GO-AHEAD GROUP
RNS Number : 3454Q
Go-Ahead Group PLC
29 November 2016
The Go-Ahead Group plc 4 Matthew Parker Street, London, SW1H 9NP
PRESS RELEASE
29 November 2016
THE GO-AHEAD GROUP PLC
("GO-AHEAD" OR "THE GROUP")
CHANGES IN ACCOUNTING FOR RAIL PENSION SCHEMES
AND DISCLOSURE OF ADJUSTED RESULTS
In line with its commitment to transparent reporting and to be consistent with emerging industry practice, The Go-Ahead Group will change the way in which it accounts for rail pensions in its income statement. The first financial statements reported under the new methodology will be the half year results for the six months ending 31 December 2016, due to be announced on 28 February 2017. Prior year comparative figures will be restated accordingly.
The long term contractual responsibility for the rail pension schemes rests with the Department for Transport. Accordingly, the Group's balance sheet only recognises the share of surplus or deficit expected to be realised over the life of each franchise. The current assessment is that there is no surplus or deficit to be recognised and so no asset or liability is provided for. However, the income statement charge has included the full rail pension service cost, although a substantial part of this service charge relates to an estimate of the future cost of benefits, accrued in the current year, but falling beyond the duration of the franchises. Therefore, to better reflect the Group's limited responsibility for rail pensions, the Group is revising its accounting policy under which operating profit will now only recognise the Group's agreed cost for rail pensions, rather than the full service charge previously included. This will be effected by means of a franchise adjustment to the income statement, in line with emerging industry practice.
Relevant restated figures for the financial years 2012/13 to 2015/16 are presented below to show the impact of this change on the income statement. This change in reporting will only affect reported profit and has no impact on cash.
Dividend cover was previously calculated excluding the incremental impact of IAS 19 (revised). In future, the calculation will be based on statutory earnings. Our dividend cover policy remains at around two times earnings.
No changes will be made to the way in which bus pensions are accounted for and the Group will no longer report financial results for the bus division adjusting for the incremental impact of IAS 19 (revised).
H1 2016
2016
2015
2014
2013
£m
£m
£m
£m
£m
Group operating profit
Reported Group statutory operating profit*
61.6
120.4
114.7
103.2
86.7
Impact of restated rail pension cost
23.8
45.2
23.9
12.2
9.6
Restated statutory operating profit*
85.4
165.6
138.6
115.4
96.3
Group EBITDA
Reported Group EBITDA
88.8
175.6
185.2
163.9
144.8
Impact of restated rail pension cost
23.8
45.2
23.9
12.2
9.6
Restated EBITDA
112.6
220.8
209.1
176.1
154.4
Adjusted net debt (excluding restricted cash)
260.8
239.3
244.7
260.0
299.6
Go-Ahead Group plc published this content on 29 November 2016 and is solely responsible for the information contained herein.
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