30th Jun 2006 07:01
Berkeley Group Holdings (The) PLC30 June 2006 The Berkeley Group Holdings plc PRESS RELEASE 30TH JUNE 2006 PRELIMINARY RESULTS ANNOUNCEMENT £475.7 MILLION OF CASH GENERATED - £246.0 MILLION IN THE CONTINUING GROUP AND £229.7 MILLION FROM CROSBY (DISCONTINUED OPERATIONS) ON TARGET TO RETURN £2 PER SHARE IN JANUARY 2007 NET ASSET VALUE PER SHARE UP 34.6% TO 697 PENCE The Berkeley Group Holdings plc ("Berkeley" or "the Group") - the urbanregenerator and residential property developer - announces its full-year resultsfor the year ended 30th April 2006. These are the first full-year results to bepublished under International Financial Reporting Standards ("IFRS"). Highlightsof the results include: • Return of Capital On target to meet next B share payment (£2 per share in January 2007). Further payments scheduled for January 2009 (£2 per share) and January 2011 (£3 per share) • Net Cash £220.6 million net cash from £255.1 million net debt last year-end (30th April 2005) - an increase of £475.7 million • NAVPS Up 34.6% from 518 pence to 697 pence • Land Holdings 23,819 plots in the continuing Group - up from 23,123 • Forward Order Book £581.9 million compared to £687.0 million for the continuing Group April 2006 April 2005 £'million £'million (unaudited) (unaudited) _____________ _____________Continuing operationsGroup Revenue 917.9 794.5 +15.5% _____________ _____________ Operating Profit 160.9 153.4 +4.9%Net Finance Costs (7.4) (8.3) +10.8%Joint Ventures (after tax) 11.6 10.3 +12.6% _____________ _____________ Profit Before Tax 165.1 155.4 +6.2%Tax (43.7) (41.4) _____________ _____________ Profit After Tax 121.4 114.0 +6.5%Profit from Discontinued Operations 80.8 24.9 _____________ _____________ Profit for the Financial Period 202.2 138.9 _____________ _____________ EPS - Basic 168.4p 116.2p +44.9%EPS - Continuing 101.1p 95.3p +6.1%ROCE (excluding profit on disposal) 24.0% 22.0% Commenting on the results, Managing Director, A.W. Pidgley said: "It gives me great pleasure to report these strong results and to note that theyarise increasingly from the long-term business model we have created in recentyears. This model, which we believe is unique in our sector, is ideally suitedto Berkeley. It enables us both to secure future returns and to maximiseshorter-term opportunities, aligning the interests of all our stakeholders, andso directly benefiting our shareholders, our people and our customers. Theseresults show the successful execution of our strategy and I look forward to 2007with confidence. As Berkeley has moved on from its traditional house-building heritage, my visionhas been to create a premier urban renaissance business that takes neglectedland and transforms it into attractive places which people will choose as adestination for work, for pleasure, and for making their home. That is whatBerkeley now does, and our ability to do it successfully and with flair is nowdriving this exciting phase of our development as a business. We have created this new momentum by focussing on our strengths. These beginwith an unrivalled landbank and include both a pioneering, visionary approachand an unrelenting attention to detail. This has simplified our business (whichis now principally concentrated on London and the South East) while defining itsnatural size - one that allows senior management to add value across the boardand encourage innovation. In terms of our financial performance, Berkeley is now able to concentrate fullyon optimising value for its shareholders, producing balanced results thatgenerate cashflow and maintain our land bank, as opposed to concentrating solelyon the income statement. As befits a company with our history, Berkeley is a caring but demandingemployer that believes in setting stretching targets for its people. As theseresults show, our people have responded by producing another exceptionalperformance in an increasingly complex business. I would like to take thisopportunity to acknowledge their immense contribution and thank each and everyone of them." Roger Lewis, Chairman said: "The housing market remains satisfactory across Berkeley's principal areas ofactivity - a feature we owe to the continued feel-good factor, especially inLondon, coupled with strong employment, low interest rates and limited supply. Berkeley continues to acquire new sites, albeit selectively, and to submitplanning applications on existing sites in order to optimise returns. Theplanning system remains slower than we would ideally like but we appreciate theimprovement that is taking place as a result of the commitment of centralGovernment, the Greater London Authority and many local planning authorities toembrace urban regeneration. During the year, we have secured a number ofimportant new consents including Potters Field by London's Tower Bridge, AlenconHouse in Basingstoke, Porters Way in West Drayton, Worcester Pottery andKingsmead in Canterbury. We have also achieved further consents at ChelseaBridge Wharf and Imperial Wharf in London and at Royal Clarence Yard in Gosport. I am delighted to report that we are on target to make the £2 per share 2006 Bshare payment to shareholders in January 2007 and that we are ahead of ourbusiness plan as we work towards achieving the 2008 and 2010 B share paymentsdue under the Scheme of Arrangement." Scheme of Arrangement The Scheme of Arrangement and The Berkeley Group Holdings plc reduction ofcapital were approved by shareholders on 17th September 2004 and by the Court atthe end of October 2004. The Scheme of Arrangement created a Berkeley Unitcomprising one ordinary share and four redeemable B shares. The 2004 B shareswere redeemed on 3rd December 2004 for £5 a share at a cost to Berkeley of£604.1 million. The redemption of the three remaining B shares is scheduled forJanuary 2007, January 2009 and January 2011 for amounts of £2, £2 and £3 a sharerespectively, subject to the necessary Board approvals and the terms set out inthe Scheme of Arrangement shareholder circular. Under the Scheme of Arrangement the intention is that all returns toshareholders will be by way of payments made on the B Shares. As a result, nodividend is recommended at the year-end. Housing Market The housing market in Berkeley's core region of London and the South-Eastremains satisfactory as the fundamentals of strong employment, historically lowinterest rates, limited supply and a continuing feel-good factor underpindemand. The Group's strategy of focusing on maximising value as opposed to concentratingon volume and profit growth allows us to match supply and demand appropriately.Reflecting this strategy, Berkeley has secured sales reservations in the yearwith a value that is 12.5% lower than in 2004/05 and this new level isconsistent with our business plan for achieving the Scheme of Arrangement. As always, getting the product right in terms of design, quality, location andprice is key to success in our business and our strategy is well suited to this. Berkeley continues to maintain a healthy balance between owner-occupiers andinvestors with each accounting for approximately 50% of reservations. Under theGroup's definition, an investor can range from a large institution to a customerpurchasing a second home. In this market, Berkeley's sales prices have typically been 5% to 8% above theprice levels in its business plan at the beginning of the year and this hascovered increases in build costs. The pressure on operating margins comes from a number of quarters - therequirement to provide subsidised housing, Section 106 planning gain obligationsand from the cost of meeting modern environmental and sustainable developmentrequirements - and this is reflected in a 0.6% reduction in the Group's landbank gross margin from 28.2% to 27.6%. This trend will continue as Berkeley'spolicy is to secure further consents on our existing land holdings and whilstthis increases the absolute quantum of gross margin and return on investment, itcan reduce the gross margin percentage. The land market has remained very competitive, especially for sites withplanning permission or in prime locations. In accordance with our strategy wehave bought sites on a very selective basis and, in the year, agreed to acquire17 sites of which 7 were in St James. Results Berkeley is delighted to announce a pre-tax profit of £165.1 million for itscontinuing business for the year ended 30th April 2006. This is £9.6 millionmore than the £155.5 million reported for the same period last year - anincrease of 6.2%. The £80.8 million profit from discontinued operations relates to Crosby whichwas sold to Lend Lease on 8th July 2005. The profit comprises two elements -Crosby's £1.1 million post-tax trading profit prior to disposal and the £79.7million profit from the disposal itself. In the year to 30th April 2005,Crosby's post-tax trading profit was £24.9 million. Basic earnings per share total 168.4 pence, an increase of 44.9% on the 116.2pence reported for the same period last year. Basic earnings per share forcontinuing operations are 101.1 pence compared to 95.3 pence last time - anincrease of 6.1%. Discontinued earnings per share have increased from 20.9 penceto 67.3 pence. Over the year, total equity has increased by £215.8 million to £837.2 million(April 2005 - £621.4 million) with net assets per share rising by 34.6% from 518pence to 697 pence. Return on Capital Employed for the period, excluding the profit on disposal ofCrosby, was 24.0% compared to 22.0% last time. At 30th April 2006, Berkeley had net cash balances of £220.6 million (April 2005- net debt of £255.1 million) after generating £475.7 million of cashflow in theyear - £246.0 million from the continuing Group and £229.7 million from Crosby. These results have been prepared in accordance with International FinancialReporting Standards (IFRS), the Group having published its restatement offinancial information for the year ended 30th April 2005 on 26th October 2005.As a result of the IFRS changes, net assets fell by £48.1 million (40 pence pershare) to £621.4 million (518 pence per share) at 30th April 2005. The one significant change for Berkeley concerns the recognition of revenue andprofit (IAS 18 - "Revenue"). Berkeley's previous policy reflected the twodifferent types of scheme that the Group develops. For traditionalhouse-building, revenue and profit on exchanged sales contracts were recognisedon physical completion. This policy remains in place and now also applies to oururban regeneration business where revenue and profit were previously recognisedon a phased basis to reflect the stage of completion of the relevant exchangedunit. The revenue recognition change accounted for £35.3 million of the £48.1million reduction in net assets with the remaining £12.8 million being due toemployee retirement benefits and the discounting of land creditors. Thesechanges impact the timing of profit recognition and have no impact on eithercash or the underlying business. Trading Analysis Revenue for the continuing Group was £917.9 million (2005 - £794.5 million).This comprises £890.5 million (2005 - £738.4 million) of residential turnover,of which £1.1 million was from land sales (2005 - £16.1 million), along with£27.4 million (2005 - £56.1 million) of commercial turnover. During the year, the continuing Group sold 3,001 units at an average sellingprice of £293,000. This compares with 2,292 units at an average selling price of£309,000 last year. At £27.4 million (2005 - £56.1 million), the continuing Group's turnover fromcommercial activities represents the disposal of commercial units on ninemixed-use sites. The continuing Group's share of post-tax results from joint ventures was £11.6million compared to £10.3 million last year. This arises from the sale of 816residential units (2005 - 799 units) at an average selling price of £372,000(2005 - £358,000) by St James, our joint venture with Thames Water. The increasein average selling price is mainly due to Wycombe Square in London where 9 unitswere taken to sales at an average sales price of £6.5 million. This scheme isnow fully sold and the average selling price in joint ventures is expected tofall back to more normal levels in the coming year. Excluding joint ventures and land sales, the house-building operating margin forthe continuing Group was 17.5% compared to 19.3% for the full year ended 30thApril 2005. This is within the 17.5% to 19.5% range (depending on mix) reportedby the Group over recent reporting periods. On the basis that current market andplanning conditions prevail, we are continuing to forecast broadly in thisrange. Joint venture operating margins are 14.1% compared to 14.7% last year andreflect the profit share arrangements with Thames Water. As already noted, with sales price enhancements covering build increases, thepressure on operating margins is coming from two main areas. These are: the costof subsidised housing and planning gain obligations; and, the costs associatedwith meeting high standards of environmental and sustainable developmentpractice. We accept these pressures in the knowledge that our duty to shareholders has tobe combined with policies for sustainable development. Indeed, we see noconflict between the two. Believing that what we create inherently benefits thewider community, we place great emphasis on sustainability at every level in ourcompany. There are, of course, associated costs and a risk that our operatingmargin will not continue at the levels we have seen in the past. In our view,however, any risk will be balanced by our ability to add value to our sites, toobtain planning consents that would otherwise be withheld, and to continuematching the expectations of our customers and therefore to maintain competitiveadvantage. Joint Ventures Berkeley currently has £69.0 million of capital employed in joint ventures, anincrease of £4.5 million from the prior year figure of £64.5 million. TheGroup's share of joint venture bank borrowings has fallen by £46.4 million to£5.3 million. Joint ventures have been a key ingredient in Berkeley's results and our recentapproach has been to concentrate on a small number of strategic partners. Thishas resulted in St James, our 50% joint venture with Thames Water now having arecord number of plots. These total 3,855, an increase of 1,150 units in theyear. The business is working up more than 1,000 further units with Thames Wateron potential future sites. In addition, Saad Berkeley continues to promote option land on four sites and weare actively exploring further opportunities. We also continue to look atcommercial opportunities within Saad Berkeley Investment Properties. However, inthe current market conditions such opportunities have not met our investmentcriteria. Forward Sales Berkeley's strategy continues to be to sell homes at an early stage in thedevelopment cycle, often at the off-plan stage. Securing customers' commitmentin this way ensures the quality of future revenue. At 30th April 2006, Berkeley held forward sales of £581.9 million - £105.1million less than the £687.0 million reported a year previously. This forwardsales position is commensurate with the ongoing business profile and in linewith the Group's strategy. Of the £581.9 million, £17.0 million (2005 - £37.3million) is included in debtors in the balance sheet. The remaining £564.9million (2005 - £649.7 million) will benefit the current and future years'income statement and cashflow. Land Holdings Once again this year, the Group (including its joint ventures) has more thanreplaced the number of plots taken to sales through acquisition and optimisationon its existing sites. Berkeley's land bank is 23,819 plots with an estimatedgross margin of £1,672 million. This compares with 23,123 plots and £1,671million at 30th April 2005. Of these holdings, 19,860 plots (2005 - 20,091) areowned and included on the balance sheet. In addition, 3,264 plots (2005 - 2,680)are contracted and a further 695 plots (2005 - 352) have terms agreed andsolicitors instructed. Over 95% of our holdings are on brownfield or recycledland. The comparative figures exclude Crosby. Since the Scheme of Arrangement Berkeley has continued to acquire land on aselective basis and continues to find land prices extremely competitive. In 2004/05 we agreed 19 sites, of which six were in St James. This year we agreed 17sites, of which seven were in St James and four of the seven from Thames Water.As a result, the land bank now comprises 19,964 (2005 - 20,418) Berkeley plotsand 3,855 plots (2005 - 2,705) within St James. In line with our focus on maximising returns from our existing land holdings, wecontinue to submit further applications on most of our regeneration sites. The Group's land holdings include over 1.5 million ft2 of commercial spacewithin our mixed-use schemes. The Group is not undertaking any standalonecommercial schemes. The Board During the year, Berkeley was fortunate to have had a balanced, experienced andstable Board to ensure good governance while pursuing the strategic objective ofcreating long-term shareholder value. The Board has remained unchanged over thisperiod, save for the addition of Michael Tanner who was appointed on 1stSeptember 2005 as a Non-Executive Director. Most recently a Divisional ManagingDirector of George Wimpey, Michael has over 34 years of experience in thebuilding and construction industry with both Tarmac and George Wimpey. The Board comprises a Chairman, four Executive Directors and four Non-ExecutiveDirectors. Our People Berkeley's management philosophy is to devolve operational responsibility andaccountability to autonomous management teams, leaving the Group to focus on itsstrategic vision. This structure allows our management teams to create their ownworking environment while still benefiting from the experience of the widerGroup. It has created a unique sense of purpose for the people in each businessand empowered them to succeed, so building a highly talented and loyalworkforce. It has also enabled the Group management to concentrate on drivingeach business forward while encouraging the climate of innovation that is vitalto success in the regeneration arena. Of course it also increases the demands onour people, but we see this as necessary to our success. On behalf of theDirectors and shareholders, we would like to express our sincere appreciationand thanks to all those who have contributed to this year's outstanding resultsand who will continue to play an important part in our future. It is always pleasing to be recognised externally for our people's performanceand Berkeley have received numerous awards in the year, a number of which areset out in our fifth Sustainability Report which will be published alongside ourAnnual Report. There are two that warrant particular attention. Berkeley camejoint first in the WWF/Insight Investment Sustainability Survey, while GunwharfQuays in Portsmouth received one of only six Crystal Awards from BURA (theBritish Urban Regeneration Association) for being the best of the best of itsprevious winners. Both of these recognise the significant contribution ofBerkeley and its people to the built environment. Current Trading and Prospects We believe Berkeley is in an excellent position to continue to perform well inthe medium term. Our business structure is simpler and more focused than everbefore, we have a formidable landbank which we know how to optimise, and we arecreating product that is attuned both to our customers' aspirations and thehousing policy imperatives of our principal markets. Our strategy is to be atthe forefront of our industry, to embrace change and make it happen, and we areconfident our knowledge will continue to give us a competitive advantage. It is also our view that the fundamentals of the housing market are good andremain underpinned by economic stability, strong employment and low interestrates. The feel-good factor which is vital to the success of the economy isstill evident, especially in London which is now truly a World City. That said,the recent interest rate increases in Europe and America do strike a note ofcaution with uncertainty in the UK over when and in which direction interestrates in this country will next move. So, Berkeley remains on target to deliver the 2006 B Share payment of £2 pershare at the beginning of January 2007 and £12 in total by January 2011. We arealso well on the way to creating a strong, sustainable and meaningful ongoingbusiness with a highly entrepreneurial and talented management team focussed onthe long term. We are looking forward to the year ahead with confidence as we continue to moveBerkeley towards being the most efficient property company performing at itsnatural size, with the best people. END For further information please contact: The Berkeley Group Holdings plc Cardew GroupA W Pidgley Tim RobertsonR C Perrins Sofia RehmanT: 01932 868555 T: 0207 930 0777 Consolidated Income Statement Year ended Year ended 30 April 30 April 2006 2005 Unaudited Unaudited Notes £'000 £'000_____________________________________________________________________ Continuing operationsRevenue 2(a) 917,926 794,461Cost of sales (686,166) (565,395)_____________________________________________________________________Gross profit 231,760 229,066Net operating expenses (70,885) (75,687) _____________________________________________________________________Net operating expenses include: - (1,633)Merger expenses_____________________________________________________________________ _____________________________________________________________________Operating profit 2(b) 160,875 153,379Interest receivable 3 19,968 11,292Finance costs 3 (27,304) (19,573)Share of post tax results of joint 2(c) 11,562 10,358ventures_____________________________________________________________________Profit on ordinary activities 165,101 155,456before taxationTaxation 4 (43,736) (41,439)_____________________________________________________________________Profit on ordinary activities after 121,365 114,017taxationDiscontinued operationsProfit from discontinued operations 5 80,782 24,941_____________________________________________________________________Profit for the financial year 202,147 138,958_____________________________________________________________________Dividends per Ordinary Share - 16.5p_____________________________________________________________________Earnings per Ordinary Share - Basic 6 168.4p 116.2p _____________________________________________________ - Continuing 101.1p 95.3p operations - Discontinued 67.3p 20.9p operations _____________________________________________________ - Diluted 6 167.4p 115.3p _____________________________________________________ - Continuing 100.5p 94.6p operations - Discontinued 66.9p 20.7p operations __________________________________________________________________________________________________________________________ Consolidated Statement of Recognised Income and Expense Year ended Year ended 30 30 April 2006 April 2005 Unaudited Unaudited £'000 £'000____________________________________________________________________ Profit for the financial year 202,147 138,958Actuarial gain/(loss) recognised 1,925 (3,262)in the pension schemeDeferred tax on actuarial gain/ (578) 978(loss) recognised in the pension schemeCredit in respect of employee share schemes 6,347 3,533Deferred tax in respect of 6,440 658employee share schemes____________________________________________________________________Total recognised income for the 216,281 140,865financial year____________________________________________________________________ Consolidated Balance Sheet At 30 April At 30 April 2006 2005 Unaudited Unaudited Notes £'000 £'000____________________________________________________________________ AssetsNon-current assetsProperty, plant and equipment 2,252 8,883Investments accounted for using 68,995 64,497equity methodDeferred tax assets 18,285 23,128____________________________________________________________________ 89,532 96,508____________________________________________________________________ Current assetsInventories 763,873 1,103,045Trade and other receivables 23,692 48,067Cash and cash equivalents 220,670 344,948____________________________________________________________________ 1,008,235 1,496,060____________________________________________________________________ LiabilitiesCurrent liabilitiesBorrowings (85) (88)Trade and other payables (202,267) (293,090)Current tax liabilities (32,589) (32,924)____________________________________________________________________ (234,941) (326,102)____________________________________________________________________Net current assets 773,294 1,169,958____________________________________________________________________Total assets less current 862,826 1,266,466liabilities____________________________________________________________________ Non-current liabilitiesBorrowings - (600,000)Retirement benefit obligation (10,342) (12,089)Other non-current liabilities (15,294) (32,968)____________________________________________________________________ (25,636) (645,057)____________________________________________________________________Net assets 837,190 621,409____________________________________________________________________ Shareholders' equityShare capital 24,164 24,164Share premium 264 264Capital redemption reserve 6,091 6,091Other reserve (961,299) (961,299)Retained profit 1,735,475 1,522,976Joint ventures' reserves 32,495 28,713____________________________________________________________________ Total shareholders' equity 7 837,190 620,909Minority interest in equity - 500____________________________________________________________________ Total equity 837,190 621,409____________________________________________________________________ Consolidated Cash Flow Statement Year ended Year ended 30 April 30 April 2006 2005 Unaudited Unaudited Notes £'000 £'000_______________________________________________________________________ Cash flows from operating activitiesCash generated from operations 276,435 289,187Dividends from joint ventures 5,396 1,564Interest received 19,968 11,413Interest paid (37,384) (7,845)Tax paid (35,413) (59,754)_______________________________________________________________________Net cash from operating activities 8 229,002 234,565_______________________________________________________________________ Cash flows from investing activitiesPurchase of tangible fixed assets (1,419) (1,853)Sale of tangible fixed assets 467 5,764Purchase of shares in joint ventures (10) -Disposal of subsidiary undertaking 5 250,736 -Overdraft balance of subsidiary 572 -disposedExpenses relating to disposal of 5 (2,765) -subsidiaryMovements in loans with joint ventures (858) 4,490 Merger expenses - (1,633)_______________________________________________________________________Net cash from investing activities 246,723 6,768_______________________________________________________________________ Cash flows from financing activitiesCost of share buybacks - (20,656)Share options exercised - 5,667Issue / redemption expenses - (2,841)Redemption of shares - (604,153)Repayment of loan stock (3) (32)Repayment of bank loan (600,000) (100,000)New bank loan issued - 600,000Equity dividends paid - (19,676)_______________________________________________________________________Net cash used in financing activities (600,003) (141,691)_______________________________________________________________________ Net (decrease)/increase in cash and (124,278) 99,642cash equivalentsCash and cash equivalents at start 344,948 245,306of the year_______________________________________________________________________Cash and cash equivalents at end of 220,670 344,948the year_______________________________________________________________________ Reconciliation of net cash flow to netcash / (debt)Net (decrease)/increase in cash and cash (124,278) 99,642equivalentsCash outflow / (inflow) from decrease / 600,003 (499,968)(increase) in debt_______________________________________________________________________Movement in net (debt) / cash in the year 475,725 (400,326)Opening net (debt) / cash (255,140) 145,186_______________________________________________________________________Closing net cash / (debt) 220,585 (255,140)_______________________________________________________________________ At 30 April At 30 April 2006 2005 Unaudited Unaudited £'000 £'000 Net cash / (debt)Cash and cash equivalents 220,670 344,948Borrowings (85) (600,088)_______________________________________________________________________Net cash / (debt) 220,585 (255,140)_______________________________________________________________________ 1 Basis of preparation The unaudited financial information for the year ended 30 April 2006 and therestated information for the year ended 30 April 2005 does not constitutestatutory accounts within the meaning of section 240 of the Companies Act 1985.This information was approved by the Board on 29 June 2006, and has beenextracted from the Group's statutory accounts which have not yet been signed,but upon which the auditors are expected to give an unqualified opinion. This information, including the restated information for the year ended 30 April2005, has been prepared in accordance with EU adopted International FinancialReporting Standards ("IFRS") and IFRIC interpretations and with those parts ofthe Companies Act 1985 applicable to companies reporting under IFRS. Thestatutory accounts for the year ended 30 April 2005 were prepared in accordancewith United Kingdom Generally Accepted Accounting Principles and have beendelivered to the Registrar of Companies. The report of the auditors on thesefinancial statements was unqualified and did not contain a statement undersection 237(2) or (3) of the Companies Act 1985. The Group has elected to take the optional exemption from applying IAS 32 andIAS 39 in the comparative year (and to first apply them at 1 May 2005 and forthe year ended 30 April 2006). There is no impact on the financial statements ofapplying IAS 32 and IAS 39 on the implementation of these standards at 1 May2005 or in the year ended 30 April 2006. Consequently there is no restatement asa result of this change in accounting policy. IFRS 7 "Financial Instruments: Disclosure" (applicable for financial yearscommencing on or after 1 January 2007) was available for early application buthas not been applied by the Group in these financial statements. The standard isconcerned only with disclosure and as such, were it to have been applied in theyear ending 30 April 2006, would have had no impact on the income statement orbalance sheet. 2 Analysis by Activity Year ended Year ended 30 April 2006 30 April 2005 Unaudited Unaudited Continuing operations £'000 £'000_________________________________________________________________________________(a) Revenue Residential housebuilding 890,539 738,349 Commercial property and other activities 27,387 56,112_________________________________________________________________________________ 917,926 794,461_________________________________________________________________________________ (b) Operating profit Residential housebuilding 156,846 146,026 Commercial property and other activities 4,029 8,986 Merger expenses - (1,633)_________________________________________________________________________________ 160,875 153,379_________________________________________________________________________________ (c) Share of post tax results of joint ventures Residential housebuilding 11,469 10,117 Commercial property and other activities 93 241_________________________________________________________________________________ 11,562 10,358_________________________________________________________________________________ All revenue and profit disclosed in the table above relate to continuingactivities of the Group and are derived from activities performed in the UnitedKingdom. Included in Group residential housebuilding revenue and operatingprofit are £1,142,000 and £889,000 in respect of land sales (2005: £16,139,000and £6,600,000). 3 Net finance costs Year ended Year ended 30 April 2006 30 April 2005 Unaudited Unaudited Continuing operations £'000 £'000_________________________________________________________________________________ Interest receivable 19,968 11,292_________________________________________________________________________________ Finance costsInterest payable on bank loans and overdrafts (26,153) (18,058)Other finance costs (1,151) (1,515)_________________________________________________________________________________ (27,304) (19,573)_________________________________________________________________________________ (7,336) (8,281)_________________________________________________________________________________ 4 Taxation Year ended Year ended 30 April 2006 30 April 2005 Unaudited Unaudited Continuing operations £'000 £'000_________________________________________________________________________________ Current taxUK corporation tax payable (35,158) (47,527)Adjustments in respect of previous periods 469 427_________________________________________________________________________________ (34,689) (47,100)Deferred tax (9,047) 5,661_________________________________________________________________________________ (43,736) (41,439)_________________________________________________________________________________ 5 Profit from discontinued operations The Group completed the sale of The Crosby Group plc ("Crosby") to Lend LeaseCorporation Limited on 8 July 2005 for consideration of £250,736,000 whichincluded the settlement of £151,306,000 of intercompany balances. The profitfrom discontinued operations which has been included in the consolidated incomestatement is as follows: Year ended Year ended 30 April 2006 30 April 2005 Unaudited Unaudited Discontinued operations £'000 £'000_________________________________________________________________________________ Revenue 8,176 236,977_________________________________________________________________________________ Operating profit 1,514 35,042Net finance costs (130) (196)Share of post tax results of joint ventures - 548Taxation (348) (10,453)_________________________________________________________________________________Post tax results from discontinued operations 1,036 24,941Profit on disposal 79,746 -_________________________________________________________________________________ 80,782 24,941_________________________________________________________________________________ Revenue and operating profit from discontinued operations include £nil inrespect of commercial property and other activities (2005: £11,436,000 and£297,000 respectively). The profit on disposal of Crosby is set out as follows: Unaudited £'000_________________________________________________________________________________ Non-current assets 10,760Current assets 202,513Current liabilities (36,550)Non-current liabilities (7,791)Minority interest (500)_________________________________________________________________________________ Net assets disposed 168,432Expenses relating to the disposal 2,765Curtailment gain in The Berkeley Group plc staff benefits plan (207)Profit on disposal 79,746_________________________________________________________________________________ Consideration 250,736_________________________________________________________________________________ Of which:Cash 99,430Settlement of intercompany balances 151,306_________________________________________________________________________________ 250,736_________________________________________________________________________________ 6 Earnings per Ordinary Share Earnings per Ordinary Share is calculated as the profit for the financial yearof £202,147,000 (2005: £138,958,000) divided by the weighted average number ofOrdinary Shares in issue during the period of 120,067,044 (2005: 119,558,439).For diluted earnings per Ordinary Share, the weighted average number of OrdinaryShares in issue is adjusted to assume the conversion of all dilutive potentialOrdinary Shares. The dilutive potential Ordinary Shares relate to shares grantedunder employee share schemes where the exercise price is less than the averagemarket price of the Ordinary Shares during the period. The effect of thedilutive potential Ordinary Shares is 681,083 shares (2005: 990,459), whichgives a diluted weighted average number of Ordinary Shares of 120,748,127 (2005:120,548,898). 7 Consolidated Statement of Changes in Shareholders' Equity Year ended Year ended 30 30 April 2006 April 2005 Unaudited Unaudited £'000 £'000________________________________________________________________________________ Profit for the financial year 202,147 138,958Dividends paid to shareholders - (19,646)Share buy-backs - (20,656)Shares issued on exercise of share options - 5,667Issue / redemption expenses - (2,841)Share redemptions - (604,153)Actuarial gain/(loss) recognised in the pension scheme 1,925 (3,262)Deferred tax on actuarial gain/(loss) recognised in (578) 978the pension schemeCredit in respect of employee share schemes 6,347 3,533Deferred tax in respect of employee share schemes 6,440 658________________________________________________________________________________Net movement on equity shareholders' funds 216,281 (500,764)Opening equity shareholders' funds 620,909 1,121,673________________________________________________________________________________Closing equity shareholders' funds 837,190 620,909________________________________________________________________________________ 8 Notes to the Consolidated Cash Flow Statement Year ended Year ended 30 April 2006 30 April 2005 Unaudited Unaudited £'000 £'000_________________________________________________________________________________ Net cash flows from operating activities Continuing operationsProfit for the financial year 121,365 114,017Adjustments for:- Tax 43,736 41,439- Depreciation 1,648 2,168- Profit on sale of property, plant and equipment (114) (1,340)- Interest income (19,968) (11,292)- Finance costs 27,304 19,573- Share of results of joint ventures after tax (11,562) (10,358)- Merger expenses - 1,633- Non-cash charge in respect of share awards 6,347 3,533Changes in working capital:- Decrease / (increase) in inventories 154,672 (26,281)- Decrease in receivables 13,292 31,017- (Decrease) / increase in payables (41,242) 34,404- Decrease in employee benefit obligations (301) (359)_________________________________________________________________________________ Cash generated from continuing operations 295,177 198,154Dividends from joint ventures 5,396 459Interest received 19,968 11,292Interest paid (37,254) (7,528)Taxation (35,413) (59,754)_________________________________________________________________________________Net cash from continuing operating activities 247,874 142,623_________________________________________________________________________________ Discontinued operationsProfit for the financial year 80,782 24,941Adjustments for:- Tax 348 10,453- Depreciation 58 413- Profit on sale of property, plant and equipment - (39)- Interest income - (121)- Finance costs 130 317- Share of results of joint ventures after tax - (548)- Profit on disposal of subsidiary undertaking (79,746) -- Non-cash movement in profit on disposal of subsidiary 707 -Changes in working capital:- (Increase) / decrease in inventories (15,785) 14,205- Decrease in receivables 5,925 28,655- (Decrease) / increase in payables (11,161) 12,757_________________________________________________________________________________ Cash generated from discontinued operations (18,742) 91,033Dividends from joint ventures - 1,105Interest received - 121Interest paid (130) (317)_________________________________________________________________________________ Net cash from discontinued operating activities (18,872) 91,942_________________________________________________________________________________ Net cash from operating activities 229,002 234,565_________________________________________________________________________________ Other net cash flows from discontinued operations Net cash from investing activities 248,556 441_________________________________________________________________________________ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Berkeley Group