28th Feb 2006 07:03
Taylor Woodrow PLC28 February 2006 TAYLOR WOODROW plc PRELIMINARY RESULTS STATEMENT (for the year ended 31 December 2005) Highlights • Profit before tax up 2 per cent to £411.0 million (2004: £403.9 million) • Group Housing profit from operations* up 1.6 per cent to £456 million - almost 50 per cent from overseas. • Basic earnings per share up 3 per cent to 50.6 pence (2004: 49.1 pence) • Dividends per share up 21 per cent to 13.4 pence (2004: 11.1 pence) • Equity shareholders' funds per share up 11 per cent to 338.4 pence (2004: 303.8 pence) • Net gearing reduced from 31.6 per cent to 23.7 per cent. • Record group housing order book at £1.32 billion • Record group housing landbank at 75,160 plots. £773 million spend on land, up 39 per cent * Profit from operations and operating margins are pre-exceptional pensioncredits in 2004 and before joint ventures' interest and tax (see Note 1). TheGroup's share of joint venture revenue is used in the margin calculation (seeNote 1). Norman Askew, Chairman of Taylor Woodrow, said today:"2005 has shown the benefits of our strategy of operating in differentgeographical and product markets and allocating capital where we see the bestopportunities." Iain Napier, Chief Executive of Taylor Woodrow, subsequently commented:"2005 was another year of good progress for Taylor Woodrow. Despite a challenging UK market, we have made good progress on strategy byimproving our forward sales position, managing our cost base and providing forfuture growth through increasing the landbank. Our North American businesscontinued its strong performance, benefiting from high levels of capitalinvestment over the last three years. We are confident of another year of growthin our overseas businesses and are well-placed to benefit from any continuedimprovement in customer confidence in the UK." -ends- International Financial Reporting Standards (IFRS)Whilst the financial information included in this preliminary announcement has been prepared in accordance with International Financial Reporting Standards (IFRS), this announcement does not itself contain sufficient information to comply with IFRS. The Company expects to publish full financial statements that comply with IFRS on 28 March 2006. All 2004 comparatives have been restated to comply with IFRS and a full reconciliation of the 2004 income statement, balance sheet and cashflow can be found in the notes to the financial statements when published and at www.taylorwoodrow.com. A presentation to analysts will be made at 10.00 hrs. This presentation will bebroadcast live on taylorwoodrow.com. For further information please contact Ian Morris 0121 600 8520 / 07816 518 767 Taylor Woodrow Media EnquiriesJonathan Drake 0121 600 8394 / 07816 517 039 Taylor Woodrow Investor RelationsBen Woodford / Dan de Belder 020 7861 3232Bell Pottinger Operating Performance Review Results Consolidated revenue for the year to 31 December 2005 was up 5 per cent at£3,476.9m (2004: £3,311.5m). Profit before tax was 2 per cent up on the previousyear at £411.0m (2004: £403.9m), with an increase in housing profit* accompaniedby a smaller contribution from property and construction. At 31 December 2005, equity shareholders' funds was £1,928.4m (2004: £1,702.8m).Net debt was £456.9m (2004: £538.8m). Net gearing was 23.7 per cent (2004: 31.6per cent). Basic earnings per share were 50.6 pence (2004: 49.1 pence). Equityshareholders' funds per share increased by 11.4 per cent to 338.4 pence. Group Housing 2005 2004 Revenue, including joint ventures £m 2,864.9 2,876.6Profit from Operations * £m 456.0 448.8Operating Margin * % 15.9 15.6Home completions 12,516 13,092 Despite challenging conditions in UK markets, we were able to improve averagesales prices by 3 per cent to £204k ( 2004: £199k ) with operating margins up0.3 percentage points to 15.9 per cent through our very strong performance inNorth America. This helped offset the effects of an overall reduction in volumesas housing profit from operations* rose 2 per cent to £456.0m (2004: £448.8m). 49 per cent of 2005 operating profits came from overseas operations (2004: 33per cent). This reflects both our decision to increase investment into thosemarkets over the last few years, and their relative strength compared to the UK. We remain well placed for continuing growth of our housing business, with thegroup order book up 16.5 per cent to £1.32bn (2004: £1.13bn) and the grouplandbank up 18 per cent at 75,160 plots (2004: 63,701 plots). UK Housing 2005 2004 Revenue including share of joint ventures £m 1,647.4 1,936.2Profit from Operations * £m 233.4 301.1Operating Margin * % 14.2 15.6Home completions 8,178 9,053 During 2005, the UK housing market was challenging, with overall demand lowerthan in 2004. We made good progress on strategy by improving our forward salesposition, managing our cost base and providing for future growth throughincreasing the landbank. Against the market average, the company delivered a strong sales performancewith a rate of sales generally exceeding industry norms. Our order book at 31December 2005 increased to £411m, compared to £407m at year-end 2004. Loweraverage selling prices at £185k (2004: £197k), are attributable to a verycompetitive market and a higher proportion of social and apartment completionsthan last year. The average square footage of our homes in the UK also fell as aconsequence from 1,032 sq ft to 960 sq ft. Operating margins* fell to 14.2 per cent (2004: 15.6 per cent). This includesthe benefit of higher than usual land sales during the year, primarily due tothe disposal of our interest in the Quartermile project in Edinburgh, the saleof which was completed in January. We continue to focus on operational performance, reducing overhead costs throughsupply chain management, use of standard products and pull through fromstrategic land. Through our logistics business, WCL we have managed to reducematerials costs, improve quality and speed up delivery times by implementing anintegrated solution that works in partnership with our key materials suppliers. Although planning remains difficult, we have been successful in securingconsents on strategic land and our strategic landbank remains strong with some18,300 gross acres representing 80,000 potential plots. Typically, land acquiredthis way is secured on option at a discount to the open market, and this hashelped us to manage the average cost of plots in our landbank. The benefits ofsuch investment are starting to be realised, with 19 per cent of completions in2005 coming from plots originally sourced from our strategic landbank (2004: 18per cent). Around 41 per cent of our current landbank has been sourced throughour strategic land programme, with benefits to be realised in future years. As a result of this and prudent purchasing in the land market, we have increasedour landbank by 8 per cent to 34,985 plots (2004: 32,459 plots). Our land bankcost per plot remains competitive at £37K (2004: £37K). 68 per cent of ourdevelopments in the UK in 2005 were on brownfield sites (2004: 64%). North America Housing 2005 2004 Revenue including share of joint ventures £m 1,141.8 863.9Profit from Operations * £m 199.6 127.6Operating Margin * % 17.5 14.8Home completions 3,932 3,635 Our operations in North America had an excellent year, benefiting from increasedinvestment and careful target marketing that enabled us to participate morefully in these strong markets. Profit from operations* increased by 56 per centto £199.6m (2004: £127.6m), driven by 8.2 per cent growth in home completionsand a 2.7 percentage point improvement in operating margins. We continue to improve our forward sales position with the order book 14 percent higher (excluding high-rise, 38 per cent) than at year-end 2004, at US$1.42bn and an increase in the landbank by 26 per cent to 37,910 plots (2004: 30,009 plots). More than half our landbank is controlled through options rather than owned,which improves capital efficiency. We also continue actively to manage our landbank by selling plots to other builders where we consider it to be valuecreating. In Florida, where we offer a wide range of middle market to luxury homes andcondominiums targeted to move-up families, retirees, and second home purchasers,the market is still strong. During 2005, we completed 752 homes (2004: 505) atan average sales price increasing to US$727k (2004: US$544k). These results wereenhanced significantly by three high-rise beachfront condominiums that completedin the second half of the year. The market also remained strong in 2005 in California, with our home completionsup 3% at 721 homes (2004: 697) but some parts of the market are showing signs ofcooling after several years of exceptional price appreciation. We have thereforecontinued to operate mainly in the stronger mid-market as opposed to the luxurysegment. We have also expanded our footprint in California by re-entering thePalm Springs market. The average sales price in 2005 was US$835k (2004:US$776k). Our Arizona division serves the Phoenix metropolitan area and continued itsexceptional performance, targeting entry level and mid-market homebuyers.Although recent sales releases have suggested some moderation in the marketPhoenix remains one of the fastest growing cities in the US, benefiting frommigration from other less affordable markets. Home completions increased by 20per cent to 1,009 (2004: 841) with average sales price up 14 per cent to US$209k(2004: US$183k). In Texas we are growing our homebuilding operations in both Austin and Houston.We are targeting the move-up segment by leveraging our existing reputation as ahigh quality community developer. Home completions increased by 102 per cent to190 (2004: 94) with average sales price down 4 per cent to US$424k (2004:US$440k). 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 southern Ontario, Monarch builds both low-rise, mid-marketfamily homes and high-rise condominiums as well as affordable, urban town-homes.Completions in the year of 2005 were 1,260 homes (2004: 1,498). The averagesales price was Can$326k (2004: Can$302k). Given the strength of its landbank and forward sales book, our North Americanbusiness is well placed to drive continued growth. Spain & Gibraltar Housing 2005 2004 Revenue £m 75.7 76.5Profit from Operations £m 23.0 20.1Operating Margin % 30.4 26.3Home completions 406 404 Trading under the Taylor Woodrow brand in Spain, we operate on the Costa del Sol, Costa Blanca and in Mallorca. Developments range from high-value villa-typecommunity and country-club projects to homes targeted at the local market.Completions increased by 1 per cent, with average sales prices down by 5 percent to £169k (2004: £178k) reflecting a change in geographic mix. Profits fromoperations rose to £23.0m, up 14 per cent on 2004, while operating margins grewby 4.1 percentage points to 30.4 per cent. The order book increased 8 per cent at £81m (2004: £75m) and we invested forfuture growth by increasing our landbank by 84 per cent to 2,265 plots (2004:1,233 plots) In Gibraltar, Taylor Woodrow serves the luxury second home market throughapartment and penthouse developments. Construction Our Construction business continues to build on its reputation with a growingportfolio of blue-chip and public sector clients, including Tesco, Texaco andthe NHS. The profit from operations* was £8.8m (2004:£17.8m), with more than 50per cent of the reduction accounted for by lower income from PFI disposals. Property The disposal of the final substantive part of the company's historic propertyportfolio was achieved with the sale of the K2 development at St Katharine'sDock. Completed on 1 July 2005, this achieved a gross profit of £17.4m. Overall,the property business recorded a profit from operations of £15.7m (2004:£26.7m). Shareholders' funds Equity shareholders' funds at the end of 2005 were £1,928.4m, up from £1,702.8mat the end of 2004. Equity shareholders' funds per share rose to 338.4 pence atthe end of 2005. This represents an increase of 11.4 per cent from the previousyear. Shareholders' returns Basic earnings per share increased by 3.1 per cent to 50.6 pence. The proposedfinal dividend of 8.9 pence produces a total return of 13.4 pence per ordinaryshare, an increase of 21 per cent over last year. During the year, the board decided to re-balance the levels of interim and finaldividends to reflect a more usual weighting of profits between the first andsecond halves of the financial year. The dividend is covered 3.8 times byearnings. Cash flow Operating cashflows before movements in working capital were £461.1m (2004:£493.4m). inventories increased by £204.9m which was partly funded by anincrease in creditors of £112.6m. Of this latter increase, £92m is representedby an increase in land creditors. Cash generated by operations was £359.7m(2004: £410.5m). Income taxes and interest payments totalled £229.5m (2004:£212.4m), resulting in net cash flows from operating activities being down by 34per cent to £130.2m (2004: £198.1m). Treasury Management and Funding Net debt at the year end stood at £456.9m (2004: £538.8m) equivalent to netgearing of 23.7 per cent (2004: 31.6 per cent). Interest on borrowings, lessinterest receivable, was £54.4m (2004: £60.0m) (See note 2). Average net debtfor the year was £823.4m (2004: £946.9m). At the year end Taylor Woodrow hadundrawn committed revolving credit facilities totaling £685m. Taxation The effective tax rate in 2005 is 30.3 per cent (2004: 30.4 per cent). Pensions At 31 December 2005, the IAS 19 deficit net of deferred tax was £154 million(2004: £100 million). The increase has been caused by continuing falls in theyield of AA - credit rated corporate bonds. The company has commenced discussionwith the trustees with a view to reaching agreement on the means of mitigatingthis deficit. Outlook for 2006 We look forward to another year of growth in North America based upon a strongforward order book and well-positioned landbank. We aim to be over 80 per centforward sold by the half year. Our selected markets remain robust with Floridaand Texas in particular continuing to enjoy stronger than normal demand. Whilst we have seen encouraging increases in both visitor numbers andreservations, together with a decline in cancellation rates, compared to thesame period in 2005, it is still too early to predict the UK market for 2006. UK reservations are slightly ahead of last year although we are currentlyoperating off fewer sites than this time last year. Our site opening programmewill result in average site numbers increasing by around 4 per cent on 2005providing for growth in home completions over the year. A greater proportion ofour homes will be standard house types increasing average size with higher ASPs. The UK housing market remains very attractive in the medium term continuing tobe fundamentally underpinned by supply-demand imbalance, relatively low interestrates and generally benign economic conditions. We will continue to invest in and grow our businesses in Spain and Gibraltar.Construction is likely to remain stable. We will maintain our strategy of a balanced portfolio with the UK, North Americaand Spain providing alternative growth channels and the capacity to mitigateexposure to any one market. Consolidated income statement for the year ended to 31 December 2005 Note 2005 2004 £m £m Continuing operationsRevenue: Group and share of joint ventures 1 3,556.4 3,361.2Less share of joint ventures (79.5) (49.7) -------- -------- Consolidated revenue 1 3,476.9 3,311.5Cost of sales (2,831.7) (2,649.6) -------- --------Gross profit 645.2 661.9Profit on disposal of propertiesand investments 10.2 21.7Administrative expenses (195.4) (179.9)Share of results of joint ventures 15.0 8.8 -------- --------Profit from operations 1 475.0 512.5 Interest receivable 8.3 6.3Finance costs 2 (72.3) (114.9) -------- --------Profit before tax 411.0 403.9 Tax 3 (124.5) (123.0) -------- --------Profit for the year 286.5 280.9 -------- -------- Attributable to:Equity holders of the parent 285.7 280.3Minority interest 0.8 0.6 -------- -------- 286.5 280.9 -------- -------- Earnings per shareFrom continuing operationsBasic 5 50.6p 49.1p -------- -------- Diluted 5 49.8p 48.8p -------- -------- Consolidated statement of recognised income and expense for the year ended to 31 December 2005 2005 2004 £m £m -------- -------- Net exchange differences on translation of foreign operations 36.4 (6.5) Actuarial (losses)/gains on defined benefit pension schemes (73.3) 15.6 Tax on actuarial (losses)/gains taken directly toequity 22.0 (5.0) -------- --------Net (expense)/income recognised directly in equity (14.9) 4.1Profit for the year 286.5 280.9 -------- --------Total recognised income for the year 271.6 285.0 -------- -------- Attributable to:Equity holders of parent 270.8 284.4Minority interests 0.8 0.6 -------- -------- 271.6 285.0 -------- -------- Reconciliation of movements in consolidated equity for the year to 31 December 2005 Note 2005 2004 £m £m Total recognised income for the year 271.6 285.0Dividends on equity shares 4 (71.3) (53.9)New share capital subscribed 9.8 3.7Proceeds from sale of own shares 7.3 3.2Purchase of own shares - (46.9)Share-based payment credit 5.9 -Increase/(decrease) in share-based payment tax reserve 1.2 (0.4)Credit to equity relating to own shares 1.3 -Increase in other reserve 0.6 -Decrease in minority interests (0.9) (0.7) -------- --------Net increase in equity 225.5 190.0Opening equity 1,703.8 1,513.8 -------- --------Closing equity 1,929.3 1,703.8 -------- -------- Consolidated balance sheet at 31 December 2005 2005 2004 £m £m Non-current assetsGoodwill 363.9 363.2Property and plant 24.4 24.2Investment property - -Interests in joint ventures 92.1 87.0Other financial assets 17.8 26.5Deferred tax assets 101.2 71.1 ------- -------- 599.4 572.0 ------- --------Current assetsInventories 2,699.6 2,422.2Trade and other receivables 301.3 282.5Cash and cash equivalents 197.3 114.9 ------- -------- 3,198.2 2,819.6 ------- --------Total assets 3,797.6 3,391.6 ------- -------- Current liabilitiesTrade and other payables (822.1) (709.7)Tax liabilities (61.6) (67.8)Debenture loans (6.5) (16.2)Bank overdrafts and loans (9.0) (16.5) ------- -------- (899.2) (810.2) ------- --------Net current assets (2,299.0) 2,009.4 ------- -------- Non-current liabilitiesTrade and other payables (76.2) (73.6)Debenture loans (638.0) (620.7)Bank loans (0.7) (0.3)Retirement benefit obligation (222.5) (146.3)Deferred tax liabilities (0.9) (6.8)Long-term provisions (30.8) (29.9) ------- -------- (969.1) (877.6) ------- -------- ------- --------Total liabilities (1,868.3) (1,687.8) ------- -------- ------- --------Net assets 1,929.3 1,703.8 ------- -------- EquityShare capital 148.0 146.7Share premium account 756.2 748.1Revaluation reserve 0.5 0.7Own shares (53.9) (57.8)Share-based payment tax reserve 4.0 2.8Capital redemption reserve 31.5 31.5Other reserve 5.4 4.8Translation reserve 29.9 (6.5)Retained earnings 1,006.8 832.5 ------- --------Equity attributable to equity holders of the parent 1,928.4 1,702.8Minority interests 0.9 1.0 ------- --------Total equity 1,929.3 1,703.8 ------- -------- Consolidated cash flow statement for the year to 31 December 2005 Note 2005 2004 £m £mNet cash from operating activities 6 130.2 198.1 Investing activitiesInterest received 8.3 6.3Dividends received from joint ventures 3.0 2.2Proceeds on disposal of properties, plantand investments 13.9 189.9Purchases of properties, plant and investments (6.3) (8.5)Amounts invested in joint ventures (22.8) (21.2)Amounts repaid by joint ventures 27.2 12.5 -------- --------Net cash from investing activities 23.3 181.2 -------- -------- Financing activities Equity dividends paid (71.3) (53.9)Dividends paid by subsidiaries to minorityshareholders (0.9) (0.7)Issue of ordinary share capital 9.8 3.7Proceeds from sale of own shares 7.3 3.2Purchase of own shares - (50.3)Redemption of preference shares - (100.0)New debenture loans raised 1.8 334.4New bank loans raised 410.2 339.4Repayment of debenture loans (18.5) (116.6)Repayment of bank loans (416.2) (771.4)Increase in bank overdrafts (2.3) 6.0 -------- --------Net cash used in financing activities (80.1) (406.2) -------- -------- -------- --------Net increase/(decrease) in cash and cash 73.4 (26.9)equivalentsCash and cash equivalents at beginning of year 114.9 143.8Effect of foreign exchange rate changes 9.0 (2.0) -------- --------Cash and cash equivalents at end of year 197.3 114.9 -------- -------- Notes to the financial statements for the year to 31 December 2005 1. Business segments For management purposes, the Group is currently organised into five operatingdivisions - Housing - United Kingdom, Housing - North America, Housing - Spainand Gibraltar, Property and Construction. These divisions are the basis on whichthe Group reports its primary segment information. Segment information about these businesses is presented below. Housing Housing Housing Housing Property Construction Consolidated United North Spain and Total Kingdom America Gibraltar 2005 £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-segmentsales 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 andshare of jointventures 1,647.4 1,141.8 75.7 2,864.9 192.0 499.5 3,556.4 ------- ------ ------- ------ ------- -------- -------- Inter-segment construction and housing revenue relates to construction contractsconducted on an arms-length basis. Result:Profit beforejoint 227.4 185.6 23.0 436.0 15.7 8.3 460.0venturesShare 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 228.0 199.5 23.0 450.5 15.7 8.8 475.0operationsInterest 8.3receivableFinance costs (72.3) ------- ------ ------- ------ ------- -------- --------Profit before 411.0taxTax (124.5) ------- ------ ------- ------ ------- -------- --------Profit for the year 286.5 ------- ------ ------- ------ ------- -------- -------- *Profit is profit from operations before joint ventures' interest and tax. Otherinformation:Property and plant additions 0.9 1.4 0.1 2.4 - 3.8 6.2 Depreciation - plant 1.1 0.8 0.2 2.1 - 3.7 5.8 ------- ------ ------- ------ ------- -------- -------- Notes to the financial statements for the year to 31 December 2005 1. Business segments continued Housing Housing Housing Total Property Construction Consolidated United North Spain and Housing Kingdom America Gibraltar 2005 2005 2005 2005 £m £m £m £m £m £m £m 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 cashequivalents 197.3 -------Consolidatedtotal assets 3,797.6 ------- Liabilities:Segmentliabilities (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 1,585.1 495.6 57.5 2,138.2 7.8 (123.7) 2,022.3employed Goodwill 363.9Net debt (456.9) -------Net assets 1,929.3 Notes to the financial statements for the year to 31 December 2005 1. Business segments continued Housing Housing Housing Housing Property Construction Consolidated United North Spain and Total Kingdom America Gibraltar 2004 2004 2004 2004 2004 2004 2004 2004 £m £m £m £m £m £m £mRevenue:External sales 1,899.1 851.3 76.5 2,826.9 74.2 410.4 3,311.5Inter-segmentsales - - - - - 134.9 134.9Eliminations - - - - - (134.9) (134.9) ------- ------- ------- ------- ------- ------- -------Total revenue 1,899.1 851.3 76.5 2,826.9 74.2 410.4 3,311.5Share of jointventures'revenue 37.1 12.6 - 49.7 - - 49.7 ------- ------- ------- ------- ------- ------- -------Group andshare of jointventures 1,936.2 863.9 76.5 2,876.6 74.2 410.4 3,361.2 ------- ------- ------- ------- ------- ------- ------- Result:Profit beforejointventures and exceptionalitem 294.2 120.1 20.1 434.4 26.7 17.8 478.9Share of jointventures' profit 6.9 7.5 - 14.4 - - 14.4 ------- ------- ------- ------- ------- ------- ------- Profit beforeexceptional item* 301.1 127.6 20.1 448.8 26.7 17.8 493.3Exceptional item* 11.6 0.9 - 12.5 - 12.3 24.8 ------- ------- ------- ------- ------- ------- -------Profit* 312.7 128.5 20.1 461.3 26.7 30.1 518.1Share of jointventures' interest and tax (5.5) (0.1) - (5.6) - - (5.6) ------- ------- ------- ------- ------- ------- ------- Profit from operations 307.2 128.4 20.1 455.7 26.7 30.1 512.5Interest receivable 6.3Finance costs (114.9) ------- ------- ------- ------- ------- ------- -------Profit before tax 403.9Tax (123.0) ------- ------- ------- ------- ------- ------- -------Profit for the year 280.9 ------- The exceptional item relates to the curtailment of pension liability. Otherinformation:Property and plant additions 1.7 1.0 0.1 2.8 - 3.4 6.2Depreciation - plant 2.0 0.8 0.3 3.1 - 3.6 6.7 ------- ------- ------- ------- ------- ------- ------- Notes to the financial statements for the year to 31 December 2005 1. Business segments continued Housing Housing Housing Housing Property Construction Consolidated United North Spain and Total Kingdom America Gibraltar 2004 2004 2004 2004 2004 2004 2004 2004 £m £m £m £m £m £m £m Assets:Segment assets 1,998.6 517.8 81.1 2,597.5 159.4 121.9 2,878.8Share of jointventures'assets 147.7 49.2 - 196.9 - 0.1 197.0Eliminations (150.0) (12.2) - (162.2) - (0.1) (162.3) ------- ------- ------- ------- ------- ------- ------- 1,996.3 554.8 81.1 2,632.2 159.4 121.9 2,913.5 Goodwill 363.2Cash and cashequivalents 114.9 -------Consolidatedtotal assets 3,391.6 ------- Liabilities:Segmentliabilities (513.9) (238.9) (38.0) (790.8) (17.3) (226.0) (1,034.1)Share of jointventures'liabilities (150.0) (12.2) - (162.2) - (0.1) (162.3)Eliminations 150.0 12.2 - 162.2 - 0.1 162.3 ------- ------- ------- ------- ------- ------- ------- (513.9) (238.9) (38.0) (790.8) (17.3) (226.0) (1,034.1) ------- ------- ------- ------- ------- -------Gross debt (653.7) -------Consolidatedtotalliabilities (1,687.8) ------- Capitalemployed 1,482.4 315.9 43.1 1,841.4 142.1 (104.1) 1,879.4 Goodwill 363.2Net debt (538.8) -------Net assets 1,703.8 ------- 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 property division is located in the United Kingdom. The constructiondivision 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 2005 2004 £m £m United Kingdom 2,248.4 2,336.5North America 1,102.1 851.3Rest of the world 126.4 123.7 -------- -------- 3,476.9 3,311.5 -------- -------- Notes to the financial statements for the year to 31 December 2005 1. Business segments continued 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 2005 2004 2005 2004 £m £m £m £m United Kingdom 2,725.5 2,638.6 1.2 2.7North America 902.2 633.2 1.4 1.0Rest of theworld 169.9 119.8 3.6 2.5 -------- -------- -------- -------- 3,797.6 3,391.6 6.2 6.2 -------- -------- -------- -------- 2. Finance costs 2005 2004 £m £m Interest on bank overdrafts and loans 20.6 31.5Interest on debenture loans 42.1 33.55.09875% preference dividend - 1.3 -------- --------Interest on borrowings 62.7 66.3Exceptional loss on repurchase of 9.5% first mortgagedebenture stock 2014 - 41.1Amortisation of discount on land creditors 5.4 3.2Notional interest on pension liability 4.2 4.3 -------- -------- 72.3 114.9 -------- -------- 3. Taxation 2005 2004 £m £m -------- -------- Current tax:UK Corporation tax: Current year 111.8 66.1 Prior year (9.7) 1.8Relief for foreign tax (63.0) (1.3)Foreign tax: Current year 82.3 60.8 Prior year 14.2 (0.4) -------- -------- 135.6 127.0 -------- -------- Deferred tax:UK: Current year 9.0 (1.3) Prior year 1.2 0.5Foreign: Current year (7.3) (4.7) Prior year (14.0) 1.5 -------- -------- (11.1) (4.0) -------- -------- -------- -------- 124.5 123.0 -------- -------- UK Corporation tax is calculated at 30% (2004: 30%) of the estimated assessableprofit for the year. Taxation for other jurisdictions is calculated at the ratesprevailing in the respective jurisdictions. Notes to the financial statements for the year to 31 December 2005 4. Dividends 2005 2004 £m £mAmounts recognised as distributions to equity holdersin the year:Final dividend for the year to 31 December 2004 of 8.1p (2003: 6.5p) per share 45.5 37.4Interim dividend for the year to 31 December 2005 of 4.5pper share (2004: 3.0p) 25.8 16.5 -------- -------- 71.3 53.9 -------- -------- 2005 2004 £m £m Proposed final dividend for the year to 31 December 2005of 8.9p (2004: 8.1p) per share 52.7 45.5 -------- -------- The proposed final dividend is subject to approval at the Annual General Meetingand has not been included as a liability in these financial statements. 5. Earnings per share Earnings per share 2005 2004 Basic 50.6p 49.1pDiluted 49.8p 48.8pAdjusted basic 50.6p 51.1pAdjusted diluted 49.8p 50.8p -------- -------- The calculation of basic, diluted, adjusted basic and adjusted diluted earningsper share is based on the following data: Earnings 2005 2004 £m £mEarnings for basic earnings per share and dilutedearnings per share 285.7 280.3Add/(less): Curtailment of pensions liability - (24.8) Loss on repurchase of debt - 41.1Less: Tax effect of above items - (4.9) -------- --------Earnings for adjusted basic and adjusted dilutedearnings per share 285.7 291.7 -------- -------- Weighted average number of shares 2005 2004 m m For basic and adjusted basic earnings per share 564.6 570.4Weighted average of dilutive options 7.8 3.1Weighted average of dilutive awards under bonus plans 1.1 1.0 -------- -------- For diluted and adjusted diluted earnings per share 573.5 574.5 -------- -------- Notes to the financial statements for the year to 31 December 2005 6. Note to the consolidated cash flow statement 2005 2004 £m £m Profit from operations 475.0 512.5Adjustments for: Exchange adjustments - 6.3 Depreciation of plant 5.8 6.7 Share-based payment charge 5.9 - Gain on disposal of property, plant and investments (10.2) (21.7) Share of joint ventures' operating profit (15.0) (8.8) Decrease in provisions (0.4) (1.6) -------- --------Operating cash flows before movement in workingcapital 461.1 493.4 Increase in inventories (204.9) (12.2) (Increase)/decrease in receivables (9.1) 42.1 Increase/(decrease) in payables 112.6 (112.8) -------- -------- Cash generated by operations 359.7 410.5Income taxes paid (153.7) (98.4)Interest paid (75.8) (114.0) -------- --------Net cash from operating activities 130.2 198.1 Net Debt 2005 2004 £m £m Cash and cash equivalents 197.3 114.9Debenture loans (644.5) (636.9)Bank overdrafts and bank loans (9.7) (16.8) -------- -------- (456.9) (538.8) -------- -------- Cash and cash equivalents (which are presented as a single class of asset on theface of the balance sheet) comprise cash at bank and other short-term highlyliquid investments with a maturity of three months or less. 7. Statutory Accounts The Preliminary Accounts were approved by the board of directors on 27 February2006. These accounts do not constitute the company's statutory accounts for theyears ended 31 December 2005 or 2004 (as restated for IFRS) but are derived fromthose accounts. Statutory accounts for 2004 have been delivered to the Registrarof Companies and those for 2005 will be delivered following the company's annualgeneral meeting. The auditors have reported on these accounts; their reportswere unqualified and did not contain a statement under section 237 (2) or (3) ofthe Companies Act 1985. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Taylor Wimpey