Section image
Cherries
oil on canvas
22 x 20 in
1981
Penny Machines
oil on canvas
23¾ x 29¾ in
1961
Stack of Books
oil on canvas
30 x 24 in
n.d.
Seven Suckers
oil on canvas
19 x 23 in
1970
Twin Jackpots
oil on canvas
30 x 46 in
1962
Ties
oil on canvas
20 x 26 in
1980
Notes 26 - 31
- 26. Authorised and issued share capital
- 27. Other reserves
- 28. Acquisitions
- 29. Principal subsidiary undertakings
- 30. Related party transactions
- 31. Reconciliation to non-GAAP measures of performance
31. Reconciliation to non-GAAP measures of performance
The non-GAAP measures of performance shown below have been included to provide the users of the financial statements with a better understanding of the key performance indicators of the business.
| Reconciliation of profit before interest and taxation to headline PBIT: | |||
|---|---|---|---|
| 2009 £m | 2008 £m | 2007 £m |
|
| Profit before interest and taxation | 818.7 | 922.0 | 846.1 |
| Gains on disposal of investments | (31.1) | (3.4) | (3.4) |
| Goodwill impairment | 44.3 | 84.1 | 44.1 |
| Goodwill write-down relating to utilisation of pre-acquisition tax losses | – | 1.5 | 1.7 |
| Amortisation and impairment of acquired intangible assets | 172.6 | 78.4 | 40.3 |
| Share of exceptional losses/(gains) of associates | 1.6 | 0.5 | (0.8) |
| Investment write-downs | 11.1 | 30.5 | – |
| Cost of changes to corporate structure | – | 4.6 | – |
| Headline PBIT | 1,017.2 | 1,118.2 | 928.0 |
| Finance income | 150.4 | 169.6 | 139.4 |
| Finance costs | (355.4) | (319.4) | (250.1) |
| (205.0) | (149.8) | (110.7) | |
| Interest cover on headline PBIT | 5.0 times | 7.5 times | 8.4 times |
| Reconciliation of profit before taxation to headline PBT and headline earnings: | |||
|---|---|---|---|
| 2009 £m | 2008 £m | 2007 £m |
|
| Profit before taxation | 662.6 | 746.8 | 719.4 |
| Gains on disposal of investments | (31.1) | (3.4) | (3.4) |
| Goodwill impairment | 44.3 | 84.1 | 44.1 |
| Goodwill write-down relating to utilisation of pre-acquisition tax losses | – | 1.5 | 1.7 |
| Investment write-downs | 11.1 | 30.5 | – |
| Amortisation and impairment of acquired intangible assets | 172.6 | 78.4 | 40.3 |
| Costs of changes to corporate structure | – | 4.6 | – |
| Share of exceptional losses/(gains) of associates | 1.6 | 0.5 | (0.8) |
| Revaluation of financial instruments | (48.9) | 25.4 | 16.0 |
| Headline PBT | 812.2 | 968.4 | 817.3 |
| Taxation1 | (193.0) | (245.3) | (207.1) |
| Minority interests | (69.2) | (74.8) | (49.2) |
| Headline earnings | 550.0 | 648.3 | 561.0 |
| Ordinary dividends paid | 189.8 | 161.8 | 138.9 |
| Dividend cover on headline earnings | 2.9 times | 4.0 times | 4.0 times |
- Note
- 1
- Excluding net deferred tax credit in relation to the amortisation of acquired intangible assets and other goodwill items.
| Calculation of headline EBITDA: | |||
|---|---|---|---|
| 2009 £m | 2008 £m | 2007 £m |
|
| Headline PBIT (as above) | 1,017.2 | 1,118.2 | 928.0 |
| Depreciation of property, plant and equipment | 195.3 | 149.6 | 126.3 |
| Amortisation of other intangible assets | 30.5 | 23.4 | 18.1 |
| Headline EBITDA | 1,243.0 | 1,291.2 | 1,072.4 |
| Headline PBIT margins before and after share of results of associates: | ||||||
|---|---|---|---|---|---|---|
| Margin % | 2009 £m | Margin % | 2008 £m | Margin % | 2007 £m |
|
| Revenue | 8,684.3 | 7,476.9 | 6,185.9 | |||
| Headline PBIT | 11.7% | 1,017.2 | 15.0% | 1,118.2 | 15.0% | 928.0 |
| Share of results of associates (excluding exceptional losses/gains) | (58.6) | (46.5) | (40.6) | |||
| Headline operating profit | 11.0% | 958.6 | 14.3% | 1,071.7 | 14.3% | 887.4 |
| Calculation of effective tax rate on headline PBT1: | |||
|---|---|---|---|
| 2009 £m | 2008 £m | 2007 £m |
|
| Taxation (note 7) | (155.7) | (232.9) | (204.3) |
| Net deferred tax credit in relation to the amortisation of acquired intangible assets and other goodwill items | (37.3) | (12.4) | (2.8) |
| Taxation1 | (193.0) | (245.3) | (207.1) |
| Headline PBT | 812.2 | 968.4 | 817.3 |
| Effective tax rate on headline PBT1 | 23.8% | 25.3% | 25.3% |
- Note
- 1
- Excluding net deferred tax credit in relation to the amortisation of acquired intangible assets and other goodwill items.
| Headline diluted earnings per ordinary share: | |||
|---|---|---|---|
| 2009 £m | 2008 £m | 2007 £m |
|
| Headline earnings | 550.0 | 648.3 | 561.0 |
| Earnings adjustment: | |||
| Dilutive effect of convertible bonds | – | 0.8 | 0.9 |
| Weighted average number of ordinary shares | 1,284,880,193 | 1,169,602,949 | 1,227,016,974 |
| Headline diluted earnings per ordinary share | 44.4p | 55.5p | 45.8p |
| Reconciliation of free cash flow: | |||
|---|---|---|---|
| 2009 £m | 2008 £m | 2007 £m |
|
| Cash generated by operations | 1,137.6 | 1,195.0 | 1,120.6 |
| Plus: | |||
| Interest received | 99.6 | 133.0 | 102.6 |
| Investment income | 1.4 | 1.8 | 3.1 |
| Movement in working capital and provisions | 102.1 | 109.3 | (25.4) |
| Dividends from associates | 45.5 | 44.6 | 28.0 |
| Issue of shares | 4.1 | 10.6 | 34.8 |
| Proceeds on disposal of treasury shares | – | 6.9 | – |
| Proceeds on disposal of property, plant and equipment | 9.2 | 11.5 | 8.3 |
| Less: | |||
| Interest and similar charges paid | (248.7) | (269.2) | (212.0) |
| Purchases of property, plant and equipment | (222.9) | (196.8) | (151.1) |
| Purchases of other intangible assets (including capitalised computer software) | (30.4) | (23.8) | (19.7) |
| Corporation and overseas tax paid | (216.6) | (182.5) | (151.0) |
| Dividends paid to minority shareholders in subsidiary undertakings | (63.0) | (63.5) | (38.9) |
| Free cash flow | 617.9 | 776.9 | 699.3 |