Cash flow and closing net cash position
| 26 weeks to £m |
30 August 2008 |
1 September 2007 |
|---|---|---|
| Benchmark operating profit | 106.0 | 136.1 |
| Exceptional items within operating profit | (549.9) | 20.2 |
| Demerger incentive scheme costs | (5.9) | (5.9) |
| Statutory operating profit after exceptional items | (449.8) | 150.4 |
| Depreciation and amortisation | 76.5 | 73.9 |
| Movement in working capital | 77.4 | 114.6 |
| Finance expense charged to FS cost of sales | 8.6 | 9.6 |
| Non-cash Homebase exceptional charges | 542.3 | – |
| Other non-cash operating items | 14.9 | 24.8 |
| Cash flows from operating activities | 269.9 | 373.3 |
| Net interest | 10.1 | 4.5 |
| Taxation | (36.7) | (57.2) |
| Net capital expenditure | (56.6) | (70.5) |
| Purchase of term deposit | (75.0) | – |
| Acquisitions and disposals | – | (6.8) |
| Cash inflow before financing activities | 111.7 | 243.3 |
| Dividends paid | (86.8) | (78.1) |
| Repayment of borrowings | – | (225.1) |
| Other financing activities | 0.1 | – |
| Net increase/(decrease) in cash and cash equivalents | 25.0 | (59.9) |
| Opening cash and cash equivalents | 174.0 | 283.8 |
| Net cash inflow/(outflow) | 25.0 | (59.9) |
| Effect of foreign exchange rate changes | 0.7 | (1.0) |
| Closing cash and cash equivalents | 199.7 | 222.9 |
| Term deposit | 75.0 | – |
| Closing financing net cash | 274.7 | 222.9 |
Cash flows from operating activities were £269.9m in the half (2007: £373.3m). Lower operating profits and a reduced level of working capital inflow were the principal drivers of the reduction in operating cash generation versus the comparable period.
Net capital expenditure reduced in the half to £56.6m (2007: £70.5m). Tax paid of £36.7m (2007: £57.2m) was lower principally as a result of a repayment from the tax authorities in respect of the final settlement of historic tax issues that were successfully agreed in the previous financial year. Other cash flows in the half included £10.1m of interest received and £86.8m of dividends paid.
The Group’s net financing cash position at 30 August 2008 was therefore £274.7m, an increase of £100.7m on the opening net cash position at 1 March 2008 of £174.0m. The financing net cash position includes a £75m nine month term deposit; this was purchased in July 2008 and matures on 15 April 2009.
