of the directors
The interim results, including the
interim financial statements, is the responsibility of, and has
been approved by, the directors. The directors are responsible for
preparing the interim results in accordance with the Disclosure
Rules and Transparency Rules of the United Kingdom's Financial
Conduct Authority.
Our responsibility is to express a
conclusion on the interim financial statements in the interim
results based on our review. This report, including the conclusion,
has been prepared for and only for the company for the purpose of
complying with the Disclosure Rules and Transparency Rules of the
United Kingdom's Financial Conduct Authority and for no other
purpose. We do not, in giving this conclusion, accept or
assume responsibility for any other purpose or to any other person
to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
What a review of interim financial statements
involves
We conducted our review in
accordance with International Standard on Review Engagements (UK
and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the
Auditing Practices Board for use in the United Kingdom. A review of
interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting
matters, and applying analytical and other review
procedures.
A review is substantially less in
scope than an audit conducted in accordance with International
Standards on Auditing (UK and Ireland) and, consequently, does not
enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
We have read the other information
contained in the interim results and considered whether it contains
any apparent misstatements or material inconsistencies with the
information in the interim financial statements.
PricewaterhouseCoopers
LLP
Chartered Accountants
Uxbridge
17 November 2015
a) The maintenance and
integrity of the UK Mail Group Plc website is the responsibility of
the directors; the work carried out by the auditors does not
involve consideration of these matters and, accordingly, the
auditors accept no responsibility for any changes that may have
occurred to the interim financial statements since they were
initially presented on the website.
b) Legislation in the
United Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other
jurisdictions.