26 Sep 2017 15:51
LADBROKES GROUP FINANCE PLC
Registered Number: 01429533
LEI: 213800QOWHF5R9VLL274
INTERIM RESULTS
FOR THE HALF YEAR ENDED 30 JUNE 2017
Business and financial review
For the half year ended 30 June 2017
Principal activities
Ladbrokes Group Finance plc (the 'Company') undertook the principal borrowing for Ladbrokes Coral Group plc and its subsidiaries (the 'Group'), invested in loans to other members of the Group and undertook associated finance-related activities.
Business review
The Company continues to provide finance-related services to other members of the Group. There haven't been any significant changes to the existing arrangements during the first six months of the financial year. On 6 March 2017, the Company repaid the 7.625% bond of £225.0 million using existing facilities. There have been no other significant events that have affected the Company during the same period.
Results and dividends
The financial statements for the half year show a profit after taxation of £45,055,000 (half year ended 30 June 2016: £37,222,000).
The directors do not propose the payment of an interim dividend (half year ended 30 June 2016: £nil).
Key performance indicators
The Company's key financial performance indicators during the year were as follows:
|
| Half year ended |
| Half year ended |
|
|
|
| 30 June |
| 30 June |
|
|
|
| 2017 |
| 2016 |
| Change |
|
| £'000 |
| £'000 |
| % |
Net finance income |
| 49,260 |
| 41,901 |
| 17.6 |
Profit before taxation |
| 45,055 |
| 40,368 |
| 11.6 |
Profit for the financial year |
| 45,055 |
| 37,222 |
| 21.0 |
|
|
|
|
|
|
|
|
| 30 June |
| 31 December |
|
|
|
| 2017 |
| 2016 |
| Change |
|
| £'000 |
| £'000 |
| % |
Third party interest bearing loans and borrowings |
| (1,119,790) |
| (1,152,992) |
| (2.9) |
Amounts due from group companies |
| 6,089,555 |
| 5,139,740 |
| 18.5 |
Amount due to group and parent companies |
| (4,354,338) |
| (3,413,719) |
| 27.6 |
Total equity |
| 606,371 |
| 561,316 |
| 8.0 |
Percentage of Ladbrokes Coral Group plc gross borrowings at fixed rates (target minimum 25%) |
| 44.5% |
| 62.7% |
|
|
Going concern
In assessing the going concern basis, the directors considered the Company's activities and the financial position of the Company and the Company's financial risk management objectives and policies.
The directors consider that the Company has adequate resources to continue in operational existence for the foreseeable future and that it is therefore appropriate to adopt the going concern basis in preparing its financial statements.
Principal risks and uncertainties
The ultimate parent company, Ladbrokes Coral Group plc, reviews and evaluates the key risks and uncertainties faced by the Group as part of the divisional reviews undertaken at its regular Board meetings. The impact of risks and uncertainties of the Company is considered as part of this review process.
The Company's principal risks arise from exposure to foreign currencies and interest rate movements arising from the finance related activities and borrowing which it undertakes on behalf of the Group. The policies of the Company for managing these exposures and the risk profile of the Company at 31 December 2016 are described in greater detail in notes 16 and 17 of the Company's annual report and financial statements 2016 (the '2016 Annual Report').
The principal risks and uncertainties included in the 2016 Annual Report are summarised below:
Interest rate risk
The Company is exposed to interest rate risk on certain of its interest-bearing loans and borrowings and on cash and cash equivalents.
Foreign currency risk
The Ladbrokes Coral Group plc carries out operations through a number of foreign enterprises and has foreign currency exposure to the Australian Dollar and to the Euro arising from foreign currency assets. The exposure of the Ladbrokes Coral Group plc to currency risk at a transactional level is monitored and reviewed regularly.
Credit risk
The Company's exposure to credit risk arising from financial assets of the Company, other than those due from fellow subsidiaries of the Ladbrokes Coral Group plc, which comprise cash and cash equivalents and derivative instruments, arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments.
Liquidity risk
The objective of the Ladbrokes Coral Group plc is to maintain a balance between continuity of funding and flexibility through the use of borrowings with a range of maturities.
These risks and uncertainties remain valid at the interim reporting date and have not changed in the period to 30 June 2017.
It is anticipated that the principal risks and uncertainties affecting the Company will remain unchanged for the remaining six months of the financial year.
Future developments
The Company does not anticipate any changes in its activities in the remaining six months of the financial year.
Independent review
This half-yearly report has not been audited or reviewed by auditors.
Statement of directors' responsibilities
The directors confirm that this condensed set of interim financial information has been prepared in accordance with Financial Reporting Standard 104: Interim Financial Reporting, issued by the Financial Reporting Council, and that the interim management report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R namely:
§ an indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year, and
§ material related party transactions in the first six months and any material changes in the related party transactions described in the last annual report.
The directors of the Company are listed in the Company's annual report and accounts for the year ended 31 December 2016. S Smith was appointed as a director on 8 February 2017.
By order of the Board
V ParmarDirector26 September 2017
Income statement (unaudited)
for the half year ended 30 June 2017
| Notes | Half year ended30 June 2017 |
| Half year ended30 June 2016 |
|
| £'000 |
| £'000 |
|
|
|
|
|
Finance income | 4 | 103,286 |
| 81,402 |
|
|
|
|
|
Finance expenses | 4 | (54,026) |
| (39,501) |
|
|
|
|
|
Net finance income |
| 49,260 |
| 41,901 |
|
|
|
|
|
Administrative expenses |
| (4,155) |
| (1,698) |
|
|
|
|
|
Foreign exchange (losses)/gains |
| (50) |
| 165 |
|
|
|
|
|
Profit before taxation |
| 45,055 |
| 40,368 |
|
|
|
|
|
Income tax | 5 | - |
| (3,146) |
|
|
|
|
|
Profit and total comprehensive income for the year |
| 45,055 |
| 37,222 |
|
|
|
|
|
There are no items of other comprehensive income in the years presented. Therefore, no separate statement of other comprehensive income has been prepared.
The above results relate to continuing activities.
Balance sheet (unaudited)
at 30 June 2017
|
| 30 June |
| 31 December |
| Notes | 2017 |
| 2016 |
|
| £'000 |
| £'000 |
ASSETS |
|
|
|
|
Current assets |
|
|
|
|
Interest bearing and other receivables |
| 6,089,555 |
| 5,139,848 |
Cash and cash equivalents |
| 117 |
| 27 |
|
| 6,089,672 |
|
5,139,875 |
|
|
|
|
|
Total assets |
| 6,089,672 |
| 5,139,875 |
|
|
|
|
|
LIABILITIES |
|
|
|
|
Current liabilities |
|
|
|
|
Interest bearing loans and other borrowings | 6 | (4,531,764) |
| (3,817,081) |
Trade and other payables |
| (9,173) |
| (11,848) |
|
| (4,540,937) |
|
(3,829,929) |
Non-current liabilities |
|
|
|
|
Loans and borrowings | 6 | (942,364) |
| (749,630) |
|
|
|
|
|
Total liabilities |
| (5,483,301) |
| (4,578,559) |
Net assets |
| 606,371 |
|
561,316 |
|
|
|
|
|
Equity |
|
|
|
|
Called up share capital |
| 20,350 |
| 20,350 |
Retained earnings |
| 586,021 |
| 540,966 |
Total equity |
| 606,371 |
|
561,316 |
Statement of changes in equity (unaudited)
for the half year ended 30 June 2017
| Issued share capital |
| Retained earnings |
| Total shareholders' equity |
| £'000 |
| £'000 |
| £'000 |
|
|
|
|
|
|
At 1 January 2016 | 20,350 |
| 466,482 |
| 486,832 |
|
|
|
|
|
|
Profit for the period and total comprehensive income | - |
| 37,222 |
| 37,222 |
At 30 June 2016 | 20,350 |
| 503,704 |
| 524,054 |
|
|
|
|
|
|
At 1 January 2017 | 20,350 |
| 540,966 |
| 561,316 |
|
|
|
|
|
|
Profit for the period and total comprehensive income | - |
| 45,055 |
| 45,055 |
At 30 June 2017 | 20,350 |
| 586,021 |
| 606,371 |
Notes to the financial statements (unaudited)
for the half year ended 30 June 2017
1. | Corporate information
|
| Ladbrokes Group Finance plc (the 'Company') is a limited company incorporated and domiciled in the United Kingdom whose debt is publicly traded.
The interim financial statements of the Company for the half year ended 30 June 2017 were authorised for issue in accordance with a resolution of the directors on 26 September 2017.
The Company's financial statements are individual entity financial statements.
The Company's financial statements are presented in Pounds Sterling (£), which is also the Company's functional currency, and all values are rounded to the nearest thousand (£'000) except where otherwise indicated.
The principal activities of the Company are described in the business and financial review.
|
2. | Basis of preparation
|
| The annual report and financial statements of the Company for the year ended 31 December 2016 were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and Companies Act 2006.
The interim condensed financial statements for the half year ended 30 June 2017 have been prepared in accordance with Financial Reporting Standard 104: Interim Financial Reporting, issued by the Financial Reporting Council. The interim condensed financial statements do not include all of the information and disclosures required in the annual financial statements, and should be read in conjunction with the Company's annual financial statements at 31 December 2016.
The accounting policies adopted in the preparation of the interim financial statements are consistent with those followed in the preparation of the Company's annual report and financial statements for the year ended 31 December 2016.
These condensed interim financial statements have not been subject to a full audit or audit review and do not constitute statutory financial statements as defined in section 434 of the Companies Act 2006. The annual report and financial statements for the year ended 31 December 2016 were approved by the directors of the Company on 9 June 2017 and have been filed with the Registrar of Companies. The report of the auditors on those financial statements was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006.
|
| Going concern
|
| After making enquiries, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. The Company therefore continues to adopt the going concern basis in preparing these interim financial statements.
|
3. | Segmental analysis
|
| The Company's principal activity of borrowing for Ladbrokes Coral Group plc and its subsidiaries represents a single operating segment in the United Kingdom and therefore no additional segmental information is required. |
4. | Finance income and expenses |
|
|
| Half year ended30 June 2017 |
| Half year ended30 June 2016 |
|
|
| £'000 |
| £'000 |
|
|
|
|
|
|
| Bank interest receivable |
| 5 |
| 73 |
| Interest receivable from parent company |
| - |
| 17,191 |
| Interest receivable from fellow subsidiary companies |
| 103,281 |
| 64,138 |
| Total interest income for financial assets measured at amortised cost(1) |
| 103,286 |
| 81,402 |
|
|
|
|
|
|
|
|
|
|
|
|
| Total finance income |
| 103,286 |
| 81,402 |
|
|
|
|
|
|
|
|
|
|
|
|
| Bank loans and overdrafts |
| (7,919) |
| (17) |
| Bonds at amortised cost |
| (16,187) |
| (11,510) |
| Interest payable to parent company |
| (680) |
| - |
| Interest payable to fellow subsidiary companies |
| (29,240) |
| (27,974) |
| Total interest expense for financial liabilities measured at amortised cost(1) |
| (54,026) |
| (39,501) |
|
|
|
|
|
|
|
|
|
|
|
|
| Total finance expense |
| (54,026) |
| (39,501) |
|
|
|
|
|
|
| Net finance income |
| 49,260 |
| 41,901 |
|
|
|
|
|
|
| (1) Calculated using the effective interest method
|
|
|
|
|
5. | Income tax expense
|
| The total tax charge for the half year ended 30 June 2017 was £nil (30 June 2016: £3,146,000). The charge for 2016 related to the utilisation of deferred assets.
There was no deferred tax asset at 31 December 2016 or 30 June 2017. |
6. | Interest bearing loans and other borrowings |
|
|
| 30 June |
| 31 December |
|
|
| 2017 |
| 2016 |
|
|
| £'000 |
| £'000 |
| Current |
|
|
|
|
| Unsecured: |
|
|
|
|
| Bank overdrafts |
| 4,028 |
| 3,940 |
| Bank loans |
| 173,398 |
| 174,547 |
| 7.625% bonds due 2017 |
| - |
| 224,875 |
| Amounts owed to parent company |
| 34,949 |
| 70,408 |
| Amounts due to group companies |
| 4,319,389 |
| 3,343,311 |
| Total current loans and borrowings |
| 4,531,764 |
|
3,817,081 |
|
|
|
|
|
|
| Non-current |
|
|
|
|
| Unsecured: |
|
|
|
|
| Bank loans |
| 446,755 |
| 254,422 |
| 5.125% bonds due 2022 |
| 99,110 |
| 99,036 |
| 5.125% bonds due 2023 |
| 396,499 |
| 396,172 |
| Total non-current loans and borrowings |
| 942,364 |
|
749,630 |
|
|
|
|
|
|
| Total unsecured loans and bank overdrafts |
| 5,474,128 |
| 4,566,711 |
| The Company has undrawn committed bank facilities of £224,000,000 at 30 June 2017 (31 December 2016: £413,000,000).
The £225.0 million 7.625% bonds 2017 were repaid on 6 March 2017 at par value. |
7.
| Financial instruments and fair value disclosures |
| The following tables illustrate the Company's financial assets and liabilities measured at fair value after initial recognition at 30 June 2017 and 31 December 2016. |
|
|
|
| 30 June 2017 | |
|
| Level 1 | Level 2 | Level 3 | Total |
|
| £'000 | £'000 | £'000 | £'000 |
| Liabilities measured at fair value |
|
|
|
|
| Derivatives | - | (41) | - | (41) |
|
|
|
|
|
|
|
|
|
| 31 December 2016 | |
|
| Level 1 | Level 2 | Level 3 | Total |
|
| £'000 | £'000 | £'000 | £'000 |
| Assets measured at fair value |
|
|
|
|
| Derivatives | - | 108 | - | 108 |
|
|
There were no other financial assets or liabilities held at fair value.
| ||
|
| Assets and liabilities designated as at fair value through profit or loss are carried at fair value. The fair value of cash and short term deposits approximates to book value due to its short-term maturity. The fair value of the bonds are classified as a level 1 fair value measurement for disclosure purposes, as the fair value is determined based on quoted prices in active markets for identical liabilities. The fair value of the £100 million 5.125% bond at 30 June 2017 was £106.1 million (31 December 2016: £101.9 million). The fair value of the £400 million 5.125% bond at 30 June 2017 was £396.7 million (31 December 2016: £393.7 million). The amortised cost of interest-bearing loans and borrowings, with the exception of the bonds, and the carrying value of all other assets and liabilities, approximates to fair value.
| ||
| Derivatives The Company classifies all derivatives as level 2 financial instruments, as their fair value is determined based on techniques for which all significant inputs are observable, either directly or indirectly.
|
| ||
| 8. | Contingent liabilities
| ||
|
| Under the terms of cross guarantee agreements, the Company has jointly and severally guaranteed the liabilities of certain other Ladbrokes Coral Group plc companies in respect of their current accounts held with UK clearing banks. The amounts under the guarantees are limited to any credit balances on current accounts held by the Company with these banks. At 30 June 2017, the aggregate amount of such credit balances was £nil (31 December 2016: £nil).
| ||
| 9. | Subsequent events
| ||
|
| There were no material subsequent events that required adjustment or disclosure in the financial statements. | ||