Railtrack Group Interim Results For The Six Months Ended September 30, 2001.Business Editors LONDON--(BUSINESS WIRE)--Dec. 18, 2001 Railtrack PLC announces interim results for the six month period ended September 30, 2001 prior to the appointment on October 7, 2001 of Joint Special Railway administrators for the Group subsidiary Railtrack PLC. Financial Highlights -- (pound)292 million ($430.5m) pre tax profit,(pound)2.9 billion ($4.28 billion) of net assets and over(pound)1 billion ($1.47 billion) of bank lines -- Investment and renewals up 25% to a record (pound)1,400 million ($2,064.02m), over 4 times pre tax profits were re-invested in the network by recourse to financial markets -- Contingent liabilities (outlined at the 2001 year end) were actively being addressed Operational Highlights Clear evidence of operational progress: -- Train delays attributable to Railtrack down by 52% on the previous six months - infrastructure delays were similar to pre Hatfield levels by September 2001 -- Broken rails down by 12% compared to first half of 2000/01 (and by 36% over two years) -- Temporary speed restrictions fell by 443, a 39% drop to 696 -- Average track quality at highest level since 1994 Real progress towards creating a safer network -- TPWS TPWS Train Protection & Warning System TPWS Tall Pines Weavers and Spinners Guild TPWS Tire Pressure Warning System TPWS Third Party Web Site fitment fitment Noun 1. an accessory attached to a machine 2. Chiefly Brit a detachable part of the furnishings of a room Noun 1. on course against HMRI HMRI Huntington Medical Research Institutes (Pasadena, CA) HMRI Hunter Medical Research Institute (Newcastle, New South Wales, Australia) HMRI Her Majesty's Railway Inspectorate targets (commissionings have doubled in six months) Announcing the interim results for Railtrack Group, Chief Executive Steve Marshall  This article or section is an autobiography, or has been extensively edited by the subject, and may not conform to Wikipedia's NPOV policy.Please see the relevant discussion on the . commented that the results demonstrate two things: "First, that Railtrack was trading profitably, in line with expectations, and the contingent liabilities Contingent Liability 1. The possibility of an obligation to pay certain sums dependent on future events. 2. Defined obligations by a company that must be met, but the probability of payment is minimal. Notes: 1. outlined at the 2001 year end were being addressed. As we have said consistently, Railtrack PLC was NOT insolvent INSOLVENT. This word has several meanings. It signifies a person whose estate is not sufficient to pay his debts. Civ. Code of Louisiana, art. 1980.. A person is also said to be insolvent, who is under a present inability to answer, in the ordinary course of business, the responsibility until the Secretary of State chose to make it so. No financial meltdown meltdown Occurrence in which a huge amount of thermal energy and radiation is released as a result of an uncontrolled chain reaction in a nuclear power reactor. The chain reaction that occurs in the reactor's core must be carefully regulated by control rods, which absorb was in sight. "Secondly, many multiples of profit were being re-invested in the network at unprecedented levels. Railtrack was achieving this by using these profits to borrow in the financial markets. Bigger profits financed greater borrowing which delivered higher investment in the network - something no longer possible. This investment must continue if our ageing network is to be sustained. "Railtrack was working more closely with its customers and had begun to deliver against its public service agenda. No one is pretending that the railway is delivering what passengers deserve or expect. The post-Hatfield challenges are truly immense, but as these results for the half year immediately prior to Administration show, we were at least making some real progress in the right direction. "The ongoing Railtrack PLC management team led by John Armitt John Armitt, CBE, is the appointed Chairman of the Olympic Delivery Authority, the body charged with building the venues, facilities and infrastructure for the 2012 Olympic Games, the appointment to commence on 1 September 2007 [1]. , and its 12,000 employees, deserve everyone's' unqualified support. Following administration their task is now even more demanding. "The Board of Railtrack is committed to maximizing value for shareholders. It is not in the interests of passengers or taxpayers for the period of Administration to be prolonged. The Board will take any action, including legal action, to crystallize crys·tal·lize also crys·tal·ize v. crys·tal·lized also crys·tal·ized, crys·tal·liz·ing also crys·tal·iz·ing, crys·tal·liz·es also crys·tal·iz·es v.tr. 1. the full and fair value of the network." Overview Considerable progress was made across the business in the six months to September 30, 2001. Profit before tax was (pound)292 million ($430.50m) an increase of (pound)117 million ($172.49m), with earnings per share amounting to 48.8p ($.72) compared with 36.8p ($.54). Investment, aided by reinvested profits and borrowings in the financial markets, was at record levels. Borrowings increased by (pound)1.2 billion ($1.77 billion), although cash flow was still some (pound)300 million ($442.29m) favorable to the internal budget. Performance, as measured by train passenger minutes' delay, was almost back to pre-Hatfield levels and the number of speed restrictions on the network was down by 39% with a year end target in place of 500 - below pre-Hatfield levels. Safety programs were beginning to deliver real benefits, with the rate of fitment of TPWS increasing twofold. The "de-risking" of major investment programs continued and total network investment reached a record (pound)1,400 million ($2,064.02m). The Executive team completed a full review of the business and announced a change program designed to push more resources to the front line with the creation of a regional structure and local area management teams. The establishment of new regional structures for Southern and Eastern regions was progressing. Substantial savings had been identified within the corporate center and plans to remove over 1,100 posts across the business were about to be implemented. On October 7, the Secretary of State petitioned the High Court to appoint an administrator for Railtrack PLC under the Railways Act 1993 and partners in Ernst & Young LLP LLP - Lower Layer Protocol were appointed. By making it clear that no further financial assistance for Railtrack would be available from the government, reneging on the Renewco transaction, emasculating the rail regulator Statutory office - created with effect from 1 December 1993 by section 1 of the Railways Act 1993 - for the independent economic regulation of the British railway industry. with threatened draft legislation and allowing news of government's intentions to be leaked to the press, Railtrack was pushed into insolvency. For these reasons the Board was advised that it could not oppose the Secretary of State's petition. Financial Review The Financial Statements for the six months ending September 30, 2001 have been prepared to show: -- the results on a comparable basis with the previous year; and -- the effect of treating Railtrack PLC as a discontinued business as a result of the Administration Order granted to the Secretary of State on October 7. In view of the impact of Administration, the accounts are subject to a number of fundamental uncertainties, but on a broadly comparable basis the results show: -- operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. up from(pound)197 million ($290.44m) to(pound)333 million ($490.94m); -- profit before tax up from(pound)175 million ($258m) to(pound)292 million ($430.5m); and -- investment up from(pound)1,119 million ($1,649.74m) to(pound)1,400 million ($2,064m), comprising: Renewals (pound)865 million ($1,275.27m) ((pound)669 million) Enhancements (pound)399 million ($588.25m) ((pound)296 million) Channel Tunnel Rail Link The Channel Tunnel Rail Link (CTRL) is a project to construct a 108 km (67 mile) high-speed railway line from London through Kent to the British end of the Channel Tunnel. (pound)136 million ($200.50m) ((pound)154 million) Operating profit is recorded after crediting a total of (pound)732 million ($1,079.19m) of revenue grants in accordance with the Regulator's determination of October 2000, and the SRA SrA abbr. senior airman agreement of April 2, 2001 as required by SSAP SSAP Source Service Access Point SSAP Statistical Signal and Array Processing SSAP Session Service Access Point SSAP sequential structure alignment program (for protein structure comparison) SSAP Simple Spectral Access Protocol 4 Accounting for Government Grants and after charging (pound)140 million ($206.40m) of delay performance payments ((pound)11 million ($16.22m)). The performance payments reflect the doubling of the tariff per minute imposed by the Rail Regulator and in cash terms the payment amounted to over (pound)200 million ($294.86m). Net interest payable rose from (pound)40 million ($58.97m) to (pound)88 million ($129.74m), reflecting the increase in net debt over the comparable period. Profit before tax benefited from the sale in July of the Group's investment in Ipsaris, a telecommunication joint venture, for approximately (pound)27.5 million ($40.54m) net of costs. After tax charged of (pound)40 million ($58.97m), an underlying tax rate of 14%, profit after tax amounted to (pound)252 million ($371.52m) compared with (pound)189 million ($278.64m) in the equivalent period last year. No dividend will be paid for the period. Earnings per share amounted to 48.8p ($.72) compared with 36.8p ($.54) in the first half of the previous year. The retained profit for the period of (pound)252 million ($371.52m) has been credited to reserves. Net debt at the close of the period totaled (pound)4,551 million ($6,709.54m), some (pound)300 million ($442.29m) favorable to plan, compared with (pound)3,362 million ($4,956.60m) at the beginning of the financial year. At September 30, the Group had net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. of (pound)2,933 million ($4,324.12m) and total undrawn un·draw tr.v. un·drew , un·drawn , un·draw·ing, un·draws To draw to one side, as a curtain. Adj. 1. undrawn - not represented in a drawing undelineated - not represented accurately or precisely , committed facilities Committed Facility A credit facility whereby terms and conditions are clearly defined by the lending institution and imposed upon the borrowing company. Notes: In committed facilities, the borrowing companies must meet specific requirements set forth by the lending of approximately (pound)1,900 million ($2,801.17m) (of which (pound)500 million ($737.15m) was maintained as backup to other borrowings). Discussions were already taking place with the Group's principal bankers with a view to extending existing facilities or establishing new ones. Business Review Performance Total Railtrack attributable train minutes' delay was reduced by over 50% in the six month period to September 2001 compared with the previous six months, with total industry passenger minutes' delay down by 38% and Railtrack attributable freight delays falling by 56%. The number of broken rails fell by 12% compared with the first half of 2000/01 and 36% compared with the first half of 1999/2000, reflecting the benefits of the broken rails initiative started in 1999 and the impact of the post-Hatfield National Recovery Programme. There was a net decrease of 443 in the total number of Temporary Speed Restrictions (TSRs) in place in the first six months of the year - a 39% drop to 696. TSRs attributable to gauge corner cracking were down by 77%. Average track quality was returned to the highest level since 1994. Engineering The increased focus on engineering started to show benefit, with a new engineering organization and strategy agreed under Richard Middleton Notable individuals named Richard Middleton:
Manual process will increasingly be augmented by new technology: new train mounted equipment enabling real-time programming of maintenance work is being assembled and will begin testing in the near future. New track examination techniques and equipment will be introduced early next year. The register of asset condition at September 30 was over 80% populated pop·u·late tr.v. pop·u·lat·ed, pop·u·lat·ing, pop·u·lates 1. To supply with inhabitants, as by colonization; people. 2. and the next phase, a real-time work planning system See spreadsheet and financial planning system. (MIMs) and preventative maintenance tools, is underway with trials started in six contract areas around the country. This will give further detail about condition and past inspections. Investment Investment expenditure in the first six months was (pound)1,400 million ($2,064.02m), a 25% increase on the same period last year. Renewals, routine works on track and signaling and other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. , accounted for (pound)865 million ($1,275.27m) and represented a 29% increase on the same period last year. Some 400km of track was rerailed, 260km of track was re-sleepered, 240km of track was reballasted and 50km of signaling was renewed. Significant progress was made on the construction of the major enhancement projects. West Coast Main Line - construction of phase 1 is 65% complete with important works outside Euston being undertaken in the period. However resign ling ling: see cod. work at South Manchester was put back to avoid disrupting the Commonwealth Games Commonwealth games, series of amateur athletic meets held among citizens of countries in the Commonwealth of Nations. Originated (1930) as the British Empire games, the series is held every four years and is patterned after the Olympic games; women have participated . It was agreed in principle with Virgin to defer the introduction of the planned phase 1 passenger timetable to May 2003. Discussions with Virgin Trains to tackle the significant commercial issues associated with the West Coast project had begun and "de-risking" options agreed for presentation to Government on October 8, 2001. Channel Tunnel Rail Link - construction of phase 1 is 75% complete on budget and on time for a 2003 completion. During the summer a 3km tunnel under the North Downs North Downs: see Downs, North, chalk hills, England. was completed. Progress on Cross Country Route Modernization modernization Transformation of a society from a rural and agrarian condition to a secular, urban, and industrial one. It is closely linked with industrialization. As societies modernize, the individual becomes increasingly important, gradually replacing the family, , Leeds First and Sunderland Direct was satisfactory. The joint SRA/Railtrack procurement review of the Thameslink 2000 project had concluded that the project should be taken forward through a Special Purpose Vehicle. Remuneration arrangements have yet to be agreed. Safety Real progress continued to be made towards creating a safer, more efficient rail network. The rate at which the Train Protection and Warning System (TPWS) is being fitted roughly doubled in the first six months of the year compared to the previous six month period, bringing the total spent so far on this important safety initiative to some (pound)170 million ($250.63m). Property and New Businesses The majority of the property portfolio lies within the regulated business. However, the unregulated Adj. 1. unregulated - not regulated; not subject to rule or discipline; "unregulated off-shore fishing" regulated - controlled or governed according to rule or principle or law; "well regulated industries"; "houses with regulated temperature" 2. property business completed a number of transactions during the period. Railtrack Spacia Ltd (which is the largest landlord to small businesses in the UK) and Safestore completed a joint venture - Spacia Safestore Ltd - which will exploit opportunities in the self-store market with its first store due to open in Bermondsey this year. Board Changes During the period Executive Directors Simon Murray Simon Murray (born 25 March 1940) is a British businessman, author and former French Foreign Legionnaire. Murray was born in Leicester, England into a family with some tradition of military service [1]. and Jonson Cox and Non-Executive Directors A non-executive director (NED, also NXD) or outside director is a member of the board of directors of a company who does not form part of the executive management team. He or she is not an employee of the company or affiliated with it in any other way. Sir Philip Beck, Jennie Page and Christopher Jonas, stepped down from the Group Board. On April 25, David Harding David Harding may refer to the following people:
Outlook Your Board is committed to aggressively maximizing value for Railtrack shareholders. At this stage it is not possible to quantify the realizable value of the Group's net assets nor indeed to estimate with any certainty the time it will take to liquidate To pay and settle the amount of a debt; to convert assets to cash; to aggregate the assets of an insolvent enterprise and calculate its liabilities in order to settle with the debtors and the creditors and apportion the remaining assets, if any, among the stockholders or owners of the these investments. The Directors are determined that the Administration process must be fair and transparent and will hold the Administrators firmly to account to ensure that a level playing field See net neutrality. for all bidders is maintained and that the fair value of assets in Railtrack PLC is realized. The Board believes that it is not in the interests of passengers or taxpayers for the period of Administration to be prolonged. The Board will take any action, including legal action, to crystallize the full and fair value of the railway network. The Directors will keep shareholders informed of material developments. Basis of Accounting The financial statements have been prepared using unchanged accounting policies from those set out in the last annual report and accounts. The Administration Order meets the definition of a non-adjusting post balance sheet event in accordance with SSAP 17 Post Balance Sheet Events. Consequently Railtrack PLC has been shown as a discontinued activity. No account has been taken of the effect on asset carrying values Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. or of any additional liabilities that may arise as a result of the Order. The balance sheet of the Group excluding Railtrack PLC as at September 30, 2001 has been prepared on a pro-forma basis and is as shown in Note 14. In view of the impact of the Administration Order the accounts are subject to a number of fundamental uncertainties, these are described in detail in Note 1 to the accounts and include: -- Going Concern The Group has given guarantees in respect of bank facilities made available to subsidiaries, including Railtrack PLC. The Group's ability to continue as a going concern is dependent on the satisfactory resolution of these undertakings. Railtrack (UK) Limited, a subsidiary of Railtrack Group PLC, has committed to purchase section 1 of CTRL See control key. ctrl - control . Administration has created uncertainty over the concession to operate CTRL. The Group's obligation to purchase CTRL would become an onerous purchase contract which could not be funded by the Group. -- Asset carrying values The rail network fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → of Railtrack PLC are included in the statutory balance sheet at the net book value. It is not possible to determine with certainty the future net income flows that these assets will generate and therefore whether any impairment has occurred. -- West Coast Route Modernization Prior to October 7, 2001, the company had begun negotiations with its principal partner with a view to addressing the significant commercial risks surrounding this project, including any compensation payable for late delivery. Outline proposals to resolve the outstanding risks are now a matter for the Administrators and will require approval from the Department of Transport, Local Government and the Regions. The financial impact of any resolution cannot therefore, at this stage, be quantified by the directors. -- Asset Maintenance Plan (AMP) As in prior periods, renewals accounting has been applied in respect of certain network fixed assets. At September 30, 2001 the Asset Maintenance Plan was still under review but was expected to be finalized See finalization. before the end of the financial year. Decisions on the timing and basis of preparation of the AMP are now a matter for the Administrators of Railtrack PLC. The Directors have therefore estimated the depreciation charge for the six months ended September 30, 2001 in respect of those fixed assets using the existing, approved five-year business plan. -- Relationship with Railtrack PLC. The relationships between Railtrack PLC and other companies within the Group are complex. The Directors are assessing the implications of the Administration Order on the Group's systems, trading arrangements and people. -- Taxation Should existing arrangements with Railtrack PLC for rollover A graphic element in an application or on a Web page that changes its color or shape when the pointer is moved (rolled) over it. See JavaScript rollover. See also n-key rollover. of chargeable gains realized not be honored, Railtrack Group may suffer a liability of up to (pound)35 million ($51.60m). Discussions on future tax arrangements are in progress. -- Cash The balance sheet at September 30, 2001 includes cash of (pound)384 million ($566.13m). On October 7, HSBC HSBC Hongkong and Shanghai Banking Corporation HSBC Humane Society of Broward County (Florida) HSBC Humane Society of Bay County (Bay County, Michigan) froze froze v. Past tense of freeze. froze Verb the past tense of freeze froze, frozen freeze the accounts of Railtrack Group PLC and Railtrack Developments Limited with a combined credit balance of approximately (pound)370 million ($545.49m). Government has since agreed that Railtrack Group will be treated as a finance creditor in respect of this sum. -- Channel Tunnel Rail Link (CTRL) The balance sheet includes assets constructed to date for CTRL, at cost. As noted above, operating arrangements for CTRL are uncertain and it is not therefore possible to assess whether impairment may have occurred. -- Investment in Railtrack PLC Railtrack PLC has been included in the pro-forma balance sheet as a trade investment. The Directors are currently unable to propose an alternative basis for inclusion. For tabular financial information please contact Taylor Rafferty at 212/889-4350 Recent press releases can be found on the Railtrack web site at the following address: http://www.railtrack.co.uk/corporate/notice. **US Dollar equivalents provided for reader convenience at the September 28, 2001 rate of(pound)1=$1.4743 |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion