11. Exceptionals

 

2013

2012

 

€’000

€’000

 

 

 

Restructuring costs

(20,704)

(13,715)

Acquisition and related costs

(14,896)

(6,568)

Adjustments to deferred and contingent acquisition consideration (note 34)

6,869

-

Other operating exceptional items

(478)

(4,611)

Net loss on disposal of subsidiaries

-

(1,770)

Restructuring of Group defined benefit pension schemes

-

3,587

Impairment of property, plant and equipment

-

(2,000)

Gain arising from Taiwanese legal claim

-

14,089

Impairment of goodwill

-

(11,369)

Operating exceptional items

(29,209)

(22,357)

 

Mark to market of swaps and related debt (note 12)

(1,682)

670

Impairment of associate company investment and loan receivable from associate

(350)

(1,068)

Net exceptional items before taxation

(31,241)

(22,755)

 

Exceptional taxation charge

-

(2,234)

Net exceptional items after taxation

(31,241)

(24,989)

 

 

The Group incurred an exceptional charge of €20.704 million in relation to the restructuring of acquired and existing businesses. Most of this related to the planned integration into DCC Energy’s existing operations of certain oil distribution assets previously owned by Total and of the BP UK LPG business, following the clearance of these acquisitions by the relevant competition authorities.

Acquisition and related costs of €14.896 million include the professional and tax costs (such as stamp duty) relating to the evaluation and completion of acquisitions. These costs also include the legal and other professional costs relating to the review and ultimate clearance by the relevant competition authorities of the Total and BP UK LPG acquisitions.

In accordance with IFRS 3 (revised), deferred and contingent consideration is measured at fair value at the time of the business combination. If the amount of deferred and contingent consideration changes as a result of a post-acquisition event then the changed amount is recognised in the Income Statement. Net reductions in deferred and contingent consideration payable by the Group amounted to €6.869 million during the year.

Most of the Group’s debt has been raised in the US Private Placement market and swapped, using long term interest, currency and cross currency derivatives, to both fixed and floating rate sterling and euro. The level of ineffectiveness calculated under IAS 39 on the fair value and cash flow hedge relationships relating to fixed rate debt, together with gains or losses arising from marking to market swaps not designated as fair value hedges offset by foreign exchange translation gains or losses on that related fixed rate debt, is charged or credited as an exceptional item. In the year to 31 March 2013 this amounted to a total exceptional loss of €1.682 million.

12. Finance Costs and Finance Income

 

2013

2012

 

€’000

€’000

Finance costs

 

 

On bank loans, overdrafts and Unsecured Notes

 

 

- repayable within 5 years, not by instalments

(26,212)

(22,252)

- repayable within 5 years, by instalments

(148)

(1,106)

- repayable wholly or partly in more than 5 years

(17,146)

(19,576)

On loan notes

- repayable within 5 years, not by instalments

-

(41)

On finance leases

(295)

(86)

Facility fees

(1,806)

(739)

Other interest

(1,373)

(1,015)

 

(46,980)

(44,815)

Other finance costs:

Interest on defined benefit pension scheme liabilities (note 33)

(5,354)

(5,632)

Mark to market of swaps and related debt* (note 11)

(1,682)

-

(54,016)

(50,447)

Finance income

Interest on cash and term deposits

2,883

4,525

Net income on interest rate and currency swaps

28,116

22,314

Mark to market of swaps and related debt* (note 11)

-

670

Other income

18

1,378

Expected return on defined benefit pension scheme assets (note 33)

4,058

4,361

35,075

33,248

 

Net finance cost

(18,941)

(17,199)

 

*Mark to market of swaps and related debt

Interest rate swaps designated as fair value hedges

(5,065)

4,714

Cross currency interest rate swaps designated as fair value hedges

27,016

48,738

Adjusted hedged fixed rate debt

(23,745)

(53,165)

Mark to market of designated swaps and related debt

(1,794)

287

 

Currency movements on fixed rate debt not designated as hedged

(6,444)

(8,969)

Currency swaps not designated as hedges

6,556

9,352

Mark to market of undesignated swaps and related debt

112

383

 

Total mark to market of swaps and related debt

(1,682)

670

 

13. Foreign Currency

The exchange rates used in translating sterling Balance Sheets and Income Statement amounts were as follows:

 

2013

2012

 

€1=Stg£

€1=Stg£

 

 

 

Balance Sheet (closing rate)

0.846

0.834

Income Statement (average rate)

0.815

0.868

 

 

 

14. Share of Associates’ Loss after Tax

The Group’s share of associates’ loss after tax is equity-accounted and is presented as a single line item in the Group Income Statement. The loss after tax generated by the Group’s associates is analysed as follows:

 

2013

2012

 

€’000

€’000

Group share of:

 

Revenue

6,171

5,732

 

Operating profit/(loss)

42

(32)

Impairment of associate company investment and loan receivable from associate

(350)

(1,068)

Loss before finance costs

(308)

(1,100)

Finance costs (net)

(10)

(14)

Loss before income tax

(318)

(1,114)

Income tax credit

-

6

Loss after tax

(318)

(1,108)

 

 

 

15. Income Tax Expense

 

2013

2012

(i) Income tax expense recognised in the Income Statement

€’000

€’000

 

 

 

Current taxation

 

 

Irish corporation tax at 12.5%

4,539

4,514

Exceptional taxation charge (note 11)

-

2,234

United Kingdom corporation tax at 24% (2012: 26%)

21,373

11,402

Other overseas tax

9,832

10,187

(Over)/under provision in respect of prior years

(837)

175

Total current taxation

34,907

28,512

 

Deferred tax

Irish at 12.5%

(2,820)

(1,373)

United Kingdom at 23% (2012: 24%)

(634)

2,696

Other overseas deferred tax

1,057

88

(Over)/under provision in respect of prior years

(271)

14

Total deferred tax (credit)/charge

(2,668)

1,425

 

Total income tax expense

32,239

29,937

 

(ii) Deferred tax recognised directly in Equity

Defined benefit pension obligations

(1,847)

(1,178)

Cash flow hedges

(248)

(11)

(2,095)

(1,189)

(iii) Reconciliation of effective tax rate

Profit on ordinary activities before taxation

163,014

132,983

Add back: share of associates’ loss after tax

318

1,108

Add back: amortisation of intangible assets

17,684

11,379

181,016

145,470

 

At the standard rate of corporation tax in Ireland of 12.5%

22,627

18,184

Adjustments in respect of prior years

(1,108)

189

Effect of earnings taxed at higher rates

14,841

12,884

Permanent and other differences

(336)

(1,169)

Income tax expense

36,024

30,088

Tax on exceptional gain

-

2,234

Deferred tax attaching to amortisation of intangible assets

(3,785)

(2,385)

Total income tax expense

32,239

29,937

 

 

 

 

2013

2012

 

%

%

Income tax expense as a percentage of profit before share of associates’ profit/(loss) after tax,

 

 

amortisation of intangible assets and net exceptionals

17.0%

18.0%

Impact of associates’ profit/(loss) after tax, amortisation of intangible assets and net exceptionals

2.8%

4.5%

 

Total income tax expense as a percentage of profit before tax

19.8%

22.5%

 

 

 

(iv) Factors that may affect future tax rates and other disclosures

No significant change is expected to the standard rate of corporation tax in the Republic of Ireland which is currently 12.5%. The standard rate of corporation tax in the UK reduced from 26% to 24% with effect from 1 April 2012. A tax rate of 23% applies with effect from 1 April 2013 and this will reduce by a further 2% on 1 April 2014 when the tax rate will be 21%. The UK March 2013 budget announcement included a further proposal to reduce the tax rate to 20%. As the legislation to give statutory effect to the reduction in the rate to 21% from 1 April 2014 has not been substantially enacted as at the balance sheet date, no account has been taken of this change in these financial statements.

The Group has not provided deferred tax in relation to temporary differences applicable to investments in subsidiaries on the basis that the Group can control the timing and realisation of these temporary differences and it is probable that the temporary difference will not reverse in the foreseeable future. No provision has been recognised in respect of deferred tax relating to unremitted earnings of subsidiaries as there is no commitment to remit earnings.

(back to top)