TIDMAGK
RNS Number : 7656E
Aggreko PLC
03 March 2020
RESULTS FOR THE TWELVE MONTHS
ED 31 DECEMBER 2019
3 MARCH 2020
Strong profit growth and cash generation; on track to deliver
mid-teens ROCE in 2020
Chris Weston, Chief Executive Officer, commented:
"Our 2019 results demonstrate the significant progress we have
made to improve the Group's financial performance. We delivered
underlying profit growth of 13%, driven by a strong performance in
Rental Solutions, and a significant working capital improvement. We
are proposing a 3% increase in the final dividend, reflecting the
Board's confidence in the sustainability of our performance. We are
well-positioned to meet our customers' evolving needs in the
changing energy market, with 185 MW of hybrid work secured and 30
Y.Cubes now under contract, reflecting the growing interest in
lower-carbon technology and our new battery storage product. Going
forward we believe that a continued focus on the four strategic
priorities first set out in 2015 will underpin the achievement of
our mid-teens ROCE target in 2020 and beyond."
Results summary
GBPm 2019 2018 CHANGE UNDERLYING
CHANGE(1)
Group revenue 1,613 1,760 (8)% (1)%
Operating profit 241 219 10% 13%
Operating profit margin (%) 14.9 12.5 2.4pp 1.8pp
Profit before tax 199 182 9% 13%
Diluted EPS (p) 50.7 49.2 3% 6%
Operating cash inflow 628 423
Final dividend per share (p) 18.3 17.7 3%
Full year dividend per share (p) 27.7 27.1 2%
ROCE (%) 11.2 10.3 0.9pp 1.1pp
---------------------------------- ------ ------ ------- -----------
(1) Underlying excludes pass-through fuel and currency. A
reconciliation between reported and underlying performance is
detailed on page 9.
-- Underlying(1) Group revenue down 1% and in line with the
prior year excluding the 2018 Winter Olympics and early design and
project management revenue for Tokyo 2020 Olympics
-- Operating profit of GBP241 million and profit before tax of
GBP199 million, representing strong growth of 13% on an
underlying(1) basis and an underlying increase of 1.8pp in
operating margin
o Rental Solutions underlying(1) operating profit up 22% (55% of
Group operating profit)
o Power Solutions Industrial underlying(1) operating profit down
7% (27% of Group operating profit)
o Power Solutions Utility underlying(1) operating profit up 21%
(18% of Group operating profit)
-- Operating cash inflow of GBP628 million supported by a
significant working capital inflow of GBP107 million, reflecting
increased focus and process improvements to drive cash collection
in Power Solutions Utility
-- ROCE improved year on year to 11.2% (2018: 10.3%), providing
good momentum into 2020 with the Group on track to deliver
mid-teens ROCE; we are monitoring the potential impact of
coronavirus
-- We continue to work closely with the Tokyo 2020 Olympic and
Paralympic Games Organising Committees with preparations
progressing as expected
-- Strengthened financial position with net debt to EBITDA of
1.0x, down from 1.3x in 2018, despite the GBP101 million adverse
impact of adopting IFRS 16 'Leases'
-- Final dividend up 3% to 18.3 pence
-- An update on our strategic priorities will be provided
alongside our interim results in August
Group trading performance
Underlying(1) Group revenue decreased 1%. Excluding revenue from
the Winter Olympics in 2018 and early design and project management
revenue for the Tokyo 2020 Olympics this year, underlying(1) Group
revenue was in line with the prior year. Underlying(1) profit
before tax was up 13% at GBP199 million. The operating margin was
14.9% (2018: 12.5%), with improved underlying margins in both
Rental Solutions and Power Solutions Utility. Diluted earnings per
share (DEPS) were 50.7 pence (2018: 49.2 pence), up 6% on an
underlying(1) basis.
The Group's return on capital employed (ROCE) increased to 11.2%
(2018: 10.3%), despite a 4% reduction in the overall volume on hire
and lower levels of utilisation. This was driven by an increase in
the underlying profitability of Rental Solutions, as a result of
higher rates in key sectors within North America, our emergency
work in Belgium and an ongoing focus on cost efficiency and pricing
discipline throughout this business, along with the benefit of the
cost reduction programme in Power Solutions Utility. The increase
in ROCE provides good momentum into 2020 and beyond, with the Group
on track to deliver mid-teens ROCE in 2020.
Reported financial measures
Reported revenue and operating profit include the translational
impact of currency as Aggreko's revenue and profit are earned in
different currencies (most notably the US Dollar), which are then
translated and reported in Sterling. The movement in exchange rates
in the period had the translational impact of increasing revenue by
GBP6 million and decreasing operating profit by GBP9 million.
In addition, the Group separately reports fuel revenue from
certain contracts in the Power Solutions Utility business in Brazil
and Sri Lanka, where we manage fuel on a pass-through basis on
behalf of our customers. The reason for the separate reporting is
that fuel revenue on these contracts is entirely dependent on fuel
prices and the volume of fuel consumed, which can be volatile and
may distort the view of the performance of the underlying business.
In 2019, fuel revenue from these contracts was GBP27 million (2018:
GBP172 million), with the year on year decrease due to lower fuel
consumption in Brazil as contracts off-hired.
Reported Group revenue was down 8% on the prior year, with
Rental Solutions up 1%, Power Solutions Industrial up 3% and Power
Solutions Utility down 33%.
Outlook
Our underlying performance during 2019 provides good momentum
into 2020 and our preparations for the Tokyo 2020 Olympic and
Paralympic Games are progressing well. Notwithstanding this, we are
monitoring closely the development and potential impact of the
coronavirus outbreak, both in terms of the Tokyo Olympics and the
Group more widely. At this point, however, we currently expect to
deliver results in-line with expectations for 2020.
We expect to make further progress on working capital and will
continue our capital expenditure discipline with expected fleet
capital expenditure of around GBP200-GBP250 million. This, combined
with our performance outlook, underpins our confidence in
delivering our mid-teens ROCE target this year and beyond, and we
look forward to providing an update on our strategic priorities
alongside our interim results in August.
Divisional headlines
REVENUE GBPm
UNDERLYING
2019 2018 CHANGE CHANGE(1)
Rental Solutions 833 822 1% (1)%
Power Solutions
Industrial 434 424 3% 2%
Utility excl. pass-through
fuel 319 342 (7)% (5)%
Pass-through fuel 27 172 (84)% (84)%
Group 1,613 1,760 (8)% (1)%
------------------------------- ------ ------ -------- ------------
OPERATING PROFIT GBPm
2019 2018 CHANGE UNDERLYING CHANGE(1)
Rental Solutions 133 105 25% 22%
Power Solutions
Industrial 64 71 (9)% (7)%
Utility excl. pass-through
fuel 43 46 (7)% 21%
Pass-through fuel 1 (3) 154% 155%
Group 241 219 10% 13%
----------------------------- ----- ----- --------- ---------------------
Rental Solutions underlying(1) revenue was down 1%, with the
year on year decrease driven by the Northern Europe and Australia
Pacific regions. North America performed well, with revenue up 5%
(up 12% excluding hurricane revenue in 2018) and a good performance
in most of our key sectors, particularly oil & gas and building
services & construction. Revenue in Continental Europe grew 3%,
helped by work in response to power shortages in Belgium and the
FIFA Women's World Cup in France. In Northern Europe our gas
contracts in Ireland off-hired, as planned, and we also experienced
continuing market uncertainty, while in Australia good growth in
the mining sector was offset by a 100MW emergency contract in the
prior year numbers. Rental Solutions operating margin of 15.9% was
up 2.9 percentage points year on year on an underlying basis as a
result of higher rates in key sectors within North America, our
emergency work in Belgium and an ongoing focus on cost efficiency
and pricing discipline throughout the business.
Power Solutions Industrial underlying(1) revenue increased 2%.
Excluding both the 2018 Winter Olympics in the prior year and the
early design and project management revenue from the Tokyo 2020
Olympics in 2019, revenue was up 6%. We saw good growth in Latin
America (up 3%), Middle East (up 10%) and Africa (up 29%). As
previously disclosed, Eurasia had a challenging year with revenue
down 8% due to slower order intake and pressure on rates from
increased competition. Revenue in Asia also decreased 17%, mainly
driven by South Korea (excluding 2018 Winter Olympics) due to a
reduction in oil & gas, mining and events. Power Solutions
Industrial operating margin was 14.8%, with the underlying decrease
of 1.4 percentage points on the prior year primarily driven by
Eurasia, where we saw pricing pressure as a result of increased
competition and a reduction in the number of available market
opportunities.
Power Solutions Utility underlying(1) revenue was down 5% due
primarily to off-hires in Africa (including Angola, Benin and
Mozambique) and Myanmar. Underlying operating margin was up 2.9
percentage points to 13.3% as a result of the ongoing cost
reduction programme. We have made good progress during the year in
managing our trade receivables in this business, with collections
of $584 million compared with amounts invoiced of $484 million, and
active ongoing engagement with our customers continues to be a key
priority.
Cash flow and balance sheet
During the year cash generated from operations was GBP628
million (2018: GBP423 million). The increase in operating cash flow
is mainly driven by a GBP163 million year on year improvement in
working capital cash flows (2019: GBP107 million inflow, 2018:
GBP56 million outflow). The 2019 GBP107 million comprised a GBP78
million inflow from trade and other receivables, a GBP21 million
inflow from trade and other payables and a GBP8 million inflow from
inventory. EBITDA also increased GBP47 million, although this was
partially offset by a GBP24 million higher cash outflow relating to
mobilisation (fulfilment assets) and demobilisation activities. The
higher fulfilment and demobilisation cash flows in 2019 primarily
relate to contracts in Brazil and Burkina Faso, as well as the
Tokyo 2020 Olympics.
The decrease in trade and other receivables of GBP78 million
included a GBP93 million decrease in Power Solutions Utility (2018:
GBP1 million decrease) which reflects an increased focus and
implementation of process improvements to drive cash collection in
this business. This was partially offset by a GBP10 million
increase in Power Solutions Industrial (2018: GBP2 million
increase) reflecting activity levels and some prepayments in the
period relating to the Tokyo 2020 Olympics, together with a GBP5
million increase in Rental Solutions (2018: GBP9 million increase).
Despite this slight increase in the year, Rental Solutions has made
good progress in reducing the level of unbilled revenue that had
built up through the end of 2018, and reducing its trade
receivables balance continues to be a key focus for 2020.
In Power Solutions Utility, the level of our bad debt provision
is broadly unchanged at $81 million (2018: $83 million) and we
remain focused on managing the trade receivables which have risen
over recent years, primarily as a result of our customers' limited
liquidity and access to foreign currency.
The various initiatives established during last year drove an
GBP8 million decrease in inventory, mainly in Power Solution
Utility, which was partially offset by an increase in Power
Solutions Industrial as we prepare for the Tokyo 2020 Olympics.
The increase in trade and other payables balances was primarily
as a result of deferred revenue for the Tokyo 2020 Olympics,
partially offset by lower trade and other payables on our fuel
contracts in Brazil due to lower fuel consumption as these
contracts off-hired.
Fleet capital expenditure was GBP189 million (2018: GBP196
million), representing 0.7 times fleet depreciation (2018: 0.7
times). Within this, GBP71 million was invested in Rental
Solutions, primarily in relation to temperature control and the
ongoing renewal of our oil free air (OFA) fleet, and GBP118 million
in Power Solutions, which included our ongoing fleet refurbishment
programme and GBP26 million of investment related to the Tokyo 2020
Olympics .
Net debt was GBP584 million at 31 December 2019. This was GBP102
million lower than the prior year, despite the recognition within
net debt of a GBP101 million lease creditor following the Group's
adoption of IFRS 16 'Leases' from 1 January 2019. A detailed cash
flow is included on page 17 of the financial statements.
Net debt to EBITDA at 31 December 2019 was 1.0 times (2018: 1.3
times, pre IFRS 16).
Capital structure and dividends
The objective of our strategy is to deliver long-term value to
shareholders while maintaining a balance sheet structure that
safeguards the Group's financial position through economic cycles.
Given the operational risk profile of the Group we believe gearing
of around one times net debt to EBITDA is appropriate, recognising
that from time to time it may be higher than this as investment
opportunities present themselves.
More detail on our capital allocation policy will be outlined as
part of the update on our four strategic priorities alongside our
interim results. Prior to this, and subject to shareholder
approval, the Board is proposing a final dividend of 18.27 pence
(2018: 17.74 pence) representing an increase of 3%. This will
result in a 2% increase in the full year dividend to 27.65 pence
(2018: 27.12 pence) per Ordinary Share, giving dividend cover
(basic EPS divided by the full year declared dividend) of 1.8 times
(2018: 1.8 times). This increase reflects the Board's confidence in
the sustainability of performance, and its recognition of the
dividend's importance in providing returns to our shareholders. The
retained earnings of the Company as at 31 December 2019 were GBP416
million and the majority of these earnings are distributable.
Business data table
2019 2018 CHANGE
Average megawatts on hire (MW) 6,381 6,659 (4)%
Rental Solutions average megawatts on hire 1,444 1,531 (6)%
Power Solutions Industrial average megawatts on hire 2,532 2,445 4%
Power Solutions Utility average megawatts on hire 2,405 2,683 (10)%
Total Power Solutions order intake (MW) 1,003 1,002 Flat
Power Solutions Industrial (ex. Eurasia) 224 271 (17)%
Power Solutions Industrial (Eurasia only) 282 333 (15)%
Power Solutions Utility 497 398 25%
Utilisation
Rental Solutions 58% 62% (4.0)pp
Power Solutions Industrial 68% 71% (3.0)pp
Power Solutions Utility 65% 66% (1.0)pp
Financial
Effective tax rate 35% 31% 4pp
Fleet capex (GBPm) 189 196 (4)%
Fleet depreciation (GBPm) 265 273 (3)%
Average net operating assets (GBPm) 2,150* 2,119 1%
Net debt (GBPm) (584)** (686) 15%
---------------------------------------------------------- ----------- --------- --------
*Includes GBP101 million of right of use assets on adoption of
IFRS 16 'Leases' from 1 January 2019
**Includes GBP101 million of a lease creditor on adoption of
IFRS 16 'Leases' from 1 January 2019.
Financial calendar
23 April 2020 Ex-dividend date
23 April 2020 Annual General Meeting
24 April 2020 Record date to be eligible for the final dividend
21 May 2020 Final dividend payment
6 August 2020 Half year results for the six months to 30 June
2020 and strategy update
Enquiries
Investors and analysts
Louise Bryant, Aggreko plc +44 7813 210 809
Richard Foster, Aggreko plc +44 7989 718 478
Financial media
Andy Rivet-Carnac, Headland +44 7968 997 365
Analyst presentation
A presentation will be held for analysts and investors today at
09:30am (GMT) at the London Stock Exchange, 10 Paternoster Square,
EC4M 7LS. A live web-cast and a copy of the slides will be available
on our website at www.plc.aggreko.com/investors .
Conference call details:
United Kingdom (Local): 020 3936 2999 - Participant Access Code:
813350
All other locations: +44 20 3936 2999 - Participant Access Code:
813350
BUSINESS UNIT PERFORMANCE REVIEW
RENTAL SOLUTIONS
REVENUE GBPm
2019 2018 CHANGE UNDERLYING CHANGE(1)
833 822 1% (1)%
----- ----- --------- ---------------------
OPERATING PROFIT GBPm
2019 2018 CHANGE UNDERLYING CHANGE(1)
133 105 25% 22%
Operating
Margin % 15.9% 12.9% 3.0pp 2.9pp
ROCE 16.7% 14.7% 2.0pp 1.7pp
----------- ------ ------ --------- ---------------------
-- Underlying(1) revenue down 1%, but operating profit up 22%
-- Improved operating margin of 15.9%, up 2.9 percentage points on an underlying(1) basis
-- ROCE of 16.7% reflects an underlying(1) increase of 1.7
percentage points, driven by profit growth in North America
-- Strong performance in key sectors within North America
North American underlying(1) revenue was up 5% on the prior year
(up 12% excluding hurricane revenue in 2018). Our sector focus has
continued to drive growth and we saw good performance in most of
our key sectors, particularly in oil & gas and building
services & construction. This top-line growth enabled us to
leverage our fixed cost base more effectively, supporting the
business to an improved operating margin.
In our Australia Pacific business, underlying(1) revenue
decreased 13% as good growth in the mining sector was offset by a
100MW emergency contract in the prior year numbers. Despite this
revenue reduction, our focus on cost efficiencies helped to drive
an improvement in operating margin.
Our Continental European business grew underlying(1) revenue 3%,
supported by revenue earned from work in response to power
shortages in Belgium and the FIFA Women's World Cup in France
(which was partially offset by the Ryder Cup revenue in the prior
year).
Underlying(1) revenue in Northern Europe was down 15%, as data
centre contracts in Ireland off-hired, as planned, together with
the effects of continuing market uncertainty.
Operating margin on an underlying(1) basis was up 2.9 percentage
points, reflecting higher rates in key sectors within North America
and our emergency work to support the power shortages in Belgium;
this was despite lower fleet utilisation as a result of prior year
hurricane work off-hiring. In addition, we have begun to realise
the benefits of our investment in new systems and processes that
enable us to focus on more profitable work and improve our ability
to recover costs.
POWER SOLUTIONS
REVENUE GBPM
2019 2018 CHANGE UNDERLYING CHANGE(1)
Industrial 434 424 3% 2%
Utility excl. pass-through
fuel 319 342 (7)% (5)%
Pass-through fuel 27 172 (84)% (84)%
---------------------------- ----- ----- -------- ---------------------
OPERATING PROFIT GBPM
UNDERLYING
2019 2018 CHANGE CHANGE(1)
Industrial 64 71 (9)% (7)%
Utility excl. pass-through
fuel 43 46 (7)% 21%
Pass-through fuel 1 (3) 154% 155%
OPERATING MARGIN %
Industrial 14.8% 16.6% (1.8)pp (1.4)pp
Utility excl. pass-through
fuel 13.3% 13.4% (0.1)pp 2.9pp
ROCE
Industrial 10.4% 10.7% (0.3)pp (0.2)pp
Utility excl. pass-through
fuel 5.8% 6.2% (0.4)pp 1.1pp
---------------------------- ------ ------ --------- -----------
-- Power Solutions Industrial
- Underlying(1) revenue increased 2%; up 6% excluding the 2018
Winter Olympics and early design and project management revenue for
the Tokyo 2020 Olympics recorded in 2019
- Underlying(1) profit decreased 7%, driven by a challenging year in our Eurasia business
- Operating margin at 14.8% was down 1.4 percentage points on an underlying(1) basis
- ROCE of 10.4% is down 0.2 percentage points on an underlying(1) basis
-- Power Solutions Utility
- Underlying (1) revenue was down 5%, primarily due to off hires
- Underlying (1) operating profit was up 21% as a result of improved operational performance
- ROCE up 1.1 percentage points to 5.8% on an underlying(1) basis
Power Solutions Industrial
Power Solutions Industrial underlying(1) revenue increased 2%.
Excluding both the 2018 Winter Olympics in the prior year and early
design and project management revenue for the Tokyo 2020 Olympics
in 2019, revenue was up 6%.
Revenue in Latin America increased 3%, primarily driven by the
mining and oil & gas sectors. In the Middle East revenue
increased 10%, with good growth in Oman and Saudi Arabia, partially
offset by Kuwait. Africa revenue grew 29%, driven by our local
business in Nigeria and industrial projects in the Democratic
Republic of Congo (DRC). As previously disclosed, Eurasia had a
challenging year with revenue down 8% due to slower order intake
and pressure on rates from increased competition. Revenue in Asia
(excluding the 2018 Winter Olympics and Tokyo 2020 Olympics)
decreased 17%, mainly driven by a reduction in work related to
mining and oil & gas.
The operating margin, on an underlying(1) basis, was down 1.4
percentage points on the prior year at 14.8%, primarily driven by
pricing pressure and a reduction in the number of available market
opportunities in Eurasia, partially offset by a good performance in
Africa and Latin America.
Power Solutions Industrial order intake for the year was 506 MW
(2018: 604 MW), including 282 MW in Eurasia (2018: 333 MW).
Power Solutions Utility
Power Solutions Utility saw underlying (1) revenue decrease 5%,
primarily due to off hires in Africa (including Angola, Benin and
Mozambique) and Myanmar. The operating margin (excluding
pass-through fuel) on an underlying(1) basis was up 2.9 percentage
points to 13.3%, primarily as a result of the ongoing cost
reduction programme.
Average megawatts on hire were down 10% to 2,405 (2018: 2,683),
impacted most significantly by projects off-hiring in Africa and
Asia. The full year off-hire rate was 33% (2018: 42%). Order intake
for the year was 497 MW (2018: 398 MW), including 150MW in the
Philippines. In addition, we have agreed contract extensions with a
number of customers including an agreement to extend our 200MW
Ivory Coast contract until December 2021.
Managing the trade receivables in our Power Solutions Utility
business continues to be a major focus, with active ongoing
engagement with our customers a key priority. Encouragingly our
Power Solutions Utility cash collections in the year were $584
million compared with amounts invoiced of $484 million. However, we
continue to experience delays in receiving payments in Venezuela,
Yemen and parts of Africa due to our customers' more limited
liquidity and access to foreign currency. While we believe that we
remain relatively well positioned to recover the Group's net
exposure in Venezuela and Yemen when the current situation in each
of these countries stabilises, we also recognise that there is a
range of potential outcomes for each. The customer with whom we
have our largest net exposure (in the range $30-40 million) is
within the Africa region and, while there is no dispute over the
amount outstanding, we remain in regular dialogue with this
customer regarding the likely process and timing of future
payments.
Overall the Power Solutions Utility bad debt provision at 31
December 2019 was $81 million (2018: $83 million). Although the
overall provision is broadly in line with the prior year, to
reflect the differing circumstances and payment progress made by
customers, the Group has increased its provision against specific
customers in Yemen and Venezuela by $8m, while reducing its
provision against other customers by $10 million. In addition, we
have revalued private placement notes relating to one customer in
Venezuela (PDVSA) to GBP1 million (2018: GBP4 million).
FINANCIAL REVIEW
Currency translation
The movement in exchange rates in the period had the
translational impact of increasing revenue by GBP6 million and
decreasing operating profit by GBP9 million. Currency translation
also gave rise to a GBP75 million decrease in the value of the
Group's net assets. Set out in the table below are the principal
exchange rates which affected the Group's profit and net
assets.
PRINCIPAL EXCHANGE RATES 2019 2018
(PER GBP STERLING)
AVERAGE YEAR AVERAGE YEAR
United States Dollar 1.28 1.31 1.34 1.27
Euro 1.14 1.17 1.13 1.11
UAE Dirhams 4.69 4.80 4.91 4.66
Australian Dollar 1.83 1.88 1.79 1.80
Brazilian Reals 5.03 5.30 4.87 4.91
Argentinian Peso 61.10 78.28 37.48 48.62
Russian Rouble 82.61 80.94 83.70 88.02
-------------------------- -------- ------ -------- ------
(Source: Bloomberg)
Reconciliation of reported to underlying results
The tables below reconcile the reported and underlying revenue
and operating profit movements:
Revenue
GBPm RENTAL SOLUTIONS INDUSTRIAL UTILITY GROUP
2019 2018 CHANGE 2019 2018 CHANGE 2019 2018 CHANGE 2019 2018 CHANGE
As reported 833 822 1% 434 424 3% 346 514 (33)% 1,613 1,760 (8)%
Pass-through
fuel - - - - (27) (172) (27) (172)
Currency
impact - 16 - 1 - (6) - 11
Underlying 833 838 (1)% 434 425 2% 319 336 (5)% 1,586 1,599 (1)%
------------- ----- ---- ---- ---- ----- ----- -----
Operating profit
RENTAL SOLUTIONS INDUSTRIAL UTILITY GROUP
GBPm
2019 2018 CHANGE 2019 2018 CHANGE 2019 2018 CHANGE 2019 2018 CHANGE
As reported 133 105 25% 64 71 (9)% 44 43 2% 241 219 10%
Pass-through
fuel - - - - (1) 3 (1) 3
Currency
impact - 3 - (1) - (11) - (9)
Underlying 133 108 22% 64 70 (7)% 43 35 21% 240 213 13%
------------- ----- ---- ---- ---- ---- ---- ---------
Notes:
1. The currency impact is calculated by taking the 2018 results
in local currency and retranslating them at the 2019 average
rates.
2. The currency impact line included in the tables above
excludes the currency impact on pass-through fuel in Utility, which
in 2019 was GBP5 million on revenue and GBPnil on operating
profit.
Interest
The net interest charge of GBP42 million was GBP5 million higher
than the prior year, primarily due to an increase in interest of
GBP5 million associated with the adoption of IFRS 16 'Leases'. The
lower average net debt has been offset by an increase in the
effective interest rate and an increase in arrangement fees for
refinancing committed debt. Interest cover (including the impact of
IFRS 16) measured against rolling 12-month EBITDA (Earnings before
Interest, Taxes, Depreciation and Amortisation) remained strong at
13 times (2018: 14 times).
Taxation
Tax charge
The Group's effective corporation tax rate for the year was 35%
(2018: 31%) based on a tax charge of GBP70 million (2018: GBP57
million) on a profit before taxation of GBP199 million (2018:
GBP182 million). The increase in the Group's effective tax rate in
2019 is largely due to the geographical mix of profits and the
impact of non-recurring prior year credits in 2018.
Total cash taxes
In 2019 the Group's worldwide operations resulted in direct and
indirect taxes of GBP272 million (2018: GBP241 million) being paid
to tax authorities. This amount represents all corporate taxes paid
on operations, payroll taxes paid and collected, import duties,
sales taxes and other local taxes.
Cash flow
During the year cash generated from operations was GBP628
million (2018: GBP423 million). The increase in operating cash flow
is mainly driven by a year on year improvement in working capital
cash flows of GBP163 million (2019: GBP107 million inflow, 2018:
GBP56 million outflow) and an increase in EBITDA of GBP47 million,
partially offset by a higher cash outflow of GBP24 million relating
to mobilisation (fulfilment assets) and demobilisation activities.
The working capital movements in the period are explained in more
detail on page 4. Capital expenditure in the year was GBP230
million (2018: GBP216 million), of which GBP189 million (2018:
GBP196 million) was invested in fleet assets.
Net operating assets
The net operating assets of the Group (including goodwill) at 31
December 2019 totalled GBP1,997 million, GBP162 million lower than
31 December 2018, as detailed in the table below.
MOVEMENT EXCLUDING
GBPm 2019 2018 MOVEMENT THE IMPACT OF CURRENCY
Goodwill/intangibles/investments 227 235 (3)% (1)%
Rental fleet 939 1,057 (11)% (9)%
Property & plant 227 112 103% 106%
Working capital (excl.
interest creditors) 496 646 (23)% (20)%
Fulfilment asset & demobilisation
provision 72 33 118% 125%
Cash (incl. overdrafts) 36 76 (53)% (51)%
----------------------------------- ------- ------- ----------- -------------------------
Total net operating assets 1,997 2,159 (8)% (5)%
----------------------------------- ------- ------- ----------- -------------------------
A key measure of our performance is the return generated from
the Group's average net operating assets (ROCE). We calculate ROCE
by taking the operating profit (pre-exceptional items) for the year
and expressing it as a percentage of the average net operating
assets at 31 December, 30 June and the previous 1 January. In 2019
ROCE increased to 11.2% compared with 10.3% in 2018. On an
underlying basis ROCE rose
1.1 percentage points, driven by a strong performance in Rental
Solutions and the benefits of the cost-saving programme in Power
Solutions Utility.
Property, plant and equipment
Our rental fleet accounts for GBP939 million, which is around
80% of the net book value of the Group's property, plant and
equipment. The majority of equipment in the rental fleet is
depreciated on a straight-line basis to a residual value of zero
over eight years, with some classes of rental fleet depreciated
over 10 and 12 years. The annual fleet depreciation charge of
GBP265 million (2018: GBP273 million) reflects the estimated
service lives allocated to each class of fleet asset. Asset lives
are reviewed at the start of each year and changed, if necessary,
to reflect their remaining lives in light of technological change,
prospective economic utilisation and the physical condition of the
assets. No changes were made in 2019.
Shareholders' equity
Shareholders' equity decreased by GBP8 million to GBP1,359
million, represented by the net assets of the Group of GBP1,943
million less net debt of GBP584 million. The movements in
shareholders' equity are analysed in the table below:
MOVEMENTS IN SHAREHOLDERS' EQUITY
GBPm GBPm
AS AT 1 JANUARY 2019 1,367
Profit for the period 129
Dividend (69)
-----
Retained earnings 60
Employee share awards 11
Purchase of Treasury shares (4)
Re-measurement of retirement benefits (1)
Currency translation (75)
Other 1
------
AS AT 31 DECEMBER 2019 1,359
--------------------------------------- ----- ------
Pensions
Pension arrangements for our employees vary depending on market
practice and regulation in each country. The Group operates a
defined benefit scheme for UK employees, which was closed to new
employees joining the Group after 1 April 2002. Most of the other
schemes in operation around the world are defined contribution
schemes.
Under IAS 19: 'Employee Benefits', Aggreko has recognised a
pre-tax pension surplus of GBP4 million at 31 December 2019 (2018:
GBP1 million surplus) which is determined using actuarial
assumptions. The improvement in pension funding is primarily driven
by the additional contributions paid by the Company during the
year. These were partially offset by the growth in liabilities
being greater than the returns on the Scheme's assets. The Scheme's
liability growth was primarily driven by a fall in interest rates,
thereby reducing the discount rate applied to the liability, while
all asset categories provided better than expected returns.
The sensitivities regarding the main valuation assumptions are
shown in the table below.
Assumption POTENTIAL CHANGE DEFICIT IMPACT
INC./(DEC) (INC.) /DEC PROFIT IMPACT
(GBPm) (INC.)/DEC.
(GBPm)
Rate of increase in salaries 0.5% (1) -
Discount rate (0.5)% (14) (1)
Inflation (0.5% increases
on pensions increases, deferred
revaluation and salary increases) 0.5% (10) -
Longevity 1 year (4) -
------------------------------------ ----------------- --------------- --------------
Treasury
Liquidity and funding
The Group maintains sufficient facilities to meet its funding
requirements over the medium term. At 31 December 2019 these
facilities totalled GBP1,027 million, in the form of committed bank
facilities arranged on a bilateral basis with several international
banks and private placement lenders. The financial covenants
attached to these facilities are that EBITDA should be no less than
4 times interest and net debt should be no more than 3 times
EBITDA. The covenants exclude the impact of IFRS 16 'Leases' and,
on that basis, at 31 December 2019, these ratios were 14 times and
0.9 times respectively. The Group does not expect to breach these
covenants in the year from the date of approval of these financial
statements.
Net debt (including GBP101 million of a lease creditor on the
Group's adoption of IFRS 16 from 1 January 2019) amounted to GBP584
million at 31 December 2019 (2018: GBP686 million) and, at that
date, un-drawn committed facilities were GBP516 million.
Further detail can be found in the Going Concern disclosure
within Note 1 to the Annual Report and Accounts.
Risks
The Group's operations expose it to a variety of financial risks
that include liquidity, the effects of changes in foreign currency
exchange rates, interest rates, and credit risk.
The Group's policy is to manage its exposure to interest rates
by ensuring an appropriate balance of fixed and floating rate debt.
At 31 December 2019, GBP478 million of the gross debt of GBP570
million (excluding the lease creditor of GBP101 million) was at
fixed rates of interest resulting in a fixed to floating rate debt
ratio of 84:16 (2018: 77:23).
The Group manages its currency flows to minimise foreign
exchange risk arising on transactions denominated in foreign
currencies and uses forward contracts and forward currency options,
where appropriate, to hedge net currency flows. The Group's foreign
currency exposure on the translation into Sterling of its net
investments in overseas subsidiaries is managed using debt in the
same currency as those investments.
The group manages its credit risk on cash deposits and other
financial instruments by limiting the aggregate amounts and their
duration depending on external credit ratings of the relevant
counterparty.
Insurance
The Group operates a policy of buying cover against the material
risks which the business faces, where it is possible to purchase
such cover on reasonable terms. Where this is not possible, or
where the risks would not have a material impact on the Group as a
whole, we self-insure.
Principal risks and uncertainties
In the day to day operations of the Group, we face various risks
and uncertainties. We seek both to prevent these risks from
materialising and to mitigate their impact if they do arise. The
Board has developed a risk management framework to facilitate this.
The principal risks that we believe could potentially affect the
Group are summarised below:
-- Global macroeconomic uncertainty;
-- Market dynamics;
-- Technology developments;
-- Talent management;
-- Change management;
-- Climate change;
-- Health and safety;
-- Cyber security;
-- Service delivery : major contractual failure;
-- Escalating sanctions; and
-- Failure to collect payments or to recover assets.
This year two risks were added to the Group's register of
principal risks and two were removed.
Risks added to the Group's register this year:
-- Climate change: We have isolated the contribution to the
Group's aggregate level of risk that is attributable to climate
change. This has been done to reflect our increased focus on this
issue.
-- Service delivery - major contractual failure: This risk
returned to the Group's Register of Principal Risks at the half
year. The severity of this risk fluctuates with the number, scale
and scope of major contracts that we are delivering at any time.
The successful delivery of the Japan Olympics is a key priority for
2020 with associated risks gaining additional scrutiny as a
result.
The risk scores of the following risks have fallen below the
threshold for inclusion in the Group's Register of Principal Risks.
In both cases, additional control measures have been put in place
to reduce the likelihood of a risk event occurring.
-- Security: Our Group security policy sets the standards in
this area. Our Group security team provides guidance and monitors
the security environment. In 2019, additional security training,
security audits and a security incident reporting app were
implemented.
-- Failure to conduct business dealings with integrity and
honesty: In 2019, a new code of conduct and associated training,
increased oversight of third-party sales representatives and an
improved supplier onboarding process were implemented to strengthen
our compliance framework further.
These risks remain on the risk registers of the relevant
business units and corporate functions and, given their nature,
will continue to be areas of focus for the Board.
UK withdrawal from the European Union
The UK has now left the EU and is currently in a transition
period until the end of 2020 while the UK and the EU negotiate
additional future arrangements. At this point we do not know what
the result of these negotiations will be or whether the current
transition period will be extended.
We have completed an impact assessment to try to identify the
aspects of our business that might be affected most by the UK's
withdrawal from the EU. We do not expect the impact on the Group's
business activities to be material because the large majority of
them take place outside the UK and the EU. However, we have taken
some actions and developed contingency plans to reduce the
potential impact on the Group of the UK leaving the EU without a
new trade agreement at the end of December 2020.
Delays in our supply chain and in the export of nished products,
changes to customs duties on the movement of equipment, changes to
tax legislation and the associated system changes have the
potential to affect our business the most, on top of the impact of
changes in the value of Sterling and GDP growth in our UK and EU
markets.
The Group earns approximately 5% of its revenue from the UK and
11% from EU markets. Demand for our services in these markets is,
in part, GDP dependent. A signi cant change in the GDP growth in
these markets is likely to have a knock-on effect on our level of
activity there. We will continue to monitor the situation closely
and re ne our contingency plans as the situation develops.
Coronavirus
As the situation continues to evolve, our primary concern is for
the welfare of our people, their families and the local communities
in which we work. We are following the development of the
coronavirus outbreak and have implemented several measures to
protect our people and to prepare for possible consequences of the
virus. It is unclear how the outbreak will develop and, therefore,
the potential impact on our business. We will continue to follow
developments closely and will take further action to protect our
people and business as appropriate.
Shareholder information
Our website can be accessed at www.plc.aggreko.com. This
contains a large amount of information about our business. The
website also carries copies of recent investor presentations, as
well as London Stock Exchange announcements.
Chris Weston Heath Drewett
Chief Executive Officer Chief Financial Officer
3 March 2020
GROUP INCOME STATEMENT
FOR THE YEARED 31 DECEMBER 2019
2019 2018
NOTES GBP MILLION GBP MILLION
Revenue 2 1,613 1,760
Cost of sales (644) (824)
------------ ------------
Gross profit 969 936
Distribution costs (482) (476)
Administrative expenses (249) (241)
Impairment loss on trade
receivables 8 (7) (7)
Other income 10 7
------------ ------------
Operating profit 2 241 219
Net finance costs
- Finance cost (46) (41)
- Finance income 4 4
------------ ------------
Profit before taxation 199 182
Taxation 5 (70) (57)
------------ ------------
Profit for the year 129 125
------------ ------------
All profit for the year is
attributable to the owners
of the Company.
Basic earnings per share
(pence) 4 50.80 49.22
------------ ------------
Diluted earnings per share
(pence) 4 50.70 49.18
---------------------------- ------ ------------ ------------
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2019
2019 2018
GBP MILLION GBP MILLION
Profit for the year 129 125
------------ ------------
Other comprehensive income/(loss)
Items that will not be reclassified to profit
or loss
Remeasurement of retirement benefits (1) 26
Taxation on remeasurement of retirement
benefits - (5)
Items that may be reclassified subsequently
to profit or loss
Cash flow hedges 1 2
Net exchange losses offset in reserves (75) (24)
------------ ------------
Other comprehensive loss for the year (net
of tax) (75) (1)
------------ ------------
Total comprehensive income for the year 54 124
----------------------------------------------- ------------ ------------
GROUP BALANCE SHEET
(COMPANY NUMBER: SC177553)
AS AT 31 DECEMBER 2019
2019 2018
NOTES GBP MILLION GBP MILLION
Non-current assets
Goodwill 177 184
Other intangible assets 41 42
Investment 9 9
Property, plant and equipment 6 1,166 1,169
Deferred tax asset 44 36
Fulfilment assets 7 54 29
Retirement benefit surplus 4 1
------------ ------------
1,495 1,470
------------ ------------
Current assets
Inventories 216 229
Trade and other receivables 8 659 781
Fulfilment assets 7 32 15
Cash and cash equivalents 87 85
Derivative financial instruments 1 1
Current tax assets 21 23
------------ ------------
1,016 1,134
------------ ------------
Total assets 2,511 2,604
------------ ------------
Current liabilities
Borrowings 9 (59) (144)
Lease liability 10 (33) -
Derivative financial instruments (1) (1)
Trade and other payables 11 (388) (371)
Current tax liabilities (42) (47)
Demobilisation provisions 12 (5) (6)
Provisions - (2)
------------ ------------
(528) (571)
------------ ------------
Non-current liabilities
Borrowings 9 (511) (627)
Lease liability 10 (68) -
Deferred tax liabilities (36) (34)
Demobilisation provisions 12 (9) (5)
(624) (666)
------------
Total liabilities (1,152) (1,237)
------------ ------------
Net assets 1,359 1,367
============ ============
Shareholders' equity
Share capital 42 42
Share premium 20 20
Treasury shares (13) (17)
Capital redemption reserve 13 13
Hedging reserve (net of deferred
tax) 2 1
Foreign exchange reserve (126) (51)
Retained earnings 1,421 1,359
------------ ------------
Total shareholders' equity 1,359 1,367
============ ============
The financial statements on pages 15 to 33 were approved by the
Board of Directors on 3 March 2020 and were signed on its behalf
by:
Ken Hanna Heath Drewett
Chairman Chief Financial Officer
GROUP CASH FLOW STATEMENT
FOR THE YEARED 31 DECEMBER 2019
2019 2018
NOTES GBP MILLION GBP MILLION
Operating activities
Profit for the year 129 125
Adjustments for:
Tax 70 57
Depreciation 315 293
Amortisation of intangibles 8 5
Fulfilment assets 7 21 9
Demobilisation provisions 12 9 4
Finance income (4) (4)
Finance cost 46 41
Profit on sale of property, plant
and equipment (PPE) (10) (7)
Share-based payments 11 10
Changes in working capital (excluding
the effects of exchange differences
on consolidation):
Decrease in inventories 8 14
Decrease/(increase) in trade and
other receivables 78 (10)
Increase/(decrease) in trade and
other payables 21 (60)
Cash flows relating to fulfilment
assets 7 (66) (44)
Cash flows relating to demobilisation
provisions 12 (6) (4)
Cash flows relating to 2017 exceptional
items (2) (6)
------------ ------------
Cash generated from operations 628 423
Tax paid (76) (61)
Interest received 4 4
Interest paid (Note (i)) (46) (36)
------------ ------------
Net cash generated from operating
activities 510 330
------------ ------------
Cash flows from investing activities
Acquisitions (net of cash acquired) - (24)
Purchases of PPE (230) (216)
Purchase of other intangible assets (8) (10)
Purchase of investments - (9)
Proceeds from sale of PPE 21 15
------------ ------------
Net cash used in investing activities (217) (244)
------------ ------------
Cash flows from financing activities
Increase in long-term loans 393 726
Repayment of long-term loans (493) (624)
Increase in short-term loans 2 5
Repayment of short-term loans (127) (94)
Payment of lease liabilities (31) -
Dividends paid to shareholders (69) (69)
Purchase of treasury shares (4) (12)
------------ ------------
Net cash used in financing activities (329) (68)
------------ ------------
Net (decrease)/increase in cash and cash
equivalents (36) 18
Cash and cash equivalents at beginning
of the year 76 59
Exchange loss on cash and cash
equivalents (4) (1)
------------ ------------
Cash and cash equivalents at end
of the year 36 76
------------------------------------------ ------ ------------ ------------
i) Interest paid of GBP46 million (2018: GBP36 million) includes
GBP5 million relating to leases (2018: GBP nil).
Cash flows for the purchase and sale of rental fleet assets are
presented as arising from investing activities because the
acquisition of new fleet assets represents a key investment
decision for the Group, the assets are expected to be owned and
operated by the Group to the end of their economic lives, the
disposal process (when the assets are largely depreciated) is not a
major part of the Group's business model and the assets in the
rental fleet are not specifically held for subsequent resale.
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
AS AT 31 DECEMBER 2019
At 1 At 31
JANUARY IFRS 16 OTHER NON-CASH DECEMBER
2019 TRANSITION CASH FLOW EXCHANGE MOVEMENTS 2019
Analysis of changes
in net debt GBP MILLION GBP MILLION GBP MILLION GBP MILLION GBP MILLION GBP MILLION
----------------------------- ------------ ------------ ------------ ------------ --------------- ------------
Cash and cash equivalents 76 - (36) (4) - 36
Current borrowings:
Bank borrowings (115) - 105 2 - (8)
Private placement
notes (20) - 20 - - -
----------------------------- ------------ ------------ ------------ ------------ ---------------
Lease liability - (31) 31 - (33) (33)
----------------------------- ------------ ------------ ------------ ------------ --------------- ------------
(135) (31) 156 2 (33) (41)
----------------------------- ------------ ------------ ------------ ------------ --------------- ------------
Non-current borrowings:
Bank borrowings (134) - 100 1 - (33)
Private placement
notes (493) - - 15 - (478)
----------------------------- ------------ ------------ ------------ ------------ ---------------
Lease liability - (73) - 2 3 (68)
----------------------------- ------------ ------------ ------------ ------------ --------------- ------------
(627) (73) 100 18 3 (579)
----------------------------- ------------ ------------ ------------ ------------ --------------- ------------
Net debt (686) (104) 220 16 (30) (584)
----------------------------- ------------ ------------ ------------ ------------ --------------- ------------
Analysis of changes
in liabilities from
financing activities
----------------------------- ------------ ------------ ------------ ------------ --------------- ------------
Current borrowings (135) (31) 156 2 (33) (41)
Non-current borrowings (627) (73) 100 18 3 (579)
Total financing liabilities (762) (104) 256 20 (30) (620)
------------ ------------ ------------ ------------ ---------------
Other non-cash movements include reclassifications between
short-term and long-term borrowings, with GBPnil being reclassified
from non-current to current borrowings and GBP24 million from
non-current to current lease liabilities. The remaining balance is
due to GBP25 million of new lease liabilities and GBP5 million of
interest.
AS AT 31 DECEMBER 2018
At 1 CASH FLOW At 31
JANUARY EXCLUDING CASH FLOW OTHER NON-CASH DECEMBER
2018 ACQUISITIONS - ACQUISITIONS EXCHANGE MOVEMENTS 2018
Analysis of changes
in net debt GBP MILLION GBP MILLION GBP MILLION GBP MILLION GBP MILLION GBP MILLION
----------------------- ------------ -------------- ---------------- ------------ --------------- ------------
Cash and cash
equivalents 59 18 - (1) - 76
Current borrowings:
Bank borrowings (72) 34 - (2) (75) (115)
Private placement
notes (55) 55 - (2) (18) (20)
----------------------- ------------ -------------- ---------------- ------------ --------------- ------------
(127) 89 - (4) (93) (135)
----------------------- ------------ -------------- ---------------- ------------ --------------- ------------
Non-current
borrowings:
Bank borrowings (103) (78) (24) (4) 75 (134)
Private placement
notes (481) - - (30) 18 (493)
----------------------- ------------ -------------- ---------------- ------------ --------------- ------------
(584) (78) (24) (34) 93 (627)
----------------------- ------------ -------------- ---------------- ------------ --------------- ------------
Net debt (652) 29 (24) (39) - (686)
----------------------- ------------ -------------- ---------------- ------------ --------------- ------------
Analysis of changes
in liabilities from
financing activities
----------------------- ------------ -------------- ---------------- ------------ --------------- ------------
Current borrowings (127) 89 - (4) (93) (135)
Non-current borrowings (584) (78) (24) (34) 93 (627)
Financing derivatives (2) 2 - - - -
Total financing
liabilities (713) 13 (24) (38) - (762)
----------------------- ------------ -------------- ---------------- ------------ --------------- ------------
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2019
AS AT 31
DECEMBER
2019 ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY
ORDINARY SHARE CAPITAL FOREIGN
SHARE PREMIUM TREASURY REDEMPTION HEDGING EXCHANGE RETAINED TOTAL
CAPITAL ACCOUNT SHARES RESERVE RESERVE RESERVE EARNINGS EQUITY
GBP GBP GBP GBP GBP (TRANSLATION) GBP GBP
MILLLION MILLLION MILLLION MILLLION MILLLION GBP MILLLION MILLLION MILLLION
---------- ---------- ---------- ------------ ---------- -------------- ---------- -------------
Balance
at 1 January
2019 42 20 (17) 13 1 (51) 1,359 1,367
Profit for
the year - - - - - - 129 129
Other comprehensive
(loss)/income:
Transfers
from hedging
reserve
to revenue - - - - (1) - - (1)
Fair value
gains on
foreign
currency
cash flow
hedge (net
of tax) - - - - 2 - - 2
Currency
translation
differences
(Note (i)) - - - - - (75) - (75)
Re-measurement
of retirement
benefits
(net of
tax) - - - - - - (1) (1)
---------- ---------- ---------- ------------ ---------- -------------- ---------- -------------
Total
comprehensive
income/(loss)
for the
year ended
31 December
2019 - - - - 1 (75) 128 54
---------- ---------- ---------- ------------ ---------- -------------- ---------- -------------
Transactions
with owners:
Purchase
of Treasury
shares - - (4) - - - - (4)
Employee
share awards - - - - - - 11 11
Issue of
ordinary
shares to
employees
under share
option schemes - - 8 - - - (8) -
Dividends
paid during
2019 - - - - - - (69) (69)
---------- ---------- ---------- ------------ ---------- -------------- ---------- -------------
- - 4 - - - (66) (62)
---------- ---------- ---------- ------------ ---------- -------------- ---------- -------------
Balance
at 31 December
2019 42 20 (13) 13 2 (126) 1,421 1,359
---------------- ---------- ---------- ---------- ------------ ---------- -------------- ---------- -------------
(i) Included in currency translation differences of the Group are exchange
gains of GBP16 million arising on borrowings denominated in foreign
currencies designated as hedges of net investments overseas, and
exchange losses of GBP91 million relating to the translation of
overseas results and net assets.
(ii) There was no impact on retained earnings at 1 January 2019 from
the adoption of IFRS 16 'Leases'.
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2019
AS AT 31 DECEMBER
2018 ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY
ORDINARY SHARE CAPITAL FOREIGN
SHARE PREMIUM TREASURY REDEMPTION HEDGING EXCHANGE RETAINED TOTAL
CAPITAL ACCOUNT SHARES RESERVE RESERVE RESERVE EARNINGS EQUITY
GBP GBP GBP GBP GBP (TRANSLATION) GBP GBP
MILLLION MILLLION MILLLION MILLLION MILLLION GBP MILLLION MILLLION MILLLION
Balance
at 1 January
2018 as
previously
reported 42 20 (7) 13 (1) (27) 1,277 1,317
Impact of
change in
accounting
policy in
2018 - - - - - - (3) (3)
Restated
balance
at 1 January
2018 42 20 (7) 13 (1) (27) 1,274 1,314
Profit for
the year - - - - - - 125 125
Other comprehensive
(loss)/income:
Fair value
gains on
interest
rate swaps
(net of
tax) - - - - 2 - - 2
Currency
translation
differences
(Note (i)) - - - - - (24) - (24)
Re-measurement
of retirement
benefits
(net of
tax) - - - - - - 21 21
---------- ---------- ---------- ------------ ---------- -------------- ---------- -------------
Total
comprehensive
income /(loss)
for the
year ended
31 December
2018 - - - - 2 (24) 146 124
---------- ---------- ---------- ------------ ---------- -------------- ---------- -------------
Transactions
with owners:
Purchase
of Treasury
shares - - (12) - - - - (12)
Employee
share awards - - - - - - 10 10
Issue of
ordinary
shares to
employees
under share
option schemes - - 2 - - - (2) -
Dividends
paid during
2018 - - - - - - (69) (69)
---------- ---------- ---------- ------------ ---------- -------------- ---------- -------------
- - (10) - - - (61) (71)
---------- ---------- ---------- ------------ ---------- -------------- ---------- -------------
Balance
at 31 December
2018 42 20 (17) 13 1 (51) 1,359 1,367
------------------ ---------- ---------- ---------- ------------ ---------- -------------- ---------- -------------
(i) Included in currency translation differences of the Group are exchange
losses of GBP46 million arising on borrowings denominated in foreign
currencies designated as hedges of net investments overseas, and
exchange gains of GBP22 million relating to the translation of
overseas results and net assets.
NOTES TO THE ACCOUNTS
For the year ended 31 December 2019
1. CHANGES IN ACCOUNTING POLICY AND DISCLOSURES
(a) New and amended standards adopted by the Group
IFRS 16 'Leases'
The Group adopted IFRS 16 from 1 January 2019 and, therefore,
this is the first set of the Group's annual financial statements
where IFRS 16 has been applied.
Prior to the adoption of IFRS 16, leases where substantially all
of the risks and rewards of ownership were not transferred to the
Group were classified as operating leases. Rentals under operating
leases were charged to operating profit on a straight-line basis
over the term of the lease. IFRS 16 addresses the accounting for
leases and requires lessees to recognise all leases on balance
sheet with limited exemptions. This results in the recognition of a
right-of-use asset and corresponding liability on the balance
sheet, with the associated depreciation and interest expense being
recorded in the income statement over the lease period. Limited
exemptions apply for short-term leases (leases with a term of 12
months or less) and low-value leases (which have been defined as
<$10,000). The payments for the exempt leases are recognised as
an expense in the income statement on a straight-line basis over
the lease term.
The Group has adopted IFRS 16 using the modified retrospective
approach, under which the cumulative effect of initial application
(GBPnil) is recognised in retained earnings at 1 January 2019.
Accordingly, the comparative information has not been restated and
continues to be reported under IAS 17 'Leases' and IFRIC 4
'Determining Whether an Arrangement contains a Lease'.
Definition of a lease
Previously, the Group determined at contract inception whether
an arrangement was or contained a lease under IFRIC 4. Under IFRS
16, a contract is, or contains a lease, if the contract conveys a
right to control the use of an identified asset for a period in
exchange for consideration.
In applying IFRS 16 for the first time, the Group has used the
following practical expedients permitted by the standard:
- to grandfather the assessment of which transactions are
leases. The Group applied IFRS 16 only to contracts that were
previously identified as leases. Contracts that were not identified
as leases under IAS 17 and IFRIC 4 were not reassessed. Therefore,
the definition of a lease under IFRS 16 has been applied only to
contracts entered or changed on or after 1 January 2019;
- the use of hindsight in determining the lease term if the
contract contains options to extend or terminate the lease;
- the accounting for operating leases with a remaining lease
term of less than 12 months as at 1 January 2019 as short-term
leases; and
- to exclude initial direct costs from the measurement of the
right-of-use asset at the date of initial application.
Accounting policy
On initial measurement the right-of-use asset is recognised at
cost, which comprises the value of the lease liability adjusted for
any lease payments made on or before the commencement date, less
any incentives received, any initial direct costs incurred and an
estimate of costs to dismantle and remove the underlying asset. The
right-of-use asset is depreciated using the straight-line method
from commencement date to the end of the lease term. The
right-of-use asset is periodically adjusted for impairment, if any,
and any remeasurements of the lease liability.
The Group leases various properties, vehicles, plant and
equipment. Rental contracts are typically for fixed periods from 3
to 7 years but may have extension options. Lease terms are
negotiated on an individual basis and contain a wide range of
different terms and conditions.
On initial measurement the lease liability is measured at the
present value of the future lease payments, discounted using the
interest rate implicit in the lease or, if that rate cannot be
readily determined, the Group's incremental borrowing rate.
Generally, the Group uses its incremental borrowing rate as the
discount rate as the majority of subsidiary debt is funded by Group
borrowings and therefore this is the rate at which lessees obtain
funding for the asset. In addition, given the types of leases
entered and the geographies of the majority of the leasing activity
the interest rates implicit in these leases would be expected to
gravitate around the Group's incremental rate. If the discount rate
increased or decreased by 0.5% then the lease liability would
change by circa GBP1 million.
The lease liability is measured at amortised cost using the
effective interest rate method and is remeasured when there is a
change in the future lease payments arising from a change in index
or a change in the original assessment made.
1. CHANGES IN ACCOUNTING POLICY AND DISCLOSURES CONTINUED
Each lease payment is allocated between the liability and
finance cost. The finance cost is charged to the income statement
over the lease period to produce a constant periodic rate of
interest on the remaining balance of the liability for each
period.
The Group presents the right-of-use asset and lease liability on
the balance sheet.
Lease payments associated with short-term and low-value leases
are recognised on a straight-line basis as an expense in the profit
or loss.
On transition to IFRS 16 the Group recognised an additional
GBP104 million of right-of-use assets and GBP104 million of lease
liabilities at the present value of the remaining lease payments,
discounted at the Group's incremental borrowing rate as at 1
January 2019. The Group's weighted average incremental borrowing
rate applied to the lease liabilities on 1 January 2019 was 5%.
This rate has remained at 5% throughout 2019. On transition the
right-of-use assets were measured at an amount equal to the lease
liability, adjusted by the amount of any prepaid or accrued lease
payments, which were not material.
The recognised right-of-use assets relate to the following types
of assets:
1 JANUARY
2019
GBP MILLION
Freehold property 75
Vehicles, plant & equipment 29
------------
104
------------------------------ ------------
The recognised lease liability at 1 January 2019 is detailed
below.
1 JANUARY
2019
GBP MILLION
Operating lease commitment at 31 December 2018 as disclosed
in the Group's consolidated financial statements 117
Impact of discounting (21)
------------
Discounted using the incremental borrowing rate at 1 January
2019 96
Recognition exemption for leases with less than 12 months
of term at transition (1)
Extension or termination options reasonably certain to
be exercised 9
------------
Lease liabilities recognised at 1 January 2019 104
--------------------------------------------------------------- ------------
Impact for the period
The impact from applying IFRS 16 for the year ended 31 December
2019 was:
Income statement
-- Improvement in operating profit of GBP3 million
-- Increase in depreciation of GBP30 million
-- Increase in interest costs of GBP5 million
-- Reduction in profit before tax of GBP2 million
Balance sheet/cash flow statement
-- Right of use asset included within property, plant &
equipment of GBP98 million at 31 December 2019 (1 January 2019:
GBP104 million)
-- Lease liabilities of GBP101 million at 31 December 2019 (1 January 2019: GBP104 million)
-- Net debt at 31 December 2019 is higher by GBP101 million
Ratios
-- An increase in EBITDA of GBP33 million
-- An increase in net debt/EBITDA of 0.1 times
-- Reduction in Group ROCE of 0.4pp
Note 10 sets out more details on the Group leases.
IFRIC 23 'Uncertainty over Income Tax Treatments'
The Group adopted IFRIC 23 from 1 January 2019. There was no
material impact arising from the adoption of this standard.
2. SEGMENTAL REPORTING
(a) Revenue by segment
EXTERNAL REVENUE
2019 2018
GBP MILLION GBP MILLION
Power Solutions
Industrial 434 424
Utility 346 514
----------------------- ----------------------
780 938
Rental Solutions 833 822
----------------------- ----------------------
Group 1,613 1,760
------------------------------------- ----------------------- ----------------------
(i) Inter-segment transfers or transactions are entered into under
the normal commercial terms and conditions that would also be available
to unrelated third parties. All inter-segment revenue was less than
GBP1 million apart from revenue of GBP1 million from Power Solutions
Utility to Rental Solutions.
Disaggregation of revenue
In the tables below revenue is disaggregated by geography and
sector.
Revenue by geography
2019 2018
GBP MILLION GBP MILLION
North America 506 460
UK 76 106
Continental Europe 176 179
Eurasia 73 77
Middle East 169 148
Africa 206 200
Asia 146 166
Australia Pacific 80 100
Latin America 181 324
------------ ------------
1,613 1,760
Revenue by sector
At 31 December 2019
PSI PSU RS Group
GBP MILLION GBP MILLION GBP MILLION GBP MILLION
Utilities 19 346 82 447
Oil & gas 178 - 148 326
Petrochemical & refining 8 - 157 165
Building services & construction 43 - 151 194
Events 55 - 72 127
Manufacturing 31 - 56 87
Mining 64 - 48 112
Other 36 - 119 155
434 346 833 1,613
---------------------------------- ------------ ------------ ------------
2. SEGMENTAL REPORTING CONTINUED
(a) Revenue by segment continued
Revenue by sector
At 31 December 2018
PSI PSU RS Group
GBP MILLION GBP MILLION GBP MILLION GBP MILLION
Utilities 27 514 99 640
Oil & gas 163 - 110 273
Petrochemical & refining 9 - 147 156
Building services & construction 48 - 151 199
Events 53 - 80 133
Manufacturing 32 - 56 88
Mining 53 - 43 96
Other 39 - 136 175
424 514 822 1,760
---------------------------------- ------------ ------------ ------------
(b) Profit by segment
2019 2018
GBP MILLION GBP MILLION
Power Solutions
Industrial 64 71
Utility 44 43
------------ ------------
108 114
Rental Solutions 133 105
------------ ------------
Operating profit 241 219
Finance costs - net (42) (37)
------------ ------------
Profit before taxation 199 182
Taxation (70) (57)
------------ ------------
Profit for the year 129 125
------------------------ ------------ ------------
(c) Depreciation and amortisation by segment
2019 2018
GBP MILLION GBP MILLION
Power Solutions
Industrial 100 90
Utility 100 104
------------ ------------
200 194
Rental Solutions 123 104
------------ ------------
Group 323 298
------------------- ------------ ------------
(d) Capital expenditure on property, plant & equipment and
intangible assets by segment
2019 2018
GBP MILLION GBP MILLION
Power Solutions
Industrial 80 55
Utility 78 76
------------ ------------
158 131
Rental Solutions 105 109
------------ ------------
Group 263 240
------------------- ------------ ------------
Capital expenditure comprises additions of property, plant and
equipment (PPE) of GBP255 million (including GBP25 million in
relation to leased right-of-use assets) (2018: GBP216 million),
additions of intangible assets of GBP8 million (2018: GBP10
million), acquisitions of PPE of GBPnil (2018: GBP13 million) and
acquisitions of intangible assets of GBPnil (2018: GBP1
million).
(e) Assets/(Liabilities) by segment
ASSETS LIABILITIES
2019 2018 2019 2018
GBP MILLION GBP MILLION GBP MILLION GBP MILLION
Power Solutions
Industrial 768 714 (175) (94)
Utility 828 996 (187) (214)
------------ ------------ ------------ ------------
1,596 1,710 (362) (308)
Rental Solutions 845 833 (82) (76)
------------ ------------ ------------ ------------
Group 2,441 2,543 (444) (384)
Tax and finance assets/(liabilities) 65 59 (87) (90)
Derivative financial instruments 1 1 (1) (1)
Borrowings - - (519) (762)
Lease liability - - (101) -
Retirement benefit surplus 4 1 - -
------------ ------------ ------------ ------------
Total assets/(liabilities)
per balance sheet 2,511 2,604 (1,152) (1,237)
-------------------------------------- ------------ ------------ ------------ ------------
(f) Average number of employees by segment
2019 2018
NUMBER NUMBER
Power Solutions
Industrial 2,071 1,954
Utility 1,227 1,314
------- -------
3,298 3,268
Rental Solutions 2,906 2,759
------- -------
Group 6,204 6,027
------------------ ------- -------
(g) Geographical information
NON-CURRENT ASSETS
2019 2018
GBP MILLION GBP MILLION
North America 294 288
UK 177 161
Continental Europe 140 137
Eurasia 69 59
Middle East 181 251
Africa 179 153
Asia 142 151
Australian Pacific 79 70
Latin America 190 164
------------ ------------
1,451 1,434
-------------------- ------------ ------------
Non-current assets exclude deferred tax.
(h) Reconciliation of net operating assets to net assets
2019 2018
GBP MILLION GBP MILLION
Net operating assets 1,997 2,159
Retirement benefit surplus 4 1
Net tax and finance payable (22) (31)
------------ ------------
1,979 2,129
Borrowings and derivative financial instruments (519) (762)
Lease liability (101) -
------------ ------------
Net assets 1,359 1,367
------------------------------------------------- ------------ ------------
3. DIVIDS
2019 2019 2018 2018
GBP MILLION PER SHARE(P) GBP MILLION PER SHARE(P)
Final paid 45 17.74 45 17.74
Interim paid 24 9.38 24 9.38
------------ ------------- ------------ -------------
69 27.12 69 27.12
-------------- ------------ ------------- ------------ -------------
In addition, the Directors are proposing a final dividend in
respect of the financial year ended 31 December 2019 of 18.27 pence
per share which will utilise an estimated GBP47 million of
Shareholders' funds. It will be paid on 21 May 2020 to shareholders
who are on the register of members on 24 April 2020.
4. 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 year, excluding shares
held by the Employee Share Ownership Trusts which are treated as
cancelled.
2019 2018
Profit for the year (GBP million) 129.3 125.4
------ ------
Weighted average number of ordinary shares in
issue (million) 254.6 254.8
------ ------
Basic earnings per share (pence) 50.80 49.22
----------------------------------------------- ------ ------
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
year. 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.
2019 2018
Profit for the year (GBP million) 129.3 125.4
------ ------
Weighted average number of ordinary shares
in issue (million) 254.6 254.8
Adjustment for share options 0.4 0.2
------ ------
Diluted weighted average number of ordinary
shares in issue (million) 255.0 255.0
------ ------
Diluted earnings per share (pence) 50.70 49.18
--------------------------------------------- ------ ------
5. TAXATION
2019 2018
GBP MILLION GBP MILLION
Analysis of charge in year
Current tax expense:
- UK corporation tax 6 6
- Double tax relief (1) -
------------ ------------
5 6
- Overseas taxation 70 62
------------ ------------
75 68
Adjustments in respect of prior years:
- UK (2) (2)
- Overseas 5 (17)
------------ ------------
78 49
Deferred taxation:
- temporary differences arising in current
year (2) 5
- movements in respect of prior years (6) 3
------------ ------------
70 57
--------------------------------------------- ------------ ------------
Variances between the current tax charge and the standard 19%
(2018: 19%) UK corporate tax rate when applied to profit on
ordinary activities for the year are as follows:
2019 2018
GBP MILLION GBP MILLION
Profit before taxation 199 182
------------
Tax calculated at 19% standard UK corporate
tax rate 38 35
Differences between UK and overseas tax rates 32 32
Expenses not tax effected 3 6
Income not subject to tax (1) (1)
Impact of deferred tax rate changes 1 1
------------ ------------
Tax on current year profit 73 73
Prior year adjustments - current tax 3 (19)
Prior year adjustments - deferred tax (6) 3
Total tax on profit 70 57
------------
Effective tax rate 35% 31%
----------------------------------------------- ------------ ------------
6. PROPERTY, PLANT AND EQUIPMENT
YEARED 31 DECEMBER 2019
VEHICLES,
FREEHOLD SHORT LEASEHOLD RENTAL PLANT &
PROPERTIES PROPERTIES FLEET EQUIPMENT TOTAL
GBP MILLION GBP MILLION GBP MILLION GBP MILLION GBP MILLION
Cost
At 1 January 2019 92 23 3,612 168 3,895
Exchange adjustments (5) (2) (112) (2) (121)
Transition to IFRS 16 75 - - 29 104
Additions (ii) 17 1 189 48 255
Disposals (iii) (2) - (161) (10) (173)
------------ ---------------- ------------ ------------ ------------
IFRS 16 remeasurements
(iv) 6 - - (2) 4
------------ ---------------- ------------ ------------ ------------
At 31 December 2019 183 22 3,528 231 3,964
------------ ---------------- ------------ ------------ ------------
Accumulated depreciation
At 1 January 2019 40 16 2,555 115 2,726
Exchange adjustments - (1) (79) (1) (81)
Charge for the year 21 1 265 28 315
Disposals (2) - (152) (8) (162)
------------ ---------------- ------------ ------------ ------------
At 31 December 2019 59 16 2,589 134 2,798
------------ ---------------- ------------ ------------ ------------
Net book values:
At 31 December 2019 124 6 939 97 1,166
------------ ---------------- ------------ ------------ ------------
At 31 December 2018 52 7 1,057 53 1,169
-------------------------- ------------ ---------------- ------------ ------------ ------------
(i) The net book value of assets capitalised in respect of
leased right-of-use assets at 31 December 2019 is GBP98
million.
(ii) Additions of GBP255 million include GBP25 million in
relation to leased right-of-use assets.
(iii) Disposals include GBP1 million of cost and GBP1 million of
accumulated depreciation in relation to leased right of use
assets.
(iv) Remeasurements represent amendments to the terms of
existing leases which are prospectively applied.
(v) Assets in the course of construction total GBP39 million
(2018: GBP49 million).
Note 10 contains information on leases.
7. FULFILMENT ASSETS
2019 2018
GBP MILLION GBP MILLION
Balance at 1 January 44 8
Capitalised in the period 66 44
Provision created for future demobilisation costs 3 3
Amortised to the income statement (24) (12)
Exchange (3) 1
Balance at 31 December 86 44
------------
Analysis of fulfilment assets
Current 32 15
Non-current 54 29
------------ ------------
Total 86 44
--------------------------------------------------- ------------ ------------
8. TRADE AND OTHER RECEIVABLES
2019 2018
GBP MILLION GBP MILLION
Trade receivables 529 587
Less: provision for impairment of receivables (85) (85)
------------ ------------
Trade receivables - net 444 502
Prepayments 45 45
Accrued income 124 169
Other receivables (Note (i)) 46 65
------------ ------------
Total receivables 659 781
------------ ------------
(i) In September 2016 the Group signed GBP14 million of private
placement notes with one customer in Venezuela (PDVSA) to progress
clearing the overdue debt. This resulted in a financial instrument
which replaced the net trade receivable balance. The financial
instrument is booked at fair value which reflects our estimation of
the recoverability of the notes. This fair value is estimated to be
GBP1 million (2018: GBP4 million). This financial instrument is
included in other receivables. Other material amounts included in
other receivables include indirect taxes receivable (such as sales
taxes) of GBP23 million (2018: GBP21 million) and deposits of GBP6
million (2018: GBP15 million).
Movements on the Group's provision for impairment of trade
receivables are as follows:
2019 2018
GBP MILLION GBP MILLION
At 1 January 85 80
Net Provision for receivables impairment 7 7
Utilised (2) (2)
Receivables written off during the year as uncollectable (3) (2)
Exchange (2) 2
At 31 December 85 85
------------
9. BORROWINGS
2019 2018
GBP MILLION GBP MILLION
Non-current
Bank borrowings 33 134
Private placement notes 478 493
------------ ------------
511 627
------------ ------------
Current
Bank overdrafts 51 9
Bank borrowings 8 115
Private placement notes - 20
------------ ------------
59 144
------------ ------------
Total borrowings 570 771
------------ ------------
Cash at bank and in hand (87) (85)
------------ ------------
Lease liability 101 -
------------ ------------
Net borrowings 584 686
------------ ------------
Overdrafts and borrowings are unsecured.
------------------------------------------ ------------ ------------
10. LEASES
(a) Amounts recognised in Balance Sheet
Property, plant and equipment comprise owned and leased
assets.
2019
GBP MILLION
Property, plant & equipment owned 1,068
Right-of-use assets 98
------------
1,166
------------------------------------- ------------
The Group leases many assets including land and buildings,
vehicles and machinery. Information about leases for which the
Group is a lessee is presented below.
Right-of-use assets
FREEHOLD VEHICLES,
PROPERTIES PLANT & EQUIPMENT TOTAL
GBP MILLION GBP MILLION GBP MILLION
Net book value at 1 January 2019 75 29 104
Additions for the year 16 9 25
Remeasurements 6 (2) 4
Depreciation charge for year (18) (12) (30)
Exchange adjustments (4) (1) (5)
------------- ------------------- ------------
Net book value at 31 December
2019 75 23 98
---------------------------------- ------------- ------------------- ------------
Lease liabilities
2019
GBP MILLION
Maturity analysis - contractual undiscounted cash flows
Less than one year 35
One to five years 63
More than five years 23
------------
Total undiscounted lease liabilities at 31 December 121
Impact of discounting (20)
------------
Lease liabilities included in the balance sheet 101
------------
Current 33
Non-current 68
--------------------------------------------------------- ------------
(b) Amounts recognised in the Income Statement
2019
GBP MILLION
Depreciation charge of right-of-use assets
Freehold property 18
Vehicles, plant & equipment 12
------------
30
------------
Interest on lease liabilities 5
Expenses relating to short-term leases 4
----------------------------------------------- ------------
(c) Amounts recognised in the statement of cash flows
2019
GBP MILLION
Total cash outflow for leases 36
-------------------------------- ------------
This GBP36 million is included in the cash flow statement with
GBP31 million included within cash flows from financing activities
and GBP5 million included in interest paid within net cash
generated from operating activities.
11. TRADE AND OTHER PAYABLES
2019 2018
GBP MILLION GBP MILLION
Trade payables 106 134
Trade payables - supplier factoring facility 3 -
Other taxation and social security payable
17 15
Other payables 106 99
Accruals 96 115
Deferred income 60 8
388 371
---------------------------------------------- ------------
The value of trade and other payables quoted in the table above
also represents the fair value of these items.
The Group participates in a supply chain finance programme under
which its suppliers may elect to receive early payment of their
invoice from a bank by factoring their receivable from the Group.
Under the arrangement, a bank agrees to pay amounts to a
participating supplier in respect of invoices owed by the Group and
receives settlement from the Group at a later date. The principal
purpose of this programme is to facilitate efficient payment
processing and enable the willing suppliers to sell their
receivables due from the Group to a bank before their due date.
From the Group's perspective, the arrangement does not
significantly extend payment terms beyond the normal terms agreed
with other suppliers that are not participating. The Group does not
incur any additional interest towards the bank on the amounts due
to the suppliers.
The Group has not derecognised the original liabilities to which
the arrangement applies because neither a legal release was
obtained, nor the original liability was substantially modified on
entering into the arrangement. The Group discloses the amounts
factored by suppliers within trade payables because the nature and
function of the financial liability remain the same as those of
other trade payables, but discloses disaggregated amounts in the
notes.
The payments to the bank are included within operating cash
flows because they continue to be part of the normal operating
cycle of the Group and their principal nature remains operating,
i.e. payments for the purchase of goods and services. The payments
to a supplier by the bank are considered non-cash transactions and
amounted to GBP4 million (2018: GBPnil).
We have undrawn bank facilities to cover a withdrawal of the
supply chain finance programme.
12. DEMOBILISATION PROVISION
2019 2018
GBP MILLION GBP MILLION
Balance at 1 January 11 10
New provisions 9 4
Utilised (6) (4)
Exchange - 1
------------
Balance at 31 December 14 11
------------
Analysis of demobilisation provision
Current 5 6
Non-current 9 5
------------
Total 14 11
------------
NOTES:
1. The financial information set out above does not constitute
the company's statutory accounts for the years ended 31 December
2019 or 2018 but is derived from those accounts. Statutory
accounts for 2018 have been delivered to the registrar of
companies, and those for 2019 will be delivered in due course.
The auditors have reported on those accounts; their reports
were (i) unqualified, (ii) did not include a reference to
any matters to which the auditors drew attention by way of
emphasis without qualifying their report and (iii) did not
contain a statement under section 498 (2) or (3) of the Companies
Act 2006.
2. The Annual Report will be posted to all shareholders on 19
March 2020 and will be available on request from the Secretary,
Aggreko plc, 8(th) Floor, 120 Bothwell Street, Glasgow, G2
7JS. The Annual General Meeting will be held in Glasgow on
23 April 2020. The Annual Report contains full details of
the principal accounting policies adopted in the preparation
of these financial statements.
3. A final dividend of 18.27 pence per share will be recommended
to shareholders and, if approved, will be paid on 21 May 2020
to shareholders on the register at 24 April 2020.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Annual Report for the year ended 31 December 2019, which
will be published on 19 March 2020, complies with the Disclosure
and Transparency Rules in respect of the requirement to produce an
Annual Financial Report. The Directors confirm that to the best of
their knowledge:
-- the consolidated financial statements contained in the Annual
Report for the year ended 31 December 2019, which have been
prepared in accordance with IFRS as adopted by the EU, give a true
and fair view of the assets, liabilities, financial position and
profit of the Group; and
-- the management report represented by the strategic report
contained in the Annual Report for the year ended 31 December 2019
includes a fair review of the development and performance of the
business and the position of the Group, together with a description
of the principal risks and uncertainties that the Group faces.
By order of the Board
Chris Weston Heath Drewett
Chief Executive Officer Chief Financial Officer
3 March 2020
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR KZGGFRZNGGZM
(END) Dow Jones Newswires
March 03, 2020 02:00 ET (07:00 GMT)
Grafico Azioni Aggreko (LSE:AGK)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Aggreko (LSE:AGK)
Storico
Da Apr 2023 a Apr 2024
