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23 Management of financial risks

The principal financial risks to which the group is exposed are liquidity risk, interest rate risk, foreign currency risk, credit risk, capital risk and energy risk. These risks are managed as follows:

Liquidity risk

Liquidity requirements are managed in line with short and long-term cash flow forecasts and reviewed against the group’s debt portfolio and maturity profile. At the year end the group had committed revolving borrowings facilities of £490m (2009: £750m), £180m of which was available to February 2010, £40m to October 2012 and £270m to September 2013. In addition to these facilities, the group has bonds totalling £675m, £300m of which mature in 2012, £100m in 2014 and £275m in 2019, together with a term loan of £100m maturing in March 2011. The bonds are not subject to repricing, and their interest rates and maturity profiles are set out in note 26.

The group’s total committed sources of funds at the date of signing these accounts are £1,085m.

The group’s bank borrowing facilities each contain one financial covenant, based on either the level of tangible net worth or fixed charge cover. The minimum covenants that apply are that tangible net worth shall be at least equal to financial indebtedness and that consolidated EBITDAR shall not be less than 2.5 times rent adjusted total net interest costs. Throughout the year the group maintained comfortable headroom against these covenants and is expected to do so into the foreseeable future.

The following analysis shows the contractual undiscounted cash flows payable under financial liabilities and derivative assets and liabilities at the balance sheet date:

Due within 1 year Due between 1 and 2 years Due 2 years and beyond
£m £m £m

Non-derivative financial liabilities
Borrowings, excluding finance lease liabilities – (100.0) (675.0)
Interest payments on borrowings (53.5) (52.8) (205.3)
Finance lease liabilities (2.1) (2.1) (57.1)
Trade and other payables (858.3) (1.3) –
Derivative financial liabilities
Derivative contracts – receipts 113.7 9.6 –
Derivative contracts – payments (107.6) (1.9) –

At 30 January 2010 (907.8) (148.5) (937.4)

Non-derivative financial liabilities
Borrowings, excluding finance lease liabilities – – (500.0)
Interest payments on borrowings (31.6) (32.4) (50.8)
Finance lease liabilities (2.2) (2.2) (59.0)
Trade and other payables (695.0) (1.5) –
Derivative financial liabilities
Derivative contracts – receipts 56.7 9.6 9.6
Derivative contracts – payments (44.8) (4.2) (5.2)

At 31 January 2009 (716.9) (30.7) (605.4)