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Annual Report & Accounts 2016 - Chief Financial Officer's review
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29 (Loss)/Profit Before Tax The Group reported a loss before tax of €138.6m against a profit of €25.5m in 2015. As noted above, the loss was primarily due to the exceptional items and amortisation associated with the Acquisition. Excluding exceptional items and amortisation associated with the Acquisition, the Group achieved an adjusted Pre Tax Profit of €93.8m, a 102% increase against €46.4m for 2015. 2016 €m 2015 €m (Loss)/profit before tax (138.6) 25.5 Exceptional items 117.8 24.5 Impairment of available for sale asset 4.2 1.2 Changes in the fair value of derivative instruments (15.0) (4.8) Amortisation of acquired intangibles 109.5 - Dividend income (3.1) - Amortisation of loan fees and early repayment option 19.0 - ADJUSTED PROFIT BEFORE TAX 93.8 46.4 Taxation The Group is currently headquartered in the Isle of Man, with key operating subsidiaries in Gibraltar (where the headline rate of corporation tax is 10%) and Malta (5%), as well as a number of jurisdictions with higher tax rates. For the year ended 31 December 2016 the tax charge/credit was €0.0m, the corporation tax charge was €11.8m and there was a deferred tax credit of €11.8m. Earnings per share Reported EPS for the period was a loss of 51 euro cents, compared to earnings of 40 euro cents profit for 2015, reflecting the amortisation and exceptional items associated with the acquisition, together with the increased number of shares in issue. Adjusted EPS (based on adjusted profit) was 26 euro cents compared to 73 euro cents for 2015. YEAR ENDED 31 DECEMBER 2016 €m 2015 €m Basic EPS (51) 40 Basic, fully diluted EPS (51) 38 Adjusted EPS 26 73 Adjusted, fully diluted EPS 26 70 Dividends As part of the terms of the Cerberus Loan taken out to part finance the Acquisition, the Group undertook to take a dividend holiday until 1 February 2017 (the first anniversary of the Acquisition). In November 2016 the Group declared its intention to pay a special dividend of 10 euro cents per share. This was subsequently increased to 14.9 euro cents and settled in sterling at 12.5p and paid to shareholders on 14 February 2017. The second special dividend declared of 15.1 euro cents per share will take the total dividend for the 2016 financial year to 30 euro cents per share. Review of the balance sheet A summarised balance sheet is shown below: 2016 €m 2015 €m Goodwill 1,090.3 132.9 Intangible assets other than goodwill 519.1 22.2 Property, plant and equipment 19.7 1.4 Other non-current assets 8.6 2.6 NON-CURRENT ASSETS 1,637.7 159.1 Cash and cash equivalents 354.8 28.2 Balances with payment processors 60.0 21.7 Derivative financial assets 26.2 3.8 Assets and liabilities held for sale 37.0 - Client liabilities (112.0) (14.8) Progressive prize pools (22.8) - Loans and borrowings (403.5) (3.0) Net taxation payable (58.7) (3.3) Other net current assets/(liabilities) (44.5) (41.0) Current assets less current liabilities (163.5) (8.4) Non-current liabilities (76.9) (22.6) NET ASSETS 1,397.3 128.1