Annual Report and Accounts 2008
38 Cash flow statement
The net cash inflows from operating activities include outflows of £27.6m (2007: £11.3m) from continuing operations which are related to exceptional costs.
(a) Reconciliation of Group profit before tax to cash generated from operations
| Total Operations | 2008 £m | 2007 £m |
|---|---|---|
| Net cash inflow from operating activities | ||
| Profit before tax from continuing operations | 109.9 | 149.3 |
| Loss before tax from discontinued operations | (12.8) | (4.8) |
| Net finance costs | 63.0 | 29.0 |
| Profit on disposal of non-current assets | (5.1) | (16.2) |
| Share of post tax results under the equity method | – | (0.4) |
| Depreciation of property, plant and equipment – continuing operations | 96.0 | 79.6 |
| Depreciation of property, plant and equipment – discontinued operations | 0.3 | – |
| Amortisation of leasehold property prepayment | 0.1 | 0.1 |
| Goodwill impairment | 0.7 | – |
| Intangible asset amortisation | 55.2 | 32.9 |
| Amortisation of fixed asset grants | (1.8) | (1.3) |
| Profit on disposal of non-current assets (in operating profit) | (2.0) | (4.3) |
| Share-based payments – continuing operations | 4.3 | 3.1 |
| Share-based payments – discontinued operations | 0.1 | 0.1 |
| Increase in inventories | (1.0) | (2.1) |
| (Increase)/decrease in receivables | (0.2) | 17.7 |
| (Decrease)/increase in payables | (69.4) | 5.9 |
| Decrease in provisions | (19.1) | (16.5) |
| Cash generated from operations | 218.2 | 272.1 |
(b) Analysis of changes in net debt
Net debt at 31 December 2008 comprises cash and cash equivalents of £105.9m (2007: £157.2m) as disclosed in note 23, other debt receivables of £0.9m (2007: £nil), current interest-bearing loans and borrowings of £71.6m (2007: £415.7m) and non-current interest-bearing loans and borrowings of £1,215.0m (2007: £652.3m) as disclosed in note 28.
| At 1 January 2008 £m | Cash flow £m | Acquisitions/disposals £m | Exchange differences £m | Other movements £m | At 31 December 2008 £m | |
|---|---|---|---|---|---|---|
| Cash | 68.0 | (24.2) | – | 8.2 | – | 52.0 |
| Overnight deposits | 14.6 | (11.9) | – | 0.8 | – | 3.5 |
| Other short term deposits | 74.6 | (24.2) | – | – | – | 50.4 |
| Cash and cash equivalents | 157.2 | (60.3) | – | 9.0 | – | 105.9 |
| Other debt receivables | – | 0.9 | – | – | – | 0.9 |
| Borrowings: | ||||||
| Loan notes | (0.8) | – | – | – | – | (0.8) |
| Bank loans | (947.4) | 19.0 | – | (220.8) | (1.6) | (1,150.8) |
| Finance lease obligations | (119.8) | 32.8 | (5.1) | (26.0) | (15.8) | (133.9) |
| Other debt payable | – | (0.9) | – | (0.2) | – | (1.1) |
| Total borrowings | (1,068.0) | 50.9 | (5.1) | (247.0) | (17.4) | (1,286.6) |
| Net debt | (910.8) | (8.5) | (5.1) | (238.0) | (17.4) | (1,179.8) |
Short term deposits included within liquid resources relate to term deposits repayable within three months. Changes in cash and cash equivalents arising from acquisitions and disposals in the year are disclosed separately on the face of the cash flow statement.
The £19.0m cash outflow (2007: £424.9m inflow) within bank loans comprises of £33.0m (2007: £nil) of payments for the maturity of foreign currency swaps and £14.0m of net loans advanced (2007: £424.9m) to the Group.
Other non-cash movements in net debt represent finance lease additions of £15.8m (2007: £0.2m) and £1.6m (2007: £0.9m) amortisation of loan arrangement fees.
| At 1 January 2007 £m | Cash flow £m | Acquisitions/disposals £m | Exchange differences £m | Other movements £m | At 31 December 2007* £m | |
|---|---|---|---|---|---|---|
| Cash | 43.7 | 22.4 | – | 1.9 | – | 68.0 |
| Overnight deposits | 21.6 | (7.0) | – | – | – | 14.6 |
| Other short term deposits | 78.3 | (4.9) | – | 1.2 | – | 74.6 |
| Cash and cash equivalents | 143.6 | 10.5 | – | 3.1 | – | 157.2 |
| Borrowings: | ||||||
| Loan notes | (0.8) | – | – | – | – | (0.8) |
| Bank loans | (478.1) | (424.9) | 14.1 | (57.6) | (0.9) | (947.4) |
| Finance lease obligations | (103.1) | 26.3 | (41.9) | (0.9) | (0.2) | (119.8) |
| Total borrowings | (582.0) | (398.6) | (27.8) | (58.5) | (1.1) | (1,068.0) |
| Net debt | (438.4) | (388.1) | (27.8) | (55.4) | (1.1) | (910.8) |
*The 2007 balances for bank loans and finance leases have been restated with a reclassification of £18.5m from bank loans to finance leases.
(c) Reconciliation of net cash flow to movement in net debt
| 2008 £m | 2007 £m | |
|---|---|---|
| (Decrease)/increase in cash and cash equivalents in the year | (60.3) | 10.5 |
| Cash outflow from movement in other debt receivables | 0.9 | – |
| Cash outflow/(inflow) from movement in debt and finance leases | 50.9 | (398.6) |
| Change in net debt resulting from cash flows | (8.5) | (388.1) |
| Change in net debt resulting from acquisitions and disposals | (5.1) | (27.8) |
| Change in net debt resulting from non-cash movements | (255.4) | (56.5) |
| Movement in net debt in the year | (269.0) | (472.4) |
| Opening net debt | (910.8) | (438.4) |
| Net debt | (1,179.8) | (910.8) |