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Reviews 35
£168.4m
Net funds
Net capital expenditure in the year,
including the purchase of computer
software licences, amounted to £25.7m
(2007: £24.2m). We expect this spend to
increase by approximately £10m in the
coming year due to the planned cyclical
refresh of IT hardware.
Cash payments relating to acquisitions
in the year amounted to £5.7m
(2007: £26.2m) net of cash acquired
of £0.7m (2007: £3.4m). As mentioned
within the segmental performance section
above, the Group acquired two businesses
during the year: Intelligent Space Partnership
Limited and Nedtech Engineering BV.
Further details of these are given in note
15 to the Financial Statements on page 90.
Within financing activities, £17.6m of
foreign currency denominated loans were
repaid following a review of the Group’s
hedging of its net investment in foreign
subsidiaries. An additional £34.0m outflow
was associated with the share buyback
programme which commenced during
the year.
Cash flows on discontinued operations
amounted to £17.3m outflow
(2007: £10.9m). The largest item was
£48.0m investments in the Metronet and
Trans4m joint ventures, which had been
provided for at 31 March 2007, offset in
part by £30.9m net cash proceeds received
on the disposal of LSH.
Events after the balance sheet date
On 1 April 2008 the disposal of the
Group’s interest in the Modern Housing
Solutions joint venture was completed
for a cash receipt of £3.9m and profit
on disposal of £2.5m.
Capital structure
The Company had 104.5m fully paid
ordinary shares in issue at 31 March 2008
(2007: 104.5m), full details of which
are shown in note 31 to the Financial
Statements on page 104. The Company
commenced a share buyback programme
in November 2007 and by 31 March 2008,
had bought 3.2m of its own shares in the
market for a total consideration, including
commission and stamp duty, of £34.9m.
These shares are held within treasury.
As at 31 March 2008, the Group had
a shareholders’ deficit of £23.4m
(2007: £76.1m).
Treasury policies and objectives
The Group’s treasury function manages and
monitors external funding and investment
requirements and financial risks in support
of the Group’s corporate objectives. The
Board reviews and agrees policies and
authority levels for treasury activities.
The Group’s financial instruments, other
than derivatives, comprise borrowings,
cash and liquid resources and various
items, such as trade receivables and trade
payables, which arise directly from its
operations. The main purpose of these
financial instruments is to finance the
Group’s operations. The Group also enters
into derivative transactions, principally
forward foreign currency contracts in
order to manage foreign exchange risk
on material commercial transactions
undertaken in currencies other than the
local functional currency. The Group
does not trade in financial instruments.
The main risks arising from the Group’s
financial instruments are market risk
(including foreign exchange risk, interest
rate risk and price risk), credit risk and
liquidity risk, along with the risks arising
from the financing of the Group’s activities
in the Public Private Partnership and Private
Finance Initiative sectors. The Group’s
exposures to and management of each of
these risks, together with sensitivities and
risk concentrations, are described in detail
in note 2 to the Financial Statements on
pages 75 to 77.
The Group funds its ongoing activities
through cash generated from its operations
and, where necessary, bank borrowings
and finance leases. The Group’s banking
facilities are described in note 25 to
the Financial Statements on page 96;
utilisation of the facility mainly relates
to letters of credit issued in respect of
individual projects undertaken by the
Group’s operating businesses. As at
31 March 2008 the Group had £58.8m
undrawn committed borrowing facility
available (2007: £31.0m).
There have been no significant changes to
the Group’s treasury policies during the year,
other than the repayment of foreign currency
loans that had previously hedged the Group’s
net investment in foreign operations.
Introduction Reviews Governance Financial Statements Investor Information
WS Atkins plc Annual Report 2008