Annual Report and Accounts 2008
5 Segmental analysis
The operating businesses are organised and managed separately according to the nature of the public transport services they provide and the geographical market they operate in. Due to the nature of the services the Group provides, the primary and secondary segments coincide. Commentary on the segments is included in the OFR.
| External revenue 2008 £m |
Inter-segment sales 2008 £m |
Segment revenue 2008 £m |
External revenue 2007 £m |
Inter-segment sales 2007 £m |
Segment revenue 2007 £m |
|
|---|---|---|---|---|---|---|
| UK Bus | 340.0 | 1.0 | 341.0 | 320.2 | 2.1 | 322.3 |
| UK Trains | 1,332.5 | – | 1,332.5 | 1,472.1 | – | 1,472.1 |
| UK Coach | 238.9 | 5.8 | 244.7 | 214.0 | 13.9 | 227.9 |
| Inter-segment sales elimination | – | (6.8) | (6.8) | – | (16.0) | (16.0) |
| UK operations | 1,911.4 | – | 1,911.4 | 2,006.3 | – | 2,006.3 |
| North American Bus | 372.5 | – | 372.5 | 308.0 | – | 308.0 |
| European Coach & Bus | 483.1 | – | 483.1 | 298.0 | – | 298.0 |
| Revenue from continuing operations | 2,767.0 | – | 2,767.0 | 2,612.3 | – | 2,612.3 |
| Discontinued operations (note 11) | 5.1 | – | 5.1 | 3.1 | – | 3.1 |
| Total revenue | 2,772.1 | – | 2,772.1 | 2,615.4 | – | 2,615.4 |
Inter-segment sales represent rail replacement services provided to UK Trains by UK Bus and UK Coach. Inter-segment trading is undertaken on standard arm’s length commercial terms. Due to the nature of the Group’s businesses, the origin and destination of revenue is the same.
| Continuing | Discontinued | Continuing | Discontinued | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Normalised operating profit 2008 £m |
Goodwill impairment, intangible amortisation and exceptional items 2008 £m |
Segment result 2008 £m |
Segment result 2008 £m |
Normalised operating profit 2007 £m |
Goodwill impairment, intangible amortisation and exceptional items 2007 £m |
Segment result 2007 £m |
Segment result 2007 £m |
|||
| UK Bus | 40.0 | (3.5) | 36.5 | 43.5 | (1.2) | 42.3 | ||||
| UK Trains | 81.3 | (13.2) | 68.1 | 63.3 | (2.9) | 60.4 | ||||
| UK Coach | 27.0 | (2.3) | 24.7 | 27.9 | (0.3) | 27.6 | ||||
| UK operations | 148.3 | (19.0) | 129.3 | 134.7 | (4.4) | 130.3 | ||||
| North American Bus | 32.5 | (15.8) | 16.7 | 37.7 | (13.3) | 24.4 | ||||
| European Coach & Bus | 83.3 | (51.3) | 32.0 | 50.9 | (28.2) | 22.7 | ||||
| Central functions | (10.2) | – | (10.2) | (12.9) | (2.8) | (15.7) | ||||
| Result from continuing operations | 253.9 | (86.1) | 167.8 | 210.4 | (48.7) | 161.7 | ||||
| Result from discontinued operations | – | (12.8) | – | (4.8) | ||||||
| Total result | 167.8 | (12.8) | 161.7 | (4.8) | ||||||
| Profit on disposal of non-current assets | 5.1 | – | 16.2 | – | ||||||
| Profit from operations | 172.9 | (12.8) | 177.9 | (4.8) | ||||||
| Share of post tax results from associates and joint ventures | – | – | 0.4 | – | ||||||
| Loss on sale of discontinued operations | – | – | – | (2.9) | ||||||
| Net finance costs | (63.0) | – | (29.0) | – | ||||||
| Profit/(loss) before tax | 109.9 | (12.8) | 149.3 | (7.7) | ||||||
| Tax expense | 23.2 | (0.6) | (37.4) | 1.4 | ||||||
| Profit/(loss) for the year | 133.1 | (13.4) | 111.9 | (6.3) |
Intangible asset amortisation and operating exceptional items can be analysed by class and geography of business as follows:
| Intangible asset amortisation 2008 £m |
Exceptional items 2008 £m |
Total 2008 £m |
|
|---|---|---|---|
| UK Bus | 0.5 | 3.0 | 3.5 |
| UK Trains | 1.0 | 12.2 | 13.2 |
| UK Coach | 0.3 | 2.0 | 2.3 |
| North American Bus | 4.7 | 11.1 | 15.8 |
| European Coach & Bus | 48.7 | 2.6 | 51.3 |
| Total continued operations | 55.2 | 30.9 | 86.1 |
| Discontinued operations (note 11) | – | 3.8 | 3.8 |
| Total | 55.2 | 34.7 | 89.9 |
| Intangible asset amortisation 2007 £m |
Exceptional items 2007 £m |
Total 2007 £m |
|
|---|---|---|---|
| UK Bus | 1.1 | 0.1 | 1.2 |
| UK Trains | 1.1 | 1.8 | 2.9 |
| UK Coach | – | 0.3 | 0.3 |
| North American Bus | 5.1 | 8.2 | 13.3 |
| European Coach & Bus | 25.6 | 2.6 | 28.2 |
| Central functions | – | 2.8 | 2.8 |
| Total | 32.9 | 15.8 | 48.7 |
In the year to 31 December 2008 exceptional costs of £4.3m for UK Integration were incurred in UK Bus, UK Trains, UK Coach and Central functions. Mobilisation costs of £0.1m were incurred in National Express East Coast. Integration costs of £2.6m were incurred in Continental Auto. Business transformation costs of £11.1m were incurred in North America. In addition, exceptional costs of £12.8m were incurred in the UK relating to a reorganisation announced at the end of 2008.
In the year to 31 December 2007 exceptional costs of £4.2m for UK Integration were incurred in UK Bus, UK Trains, UK Coach and Central functions. Mobilisation costs of £0.8m were incurred in National Express East Coast. Integration costs of £2.6m were incurred in Continental Auto. Business transformation costs of £8.2m were incurred in North America
In 2008 non-operating exceptional items comprise £5.1m of profit on disposal of businesses owned by Alsa (note 19b).
In 2007 non-operating exceptional items comprise £16.2m of profit on disposal of the trade and business of Stewart International Airport.
Assets, liabilities and capital expenditure can be analysed by class and geography of business as follows:
| Assets 2008 £m |
Liabilities 2008 £m |
Capital expenditure 2008 £m |
Assets 2007 £m |
Liabilities 2007 £m |
Capital expenditure 2007 £m |
|
|---|---|---|---|---|---|---|
| UK Bus | 190.5 | (90.7) | 7.4 | 202.7 | (104.1) | 22.4 |
| UK Trains | 205.5 | (340.7) | 10.8 | 212.4 | (366.6) | 37.6 |
| UK Coach | 70.9 | (54.3) | 10.4 | 73.4 | (59.1) | 12.9 |
| Intercompany elimination | (1.9) | 1.9 | – | (2.6) | 2.6 | – |
| UK operations | 465.0 | (483.8) | 28.6 | 485.9 | (527.2) | 72.9 |
| North American Bus | 700.6 | (115.6) | 71.7 | 498.6 | (86.2) | 50.7 |
| European Coach & Bus | 1,580.6 | (186.9) | 39.4 | 1,248.2 | (130.5) | 32.6 |
| Central functions | 16.8 | (84.5) | 0.7 | 9.7 | (77.6) | 0.9 |
| Unallocated | 144.0 | (1,449.3) | – | 189.2 | (1,173.1) | – |
| Intercompany elimination | (31.2) | 31.2 | – | (24.9) | 24.9 | – |
| Total continuing operations | 2,875.8 | (2,288.9) | 140.4 | 2,406.7 | (1,969.7) | 157.1 |
| Assets in disposal group/(liabilities directly associated with disposal group) classified as held for sale | 0.7 | (2.2) | 0.6 | – | – | 0.9 |
| Total | 2,876.5 | (2,291.1) | 141.0 | 2,406.7 | (1,969.7) | 158.0 |
Capital expenditure comprises property, plant and equipment additions as disclosed above and in note 15. In addition, software intangible assets of £8.2m (2007: £nil) were acquired and disclosed in note 14.
Unallocated assets and liabilities comprise the following items:
| Unallocated assets 2008 £m |
Unallocated liabilities 2008 £m |
Unallocated assets 2007 £m |
Unallocated liabilities 2007 £m |
|
|---|---|---|---|---|
| Cash and cash equivalents | 105.9 | – | 157.2 | – |
| Other debt receivable | 0.9 | – | – | – |
| Current tax | 4.0 | (32.5) | 9.5 | (24.7) |
| Available for sale investments | 9.2 | – | 7.2 | – |
| Derivative financial assets/(liabilities) | 4.0 | (138.6) | 15.3 | (23.1) |
| Borrowings, excluding finance leases | – | (1,152.7) | – | (966.7) |
| Dividend payable | – | (0.6) | – | (0.5) |
| Deferred tax | 20.0 | (124.9) | – | (158.1) |
| Total | 144.0 | (1,449.3) | 189.2 | (1,173.1) |