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Imperial Chemical Industries (ICI)
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ICI » Topics » Group cash flow and net debt

This excerpt taken from the ICI 6-K filed Aug 10, 2006.

Group cash flow and net debt

Operating activities

Net cash from operating activities after interest, tax (excluding tax on disposals) and dividends, was an outflow of £150m for the half year, compared with an outflow of £156m for the first half of 2005. The decreased outflow, despite the adverse impact of £72m of additional pension contributions to the two main UK pension funds, was primarily due to an improved working capital performance during the first six months of the year, combined with higher trading profit.

Investing activities

There were no significant proceeds from disposals received during the first half of the year. During the first half of 2006, ICI completed the acquisition of the fragrance operations of Shaw Mudge and

 

acquired the outstanding minority interest in Quest India Ltd. As a result, net cash flow from investing activities was an outflow of £89m, compared with an inflow of £13m for the first half of 2005 when there were net proceeds from the disposal of the Vinamul Polymers business.

Movement in net debt

The cash flow before financing for the half year was an outflow of £239m, compared with an outflow of £143m for the first half of last year, reflecting the additional pension fund payments in 2006 and the reduced divestment proceeds.

With a positive non-cash impact of £40m relating primarily to the impact of foreign exchange movements, net debt at the half year was £962m compared with £1,156m as at 30 June 2005 and £763m at the start of 2006.


This excerpt taken from the ICI 6-K filed Aug 11, 2005.

Group cash flow and net debt

Operating activities
Net cash from operating activities after interest, tax (excluding tax on disposals) and dividends, was an outflow of £156m for the half year, compared with an outflow of £27m for the first half of 2004. The increased outflow was primarily due to a higher seasonal outflow of working capital as a result of increased sales and a slight deterioration in working capital efficiency.

Investing activities
The completion of the sale of National Starch’s Vinamul Polymers business, with gross proceeds of £111m received in the first quarter, was the major contributor to net disposal proceeds of £103m for the half year. This more than offset capital expenditure of £70m and payments of £14m in respect of disposals prior to 2004.


 

ICI INTERIM REPORT 2005  7

 

Consequently, net cash flow from investing activities was an inflow of £13m, £125m less than the first half of 2004, when net disposal proceeds benefited from the £249m disposal of the Quest Food Ingredients business.

Movement in net debt
The cash flow before financing for the half year was an outflow of £143m, compared with an inflow of £111m for the first half of last year. With an adverse non-cash impact of £6m relating mainly to the impact of exchange movements, net debt at the half year was £1,138m compared with £989m at the start of the year.

Events since the balance sheet date
On 8 July, the Group announced the planned acquisition of the Celanese emulsion powders business for US$25.5m. This will be the first significant bolt-on acquisition made by ICI for several years and will extend the range of National Starch’s Specialty Polymers division. The acquisition will also provide additional growth opportunities and increased geographic coverage. The transaction is expected to complete in the third quarter of the year.

On 20 July, it was announced that the 2005 interim valuation of the ICI UK Pension Fund, conducted as at 31 March 2005, had concluded that:

• Having taken account of appropriate adjustments to the financial assumptions and of actual mortality experience to 31 March 2005, the Fund had a deficit for funding purposes of some £470m.
   
• An increase to the allowance for future improvements in longevity is also appropriate. Initial indications from the actuary are that such an increase might add some £100m to £250m to the deficit, but further detailed actuarial analysis is required.

Consequently, ICI and the Fund trustees have agreed to bring forward the date of the next scheduled triennial valuation of the Fund from 31 March 2006 to 31 March 2005. The results of this valuation, which will take account of all appropriate changes to assumptions, and any implications on current funding arrangements, are likely to be available by the end of this year.


 

 

EXCERPTS ON THIS PAGE:

6-K
Aug 10, 2006
6-K
Aug 11, 2005

RELATED TOPICS for ICI:

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