ABSTRACT
Operating profit 1 735 1 484 Dividends from joint ventures and associates 60 11 Interest received 41 37
1 836 1 532 Non-cash item: Depreciation and amortization 752 602 Gross funds from operations 2 588 2 134 Financing costs and tax: (966) (989)
Interest paid 337 255 Tax paid 326 366 Dividends paid 303 368
Net funds from operations 1 622 1 145 Decreases in working capital: 455 289
Stocks (77) (126) Debtors 17 (28) Creditors 515 443
Net cash from operations 2 077 1 434 Sale of tangible fixed assets 62 32 Total cash available 2 139 1 466 Fixed asset investment (2 511) (2 468)
Purchase of tangible fixed assets 2 239 2 032 Purchase of subsidiaries 216 386 Purchase of interests in joint ventures 56 50
Financing requirement (372) (1 002)
External financing Ordinary share capital 868 73 Purchase of own shares (51) (52) Net (decrease)/increase in loans (178) 950 (Increase)/decrease in cash and liquid resources (267) 31
372 1 002
The statement on the left shows cash flows for 2003 and 2004. From these figures we can see a number of things:
● Operating profit rose 17 per cent, from £1 484m to £1 735m. ● Following heavy investment in fixed assets, depreciation rose by 25 per cent. ● Interest paid was up by one-third, but tax paid was down by 10 per cent. ● Net funds from operations were up by 40 per cent, from £1 145m to £1 622m. ● Working capital figures again reflect a significant decrease, due to creditors. ● Tangible fixed asset investment is (net) 10 per cent up at £2 177m. ● The financing requirement is well down on 2003’s £1 002m. ● Whereas 2003’s financing requirement was almost entirely met by borrowing, in
2004 there was a significant issue of equity shares.
