Annual report & review 2006 - Shopic.com

More documents

Recommendations

Info

Finance review Table 2 Summary cash flow statement 2006 €m 2005 Restated €m Operating profit 104.9 101.0 Depreciation and amortisation 55.8 60.4 EBITDA* 160.7 161.4 Interest (19.8) (22.3) Taxation (20.5) (16.0) Dividends (15.5) (14.7) Special pension contribution (5.2) (10.0) Working capital (19.9) (13.0) Operating cashflow 79.8 85.4 Net capital proceeds/expenditure 60.6 (11.5) Payments to reacquire company shares (4.1) (3.3) Issue costs amortisation (2.7) (3.8) Issue costs paid 2.1 – Translation adjustment (2.5) (5.8) Purchase of subsidiary undertakings – (11.0) Debt obligations disposed of with subsidiary undertakings 6.2 – Decrease in net debt 139.4 50.0 * Earnings before interest, taxes, depreciation and amortisation Borrowings and interest cost The Group refinanced its borrowing facilities during the year and now has €600.0 million of unsecured committed medium-term bank debt facilities in place with a syndicate of banks. These consist of both revolving credit and term debt facilities. The Group’s core bank debt was €188.2 million at year-end (excluding issue costs of €1.9 million) resulting in a comfortable level of funds available (headroom) of €411.8 million. The Group’s net debt to equity ratio at 31 December 2006 was 60.3 per cent (2005: 134.4 per cent). In 2006 net interest payable decreased by 28.3 per cent to €18.5 million. This reflects the strong cashflow generated during the year. Interest cover, an important measure of the Group’s capacity to service its debt obligations, continued to be comfortable at 8.7 times EBITDA (2005: 6.3 times). Pensions The Group’s pension liability in respect of its defined benefit schemes is €52.4 million (2005: €75.7 million). The decrease during the year of €23.3 million reflects a strong investment performance on pension scheme assets and an increase in the interest rate used to discount future scheme liabilities along with a special employer contribution to the ROI scheme of €5.2 million during 2006, in addition to a €10.0 million special contribution in 2005. The Group has adopted pension contribution rates designed to eliminate this deficit over the average remaining working lifetimes of employees. At 31 December 2006 the various defined benefit pension schemes had assets of €215.4 million. 50 Musgrave Group Plc Annual Report & Review 2006
Finance review Taxation The effective tax rate for the year ended 31 December 2006 is 25.1 per cent compared to 23.4 per cent in the prior year. This increase relates to tax arising on the disposal of own stores in Great Britain which is incurred at a rate of 30 per cent. Financial risk management The Group’s operations expose it to a variety of financial risks that include foreign exchange risk, credit risk, liquidity and interest rate risk. The Group has in place a risk management programme that seeks to manage the financial exposures of the Group and a treasury policy that has been approved by the Board. The policies are implemented by the Group’s finance department and includes specific guidelines to manage interest rate risk, credit risk and the circumstances where it would be appropriate to use financial instruments to manage these risks. In order to ensure stability of interest outflows the Group has a policy of maintaining 50 per cent of its term debt at fixed interest rates for a one-year period. The Group actively maintains adequate medium-term committed facilities to ensure the Group has sufficient available funds for operations and planned expansion. The Group is exposed to foreign exchange risk in the normal course of business for purchases outside the euro-zone. The Group’s policy on mitigating the effect of this currency exposure is to hedge transactions by entering into forward foreign exchange contracts. The Group also has substantial net assets denominated in sterling and has a policy of maintaining balance sheet hedges, through sterling debt and cross-currency swaps, designed to hedge up to 50 per cent of this net investment. The exchange rate between the euro and sterling was relatively stable during the year and did not have a material impact on the Group’s results. The Group is highly focused on risk management. Accordingly insurance is held for all significant insurable risks and against major catastrophes. For any such events the Group generally bears an initial cost before external cover begins. Corporate governance The board of Musgrave Group plc is committed to a culture of effective corporate governance which the Board defines as the system by which the Musgrave Group through living its values is directed and managed. It influences how the objectives of the Group are set and achieved, how risk is monitored and assessed, and how performance is optimised. Good corporate governance structures encourage the Group to create value for stakeholders and provide accountability and control systems commensurate with the risks incurred. The Board and its executive, audit, remuneration and shareholder committees are committed to continuing to develop a culture of effective corporate governance across the Group. Summary The Group has performed well in 2006 delivering profit growth, continuing strong cash generation, further dividend growth and a stronger balance sheet and is well positioned to continue to grow its businesses. Tim Kenny Group Finance Director Table 3 Key financial indicators 2006 2005 Restated 2004 Restated EBITDA: Interest Cover (times) 8.7 6.3 5.4 Net Debt: Shareholders’ Funds (%) 60.3 134.4 174.2 Return on Average Capital Employed (%)* 23.9 23.5 25.7 * Excluding pension deficit 51 Musgrave Group Plc Annual Report & Review 2006
Page 1 and 2: Annual report & review 2006
Page 3 and 4: Musgrave at a glance 4 Our Chairman
Page 5 and 6: Musgrave at a glance hoW Do We SouR
Page 7 and 8: Our Chairman’s statement WoRkING
Page 9 and 10: Interview with our Group CEO Making
Page 11 and 12: Interview with our Group CEO orderi
Page 13 and 14: Interview with our Group CEO exciti
Page 15 and 16: Review of 2006 This is a year in wh
Page 17 and 18: Our business is all about respondin
Page 19 and 20: Review of 2006 Our innovative Marke
Page 21 and 22: Review of 2006 Our business in Grea
Page 23 and 24: Different & better - retailers & lo
Page 29 and 30: Budgens Virginia Quay Providing a h
Page 33 and 34: Different & better - consumers & co
Page 39 and 40: to meet international best practice
Page 41 and 42: Musgrave Group head office, Cork 41
Page 43 and 44: Responsibility charitable support A
Page 45 and 46: accordance with management’s auth
Page 47 and 48: Our board of directors peter Musgra
Page 49: Results Turnover amounted to €4,5
Page 53 and 54: Summary financial statements CONSOL
Page 55 and 56: Summary financial statements Notes
Page 57 and 58: Summary financial statements 5 Taxa
Page 59 and 60: Summary financial statements 10 Ban
Page 61 and 62: Summary financial statements 15 Rec
Page 63 and 64: Summary financial statements Analys
Page 65 and 66: Summary financial statements Moveme
Page 67 and 68: Printed on Hello silk, fully recycl

Annual report & review 2006 - Shopic.com

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?