Notes to the Interim Accounts
For the six months ended 30 June 2011 (unaudited)
1 General information
The Company is a public limited company which is listed on the London Stock Exchange and is incorporated and domiciled in the UK. The address of the registered office is 120 Bothwell Street, Glasgow G2 7JS, UK.
This condensed interim financial information was approved for issue on 25 August 2011.
This condensed consolidated interim financial information does not comprise Statutory Accounts within the meaning of Section 434 of the Companies Act 2006. Statutory Accounts for the year ended 31 December 2010 were approved by the Board on 10 March 2011 and delivered to the Registrar of Companies. The report of the auditors on those Accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 498 of the Companies Act 2006.
The condensed consolidated interim financial information is unaudited but has been reviewed by the Group's auditors, whose report can be viewed here.
2 Basis of preparation
This condensed consolidated interim financial information for the six months ended 30 June 2011 has been prepared in accordance with the Disclosure and Transparency Rules (DTR) of the Financial Services Authority and IAS 34 'Interim financial reporting' as adopted by the European Union. The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2010, which have been prepared in accordance with IFRSs as adopted by the European Union.
Going-concern basis
The Group's banking facilities are primarily in the form of a US private placement and committed bank facilities arranged on a bilateral basis with a number of international banks; facilities totalled £762.8 million at 30 June 2011. The financial covenants attached to these facilities are that EBITDA should be no less than 4 times interest (30 June 2011: 36.2 times) and net debt should be no more than 3 times EBITDA (30 June 2011: 0.5 times). The Group does not consider that these covenants are restrictive to its operations. The maturity profile of the borrowings is detailed in Note 12 to the Accounts. The Group's forecasts and projections show that the facilities in place are currently anticipated to be ample for meeting the Group's operational requirements for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing its consolidated interim financial statements.
3 Accounting policies
Except as described below, the accounting policies are consistent with those of the annual financial statements for the year ended 31 December 2010, as described in those annual financial statements.
Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.
No new standards and amendments to standards have been adopted in the period.
(a) New and amended standards, and interpretations mandatory for the first time for the financial year beginning 1 January 2011 but not currently relevant to the Group (although they may affect the accounting for future transactions and events)
- Amendments to IAS 24 (revised), 'Related party disclosures', issued in November 2009. It supersedes IAS 24, 'Related party disclosures', issued in 2003. IAS 24 (revised) is mandatory for periods beginning on or after 1 January 2011. The revised standard clarifies and simplifies the definition of a related party and removes the requirement for government-related entities to disclose details of all transactions with the government and other government-related entities.
- 'Classification of rights issues' (amendment to IAS 32), issued in October 2009. The amendment applies to annual periods beginning on or after 1 February 2010. The amendment addresses the accounting for rights issues that are denominated in a currency other than the functional currency of the issuer. Provided certain conditions are met, such rights issues are now classified as equity regardless of the currency in which the exercise price is denominated. Previously, these issues had to be accounted for as derivative liabilities. The amendment applies retrospectively in accordance with IAS 8 'Accounting policies, changes in accounting estimates and errors'.
- 'Prepayments of a minimum funding requirement' (amendments to IFRIC 14). The amendments correct an unintended consequence of IFRIC 14, 'IAS 19 – The limit on a defined benefit asset, minimum funding requirements and their interaction'. Without the amendments, entities are not permitted to recognise as an asset some voluntary prepayments for minimum funding contributions. This was not intended when IFRIC 14 was issued, and the amendments correct this. The amendments are effective for annual periods beginning 1 January 2011. The amendments should be applied retrospectively to the earliest comparative period presented.
- IFRIC 19 'Extinguishing financial liabilities with equity instruments', effective 1 July 2010. The interpretation clarifies the accounting by an entity when the terms of a financial liability are renegotiated and result in the entity issuing equity instruments to a creditor of the entity to extinguish all or part of the financial liability (debt for equity swap). It requires a gain or loss to be recognised in profit or loss, which is measured as the difference between the carrying amount of the financial liability and the fair value of the equity instruments issued. If the fair value of the equity instruments issued cannot be reliably measured, the equity instruments should be measured to reflect the fair value of the financial liability extinguished.
(b) New standards, amendments and interpretations issued but not effective for the financial year beginning 1 January 2011 and not early adopted
- Amendments to IFRS 7 'Financial instruments: Disclosures on derecognition'. These amendments are part of the IASBs comprehensive review of off balance sheet activities. The amendments will promote transparency in the reporting of transfer transactions and improve users' understanding of the risk exposures relating to transfers of financial assets and the effect of those risks on an entity's financial position, particularly those involving securitisation of financial asset. The amendments are effective for annual periods beginning 1 July 2011.
- IFRS 9 'Financial instruments', issued in November 2009. This standard is the first step in the process to replace IAS 39, 'Financial instruments: recognition and measurement'. IFRS 9 introduces new requirements for classifying and measuring financial assets and is likely to affect the Group's accounting for its financial assets. The standard is not applicable until 1 January 2013 but is available for early adoption.
- IFRS 10 'Consolidated financial statements'. This standard builds on existing principles identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements. The standard provides additional guidance to assist in determining control where this is difficult to assess. The amendments are effective for annual periods beginning 1 January 2013.
- IFRS 11 'Joint arrangements'. This standard provides for a more realistic reflection of joint arrangements by focusing on the rights and obligations of the arrangement, rather than its legal form. Proportional consolidation of joint ventures is no longer allowed. The amendments are effective for annual periods beginning 1 January 2013.
- IFRS 12 'Disclosures of interests in other entities'. This standard includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. The amendments are effective for annual periods beginning 1 January 2013.
- IFRS 13 'Fair value measurement'. This standard aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The amendments are effective for annual periods beginning 1 January 2013.
- Amendment to IAS 1 'Financial Statement presentation' regarding other comprehensive income. The main change from these amendments is a requirement to group items presented in Other comprehensive income on the basis of whether they are potentially recycled to profit or loss. The amendments are effective for annual periods beginning 1 July 2012.
- Amendments to IAS 12 'Income taxes'. Currently IAS 12 requires an entity to measure the deferred tax relating to an asset depending on whether the entity expects to recover the carrying amount of the asset through use or sale. It can be difficult and subjective to assess whether recovery will be through use or through sale when the asset is measured using the fair value model in IAS 40 'Investment Property'. Hence this amendment introduces an exception to the existing principle for the measurement of deferred tax assets or liabilities arising on investment property measured at fair value. The amendments are effective for annual periods beginning 1 January 2012.
- Amendment to IAS 19 'Employee Benefits'. These amendments eliminate the corridor approach and calculate finance costs on a net funding basis. The amendments are effective for annual periods beginning 1 January 2013.
- IAS 27 (revised 2011) 'Separate financial statements'. This standard includes the provisions on separate financial statements that are left after the control provisions of IAS 27 have been included in the new IFRS 10. The amendments are effective for annual periods beginning 1 January 2013.
- IAS 28 (revised 2011) 'Associates and joint ventures'. This standard includes the requirements for joint ventures as well as associates, to be equity accounted following the issue of IFRS 11. The amendments are effective for annual periods beginning 1 January 2013.
The only standards, amendments and interpretations endorsed by the EU as yet are amendments to IFRS 7.
The Directors do not anticipate that the adoption of any of the other above standards or interpretations will have a material impact on the Group's financial statements in the period of initial application.
4 Cashflow from operating activities
|
6 months |
6 months |
Year |
|
|
Profit for the period |
85.1 |
87.4 |
213.1 |
|
Adjustments for: |
|||
|
Tax |
33.9 |
38.3 |
91.3 |
|
Depreciation |
86.5 |
77.4 |
158.3 |
|
Amortisation of intangibles |
1.7 |
1.4 |
2.8 |
|
Finance income |
(0.2) |
(0.1) |
(0.5) |
|
Finance cost |
8.4 |
5.1 |
10.6 |
|
Profit on sale of PPE |
(1.8) |
(0.9) |
(2.7) |
|
Share based payments |
10.7 |
10.3 |
18.7 |
|
Changes in working capital |
|||
|
(Increase)/decrease in inventories |
(28.6) |
(16.6) |
(27.7) |
|
(Increase)/decrease in trade and other receivables |
(102.3) |
(64.0) |
(73.5) |
|
Increase/(decrease) in trade and other payables |
61.8 |
70.0 |
77.5 |
|
Cash generated from operations |
155.2 |
208.3 |
467.9 |
5 Cash and cash equivalents
|
30 June |
30 June |
31 Dec |
|
|
Cash at bank and in hand |
33.0 |
31.2 |
20.0 |
|
Short-term bank deposits |
30.0 |
0.3 |
6.4 |
|
63.0 |
31.5 |
26.4 |
Cash and bank overdrafts include the following for the purposes of the cashflow statement:
|
30 June |
30 June |
31 Dec |
|
|
Cash and cash equivalents |
63.0 |
31.5 |
26.4 |
|
Bank overdrafts (Note 12) |
(18.2) |
(15.5) |
(16.2) |
|
44.8 |
16.0 |
10.2 |
6 Segmental reporting
(a) Revenue by segment
|
Total revenue |
Inter-segment revenue |
External revenue |
|||||||
|
6 months |
6 months |
Year ended |
6 months |
6 months |
Year ended |
6 months |
6 months |
Year |
|
|
Middle East & South East Europe |
48.9 |
48.7 |
97.6 |
– |
– |
– |
48.9 |
48.7 |
97.6 |
|
Europe |
83.3 |
76.4 |
164.3 |
0.1 |
– |
0.1 |
83.2 |
76.4 |
164.2 |
|
North America |
114.6 |
115.3 |
246.8 |
– |
0.3 |
0.9 |
114.6 |
115.0 |
245.9 |
|
International Local |
78.5 |
85.8 |
188.8 |
0.3 |
0.8 |
1.1 |
78.2 |
85.0 |
187.7 |
|
Local business |
325.3 |
326.2 |
697.5 |
0.4 |
1.1 |
2.1 |
324.9 |
325.1 |
695.4 |
|
International Power Projects |
312.7 |
259.2 |
536.0 |
0.4 |
0.7 |
1.5 |
312.3 |
258.5 |
534.5 |
|
Eliminations |
(0.8) |
(1.8) |
(3.6) |
(0.8) |
(1.8) |
(3.6) |
– |
– |
– |
|
Group |
637.2 |
583.6 |
1,229.9 |
– |
– |
– |
637.2 |
583.6 |
1,229.9 |
Inter-segment transfers or transactions are entered into under the normal commercial terms and conditions that would also be available to unrelated third parties.
(b) Profit by segment
|
Trading profit pre intangible |
Amortisation of intangible assets |
Trading profit |
|||||||
|
6 months |
6 months |
Year ended |
6 months |
6 months |
Year ended |
6 months |
6 months |
Year |
|
|
Middle East & South East Europe |
7.5 |
11.5 |
23.1 |
– |
– |
(0.1) |
7.5 |
11.5 |
23.0 |
|
Europe |
2.2 |
2.5 |
18.7 |
(0.1) |
(0.1) |
(0.1) |
2.1 |
2.4 |
18.6 |
|
North America |
17.0 |
15.6 |
46.8 |
(1.2) |
(0.9) |
(1.7) |
15.8 |
14.7 |
45.1 |
|
International Local |
14.6 |
23.9 |
55.9 |
(0.4) |
(0.4) |
(0.7) |
14.2 |
23.5 |
55.2 |
|
Local business |
41.3 |
53.5 |
144.5 |
(1.7) |
(1.4) |
(2.6) |
39.6 |
52.1 |
141.9 |
|
International Power Projects |
85.8 |
77.7 |
170.0 |
– |
– |
(0.1) |
85.8 |
77.7 |
169.9 |
|
Group |
127.1 |
131.2 |
314.5 |
(1.7) |
(1.4) |
(2.7) |
125.4 |
129.8 |
311.8 |
|
Gain/(loss) on sale of PPE |
Operating profit |
|||||
|
6 months |
6 months |
Year |
6 months |
6 months |
Year |
|
|
Middle East & South East Europe |
(0.2) |
0.2 |
0.1 |
7.3 |
11.7 |
23.1 |
|
Europe |
– |
0.9 |
1.4 |
2.1 |
3.3 |
20.0 |
|
North America |
1.2 |
1.4 |
2.3 |
17.0 |
16.1 |
47.4 |
|
International Local |
0.3 |
(0.1) |
0.2 |
14.5 |
23.4 |
55.4 |
|
Local business |
1.3 |
2.4 |
4.0 |
40.9 |
54.5 |
145.9 |
|
International Power Projects |
0.5 |
(1.5) |
(1.3) |
86.3 |
76.2 |
168.6 |
|
Group |
1.8 |
0.9 |
2.7 |
127.2 |
130.7 |
314.5 |
|
Finance costs – net |
(8.2) |
(5.0) |
(10.1) |
|||
|
Profit before taxation |
119.0 |
125.7 |
304.4 |
|||
|
Taxation |
(33.9) |
(38.3) |
(91.3) |
|||
|
Profit for the period |
85.1 |
87.4 |
213.1 |
|||
(c) Depreciation and amortisation by segment
|
6 months |
6 months |
Year |
|
|
Middle East & South East Europe |
9.6 |
8.9 |
18.5 |
|
Europe |
10.7 |
10.3 |
20.7 |
|
North America |
15.3 |
14.0 |
28.2 |
|
International Local |
11.2 |
9.2 |
20.3 |
|
Local business |
46.8 |
42.4 |
87.7 |
|
International Power Projects |
41.4 |
36.4 |
73.4 |
|
Group |
88.2 |
78.8 |
161.1 |
(d) Capital expenditure on property, plant and equipment and intangible assets by segment
|
6 months |
6 months |
Year |
|
|
Middle East & South East Europe |
17.7 |
12.6 |
26.3 |
|
Europe |
14.0 |
9.7 |
27.0 |
|
North America |
28.9 |
12.5 |
54.1 |
|
International Local |
59.6 |
21.2 |
23.8 |
|
Local business |
120.2 |
56.0 |
131.2 |
|
International Power Projects |
69.0 |
47.6 |
146.3 |
|
Group |
189.2 |
103.6 |
277.5 |
(i) Capital expenditure comprises additions of property, plant and equipment (PPE) of £181.0 million (30 June 2010: £103.6 million, 31 December 2010: £268.8 million), acquisitions of PPE of £6.4 million (30 June 2010: £nil, 31 December 2010: £5.6 million) and acquisitions of other intangible assets of £1.8 million (30 June 2010: £nil, 31 December 2010: £3.1 million).
(ii) The net book value of total Group disposals of PPE during the period were £3.7 million (30 June 2010: £2.6 million, 31 December 2010: £5.1 million).
(e) Total assets by segment
|
6 months |
6 months |
Year |
|
|
Middle East & South East Europe |
153.6 |
124.3 |
121.7 |
|
Europe |
183.7 |
155.0 |
162.6 |
|
North America |
294.4 |
241.8 |
273.8 |
|
International Local |
213.0 |
166.1 |
174.9 |
|
Local business |
844.7 |
687.2 |
733.0 |
|
International Power Projects |
794.3 |
588.2 |
656.8 |
|
1,639.0 |
1,275.4 |
1,389.8 |
|
|
Deferred and current tax asset |
18.5 |
10.8 |
14.7 |
|
Derivative financial instruments |
0.2 |
– |
0.1 |
|
Total assets per balance sheet |
1,657.7 |
1,286.2 |
1,404.6 |
7 Dividends
The dividends paid in the period were:
|
6 months |
6 months |
Year |
|
|
Total dividend (£ million) |
33.2 |
22.1 |
39.7 |
|
Dividend per share (pence) |
12.35 |
8.23 |
14.78 |
An interim dividend in respect of 2011 of 7.20 pence (2010: 6.55 pence), amounting to a total dividend of £18.9 million (2010: £17.5 million) was proposed during the period.
8 Earnings per share
Basic earnings per share have been calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of shares in issue during the period, excluding shares held by the Employee Share Ownership Trusts which are treated as cancelled.
|
30 June |
30 June |
31 Dec |
|
|
Profit for the period (£ million) |
85.1 |
87.4 |
213.1 |
|
Weighted average number of ordinary shares in issue (million) |
268.5 |
269.0 |
268.5 |
|
Basic earnings per share (pence) |
31.69 |
32.49 |
79.37 |
For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potentially dilutive ordinary shares. These represent share options granted to employees where the exercise price is less than the average market price of the Company's ordinary shares during the period. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.
|
30 June |
30 June |
31 Dec |
|
|
Profit for the period (£ million) |
85.1 |
87.4 |
213.1 |
|
Weighted average number of ordinary shares in issue (million) |
268.5 |
269.0 |
268.5 |
|
Adjustment for share options (million) |
1.0 |
1.3 |
1.3 |
|
Diluted weighted average number of ordinary shares in issue (million) |
269.5 |
270.3 |
269.8 |
|
Diluted earnings per share (pence) |
31.58 |
32.33 |
78.98 |
9 Taxation
The taxation charge for the period is based on an estimate of the Group's expected annual effective rate of tax for 2011 based on prevailing tax legislation at 30 June 2011. This is currently estimated to be 28.5% (2010: 30.5%).
10 Property, plant and equipment
Six months ended 30 June 2011
|
Freehold |
Short |
Rental fleet |
Vehicles, |
Total |
|
|
Cost |
|||||
|
At 1 January 2011 |
46.2 |
15.8 |
1,659.8 |
71.4 |
1,793.2 |
|
Exchange adjustments |
(0.1) |
– |
(31.5) |
– |
(31.6) |
|
Additions |
– |
1.1 |
169.4 |
10.5 |
181.0 |
|
Acquisitions (Note 16) |
– |
– |
6.4 |
– |
6.4 |
|
Disposals |
– |
(0.1) |
(23.0) |
(0.5) |
(23.6) |
|
At 30 June 2011 |
46.1 |
16.8 |
1,781.1 |
81.4 |
1,925.4 |
|
Accumulated depreciation |
|||||
|
At 1 January 2011 |
15.3 |
8.1 |
858.1 |
52.9 |
934.4 |
|
Exchange adjustments |
(0.1) |
– |
(14.9) |
– |
(15.0) |
|
Charge for the period |
0.6 |
0.8 |
81.3 |
3.8 |
86.5 |
|
Disposals |
– |
(0.1) |
(19.4) |
(0.4) |
(19.9) |
|
At 30 June 2011 |
15.8 |
8.8 |
905.1 |
56.3 |
986.0 |
|
Net book values |
|||||
|
At 30 June 2011 |
30.3 |
8.0 |
876.0 |
25.1 |
939.4 |
|
At 31 December 2010 |
30.9 |
7.7 |
801.7 |
18.5 |
858.8 |
Six months ended 30 June 2010
|
Freehold |
Short |
Rental fleet |
Vehicles, |
Total |
|
|
Cost |
|||||
|
At 1 January 2010 |
40.2 |
13.8 |
1,379.0 |
65.7 |
1,498.7 |
|
Exchange adjustments |
0.7 |
0.4 |
64.8 |
0.8 |
66.7 |
|
Additions |
1.7 |
0.5 |
99.1 |
2.3 |
103.6 |
|
Disposals |
– |
– |
(22.3) |
(0.7) |
(23.0) |
|
At 30 June 2010 |
42.6 |
14.7 |
1,520.6 |
68.1 |
1,646.0 |
|
Accumulated depreciation |
|||||
|
At 1 January 2010 |
12.7 |
6.7 |
718.7 |
47.6 |
785.7 |
|
Exchange adjustments |
0.5 |
0.1 |
29.7 |
0.6 |
30.9 |
|
Charge for the period |
0.9 |
0.6 |
72.3 |
3.6 |
77.4 |
|
Disposals |
– |
– |
(19.8) |
(0.6) |
(20.4) |
|
At 30 June 2010 |
14.1 |
7.4 |
800.9 |
51.2 |
873.6 |
|
Net book values |
|||||
|
At 30 June 2010 |
28.5 |
7.3 |
719.7 |
16.9 |
772.4 |
|
At 31 December 2009 |
27.5 |
7.1 |
660.3 |
18.1 |
713.0 |
11 Trade and other receivables
|
30 June |
30 June |
31 Dec |
|
|
Trade receivables |
312.9 |
214.0 |
225.4 |
|
Less: provision for impairment of receivables |
(45.7) |
(26.4) |
(33.4) |
|
Trade receivables – net |
267.2 |
187.6 |
192.0 |
|
Prepayments and accrued income |
103.8 |
79.6 |
84.4 |
|
Other receivables |
38.9 |
30.1 |
33.0 |
|
Total receivables |
409.9 |
297.3 |
309.4 |
Other receivables principally comprise deposits and advance payments.
Provision for impairment of receivables
|
30 June |
30 June |
31 Dec |
|
|
Middle East & South East Europe |
1.6 |
1.4 |
1.7 |
|
Europe |
2.9 |
3.5 |
2.6 |
|
North America |
1.3 |
1.3 |
1.4 |
|
International Local |
0.9 |
0.6 |
2.4 |
|
Local Business |
6.7 |
6.8 |
8.1 |
|
International Power Projects |
39.0 |
19.6 |
25.3 |
|
Group |
45.7 |
26.4 |
33.4 |
12 Borrowings
|
30 June |
30 June |
31 Dec |
|
|
Non-current |
|||
|
Bank borrowings |
281.1 |
137.5 |
111.3 |
|
Current |
|||
|
Bank overdrafts |
18.2 |
15.5 |
16.2 |
|
Bank borrowings |
20.9 |
38.0 |
31.1 |
|
39.1 |
53.5 |
47.3 |
|
|
Total borrowings |
320.2 |
191.0 |
158.6 |
|
Short-term deposits |
(30.0) |
(0.3) |
(6.4) |
|
Cash at bank and in hand |
(33.0) |
(31.2) |
(20.0) |
|
Net borrowings |
257.2 |
159.5 |
132.2 |
The bank overdrafts and borrowings are all unsecured.
The maturity of financial liabilities
The maturity profile of the borrowings was as follows:
|
30 June |
30 June |
31 Dec |
|
|
Within 1 year, or on demand |
39.1 |
53.5 |
47.3 |
|
Between 1 and 2 years |
10.1 |
109.0 |
10.1 |
|
Between 2 and 3 years |
80.5 |
28.5 |
81.8 |
|
Between 3 and 4 years |
– |
– |
– |
|
Between 4 and 5 years |
18.7 |
– |
19.4 |
|
Between 5 and 10 years |
171.8 |
– |
– |
|
320.2 |
191.0 |
158.6 |
13 Capital commitments
|
30 June |
30 June |
31 Dec |
|
|
Contracted but not provided for (property, plant and equipment) |
38.4 |
19.2 |
33.9 |
14 Pension commitments
Analysis of movement in retirement benefit obligation in the period:
|
30 June |
30 June |
31 Dec |
|
|
At start of period |
(3.2) |
(5.8) |
(5.8) |
|
Income statement expense |
(0.9) |
(1.2) |
(2.2) |
|
Contributions |
3.4 |
4.3 |
5.4 |
|
Net actuarial gain/(loss) |
0.1 |
(1.7) |
(0.6) |
|
At end of period |
(0.6) |
(4.4) |
(3.2) |
15 Related party transactions
Transactions between the Group and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. There were no other related party transactions in the period.
16 Seasonality
The Group is subject to seasonality with the third quarter of the year being our peak demand period, accordingly revenue and profits have historically been higher in the second half of the year.
17 Acquisitions
On 31 March 2011 the Group completed the acquisition of the business and assets of N. Z. Generator Hire Limited for a total cash consideration of £14.4 million. The business acquired had revenue in 2010 of £6.0 million and operating profit of £1.1 million.
The revenue included in the consolidated income statement from 31 March 2011 to 30 June 2011 contributed by N. Z. Generator Hire Limited was £2.7 million. Had N. Z. Generator Hire Limited been consolidated from 1 January 2011, the consolidated income statement for the six months ended 30 June 2011 would show revenue of £5.8 million.
The acquisition method of accounting has been adopted and the goodwill arising on the purchase has been capitalised.
The details of the transaction and fair value of assets acquired are shown below:
|
Fair value |
|
|
Intangible assets |
1.8 |
|
Property, plant and equipment |
6.4 |
|
Inventories |
0.1 |
|
Trade and other receivables |
2.1 |
|
Trade and other payables |
(0.7) |
|
Net assets acquired |
9.7 |
|
Goodwill |
4.7 |
|
Consideration |
14.4 |
Intangible assets represent customer relationships and a non-compete agreement.
Goodwill represents the value of synergies arising from the integration of the acquired business. Synergies include direct cost savings and the reduction of overheads as well as the ability to leverage Aggreko systems and assets.
During the period the Group received £0.2 million relating to the Northland Power acquisition which completed in December 2010.
18 Events occurring after the balance sheet date
The Board announced on 10 March 2011 that Aggreko plc would return approximately £150 million to shareholders which equated to 55 pence per ordinary share in issue at the Record date, of 8 July 2011. The return of value and related consolidation of shares was approved at a General Meeting on 5 July 2011. Since the Balance Sheet date a special dividend of 55 pence per ordinary share was paid on 182,700,915 B shares, which then converted into deferred shares of negligible value resulting in a cash payment from the Company of £100.5 million on 19 July 2011; 85,896,058 B shares were bought back at 55 pence each resulting in a cash payment from the Company of £47.2 million on 19 July 2011; the Company intends to offer to purchase the remaining 6,663,731 B shares in the future at 55 pence each.