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

Cake Slices
oil on canvas
20 x 16 in
n.d.

Notes 11-15

For the year ended 31 December 2010

11. Analysis of cash flows

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

Net cash from operating activities:

  2010
£m
2009
£m
2008
£m
Profit for the year 661.0 506.9 513.9
Taxation 190.3 155.7 232.9
Revaluation of financial instruments (18.2) (48.9) 25.4
Finance costs 276.8 355.4 319.4
Finance income (81.7) (150.4) (169.6)
Share of results of associates (55.2) (57.0) (46.0)
Operating profit 973.0 761.7 876.0
Adjustments for:      
Non-cash share-based incentive plans (including share options) 70.4 54.9 62.3
Depreciation of property, plant and equipment 184.9 195.3 149.6
Impairment of goodwill 10.0 44.3 84.1
Goodwill write-down relating to utilisation of pre‑acquisition tax losses 1.5
Amortisation and impairment of acquired intangible assets 170.5 172.6 78.4
Amortisation of other intangible assets 25.4 30.5 23.4
Investment write-downs 37.5 11.1 30.5
Gains on disposal of investments (4.1) (31.1) (3.4)
Gains on re-measurement of equity interest on acquisition of controlling interest (13.7)
Losses on sale of property, plant and equipment 0.7 0.4 1.9
Operating cash flow before movements in working capital and provisions 1,454.6 1,239.7 1,304.3
(Increase)/decrease in inventories and work in progress (46.3) 12.4 65.6
(Increase)/decrease in receivables (850.8) (90.0) 492.6
Increase/(decrease) in payables – short term 1,135.7 (51.3) (628.9)
Increase/(decrease) in payables – long term 10.3 25.5 (23.1)
(Decrease)/increase in provisions (23.4) 1.3 (15.5)
Cash generated by operations 1,680.1 1,137.6 1,195.0
Corporation and overseas tax paid (207.4) (216.6) (182.5)
Interest and similar charges paid (219.7) (248.7) (269.2)
Interest received 50.7 99.6 133.0
Investment income 4.2 1.4 1.8
Dividends from associates 53.3 45.5 44.6
Net cash inflow from operating activities 1,361.2 818.8 922.7

Acquisitions and disposals:

  2010
£m
2009
£m
2008
£m
Initial cash consideration (138.6) (35.4) (872.2)
Cash and cash equivalents acquired (net) 57.0 1.3 (6.1)
Earnout payments (113.3) (81.5) (67.8)
Loan note redemptions (5.1) (2.6)
Purchase of other investments (including associates) (23.8) (53.3) (91.7)
Proceeds on disposal of investments 23.7 50.5 11.0
Acquisitions and disposals (200.1) (118.4) (1,029.4)
Cash consideration for non-controlling interests (15.1) (26.4) (19.7)
Net cash outflow (215.2) (144.8) (1,049.1)

Share repurchases and buy-backs:

  2010
£m
2009
£m
2008
£m
Purchase of own shares by ESOP Trust (46.4)
Share cancellations (excluding brokerage fees) (112.2)
Shares purchased into treasury (9.5)
Proceeds on disposal of treasury shares 6.9
Net cash outflow (46.4) (9.5) (105.3)

Net increase/(decrease) in borrowings:

  2010
£m
2009
£m
2008
£m
Increase/(decrease) in drawings on bank loans 19.8 (1,068.0) 1,273.3
Proceeds from issue of £450 million convertible bonds 450.0
Proceeds from issue of $600 million bonds 367.4
Repayment of TNS debt (175.7) (395.7)
Repayment of €650 million bonds (515.1)
Repayment of $100 million bonds (50.5)
Repayment of $150 million convertible debt (96.2)
Proceeds from issue of €750 million bonds 594.6
Net cash inflow/(outflow) 19.8 (426.3) 810.4

Cash and cash equivalents:

  2010
£m
2009
£m
2008
£m
Cash at bank and in hand 1,877.1 1,570.5 2,485.9
Short-term bank deposits 88.1 96.2 86.6
Overdrafts1 (255.4) (720.7) (1,254.4)
Cash and cash equivalents at end of year 1,709.8 946.0 1,318.1
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.