Notes 11-15

11. Analysis of cash flows

The following tables analyse the items included within the main cash flow headings on the Consolidated cash flow statement.

Net cash from operating activities:

2008
£m
2007
£m
2006
£m
Profit for the year 513.9 515.1 482.6
Taxation 232.9 204.3 199.4
Finance costs 344.8 266.1 211.7
Finance income (169.6) (139.4) (111.0)
Share of results of associates (46.0) (41.4) (41.1)
Operating profit 876.0 804.7 741.6
Adjustments for:
Non-cash share-based incentive plans
(including share options)

62.3

62.4

70.9
Depreciation of property, plant and equipment 149.6 126.3 129.1
Impairment of goodwill 84.1 44.1 35.5
Goodwill write-down relating to utilisation
of pre-acquisition tax losses
1.5 1.7 8.8
Amortisation and impairment of acquired intangible assets 78.4 40.3 43.3
Amortisation of other intangible assets 23.4 18.1 13.5
Investment write-downs 30.5
Gains on disposal of investments (3.4) (3.4) (7.3)
Losses/(gains) on sale of property, plant and equipment 1.9 1.0 (3.7)
Operating cash flow before movements
in working capital and provisions
1,304.3 1,095.2 1,031.7
Decrease/(increase) in inventories and work in progress 65.6 29.4 (83.0)
Decrease/(increase) in receivables 492.6 (886.7) (489.1)
(Decrease)/increase in payables – short term (628.9) 897.6 433.4
(Decrease)/increase in payables – long term (23.1) 7.6 17.6
Decrease in provisions (15.5) (22.5) (50.0)
Cash generated by operations 1,195.0 1,120.6 860.6
Corporation and overseas tax paid (182.5) (151.0) (162.0)
Interest and similar charges paid (269.2) (212.0) (135.1)
Interest received 133.0 102.6 75.2
Investment income 1.8 3.1 2.4
Dividends from associates 44.6 28.0 20.3
Net cash inflow from operating activities 922.7 891.3 661.4
Acquisitions and disposals:

2008
£m
2007
£m
2006
£m
Initial cash consideration (891.9) (520.4) (120.5)
Cash and cash equivalents acquired (net) (6.1) 60.5 21.4
Earnout payments (67.8) (93.9) (91.6)
Loan note redemptions (2.6) (2.1) (11.7)
Purchase of other investments (including associates) (91.7) (128.0) (28.7)
Proceeds on disposal of investments 11.0 9.1 15.5
Net cash outflow (1,049.1) (674.8) (215.6)
Share repurchases and buy-backs:

2008
£m
2007
£m
2006
£m
Share cancellations (excluding brokerage fees) (112.2) (402.7) (218.8)
Purchase of own shares by ESOP trust (38.9)
Shares purchased into treasury (12.7)
Proceeds on disposal of treasury shares 6.9
Net cash outflow (105.3) (415.4) (257.7)
Net increase in borrowings:

 
2008
£m
2007
£m
2006
£m
Increase in drawings on bank loans 1,273.3
Repayment of €650 million bonds (515.1)
Repayment of $100 million bonds (50.5)
Repayment of $150 million convertible debt (96.2)
Repayment of TNS debt (395.7)
Proceeds from issue of f750 million bonds 594.6
Repayment of £450 million bonds (450.0)
Proceeds from issue of £400 million bonds 400.0
Proceeds from issue of £200 million bonds 200.0
Proceeds from issue of €500 million bonds 348.9
Increase in drawings on bank loans (21.8)
Proceeds from issue of €600 million Eurobonds 403.9
Net cash inflow 810.4 498.9 382.1
Cash and cash equivalents:

 
2008
£m
2007
£m
2006
£m
Cash at bank and in hand 2,485.9 1,957.4 1,476.8
Short-term bank deposits 86.6 82.8 186.9
Overdrafts1 (1,254.4) (977.9) (706.8)
Cash and cash equivalents at end of year 1,318.1 1,062.3 956.9

Note

1
Bank overdrafts are included in cash and cash equivalents because they form an integral part of the Group’s cash management.

The Group considers that the carrying amount of cash and cash equivalents approximates their fair value.

Back to top