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10. Analysis of cash flows

The following tables analyse the items included within the main cash flow headings:

Net cash (outflow)/inflow from operating activities:

Net cash (outflow)/inflow from operating activities:

 
Six months
ended
30 June
2010
£m
Six months
ended
30 June
2009
£m

Year ended
31 December
2009
£m
Profit for the period 182.6 138.3 506.9
Taxation 61.3 41.0 155.7
Revaluation of financial instruments 19.5 (50.8) (48.9)
Finance costs 138.4 197.5 355.4
Finance income (39.3) (107.5) (150.4)
Share of results of associates (22.3) (19.8) (57.0)
Operating profit 340.2 198.7 761.7
Adjustments for:      
Non-cash share-based incentive plans (including share options) 34.7 31.1 54.9
Depreciation of property, plant and equipment 93.0 97.3 195.3
Goodwill impairment 10.0 40.0 44.3
Amortisation and impairment of acquired intangible assets 87.0 88.1 172.6
Amortisation of other intangible assets 12.5 16.2 30.5
Gains on disposal of investments (6.8) (8.4) (31.1)
Investment write-downs 2.2 4.3 11.1
Losses on sale of property, plant and equipment 0.3 0.1 0.4
Operating cash flow before
movements in working capital
and provisions

573.1
467.4 1,239.7
Movements in working capital and provisions1 (555.7) (481.9) (102.1)
Cash generated by operations 17.4 (14.5) 1,137.6
Corporation and overseas tax paid (95.7) (94.9) (216.6)
Interest and similar charges paid (134.1) (200.7) (248.7)
Interest received 27.1 96.2 99.6
Investment income 1.0 0.4 1.4
Dividends from associates 24.6 22.1 45.5
  (159.7) (191.4) 818.8
Notes
1
The Group typically experiences an outflow of working capital in the first half of the financial year and an inflow in the second half. This is primarily due to the seasonal nature of working capital flows associated with its media buying activities on behalf of clients.

Acquisitions and disposals:

Acquisitions and disposals:

 
Six months
ended
30 June
2010
£m
Six months
ended
30 June
2009
£m

Year ended
31 December
2009
£m
Initial cash consideration (5.3) (12.4) (35.4)
Cash and cash equivalents acquired (net) 0.4 0.9 1.3
Earnout payments (71.2) (37.8) (81.5)
Loan note redemptions (4.0)
Purchase of other investments (including associates) (11.4) (36.7) (53.3)
Proceeds on disposal of investments 14.0 8.7 50.5
Acquisitions and disposals (77.5) (77.3) (118.4)
Cash consideration for non-controlling interests (12.4) (15.7) (26.4)
Net acquisition payments and investments (89.9) (93.0) (144.8)

Share repurchases and buy-backs:

Share repurchases and buy-backs:

 
Six months
ended
30 June
2010
£m
Six months
ended
30 June
2009
£m

Year ended
31 December
2009
£m
Purchase of own shares by ESOP trust (28.6)
Shares purchased into treasury (9.5) (9.5)
  (28.6) (9.5) (9.5)

Net increase in borrowings:

Net increase in borrowings:

 
 
Six months
ended
30 June
2010
£m
Six months
ended
30 June
2009
£m

Year ended
31 December
2009
£m
Increase/(decrease) in drawings on bank loans 432.0 (534.0) (1,068.0)
Proceeds from issue of £450 million 5.75% convertible
bonds due May 2014

450.0 450.0
Proceeds from issue of $600 million 8.0% bonds due September 2014 367.4 367.4
Repayment of TNS debt (175.7) (175.7)
  432.0 107.7 (426.3)

Cash and cash equivalents:

Cash and cash equivalents:

 
 
Six months
ended
30 June
2010
£m
Six months
ended
30 June
2009
£m

Year ended
31 December
2009
£m
Cash at bank and in hand 1,005.8 1,026.9 1,570.5
Short-term bank deposits 97.8 71.3 96.2
Overdrafts1 (151.6) (380.3) (720.7)
  952.0 717.9 946.0
Notes
1
Bank overdrafts are included in cash and cash equivalents because they form an integral part of the Group’s cash management.

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