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REG-Jarvis PLC Annual Financial Report - Part 6Released: 14/07/2009
Part 6 : For preceding part double-click [nRn5N5989V]
10 Earnings per share 2009 2008
£m £m
(Loss) / profit for the year
- Continuing operations (9.6) 9.7
- Discontinued operations - 1.4
Total (9.6) 11.1
Number of shares Number (m) Number (m)
Weighted average number of shares in issue - basic 213.3 208.0
Effect of share options and warrants - 0.3
Weighted average number of shares in issue - diluted 213.3 208.3
Basic and diluted (loss) / earnings per share
- Continuing operations (4.5)p 4.7p
- Discontinued operations - 0.7p
Total (4.5)p 5.4p
11 Intangible assets
Computer software and licenses
£m
At 3 April 2007 -
Additions 2.8
At 31 March 2008 2.8
Additions 2.9
At 31 March 2009 5.7
Accumulated amortisation
At 3 April 2007 -
Charge for the year -
At 31 March 2008 -
Charge for the year 0.3
At 31 March 2009 0.3
Net book value
At 31 March 2009 5.4
At 31 March 2008 2.8
During the year £2.8m of costs have been incurred in the development of the Group's new Enterprise Resource Planning (ERP) business system, and software
licenses with a value of £0.1m have been purchased. Amortisation of the ERP costs will commence when the system is brought into operational use during
the 2009-10 financial year. The software licenses are being amortised over a period of five years.
12 Property, plant and equipment
Plant,
Leasehold vehicles
improvements and equipment Total
£m £m £m
Cost or valuation
At 3 April 2007 1.8 47.9 49.7
Additions 0.1 0.4 0.5
Disposals - (6.7) (6.7)
At 31 March 2008 1.9 41.6 43.5
Additions 0.2 1.0 1.2
Disposals - (2.4) (2.4)
At 31 March 2009 2.1 40.2 42.3
Accumulated depreciation
At 3 April 2007 1.7 25.2 26.9
Charge for the year 0.1 3.1 3.2
Disposals - (5.2) (5.2)
At 31 March 2008 1.8 23.1 24.9
Charge for the year 0.1 3.2 3.3
Impairment loss - 1.2 1.2
Disposals - (1.9) (1.9)
At 31 March 2009 1.9 25.6 27.5
Net book value
At 31 March 2009 0.2 14.6 14.8
At 31 March 2008 0.1 18.5 18.6
13 Deferred taxation
Deferred tax assets / (liabilities) are attributable as shown below.
Assets Liabilities Net
2009 2008 2009 2008 2009 2008
£m £m £m £m £m £m
Accelerated capital allowances 0.1 0.1 (2.2) (3.7) (2.1) (3.6)
Retirement benefit liability 2.8 4.2 - - 2.8 4.2
Retirement benefit asset - - (0.9) (11.3) (0.9) (11.3)
Taxation losses 4.6 8.4 - - 4.6 8.4
Other short term temporary differences - - - - - -
7.5 12.7 (3.1) (15.0) 4.4 (2.3)
Movements in net deferred tax assets / (liabilities) are analysed below.
Accelerated capital allowances Retirement benefit asset/liability Taxation losses Other Total
£m £m £m £m £m
At 3 April 2007 0.1 (10.9) 9.7 (0.1) (1.2)
(Charge) / credit to Consolidated Income Statement (3.7) 3.8 (1.3) 0.1 (1.1)
At 31 March 2008 (3.6) (7.1) 8.4 - (2.3)
Credit / (charge) to Consolidated Income Statement 1.5 (1.0) (3.8) - (3.3)
Credit to equity - 10.0 - - 10.0
At 31 March 2009 (2.1) 1.9 4.6 - 4.4
The Group has not recognised deferred tax assets of £78.6m (2008: £76.5m) in respect of losses amounting to £280.7m (2008: £273.5m) that can be carried forward against future
taxable income.
14 Retirement benefits
14.1 Overview
For the disclosure requirements of IAS19 'Employee Benefits', the Railways Pension Scheme (RPS) and the Streamline
Pension Schemes are the only material defined benefit pension schemes operated by the Group. All other schemes are
accounted for as defined contribution.
Railways Pension Scheme
The scheme is administered in accordance with its trust deed, and is commonly known as a shared cost scheme, under
which the employer and employees are liable for the costs and any surplus or deficit arising under the scheme in the
proportion of 60:40 respectively. Eligible employees participate in three shared cost sections of the RPS, being the
Relayfast, Fastline and Jarvis Facilities sections. The latest triennial actuarial valuation of the RPS was as at 31
December 2007, and was undertaken by professionally qualified and independent actuaries. At that date the market
value of the assets was £398.4m and the average funding level was 101%.
For the year ended 31 March 2009, employer contributions to the three Jarvis sections of the RPS were 17.22%, 16.82%
and 14.40% of pensionable pay for the Relayfast, Fastline and Jarvis Facilities sections respectively. The employer
contributions to the RPS were £2.7m in the year ended 31 March 2009 (2008: £2.9m).
Streamline Pension Schemes
The schemes comprise the Streamline Pension Fund (SPF) and the Streamline Local Government Pension Scheme (SLG). The
latest triennial actuarial valuation for the SLG was as at 5 April 2007 and at that date the market value of the
assets was £6.3m and the funding level was 76.1%. Following this triennial actuarial valuation, the employer
contribution rates for the SLG were maintained at 20% of pensionable salaries. In addition, special employer
contributions of £130,000 per annum are payable over a 14 year period from April 2009. The employer contributions
(including special employer contributions) to the SLG were £0.2m in the year ended 31 March 2009 (2008: £0.2m).
The latest triennial actuarial valuation for the SPF was as at 5 April 2007 and at that date the market value of the
assets was £26.5m and the funding level was 65.5%. Following this triennial actuarial valuation, the employer
contribution rates for the SPF were maintained as 23.9%, 16.5% and 12.9% of pensionable salaries for the 1968, 1984
and 1992 sections respectively. In addition, special employer contributions of £1,190,000 per annum are payable over
a 14 year period from April 2009. The employer contributions (including special employer contributions) to the SPF
were £1.1m in the year ended 31 March 2009 (2008: £1.0m).
The total employer contribution to the defined benefit pension schemes for the year ending 31 March 2010, including
special contributions, is estimated to be £3.8m.
All Group defined benefit pension schemes are closed to new entrants, other than for new employees who qualify for
participation in the RPS and employees transferring from the public sector, where conditions are specified in the
terms of their transfer, who are admitted into the SLG. Other eligible new employees are offered participation in the
Group's defined contribution schemes.
Contributions made to defined contribution arrangements for other eligible Group employees are based on a pre
-determined percentage of individual salaries. Contributions by the Group into defined contribution schemes and non
-material defined benefit schemes are disclosed in Note 7.
14.2 IAS 19 disclosures
Assets and liabilities for IAS 19 accounting purposes have been estimated by independent qualified actuaries,
updating the most recent triennial actuarial valuations. The weighted averages of the principal assumptions used are
shown below.
2009 2008
% %
Discount rate for scheme liabilities 7.00 6.10
Retail price inflation 3.10 3.50
Rate of increase in salaries 3.55* 3.95
Rate of increase to pensions in payment 3.10 3.50
Rate of increase to deferred pensions 3.10 3.50
Expected return on scheme assets ** 6.09 6.96
* Nil for one year, thereafter 3.55%.
** The expected return on scheme assets is based on the market expectations at the beginning of the year for returns
over the life of the benefit obligation.
For both the RPS and Streamline Schemes the mortality basis is in line with the basis used by the respective Trustees
at the last valuation. The Streamline schemes have adopted the 'PA92(C=2015)mc + 2 years' table for all members. The
RPS uses scheme specific assumptions based on industry experience.
The life expectancies, for a male aged 65, implied by the mortality assumptions used are shown below.
2009 2008
Streamline Pension Schemes
Active/deferred 19.8 19.8
Pensioner 19.8 19.8
Railways Pension Scheme
Active/deferred 21.8 19.0
Pensioner 19.9 17.8
Railways Pension Scheme Streamline Pension Schemes Total
Expected rates of return and analysis of scheme assets Expected long term rate of return Market value Share of total scheme assets Market value Share of total scheme assets Market value Share of total scheme assets
as at 31 March 2009 % £m % £m % £m %
Equity 7.54 86.2 57.4 12.4 49.2 98.6 56.2
Property 5.94 12.9 8.6 - - 12.9 7.4
Gilts 4.04 19.4 12.9 9.2 36.5 28.6 16.3
Corporate bonds (currency hedged) 7.00 14.8 9.9 2.9 11.5 17.7 10.1
Cash 0.50 16.9 11.2 0.7 2.8 17.6 10.0
Fair value of scheme assets 6.09 150.2 100.0 25.2 100.0 175.4 100.0
As at 31 March 2008
Equity 7.70 124.1 60.3 14.6 50.0 138.7 59.0
Property 6.50 17.2 8.3 - - 17.2 7.3
Bonds (including gilts) 5.05 23.5 11.4 14.6 50.0 38.1 16.2
Hedge funds 7.84 18.5 9.0 - - 18.5 7.9
Cash 5.25 22.6 11.0 - - 22.6 9.6
Fair value of scheme assets 6.96 205.9 100.0 29.2 100.0 235.1 100.0
The expected long term rate of return for equity, property and bonds is based on the yield to redemption on 20 year fixed interest gilts of 4.04% (2008: 4.60%) plus an adjustment to reflect market expectations of the equity, property and bond asset
classes respectively. Cash comprises mainly of cash holdings and the expected long term rate of return reflects the current short term returns on such deposits. The expected return for each asset class was weighted based on the actual asset allocation, to
develop an overall expected long-term rate of return on assets assumption for the portfolio. The overall expected return is then reduced to allow for expected non-investment expenses and PPF levies in respect of the RPS.
Amounts recognised in the Consolidated Income Statement Railways Pension Scheme Streamline Pension Schemes 2009 Total Railways Pension Scheme Streamline Pension Schemes 2008 Total
£m £m £m £m £m £m
Current service cost - charged to operating profit (2.9) (0.1) (3.0) (3.6) (0.2) (3.8)
Interest cost (9.9) (2.5) (12.4) (9.2) (2.5) (11.7)
Expected return on pension assets 13.3 1.9 15.2 14.3 1.5 15.8
Total amount credited / (charged) to finance income 3.4 (0.6) 2.8 5.1 (1.0) 4.1
Total credited / (charged) to the Consolidated Income Statement 0.5 (0.7) (0.2) 1.5 (1.2) 0.3
Amounts recognised in the Consolidated Statement of Recognised Income and Expense Railways Pension Scheme Streamline Pension Schemes 2009 Total Railways Pension Scheme Streamline Pension Schemes 2008 Total
£m £m £m £m £m £m
Actual return less expected return on pension scheme assets (62.1) (5.6) (67.7) (15.8) (1.8) (17.6)
Gain / (loss) arising from changes in the assumptions underlying the present value of 21.7 10.2 31.9 15.4 3.7 19.1
scheme liabilities
Net actuarial (loss) / gain in the Consolidated Statement of Recognised Income and Expense (40.4) 4.6 (35.8) (0.4) 1.9 1.5
The actual loss on scheme assets for the year ended 31 March 2009 was £52.5m (2008: £1.7m).
Balance sheet analysis Railways Pension Scheme Streamline Pension Schemes 2009 Total Railways Pension Scheme Streamline Pension Schemes 2008 Total
£m £m £m £m £m £m
Present value of funded defined benefit obligations brought forward (165.5) (44.3) (209.8) (177.5) (49.3) (226.8)
Current service cost (2.9) (0.1) (3.0) (3.6) (0.2) (3.8)
Interest cost (9.9) (2.5) (12.4) (9.2) (2.5) (11.7)
Benefits paid 9.6 1.6 11.2 9.4 4.0 13.4
Net actuarial gain / (loss) recognised in the Consolidated Statement of Recognised 21.7 10.2 31.9 15.4 3.7 19.1
Income and Expense
Present value of funded defined benefit obligations carried forward (147.0) (35.1) (182.1) (165.5) (44.3) (209.8)
Pension assets brought forward 205.9 29.2 235.1 213.9 32.3 246.2
Expected return on scheme assets 13.3 1.9 15.2 14.3 1.5 15.8
Benefits paid (9.6) (1.6) (11.2) (9.4) (4.0) (13.4)
Actuarial loss (62.1) (5.6) (67.7) (15.8) (1.8) (17.6)
Contributions paid by employer 2.7 1.3 4.0 2.9 1.2 4.1
Contributions paid by employees - - - - - -
Pension assets carried forward 150.2 25.2 175.4 205.9 29.2 235.1
Net defined benefit obligation 3.2 (9.9) (6.7) 40.4 (15.1) 25.3
Pension surplus / (deficit) recognised as a non-current Railways Pension Scheme Streamline Pension Schemes 2009 Total Railways Pension Scheme Streamline Pension Schemes 2008 Total
asset / (liability) £m £m £m £m £m £m
Fastline (1.1) - (1.1) 14.4 - 14.4
Relayfast 0.9 - 0.9 5.6 - 5.6
Jarvis Facilities 3.4 - 3.4 20.4 - 20.4
Streamline LG Scheme - (1.2) (1.2) - (1.9) (1.9)
Streamline Pension Fund - (8.7) (8.7) - (13.2) (13.2)
Net defined benefit pension obligation 3.2 (9.9) (6.7) 40.4 (15.1) 25.3
History of experience gains and losses - Railways Pension Scheme 2009 2008 2007 2006 2005
Present value of defined benefit obligations (£m) (147.0) (165.5) (177.5) (177.0) (162.3)
Fair value of scheme assets (£m) 150.2 205.9 213.9 199.0 166.7
Surplus in scheme (£m) 3.2 40.4 36.4 22.0 4.4
Experience (losses) / gains on scheme assets (£m) (62.1) (15.8) 8.4 28.6 17.7
Percentage of scheme assets (%) (41.4) (7.7) 3.9 14.4 10.6
Experience (losses) / gains on scheme liabilities (£m) (2.2) - - - 1.9
Percentage of the present value of scheme liabilities (1.5) - - - 1.2
(%)
Total amount recognised in the Consolidated Statement of Recognised Income and Expense (40.4) (0.4) 11.7 17.2 11.1
(£m)
Percentage of the present value of scheme liabilities (27.5) (0.2) 6.6 9.7 6.8
(%)
History of experience gains and losses - Streamline Pension Schemes 2009 2008 2007 2006 2005
Present value of defined benefit obligations (£m) (35.1) (44.3) (49.3) (50.0) (48.7)
Fair value of scheme assets (£m) 25.2 29.2 32.3 32.1 28.5
Deficit in scheme (£m) (9.9) (15.1) (17.0) (17.9) (20.2)
More to follow, for following part double-click [nRn7N5989V]
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disclaimer | Privacy statement | Jarvis plc – Registered in England. Registered office: Meridian House, The Crescent, York, YO24 1AW. Registered number: 2238084