22nd Feb 2007 07:01
Capita Group PLC22 February 2007 THE CAPITA GROUP PLC Preliminary Results for the year ended 31 December 2006 STRONG 2006 PERFORMANCE Financial Highlights Year ended 31 Year ended 31 Change December 2006 December 2005 Turnover £1,739m £1,436m +21%Operating profit * £225.1m £183.1m +23%Profit before tax * £200.1m £169.6m +18%Earnings per share * 23.1p 18.6p +24%Total dividend per share 9.0p 7.0p +29% * before intangible amortisation of £6.9m (2005: £16.5m, including impairment of£12.0m) and after share based payment charge of £8.5m (2005: £7.6m). Key points • Operating margins increased by 19 basis points to 12.9% (2005: 12.8%) • Operating cash flow of £279m (2005: £232m) • £1.37bn major contract wins and renewals in 2006 (2005: £1.14bn) • Bid pipeline of £2.6bn (February 2006: £2.2bn) • Life & pensions and local government markets particularly buoyant • £301m returned to shareholders, including the proposed final dividend Paul Pindar, Chief Executive of The Capita Group Plc, commented: "Capita has performed very strongly in 2006. We have secured record levels ofnew business, thereby strengthening our position as the UK's market leader inproviding BPO services to the public and private sectors. "Our successes in 2006 and progress in early 2007 mean that the ingredients fora successful year are already in place. The Board anticipates delivering stronggrowth in 2007." For further information: The Capita Group Plc Tel: 020 7799 1525Paul Pindar, Chief ExecutiveShona Nichols, Corporate Communications DirectorCapita Press Office Tel: 0870 2400 488 Financial Dynamics Tel: 020 7269 7121Andrew Lorenz/Susanne Walker The Capita Group Plc Preliminary Statement for the year ended 31 December 2006 Capita has performed very strongly in 2006. We have secured record levels of newbusiness, thereby strengthening our position as the UK's market leader inproviding business process outsourcing (BPO) services to the public and privatesectors. Our successes during 2006 position us well for 2007. In the year ended 31 December 2006, turnover increased by 21% to £1,739m (2005:£1,436m). Operating profits before amortisation and after share based paymentcharge rose by 23% to £225.1m (2005: £183.1m) and profits before taxation andamortisation and after share based payment charge increased by 18% to £200.1m(2005: £169.6m). Earnings per share before amortisation and after share basedpayment charge grew by 24% to 23.1p (2005: 18.6p). Operating cash flow rose by 20% to £279m (2005: £232m). We have increaseddividends by 29% and returned a further £245m to shareholders through purchasingour own shares. In total, including the proposed final dividend, we will bereturning £301m (2005: £96m) to shareholders in respect of the 2006 financialyear. We remain enthused by the many opportunities that exist to develop the Group andwe will continue to build long term value for our shareholders, customers andour employees. Building value for shareholders To ensure we are building value for shareholders, we focus on a number of keymeasures. We believe that the disciplines set out below collectively form anintegral part of building value for our shareholders on a consistent basis overthe long term. • We have continued our long term trend of improving operating margins (before amortisation and after share based payment charge), which have increased 19 basis points during the period to 12.9%. This is due to several factors including increasing volumes of work being processed through existing infrastructure, excellent operational performance across our contract base and our continued focus on seeking efficiencies in service delivery, including increasing the proportion of services delivered from India. • The strength of Capita and its business model is reflected in our excellent underlying cash flow, with £279m (2005: £232m) generated by operations in the year, representing an operating profit to cash conversion rate of 124% (2005: 127%). Our underlying free cash flow increased by 21% to £154m (2005: £127m). • We aim to contain capital expenditure at or below 4% of revenue, although there may be rare occasions when we exceed this where the financial strength of Capita can be used as a competitive advantage. In 2006, we met this objective with net capital expenditure being 3.6% (2005: 3.7%) of annual revenue. This was achieved after significant investment in Capita's advanced IT platforms supporting, in particular, our life & pensions business. • We focus on driving a steadily increasing return on capital. During 2006, the post tax return on average capital employed has improved to 18.5% (2005: 17.1%). This compares to our estimated weighted average cost of capital which is 8.4%. • A key element in the creation of shareholder value is a progressive dividend policy. The Board is recommending a final dividend of 6.3p per ordinary share making a total of 9p (2005: 7p) for the year. This represents a 29% increase in dividends paid in respect of the 2005 financial year. Over the 5 years to 31 December 2006, we have grown Capita's annual dividend at a compound rate of 32%. The final dividend will be payable on 4 May 2007 to shareholders on the register at the close of business on 30 March 2007. Our confidence in the strength and resilience of Capita's business model allows us to reduce annual dividend cover to 2.6 times (2005: 2.7 times). • There may be circumstances in which market conditions allow us to add value for shareholders through share buybacks, thus ensuring we have an efficient capital structure which will minimise our long term cost of capital. During 2006, the Group bought back 53m shares (representing 7.9% of the issued share capital) at an average price of £4.64. The Group has authority to re-purchase up to 10% of its issued share capital and we plan to seek renewal of this authority at the Annual General Meeting. • We have continued with our strategy of acquiring small to medium-sized businesses which are priced at a level which adds value for our shareholders. In 2006, we spent £48m on 11 acquisitions and investments. This year, our pipeline of potential businesses to be acquired remains at a healthy level. We will continue to be extremely selective but, notwithstanding this, we anticipate a sustained volume of small transactions during 2007. • Over the 10 years to 14 February 2007, the market capitalisation of the Group has increased from £360m to £4.1bn. The total shareholder return in this period has been 10.5 fold, equivalent to a 27% compound annual return. Our marketplace We have maintained our number 1 position in the BPO market as well as retainingleading positions across the majority of our 9 chosen markets, including: localgovernment, central government, education, transport, life & pensions andinsurance.* Our extensive infrastructure and capability provide us with a strongcompetitive edge across our markets and enable us to present strong propositionsto clients. The market for BPO in the UK and Ireland continues to provide strong growthopportunities. In 2006, this market was estimated at £4.6bn, split 35% and 65%between the public and private sectors respectively. Our public/private sectorsplit is currently 52%/48% and over time we expect to move closer to the overallmarket split. Industry analysts, Ovum, estimate that the total potential marketis worth £94.8bn per annum.* Generating profitable organic growth & developing through acquisitions Of the 21% increase in turnover in 2006, 16% was achieved through organic growthand the remaining 5% was derived through acquisitions. We have 2 complementary approaches to creating organic growth. First, ourcentrally managed Major Sales Team seeks to secure contracts typically with avalue of £10m or above. These contracts are complex, integrated projects thatrequire a wide range of the Group's skills and which generate high quality,recurring revenues. Secondly, each of our businesses employs sales teams focused upon securinggrowth from both existing and new customers. Across the Group we have over20,000 customers and our retention rate is excellent. Additionally, we achieve growth through acquiring businesses which enable us tobuild on our existing capabilities or establish a presence in a new market area. Securing major contracts Securing and renewing major contracts is an important component of our growth.Our sales performance in 2006 was excellent. We secured 23 major new andextended contracts with an aggregate value of £1.37bn (2005: £1.14bn).Significant new contracts won include a 10 year contract worth £132m with theBBC, a 3 year contract worth £120m with the Department of Trade & Industry(DTI), a 7 year contract worth £120m with DSG international plc, a 15 yearcontract worth £100m with Fujitsu and preferred bidder status on a 10 yearcontract worth £250m with Co-operative Insurance. 2007 has started well. In early January, we announced a 15 year contract worth£19m with Countrywide Assured to provide administration services for 80,000 lifeand pensions policies. At the beginning of February, we announced that we hadsigned a contract with Swindon Council to deliver local services in a 15 yearstrategic partnership worth £243m. This contract had previously been estimatedas worth £140m over 10 years when we announced our selection as preferredsupplier in October 2006. Today, we are pleased to announce that we have beenselected as preferred partner to provide outsourced occupational health servicesto the Department for Work and Pensions, the Department for Education and Skillsand the Health and Safety Executive, estimated to be worth £10m over 5 years. As a consequence of this activity, the total value of major contracts won andextended in the first 8 weeks of 2007 is £132m. We are also now in the positionwhere we have no material contracts (defined as having annual revenue in excessof 1% of 2006 turnover) due for renewal in 2007 and 2008 and only 2 in 2009. Our current bid pipeline stands at £2.6bn (February 2006: £2.2bn) and containssome exciting opportunities, particularly within the life and pensions and localgovernment markets. The bid pipeline only includes bid situations in whichCapita is shortlisted as one of 4 or fewer competitors and caps our largest bidsat £500m. Behind this is an active prospect list of opportunities which are yetto reach a shortlist stage. We have already secured strong revenue growth for 2007 and our efforts are nowfocused upon achieving a similar position for 2008. Development across our businesses Our businesses have developed well across the year securing new and repeatbusiness. We have also continued our strategy of expanding existing offeringsand entering new market segments through acquiring small, niche businesses. Ouroperational capabilities continue to grow, evidenced by the smooth running ofour major integrated contracts and our separate businesses. Some highlights fromacross our Divisions are detailed below. Our operations supporting the financial services sector have performed superbly,demonstrated by the growth in our fund and unit trust administration business.During the year, we more than doubled funds under administration which todayexceed £30bn. Growth has come organically, through acquisition and also byincreasing our product range and entering new markets, including Jersey andDublin for offshore funds. We provide a wide range of fund administrationservices including a "hosting" solution for fund managers. Under thisarrangement, the fund manager outsources the administration of 39 out of 40functions to Capita. The manager retains the function of investment management. In the life and pensions market, we are the leading outsourcing provider with anestimated 39% market share of contracts let.* We currently administer 4.5m life,savings and pensions policies and this market continues to be very active. Ournew Prudential contract, delivering administration services from Belfast toPrudential's UK life and pensions operations, transferred smoothly at thebeginning of October and already progress has been made in improving servicequality and efficiency. Our SIPP business currently administers self investedpersonal pensions for a number of leading life and investment firms includingScottish Life, St. James's Place and MetLife. SIPP administration is a stronggrowth area of the pensions market. Capita Hartshead delivered another year ofstrong performance, gaining 28% market share of the current outsourced marketand 12% of the overall occupational pension scheme administration market. In the year, businesses across the Group increasingly worked together to combineservices and resources to meet clients' widening requirements. One reason why wewere chosen as preferred partner by Co-operative Insurance was our ability toprovide unit trust administration seamlessly alongside our life and pensionscapabilities. Another joint proposition draws on our life and pensions, generalinsurance, SIPP, unit trust administration and software capabilities to enhancethe interface between providers and distributors, enabling products to bebrought to market swiftly and reducing the cost of distribution. We broadenedthis proposition in the year by acquiring Synaptic Systems, a leading providerof on-line life, pensions and investment research. 2006 has seen a leap forward in the development of our integrated HR solutionsbusiness, with the commencement of the BBC and Northern Ireland Civil Servicecontracts and the establishment of an HR administration centre in NorthernIreland. The breadth and strength of our HR strategy, resourcing, payrolladministration, learning and development and outplacement resourcing businessesplayed a key role in securing these contracts. Our resourcing businessesperformed well in the year. Capita Resourcing has experienced good growth,winning significant new business and successfully extending existing managedservices contracts with BAA, BUPA and NATS. Capita Education Resourcingmaintained market share and increased its further education supply business by117%. Veredus, our search and selection business, secured contracts with anumber of new and existing clients including National Assembly for Wales, DTIand the Arts Council. Although the central government market has been quieter in 2006, there has beenincreasing demand for our services across the local government and educationmarkets. Our ICT led transformation partnership with Birmingham City Council isprogressing well with measurable service quality improvements and significantsavings already achieved. Capita Local Government Services grew strongly in theyear, securing major partnerships with Rossendale Borough Council and SouthOxfordshire and the Vale of White Horse District Councils and winningadministration and customer services business from new and existing clients,including Bristol and Edinburgh City Councils and Barking and Dagenham Council.Following the introduction of the Government's "Every Child Matters: Change forChildren" strategy, we reviewed our service offering in this area and are nowrecognised as leading providers of both consultancy and interim management andsoftware support to children's services authorities. Growth of our BPO offshore operation in India has accelerated, with the businessdoubling in size in the past 12 months. We have over 800 staff working across 2sites in Mumbai. By the end of 2007, we will have secured a third site in asecond Indian city and we anticipate employing 1,500 staff. By 2009, weanticipate that we will have approaching 3,000 people based in India. Ouroffshore facilities are delivering significant savings, providing operationalflexibility, raising service quality and increasing productivity. Capita isdirectly benefiting through offshoring some of its own support functions, someadministration operations that support multiple client groups (our financialservices and life & pensions divisions are the largest internal users) and backoffice processes for some of our existing long term contracts. Additionally, ourability to offer a standalone offshoring or blended offshore/onshore operatingmodel to new clients provides a strong competitive proposition and will be themain driver of growth for our offshore operations. Valuing our people The value that we have created for our stakeholders in Capita is a direct resultof the competence and commitment that our staff give to the company. The culturewithin Capita is a key differentiator from our competition. We have a stable andconsistent management team, a low turnover of senior people and a tremendousspirit throughout the company. The Board would like to thank everyone for therole they play in Capita's success. We also welcome the employees that havejoined us since the beginning of 2006. We now employ 27,800 people in the UK,Ireland, the Channel Islands and India. Board changes Rod Aldridge, Capita's founder and Chairman, retired from the Board on 31 July2006. Rod played a major role in building and developing the company for over 20years and the Board and staff across Capita wish him every success with his newinterests. Following Rod's retirement, Eric Walters was appointed asNon-Executive Chairman on 1 August 2006, having been a Non-Executive Director ofCapita for over 5 years. Also on 1 August 2006, Simon Pilling was appointed tothe Group Board as an Executive Director, having served on Capita's ExecutiveDivisional Board. The Board was further strengthened with the appointment ofBill Grimsey as Non-Executive Director with effect from 9 October 2006. Future prospects Capita enters 2007 with confidence. Our markets continue to generateopportunity, our sales prospects are exciting and our operational performance isconsistently strong. Our successes in 2006 and progress in early 2007 mean that the ingredients for asuccessful year are already in place. The Board anticipates delivering stronggrowth in 2007. -Ends- * Source: Ovum 2006 Preliminary Statement Consolidated income statement for the year ended 31 December 2006 2006 2005 Before impairment Impairment Before and and amortisation Amortisation Total amortisation amortisation Total Notes £m £m £m £m £m £mContinuingoperations:Revenue 1 1,738.5 - 1,738.5 1,435.5 - 1,435.5Cost of sales 1,256.5 - 1,256.5 1,054.6 - 1,054.6 Gross profit 482.0 - 482.0 380.9 - 380.9Administrative expenses 2 256.9 6.9 263.8 197.8 16.5 214.3 Operating profit 1 225.1 (6.9) 218.2 183.1 (16.5) 166.6Finance revenue 1.0 - 1.0 0.4 - 0.4Finance costs (26.0) - (26.0) (13.9) - (13.9)Profit before tax 200.1 (6.9) 193.2 169.6 (16.5) 153.1Income tax expense (55.4) 1.9 (53.5) (47.0) 1.2 (45.8) Profit for the year 144.7 (5.0) 139.7 122.6 (15.3) 107.3 Attributable to:Equity holders of the parent 144.8 (5.0) 139.8 122.8 (15.3) 107.5Minority interest (0.1) - (0.1) (0.2) - (0.2) 144.7 (5.0) 139.7 122.6 (15.3) 107.3 Earnings per share 3- basic 23.10p (0.78)p 22.32p 18.60p (2.32)p 16.28p- diluted 22.56p (0.76)p 21.80p 18.33p (2.28)p 16.05p Consolidated statement of recognised income and expense for the year ended 31 December 2006 2006 2005 £m £m Actuarial gains/(losses) on defined benefit pension schemes 12.8 (3.7)Exchange differences on translation of foreign operations (0.7) 0.2Gain on available for sale investments 0.3 -Tax on items taken directly to equity 11.0 3.7 Net income recognised directly in equity 23.4 0.2Profit for the year 139.7 107.3Total income and expense for the period 163.1 107.5 Attributable to: Equity holders of the parent 163.2 107.7Minority interest (0.1) (0.2) 163.1 107.5 Consolidated balance sheet at 31 December 2006 2006 2005 Notes £m £mNon-current assetsProperty, plant and equipment 171.0 150.1Intangible assets 630.0 588.7Financial assets 32.6 13.8Trade and other receivables 6.8 5.8Deferred taxation 22.1 25.1 862.5 783.5Current assetsTrade and other receivable 394.9 343.8Cash 9.7 - 404.6 343.8Total assets 1,267.1 1,127.3 Current liabilitiesTrade and other payables 449.4 378.0Financial liabilities 50.4 49.9Provisions 1.0 1.3Income tax payable 33.5 32.5 534.3 461.7Non-current liabilitiesTrade and other payables 0.8 1.3Financial liabilities 378.7 221.7Provisions 0.7 2.0Employee benefits 26.8 43.0 407.0 268.0 Total liabilities 941.3 729.7 Net assets 325.8 397.6 Capital and reservesIssued capital 12.3 13.4Share premium 308.1 258.1Treasury shares - (0.4)Capital redemption reserve 1.7 0.2Foreign currency translation (0.4) 0.3Retained earnings 4.0 125.8Equity shareholders' funds 325.7 397.4Minority interest 0.1 0.2 Total equity 325.8 397.6 Consolidated cash flow statement for the year ended 31 December 2006 2006 2005 Notes £m £mCash flows from operating activitiesOperating profit on continuing activities before 218.2 166.6interest and taxationDepreciation 42.2 31.7Amortisation of other intangible assets (treated as 1.2 4.9depreciation)Amortisation of intangible assets created on 6.9 4.5acquisitionImpairment of goodwill 2 - 12.0Share based payment charge 8.5 7.6Pension charge 15.9 12.0Pension contributions (19.1) (16.6)Loss on sale of property, plant and equipment 0.3 0.5Movement in provisions (1.9) (2.4)Increase in debtors (48.8) (19.4)Increase in creditors 55.6 30.8 Cash generated from operations 279.0 232.2 Income tax paid (40.3) (38.2)Interest paid (23.1) (13.9)Interest received 1.0 0.4 Net cash generated from operating activities 216.6 180.5 Net cash used in investing activitiesPurchase of property, plant and equipment (63.0) (49.7)Proceeds from sale of property, plant and equipment 1.9 0.4Purchase of intangible fixed assets (1.4) (4.0)Acquisition of subsidiary undertakings and businesses (37.6) (101.9)Cash acquired with subsidiary undertakings 1.0 2.7Purchase of trade investments in insurance captives (7.6) (12.0)Investment loan (11.7) - (118.4) (164.5) Net cash used in financing activitiesIssue of ordinary share capital 50.4 9.9Share buybacks (244.9) (49.6)Share transaction costs (1.2) (0.3)Dividends paid 4 (47.7) (38.0)Capital element of finance lease rental payments (0.4) (0.2)Asset based securitised financing 5 (0.7) 1.4Repayment of loan notes and long term loans (3.4) (7.3)Proceeds on issue of bond 179.1 75.0Financing arrangement costs (0.9) (0.1) (69.7) (9.2) Net increase in cash and cash equivalents 5 28.5 6.8Cash and cash equivalents at the beginning of the period (19.3) (26.1) Cash and cash equivalents at 31 December 9.2 (19.3) Cash and cash equivalents comprise:Overdraft (0.5) (19.3)Cash at bank and in hand 9.7 - Total 9.2 (19.3) Notes to the Preliminary Statement 31 December 2006 1. Segmental information The Group's operations are organised and managed separately according to thenature of the services provided, with each segment representing a strategicbusiness unit offering a different package of related services across theGroup's markets. Before eliminating sales between business units on consolidation, the Groupaccounts for sales between business units as if they were to a third party atmarket rates. Revenues are attributed to geographic areas based on the locationof the assets producing the revenues. During 2006 the Group changed the management reporting structure of itsoperations and therefore the disclosure below presents the information under thenew structure. The comparatives have been restated accordingly. Year ended 31 December 2006 Insurance Property and ICT and Life & HR solutions consultancy specialist Financial Integrated advisory pensions Professional services services services services services services services services TotalSegment £m £m £m £m £m £m £m £m £mrevenueTotal segment revenue 226.0 225.5 310.1 120.9 317.6 329.3 186.9 249.5 1,965.8Inter-segment revenue (20.1) (26.1) (26.9) (0.1) (16.7) (77.0) (2.6) (57.8) (227.3)Third party revenue 205.9 199.4 283.2 120.8 300.9 252.3 184.3 191.7 1,738.5 Segment resultResult after depreciation 18.7 13.9 32.8 32.1 48.7 25.8 23.4 38.2 233.6Share based payment (1.0) (1.1) (1.5) (0.6) (2.1) (0.7) (0.7) (0.8) (8.5)Intangible amortisation (0.2) (0.9) (2.2) (0.9) (0.9) (0.4) (1.2) (0.2) (6.9)Impairment charge - - - - - - - - - 17.5 11.9 29.1 30.6 45.6 24.8 21.5 37.2 218.2 Net finance costs (25.0)Profit before taxand minorityinterests 193.2Corporation taxation (53.5)Minority interests 0.1Profit after taxand minorityinterests 139.8 Year ended 31 December 2005 Insurance Property and ICT and Life & HR solutions consultancy specialist Financial Integrated advisory pensions Professional services services services services services services services services TotalSegment £m £m £m £m £m £m £m £m £mrevenueTotal segment revenue 216.5 200.7 271.4 99.4 287.0 191.0 117.1 190.1 1,573.2Inter-segment revenue (14.3) (10.2) (17.7) (1.9) (24.3) (46.0) (2.3) (21.0) (137.7)Third party revenue 202.2 190.5 253.7 97.5 262.7 145.0 114.8 169.1 1,435.5 Segment resultResult after depreciation 15.9 17.1 25.4 24.9 43.7 15.9 14.2 33.6 190.7Share based payment (0.9) (1.0) (1.3) (0.5) (1.9) (0.6) (0.6) (0.8) (7.6)Intangible amortisation (1.7) (0.5) (0.9) (0.3) (0.6) - (0.5) - (4.5)Impairment charge - - - - - - - (12.0) (12.0) 13.3 15.6 23.2 24.1 41.2 15.3 13.1 20.8 166.6 Finance costs (13.5)Profit before taxand minorityinterests 153.1 Corporation taxation (45.8)Minority interests 0.2 Profit after taxand minorityinterests 107.5 Notes to the Preliminary Statement 31 December 2006 2 Administrative expenses Included in the middle column disclosed on the face of the consolidated incomestatement, against the line item administrative expenses, are the following: 2006 2005 £m £m Intangible amortisation 6.9 4.5Impairment - 12.0 6.9 16.5 3 Earnings per share Basic earnings per share amounts are calculated by dividing net profit for theyear attributable to ordinary equity holders of the parent by the weightedaverage number of ordinary shares outstanding during the year. Diluted earnings per share amounts are calculated by dividing the net profit forthe year attributable to ordinary equity holders of the parent by the weightedaverage number of ordinary shares outstanding during the year plus the weightedaverage number of ordinary shares that would be issued on the conversion of allthe dilutive potential ordinary shares into ordinary shares. The following reflects the income and share data used in the basic and dilutedearnings per share computations: 2006 2005 £m £m Net profit attributable to ordinary equity holders of the parent from continuing operations 139.8 107.5 2006 2005 Number Number million millionWeighted average number of ordinary shares (excluding treasury shares)for basic earnings per share 626.3 660.1Dilutive potential ordinary shares:Employee share options 15.0 9.7Weighted average number of ordinary shares (excluding treasury shares)adjusted for the effect of dilution 641.3 669.8 There have been no other transactions involving ordinary shares or potentialordinary shares between the reporting date and the date of completion of thesefinancial statements. The following additional earnings per share figures are calculated based onearnings attributable to ordinary equity holders of the parent beforeamortisation and impairment of £144.8m (2005: £122.8m). They are included asthey provide a better understanding of the underlying trading performance of theGroup. 2006 2005 P pBasic earnings per share - before amortisation and impairment 23.10 18.60 - after amortisation and impairment 22.32 16.28Diluted earnings per share - before amortisation and impairment 22.56 18.33 - after amortisation and impairment 21.79 16.05 Notes to the Preliminary Statement 31 December 2006 4 Dividends paid and proposed 2006 2005 £m £mDeclared and paid during the year Ordinary shares (equity):Final for 2005 paid: 4.9p per share (2004: 3.6p per share) 31.1 24.0Interim for 2006 paid 2.7p per share (2005: 2.1p per share) 16.6 14.0 47.7 38.0Proposed for approval at AGM (not recognised as a liability at 31December) Ordinary shares (equity):Final for 2006: 6.3p per share (2005: 4.9p per share) 38.9 32.0 5 Reconciliation of net cash flow to movement in net funds/(debt) At December 2006 Net debt Acquisi- at 1 tions Non-cash Net debt at January in 2006 Cash flow flow 31 December 2006 (exc. Cash) movements movements 2006 £m £m £m £m Cash and cash equivalents - - 9.7 - 9.7Overdrafts (19.3) - 18.8 - (0.5)Cash (19.3) - 28.5 - 9.2Loan notes (22.7) - 0.5 - (22.2)Long term debt - (2.9) 2.9 - -Bonds (198.6) - (178.6) 5.2 (372.0)Currency swaps (2.6) - - (3.8) (6.4)Interest rate swaps 1.6 - - (1.6) -Finance leases (0.2) (0.7) 0.4 - (0.5) Sub-total net debt (241.8) (3.6) (146.3) (0.2) (391.9)Asset based securitised finance (28.2) - 0.7 - (27.5) (270.0) (3.6) (145.6) (0.2) (419.4) At December 2005 Net debt Acquisi- at 1 tions Non-cash Net debt at January in 2005 Cash flow flow 31 December 2005 (exc. Cash) movements movements 2005 £m £m £m £mCash and cash equivalents - - - - -Overdrafts (26.1) - 6.8 - (19.3)Cash (26.1) - 6.8 - (19.3)Loan notes (27.1) - 4.4 - (22.7)Long term debt - (2.9) 2.9 - -Bonds (123.0) - (74.9) (0.7) (198.6)Currency swaps (3.1) - - 0.5 (2.6)Interest rate swaps 1.4 - - 0.2 1.6Finance leases (0.2) (0.2) 0.2 - (0.2) Sub-total net debt (178.1) (3.1) (60.6) - (241.8)Asset based securitised finance - (26.8) (1.4) - (28.2) (178.1) (29.9) (62.0) - (270.0) Notes to the Preliminary Statement 31 December 2006 6. Preliminary announcement The preliminary announcement is prepared in accordance with InternationalFinancial Reporting Standards. A duly appointed and authorised committee of the Board of Directors approved thepreliminary announcement on 21 February 2007. The announcement represents non-statutory accounts within the meaning of section240 of the Companies Act 1985. The statutory annual accounts for the year ended31 December 2006, upon which an unqualified audit opinion has been given andwhich did not contain a statement under section 235, 237(2) or 237(3) of theCompanies Act 1985, will be sent to the Registrar of Companies. Copies of the announcement can be obtained from the Company's registered officeat 71 Victoria Street, Westminster, London, SW1H 0XA. It is intended that the Annual Report and Accounts will be posted toshareholders on 29 March 2007 and will be available to members of the public atthe registered office of the Company from that date. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Capita