8th Dec 2005 07:00
St. James's Place Capital PLC08 December 2005 PRESS RELEASE 8 December 2005 RESTATEMENT OF 2004 FULL YEAR RESULTS UNDER EUROPEAN EMBEDDED VALUE PRINCIPLES St. James's Place Capital plc, the wealth management group, today publishes therestatement of its 2004 full year results under European Embedded Value ("EEV")principles. •Pre-tax new business contribution has increased by 20.5% to £45.8 million. •Pre-tax operating profit 5.3% lower at £75.8 million. •Group net assets at 31 December 2004 have increased by 3.6% to £663.4 million. Resulting net asset value per share has increased by 5.2 pence to 151.0 pence per share. •A bottom-up market-consistent approach to allow for risk has been adopted in calculating EEV. Andrew Croft, Group Finance Director, commented "The EEV Principles are an important step forward for the insurance sector. Inapplying them, we have used a rigorous and market consistent methodology toreflect the risks of our business. "The EEV results show an increase in the value of our in-force and new businesscontribution relative to our achieved profits approach. "As shareholders are aware the Group does not write with-profit or annuitybusiness, nor do our products offer any significant financial guarantees oroptions; therefore no allowance needs to be made for these areas. "EEV reporting has no impact on our solvency, cash generation or dividendpolicy." The text of the transition restatement is attached. Enquiries: Andrew Croft, Group Finance Director Tel: 020 7514 1985Nitya Bolam, Brunswick Group Tel: 020 7404 5959 ST. JAMES'S PLACE CAPITAL PLC RESTATEMENT OF 2004 FULL YEAR RESULTS UNDER EUROPEAN EMBEDDED VALUE PRINCIPLES CONTENTS Page Number Summary Financial Information 3 Commentary 4 Consolidated Profit and Loss Account for year ended 31 December 2004 6 Summarised Net Asset Statement at 31 December 2004 7 Reconciliation to IFRS Net Assets 7 Notes to the Results 8 EEV Methodology 10 • Basis of preparation • Covered business • Allowance for risk • Deriving the risk discount rate • Cost of solvency capital • Non-market risk • New business • Expenses • Taxation • Other issues considered European Embedded Value Assumptions 13 European Embedded Value Sensitivities 15 Auditor's Report 16 SUMMARY FINANCIAL INFORMATION YEAR ENDED 31 DECEMBER 2004 The summary financial information shows the result of the Group adopting theEuropean Embedded Value Principles compared to the previously reported AchievedProfit basis. European Achieved Embedded Profit* Value -------- --------- £' Million £' Million Pre-tax operating profit 75.8 80.0 -------- --------- Total pre-tax profit 130.9 140.1 -------- --------- Pre-tax new business profit 45.8 38.0 -------- --------- Total net assets 663.4 640.4 -------- --------- Net asset value per share 151.0p 145.8p -------- --------- * These figures are as reported in the interim statement issued on 26 July 2005and have not been subject to an audit. COMMENTARY Introduction In May 2004 the Chief Financial Officers Forum published the European EmbeddedValue ("EEV") Principles. The purpose of this document is to set out the impactof the adoption of these Principles. We have developed our EEV methodology in conjunction with our consultingactuaries Tillinghast. This document has also been reviewed by our auditors KPMGAudit Plc and an audit report is included on page 16. The purpose of this document is to restate the 2004 Achieved Profit ("AP")result to an EEV basis. These EEV figures will replace the AP numbers previouslyreported as Supplementary Information and will be included as the comparativesfor the year ended 31 December 2005. Methodology We have adopted a market-consistent approach to set the risk discount rates ateach balance sheet date and allowed a margin for non-market risk. The riskdiscount rate used within the EEV at 31 December 2004 is 7.7% (AP basis 8%) withan associated equity risk premium of 3% (AP basis 2.5%). Included within thediscount rate is an allowance of 0.8% for non-market risks. There have been anumber of other changes to the economic assumptions adopted which are detailedon page 13. Experience assumptions have been amended to a "best estimate" basis as requiredunder EEV guidance. Maintenance costs have been increased to bring them into line with EEV guidance.This has resulted in certain irregular costs now being incorporated by way ofhigher maintenance expense loadings. As shareholders are aware, the Group does not write with-profit or annuitybusiness, nor do our products offer any significant financial guarantees oroptions, therefore no allowance needs to be made for these areas. Furthermoreneither the Group nor the covered business has any external debt, nor does theGroup have any Defined Benefit Pension Scheme deficit. Impact of changes Detailed below is the impact of the EEV changes on the pre-tax new businesscontribution for the year ended 31 December 2004, the pre-tax operating profitfor the same period and the net assets of the Group at 31 December 2004. The restated pre-tax new business contribution has increased by £7.8 million to£45.8 million (a movement of £5.9 million post-tax). The principal reason for this increase is the move to the market-consistentvaluation method, as adjusted to allow for the impact of non-market risk. Therehas also been some impact from the amendment of certain experience assumptionsto a "best estimate" basis. The impact of the higher maintenance costs has beenoffset to some extent by a reduction in the level of acquisition expenses. £' millionNew business contribution on AP basis 38.0 Market-consistent valuation 13.7Non-market risk adjustment (7.3)Experience assumptions 2.5Expense and tax assumptions (1.1) New business contribution on an EEV basis 45.8 The restated pre-tax operating profit for the year ended 31 December 2004 is£4.2 million lower than the AP result. The reduction in the pre-tax operating profit, despite the increase in the newbusiness contribution discussed above, is principally due to a smaller unwind ofthe risk discount rate (resulting from the reduction of 0.3% in the rate usedfor the EEV) and a reduction in the experience variances. Much of the change inexperience variances arises from the following two sources - firstly theamendments to certain assumptions to move them to a "best estimate" basis (whichreduces the positive experience variances by around £2 million), and secondlychanges to the method used to calculate the value of the tax relief on carriedforward unutilised expenses (which reduces the experience variances by around£6 million). £' millionOperating profit on AP basis 80.0 New business contribution 7.8Unwind of risk discount rate (1.6)Experience variances (9.2)Operating assumption changes (1.2) Restated operating profit on an EEV basis 75.8 The net asset value has increased by 3.6% from £640.4 million on the AP basis to£663.4 million. The principal reason for this increase is the move to the bottom-upmarket-consistent valuation method, as adjusted to allow for the impact ofnon-market risk. There has also been an increase due to the impact of amendmentsto certain experience assumptions to a "best estimate" basis, and a reduction inthe value due to the higher future maintenance costs assumed. £' millionNet assets on AP basis 640.4 Market-consistent valuation 58.0*Non-market risk adjustment (31.1)Experience assumptions 8.8Expense and tax assumptions (12.7)* Revised net asset value on an EEV basis 663.4 * These numbers include a total reduction of £3.2 million in the value of futuretax relief on carried forward unutilised expenses. This arises from both changesto assumptions and the move to a market-consistent approach. CONSOLIDATED PROFIT & LOSS ACCOUNT YEAR ENDED 31 DECEMBER 2004 The following information shows the result of the Group adopting the EEVPrinciples compared to the previously reported AP basis. European Achieved Embedded Profit* Value -------- -------- £' Million £' Million Life business 57.3 62.9Unit trust business 30.9 29.5Other (6.8) (6.8) -------- -------- 81.4 85.6IT systems development (5.6) (5.6) -------- -------- Operating profit 75.8 80.0 Investment return variances 26.5 30.0Economic assumption changes 0.6 2.1 -------- -------- Profit from core business 102.9 112.1LAHC profit on sale 28.0 28.0 -------- -------- Profit on ordinary activities before tax 130.9 140.1 TaxLife business (19.1) (23.4)Unit trust business (12.0) (11.6)Other 1.2 1.2LAHC - - -------- -------- (29.9) (33.8) -------- -------- Profit on ordinary activities after tax 101.0 106.3 ======== ======== Pence Pence Basic earnings per share 23.2 24.5Diluted earnings per share 22.5 23.7 -------- -------- * These figures are as reported in the interim statement issued on 26 July 2005and have not been subject to an audit. SUMMARISED NET ASSET STATEMENT AT 31 DECEMBER 2004 European Achieved Embedded Profit* Value -------- -------- £' Million £' Million Value of in-force Unit trust 113.5 104.8 Long-term insurance 377.2 362.9Other assets 172.7 172.7 -------- -------- Consolidated net assets 663.4 640.4 -------- -------- Pence Pence Net asset value per share 151.0 145.8 -------- -------- * These figures are as reported in the interim statement issued on 26 July 2005and have not been subject to an audit. RECONCILIATION TO IFRS NET ASSETS European Achieved Embedded Profit* Value -------- -------- £' Million £' Million IFRS net assets 222.2 222.2Less acquired value of in-force (70.5) (70.5)Add deferred tax on acquired value of in-force 21.0 21.0 -------- -------- 172.7 172.7 Add long-term insurance business in-force 377.2 362.9Add unit trust in-force 113.5 104.8 -------- -------- 663.4 640.4 -------- -------- * These figures are as reported in the interim statement issued on 26 July 2005and have not been subject to an audit. NOTES TO THE RESULTS Components of Life and Unit Trust Profit The pre-tax components of the result for life and unit trust business for theyear ended 31 December 2004 are shown below: Life business European Achieved Embedded Profit* Value -------- -------- £' Million £' Million New business contribution 29.9 23.7Profit from existing business: Unwind of discount rate 36.0 38.1 Experience variances (11.2) (2.8) Operating assumption changes (0.5) 0.7Investment income 3.1 3.2 -------- --------Life operating profit beforetax 57.3 62.9 Investment return variances 17.2 20.6Economic assumption changes 0.9 2.3 -------- --------Life profit before tax 75.4 85.8 Attributed tax (19.1) (23.4) -------- -------- Life profit after tax 56.3 62.4 -------- -------- New business contribution after tax is £22.3 million (£17.5 million on the APbasis). Unit trust business European Achieved Embedded Profit* Value -------- -------- £' Million £' Million New business contribution 15.9 14.3Profit from existing business Unwind of discount rate 9.8 9.3 Experience variances 5.2 5.9 Operating assumption changes - - -------- --------Unit trust operating profit beforetax 30.9 29.5 Investment return variances 9.3 9.4Economic assumption changes (0.3) (0.2) -------- --------Unit trust profit before tax 39.9 38.7 Attributed tax (12.0) (11.6) -------- -------- Unit trust profit after tax 27.9 27.1 -------- -------- New business contribution after tax is £11.1 million (£10.0 million on the APbasis). * These figures are as reported in the interim statement issued on 26 July 2005and have not been subject to an audit. Life and unit trust business combined European Achieved Embedded Profit* Value -------- -------- £' Million £' Million New business contribution 45.8 38.0Profit from existing business Unwind of discount rate 45.8 47.4 Experience variances (6.0) 3.1 Operating assumption changes (0.5) 0.7Investment income 3.1 3.2 -------- --------Operating profit before tax 88.2 92.4 Investment return variances 26.5 30.0Economic assumption changes 0.6 2.1 -------- --------Profit before tax 115.3 124.5 Attributed tax (31.1) (35.0) -------- -------- Profit after tax 84.2 89.5 -------- -------- New business contribution after tax is £33.4 million (£27.5 million on an APbasis). * These figures are as reported in the interim statement issued on 26 July 2005and have not been subject to an audit. EEV METHODOLOGY Basis of Preparation The EEV results presented in this document have been prepared in accordance withthe EEV Principles issued by the Chief Financial Officers Forum in May 2004.They will replace the Achieved Profit basis previously reported as supplementaryinformation for the covered business and will be included as the comparativesfor the year ended 31 December 2005. The treatment within this supplementaryinformation of all business other than the covered business is unchanged fromthe primary financial statements on an IFRS basis. The EEV results should be considered in conjunction with the Group'sInternational Financial Reporting Standards ("IFRS") restatement press releasedated 26 July 2005. This contained information regarding the Group's financialstatements prepared in accordance with IFRS issued by the InternationalAccounting Standards Board ("IASB") and adopted for use in the EU. Thispreliminary IFRS financial information forms the starting point for the EEVsupplementary information. The underlying IFRS preliminary financialinformation, and therefore this EEV supplementary information, may requireadjustment before its inclusion as comparative information because the policiesto be adopted will be determined finally only when the annual financialstatements are prepared for the year ending 31 December 2005, reflectingadditional interpretations and developing industry guidance. This may bringabout changes to the accounting policies used to prepare the underlyingpreliminary IFRS financial information. The preliminary IFRS financial information is based on the UK GAAP financialstatements approved by the Board on 28 February 2005 and adjusted to comply withIFRS. In accordance with IFRS 1 there have been no adjustments to the estimatesmade at the time of the preparation of the UK GAAP financial statements. The Directors acknowledge their responsibility for the preparation of thepreliminary supplementary information, which has been prepared in accordancewith the EEV Principles using the approach expected to be adopted when the Boardprepares the Group's first set of EEV supplementary information for the year to31 December 2005. The Directors approved the preliminary supplementaryinformation on 7 December 2005. Under the EEV methodology, profit is recognised as it is earned over the life ofthe products within the covered business. The embedded value of the coveredbusiness is the sum of the shareholders' net worth in respect of the coveredbusiness, and the present value of this projected stream of profit. Covered business The covered business is the life, pension and investment business, includingunit trust business, undertaken by the Group. Allowance for risk The allowance for risk in the shareholder cash flows is a key feature of the EEVPrinciples. The EEV guidance set out three main areas to allow for risk in anembedded value; •The risk discount rate •The allowance for the cost of financial options and guarantees •The cost of holding both prudential reserves and any additional capital required The reported EEV allows for risk via a risk discount rate based on a bottom-upmarket-consistent approach plus an appropriate additional margin for non-marketrisk. Deriving the risk discount rate A market-consistent embedded value for each product class has been calculated. In principle, each cash flow is valued using the discount rate applied to such acash flow in the capital markets. However in practice, where cash flows areeither independent or move linearly with market movements, it is possible toapply a simplified method known as the "certainty equivalent" approach. Underthis approach all assets are assumed to earn the risk free rate and arediscounted using that risk free rate. As part of this approach, an appropriate adjustment has been made to reflect thefact that the value of tax relief on expenses does not move linearly with marketmovements, as described later in these notes. A market-consistent cost of holding the required capital has also beencalculated and an additional allowance for non-market risk has been made byincreasing the discount rate. For presentational purposes, a risk discount rate has then been calculated whichunder the EEV basis gives the same value determined above. This provides anaverage risk discount rate for the EEV. This same average risk discount rate has also been used to calculate thepublished value of new business. Cost of solvency capital In light of the results of internal analysis, the Directors consider that theminimum regulatory capital provides adequate capital cover for the risksinherent in the covered business. The required capital for the EEV calculationshas therefore been set to the minimum required capital. The EEV includes a reduction for the frictional cost of holding the requiredcapital. No allowance has been made for any potential agency cost adjustment,this representing the potential markdown to the EEV that investors may applybecause they do not have direct control over their capital. Any such adjustmentwould be subjective, as different investors will have different views of what,if any, adjustment should be made. Non-market risk Best estimate assumptions have been established based on available informationand when used within the market consistent calculations provide the primaryevaluation of the impact of non-market risk. However, some non-marketoperational risks are not symmetric, with adverse experience having a higherimpact on the EEV than favourable experience. Allowance has been made for thisby increasing the risk discount rate by 0.8%. New business The new business contribution arising from reported new business premiums hasbeen calculated using the same assumptions as used in the EEV at the end of thefinancial year. The value of contractual incremental premiums to existingbusiness is treated as new business in the year of the increment, rather than atthe outset of the policy. This approach better reflects the way the Groupmanages its business. Expenses The expense assumptions include allowance for both the costs charged by therelevant third party administrators for acquisition and maintenance, and thecorporate costs incurred in respect of covered business. The corporate costs have been appropriately apportioned, so that the totalmaintenance costs represent the anticipated ongoing expenses, including thesystems development costs, which are expected to arise in future years inmeeting the policy servicing requirements of the in-force business. Taxation The EEV includes the present value of relief for expenses calculated on amarket-consistent basis. This calculation takes into account all expense(including carried forward unutilised expenses) and income amounts projected forthe in-force business. In determining the market-consistent value an appropriateallowance is made to reflect the fact that the value of tax relief on expensesdoes not move linearly with market movements. The impact of this is assessedusing a stochastic simulation model, calibrated to market conditions at eachbalance sheet date. When calculating the value of new business, first priority is given to relievingthe expenses relating to that business. Other issues considered In adopting the EEV Principles, consideration has been given to the followingmatters that were not relevant to the Group; •The Group does not write with-profit or annuity business •The Group does not have products which offer any significant financial guarantees or options •The Group does not have any debt •The Group does not have a defined benefit pension scheme deficit. EUROPEAN EMBEDDED VALUE ASSUMPTIONS Economic Assumptions The principal economic assumptions used within the cash flows at 31 December2004 are set out below: European Achieved Embedded Profit* Value -------- ---------- £' Million £' Million Risk discount rate (net of tax) 7.7% 8.0%Future investment returns: - Gilts 4.7% 4.5% - Equities 7.7% 7.0% - Unit-linked funds: - Capital growth 4.2% 3.7% - Dividend income 2.8% 2.8% - Total 7.0% 6.5%Expense inflation 4.4% 4.25%Indexation of capital gains 2.1% 1.8% * These figures are as reported in the interim statement issued on 26 July 2005and have not been subject to an audit. The approach to determining the risk discount rate was described earlier. Therisk discount rate is used to discount the projected future cash flows from thebusiness in force to a present value. The assumed future pre-tax returns on fixed interest securities are set byreference to the yield on 10 year gilts. The other investment returns are set byreference to this assumption. The expense inflation and indexation of capital gains assumptions are based onthe rate of inflation implicit in the valuation of 10 year index-linked gilts(2.9% at 31 December 2004). This rate is increased by 1.5%, to reflect higherincreases in earnings, to derive the expense inflation assumption. The rate isreduced by 10% to derive the indexation of capital gains for the proportion ofthe fund invested in equities. Experience assumptions The principal experience assumptions have been set on a best estimate basis,whereas under the achieved profit basis SJPC set assumptions on a moderatelypassive basis. •The persistency assumption is derived from the Group's own experience, or where insufficient data exists, from external industry experience. •Maintenance expenses have been set in line with the costs charged by the Group's third party administrators, together with an allowance for the Group's own maintenance costs. •Mortality and morbidity assumptions have been set by reference to the Group's own experience, published industry data and the rates set by the Group's reassurers. These assumptions will be reviewed on an annual basis. A provision of £7.0 million before tax has been included within the cash flowsto provide for adverse morbidity experience on critical illness plans. Other Points The value of new business has been established at the end of the reportingperiod and has been calculated using actual acquisition costs. Profit from existing business comprises the expected return on the value of inforce business at the start of the year plus the impact of any changes in theassumptions regarding future operating experience, changes in reserving basis(other than economic assumption changes) and profits and losses caused bydifferences between the actual experience for the period and the assumptionsused to calculate the embedded value at the end of the period. Future taxation has been determined assuming a continuation of the current taxlegislation. The EEV result has been calculated on an after tax basis and hasbeen grossed up to a pre tax level for presentation in the profit and lossaccount. The corporation tax rate used for this grossing up is 28% for UK lifeand pensions business, 12.5% for Irish life and pensions business and 30% forunit trust business. A pre-tax provision of £4.0 million has been included to cover the possibleimpact on the Group from an expected repositioning of the VAT exemption forinsurance related services following a recent ruling in the European Court ofJustice. EUROPEAN EMBEDDED VALUE SENSITIVITIES The table below shows the estimated impact on the combined life and unit trustreported value of new business and EEV to changes in various EEV calculatedassumptions. In each case, only the indicated item is varied relative to therestated values. Change in new business contribution Change in the European Embedded Value Notes Pre-tax Post-tax £' Million £' Million £' MillionRestated valueat 31 December 2004 45.8 33.4 663.4 1% reduction inrisk discount rate 1 8.0 5.8 40.1 1% reduction inrisk-free rates,with correspondingchange in fixedinterest asset values 0.5 0.4 2.7 10% reduction in withdrawal rates 4.8 3.5 23.7 10% reduction in expenses 7.8 5.8 9.8 10% reduction inmarket value ofequity assets n/a n/a (46.3) 5% reduction inmortality and morbidity 0.2 0.3 1.6 1% increase inequity expected returns 2 - - - £10 million increase incapital requirements(for embedded value) n/a n/a (0.8) 1. Although not directly relevant under a market-consistent valuation where therisk discount rate is a derived disclosure only, this sensitivity shows thelevel of adjustment which would be required to reflect differing investor viewsof risk. 2. As a market-consistent approach is used, equity expected returns only affectthe derived discount rate and not the embedded value or contribution to profitsfrom new business. Special Purpose Audit Report of KPMG Audit Plc to St James's Place Capital plc on its European Embedded Value ("EEV") Supplementary Information. In accordance with the terms of our engagement letter we have audited the EEVsupplementary information of St James's Place Capital plc ("the Company") as at31 December 2004, set out on pages 6 to 15. As described in the basis of preparation on page 10, the EEV supplementaryinformation has been prepared in accordance with the European Embedded ValuePrinciples issued in May 2004 by the European CFO Forum ("the EEV Principles"). Respective responsibilities of directors and KPMG Audit Plc As described on page 10, the Directors of the Company have acceptedresponsibility for the preparation of the EEV supplementary information inaccordance with the EEV Principles. It has been prepared as part of theCompany's conversion of its supplementary information, previously prepared inaccordance with the guidance issued in December 2001 by the Association ofBritish Insurers entitled "Supplementary Reporting for Long Term InsuranceBusiness (the Achieved Profits Method)" ("on the Achieved Profits basis") to anEEV basis. The accounting policies that have been adopted in preparing the underlyingpreliminary IFRS financial information which is the starting point for the EEVsupplementary information are consistent with those that the directors currentlyintend to use in the next annual financial statements. There is however, apossibility that the Directors may determine that some changes to these policiesare necessary when preparing the full annual financial statements for the firsttime in accordance with those IFRSs adopted for use by the European Union. Thisis because, as disclosed in the basis of preparation on page 10, the Directorsmay be required make adjustments to accounting policies as a result ofadditional interpretations and developing industry guidance. Our responsibilities as independent auditors are established in the UnitedKingdom by the Auditing Practices Board, our profession's ethical guidance, andthe terms of our engagement. Under the terms of engagement we are required toreport to you our opinion as to whether the EEV supplementary information hasbeen properly prepared in all material respects in accordance with the basis ofpreparation set out in the methodology section on pages 10 to 12 of the EEVsupplementary information. We also report to you if, in our opinion, we have notreceived all the information and explanations we require for our audit. Our report has been prepared for the Company solely in connection with theCompany's conversion of its supplementary information, previously prepared onthe Achieved Profits basis, to an EEV basis. We read the other information accompanying the EEV supplementary information andconsider whether it is consistent with the EEV supplementary information. Weconsider the implications for our report if we become aware of any apparentmis-statements or material inconsistencies with the EEV supplementaryinformation. Our report was designed to meet the agreed requirements of the Companydetermined by the Company's needs at the time. Our report should not thereforebe regarded as suitable to be used or relied on by any party wishing to acquirerights against us other than the Company for any purpose or in any context. Anyparty other than the Company who chooses to rely on our report (or any part ofit) will do so at its own risk. To the fullest extent permitted by law, KPMGAudit Plc will accept no responsibility or liability in respect of our report toany other party. Basis of audit opinion We conducted our audit having regard to Auditing Standards issued by the UKAuditing Practices Board. An audit includes examination, on a test basis, ofevidence relevant to the amounts and disclosures in the EEV supplementaryinformation. It also includes an assessment of the significant estimates andjudgements made by the directors in the preparation of the EEV supplementaryinformation, and of whether the accounting policies are appropriate to theGroup's circumstances, consistently applied and adequately disclosed. We plannedand performed our audit so as to obtain all the information and explanationswhich we considered necessary in order to provide us with sufficient evidence togive reasonable assurance that the EEV supplementary information is free frommaterial misstatement, whether caused by fraud or other irregularity or error.In forming our opinion we also evaluated the overall adequacy of thepresentation of information in the EEV supplementary information. Emphasis of matters Without qualifying our opinion, we draw your attention to the following matters: • As described in the basis of preparation note to the EEV supplementary information, as part of its conversion from the Achieved Profits basis to an EEV basis, the Company has prepared the EEV supplementary information for the year ended 31 December 2004 to establish the financial position and results of operations of the Company necessary to provide the comparative supplementary information expected to be included in the Company's first complete set of EEV supplementary information to be included in the annual report for the year ending 31 December 2005. • As explained in the basis of preparation, in accordance with IFRS 1 First-time Adoption of International Financial Reporting Standards, in arriving at the underlying preliminary IFRS financial information which forms the starting point for the EEV supplementary information, no adjustments have been made for any changes in estimates made at the time of approval of the UK Generally Accepted Accounting Practices financial statements on which the preliminary IFRS Financial Information is based. Opinion In our opinion, the accompanying EEV supplementary information for the yearended 31 December 2004 has been properly prepared, in all material respects, inaccordance with the basis of preparation set out in the methodology section onpages 10 to 12, which describes how the EEV Principles have been applied. KPMG Audit PlcChartered AccountantsLondon7 December 2005 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
St James's Place