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Notes 6-10

10. Analysis of cash flows

The following tables analyse the items included within the main cash flow headings in the Unaudited condensed consolidated interim cash flow statement.

Net cash (outflow)/inflow from operating activities:

  Six months ended
30 June
2011
£m
Six months ended
30 June
2010
£m
Year ended
31 December
2010
£m
Profit for the period 262.8 182.6 661.0
Taxation 71.5 61.3 190.3
Revaluation of financial instruments 20.5 19.5 (18.2)
Finance costs 145.8 138.4 276.8
Finance income (44.9) (39.3) (81.7)
Share of results of associates (24.5) (22.3) (55.2)
Operating profit 431.2 340.2 973.0
Adjustments for:      
Non-cash share-based incentive plans (including share options) 38.2 34.7 70.4
Depreciation of property, plant and equipment 89.1 93.0 184.9
Goodwill impairment 10.0 10.0
Amortisation and impairment of acquired intangible assets 83.3 87.0 170.5
Amortisation of other intangible assets 12.5 12.5 25.4
Investment write-downs 0.9 2.2 37.5
Losses/(gains) on disposal of investments 2.7 0.7 (4.1)
Gains on re-measurement of equity interest on acquisition of controlling interest (25.4) (7.5) (13.7)
(Gains)/losses on sale of property, plant and equipment (1.0) 0.3 0.7
Operating cash flow before movements in working capital and provisions 631.5 573.1 1,454.6
Movement in working capital and provisions1 (911.8) (555.7) 225.5
Cash generated by operations (280.3) 17.4 1,680.1
Corporation and overseas tax paid (126.5) (95.7) (207.4)
Interest and similar charges paid (132.2) (134.1) (219.7)
Interest received 24.9 27.1 50.7
Investment income 0.2 1.0 4.2
Dividends from associates 23.9 24.6 53.3
  (490.0) (159.7) 1,361.2

Notes

  1. 1 The Group typically experiences an outflow of working capital in the first half of the financial year and an inflow in the second half. This is primarily due to the seasonal nature of working capital flows associated with its media buying activities on behalf of clients. Movements in working capital and provisions also include the effect of cash incentive payments paid in the period, but accrued in the prior year. An incremental outflow of £130.0 million occurred in the first half of 2011 compared with the first half of 2010.

Acquisitions and disposals:

  Six months ended
30 June
2011
£m
Six months ended
30 June
2010
£m
Year ended
31 December
2010
£m
Initial cash consideration (163.7) (5.3) (138.6)
Cash and cash equivalents acquired (net) 64.5 0.4 57.0
Earnout payments (53.0) (71.2) (113.3)
Loan note redemptions (0.8) (4.0) (5.1)
Purchase of other investments (including associates) (31.4) (11.4) (23.8)
Proceeds on disposal of investments 2.6 14.0 23.7
Acquisitions and disposals (181.8) (77.5) (200.1)
Cash consideration for non-controlling interests (46.9) (12.4) (15.1)
Net acquisition payments and investments (228.7) (89.9) (215.2)

Share repurchases and buy-backs:

  Six months ended
30 June
2011
£m
Six months ended
30 June
2010
£m
Year ended
31 December
2010
£m
Purchase of own shares by ESOP Trust (63.8) (28.6) (46.4)
Share cancellations (15.5)
Shares purchased into treasury (19.2)
  (98.5) (28.6) (46.4)

Net increase/(decrease) in borrowings:

  Six months ended
30 June
2011
£m
Six months ended
30 June
2010
£m
Year ended
31 December
2010
£m
Increase in drawings on bank loans 300.0 432.0 19.8
Repayment of debt acquired (9.0)
  291.0 432.0 19.8

Cash and cash equivalents:

  Six months ended
30 June
2011
£m
Six months ended
30 June
2010
£m
Year ended
31 December
2010
£m
Cash at bank and in hand 1,679.5 1,005.8 1,877.1
Short-term bank deposits 89.3 97.8 88.1
Overdrafts1 (681.6) (151.6) (255.4)
  1,087.2 952.0 1,709.8

Notes

  1. 1Bank overdrafts are included in cash and cash equivalents because they form an integral part of the Group’s cash management.