ingenuity at work

Transcription

ingenuity at work

ingenuity at work
HALF-YEAR REPORT 2015
FUTURE
WORKLOAD
BILLION SHOPPERS
USE ENVIRONMENTS WE SUPPORT
WE ARE A
TOP
5
CLEANING
PROVIDER
17,000
MEALS SERVED EACH DAY
ACROSS 120 SCHOOLS
INTERSERVE HALF-YEAR REPORT 2015
HIGHLIGHTS
1
HALF-YEAR RESULTS FOR THE SIX MONTHS TO 30 JUNE 2015
CONTINUED GROWTH AND
STRATEGIC MOMENTUM
OUR VISION IS TO REDEFINE THE FUTURE FOR PEOPLE AND PLACES.
EVERYTHING WE DO IS SHAPED BY OUR CORE VALUES.
HIGHLIGHTS
Results summary
H1 2015
H1 2014
Change
£1,595.1m
£1,374.8m
+16%
Headline total operating profit*
£60.3m
£53.7m
+12%
Profit before tax
£33.7m
£28.3m
+19%
30.3p
27.5p
+10%
Future workload
£8.3bn
£7.5bn
+11%
Interim dividend
7.9p
7.5p
+5%
Revenue
Headline earnings per share*
*The Interim Management Report includes a number of non-statutory measures to
reflect the impact of non-trading and non-recurring items. See note 12 to the condensed
consolidated financial statements for a reconciliation of these measures to their statutory
equivalents on page 29 and note 7 on page 26 for calculation of earnings per share.
CHIEF EXECUTIVE ADRIAN RINGROSE COMMENTED:
"We have made good progress in the first half of the year in
markets that offer both opportunities and challenges.
We have delivered volume growth across the board, and
strong profit performances in our Support Services, Equipment
Services and International Construction businesses.
Market conditions in UK Construction have remained challenging
although demand continues to strengthen and the expanded
future workload is encouraging.
Our focus on providing high-quality services for both new and
existing clients resulted in strong work-winning during the
period, with our future workload rising 11 per cent over the
12 months to June to stand at a record £8.3 billion.
We expect the premium to the National Minimum Wage
announced in the recent Budget to have an initial adverse
impact on margins in the UK Support Services segment of
£10-15 million in 2016, receding over the next few years
thereafter as the change is priced in to relevant contracts.
However, demand in our main markets continues to strengthen,
our financial position remains strong which, together with our
growing future workload, underpins the Board's confidence in
our positive outlook and the increase in the interim dividend
to 7.9 pence."
HIGHLIGHTS
2
HIGHLIGHTS
CONTENTS
REVENUE
HIGHLIGHTS 1
OUR MODEL IN ACTION 3
£1,595.1m +16%
PROFIT BEFORE TAX
£33.7m +19%
HEADLINE TOTAL
OPERATING PROFIT
INTERIM MANAGEMENT
REPORT
CHAIRMAN’S STATEMENT BUSINESS REVIEW 5
7
RESPONSIBILITY
STATEMENT14
INDEPENDENT
REVIEW REPORT
15
£60.3m +12%
FINANCIAL STATEMENTS 16
NOTES TO THE
FINANCIAL STATEMENTS 22
FUTURE WORKLOAD
DIRECTORS AND ADVISERS 31
£8.3bn +11%
INTERIM DIVIDEND
7.9p +5%
HEADLINE EARNINGS
PER SHARE
30.3p +10%
FOR FURTHER INVESTOR INFORMATION:
www.interserve.com/investor-centre
OUR MODEL IN ACTION
3
OUR MODEL IN ACTION
Our business model is designed to generate value by using our capabilities to their maximum effect. These examples
demonstrate the breadth of our activities and their impact on financial, social, knowledge and natural capital.
Principal outcomes
Create places
that benefit people
Deliver public service
in the public interest
Build more skills and
more opportunities
Generate a positive
environmental impact
Achieve
sustainable growth
INNOVATION AND TECHNOLOGY
DRIVES EDEN’S GROWTH
Read the full story on page 12
RMD SUPPORTS COMPLEX UAE
RING ROAD PROJECT
RENOVATION OF ROYAL MILITARY
ACADEMY SANDHURST
OUR MODEL IN ACTION
4
OUR MODEL IN ACTION CONTINUED
Principal outcomes
Create places
that benefit people
Deliver public service
in the public interest
Build more skills and
more opportunities
PROVIDING PROBATION SERVICES
FOR 40,000 PEOPLE A YEAR
Generate a positive
environmental impact
Achieve
sustainable growth
BUILDING OIL AND GAS
PIPELINES IN OMAN
DRIVING GROWTH IN THE UK
TRANSPORT SECTOR
INTERIM MANAGEMENT REPORT
CHAIRMAN'S STATEMENT
5
CHAIRMAN’S STATEMENT
INTERSERVE CONTINUED TO
PERFORM WELL IN THE FIRST
HALF OF 2015, DELIVERING
FURTHER REVENUE GROWTH
IN EACH PART OF OUR BUSINESS
STRATEGIC DEVELOPMENT
Interserve continued to perform
well in the first-half of 2015,
delivering further revenue growth
in each part of our business and
progressing our strategy of building
strong core businesses, capturing
related expansion opportunities
and growing internationally.
While the shape of the business has
evolved over the past year, with a
stronger presence in support services
derived from strategic growth in
both facilities management and
frontline services, our construction
and equipment services businesses
also continue to grow. Significant
developments in the period included:
the commencement of delivery of
probation services as part of the Ministry
of Justice’s Transforming Rehabilitation
programme; the integration of esg
(acquired in December 2014 to expand
our capabilities in the welfare and
skills sectors); and the expansion of our
frontline and FM services in Saudi Arabia.
We continue to invest in the business,
boosting our operational capacity and
scaling our back-office functions in
support of our future growth aspirations.
While the first-half results for the Group
are good, margin performance in UK
construction was below our mediumterm expectations due principally to
the impact of supply-chain volatility and
inflation, together with the pressures
on contract close-outs in the current
challenging contracting environment.
We won further work in the Energy from
Waste, health and education sectors and
were appointed as preferred bidder to
build a new complex at the Defence and
National Rehabilitation Centre at Stanford
Hall. With a growing order book we are
determined to maintain our historic
disciplines and sustain prudent margins
through the current demand cycle.
Our Middle East operations continued
to gain momentum, driven largely by
infrastructure investment and through
the extensions to our offering in which we
have invested in recent times. Revenues
and contribution to operating profit grew,
most notably in Equipment Services,
driven by major projects in national
development plans such as Qatar’s
‘Vision 2030’ and in anticipation of Expo
2020 in the UAE. International Support
Services grew strongly through our focus
on operational oil and gas services and
further development in our facilities
management activities. International
Construction also made good progress, in
particular through our role in two notable
retail developments in Dubai and Doha.
With respect to our other international
operations in Equipment Services,
the Far East and much of Asia-Pacific
remained buoyant, offsetting more
muted performances in the Americas
and Australia.
SUSTAINABILITY
As we continue to grow, we remain
mindful of the imperative to promote
our culture and values throughout
the business. The health and safety
of our employees is of paramount
importance and we pursue ambitious
continuous improvement targets. We
have made good progress in the first
half, substantially reducing the rate
of lost-time incidents. Our sustained
progress was recognised by the
Royal Society for the Prevention of
Accidents awarding us their Order of
Distinction and President’s Award.
Our commitments to developing our
people and enhancing the skill-base in
our sector were reflected in further
investments in training (including
both additional online functionality
and a new training school in Dubai),
together with growing the volume of
work experiences, apprenticeships and
graduate opportunities we offer.
Sustainability with regard to social,
natural, human and financial capital
is integral to our strategy and our
day-to-day operations. In May
we published our second annual
sustainability report, showing good
progress against our 2020 vision
(http://sustainabilities.interserve.com).
CHAIRMAN'S STATEMENT
6
CHAIRMAN’S STATEMENT CONTINUED
BOARD CHANGES
Following Les Cullen’s retirement at the
AGM after serving for over nine years,
Russell King has assumed the role of
Senior Independent Director (SID), in
which capacity he is leading the Board’s
plans in respect of my own succession
as previously announced.
PROSPECTS
The Board remains confident in
the Group’s market positioning and
encouraged by the broad range of workwinning opportunities to deliver further
growth for the remainder of this year.
The inflationary pressure created by rising
demand will continue to require careful
management, as will ongoing contracting
risk in an environment in which some
clients are grappling with their own
budgetary challenges. The unexpected
premium to the UK National Minimum
Wage announced in the recent Budget,
while being absorbed over time through
mitigating actions and contract pricing,
will present a new headwind from 2016.
Despite this temporary setback, our
prospects remain encouraging in the
medium term with each of our main
markets set to experience continued
demand growth in the coming years.
DIVIDEND
Reflecting our performance and
prospects, the Board has approved a
further increase in the dividend of 5 per
cent to 7.9 pence per share (H1 2014:
7.5 pence per share) which will be paid
on 23 October 2015 to shareholders on
the register at the close of business
on 18 September 2015.
40
OPERATING IN OVER
COUNTRIES
Lord Blackwell
Chairman
12 August 2015
CASE STUDY
PROVIDING PROBATION SERVICES
FOR 40,000 PEOPLE A YEAR
EARLIER THIS YEAR INTERSERVE MOBILISED ITS SEVEN-YEAR CONTRACT WITH THE MINISTRY OF JUSTICE (MOJ), VALUED AT
CIRCA £600 MILLION, TO PROVIDE PROBATION AND REHABILITATION SERVICES FOR LOW AND MEDIUM-RISK OFFENDERS IN
FIVE REGIONAL AREAS FROM FEBRUARY 2015 AS PART OF THE MOJ’S TRANSFORMING REHABILITATION (TR) PROGRAMME.
Our 2,000 probation staff manage services for some 40,000 low-to-medium risk offenders a year across five contract areas:
Cheshire & Greater Manchester; Hampshire & Isle of Wight; Humberside, Lincolnshire & North Yorkshire; Merseyside and
West Yorkshire.
We operate these contracts under Purple Futures, an
Interserve-led partnership, which includes the charities
Shelter and P3 and the social enterprise 3SC. This is the first
time business has worked with local specialist and voluntary
groups to provide support to offenders, to improve their life
chances on release and reduce reoffending rates.
From 1 May Purple Futures started providing 'through-thegate' services to help offenders reintegrate into society,
giving specialist support for those dealing with issues such
as substance abuse, homelessness and debt management
as well as providing education and employability services
from the final weeks in prison through to release and
resettlement into the community.
BUSINESS REVIEW
7
BUSINESS REVIEW
The Group continued to perform well in the first half of the
year with revenue and headline operating profit growth of
16 per cent and 12 per cent respectively. We won new work in
the period with an aggregate whole-life value of £2.0 billion,
increasing our future workload at 30 June by 11 per cent over
the corresponding date in 2014. Headline earnings per share
grew by 10 per cent.
Results summary
Revenue
H1 2015
H1 2014
Change
£1,595.1m £1,374.8m
+16%
of both public and private-sector organisations in the UK and
overseas. Operations in mainland Europe, which are managed
from the UK, are disclosed under Support Services UK.
Results summary
H1 2015
H1 2014
Change
– UK (consolidated revenue)
£933.1m
£808.5m
+15%
– International
(including share of associates)
£102.6m
£76.1m
+35%
Revenue
Headline total operating profit
£60.3m
£53.7m
+12%
Profit before tax
£33.7m
£28.3m
+19%
Contribution to total
operating profit
£44.0m
£37.1m
+19%
30.3p
27.5p
+10%
– UK
£40.0m
£33.9m
+18%
£8.3bn
£7.5bn
+11%
– International
£4.0m
£3.2m
+26%
Headline earnings per share
Future workload
DIVISIONAL REVIEW
Operating margin
We segment our results into three main areas of service –
Support Services, Construction and Equipment Services –
each of which is supported by central Group Services.
– UK
4.3%
4.2%
– International*
4.2%
4.3%
– UK
£6.2bn
£5.8bn
+7%
– International
(including share of associates)
£0.3bn
£0.1bn
+83%
SUPPORT SERVICES
Support Services focuses on the management and delivery of
outsourced operational activities including facilities management,
a broad range of process- and accommodation-related services
and services direct to the citizen. Our client base is comprised
Future workload
*Blended underlying margins of associates and subsidiaries
CASE STUDY
DRIVING GROWTH IN THE UK
TRANSPORT SECTOR
WE FURTHER STRENGTHENED OUR PRESENCE IN THE UK
TRANSPORT SECTOR THROUGH CONTRACT WINS AND
EXTENSIONS IN THE RAIL INDUSTRY.
We recently won a seven-year maintenance and cleaning
contract with Crossrail, a 118km railway line under
construction in and around London, which is due to start
running services in 2017.
We also secured a new seven-year contract to provide
cleaning and security services for London’s Docklands Light
Railway (DLR) on behalf of KeolisAmey Docklands. The
contract covers seven routes and 45 depots and supports
the 278,000 passengers that use the DLR every day.
This follows a two-year contract extension with
London Underground, which sees us continue to deliver
facilities services across 12 depots and 168 stations. Our
1,600-strong London Underground team clean
2,490 carriages and 685,000m2 of train floors every night,
and collect rubbish from 315km of track each week.
These contracts add to our significant transport
operations in Spain, covering the rail and aviation markets
for clients including Iberia, Alstom, Renfe and Aena.
BUSINESS REVIEW
BUSINESS REVIEW CONTINUED
Support Services UK
Support Services International
Support Services UK performed well, achieving revenue growth
of 15 per cent, increasing future workload by 7 per cent and
delivering incremental growth in the operating margin to
4.3 per cent compared with the first half of 2014.
Our principal focus is on the Middle East oil and gas industry
where we deliver project management, operational services
(such as supplies logistics, rig-moving, fabrication, maintenance
and turnaround services), education and training in the United
Arab Emirates (UAE), Qatar and Oman. We also provide a broad
range of facilities management services in sectors such as
hospitality, leisure, education, defence and retail.
During the period we developed further our portfolio of
private–sector clients, for instance in the transport sector
where we won a number of long-term contracts in the rail
sector with MTR Crossrail and KeolisAmey Docklands in addition
to a two-year contract extension to our existing contract with
London Underground. In aggregate, these contracts added circa
£100 million to our future workload.
We made good progress in the retail sector as well. We secured
a three-year, £35 million extension with B&Q, doubling the scale
of the cleaning service and adding catering to around a quarter
of the estate. We extended our relationship with Debenhams, in
which we have delivered facilities services across its UK stores
and offices for over 25 years, and mobilised our contract with
Sony Europe to manage the company’s estate in 27 countries.
Our public-sector business has evolved significantly in the past
12–18 months. With respect to facilities management, the main
changes relate to reductions in revenue from the loss in 2014
of the South East Regional Prime contract and the decrease
in size of the new MoD National Training Estate contract
compared to the previous arrangements.
In recent years we have, though, built capability in the provision
of frontline public services across healthcare, welfare-to-work,
skills and justice. This growing part of the business includes
Interserve Healthcare, Interserve Learning & Employment
(ILE), which was expanded following last year’s acquisition of
the Employment and Skills Group (esg) and Purple Futures,
which provides probation, rehabilitation and ‘through-the-gate’
services on behalf of the Ministry of Justice (MoJ).
Our frontline services businesses now employ some 5,000 staff
and generate annual revenues of over £200 million. While these
businesses currently operate in largely discrete markets, there
are many operational and development synergies we hope to
realise in the coming years as public-service commissioning
becomes more integrated and potentially devolved. The
recently announced pooling of budgets in the Greater
Manchester area, covering transport, housing, planning,
policing and public health is an early example of a context
in which we believe our breadth of capability could be highly
relevant to more 'place-focused' commissioning.
In recent years we have developed greater reach and capability
across the oil and gas services sector in the region, opening
up access to a wider pool of customers and pan-regional, as
well as national, opportunities. An example of this is a recent
oil and gas services contract with Petrofac in Oman, having
initially worked for this client solely in the UAE.
Our focus on servicing essential production facilities (as opposed
to supporting exploration), maintaining customers’ critical
assets and providing their staff with health and safety training
led to revenue (including our share of associates) growth
of 35 per cent year-on-year to £102.6 million (H1 2014:
£76.1 million). Contribution to total operating profit increased
by 26 per cent to £4.0 million (H1 2014: £3.2 million). Our future
workload is some 83 per cent greater at the half-year than
twelve months prior, reflecting a strong operational performance
and the successful mobilisation of contracts won in 2014.
Highlights during the period included winning fuel pipeline
construction and installation contracts with BP Khazzan,
Gulf Petrochemicals Services Company and RasGas, as well
as a seawater treatment works contract with Veolia Water.
Our facilities management businesses won contracts with
new clients including the Abu Dhabi Equestrian Club, the
Environment Agency of Abu Dhabi and secured further work
with IKEA in Qatar.
Our newly-established facilities management business in Saudi
Arabia mobilised its first contracts in the period to manage
services at the Information Technology and Communications
Complex (ITCC) and King Abdullah Financial District in Riyadh
for the Al Ra'idah Investment Company. We are also encouraged
by the prospects for our recently-launched joint venture with
the Rezayat Group (Interserve Rezayat) which adds significantly
to our delivery capability in the Kingdom.
8
BUSINESS REVIEW
9
CASE STUDY
BUILDING OIL AND GAS
PIPELINES IN OMAN
CONSTRUCTION
We provide advice, design, construction and fit-out services for
buildings and infrastructure. Our focus is on forming long-term
relationships, developing sector expertise and delivering repeat
business predominantly through framework agreements.
Results summary
H1 2015
H1 2014
Change
Revenue
– UK (consolidated revenue)
£500.7m
£432.6m
+16%
– International
(share of associates)
£130.3m
£99.4m
+31%
Contribution to total
operating profit
£10.2m
£12.3m
-17%
– UK
£5.3m
£8.0m
-34%
– International
£4.9m
£4.3m
+13%
Operating margin
– UK
1.1%
1.9%
– International*
3.3%
2.4%
– UK
£1.7bn
£1.4bn
+22%
– International
(share of associates)
£0.2bn
£0.2bn
+2%
Future workload
*Underlying margins of associates
Construction UK
TOCO, OUR OMAN-BASED OIL AND GAS ENGINEERING
BUSINESS, RECENTLY WON CONTRACTS TO BUILD
TWO MAJOR PIPELINES – A 227KM TWO-WAY MULTIPRODUCT PIPELINE FOR THE OMAN OIL REFINERIES
AND PETROLEUM INDUSTRIES COMPANY (ORPIC)
AND A 60KM GAS PIPELINE FOR BP.
The ORPIC pipeline will run from the refinery in Sohar
to a storage terminal in the eastern coastal city of
Seeb. The pipeline will reduce the number of fuel
tanker journeys in and around the capital, Muscat,
by 70 per cent, helping to cut traffic congestion
and carbon emissions.
TOCO is also building a 36-inch carbon steel pipeline
which will be used to transport sales gas from BP’s
Khazzan processing facility to the existing Omani gas
pipeline where it will be prepared for export. The
project is due to complete by the end of 2016.
Market demand continued to strengthen in the period, driving
revenue growth of 16 per cent. The challenges of the current
trading environment, however, combined with marked supplier
cost inflation, resulted in margins dipping below our mediumterm expected range at 1.1 per cent. Although tender pricing is
improving and the risks associated with supply-chain insolvency
and pricing inflation are beginning to recede, we expect
margins to remain tight in the short term.
Notwithstanding the challenges outlined above, we remain
confident in our growth strategy, which blends our regional
presence in repeat business and frameworks with sector
expertise in health, education, water, energy from waste
(EfW) and selected commercial developments. Work-winning
in the period was strong, leading to further growth in our
future workload to a record £1.7 billion (H1 2014: £1.4 billion).
Significant items within the additional workload included our
appointment as preferred bidder to build a new £200 million
complex at the Defence and National Rehabilitation Centre at
Stanford Hall, further wins in the EfW market (in East Lothian
and Rotherham) and a contract to build seven secondary
schools across Hertfordshire, Luton and Reading.
BUSINESS REVIEW
10
Construction International
Our performance in the Middle East continued to improve with
contribution to operating profit in our associate businesses
increasing by 13 per cent to £4.9 million (H1 2014: £4.3
million) and margins strengthening to 3.3 per cent (H1 2014:
2.4 per cent). Future workload remained stable at £0.2 billion
(H1 2014: £0.2 billion).
Demand continued to strengthen across the region:
strategic development plans such as Qatar’s ‘Vision 2030’,
the UAE’s plans for Expo 2020 and the ongoing need
for infrastructure development to keep pace with rapid
population growth are all gaining traction and stimulating
activity in our market.
Work-winning during the period included projects to expand
the Doha West sewage treatment plant for the Marubeni
Corporation, to build a seawater pumping station for a
desalination plant in Doha for the Toya Thai Corporation
and an executive jet terminal at Al Maktoum International
Airport for Dubai Aviation City Corporation. We also
secured further works with clients such as Dubai’s Road and
Transport Authority, Siemens, Petron Gulf and the British
School Muscat.
EQUIPMENT SERVICES
Our Equipment Services business (RMD Kwikform) operates
globally, designing, hiring and selling formwork and falsework
solutions for infrastructure and building projects.
Results summary
Revenue
Contribution to
total operating profit
Operating margin
Change
+15%
£18.6m
£14.0m
+33%
17.9%
15.4%
We continued to invest in rising markets, albeit at a more
modest pace than in 2014, with net capex of £10.4 million
(2014: £14.7 million). Over the last 18 months we have invested
a cumulative £51 million in stock, working capital and net
capex; however, we expect the rate of expansion in the asset
base to continue to ease in the second half of this year.
RENOVATION OF ROYAL MILITARY
ACADEMY SANDHURST
INTERSERVE IS CARRYING OUT SPECIALIST REPAIRS TO SANDHURST’S GRADE II LISTED
ROYAL MILITARY ACADEMY FOR THE DEFENCE INFRASTRUCTURE ORGANISATION (DIO).
Passing-out parades – attended by members of the
Royal Family – for officers who have completed their
training are being held in front of the building while the
project is underway. For these occasions, in order to
conceal scaffolding, a specialist fabric façade has been
placed over the entire front of the building, over-printed
with a life-size image of how it will look when work is
completed in May 2016.
H1 2014
£90.9m
Overall progress was excellent as the business benefited
from our fleet investment in improving global infrastructure
markets. Revenue grew by 15 per cent and contribution to
total operating profit increased by 33 per cent to £18.6 million
reflecting strong pricing and incremental utilisation growth.
CASE STUDY
The £18 million renovation project, which Interserve is
working on in joint venture with Scottish & Southern Energy
Contracting, is being carried out while the building remains
occupied. It involves the replacement of roof slates and
the safe removal of around 3,000m2 of asbestos from roof
voids. It also involves the deconstruction and rebuilding
of 58 chimneys, which requires the use of 1,700 tonnes of
scaffolding and would reach 3,200km if laid end to end.
H1 2015
£104.2m
BUSINESS REVIEW
CASE STUDY
RMD SUPPORTS COMPLEX UAE
RING ROAD PROJECT
A WIDE RANGE OF RMD KWIKFORM’S FORMWORK
AND SHORING EQUIPMENT WAS USED BY SPECIALIST
SUB-CONTRACTORS CHINA CIVIL ENGINEERING AND
CONSTRUCTION CORPORATION AND STRUCTCON TO
BUILD THE $1 BILLION SHARJAH RING ROAD PROJECT
IN THE UNITED ARAB EMIRATES.
With a local base in Sharjah, RMD Kwikform engineers
were able to support the entire project, providing
technical designs and site assistance during each
phase of construction.
In order to meet the curvature and weight challenges
of the structure above the roundabout’s gantry, the
team used standard components from its fleet to
build a simple and cost-effective solution without
the need to construct individual items. RMD’s local
team designed a flexible yet robust support system
that ensured the traffic flow under the bridge was not
disrupted, while keeping the site team safe.
In Asia-Pacific, we delivered strong performances in Hong
Kong and the Philippines, driven by increased investment in
infrastructure projects, including the Kowloon Rail Terminus,
the Hong Kong Macau Bridge and the Manila Bay Development.
Demand in Australasia, however, remains muted following the
conclusion in 2014 of a series of major mining-related projects
with no current visibility of future capacity expansion.
We continued to see strong growth in the Middle East, benefiting
from increased demand in Qatar where a number of large-scale
infrastructure projects are now underway, including the East
West Highway project where we are supplying equipment on
several bridge structures. Demand also continued to grow in
the UAE, where work has been delivered on the Dubai Opera
House, the Saadyatt Resort in Abu Dhabi and on the new
Dubai-Abu Dhabi highway. In Saudi Arabia, we started work on
a new 14-storey, 65,000m2 transport hub being built in Mecca.
The UK continued to benefit from increasingly confident
construction markets, with a significant pipeline of road
projects offering potential to replace work on more mature
schemes such as Crossrail. Work continues on sizeable rail
improvement projects in Reading and on the Stockley
Viaduct project near Heathrow airport.
GROUP SERVICES
All central costs and income, including those related to our
financing, central bidding and asset management activities
are disclosed within the Group Services segment. This segment
now also includes ‘Investments’ which was formerly reported
separately. Following the disposal of the majority of our PFI
portfolio it is no longer judged individually material.
Group Services’ costs in H1 2015 were £12.5 million (H1 2014:
£9.7 million), reflecting an increased investment in backoffice capabilities, IT infrastructure, people development and
communications. We also started investing in the construction
of a new Midlands office where we will consolidate our backoffice activities.
11
BUSINESS REVIEW
NET DEBT AND OPERATING CASHFLOW
Net debt at 30 June was £297.9 million (YE 2014: £268.9 million),
the movement primarily reflecting our continuing investments
in net capital expenditure (H1 2015: £28.9 million) and working
capital (H1 2015: £20.4 million).
£million
Total operating profit before exceptional
items and amortisation of intangible assets
Depreciation and amortisation
Net capital expenditure
Gain on disposal of property,
plant and equipment
Other
Working capital movement
Gross operating cash flow
2015
2014
60.3
21.4
(28.9)
53.7
18.8
(24.9)
(6.7)
(7.1)
(20.4)
18.6
(5.3)
(0.9)
(36.5)
4.9
The net working capital outflow of £20.4 million (H1 2014:
£36.5 million outflow) reflects a combination of continuing
revenue growth, particularly in Middle East Equipment
Services, cash outflow in UK Construction and cash inflow
in International Support Services.
Capital expenditure continued to be significant at £28.9 million
in the period (H1 2014: £24.9 million). This includes continuing
investment in the Equipment Services fleet, particularly in the
Middle East. This net investment is expected to continue into
the second half of the year but at a reduced rate. Also notable
is capex of £7.0 million as the first stage of investment in a new
UK Midlands office.
PENSIONS
During the first half of 2015 we concluded negotiations on the
triennial valuation of the Interserve Pension Scheme based
on the position at 31 December 2014. Since the last time this
exercise was carried out we have undertaken considerable
efforts both to de-risk the liability position, notably via the
2014 pension buy-in, and increase the asset strength of the
scheme, including the one-off contribution (in 2013) of
£55 million of PFI assets. The effect of these actions is
reflected in an IAS 19 pension asset of £34 million in our
June 2015 balance sheet (June 2012: £93 million deficit)
and a much reduced actuarial deficit of £64 million as at
December 2014 (December 2011: £150 million deficit).
We have agreed with the Pension Scheme Trustees that
the existing deficit recovery payments of £12 million per
annum, indexed for inflation, will continue until the next
triennial valuation.
CASE STUDY
INNOVATION AND
TECHNOLOGY DRIVES
EDEN’S GROWTH
INTERSERVE’S SCHOOL CATERING BUSINESS EDEN
FOODSERVICE (EDEN), WHICH SUPPLIES MEALS TO
MORE THAN 350 SCHOOLS ACROSS THE UK, IS USING
TECHNOLOGY AND INTERACTIVE EVENTS TO HELP
PUPILS LEARN MORE ABOUT WHAT THEY EAT AND
INCREASE THE NUMBER OF PUPILS EATING HEALTHY
MEALS AT SCHOOL.
In 2014 Eden rolled out its ‘Feedback’ initiative,
which allows pupils to provide reviews of its school
meals via their mobile phones, across 43 secondary
schools. As a result of the initiative, which gives
pupils the chance to win prizes, Eden experienced
a 25 per cent uplift in children eating meals at
participating schools and won the Catey’s 2015 ‘Best
Use of Technology’ award.
Eden’s nutritionists and chefs also visit schools to help
pupils better understand food, cooking and health,
with valuable feedback also provided through menu
surveys and pupil focus groups.
Eden sources all of its meals locally using sustainable
produce and ingredients that are traceable from
farm to fork.
12
BUSINESS REVIEW
13
KEY PERFORMANCE INDICATORS (KPIs)
We use a set of financial and non-financial KPIs to measure
critical aspects of the Group’s performance. These KPIs are
aligned with:
WORKLOAD (EXCLUDING ASSOCIATES) FOR NEXT YEAR1
2015
56.6%
50.2%
2014
• A
chieving the Group’s strategic objectives of delivering a
substantial future workload and generating strong earnings
growth and cash conversion.
Target: At the half-year: visibility over 50% of next year’s
consolidated revenue (consensus)
• T
he Group’s key behavioural goals, specifically regarding
our employees and the health and safety of everyone
working both directly and indirectly for Interserve.
HEADLINE EARNINGS PER SHARE (EPS)
30.3p
2015
OUTLOOK
Looking ahead, our main markets continue to exhibit
encouraging demand characteristics driven by demographic
change, infrastructure investment and ongoing client need for
business process efficiency. Notwithstanding this encouraging
backdrop, the impact from April 2016 of the premium to the
National Minimum Wage announced in the recent Budget will
increase employment costs in UK Support Services relating to
more than 10,000 colleagues working in a multitude of contracts
with an average duration of four years. Our preliminary estimate
of the incremental cost in 2016 is in the region of £10-15 million.
We are considering a range of mitigating actions and have begun
discussions with our clients accordingly. Until contract pricing
can be adjusted for this significant change we will be unable to
recover all of this additional cost. We will have better visibility
of this over time, as our mitigating actions are implemented.
Against a backdrop of generally improving market conditions in
most segments, we reiterate our full-year guidance for further
progress in 2015, driven by our focus on markets with strong
long-term growth drivers and the successful integration of
our recent acquisitions. Whilst risks in the current challenging
contracting environment will continue to require careful
management, the Board remains confident in the Group’s
market positioning and the broad range of work-winning
opportunities we are able to pursue in seeking to deliver
further sustainable growth in the medium term.
27.5p
2014
Target: Double headline EPS over the five years to 2015
OPERATING CASH CONVERSION 3-YEAR ROLLING AVERAGE2
2015
29.9%
2014
61.4%
Target: 100% over medium term
ANNUALISED STAFF TURNOVER3
2015
2014
16.2%
9.8%
Target: Below 10%
ANNUALISED ALL-LABOUR ACCIDENT INCIDENCE RATE4
(per 100,000 workforce)
2015
2014
164
224
Target: Halve the rate by 2020 from a 2010 base5
1.
uture workload comprises forward orders and pipeline. Forward orders are those
F
for which we have secured contracts in place and pipeline covers contracts for
which we are in bilateral negotiations and on which final terms are being agreed.
2.
See note 12 for a definition of operating cash conversion.
3.
S taff turnover measures the proportion of managerial, technical and office-based
staff leaving voluntarily over the course of the period. This is measured on a
12-month rolling basis.
4.
Includes Interserve, its subsidiaries, associates and sub-contractors.
5.
2010 base: 377.
BUSINESS REVIEW / RESPONSIBILITY STATEMENT
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and uncertainties which could have a
material impact upon the Group’s performance, together with
the mitigation strategies adopted, have been reviewed and
have not changed significantly from those set out on pages 30
and 31 of the Strategic Report included in the Group’s 2014
Annual Report and Financial Statements.
These risks and uncertainties arise from:
• F
ailure to win new or sufficiently profitable contracts in
our chosen markets or to complete those contracts with
sufficient profitability, due to adverse changes in the
business, economic and political environment.
• T
he termination or unsatisfactory execution of
major contracts.
• A
breakdown of the relationships in the businesses in
which we do not have overall control.
• Failure to recruit or retain key people.
• Failure to manage health and safety adequately.
• T
he financial risks discussed in the Financial Review
on pages 42 to 47 of the Group’s 2014 Annual Report
and Financial Statements.
• D
amage to reputation resulting from issues arising
within contracts, the management of our business or the
behaviour of our employees.
RESPONSIBILITY
STATEMENT
A list of current directors and their functions is maintained
on the Group website: www.interserve.com.
The directors confirm to the best of their knowledge:
a) the condensed set of financial statements has been
prepared in accordance with IAS 34 as adopted by the
European Union;
b) the interim management report includes a fair review of the
important events during the first six months and description
of the principal risks and uncertainties for the remaining
six months of the year, as required by DTR 4.2.7R of the
Disclosure and Transparency Rules of the Financial Conduct
Authority (DTR); and
c) the interim management report includes a fair review of
the information required by DTR 4.2.8R.
By order of the Board
• E
nvironmental change which could have uncertain
implications for our business and for many of our clients.
Adrian Ringrose Tim Haywood
Chief Executive Group Finance Director
The Group continues to have no material exposure to currency
risks. Whilst it does not trade in commodities, the Group
operates in countries where their economies depend upon
commodity extraction and are therefore subject to volatility in
commodity prices. The Group’s principal businesses operate in
countries which we regard as politically stable.
12 August 2015
AUDITOR
Grant Thornton UK LLP has been the Group’s auditor since
2014. Reappointment will be subject to approval by the
shareholders at the next general meeting.
14
INDEPENDENT REVIEW REPORT
Independent review report
to the members of Interserve Plc
Introduction
We have reviewed the condensed set of financial statements in the half-yearly financial report of Interserve Plc for the six months
ended 30 June 2015 which comprises the Condensed Consolidated Income Statement, the Condensed Consolidated Statement
of Comprehensive Income, the Condensed Balance Sheet, the Condensed Consolidated Statement of Changes in Equity, the
Condensed Consolidated Statement of Cash Flows and the related notes. We have read the other information contained in the halfyearly financial report which comprises only the Chairman's Statement and Business Review and considered whether it contains any
apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company’s members, as a body, 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'.
Our review work has been undertaken so that we might state to the Company’s members those matters we are required to state
to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company and the Company’s members as a body, for our review work, for this
report, or for the conclusion we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with International Financial
Reporting Standards as adopted by the European Union. The condensed set of financial statements included in this half-yearly
financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as
adopted by the European Union.
Our responsibility
Our responsibility is to express a conclusion on the condensed set of financial statements in the half-yearly financial report based
on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor of the Entity'. A review of interim financial information
consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical
and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International
Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of
all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30 June 2015 is 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 and
Transparency Rules of the United Kingdom's Financial Conduct Authority.
Grant Thornton UK LLP
Auditor
London
12 August 2015
15
FINANCIAL STATEMENTS
16
Unaudited condensed consolidated income statement
For the six months ended 30 June 2015
Six months ended 30 June 2015
Before
exceptional
items and
amortisation
of acquired
intangible
assets
£million
Exceptional
items and
amortisation
of acquired
intangible
assets
£million
1,804.4
–
Six months ended 30 June 2014
Year ended 31 December 2014
Total
£million
Before
exceptional
items and
amortisation
of acquired
intangible
assets
£million
Exceptional
items and
amortisation
of acquired
intangible
assets
£million
Total
£million
Before
exceptional
items and
amortisation
of acquired
intangible
assets
£million
1,804.4
1,565.5
–
1,565.5
3,305.3
Exceptional
items and
amortisation
of acquired
intangible
assets
£million
Total
£million
Continuing operations
Revenue including share of
associates and joint ventures
Less: Share of associates
and joint ventures
Consolidated revenue
Cost of sales
(209.3)
1,595.1
(1,393.3)
–
–
(209.3)
1,595.1
– (1,393.3)
(190.7)
–
(190.7)
(392.3)
1,374.8
–
1,374.8
2,913.0
(1,221.8)
–
(1,221.8)
(2,583.7)
– 3,305.3
–
–
(392.3)
2,913.0
– (2,583.7)
Gross profit
201.8
–
201.8
153.0
–
153.0
329.3
–
329.3
Administration expenses
(152.1)
–
(152.1)
(106.0)
–
(106.0)
(228.7)
–
(228.7)
Amortisation of acquired
intangible assets
–
(15.4)
(15.4)
–
(10.2)
(10.2)
–
(24.4)
Exceptional items (note 4)
–
(2.8)
(2.8)
–
(11.7)
(11.7)
–
(19.8)
(19.8)
(152.1)
(18.2)
(170.3)
(106.0)
(21.9)
(127.9)
(228.7)
(44.2)
(272.9)
Operating profit
49.7
(18.2)
31.5
47.0
(21.9)
25.1
100.6
(44.2)
56.4
Share of result of associates
and joint ventures
10.6
10.6
6.7
–
6.7
16.6
–
–
–
–
Total administration expenses
Amortisation of acquired
intangible assets
–
–
(0.1)
(0.1)
Total share of result of
10.6
(0.1)
10.5
6.7
Total operating profit
60.3
(18.3)
42.0
53.7
–
2.2
2.0
–
Investment revenue
2.2
Finance costs
(10.5)
Profit before tax
52.0
Tax (charge)/credit (note 5)
Profit for the period
(10.5)
(5.5)
(18.3)
33.7
50.2
3.3
(4.4)
(9.6)
44.3
(15.0)
29.3
43.8
(15.0)
(7.7)
–
(21.9)
–
–
–
(0.1)
(24.4)
16.6
(0.1)
6.7
16.6
(0.1)
16.5
31.8
117.2
(44.3)
72.9
2.0
5.0
(5.5)
(16.0)
(21.9)
28.3
106.2
4.3
(5.3)
40.6
(17.6)
28.8
38.0
(17.6)
0.5
2.6
29.3
40.6
–
5.0
–
(16.0)
(44.3)
61.9
(18.7)
6.7
(12.0)
23.0
87.5
(37.6)
49.9
20.4
83.0
(37.6)
45.4
2.6
4.5
23.0
87.5
Attributable to:
Equity holders of the parent
Non-controlling interests
0.5
44.3
–
(15.0)
Six months ended
30 June 2015
pence
–
(17.6)
–
(37.6)
4.5
49.9
Six months ended
30 June 2014
pence
Year ended
31 December 2014
pence
Earnings per share (note 7)
Basic
19.9
14.7
32.2
Diluted
19.8
14.6
31.7
17
Unaudited condensed consolidated
statement of comprehensive income
Six months ended
30 June 2015
£million
Six months ended
30 June 2014
£million
Year ended
31 December 2014
£million
29.3
23.0
49.9
Actuarial gains/(losses) on defined benefit pension schemes
30.9
(2.8)
(15.7)
Deferred tax on above items taken directly to equity (note 5)
(6.2)
0.6
3.1
24.7
(2.2)
(12.6)
(8.9)
(8.6)
12.8
1.8
(6.1)
Items that will not be reclassified subsequently to profit or loss:
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations
Gains/(losses) on cash flow hedging instruments (excluding joint ventures)
Deferred tax on above items taken directly to equity (note 5)
Net impact of Items relating to joint-venture entities
Other comprehensive income/(expense) net of tax
Total comprehensive income
–
–
5.6
(2.0)
(9.5)
(1.3)
11.6
(16.6)
(16.0)
28.0
8.1
(18.2)
15.4
37.4
4.8
65.3
36.9
2.2
60.7
0.5
2.6
4.6
37.4
4.8
65.3
Attributable to:
Equity holders of the parent
18
Unaudited condensed consolidated balance sheet
At 30 June 2015
30 June 2015
£million
30 June 2014
£million
31 December 2014
£million
401.4
Non-current assets
Goodwill
425.2
387.1
Other intangible assets
100.7
115.3
123.1
Property, plant and equipment
206.5
171.7
195.3
Interests in joint-venture entities
38.0
22.9
42.7
Interests in associated undertakings
81.6
73.0
77.2
Retirement benefit surplus (note 11)
34.3
–
–
–
3.6
–
886.3
773.6
839.7
49.3
41.9
48.6
Trade and other receivables
775.3
690.9
679.4
Cash and deposits
108.2
120.7
82.1
932.8
853.5
810.1
1,819.1
1,627.1
1,649.8
Deferred tax asset
Current assets
Inventories
Total assets
Current liabilities
Bank overdrafts
Trade and other payables
Current tax liabilities
Short-term provisions
Net current assets
(8.1)
(0.8)
(5.5)
(825.2)
(769.9)
(748.7)
(2.7)
(1.2)
(1.0)
(26.2)
(24.1)
(29.2)
(862.2)
(796.0)
(784.4)
70.6
57.5
25.7
Non-current liabilities
(397.2)
(362.2)
(344.7)
(17.2)
(13.8)
(14.8)
Long-term provisions
(40.7)
(26.1)
(19.5)
Borrowings
Retirement benefit obligation (note 11)
Deferred tax liabilities
Total liabilities
Net assets
(7.0)
(0.5)
-
(4.8)
(2.0)
(462.1)
(402.6)
(385.8)
(1,324.3)
(1,198.6)
(1,170.2)
494.8
428.5
479.6
Equity
Share capital
Share premium account
Capital redemption reserve
Merger reserve
14.5
14.4
14.4
116.5
115.3
115.3
0.1
0.1
0.1
121.4
121.4
121.4
Hedging and revaluation reserve
11.9
(5.0)
19.5
Translation reserve
26.1
13.7
35.0
Investment in own shares
(3.0)
(2.7)
(3.0)
Retained earnings
195.4
160.1
165.3
Equity attributable to equity holders of the parent
482.9
417.3
468.0
11.9
11.2
11.6
494.8
428.5
479.6
Total equity
19
statement of changes in equity
Share
Share
capital premium
£million £million
Capital
redemption
reserve
£million
Merger
reserve1
£million
Hedging
and
revaluation
reserve2
£million
Translation
reserve
£million
Investment
in own
shares3
£million
Noncontrolling
interests
£million
Total
£million
370.3
12.9
115.0
0.1
49.0
2.4
22.3
-
-
-
-
-
-
Other comprehensive income
-
-
-
-
(7.4)
-
-
-
-
(7.4)
Dividends paid (note 6)
-
-
-
-
-
-
1.5
0.3
-
72.4
-
-
-
-
74.2
-
74.2
-
-
-
-
-
-
0.2
0.3
0.5
-
0.5
Balance at 31 December 2013
Shares issued
Company shares used to settle
share-based payments
(2.9)
Retained
earnings
£million
Attributable
to equity
holders of
the parent
£million
161.6
360.4
9.9
-
20.4
20.4
2.6
(8.6)
-
(2.2)
(18.2)
(8.6)
-
18.2
2.2
2.6
4.8
-
(20.8)
(20.8)
(1.3)
(22.1)
-
23.0
(18.2)
-
-
-
-
-
-
-
0.8
0.8
Transactions with owners
1.5
0.3
-
72.4
-
-
0.2
(19.7)
54.7
(1.3)
53.4
Balance at 30 June 2014
(2.7)
Share-based payments
(5.0)
13.7
-
0.8
14.4
115.3
0.1
121.4
160.1
417.3
11.2
428.5
-
-
-
-
-
-
-
25.0
25.0
1.9
26.9
-
-
-
-
24.5
21.3
-
(12.3)
33.5
0.1
33.6
-
-
-
-
24.5
21.3
-
12.7
58.5
2.0
60.5
-
-
-
-
-
-
-
(10.7)
(10.7)
(1.6)
(12.3)
Purchase of Company shares
-
-
-
-
-
-
(1.3)
-
-
-
-
-
-
1.0
-
-
-
-
-
-
-
-
-
-
-
-
-
(0.3)
(3.0)
14.4
115.3
0.1
121.4
19.5
35.0
-
-
-
-
-
-
-
-
-
-
(7.6)
-
-
-
-
(7.6)
-
-
-
-
-
Balance at 31 December 2014
(1.3)
-
(1.3)
(0.4)
0.6
-
0.6
3.6
3.6
-
(7.5)
(7.8)
(1.6)
3.6
(9.4)
165.3
468.0
11.6
479.6
-
28.8
28.8
0.5
29.3
(8.9)
-
24.6
8.1
-
8.1
(8.9)
-
53.4
36.9
0.5
37.4
-
-
(22.2)
(22.2)
(0.2)
(22.4)
0.1
1.2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Shares issued
-
0.1
1.2
-
-
-
-
Balance at 30 June 2015
14.5
116.5
0.1
121.4
11.9
26.1
(3.0)
(1.1)
1.3
-
-
-
(1.1)
-
1.3
(1.1)
(23.3)
(22.0)
(0.2)
(22.2)
195.4
482.9
11.9
494.8
1
The £121.4 million merger reserve represents £16.4 million premium on the shares issued on the acquisition of Robert M. Douglas Holdings Plc in 1991, £32.6 million premium on the
shares issued on the acquisition of MacLellan Group Plc in 2006 and £72.4 million premium on the shares placed on the acquisition of Initial Facilities in 2014.
2
The hedging and revaluation reserve includes £16.1 million relating to the revaluation of available-for-sale financial assets within the joint ventures (£27.6 million at December 2014
and £5.4 million at 30 June 2014).
3
The investment in own shares reserve represents the cost of shares in Interserve Plc held by the trustees of the How Group, Bandt and Interserve Employee Benefit Trusts. The
market value of these shares at 30 June 2015 was £5.5 million (£4.8 million at 31 December 2014 and £6.0 million at 30 June 2014).
20
statement of cash flows
Six months ended
30 June 2015
£million
Six months ended
30 June 2014
£million
Year ended
31 December 2014
£million
42.0
31.8
72.9
15.4
10.2
24.4
1.4
1.2
3.7
20.0
17.6
35.6
0.5
0.5
1.4
(8.1)
(10.1)
(18.2)
(10.5)
(6.7)
(16.5)
Operating activities
Adjustments for:
Amortisation of acquired intangible assets
Amortisation of capitalised software development
Depreciation of property, plant and equipment
Other non-cash exceptional items
Pension payments in excess of income statement charge
Share of results of associates and joint-venture entities
(Credit)/Charge relating to share-based payments
(1.0)
1.0
3.4
Gain on disposal of plant and equipment – hire fleet
(6.6)
(5.2)
(12.1)
Gain on disposal of plant and equipment – other
Operating cash flows before movements in working capital
(0.1)
53.0
(0.1)
40.2
(0.1)
94.5
Increase in inventories
(1.7)
(8.5)
(13.4)
Increase in receivables
(99.0)
(96.2)
(73.6)
Increase in payables
80.3
68.2
33.7
Cash generated by operations before changes in hire fleet
32.6
3.7
41.2
(20.4)
(25.0)
(47.0)
8.4
7.5
16.7
Cash generated by operations
20.6
(13.8)
10.9
Taxes paid
(2.7)
(6.7)
(10.2)
Net cash from/(used in) operating activities
17.9
(20.5)
0.7
Capital expenditure – hire fleet
Proceeds on disposal of plant and equipment – hire fleet
Investing activities
Interest received
2.2
2.0
4.7
Dividends received from associates and joint ventures
4.5
4.8
17.8
Proceeds on disposal of plant and equipment - non-hire fleet
0.5
0.1
0.9
Capital expenditure – non-hire fleet
Purchase of business
Investment in joint-venture entities
Receipt of loan repayment – Investments
Net cash generated in investing activities
(17.4)
(4.1)
(14.3)
(7.5)
(24.9)
(226.5)
(243.7)
(3.1)
(10.4)
0.3
0.3
(229.9)
(255.3)
21
statement of cash flows continued
Six months ended
30 June 2015
£million
Six months ended
30 June 2014
£million
Year ended
31 December 2014
£million
Financing activities
Interest paid
(10.5)
(5.4)
(16.0)
Dividends paid to equity shareholders
(22.2)
(20.8)
(31.5)
Dividends paid to minority shareholders
Proceeds from issue of shares and exercise of share options
(0.2)
1.3
(1.3)
(2.9)
74.2
75.2
Purchase of own shares
–
–
Proceeds from US private placement
–
207.2
207.2
52.5
65.0
47.5
Increase in bank loans
Movement in obligations under finance leases
–
(0.1)
(1.3)
(0.1)
Net cash used in financing activities
20.9
318.8
278.1
Net increase in cash and cash equivalents
24.5
68.4
23.5
Cash and cash equivalents at beginning of period
76.6
52.3
52.3
Effect of foreign exchange rate changes
(1.0)
(0.8)
Cash and cash equivalents at end of period
0.8
100.1
119.9
76.6
108.2
120.7
82.1
Cash and cash equivalents comprise
Cash and deposits
Bank overdrafts
(8.1)
100.1
(0.8)
119.9
(5.5)
76.6
Reconciliation of net cash flow to movement in net debt
Net increase in cash and cash equivalents
Proceeds from US private placement
Increase in bank loans
Movement in obligations under finance leases
Change in net debt resulting from cash flows
24.5
–
(52.5)
–
(28.0)
68.4
23.5
(207.2)
(207.2)
(65.0)
(47.5)
0.1
(203.7)
Effect of foreign exchange rate changes
(1.0)
(0.8)
Change in net debt during the period
(29.0)
(204.5)
0.1
(231.1)
0.8
(230.3)
Net debt – opening
(268.9)
(38.6)
(38.6)
Net debt – closing
(297.9)
(243.1)
(268.9)
NOTES TO THE FINANCIAL STATEMENTS
Notes to the unaudited interim financial statements
1. General information
Interserve Plc (the Company) is a company incorporated in the United Kingdom. The half-year results and condensed consolidated
financial statements for the six months ended 30 June 2015 (the interim financial statements) comprise the results of the Company
and its subsidiaries (together referred to as the Group) and the Group's interest in joint ventures and associates.
The directors have considered the Group's financial position with reference to latest forecasts and the actual performance for
the half-year period. Whilst the current economic environment continues to be uncertain, the directors believe that the Group
has adequate resources to continue in operational existence for the foreseeable future, noting in particular that: the majority of
the Group's revenue is derived from long-term contracts; the Group had visibility of £2.0 billion of work scheduled for 2016 at the
balance sheet date; and the Group has access to committed debt facilities of $350 million with a weighted average maturity of
nine years and £300 million until at least 2019. Accordingly, the Group continues to adopt the going concern basis in preparing the
interim financial statements.
A copy of the statutory accounts for the year ended 31 December 2014 has been delivered to the Registrar of Companies. The
auditors' report on those accounts was unqualified and did not contain statements made under sections 498(2) or (3) of the
Companies Act 2006.
The interim financial statements for the six months ended 30 June 2015 have been reviewed by Grant Thornton UK LLP but have
not been audited (see page 15).
2. Accounting policies and principal risks
The interim financial statements have been prepared in accordance with IAS 34 Interim financial reporting, the recognition and
measurement criteria of International Financial Reporting Standards (IFRSs) as adopted by the European Union and the disclosure
requirements of the Listing Rules. The financial information set out in this interim report does not constitute statutory accounts as defined
in section 434 of the Companies Act 2006. The interim financial statements do not include all information required for full annual financial
statements and should be read in conjunction with the Annual Report and Financial Statements for the year ended 31 December 2014.
The accounting policies and methods of computation followed in the interim financial statements are consistent with those
published in the Group's Annual Report and Financial Statements for the year ended 31 December 2014 and which are available on
the Group's website at www.interserve.com.
In addition, the accounting policies used are consistent with those that the directors intend to use in the Annual Report and
Financial Statements for the year ending 31 December 2015. Taxes on income in the interim period are accrued using the tax rate
that would be applicable to expected total annual earnings.
With effect from 1 January 2015, the Company will prepare its financial statements in accordance with Financial Reporting Standard
(FRS) 101 – Reduced disclosure framework. The application of FRS 101 is not expected to have a significant impact on the Company.
At the date of authorisation of these interim financial statements the following standards and interpretations were in issue but not
yet effective, and therefore have not been applied in these interim financial statements:
IFRS 9 Financial instruments
The impact of the sections of IFRS 9 currently issued will result in the Group's project finance interests that are currently treated
by the joint-venture companies as being available-for-sale, being treated as a debt carried at 'fair value through profit or loss' or
'amortised cost'. As a result, movements in the fair value will no longer be taken to 'other comprehensive income'.
IFRS 15 Revenue from contracts with customers
The new standard will replace IAS 18 Revenue and IAS 11 Construction contracts. It will become effective for accounting periods
on or after 1 January 2017, at the earliest. In advance of its adoption, the Group will conduct a systematic review of all existing
major contracts to ensure that the impact and effect of the new standard is fully understood, and changes to the current
accounting procedures are highlighted and acted upon. Any impact is neither known nor possible to estimate at this time.
Except for IFRS 9 and IFRS 15 noted above, the directors do not currently anticipate that the adoption of any other standard and
interpretation that has been issued but is not yet effective will have a material impact on the financial statements of the Group in
future periods.
In the directors' view, there have been no changes to the principal risks and uncertainties facing the Group from those described
on pages 30 and 31 of the Group's Annual Report and Financial Statements for the year ended 31 December 2014. The directors
expect that the Group's profits will continue to be weighted to the second half.
22
23
Notes to the unaudited interim financial statements continued
3. Business and geographical segments
(a) Business segments
The Group is organised into three operating divisions, as set out below. Information reported to the Executive Board for the
purposes of resource allocation and assessment of segment performance is based on the products and services provided.
• S upport Services: provision of outsourced support services to public- and private-sector clients, both in the UK
and internationally.
• Construction: design, construction and maintenance of buildings and infrastructure, both in the UK and internationally.
• Equipment Services: design, hire and sale of formwork, falsework and associated access equipment.
Costs of central services, including those relating to managing our PFI investments and central bidding activities, are shown in
"Group Services".
Support Services – UK
Support Services – International
Support Services
Construction – UK
Construction – International
Construction
Result
Six months
ended
30 June
2015
£million
Six months
ended
30 June
2014
£million
Year
ended
31 December
2014
£million
Six months
ended
30 June
2015
£million
Six months
ended
30 June
2014
£million
Year
ended
31 December
2014
£million
Six months
ended
30 June
2015
£million
Six months
ended
30 June
2014
£million
Year
ended
31 December
2014
£million
963.2
102.6
1,065.8
866.3
76.1
942.4
1,786.0
157.2
1,943.2
933.1
74.2
1,007.3
808.5
58.7
867.2
1,679.9
117.5
1,797.4
40.0
4.0
44.0
33.9
3.2
37.1
81.4
7.4
88.8
500.7
130.3
631.0
432.6
99.4
532.0
970.7
207.9
1,178.6
500.7
–
500.7
432.6
–
432.6
970.7
–
970.7
5.3
4.9
10.2
8.0
4.3
12.3
15.4
10.8
26.2
90.9
24.3
(24.1)
1,565.5
195.5
46.7
(58.7)
3,305.3
104.2
4.6
(21.7)
1,595.1
90.9
8.2
(24.1)
1,374.8
195.5
8.1
(58.7)
2,913.0
18.6
(12.5)
60.3
(15.5)
(2.8)
42.0
2.2
(10.5)
33.7
(4.4)
29.3
14.0
(9.7)
53.7
(10.2)
(11.7)
31.8
2.0
(5.5)
28.3
(5.3)
23.0
26.6
(24.4)
117.2
(24.5)
(19.8)
72.9
5.0
(16.0)
61.9
(12.0)
49.9
104.2
25.1
(21.7)
1,804.4
Exceptional items
Investment revenue
Finance costs
Profit before tax
Tax charge
Profit after tax
Equipment Services
Group Services
Inter-segment elimination
Net assets/(liabilities)
Support Services – UK
Support Services – International
Support Services
Construction – UK
Construction – International
Construction
Equipment Services
Group Services, goodwill and acquired intangible assets
Net debt
Net assets (excluding non-controlling interests)
30 June
2015
£million
30 June
2014
£million
31 December
2014
£million
39.4
51.1
90.5
28.6
51.1
79.7
52.7
62.6
115.3
(64.2)
53.7
(10.5)
(83.9)
46.5
(37.4)
(107.2)
50.8
(56.4)
191.8
271.8
509.0
780.8
(297.9)
482.9
170.8
213.1
447.3
660.4
(243.1)
417.3
190.1
249.0
487.9
736.9
(268.9)
468.0
24
3. Business and geographical segments continued
(b) Geographical segments
The Support Services and Construction divisions are located in the United Kingdom and in the Middle East. Equipment Services has
operations in all of the geographic segments listed below.
The table below provides an analysis of the Group’s sales by geographical market, irrespective of the origin of the goods/services.
Six months
ended
30 June
2015
£million
United Kingdom
Rest of Europe
Middle East & Africa
Australasia
Far East
Americas
Group Services
Inter-segment elimination
1,441.6
21.9
298.5
12.1
13.0
13.9
25.1
(21.7)
1,804.4
Six months
ended
30 June
2014
£million
1,296.5
15.7
214.5
15.5
10.0
13.1
24.3
(24.1)
1,565.5
Year
ended
31 December
2014
£million
2,741.0
42.5
454.1
31.4
21.3
27.0
46.7
(58.7)
3,305.3
Six months
ended
30 June
2015
£million
Six months
ended
30 June
2014
£million
1,411.5
21.9
139.8
12.1
13.0
13.9
4.6
(21.7)
1,595.1
1,238.7
15.7
97.7
15.5
10.0
13.1
8.2
(24.1)
1,374.8
Year
ended
31 December
2014
£million
2,634.9
42.5
206.5
31.4
21.3
27.0
8.1
(58.7)
2,913.0
Six months
ended
30 June
2015
£million
United Kingdom
Rest of Europe
Australasia
Far East
Americas
Group Services
Exceptional items
46.1
(0.5)
22.0
1.4
4.8
(1.0)
(12.5)
60.3
(15.5)
(2.8)
42.0
Six months
ended
30 June
2014
£million
Year
ended
31 December
2014
£million
43.7
(0.6)
14.9
2.7
3.0
(0.3)
(9.7)
53.7
(10.2)
(11.7)
98.8
(0.3)
32.1
5.7
5.8
(0.5)
(24.4)
117.2
(24.5)
(19.8)
31.8
72.9
Non-current assets
United Kingdom
Rest of Europe
Australasia
Far East
Americas
Group Services, goodwill and acquired intangible assets
Retirement benefit surplus
Deferred tax asset
Total non-current assets
30 June
2015
£million
30 June
2014
£million
31 December
2014
£million
96.1
3.3
164.6
13.6
11.8
25.9
536.7
852.0
34.3
–
886.3
102.3
4.3
140.0
14.8
10.2
20.1
478.3
770.0
–
3.6
773.6
103.2
4.0
153.2
15.7
12.1
24.5
527.0
839.7
–
–
839.7
25
4. Exceptional items
Six months ended
30 June 2015
£million
Six months ended
30 June 2014
£million
Year ended
31 December 2014
£million
Transaction costs on acquisitions
(0.2)
(7.6)
(8.2)
Integration costs on acquisitions
(2.1)
(3.6)
(10.2)
Earnout arrangements on the acquisition of Paragon Management UK Ltd
(0.5)
(0.5)
(1.4)
Exceptional items
(2.8)
(11.7)
(19.8)
5. Taxation
Six months ended
30 June 2015
£million
Six months ended
30 June 2014
£million
Year ended
31 December 2014
£million
Current tax – UK
1.2
0.5
2.8
Current tax – overseas
3.2
2.0
4.3
–
2.8
4.9
4.4
5.3
12.0
4.4
5.3
11.9
–
–
0.1
A
4.4
5.3
12.0
B
Deferred tax
A
Tax charge before prior period adjustments and changes in rates
Prior period adjustments
Profit before tax
23.4
29.2
53.6
Non-tax-deductible transaction costs
(0.2)
(7.6)
(8.2)
Group share of profit after tax of associates and joint ventures
10.5
6.7
16.5
33.7
28.3
61.9
18.8%
18.2%
22.4%
Subsidiary undertakings’ profit before tax
Effective tax, excluding one-offs, on subsidiary profits before tax
A/B
In addition to the income tax charged to the income statement, the following deferred tax charges/(credits) have been recorded
directly in equity in the period:
Six months ended
30 June 2015
£million
Tax on actuarial gains/(losses) on defined benefit pension schemes
Tax on the intrinsic value of share-based payments
6.2
–
6.2
Six months ended
30 June 2014
£million
(0.6)
–
(0.6)
Year ended
31 December 2014
£million
(3.1)
2.0
(1.1)
26
6. Dividends
Six months ended
30 June 2015
£million
Six months ended
30 June 2014
£million
Year ended
31 December 2014
£million
14.7
–
20.8
20.8
7.5
–
–
10.7
15.5
22.2
–
–
22.2
20.8
31.5
Dividend
per share
pence
Final dividend for the year ended 31 December 2013
Interim dividend for the year ended 31 December 2014
Final dividend for the year ended 31 December 2014
Amount recognised as distribution to equity holders in the period
The 2015 interim dividend of 7.9p per share, amounting to £11.5 million, was approved by the directors on 12 August 2015 and has
therefore not been included as a liability as at 30 June 2015.
7. Earnings per share
The calculation of earnings per share is based on the following data:
Earnings
Net profit attributable to equity holders of the parent
(for basic and basic diluted earnings per share)
Six months ended
30 June 2015
£million
Six months ended
30 June 2014
£million
Year ended
31 December 2014
£million
28.8
20.4
45.4
Adjustments:
Exceptional items
Amortisation of acquired intangibles
2.8
11.7
19.8
15.5
10.2
24.5
Tax effect of above adjustment
(3.3)
Headline earnings (for headline and headline diluted earnings per share)
43.8
38.0
83.0
Six months ended
30 June 2015
Number
thousand
Six months ended
30 June 2014
Number
thousand
Year ended
31 December 2014
Number
thousand
144,662
138,318
141,137
1,079
1,487
2,110
145,741
139,805
143,247
Six months ended
30 June 2015
pence
Six months ended
30 June 2014
pence
Year ended
31 December 2014
pence
Weighted average number of shares
Weighted average number of ordinary shares for the
purposes of basic and headline earnings per share
(4.3)
(6.7)
Effect of dilutive potential ordinary shares:
Weighted average number of ordinary shares for the
purposes of basic and headline diluted earnings per share
Earnings per share
Basic earnings per share
19.9
14.7
32.2
Diluted basic earnings per share
19.8
14.6
31.7
Headline earnings per share
30.3
27.5
58.8
Diluted headline earnings per share
30.1
27.2
57.9
27
8. Acquisitions
2014 acquisitions of Initial Facilities and esg
During 2014, the Group acquired Initial Facilities and esg, and the fair value of the assets acquired were provisionally assessed
at that time and reported in the 2014 Annual Report. Since the year end, these provisional assessments have been updated by
£19.7 million to reflect the impact of loss-making contracts on which constructive and legal obligations existed at the time of the
acquisitions of Initial Facilities and esg respectively.
Initial Facilities
£million
Assets acquired
esg
£million
6.6
3.2
Intangible assets
87.8
13.2
Cash balances
25.3
4.5
Property, plant and equipment
3.3
-
Trade and other receivables
107.7
5.2
(96.8)
(13.4)
Provisions
(22.6)
(11.1)
Deferred tax
(15.6)
(2.4)
Net assets/(liabilities)
95.7
Inventories
(0.8)
Goodwill
150.0
26.5
Consideration
245.7
25.7
Net cash outflow on acquisition
220.4
21.2
9. Financial assets/(liabilities) held at fair value
Trade and other receivables, trade and other payables and long-term borrowings are held at amortised cost. The directors
consider these values to approximate their fair values. The interest rate and foreign exchange hedges are held at fair value at
each balance sheet date.
Classification of financial assets/(liabilities) held at fair value according to the definitions set out in IFRS 7 Paragraph 27:
30 June 2015
£million
Level 2
7.0
30 June 2014
£million
(6.4)
31 December 2014
£million
5.3
Derivatives used for hedging financial liabilities are considered to be within the grouping referred to as Level 2. Their fair values
are calculated based on the valuation models operated by the relevant counterparty bank, based on market interest rates in force
on the date of valuation. The Level 2 financial derivatives are classified within trade and other payables.
No financial instruments have been transferred between levels during the period.
28
10. Share capital
At 1 January
Equity placing
Share awards issued
At the end of the period
Six months ended
30 June 2015
Shares
thousand
Six months ended
30 June 2014
Shares
thousand
Year ended
31 December 2014
Shares
thousand
143,918
129,054
129,054
-
12,898
12,898
1,290
1,957
1,966
145,208
143,909
143,918
11. Defined benefit retirement schemes
The following table sets out the key IAS 19 assumptions used to assess the present value of the defined benefit obligation.
Six months ended
30 June 2015
Six months ended
30 June 2014
Year ended
31 December 2014
Significant actuarial assumptions
Retail prices index
3.30% pa
3.30% pa
3.10% pa
Discount rate
3.80% pa
4.30% pa
3.60% pa
Consumer prices index
2.30% pa
2.30% pa
2.10% pa
Pension increases in payment:
3.10%/3.30%
3.20%/3.20%
3.00%/3.10%
Fixed 5%
5.00%
5.00%
5.00%
3% or RPI if higher (capped at 5%)
3.70%
3.70%
3.60%
2.30 – 2.80% pa
2.30 – 2.80% pa
2.10 – 2.60% pa
LPI/RPI
General salary increases
The amount included in the balance sheet arising from the Group’s obligations in respect of the various pension schemes is as follows:
30 June 2015
£million
Present value of defined benefit obligation
Fair value of schemes’ assets
(Asset)/Liability recognised in the balance sheet
30 June 2014
£million
31 December 2014
£million
910.1
851.4
924.9
(944.4)
(850.9)
(920.1)
(34.3)
0.5
4.8
Six months ended
30 June 2015
£million
Six months ended
30 June 2014
£million
Year ended
31 December 2014
£million
Employer’s part of current service cost
4.0
4.0
8.0
Administration costs
1.2
1.1
Bulk transfer
–
–
(0.1)
Net interest (income)/expense
–
0.1
(0.3)
5.2
5.2
9.2
The amounts recognised in the income statement are as follows:
Total expense recognised in the income statement
1.6
Actuarial gains and losses are recognised in full in the period in which they occur. They are recognised directly in equity and
presented in the statement of comprehensive income.
The Group has assessed that no further liability arises under IFRIC 14 IAS 19 – The limit on a defined benefit asset, minimum
funding requirements and their interaction – on the basis that the scheme rules allow the Company an unconditional right to
refunds, as a result of the Trustees not having a unilateral power to wind up the scheme and assuming the gradual settlement of
plan liabilities over time until all members have left the scheme.
29
12. Reconciliation of non-statutory measures
The Group uses a number of key performance indicators to monitor the performance of its business. This note reconciles these key
performance indicators to individual lines in the financial statements.
(a) Headline pre-tax profit
Profit before tax
Six months ended
30 June 2015
£million
Six months ended
30 June 2014
£million
Year ended
31 December 2014
£million
33.7
28.3
61.9
24.4
Adjusted for:
15.4
10.2
Share of associates’ amortisation of acquired intangible assets
0.1
-
0.1
Exceptional items
2.8
11.7
19.8
52.0
50.2
106.2
Six months ended
30 June 2015
£million
Six months ended
30 June 2014
£million
Year ended
31 December 2014
£million
Headline pre-tax profit
(b) Operating cash flow
Cash generated by operations
20.6
(13.8)
10.9
Adjusted for:
Pension contributions in excess of income statement charge
8.1
10.1
18.2
Exceptional items cash impact
2.3
11.2
18.4
Proceeds on disposal of plant and equipment - non-hire fleet
0.5
0.1
0.9
(17.4)
(7.5)
(24.9)
14.1
0.1
23.5
Six months ended
30 June 2015
£million
Six months ended
30 June 2014
£million
Year ended
31 December 2014
£million
14.1
0.1
23.5
Capital expenditure - non-hire fleet
Operating cash flow
(c) Free cash flow
Operating cash flow
Adjusted for:
Pension contributions in excess of income statement charge
(8.1)
(10.1)
(18.2)
Taxes paid
(2.7)
(6.7)
(10.2)
4.5
4.8
17.8
Interest received
2.2
2.0
4.7
(10.5)
(5.4)
(16.0)
(1.0)
(0.8)
0.8
(1.5)
(16.1)
2.4
Interest paid
Effect of foreign exchange rate change
Free cash flow
30
12. Reconciliation of non-statutory measures continued
(d) Operating cash conversion
Six months ended
30 June 2015
£million
Six months ended
30 June 2014
£million
Year ended
31 December 2014
£million
Operating cash flow
14.1
0.1
23.5
Operating profit, before exceptional items and amortisation of acquired intangible assets
49.7
47.0
100.6
28.4%
0.2%
23.4%
74.8
118.2
123.0
Current period operating cash conversion
Three-year rolling operating cash flow
Three-year rolling operating profit, before exceptional items and amortisation of acquired
intangible assets
249.9
192.5
223.0
Operating cash conversion, three-year rolling average
29.9%
61.4%
55.2%
Six months ended
30 June 2015
£million
Six months ended
30 June 2014
£million
Year ended
31 December 2014
£million
14.1
0.1
23.5
(e) Gross operating cash conversion
Operating cash flow
4.5
4.8
17.8
Gross operating cash flow
18.6
4.9
41.3
Operating profit, before exceptional items and amortisation of acquired intangible assets
49.7
47.0
100.6
Share of result of associates and joint ventures, before exceptional items and
amortisation of acquired intangible assets
10.6
6.7
16.6
Total operating profit, before exceptional items and amortisation of acquired
intangible assets
60.3
53.7
117.2
30.8%
9.1%
35.2%
Three-year rolling gross operating cash flow
119.9
162.3
174.3
Three-year rolling total operating profit, before exceptional items and
amortisation of acquired intangible assets
306.7
257.2
282.3
Gross operating cash conversion, three-year rolling average
39.1%
63.1%
61.7%
Six months ended
30 June 2015
£million
Six months ended
30 June 2014
£million
Year ended
31 December 2014
£million
1,595.1
1,374.8
2,913.0
209.3
190.7
392.3
1,804.4
1,565.5
3,305.3
Six months ended
30 June 2015
£million
Six months ended
30 June 2014
£million
Year ended
31 December 2014
£million
60.3
53.7
117.2
1,804.4
1,565.5
3,305.3
3.3%
3.4%
3.5%
Current period gross operating cash conversion
(f) Gross revenue
Share of revenue of associates and joint ventures
Gross revenue
(g) Operating margins
Total operating profit, before exceptional items and amortisation of acquired
intangible assets
Gross revenue
Total operating margin
DIRECTORS AND ADVISERS
31
Directors and advisers
Chairman
Registered office
Norman Blackwell (Lord Blackwell)1A 3
Interserve House
Ruscombe Park
Twyford
Reading
Berkshire RG10 9JU
Executive directors
Adrian Ringrose1 – Chief Executive
Tim Haywood – Group Finance Director
Steven Dance
Bruce Melizan
Dougie Sutherland
Non-executive directors
Anne Fahy 1 2A 3
Russell King 1 2 3 4
Keith Ludeman 1 2 3A
Nick Salmon 1 2 3
1
Member of the Nomination Committee
1A Chairman of the Nomination Committee
2
Member of the Audit Committee
2A Chairman of the Audit Committee
3
Member of the Remuneration Committee
3A Chairman of the Remuneration Committee
4
Senior Independent Director
Group Company Secretary
Trevor Bradbury
T +44 (0)118 932 0123
F +44 (0)118 932 0206
info@interserve.com
www.interserve.com
Registered number
88456
Registrar and share transfer office
Capita Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
T: +44 (0)20 8639 3399
F: +44 (0)1484 600911
shareholderenquiries@capita.co.uk
www.capitashareportal.com
Auditors
Grant Thornton UK LLP
Stockbrokers
J.P. Morgan Cazenove Limited
Numis Securities Limited
Lawyers
Ashurst LLP
REGISTERED OFFICE
Interserve Plc
Interserve House Ruscombe Park Twyford
Reading Berkshire RG10 9JU
T. +44 (0)118 932 0123
F. +44 (0)118 932 0206
E. info@interserve.com
www.interserve.com

ingenuity at work

Transcription

Similar documents

Unaudited Financial Result Dec 2015 - Simplex

Interim Results - About us

earms limited - Simran Farms Ltd

Notes to Condensed Interim Financial Information

The Interim Results for the period ended 28 February 2013

1111111111 bartronics

CBH Approval of the Annual Financial results 2012

H1 FY16 Results - Investor Relations