Become a Member
  • Track your favourite stocks
  • Create & monitor portfolios
  • Daily portfolio value
Sign Up
Quickpicks
Add shares to your
quickpicks to
display them here!

Final Results

20th Feb 2007 07:03

Taylor Woodrow PLC20 February 2007 TAYLOR WOODROW plc PRELIMINARY RESULTS STATEMENT (for the year ended 31 December 2006) Highlights • Group revenues £3.68bn (2005: £3.56bn) • Housing profit from operations* £469m (2005: £456m) after providing £21m for land write-downs and option cost write-offs in North America • Profit before tax £406m (2005: £411m) • Basic earnings per share 50.5 pence (2005: 50.6 pence) • Full year dividend 14.75 pence (2005: 13.4 pence) • Net gearing 18.6 per cent (2005: 23.7 per cent) • Equity shareholders' funds per share 364.7 pence (2005: 338.4 pence) * Profit from operations and operating margins are before joint ventures'interest and tax (see Note 1). The Group's share of joint venture revenue isused in the margin calculation (see Note 1). Norman Askew, Chairman of Taylor Woodrow, said today: "We have delivered a robust performance in 2006 and the increase in the fullyear dividend of 10 per cent maintains our progressive dividend policy. I lookforward to working with Ian Smith, our new Chief Executive, to achieve furthersuccess for Taylor Woodrow." Ian Smith, Chief Executive of Taylor Woodrow, commented: "My initial review of Taylor Woodrow's operations has confirmed my impression ofa business with strong potential for growth in the medium term. The UK has delivered in line with expectations in 2006. We have a number ofinitiatives in place to improve our performance and this will be our UKmanagement team's key focus. In North America, we have achieved an excellent performance in 2006 as a resultof the strategy of maximising forward sales during 2005. We continue to beconfident in the prospects for the business in the medium-term, but expect tosee significant reductions in both operating margin and return on capitalemployed during 2007." -ends- A presentation to analysts will be made at 10.00 hrs on 20 February 2007. Thispresentation will be broadcast live on taylorwoodrow.com. For further information please contact Taylor Woodrow Jonathan Drake (Investor Relations) 07816 517 039 / 0121 600 8394 Ian Morris (Media Enquiries) 07816 518 767 / 0121 600 8520 Bell Pottinger Ben Woodford / Dan de Belder 020 7861 3232 Taylor Woodrow operates a portfolio of housing businesses in selected markets inthe UK, North America, Spain and Gibraltar, which account for 98 per cent of ouroperating profits. In addition to building new homes, we also have expertise inmixed-use development and construction, which help to support our development ofsustainable new communities. Group performance scorecard 2006 2005Operating Margin* % 13.0 13.5Return on Average Capital Employed % 23.0 24.6Gearing % 18.6 23.7Home Completions 13,165 12,516Order book £m 2,235 2,025Landbank plots 68,662 75,160 Results Consolidated revenue for the year to 31 December 2006 was up 3 per cent at£3,572.1m (2005: £3,476.9m). Profit before tax was £405.6m (2005: £411.0m). At 31 December 2006, total equity before minority interests was £2,103.5m (2005:£1,928.4m). Net debt was £391.3m (2005: £456.9m). Net gearing was 18.6 per cent(2005: 23.7 per cent). Basic earnings per share was 50.5 pence (2005: 50.6 pence). Equity shareholders'funds per share increased by 7.8 per cent to 364.7 pence. Group housing 2006 2005Revenue, including 3,128.4 2,864.9joint ventures £mProfit from operations* £m 469.2 456.0Operating margin* % 15.0 15.9Ending capital employed £m 2,241.2 2,138.2ROACE % 21.4 22.9Home completions 13,165 12,516Home average selling price £'000 207 204Lot completions 6,413 4,495Order book £m 1,070 1,318Landbank plots 68,662 75,160 Group housing has had a good year, with our North American business reportinganother year of record profits. Revenue increased to £3,128.4m (2005:£2,864.9m), reflecting an increase in both home and lot completions. Profitsfrom operations were higher than last year, at £469.2m, as the increase incompletions outweighed the reduction in overall Group housing operating margin. 53 per cent of 2006 Group housing profit from operations* came from overseasoperations (2005: 49 per cent). This reflects our decision to increaseinvestment into those markets over the last few years. The Group housing landbank (owned and controlled) was reduced to 68,662 plots(2005: 75,160), as a result of our more cautious approach to land buying inNorth America. The Group housing order book stood at £1,070m (2005: £1,318m),with a decrease in North America offsetting increases in the UK and Spain. UK housing 2006 2005Revenue, including 1,842.0 1,647.4joint ventures £mProfit from 221.5 233.4operations* £mOperating margin* % 12.0 14.2Ending capital employed £m 1,574.4 1,585.1ROACE % 14.0 15.2Home completions 8,294 8,178Home average selling price £'000s 193 185Lot completions 3,695 1,748Active sites (average) 207 204Order book £m 534 411Landbank plots 34,827 34,985Strategic landbank potential plots 79,000 80,000Customer satisfaction % 78 75 2006 saw a return to more stable market conditions in the UK. There was,however, considerable regional variation in the strength of markets. London andthe South-East were particularly strong while the Midlands and North remainedsubdued. Overall visitor levels per site per week were up 12 per cent on 2005and we also saw an increase in the reservation rate to 0.83 homes per site perweek (2005: 0.81). Cancellation rates have also improved, with the 2006 level of17 per cent being broadly in line with the long-run industry average (2005: 20per cent). We have increased our average number of active sites in 2006 to 207 (2005: 204).Home completions for the year were up 1 per cent to 8,294 (2005: 8,178) and weentered 2007 with an order book up by 30 per cent to £534m (2005: £411m). Average selling prices were higher at £193k (2005: £185k). An increase in theunderlying price per square foot offset the slight reduction in average squarefootage of our homes from 960 sq ft to 952 sq ft. The latter was a result of anincrease in the proportion of social housing completions to 15 per cent (2005:13 per cent) and the proportion of apartment completions to 45 per cent (2005:40 per cent). UK Housing revenue increased by 11.8 per cent, driven by the increases in homecompletions and average selling prices. Operating margins* were lower at 12.0per cent (2005: 14.2 per cent). Results in 2005 benefited from a higher level ofland profits, primarily due to the disposal of the Quartermile project inEdinburgh. Revenue from land sales in 2006 was £194.6m (2005: £134.4m) andyielded lower profits and margins than in 2005, due to an increased proportionof recently-acquired land in the mix. This is a result of our strategy ofacquiring large sites and selling on those parcels of land that we do notrequire for our homebuilding business. Return on average capital employed forthe year was 14.0 per cent (2005: 15.2 per cent). Our operating margin has declined in 2006, and consequently growth in margin isthe long-term key focus of our UK management. We are preparing a number of newmeasures to extract greater value from our sites. These will complement ourongoing activity to better manage cost: •Increasing the proportion of our homes that are built using our core range, which provides customers with the choice that they need, whilst also enabling us to achieve lower build costs; •Further developing our 'right first time' approach to reduce maintenance costs and increase customer satisfaction; •Increasing build process efficiency. We will be providing an update on our progress with these initiatives when weannounce our Interim Results on 31 July 2007. Our Supply Chain team works to deliver value throughout the build process. Theirskills were recognised by the Chartered Institute of Purchasing and Supply whenTaylor Woodrow's Supplier Management Solution won the award for 'Best Use ofTechnology' in 2006. We continue to make good progress with our strategic landbank, which representsland that does not currently have planning consent. Having identified a sitewith strategic potential we will typically agree a purchase option arrangementwith the landowner and then work together to promote the land through theplanning process. Such options generally provide us with the ability to purchasethe land at a discount to market value when suitable planning consents areobtained. Sites brought through from the strategic landbank typically generatehigher margins than those bought in the open market with a planning consent inplace. During 2006, 22 per cent of our home completions were strategicallysourced (2005: 19 per cent) and we aim to increase this to 25 per cent of ourcompletions by 2008. At the end of 2006 we had 79,000 potential plots within ourstrategic landbank (2005: 80,000) and 39 per cent of the land in our landbankoriginally came from strategic sources (2005: 41 per cent). The quality of the landbank is critical to delivering growth in future years. Aswell as the strength of the strategic land outlined above, we have maintainedour investment in the UK landbank during 2006. As a result, our year endlandbank stood at 34,827 plots owned or controlled, broadly in line with theposition a year ago. This represents 4.2 years of supply. We are committed to developing communities where people want to live, ratherthan just building a collection of houses. For example, The Green Building atMacintosh Village in Manchester won the Civic Trust Sustainability Award for itsurban design and use of materials. Customer satisfaction is a key priority and our efforts in this area arereflected in the improvements to our customer satisfaction score. In 2006, thescore for our UK Housing business rose to 78 per cent (2005: 75 per cent). North America housing 2006 2005Revenue, including 1,194.3 1,141.8joint ventures £mProfit from 221.3 199.6operations* £mOperating margin* % 18.5 17.5Ending capital employed £m 577.2 495.6ROACE % 41.3 49.2Home completions 4,492 3,932Home average selling price £'000s 233 248Lot completions 2,640 2,735Active sites (average) 108 85Order book US$m 854 1,421Landbank plots 31,353 37,910Customer satisfaction % 87 86 Our North American business has delivered another excellent year of profitgrowth, with profit from operations* increasing by 11 per cent to £221.3m (2005:£199.6m). This reflects the success of our strategy of maximising forward salesin the buoyant market conditions of 2005 in order to mitigate the anticipatedimpact of market weakness in Arizona, California and Florida during 2006. Home completions increased by 14 per cent to 4,492 (2005: 3,932) with lotcompletions slighter lower at 2,640 (2005: 2,735). Despite the challengingmarket conditions, our operating margin increased to 18.5 per cent, as thereservations in our order book at the start of the year were converted intocompletions. Return on average capital employed has reduced from the whollyexceptional levels achieved last year, but still represents a very strongresult. We entered 2006 with a record order book of US$1,421m as a result of our focuson pre-selling. Our order book of US$854m at the end of 2006 reflected theweaker market conditions experienced during the year. We have been more cautious in the land market in 2006, as land prices adjusteddownwards to reflect the market conditions. Much of our land is acquired underoption initially and only bought outright once planning consents are in place.We carefully review the terms of each option as it becomes exercisable and,where terms are no longer attractive due to changes in market conditions, weapproach the land vendor to renegotiate. In many instances we have managed toimprove terms, but there have also been cases where we have allowed options tolapse. We have undertaken a full review of our year-end land positions which, inconjunction with deposits on options not taken up, has resulted in a pre-taxland write-off of US$40m. While we have continued to buy land through our existing portfolio of options,we have been very selective in replacing options during 2006. As a result, ourlandbank at the year end stood at 31,353 plots (2005: 37,910 plots). Thisrepresents 4.4 years of supply and allows us to continue to be selective in ourland purchasing in 2007. While short-term market prospects are difficult, commentators are united in thebelief that a recovery will occur. There is very significant potential forTaylor Woodrow in North America in the medium-term. Our home completions inNorth America are just over a half of our completions in the UK for 2006, butthe Florida market alone is larger than the entire UK market. Our business in Arizona, which is focused on the Phoenix market, has beentremendously successful since it was acquired in 2002. Having originally beencentred on entry-level homes, the business has been diversifying into themid-market and during 2006 launched a new product range, targeting growingfamilies and executive buyers. We completed 1,245 homes in Arizona in 2006(2005: 1,009) at an average selling price of US$287k (2005: US$209k). Thebusiness is also a highly successful land developer, buying larger tracts ofland, identifying the plots that best suit our product and selling on theremaining plots to other builders. During the year we completed the sale of1,171 lots (2005: 1,076). Whilst the market in Arizona cooled during 2006, thelong-term fundamentals of population growth, job growth and relativeaffordability remain in place. In California we operate in two key markets. In the North, our business isfocused on the lower end of the mid-market in the San Francisco Bay area. InSouthern California we build in selected sub-markets from Riverside and SanBernardino Counties southwards to San Diego and eastwards towards Palm Springs.Californian markets in general weakened significantly during 2006, primarily dueto interest rate rises and affordability issues. However, our focus on themid-market and providing high-quality homes allows us to offer an attractiveproposition to our customers. During the year we completed the sale of 540 homes(2005: 721 homes) at an average selling price of US$812k (2005: US$835k). Wealso achieved 156 lot completions (2005: 378). We operate from three divisions in Florida. Our Central Florida division coversthe areas around St Petersburg, Tampa, Bradenton and Sarasota. In South-EastFlorida we operate in the Palm Beach area, whilst in South-West Florida we arefocused on the markets between Fort Myers and Naples. We offer a wide range,from middle market to luxury homes and condominiums, targeted to move-upfamilies, retirees, and second home purchasers. The Florida market has alsoexperienced more difficult conditions following a number of years of very stronghouse price appreciation. Home completions in 2006 were 835 (2005: 752) at anaverage selling price of US$653k (2005: US$727k). Our land development businessin Florida is primarily centred around our large-scale developments, where wesell lots to other homebuilders. In 2006 we completed the sale of 499 lots(2005: 219 lots). Our operations in Texas are active in both Austin and Houston. These markets didnot experience the price growth of other US regions in recent years and areproving more stable while other markets weaken. They offer good levels ofaffordability, particularly in comparison to the Western United States. We havea strong reputation in Texas as a high-quality community developer, whichenables us to target the 'move-up' market. We offer our customers a range ofinnovative home designs that deliver 'affordable luxury'. Home completionsincreased to 280 (2005: 190) with average sales prices up 5 per cent to US$447k(2005: US$424k). We also have a strong land development business in Texas,centred on our community at Steiner Ranch in Austin. We completed on 306 lots in2006 (2005: 353). In Ontario, Canada, the group trades under the Monarch brand which benefits froma long-standing reputation for quality and value. Operating in the GreaterToronto Area and in Ottawa in Eastern Ontario, Monarch builds low-rise,mid-market family homes and high-rise condominiums as well as affordable, urbantownhomes. The Ontario market has not seen significant house price inflationover recent years and retains a good level of affordability. In addition, themarket was assisted by the reduction in the level of Canadian Goods and ServicesTax during the year. Completions in 2006 were 1,592 homes (2005: 1,260). Theaverage sales price was Can$322k (2005: Can$326k). We also sell lots in Canadaand completed 508 during 2006 (2005: 709). The continuing success of our business in North America is a result of our focuson high-quality developments, professional finishes, and exceptional customerservice. In October 2006, Taylor Woodrow received the honour of being the firsthomebuilder ever to be inducted into the Builder Magazine Hall of Fame forDesign Excellence. This prestigious award recognises outstanding contributionsto residential design. Our North America divisions are consistently recognised by customers andindustry peers, winning some of the most sought-after awards in the business. Inparticular, our Arizona division received five awards at the 2006 'TheNationals' Awards, recognising Taylor Woodrow's contribution to innovation inhome design, marketing and sales. Spain and Gibraltar housing 2006 2005Revenue, including 92.1 75.7joint ventures £mProfit from 26.4 23.0operations* £mOperating margin* % 28.7 30.4Ending capital employed £m 89.6 57.5ROACE % 35.9 45.7Home completions 379 406Home average selling price £'000s 205 169Lot completions 78 12Active sites (average) 28 22Order book £m 100 81Landbank plots 2,482 2,265Customer satisfaction % 62 73 Our business in Spain trades under the Taylor Woodrow brand and is primarilyfocused on developing sites in popular holiday destinations. Where we identifyappropriate opportunities, we also build homes designed to meet the requirementsof the local population. In Gibraltar, Taylor Woodrow serves the luxury market through apartmentdevelopments, selling off-plan well in advance of the start of construction. After a strong performance in 2005, we saw our markets in the Costa Blanca andCosta del Sol slowing during 2006. However, the market in Mallorca continues tobe good as a result of the limited supply to meet the demand for new propertieson the island, which has become a sought-after destination. We sold a total of 379 homes in 2006 (2005: 406) at an average selling price of£205k (2005: £169k). This increase in average selling price reflects a change inthe mix of completions, with a higher proportion of completions in 2006 comingfrom our developments in Mallorca. We also took the opportunity during the yearto rebalance the land portfolio by selling some of our holdings in the Malagaarea. Operating margins and returns on capital have remained strong, albeit below theexceptional levels achieved in recent years. The order book increased 23 per cent to £100m (2005: £81m) and our year-endlandbank stood at 2,482 plots, up 10 per cent (2005: 2,265). The disappointing reduction in our customer satisfaction score resultspredominantly from difficulties in obtaining habitation certificates, as highlevels of development activity put pressure on local town halls. Construction Our Construction business has developed an excellent reputation within itschosen markets focusing on repeat work for blue chip clients, facilitiesmanagement, infrastructure and government projects. This excellence has onceagain been recognised with a number of industry awards in 2006, including beingnamed Building Magazine's 'Major Contractor of the Year' and winner of theoverall 'Constructing Excellence' award. Profit from operations* was £8.1m(2005: £8.8m) and our increased order book of £1,165m at the year end (2005:£707m) provides us with a solid platform for 2007. During the year we have undertaken projects ranging from the redevelopment ofthe ticket hall at Kings Cross Underground Station in London to the design andbuild of the new National Assembly for Wales in Cardiff. We have recentlycommenced work on the St Helens and Knowsley Hospitals PFI Scheme and are alsopreferred bidder on the Sheffield 'Building Schools for the Future' programme.We achieved a customer satisfaction score of 87 per cent in 2006 (2005: 91 percent). Pensions At 31 December 2006, the gross IAS19 deficit was £206m (2005: £220m). Net ofdeferred tax, the deficit was £144m (2005: £154m). The company has now completed discussions with the trustees of the main definedbenefit pension scheme in the UK on the means of mitigating this deficit. As weannounced at our Interim Results, the company has agreed to increase its pastservice deficit funding payments from £4.8m per annum to £20m per annum for aperiod of 10 years. This increase impacts on cashflow, but profit fromoperations will not be affected. Also in line with our previous announcement,the fund was closed to future accrual for existing members on 1 December 2006. Equity shareholders' funds At the end of 2006, shareholders' funds were £2,103.5m, up from £1,928.4m at theend of 2005. Equity shareholders' funds per ordinary share rose to 364.7 penceat the end of 2006. This represents an increase of 7.8 per cent from theprevious year-end. Shareholders' returns Basic earnings per share stood at 50.5 pence (2005: 50.6 pence). The proposedfinal dividend of 9.75 pence produces a total return of 14.75 pence per ordinaryshare, an increase of 10 per cent over last year. This level of dividend isconsistent with the Board's policy of paying progressive dividends through thebusiness cycle. The dividend is covered 3.4 times by earnings. Cash flow and net debt Operating cashflows before movements in working capital were £460.9m (2005:£461.1m). Inventories increased by £347.5m which was partly funded by anincrease in creditors of £174.4m. Of this latter increase, £131.1m isrepresented by an increase in land creditors. Cash generated by operations was£223.3m (2005: £359.7m). Income taxes and interest payments totalled £166.3m(2005: £229.5m), resulting in net cash from operating activities of £57.0m(2005: £130.2m). Net debt at the year-end stood at £391.3m (2005: £456.9m) equivalent to netgearing of 18.6 per cent (2005: 23.7 per cent). Interest on borrowings, net ofinterest receivable was £55.0m (2005: £54.4m). Average net debt for the year was£837.8m (2005: £823.4m). At the year-end Taylor Woodrow had undrawn committedrevolving credit facilities totalling £629.5m. Taxation The effective tax rate in 2006 was 28.4 per cent (2005: 30.3 per cent). Prospects for 2007 Our geographic portfolio of businesses continues to provide us with alternativeinvestment and growth options. The UK Housing market remains good. Underlying fundamentals are strong due tothe continuing significant undersupply of new housing. Whilst Government iscommitted to introducing policies that will increase the availability of landfor development, we have not yet seen any increase in supply. Despite strongprice appreciation during 2006, there were wide regional variations and customerconfidence could be damaged in some of the weaker markets if further interestrate rises materialise in 2007. We anticipate an increase in the number of homecompletions during 2007 and will continue to focus on improving our operatingmargins. In North America, although the markets in Arizona, California and parts ofFlorida remain challenging and difficult to predict, current market conditionsin Texas and Ontario are healthy. We continue to be confident in the prospectsfor the business in the medium-term, but expect to see significant reductions inboth operating margin and return on capital employed during 2007. The priorityfor our North American management is to minimise the impact of the marketdownturn in the short-term, whilst taking the opportunity to position thebusiness for accelerated growth in the future. The market in Spain remains attractive on a medium-term view, although anyweakness in the UK market in the short-term could reduce demand for property inSpain from British buyers. With an in-depth knowledge of the markets in which weoperate, we are well-placed to benefit from any land acquisition opportunitiesthat market conditions might present. Shareholder Information The company's 2007 Annual General Meeting will be held at 2pm on Wednesday 2 May2007 in the Oasis Suite at the Crowne Plaza Hotel, Pendigo Way, NationalExhibition Centre, Birmingham, B40 1PS. Subject to confirmation at the Annual General Meeting, the 2006 final dividendof 9.75 pence per share will be paid on Monday 2 July 2007 to shareholders onthe register of members at the close of business on Friday 25 May 2007. Shareholders are again being offered the opportunity to re-invest some or all oftheir dividend under the Dividend Re-Investment Plan, details of which will becontained in the 2007 AGM circular to shareholders, which will be posted toordinary shareholders with the 2006 Annual Report and Accounts on Monday 19March 2007. Copies of the Report and Accounts 2006 will also be available from that date onthe Company's website taylorwoodrow.com and from the registered office at 2Princes Way, Solihull, West Midlands, B91 3ES. The latest date for receipt of the Dividend Re-Investment Plan mandate forms forthe 2006 final dividend is Friday 1 June, 2007. The latest date for receipt ofnotices of withdrawal from the Plan for the 2006 final dividend is Friday 15June, 2007. Consolidated Income Statement for the year to 31 December 2006 Note 2006 2005 £m £m Continuing operationsRevenue: Group and share of joint ventures 1 3,679.0 3,556.4Less share of joint ventures (106.9) (79.5) -------- --------Consolidated revenue 1 3,572.1 3,476.9Cost of sales (2,933.4) (2,831.7) -------- --------Gross profit 638.7 645.2Profit on disposal of properties and investments 9.1 10.2Administrative expenses (200.1) (195.4)Share of results of joint ventures 22.1 15.0 -------- --------Profit from operations 1 469.8 475.0 Interest receivable 9.1 8.3Finance costs 2 (73.3) (72.3) -------- --------Profit before tax 405.6 411.0 Tax 3 (115.0) (124.5) -------- --------Profit for the year 290.6 286.5 -------- --------Attributable to:Equity holders of the parent 289.5 285.7Minority interest 1.1 0.8 -------- -------- 290.6 286.5 -------- --------Earnings per shareFrom continuing operationsBasic 5 50.5p 50.6p -------- --------Diluted 5 50.1p 49.8p -------- -------- Consolidated Statement of Recognised Income and Expense for the year to 31 December 2006 2006 2005 £m £m -------- -------- Net exchange differences on translation of foreign (49.0) 36.4operationsActuarial losses on defined benefit pension schemes (1.6) (73.3)Tax on actuarial losses taken directly to equity 0.5 22.0Net surplus on revaluation 1.0 - -------- --------Net expense recognised directly in equity (49.1) (14.9)Profit for the year 290.6 286.5 -------- --------Total recognised income for the year 241.5 271.6 -------- -------- Attributable to:Equity holders of parent 240.4 270.8Minority interests 1.1 0.8 -------- -------- 241.5 271.6 -------- -------- Reconciliation of movements in consolidated equity for the yearto 31 December 2006 Note 2006 2005 £m £m -------- -------- Total recognised income for the year 241.5 271.6Dividends on equity shares 4 (79.7) (71.3)New share capital subscribed 3.8 9.8Proceeds from sale of own shares 15.0 7.3Purchase of own shares (6.1) -Increase in share-based payment tax reserve 4.2 1.2Credit to equity relating to own shares - 1.3Share-based payment credit 6.1 5.9Cash cost of satisfying share options (8.0) -Increase (decrease) in other reserve (0.6) 0.6Decrease in minority interests - (0.9) -------- --------Net increase in equity 176.2 225.5Opening equity 1,929.3 1,703.8 -------- --------Closing equity 2,105.5 1,929.3 -------- -------- Consolidated Balance Sheet at 31 December 2006 2006 2005 £m £m -------- ---------Non-current assetsGoodwill 363.1 363.9Property and plant 25.5 24.4Interests in joint ventures 56.2 92.1Trade and other receivables 56.0 37.2Deferred tax assets 95.4 101.2 --------- --------- 596.2 618.8 --------- ---------Current assetsInventories 2,946.5 2,699.6Trade and other receivables 294.9 278.3Tax receivables 19.7 3.6Cash and cash equivalents 236.5 197.3 --------- --------- 3,497.6 3,178.8 --------- --------- --------- ---------Total assets 4,093.8 3,797.6 --------- --------- Current liabilitiesTrade and other payables (926.0) (822.1)Tax payables (74.1) (61.6)Debenture loans (2.5) (6.5)Bank loans and overdrafts (12.3) (9.0) --------- --------- (1,014.9) 899.2) --------- --------- --------- ---------Net current assets 2,482.7 2,279.6 --------- --------- Non-current liabilitiesTrade payables (123.1) (76.2)Debenture loans (610.6) (638.0)Bank loans (2.4) (0.7)Retirement benefit obligation (208.6) (222.5)Deferred tax liabilities (0.8) (0.9)Long-term provisions (27.9) (30.8) --------- --------- (973.4) (969.1) --------- --------- --------- ---------Total liabilities (1,988.3) (1,868.3) --------- --------- --------- ---------Net assets 2,105.5 1,929.3 --------- --------- EquityShare capital 148.5 148.0Share premium account 758.8 756.2Revaluation reserve 1.5 0.5Own shares (45.0) (53.9)Share-based payment tax reserve 8.2 4.0Capital redemption reserve 31.5 31.5Other reserve 4.8 5.4Translation reserve (19.1) 29.9Retained earnings 1,214.3 1,006.8 --------- ---------Equity attributable to equity holders of the parent 2,103.5 1,928.4Minority interests 2.0 0.9 --------- ---------Total equity 2,105.5 1,929.3 --------- --------- Consolidated Cash Flow Statement for the year to 31 December 2006 Note 2006 2005 £m £m -------- -------- Net cash from operating activities 6 57.0 130.2 Investing activitiesInterest received 9.1 8.3Dividends received from joint ventures 22.6 3.0Proceeds on disposal of properties, plant and investments, including joint ventures 48.0 13.9Purchases of properties, plant and investments (6.7) (6.3)Amounts invested in joint ventures (9.2) (22.8)Amounts repaid by joint ventures 5.3 27.2 -------- --------Net cash from investing activities 69.1 23.3 -------- -------- Financing activitiesEquity dividends paid (79.7) (71.3)Dividends paid by subsidiaries to minority shareholders (0.1) (0.9)Issue of ordinary share capital 3.3 9.8Proceeds from sale of own shares 15.9 7.3Purchase of own shares (12.4) -New debenture loans raised - 1.8New bank loans raised 608.7 410.2Repayment of debenture loans (4.3) (18.5)Repayment of bank loans (600.9) (416.2)Decrease in bank overdrafts (2.7) (2.3) -------- --------Net cash used in financing activities (72.2) (80.1) -------- -------- Net increase/(decrease) in cash and cashequivalents 53.9 73.4Cash and cash equivalents at beginning of year 197.3 114.9Effect of foreign exchange rate changes (14.7) 9.0 -------- --------Cash and cash equivalents at end of year 236.5 197.3 -------- -------- Notes to the Consolidated Financial Statements for year to 31 December 2006 1. Business and geographical segments Business segments For management purposes, the Group is currently organised into four operatingdivisions - Housing - United Kingdom, Housing - North America, Housing - Spainand Gibraltar, and Construction. From 2006, the Property sector is no longerseparately reported. These divisions are the basis on which the Group reportsits primary segment information. Segment information about these businesses is presented below. Housing Housing United Housing Spain and Kingdom North America Gibraltar Total Housing Construction Consolidated2006 £m £m £m £m £m £m ------- -------- ------- -------- ------- -------Revenue:External sales 1,759.2 1,170.2 92.1 3,021.5 550.6 3,572.1Inter-segment sales 4.1 4.1 60.8 64.9Eliminations (4.1) (4.1) (60.8) (64.9) ------- -------- ------- -------- ------- -------Total revenue 1,759.2 1,170.2 92.1 3,021.5 550.6 3,572.1Share of jointventures' revenue 82.8 24.1 - 106.9 - 106.9 ------- -------- ------- -------- ------- -------Group andshare of jointventures 1,842.0 1,194.3 92.1 3,128.4 550.6 3,679.0 ------- -------- ------- -------- ------- -------Result:Profit beforejoint ventures 206.8 206.4 26.4 439.6 8.1 447.7Share of jointventures' profit* 14.7 14.9 - 29.6 - 29.6 ------- -------- ------- -------- ------- -------Profit* 221.5 221.3 26.4 469.2 8.1 477.3Share of jointventures'interest and tax (6.1) (1.4) - (7.5) - (7.5) ------- -------- ------- -------- ------- -------Profit from operations 215.4 219.9 26.4 461.7 8.1 469.8Finance costs, net (64.2) ------- -------- ------- -------- ------- -------Profit before tax 405.6Tax (115.0) ------- -------- ------- -------- ------- -------Profit for the year 290.6 ------- -------- ------- -------- ------- ------- *Profit is profit from operations before joint ventures' interest and tax. Other information:Property and plantadditions 2.5 1.7 0.3 4.5 2.2 6.7Depreciation - plant 1.1 1.1 0.1 2.3 5.4 7.7 ------- -------- -------- -------- -------- -------- 1. Business and geographical segments continued Housing Housing United Housing Spain and Kingdom North America Gibraltar Total Housing Construction Consolidated2006 £m £m £m £m £m £m ------- -------- ------- -------- ------- -------Assets:Segment assets 2,310.5 868.7 173.7 3,352.9 100.7 3,453.6Share of jointventures' assets 53.3 54.1 - 107.4 3.3 110.7Eliminations (35.4) (34.7) - (70.1) - (70.1) ------- -------- -------- -------- -------- -------- 2,328.4 888.1 173.7 3,390.2 104.0 3,494.2 ------- -------- -------- -------- --------Goodwill 363.1Cash and cash equivalents 236.5 ------- -------- -------- -------- -------- --------Consolidated totalassets 4,093.8 ------- -------- -------- -------- -------- -------- Liabilities:Segment liabilities (754.0) (310.9) (84.1) (1,149.0) (211.5) (1,360.5)Share of jointventures' liabilities (35.4) (34.7) - (70.1) - (70.1)Eliminations 35.4 34.7 - 70.1 - 70.1 ------- -------- -------- -------- -------- -------- (754.0) (310.9) (84.1) (1,149.0) (211.5) (1,360.5) ------- -------- -------- -------- --------Gross debt (627.8) ------- -------- -------- -------- -------- --------Consolidated total liabilities (1,988.3) ------- -------- -------- -------- -------- --------Capital employed** 1,574.4 577.2 89.6 2,241.2 (107.5) 2,133.7 ------- -------- -------- -------- --------Goodwill 363.1Net debt (391.3) ------- -------- -------- -------- -------- --------Net assets 2,105.5 ------- -------- -------- -------- -------- -------- *\* The Group is unable to allocate the defined benefit pension scheme assets andliabilities on an actuarial basis by entity. However, for the purposes of thesegmental analysis above the Group has allocated the deficit on the basis ofmembers in the plan. This allocation is performed solely for the purposes ofproviding a more meaningful segmental analysis and is not an appropriateapportionment in accordance with IAS 19. Housing Housing Housing United North Spain and Kingdom America Gibraltar Total Housing Property Construction Consolidated2005 £m £m £m £m £m £m £m ------- -------- -------- -------- -------- -------- --------Revenue:External sales 1,607.9 1,102.1 75.7 2,785.7 192.0 499.2 3,476.9Inter-segment sales 4.8 - - 4.8 - 71.1 75.9Eliminations (4.8) - - (4.8) - (71.1) (75.9) ------- ------- ------- ------- ------- ------- -------Total revenue 1,607.9 1,102.1 75.7 2,785.7 192.0 499.2 3,476.9Share of jointventures' revenue 39.5 39.7 - 79.2 - 0.3 79.5 ------- ------- ------- ------- ------- ------- -------Group and share of joint ventures 1,647.4 1,141.8 75.7 2,864.9 192.0 499.5 3,556.4 ------- ------- ------- ------- ------- ------- ------- 1. Business and geographical segments continued Housing Housing Housing United North Spain and Kingdom America Gibraltar Total Housing Property Construction Consolidated2005 £m £m £m £m £m £m £m ------- -------- -------- -------- -------- -------- --------Result:Profit before jointventures 227.4 185.6 23.0 436.0 15.7 8.3 460.0Share of jointventures' profit* 6.0 14.0 - 20.0 - 0.5 20.5 ------- ------- ------- ------- ------- ------- -------Profit* 233.4 199.6 23.0 456.0 15.7 8.8 480.5Share of jointventures' interest and tax (5.4) (0.1) - (5.5) - - (5.5) ------- ------- ------- ------- ------- ------- -------Profit from operations 228.0 199.5 23.0 450.5 15.7 8.8 475.0Finance costs, net (64.0) ------- ------- ------- ------- ------- ------- -------Profit before tax 411.0Tax (124.5) ------- ------- ------- ------- ------- ------- -------Profit for the year 286.5 ------- ------- ------- ------- ------- ------- ------- Other information:Property andplant additions 0.9 1.4 0.1 2.4 - 3.8 6.2Depreciation - plant 1.1 0.8 0.2 2.1 - 3.7 5.8 ------- ------- ------- ------- ------- ------- ------- Assets:Segment assets 2,160.2 746.9 121.5 3,028.6 25.2 152.6 3,206.4Share of jointventures' assets 133.7 55.9 - 189.6 - - 189.6Eliminations (133.5) (26.1) - (159.6) - - (159.6) ------- ------- ------- ------- ------- ------- ------- 2,160.4 776.7 121.5 3,058.6 25.2 152.6 3,236.4 ------- ------- ------- ------- ------- -------Goodwill 363.9Cash and cash equivalents 197.3 ------- ------- ------- ------- ------- -------Consolidatedtotal assets 3,797.6 ------- ------- ------- ------- ------- ------- ------- Liabilities:Segment liabilities (575.3) (281.1) (64.0) (920.4) (17.4) (276.3) (1,214.1)Share of jointventures' liabilities (133.5) (26.1) - (159.6) - - (159.6)Eliminations 133.5 26.1 - 159.6 - - 159.6 ------- ------- ------- ------- ------- ------- ------- (575.3) (281.1) (64.0) (920.4) (17.4) (276.3) (1,214.1) ------- ------- ------- ------- ------- -------Gross debt (654.2) ------- ------- ------- ------- ------- -------Consolidatedtotal liabilities (1,868.3) ------- ------- ------- ------- ------- ------- -------Capital employed** 1,585.1 495.6 57.5 2,138.2 7.8 (123.7) 2,022.3 ------- ------- ------- ------- ------- -------Goodwill 363.9Net debt (456.9) ------- ------- ------- ------- ------- ------- -------Net assets 1,929.3 ------- ------- ------- ------- ------- ------- ------- 1. Business and geographical segments continued Geographical segments The Group's operations are located primarily in the United Kingdom and NorthAmerica. The Group's housing divisions are already segmented geographicallyabove. The construction division is primarily located in the United Kingdom. The following table provides an analysis of the Group's sales by geographicalmarket, irrespective of the origin of the goods/services: Sales revenue by geographical market 2006 2005 £m £m -------- --------United Kingdom 2,243.6 2,248.4North America 1,170.1 1,102.1Rest of the world 158.4 126.4 -------- -------- 3,572.1 3,476.9 -------- -------- The following is an analysis of the carrying amount of segment assets, andadditions to property and plant, analysed by the geographical area in which theassets are located: Carrying amount of Additions to property segment assets and plant 2006 2005 2006 2005 £m £m £m £m -------- -------- -------- -------- United Kingdom 2,854.9 2,725.5 2.6 1.2North America 1,012.3 902.2 1.7 1.4Rest of the world 226.6 169.9 2.4 3.6 -------- -------- -------- -------- 4,093.8 3,797.6 6.7 6.2 -------- -------- -------- -------- 2. Finance costs 2006 2005 £m £m -------- --------Interest on bank overdrafts and loans 22.9 20.6Interest on debenture loans 41.2 42.1 -------- -------- 64.1 62.7Amortisation of discount on land creditors 6.5 5.4Notional interest on pension liability 2.7 4.2 -------- -------- 73.3 72.3 -------- -------- 3. Tax 2006 2005 £m £m -------- --------Current tax:UK corporation tax: Current year 58.8 111.8 Prior year (9.9) (9.7)Relief for foreign tax (8.3) (63.0)Foreign tax: Current year 80.4 82.3 Prior year (8.3) 14.2 -------- -------- 112.7 135.6 -------- --------Deferred tax:UK: Current year (3.0) 9.0 Prior year (0.2) 1.2Foreign: Current year (4.8) (7.3) Prior year 10.3 (14.0) -------- -------- 2.3 (11.1) -------- -------- 115.0 124.5 -------- -------- Corporation tax is calculated at 30 per cent (2005: 30 per cent) of theestimated assessable profit for the year in the UK. Taxation for other jurisdictions is calculated at the rates prevailing in therespective jurisdictions. Deferred tax recognised in the Group statement of recognised income and expenseis due to actuarial gains on post-retirement liability. 4. Dividends 2006 2005 £m £m -------- --------Amounts recognised as distributions to equity holders in the year:Final dividend for the year ended 31 December 2005 of 8.9p 51.0 45.5 (2004: 8.1p) per share.Interim dividend for the year ended 31 December 2006 of 5.0p (2005: 4.5p) per share. 28.7 25.8 -------- -------- 79.7 71.3 -------- --------Proposed final dividend for the year ended 31 December 2006 of 57.6 51.0 9.75p (2005: 8.9p) per share. -------- -------- The proposed final dividend is subject to approval by shareholders at the AnnualGeneral Meeting and has not been included as a liability in these financialstatements. 5. Earnings per share From continuing operations 2006 2005Basic 50.5p 50.6p -------- --------Diluted 50.1p 49.8p -------- -------- The calculation of the basic and diluted earnings per share is based on thefollowing data: Earnings: 2006 2005 £m £m -------- -------- Earnings for basic earnings per share and diluted earnings per share 289.5 285.7 -------- -------- Weighted average number of shares: 2006 2005 m m -------- --------For basic earnings per share 572.9 564.6Weighted average of dilutive options 5.0 7.8Weighted average of dilutive awards under bonus plans 0.5 1.1 -------- --------For diluted earnings per share 578.4 573.5 -------- -------- 6. Notes to the cash flow statement 2006 2005 £m £m -------- -------- Profit from operations 469.8 475.0Adjustments for: Depreciation of plant 7.7 5.8 Share-based payment charge 6.1 5.9 Gain on disposal of property and plant (9.1) (10.2) Share of joint ventures' operating profit (22.1) (15.0) Increase/(decrease) in provisions 8.5 (0.4) -------- --------Operating cash flows before movements in working capital 460.9 461.1 Increase in inventories (347.5) (204.9) Increase in receivables (37.2) (9.1) Increase in payables 174.4 112.6 Pension contributions (27.3) - -------- --------Cash generated by operations 223.3 359.7 Income taxes paid (95.2) (153.7)Interest paid (71.1) (75.8) -------- --------Net cash from operating activities 57.0 130.2 -------- -------- Cash and cash equivalents (which are presented as a single class of assets onthe face of the balance sheet) comprise cash at bank and other short-term highlyliquid investments with an original maturity of three months or less. 6. Notes to the cash flow statement continued 2006 2005 £m £m -------- --------Net debtCash and cash equivalents 236.5 197.3Bank overdrafts and bank loans (14.7) (9.7)Debenture loans (613.1) (644.5) -------- --------Net debt (391.3) (456.9) -------- -------- 7. Statutory Accounts The Report and Accounts were approved by the Board of Directors on 19 February2007. This announcement does not constitute the company's statutory accounts forthe years ended 31 December 2006 or 2005 but is derived from those accounts.Statutory accounts for 2005 have been delivered to the Registrar of Companiesand those for 2006 will be delivered following the company's annual generalmeeting. The auditors have reported on these accounts; their reports wereunqualified and did not contain a statement under section 237 (2) or (3) of thecompanies Act 1985. This information is provided by RNS The company news service from the London Stock Exchange

Related Shares:

Taylor Wimpey
FTSE 100 Latest
Value8,705.23
Change24.94