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Henry Boot PLC Annual Report and Financial Statements for the year ended 31 December 2015 www.henryboot.co.uk Stock Code: BHY Financial Statements Notes to the Financial Statements continued for the year ended 31 December 2015 19. Construction contracts Contracts in progress at 31 December: Amounts due from contract customers included in trade receivables 2,322 573 Amounts due to contract customers included in trade payables (6,529) (10,096) (4,207) (9,523) Contract costs incurred plus recognised profits less recognised losses to date 357,110 305,843 Less: progress billings (361,317) (315,366) (4,207) (9,523) At 31 December 2015, retentions held by customers for contract work amounted to £1,947,000 (2014: £1,547,000). Advances received from customers for contract work amounted to £6,529,000 (2014: £10,096,000). 20. Assets classified as held for sale Assets classified as held for sale are investment properties, within the Property Investment and Development segment, which are individually being actively marketed for sale with expected completion dates within one year. At the reporting date the Group had no assets classified as held for sale. Assets classified as held for sale comprise the following: 2015 £’000 Investment property Fair value At 1 January 260 10,511 Transfer from investment property 13,163 260 Disposals (13,423) (10,511) At 31 December — 260 Adjustment in respect of tenant incentives — — Adjustment in respect of tax benefits — — Market value at 31 December — 260 2015 £’000 Assets classified as held for sale have been valued at 31 December 2015 at fair value by the Directors of the Company at £nil (2014: £260,000). 21. Trade and other payables Group 2015 £’000 Parent Company Trade payables 58,804 55,675 1,690 1,662 Social security and other taxes 4,250 4,842 367 472 Accrued expenses 1,887 2,305 887 347 Deferred income 6,027 9,083 — — Interest rate swap liability — 17 — — Amounts owed to related parties 55 50 — — Amounts owed to Group undertakings — — 79,656 79,737 71,023 71,972 82,600 82,218 Due within one year 64,384 68,833 82,600 82,218 Due after more than one year 6,639 3,139 — — 71,023 71,972 82,600 82,218 The Directors consider that the carrying amount of trade payables approximates to their fair value. 2014 £’000 2015 £’000 2014 £’000 2014 £’000 2014 £’000 118
Henry Boot PLC Annual Report and Financial Statements for the year ended 31 December 2015 www.henryboot.co.uk Stock Code: BHY 22. Government grants Government grants have been received in relation to the infrastructure of one of the Company’s land developments and three of the Group’s property developments. Grant income received relating to revenue grants are included within deferred income and released to the Statement of Comprehensive Income on a systematic basis to match the costs it is intended to compensate. There are no unfulfilled conditions or contingencies attached to the grants that have been recognised. Amounts credited to the Statement of Comprehensive Income during the year were £ 917,000 (2014: £nil). Grant income relating to capital grants is included within deferred income until the completion conditions are met; at this point the grant is transferred to offset the cost of the asset. 23. Capital risk management The Company’s objectives when managing capital are: • to safeguard the Group’s ability to continue as a going concern and have the resources to provide returns for shareholders and benefits for other stakeholders; and • to maximise returns to shareholders by allocating capital across our businesses based on the level of expected return and risk. The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group monitors capital on the basis of net debt to equity. Net debt is total debt less cash and cash equivalents and at 31 December 2015 this was £38.9m (2014: £36.4m). Equity comprises all components of equity and at 31 December 2015 this was £221.5m (2014: £200.5m). During 2015 the Group’s strategy, which was unchanged from previous years, was to maintain the debt to equity ratio below 50%. This level was chosen to ensure that we can access debt relatively easily and inexpensively if required. In February 2015, the Group concluded negotiations with its three banking partners to put in place a £60m facility to replace the £50m facility we had in place at 31 December 2014. The renewed facilities commenced on 17 February 2015, with a renewal date of 17 February 2018 and an option to extend the facility by one year, each year, for the next two years occurring on the anniversary of the facility. On 17 February 2016 we exercised our option to extend the facilities by one year to 17 February 2019. The renewed facilities, on improved terms, maintain covenants on the same basis as the previous facilities. The Group’s secured bank facilities are subject to covenants over loan to market value of investment properties, interest cover, gearings and minimum consolidated tangible assets value. The Group has other bank debt on which there are also covenant requirements. The Group operated comfortably within all of its requirements throughout the year. Shareholder Information Financial Statements Governance Strategic Report Overview 119
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Governance Strong governance within
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