Cashflow

Consolidated and parent Company statement of cash flows

For the year ended 31 December 2018

 

2018
£000

2017
£000

Net cash used in operating activities

(19,021)​

(27,478)

Investing activities

Purchase of property, plant and equipment

(2,367)​

(4,885)

Purchase of intangible assets

(11,077)​

(9,112)

Proceeds from disposal of intangible assets and property, plant and equipment

3,759

1,319

Dividends received from associate

-​

7,233

Disposal of associate

-​

18,143

Acquisition of subsidiaries, net of cash acquired

(57,022)​

(8,201)

Acquisition of subsidiary, deferred consideration

(11,612)​

(8,888)

Net cash used in investing activities

(78,319)​

(4,391)

Financing activities

Movements in other banking facilities​

91,092​

66,327

Proceeds from senior notes (net of fees)

345,847​

340,546

Redemption of senior notes

(203,467)​

(290,867)

Early repayment of bond

(13,623)​

(17,631)

Repayment of interest on senior notes

(36,522)​

(31,119)

Repurchase of own shares

(2,509)​​

(1,355)

Issue of share capital

10​

9

Bank interest received

76​

9

Bank and other similar fees paid

(6,248)​

(4,274)

Payment of dividends

(21,201)​

(16,855)

Payment of deferred interest

(257)​

(610)

Net cash flow generated by financing activities

153,198​

44,180

Net increase in cash and cash equivalents

55,858​

12,311

Cash and cash equivalents at beginning of year

35,943​

23,203

Effect of exchange rates on cash and cash equivalents

200​

429

Cash and cash equivalents at end of year

92,001​

35,943

Underlying profit after tax

For the Year Ended 31 December 2018

 

31 December
2018
£000

31 December
2017
£000

Continuing operations

Income

361,796​

319,015

Operating expenses

Collection activity costs

(117,961)​

(117,638)

Other operating expenses

(113,296)​

(88,344)

Total operating expenses

(231,257)​

(205,982)

Operating profit

130,539​

113,033

Finance income

76​

9

Finance costs

(48,210)​

(44,317)

Share of profit in associates

–​

1,578

Underlying profit before tax

82,405​

70,303

Taxation charge on underlying activities

(18,297)​

(13,697)

Underlying profit after tax before non-controlling interest

64,108​

56,606

Non-controlling interest

–​

(44)

Underlying profit after tax

64,108​

56,562

Underlying Basic EPS (£)

0.37​

0.32

Underlying tax rate

22.2%​

19.5%

Reconciliation of reported to underlying costs

 

Reported
£000

Adjustments
£000

Underlying
£000

Reported
£000

Adjustments
£000

Underlying
£000

Collection activity costs

(119,041)​

1,080​

(117,961)​

(118,468)

830

(117,638)

Other operating expenses

(135,972)​

22,676​

(113,296)​

(94,603)

6,259

(88,344)

Finance costs

(66,868)​

18,658​

(48,210)​

(71,669)

27,352

(44,317)

Collection activity cost adjusting items relate to One Arrow costs incurred during the current and prior year.

Of the £42,414,000 (2017: £34,441,000) adjusting items total, £18,658,000 (2017: £27,352,000) related to bond refinancing costs, £14,717,000 were acquisition related costs, and £9,039,000 related to ‘One Arrow’ costs. Bond refinancing costs consisted of a £13,623,000 cost related to the call premium, along with £5,035,000 due to a non-cash write-off of related transaction fees, in connection with the 2023 Notes. 

Of the £14,717,000 (2017: £2,444,000) acquisition related costs, £3,068,000 related to acquisitions in the current year, and £11,649,000 related to contingent consideration payments on previous periods’ acquisitions.

The remaining £9,039,000 (2017: £4,645,000) related to ‘One Arrow’, which was a Group-wide programme which began in 2017 and came to an end in 2018, and included the development of a revised governance structure, office consolidations and IT/change investment across the Group. Given the aggregate size and nature of this Group-wide transformation programme, these costs have been presented as profit adjusting items as they are considered to warrant separate presentation. The Group expects this will drive longer term benefits into future periods.