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For the year ended December 31, 2005
| 2005 £m |
2004 £m |
|
|---|---|---|
| Reconciliation of operating cash flows | ||
| Profit before taxation | 477 | 364 |
| Share of profit of joint ventures | (46) | (19) |
| Loss/(gain) on sale of businesses | 2 | (9) |
| Loss on sale of property, plant and equipment | 1 | 2 |
| Net interest payable | 39 | 52 |
| Net other financing expenses | 361 | 1 |
| Taxation paid | (60) | (84) |
| Depreciation of intangible assets (note 9) | 54 | 58 |
| Depreciation of property, plant and equipment (note 10) | 200 | 242 |
| Decrease in provisions | (31) | (8) |
| Increase in inventories | (221) | (116) |
| (Increase)/decrease in trade and other receivables | (252) | 179 |
| Increase/(decrease) in payables | 720 | (31) |
| Decrease in other financial assets and liabilities | 283 | |
| Post-retirement benefits adjustment | (69) | (42) |
| Share-based payments | 26 | 6 |
| Hedge reserve movements | (459) | |
| Dividends received from joint ventures | 35 | 15 |
| Net cash inflow from operating activities | 1,060 | 610 |
Cash flows from investing activities |
||
| Disposals of unlisted investments | 5 | — |
| Additions to intangible assets | (116) | (142) |
| Purchases of property, plant and equipment | (235) | (175) |
| Disposals of property, plant and equipment | 69 | 66 |
| Disposals of businesses (note 32) | 1 | 16 |
| Investments in joint ventures | (13) | (2) |
| Net cash outflow from investing activities | (289) | (237) |
Cash flows from financing activities |
||
| Borrowings due within one year - repayment of loans | (202) | (57) |
| Borrowings due within one year - increase in loans | — | — |
| Borrowings due after one year - repayment of loans | (5) | (95) |
| Borrowings due after one year - increase in loans | — | 500 |
| Capital element of finance lease payments | (11) | (52) |
| Net cash (outflow)/inflow from (decrease)/increase in borrowings | (218) | 296 |
| Interest received | 41 | 58 |
| Interest paid | (88) | (107) |
| Interest element of finance lease payments | (2) | (3) |
| (Increase)/decrease in government securities and corporate bonds | (1) | 3 |
| Equity dividends paid | — | (33) |
| Issue of ordinary shares | 26 | 4 |
| Settlement of financial liabilities to purchase own shares | (149) | (2) |
| Redemption of B Shares | (52) | (27) |
| Net cash (outflow)/inflow from financing activities | (443) | 189 |
Increase in cash and cash equivalents |
328 | 562 |
| Cash and cash equivalents at January 1 | 1,439 | 909 |
| Exchange and other non-cash adjustments | 46 | (32) |
| Adjustment on implementation of IAS 32 and IAS 39 | (68) | |
| Cash and cash equivalents at December 31 | 1,745 | 1,439 |
Reconciliation of increase in cash and cash equivalents to movement in net funds |
||
| Increase in cash and cash equivalents | 328 | 562 |
| Cash outflow/(inflow) from increase/(decrease) in government securities and corporate bonds |
1 | (3) |
| Net cash outflow/(inflow) from decrease/(increase) in borrowings | 218 | (296) |
| Change in net funds resulting from cash flows | 547 | 263 |
| Borrowings of businesses disposed | 1 | — |
| Finance lease additions | (1) | — |
| Zero-coupon bonds 2005/2007 (9.0% interest accretion) | — | (4) |
| Exchange adjustments | 5 | (8) |
| Fair value adjustments | 47 | |
| Movement in net funds | 599 | 251 |
| Net debt at January 1 | (149) | (400) |
| Adjustment on implementation of IAS 32 and IAS 39 | (189) | |
| 261 | (149) | |
| Fair value of swaps hedging fixed rate borrowings | 74 | |
| Net funds/(debt) at December 31 | 335 | (149) |
| Analysis of net funds | At January 1, 2005 £m |
Adjustment for IAS 32/39 £m |
Restated at January 1, 2005 £m |
Cash flow £m |
Borrowings of businesses disposed £m |
Exchange adjust-ments £m |
Fair value adjustments £m |
Other non-cash changes £m |
At December 31, 2005 £m |
|---|---|---|---|---|---|---|---|---|---|
| Cash at bank and in hand | 758 | (68) | 690 | (374) | — | 22 | — | — | 338 |
| Overdrafts | (13) | — | (13) | — | 1 | — | — | — | (12) |
| Short-term deposits | 694 | — | 694 | 702 | — | 23 | — | — | 1,419 |
| Cash and cash equivalents | 1,439 | (68) | 1,371 | 328 | 1 | 45 | — | — | 1,745 |
| Investments | 36 | — | 36 | 1 | — | — | — | — | 37 |
| Other borrowings due within one year |
(182) | (7) | (189) | 202 | — | (5) | 7 | (70) | (55) |
| Borrowings due after one year |
(1,410) | (114) | (1,524) | 5 | — | (35) | 40 | 70 | (1,444) |
| Finance leases | (32) | — | (32) | 11 | — | — | — | (1) | (22) |
| (149) | (189) | (338) | 547 | 1 | 5 | 47 | (1) | 261 | |
| Fair value of swaps hedging fixed rate borrowings |
121 | 121 | (47) | 74 | |||||
| (149) | (68) | (217) | 547 | 1 | 5 | — | (1) | 335 |