Table:
| Adjusted earnings per share (£m) | 2018/19 | 2017/18 |
| --- | --- | --- |
| Trading profit | 128.5 | 123.0 |
| Depreciation | 17.0 | 16.6 |
| Other non-cash items | 2.4 | 2.8 |
| Interest | (30.1) | (38.0) |
| Taxation | – | 1.0 |
| Pension contributions | (41.9) | (39.8) |
| Capital expenditure | (17.7) | (19.2) |
| Working capital and other | (7.7) | (0.6) |
| Restructuring costs | (18.1) | (12.5) |
| Proceeds from share issue | 1.4 | 1.2 |
| Sale of property, plant and equipment | – | 1.3 |
| Hovis repayment of loan note | 7.6 | – |
| Financing fees | (12.2) | (7.0) |
| Free cash flow10 | 29.2 | 28.8 |
| Statutory cash flow statement |  |  |
| Cash generated from operating activities | 57.7 | 52.4 |
| Cash used in investing activities | (17.7) | (17.9) |
| Cash (used in)/generated from financing activities | (35.8) | 7.2 |
| Net increase in cash and cash equivalents | 4.2 | 41.7 |
Paragraphs:
Free cash flow
The Group reported an inflow of Free cash in the period of £29.2m. Trading profit of £128.5m was £5.5m ahead of the prior year for the reasons outlined above, while depreciation of £17.0m was slightly higher than 2017/18. Other non-cash items of £2.4m was predominantly due to share based payments.
Net interest paid was £7.9m lower in the year at £30.1m, reflecting the timing of interest payable on the £300m fixed rate notes due October 2023 which were issued in the first half of the year. This is a one-off benefit to cash interest paid; in 2019/20 cash interest is expected to be in the range of £35-39m. No taxation was paid in the period due to the availability of brought forward losses and capital allowances, however, a payment of £1.0m was received in the prior period from Irish tax authorities in respect of tax paid in prior years.
Pension contributions in the year were £41.9m, in line with expectations, and £2.1m higher than the prior year. Pension deficit contribution payments made to the Premier Foods pension schemes of £34.9m were the largest component of cash paid in the year; the balance being expenses connected to administering both the RHM and Premier Foods schemes and government levies. Pension deficit contribution payments in 2019/20 are expected to be £37m and administration and government levy costs approximately £6-8m.
Capital expenditure was £17.7m in the year, £1.5m lower than the prior year. In 2019/20, the Group expects to increase its capital expenditure to circa £25m to fund investment in both growth projects supporting the Group’s innovation strategy and cost release projects to deliver efficiency savings. For example, the Group is investing in one of its lines at its Stoke cake manufacturing site which will provide enhanced and varied product innovation capabilities.
Working capital investment was £7.7m in the year compared to £0.6m in 2017/18. Part of this movement reflected higher stock levels in anticipation of the original planned date to leave the European Union to protect the Company against the risk of delays at ports.
Restructuring costs were £18.1m compared to £12.5m in the comparative period. These were predominantly associated with implementation costs of the Group’s logistics transformation programme and also advisory costs connected with the potential disposal of the Ambrosia brand which has since concluded.
Financing fees of £12.2m relate to costs associated with the extension of the Group’s revolving credit facility and the issue of new £300m Senior secured fixed rate notes early in the financial year. This comprised £5.6m due to the early redemption of previously issued fixed rate notes due March 2021 and £6.6m of other fees associated with the issue of the new fixed rate notes and extension of the Group’s revolving credit facility.
The Group received a partial repayment of its loan note and associated interest from Hovis of £7.6m in the year. There is the possibility of the Group receiving a second tranche during 2019/20.
On a statutory basis, cash generated from operations was £80.2m compared to £89.4m in 2017/18. Cash generated from operating activities was £57.7m in the year after deducting net interest paid of £22.5m, which includes the partial repayment of the loan note from Hovis as described above. Cash used in investing activities was £17.7m in 2018/19 compared to £17.9m in the prior year. Cash used in financing activities was £35.8m in the year versus £7.2m cash generated in 2017/18. This was due to the repayment of the £325m fixed rate notes due March 2021, partly offset by proceeds received from the issue of £300m floating rate notes due October 2023 and the payment of financing fees as described above.
At 30 March 2019, the Group held cash and bank deposits of £27.8m compared to £23.6m at 31 March 2018 and the Group’s revolving credit facility was undrawn.
Question:
What was the average depreciation for 2017/18 and 2018/19?
Answer: (17.0 + 16.6) / 2 = 16.8