| RNS-PRN : ABC7 |
| United Utilities PLC |
| Part 2 : For preceding part double-click [nPRL1ABC7] |
| Provisions for liabilities and charges |
|
(333.5 |
) |
(310.4 |
) |
(345.0 |
) |
|
|
---------- |
|
---------- |
|
---------- |
|
| Net assets |
|
3,129.5 |
|
2,570.8 |
|
2,551.3 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
| Capital and reserves |
| Called up share capital |
|
711.5 |
|
556.0 |
|
556.5 |
|
| Share premium account |
|
1,023.1 |
|
671.9 |
|
674.3 |
|
| Profit and loss account |
|
1,376.2 |
|
1,326.8 |
|
1,302.8 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
| Equity shareholders' funds |
|
3,110.8 |
|
2,554.7 |
|
2,533.6 |
|
| Equity minority interest |
|
18.7 |
|
16.1 |
|
17.7 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
| Capital employed |
|
3,129.5 |
|
2,570.8 |
|
2,551.3 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
| Consolidated cash flow statement |
|
|
Six months ended |
|
Year ended |
|
|
|
30 September 2003 |
|
30 September 2002 |
|
31 March 2003 |
|
|
|
£m |
|
£m |
|
£m |
|
| Net cash inflow from operating activities |
|
403.7 |
|
367.1 |
|
851.5 |
|
| Income from joint ventures |
|
0.5 |
|
1.3 |
|
2.8 |
|
| Returns on investments and servicing of finance |
|
(112.1 |
) |
(105.7 |
) |
(218.9 |
) |
| Taxation |
|
(1.1 |
) |
0.6 |
|
- |
|
| Capital expenditure and financial investment |
|
(473.4 |
) |
(310.8 |
) |
(697.9 |
) |
| Acquisitions and disposals |
| Acquisitions |
|
(3.9 |
) |
(0.2 |
) |
(4.9 |
) |
| Disposals |
|
- |
|
11.3 |
|
7.9 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
|
|
(3.9 |
) |
11.1 |
|
3.0 |
|
| Equity dividends paid |
|
(178.2 |
) |
(0.3 |
) |
(262.0 |
) |
|
|
---------- |
|
---------- |
|
---------- |
|
| Cash outflow before use of liquid resources and financing |
|
(364.5 |
) |
(36.7 |
) |
(321.5 |
) |
| Management of liquid resources |
|
(285.2 |
) |
(86.1 |
) |
(282.0 |
) |
| Management of liquid resources |
|
(285.2 |
) |
(86.1 |
) |
(282.0 |
) |
| Financing |
| Issues of shares |
|
503.8 |
|
0.4 |
|
3.3 |
|
| Increase in debt |
|
134.6 |
|
107.6 |
|
610.5 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
|
|
638.4 |
|
108.0 |
|
613.8 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
| (Decrease)/Increase in cash |
|
(11.3 |
) |
(14.8 |
) |
10.3 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
| Reconciliation of net cash flow to movement in net debt |
|
|
Six months ended |
|
Year ended |
|
|
|
30 September 2003 |
|
30 September 2002 |
|
31 March 2003 |
|
|
|
£m |
|
£m |
|
£m |
|
| (Decrease)/Increase in cash |
|
(11.3 |
) |
(14.8 |
) |
10.3 |
|
| Cash inflow from increase in debt |
|
(134.6 |
) |
(107.6 |
) |
(610.5 |
) |
| Cash outflow from management of liquid resources |
|
285.2 |
|
86.1 |
|
282.0 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
| Change in net debt resulting from cash flows |
|
139.3 |
|
(36.3 |
) |
(318.2 |
) |
| Exchange adjustments and other non-cash adjustments |
|
6.6 |
|
(0.2 |
) |
5.1 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
| Movement in net debt |
|
145.9 |
|
(36.5 |
) |
(313.1 |
) |
| Opening net debt |
|
(3,373.9 |
) |
(3,060.8 |
) |
(3,060.8 |
) |
|
|
---------- |
|
---------- |
|
---------- |
|
| Closing net debt |
|
(3,228.0 |
) |
(3,097.3 |
) |
(3,373.9 |
) |
|
|
---------- |
|
---------- |
|
---------- |
|
| Statement of total recognised gains and losses |
|
|
Six months ended |
|
Year ended |
|
|
|
30 September 2003 |
|
30 September 2002 |
|
31 March 2003 |
|
|
|
£m |
|
£m |
|
£m |
|
| Profit for the period: |
| Group |
|
176.2 |
|
127.8 |
|
275.9 |
|
| Joint ventures |
|
(1.0 |
|
(0.2 |
) |
1.9 |
) |
|
|
---------- |
|
---------- |
|
---------- |
|
|
|
175.2 |
|
127.6 |
|
277.8 |
|
| Exchange adjustments |
|
0.8 |
|
(7.2 |
) |
(2.8 |
) |
|
|
---------- |
|
---------- |
|
---------- |
|
| Total gains and losses recognised since last annual report |
|
176.0 |
|
120.4 |
|
275.0 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
| Reconciliation of movement in equity shareholders' funds |
|
|
Six months ended |
|
Year ended |
|
|
|
30 September 2003 |
|
30 September 2002 |
|
31 March 2003 |
|
|
|
£m |
|
£m |
|
£m |
|
| Profit for the period |
|
175.2 |
|
127.6 |
|
277.8 |
|
| Dividends |
|
(102.6 |
) |
(86.2 |
) |
(264.8 |
) |
|
|
---------- |
|
---------- |
|
---------- |
|
| Retained profit for the period |
|
72.6 |
|
41.4 |
|
13.0 |
|
| New share capital issued |
|
503.8 |
|
0.4 |
|
3.3 |
|
| Goodwill on business disposals |
|
- |
|
0.9 |
|
0.9 |
|
| Exchange adjustments |
|
0.8 |
|
(7.2 |
) |
(2.8 |
) |
|
|
---------- |
|
---------- |
|
---------- |
|
| Net increase in equity shareholders' funds for the period |
|
577.2 |
|
35.5 |
|
14.4 |
|
| Opening equity shareholders' funds |
|
2,533.6 |
|
2,519.2 |
|
2,519.2 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
| Equity shareholders' funds |
|
3,110.8 |
|
2,554.7 |
|
2,533.6 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
| Net cash inflow from operating activities |
|
|
Six months ended |
|
Year ended |
|
|
|
30 September 2003 |
|
30 September 2002 |
|
31 March 2003 |
|
|
|
£m |
|
£m |
|
£m |
|
| Group operating profit |
|
279.2 |
|
239.6 |
|
510.0 |
|
| Exceptional items within group operating profit |
|
- |
|
28.5 |
|
29.3 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
| Group operating profit before exceptional items |
|
279.2 |
|
268.1 |
|
539.3 |
|
| Depreciation |
|
178.5 |
|
170.8 |
|
349.8 |
|
| Amortisation of goodwill and intangible assets |
|
4.0 |
|
3.8 |
|
7.1 |
|
| Profit on disposal of tangible fixed assets |
|
(1.6 |
) |
(0.7 |
) |
(4.5 |
) |
| Stocks increase |
|
(4.3 |
) |
(2.5 |
) |
(11.8 |
) |
| Debtors increase |
|
(53.6 |
) |
(37.1 |
) |
(21.9 |
) |
| Creditors increase/(decrease) |
|
3.8 |
|
(31.4 |
) |
0.6 |
|
| Outflow related to exceptional items |
|
(2.3 |
) |
(3.9 |
) |
(7.1 |
) |
|
|
---------- |
|
---------- |
|
---------- |
|
| Net cash inflow from operating activities |
|
403.7 |
|
367.1 |
|
851.5 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
| Segmental analysis by class of business |
|
|
Six months ended |
|
Year ended |
|
|
|
30 September 2003 |
|
30 September 2002 |
|
31 March 2003 |
|
|
|
£m |
|
£m |
|
£m |
|
| Licensed multi-utility operations |
|
642.5 |
|
604.1 |
|
1,230.1 |
|
| Infrastructure management |
|
207.2 |
|
175.4 |
|
397.1 |
|
| Business process outsourcing |
|
178.9 |
|
142.8 |
|
307.6 |
|
| Telecommunications |
|
86.9 |
|
79.3 |
|
161.7 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
|
|
1,115.5 |
|
1,001.6 |
|
2,096.5 |
|
| Inter-business eliminations |
|
(90.9 |
) |
(86.8 |
) |
(176.0 |
) |
|
|
---------- |
|
---------- |
|
---------- |
|
|
|
1,024.6 |
|
914.8 |
|
1,920.5 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
|
|
Six months ended |
|
Year ended |
|
|
|
30 September 2003 |
|
30 September 2002 |
|
31 March 2003 |
|
|
|
£m |
|
£m |
|
£m |
|
| Profit / (loss) before non-operating items, interest and tax |
| Licensed multi-utility operations |
|
254.9 |
|
251.7 |
|
502.8 |
|
| Infrastructure management |
|
32.0 |
|
28.0 |
|
58.8 |
|
| Business process outsourcing |
|
12.1 |
|
8.6 |
|
18.8 |
|
| Telecommunications |
|
(9.4 |
) |
(10.2 |
) |
(19.5 |
) |
| Other activities |
|
3.7 |
|
2.2 |
|
5.1 |
|
| Corporate costs |
|
(2.4 |
) |
(2.3 |
) |
(4.3 |
) |
|
|
---------- |
|
---------- |
|
---------- |
|
|
|
290.9 |
|
278.0 |
|
561.7 |
|
| Goodwill amortisation |
|
(4.3 |
) |
(3.5 |
) |
(7.5 |
) |
|
|
---------- |
|
---------- |
|
---------- |
|
| Continuing operations, before exceptional items |
|
286.6 |
|
274.5 |
|
554.2 |
|
| Exceptional items |
|
- |
|
(28.5 |
) |
(29.3 |
) |
|
|
---------- |
|
---------- |
|
---------- |
|
| Profit before non-operating items, interest and tax |
|
286.6 |
|
246.0 |
|
524.9 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
|
|
30 September 2003 |
|
30 September 2002 |
|
31 March 2003 |
|
|
|
£m |
|
£m |
|
£m |
|
| Net operating assets |
| Licensed multi-utility operations |
|
6,870.0 |
|
6,385.6 |
|
6,553.7 |
|
| Infrastructure management |
|
103.2 |
|
86.9 |
|
82.8 |
|
| Business process outsourcing |
|
114.6 |
|
86.8 |
|
121.6 |
|
| Telecommunications |
|
199.5 |
|
193.7 |
|
197.1 |
|
| Other activities |
|
(42.0 |
) |
(57.1 |
) |
(46.9 |
) |
|
|
---------- |
|
---------- |
|
---------- |
|
|
|
7,245.3 |
|
6,695.9 |
|
6,908.3 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
Net operating assets comprise fixed assets and net current assets excluding netdebt, corporation and deferred tax and dividends.
NOTES
1. Basis of preparation
The results for the period ended 30 September 2003, which are unaudited, have been prepared on the basis of accounting policies consistent with those set out in the annual report to shareholders for the year ended 31 March 2003. The financial information set out in this statement relating to the year ended 31 March 2003 does not constitute statutory accounts for that period. Full audited accounts of United Utilities PLC in respect of that financial period (which received an unqualified audit opinion and did not contain a statement under either section 237(2) or (3) of the Companies Act 1985) have been delivered to the Registrar of Companies.
2. Rights Issue
The 5 for 9 rights issue, structured so that the proceeds are received in two stages, was approved at the Extraordinary General Meeting of shareholders on 26 August 2003. The first tranche of the proceeds, received during September 2003, raised £502.3 million (net of costs) from the issuing of 309,286,997 A shares. The first dividend for which the initial A shares will rank is the 2003/04 interim dividend; the amount of this dividend is 50 per cent of that paid on an ordinary share. The second tranche of proceeds will be received in June 2005, reflecting the subscription for further A shares. All A shares will then be consolidated and reclassified as ordinary shares on the basis of one ordinary share for two A shares. |
| 3. Goodwill and exceptional items |
|
|
Six months ended |
|
Six months ended |
|
Year ended |
|
|
|
30 September 2003 |
|
30 September 2002 |
|
31 March 2003 |
|
|
|
£m |
|
£m |
|
£m |
|
| Goodwill and operating exceptional items |
| Adjustment to the carrying value of telecoms assets |
|
- |
|
(25.5 |
) |
(25.5 |
) |
| Business restructuring |
|
- |
|
(3.0 |
) |
(3.8 |
) |
| Goodwill amortisation |
|
(4.3 |
) |
(3.5 |
) |
(7.5 |
) |
|
|
---------- |
|
---------- |
|
---------- |
|
|
|
(4.3 |
) |
(32.0 |
) |
(36.8 |
) |
| Non-operating exceptional items operations |
| Profit on sale or termination of operations |
|
2.4 |
|
34.0 |
|
34.0 |
|
| Loss on disposal of fixed assets |
|
(2.4 |
) |
- |
|
- |
|
|
|
---------- |
|
---------- |
|
---------- |
|
|
|
- |
|
34.0 |
|
34.0 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
|
|
(4.3 |
) |
2.0 |
|
(2.8 |
) |
|
|
---------- |
|
---------- |
|
---------- |
|
| 4. Taxation |
|
|
Six months ended |
|
Six months ended |
|
Year ended |
|
|
|
30 September 2003 |
|
30 September 2002 |
|
31 March 2003 |
|
|
|
£m |
|
£m |
|
£m |
|
| Current tax: |
| UK corporation tax credit |
|
4.8 |
|
7.0 |
|
30.9 |
|
| Overseas tax |
|
(0.1 |
) |
- |
|
(0.1 |
) |
| Share of joint ventures' tax |
|
(2.3 |
) |
(0.4 |
|
(1.7 |
) |
|
|
---------- |
|
---------- |
|
---------- |
|
|
|
2.4 |
|
6.6 |
|
29.1 |
|
| Deferred tax: |
| Gross movement in deferred tax |
|
(53.4 |
) |
(41.3 |
) |
(88.2 |
) |
| Increase/(decrease) in discount |
|
60.5 |
|
(8.1 |
) |
(0.3 |
) |
| Prior period tax adjustments |
|
- |
|
- |
|
2.6 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
|
|
7.1 |
|
(49.4 |
) |
(85.9 |
) |
| Exceptional tax: |
|
|
- |
|
2.6 |
|
6.3 |
|
| Deferred tax |
|
- |
|
3.2 |
|
3.1 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
|
|
- |
|
5.8 |
|
9.4 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
|
|
9.5 |
|
(37.0 |
) |
(47.4 |
) |
|
|
---------- |
|
---------- |
|
---------- |
|
5. Earnings per share
Basic earnings per share and diluted earnings per share are calculated by dividing profit for the period by the following weighted average number of shares in issue:
|
|
Basic |
Diluted |
| (i) |
Period ended 30 September 2003 |
614.1 million |
618.2 million |
| (ii) |
Period ended 30 September 2002 (restated) |
605.9 million |
607.7 million |
| (iii) |
Year ended 31 March 2003 (restated) |
606.0 million |
607.7 million | For the purposes of calculating the weighted average number of shares used in the earnings per share calculations, the A shares have been treated as part paid ordinary shares, two A shares being equivalent to one ordinary share. The difference between the weighted average number of shares used in the basic and the diluted earnings per share calculations represents those ordinary shares deemed to have been issued for no consideration on the conversion of all potential dilutive ordinary shares in accordance with FRS 14 (Earnings per Share).
The basic and diluted weighted average number of shares have been restated for all periods prior to the rights issue to reflect the bonus element of the rights issue as required by FRS14. The adjustment factor is based on the consideration received from the first stage of the rights issue. The adjustment factor is 0.9176, calculated using 531.5p per ordinary share, being the closing price on 26 August 2003, the date of approval of the rights issue at the EGM.
6. Adjusted basic earnings per share
Adjusted basic earnings per share has been calculated by dividing adjusted profit for the period (see below) by the following adjusted weighted average number of shares in issue:
| (i) |
Period ended 30 September 2003 |
648.7 million |
| (ii) |
Period ended 30 September 2002 (restated) |
643.1 million |
| (iii) |
Year ended 31 March 2003 (restated) |
643.2 million | The adjusted weighted average number of shares have been restated for all periods prior to the rights issue using an adjustment factor based on the consideration received from the first stage of the rights issue and assumed proceeds from the second stage, which are due to be received in June 2005. The adjustment factor is 0.8646 calculated using 531.5p per ordinary share, being the closing price on 26 August 2003, the date of approval of the rights issue at the EGM. This reflects the full bonus element of the rights issue which arose at the first stage, as demonstrated by the movement in the share price following the approval of the rights issue at the EGM. On this basis there will be no further dilutive effect on the share price arising from the subscription of the second tranche.
The adjusted profit for the period excludes:
- Period ended 30 September 2003 - £4.3 million in respect of goodwill amortisation and non-operating exceptional items totalling £nil million.
- Period ended 30 September 2002 - £3.0 million charge in respect of restructuring costs, £34.0 million in respect of an exceptional credit on withdrawal from infrastructure management in the Americas, £25.5 million exceptional charge from the FRS 11 adjustment to the carrying value of the telecoms assets, £5.8 million exceptional tax credit and £3.5 million in respect of goodwill amortisation;
- Year ended 31 March 2003 - £3.8 million charge in respect of restructuring costs, £34.0 million in respect of an exceptional credit on withdrawal from infrastructure management in the Americas, £25.5 million exceptional charge from the FRS 11 adjustment to the carrying value of the telecoms assets, £9.4 million exceptional tax credit and £7.5 million in respect of goodwill amortisation.
Adjusted basic earnings per share excluding deferred tax has been derived by taking the adjusted profit for the period as above and excluding the deferred tax credit in the period of £7.1 million (2002: £49.4 million charge).
7. Interest cover
Interest cover is calculated as the number of times the interest charge for the period is covered by profit from continuing operations before exceptional items, goodwill amortisation, non-operating items, interest and tax.
8. Adjusted dividend cover
Adjusted dividend cover is calculated by dividing profit for the period before exceptional items and goodwill amortisation by the dividend charge. |
| |
| 9. Dividends |
|
|
Six months ended |
|
Six months ended |
|
Year ended |
|
|
|
30 September 2003 |
|
30 September 2002 |
|
31 March 2003 |
|
|
|
£m |
|
£m |
|
£m |
|
| The charge for dividends to shareholders comprises: |
| Interim dividend |
|
102.6 |
|
86.2 |
|
86.2 |
|
| Final dividend |
|
- |
|
- |
|
178.6 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
|
|
102.6 |
|
86.2 |
|
264.8 |
|
|
|
---------- |
|
---------- |
|
---------- |
|
Prior period dividends per ordinary share have been re-presented for comparative purposes to take account of the bonus element of the first stage of the rights issue. The factor applied to the prior period dividends is 0.9072, calculated using 576.0 pence per ordinary share, this being the closing price on 25 July 2003, the last business day prior to the announcement of the rights issue.
The interim dividend of 14.43 pence per ordinary share and 7.215 pence per A share will be paid on 9 February 2004 to shareholders on the register at the close of business on 19 December 2003. The ex-dividend date for the interim dividend is 17 December 2003.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This interim results statement contains certain forward-looking statements with respect to the financial condition, results of operations and business of the company.
Statements that are not historical facts, including statements about the company's beliefs and expectations, are forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995. Words such as "expects", "anticipates", "intends", "plans", "believes", "seeks", "estimates", "potential", "reasonably possible" and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are based on current plans, estimates and projections, and therefore investors should not rely on them. Forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update publicly any of them in the light of new information or future events. Forward-looking statements involve inherent risks and uncertainties. The company cautions investors that a number of important factors could cause actual results to differ materially from those anticipated or implied in any forward-looking statements. These factors include: (i) the effect of, and changes in, regulation and government policy; (ii) the effects of competition and price pressures; (iii) the ability of the company to achieve cost savings and operational synergies; (iv) the ability of the company to service its future operations and capital requirements; (v) the timely development and acceptance of new products and services by the company; (vi) the effect of technological changes; and (vii) the company's success at managing the risks of the foregoing. The company cautions that the foregoing list of important factors does not address all the factors that could cause the results to differ materially.
INDEPENDENT REVIEW REPORT TO UNITED UTILITIES PLC
Introduction
We have been instructed by the Company to review the financial information for the six months ended 30 September 2003 which comprises the consolidated profit and loss account, the statement of total recognised gains and losses, the consolidated balance sheet, the consolidated cash flow statement and related notes 1 to 9 together with the reconciliation of net cash flow to movement in net debt, the reconciliation of movement in equity shareholders' funds, the net cash inflow from operating activities and the segmental analysis by class of business. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information.
This report is made solely to the Company in accordance with Bulletin 1999/4 issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the Company 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, for our review work, for this report, or for the conclusions we have formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Listing Rules of the Financial Services Authority which require that the accounting polices and presentation applied to the interim figures are consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with the guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with United Kingdom auditing standards and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 September 2003.
Deloitte & Touche LLP
Chartered Accountants
Manchester
3 December 2003
United Utilities' ordinary shares trade on the London Stock Exchange and its ADRs, each equal to two ordinary shares, trade on the New York Stock Exchange under the Trading Symbol "UU".
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