30th May 2006 07:03
Vodafone Group Plc30 May 2006 Vodafone Group PlcPreliminary Results for the year ended 31 March 2006PART 3 CONSOLIDATED INCOME STATEMENT 2006 2005 Notes £m £mRevenue 2 29,350 26,678 Cost of sales (17,070) (15,800) ---------- ----------Gross profit 12,280 10,878 Selling and distribution expenses (1,876) (1,649)Administrative expenses (3,416) (2,856)Share of result in associated undertakings 2,428 1,980Impairment losses 3 (23,515) (475)Other income and expense 15 - ---------- ----------Operating (loss)/profit 2 (14,084) 7,878 Non-operating income and expense (2) (7)Investment income 353 294Financing costs (1,120) (880) ---------- ----------(Loss)/profit before taxation (14,853) 7,285 Tax on (loss)/profit 4 (2,380) (1,869) ---------- ----------(Loss)/profit for the financial year fromcontinuing operations (17,233) 5,416 (Loss)/profit from discontinued operations (4,588) 1,102 ---------- ----------(Loss)/profit for the financial year (21,821) 6,518 ========== ========== Attributable to:- Equity shareholders (21,916) 6,410- Minority interests 95 108 Basic (loss)/earnings per share from continuingoperations (27.66)p 8.12p Diluted basic (loss)/earnings per share from continuing operations (27.66)p 8.09p Basic (loss)/earnings per share on (loss)/profitfor the financial year (35.01)p 9.68p Diluted basic (loss)/earnings per share on (loss)/profit for the financial year (35.01)p 9.65p CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE 2006 2005 £m £mGains on revaluation of available-for-sale investments 705 106Exchange differences on translation of foreignoperations 1,494 1,488Actuarial losses on defined benefit pension schemes (30) (79)Revaluation gain 112 - ---------- ----------Transfer to the income statement on disposal of foreignoperations 36 - ---------- ----------Net income recognised directly in equity 2,317 1,515 (Loss)/profit for the financial year (21,821) 6,518 ---------- ----------Total recognised income and expense relating to thefinancial year (19,504) 8,033 ========== ========== Attributable to:- Equity shareholders (19,607) 7,958- Minority interests 103 75 CONSOLIDATED BALANCE SHEET 2006 2005 £m £mNon-current assetsIntangible assets 69,118 97,148Property, plant and equipment 13,660 17,442Investments in associated undertakings 23,197 20,234Other investments 2,119 1,181Deferred tax assets 140 1,184Post employment benefits 19 12Trade and other receivables 361 585 ---------- ---------- 108,614 137,786 ---------- ----------Current assetsInventory 297 440Taxation recoverable 8 38Trade and other receivables 4,438 5,164Cash and cash equivalents 2,789 3,769 ---------- ---------- 7,532 9,411 ---------- ---------- Assets included in disposal group held for resale 10,592 - ---------- ----------Total assets 126,738 147,197 ========== ========== EquityCalled up share capital 4,165 4,286Share premium account 52,444 52,284Own shares held (8,198) (5,121)Additional paid in capital 100,152 100,081Capital redemption reserve 128 -Accumulated other recognised income and expense 4,090 1,781Retained losses (67,356) (39,511) ---------- ----------Total equity shareholders' funds 85,425 113,800 Minority interests (113) (152) ---------- ----------Total equity 85,312 113,648 ---------- ---------- Non-current liabilitiesLong-term borrowings 16,750 13,190Deferred tax liabilities 5,670 4,849Post employment benefits 120 136Provisions for other liabilities and charges 265 319Other payables 566 438 ---------- ---------- 23,371 18,932 ---------- ----------Current liabilitiesShort-term borrowings 3,448 2,003Current taxation liabilities 4,448 4,353Trade payables and other payables 7,477 8,033Provisions for other liabilities and charges 139 228 ---------- ---------- 15,512 14,617 ---------- ---------- Liabilities included in disposal group held for resale 2,543 - ---------- ----------Total equity and liabilities 126,738 147,197 ========== ========== CONSOLIDATED CASH FLOW STATEMENT 2006 2005 Note £m £m Net cash flows from operating activities 7 11,841 10,979 --------- ---------Cash flows from investing activitiesPurchase of interests in subsidiaryundertakings and jointly controlled entities, net of cash acquired (4,186) (2,461)Disposal of interests in subsidiaryundertakings, net of cash disposed 599 444Purchase of intangible fixed assets (690) (699)Purchase of property, plant and equipment (4,481) (4,279)Purchase of investments (57) (19)Disposal of property, plant and equipment 26 68Disposal of investments 1 22Loans to businesses sold or acquired businessesheld for sale - 110Dividends received from associated undertakings 835 1,896Dividends received from investments 41 19Interest received 319 339 --------- ---------Net cash flows from investing activities (7,593) (4,560) --------- --------- Cash flows from financing activitiesIssue of ordinary share capital and re-issue oftreasury shares 356 115Net movement in short-term borrowings 708 -Proceeds from issue of long term borrowings 5,256 -Repayment of borrowings (1,371) (1,824)Loans repaid to associated undertakings (47) (2)Purchase of treasury shares (6,457) (4,053)Equity dividends paid (2,749) (1,991)Dividends paid to minority shareholders insubsidiary undertakings (51) (32)Interest paid (721) (744) --------- ---------Net cash flows from financing activities (5,076) (8,531) --------- --------- Net decrease in cash and cash equivalents (828) (2,112) Cash and cash equivalents at the beginning ofthe financial year 3,726 5,809Exchange gain on cash and cash equivalents 34 29 --------- ---------Cash and cash equivalents at the end of thefinancial year 2,932 3,726 ========= ========= NOTES TO THE PRELIMINARY ANNOUNCEMENT OF RESULTSFOR THE YEAR ENDED 31 MARCH 2006 1 Basis of preparation The preliminary results for the year ended 31 March 2006 are an abridgedstatement of the full Annual Report, which was approved by the Board ofDirectors on 30 May 2006. The Auditors' Report on these accounts was unqualifiedand did not contain statements under section 237(2) or 237(3) of the CompaniesAct 1985. The preliminary results do not comprise statutory accounts within themeaning of section 240 of the UK Companies Act 1985. The Annual Report for theyear ended 31 March 2006 will be delivered to the Registrar of Companiesfollowing the Company's Annual General Meeting, to be held on 25 July 2006. The preliminary results are prepared in accordance with International FinancialReporting Standards ("IFRS") (including International Accounting Standards("IAS") and interpretations issued by the International Accounting StandardsBoard ("IASB") and its committees, and as interpreted by any regulatory bodiesapplicable to the Group) as adopted for use in the European Union ("EU"), theCompanies Act 1985 and Article 4 of the IAS Regulations. Financial informationfor the year ended 31 March 2005, presented as comparative figures in thisreport, has been restated from UK GAAP in accordance with IFRS as adopted foruse in the EU. The Group has adopted the Amendments to IAS 21, "The Effect ofChanges in Foreign Exchange Rates", with effect from 1 April 2004, being thedate of transition to IFRS for the Group. The preparation of the preliminary results requires management to make estimatesand assumptions that affect the reported amounts of assets and liabilities, anddisclosure of contingent assets and liabilities at the balance sheet date, andthe reported amounts of revenue and expenses during the reporting period. Actualresults could vary from these estimates. The estimates and underlyingassumptions are reviewed on an ongoing basis. Revisions to accounting estimatesare recognised in the period in which the estimate is revised if the revisionaffects only that period or in the period of the revision and future periods ifthe revision affects both current and future periods. 2 Segmental and other analyses The Group's principal business is the supply of mobile telecommunicationsservices and products. Other operations primarily comprise fixed linetelecommunications businesses. Analyses of revenue and operating profit bygeographical region and class of business are as follows: Year ended 31 March 2006 ------------------------------------------------------------------------------------------------------------------- Revenue Less: between Intra- Inter- mobile Segment Joint segment Common(2) Segment Net and other Group revenue Subsidiaries ventures revenue functions revenue revenue operations revenue £m £m £m £m £m £m £m £m £m-------------------------------------------------------------------------------------------------------------------Continuing operations Mobiletelecommunications:Germany(1) 5,754 5,754 - - (64) 5,690 (91) 5,599Italy(1) 4,363 - 4,363 - (44) 4,319 - 4,319Spain(1) 3,995 3,995 - - (105) 3,890 - 3,890UK(1) 5,048 5,048 - - (65) 4,983 - 4,983US(1) - - - - - - - -Other mobile(1) 9,250 7,812 1,470 (32) (121) 9,129 (1) 9,128Common functions 145 (19) 126 - 126-------------------------------------------------------------------------------------------------------------------Total 28,410 22,609 5,833 (32) 145 (418) 28,137 (92) 28,045 Other operations:Germany(1) 1,320 1,320 - - - 1,320 (34) 1,286Other(1) 19 - 19 - - 19 - 19-------------------------------------------------------------------------------------------------------------------Total 1,339 1,320 19 - - 1,339 (34) 1,305------------------------------------------------------------------------------------------------------------------- 29,749 23,929 5,852 (32) 145 (418) 29,476 (126) 29,350===================================================================================================================DiscontinuedoperationsJapan(1)(4) 7,268 7,268 - - - (2) 7,266 - 7,266=================================================================================================================== ---------------------------------------------------------------------------------------------------------------------- Adjusted Segment Joint Common(2) Operating Other(3) operating result Subsidiaries ventures functions Associates profit Adjustments profit £m £m £m £m £m £m £m £m----------------------------------------------------------------------------------------------------------------------Continuing operationsMobiletelecommunications:Germany(1) (17,904) (17,904) - - (17,904) 19,400 1,496Italy(1) (1,928) - (1,928) - (1,928) 3,600 1,672Spain(1) 968 968 - - 968 - 968UK(1) 698 698 - - 698 - 698US(1) - - - 1,732 1,732 - 1,732Other mobile(1) 1,296 933 363 712 2,008 495 2,503Commonfunctions 215 8 223 (12) 211----------------------------------------------------------------------------------------------------------------------Total (16,870) (15,305) (1,565) 215 2,452 (14,203) 23,483 9,280 Other operations:Germany(1) 139 139 - 139 - 139Other(1) 4 - 4 (24) (20) - (20)----------------------------------------------------------------------------------------------------------------------Total 143 139 4 (24) 119 - 119---------------------------------------------------------------------------------------------------------------------- (16,727) (15,166) (1,561) 215 2,428 (14,084) 23,483 9,399======================================================================================================================DiscontinuedoperationsJapan(1)(4) (4,445) (4,445) - - - (4,445) 4,900 455======================================================================================================================(1) Reportable segments (2) Common functions represents results from Partner Markets and unallocated central Group income and expenses (3) Comprises impairments to the carrying value of goodwill relating to the mobile operations in Germany, Italy and Sweden amounting to £23,515 million offset by £17 million of non-operating income in relation to the Group's associated undertakings and £15 million of other items. The adjustment to discontinued operations represents an impairment loss following the announcement of the sale of Vodafone Japan (4) Operations relate entirely to the supply of mobile telecommunications services and products Year ended 31 March 2005------------------------------------------------------------------------------------------------------------------- Revenue Less: between Intra- Inter- mobile Segment Joint segment Common(2) Segment Net and other Group revenue Subsidiaries ventures revenue functions revenue revenue operations revenue £m £m £m £m £m £m £m £m £m-------------------------------------------------------------------------------------------------------------------Continuing operationsMobiletelecommunications:Germany(1) 5,684 5,684 - - (51) 5,633 (110) 5,523Italy(1) 4,273 - 4,273 - (36) 4,237 - 4,237Spain(1) 3,261 3,261 - - (80) 3,181 - 3,181UK(1) 5,065 5,065 - - (47) 5,018 - 5,018US(1) - - - - - - - -Other mobile(1) 7,637 6,474 1,184 (21) (84) 7,553 - 7,553Commonfunctions 123 (5) 118 (1) 117-------------------------------------------------------------------------------------------------------------------Total 25,920 20,484 5,457 (21) 123 (303) 25,740 (111) 25,629 Other operations:Germany(1) 1,095 1,095 - - - 1,095 (46) 1,049Other(1) - - - - - - - --------------------------------------------------------------------------------------------------------------------Total 1,095 1,095 - - - 1,095 (46) 1,049------------------------------------------------------------------------------------------------------------------- 27,015 21,579 5,457 (21) 123 (303) 26,835 (157) 26,678======================================================================================================================DiscontinuedoperationsJapan(1) (4) 7,396 7,396 - - (1) 7,395 - 7,395====================================================================================================================== ---------------------------------------------------------------------------------------------------------------------- Adjusted Segment Joint Common(2) Operating Other operating result Subsidiaries ventures functions Associates profit Adjustments profit £m £m £m £m £m £m £m £m----------------------------------------------------------------------------------------------------------------------Continuing operationsMobiletelecommunications:Germany(1) 1,473 1,473 - - 1,473 - 1,473Italy(1) 1,694 - 1,694 - 1,694 - 1,694Spain(1) 775 775 - - 775 - 775UK(1) 779 779 - - 779 - 779US(1) - - - 1,354 1,354 - 1,354Other mobile(1) 1,198 893 305 671 1,869 475 2,344Commonfunctions (85) (85) - (85)----------------------------------------------------------------------------------------------------------------------Total 5,919 3,920 1,999 (85) 2,025 7,859 475 8,334 Other operations:Germany(1) 64 64 - - 64 - 64Other(1) - - - (45) (45) - (45)----------------------------------------------------------------------------------------------------------------------Total 64 64 - (45) 19 - 19---------------------------------------------------------------------------------------------------------------------- 5,983 3,984 1,999 (85) 1,980 7,878 475 8,353======================================================================================================================DiscontinuedoperationsJapan(1)(4) 664 664 - - 664 - 664====================================================================================================================== (1) Reportable segments(2) Common functions represents results from Partner Markets and unallocated central Group income and expenses(3) Impairment to the carrying value of goodwill relating to Vodafone Sweden(4) Operations relate entirely to the supply of mobile telecommunications services and products 3 Impairment losses 2006 2005 £m £mGermany 19,400 -Italy 3,600 -Sweden 515 475 --------- ------- 23,515 475 ========= ======= Germany and Italy The carrying value of goodwill of the Group's mobile operations in Germany andItaly, with each representing a reportable segment, has been impaired due toVodafone having revised its view of medium to longer term prospects for thesebusinesses given certain developments in the current market environment. The German market has seen recent intensification in price competition,principally from new market entrants, together with high levels of penetrationand continued regulated reductions in incoming call rates. In Italy, competitive pressures are increasing with the mobile network operatorscompeting aggressively on subsidies and, increasingly, on price. Sweden The impairment of the carrying value of goodwill in relation to Vodafone Swedenin the year to 31 March 2006 resulted from fierce competition in the Swedishmarket combined with onerous 3G licence obligations. Vodafone Sweden representsthe Group's entire business operation in Sweden and forms part of the Group'sOther Mobile Operations, which is a reportable segment. The recoverable amountof Vodafone Sweden was based on the fair value less costs to sell, reflectingthe announcement on 31 October 2005 that the Group's 100% interest in VodafoneSweden was to be sold. The sale completed on 5 January 2006 with net cashproceeds, after assumption of net debt by the purchaser, of €953 million (£653million). 4 Taxation 2006 2005 £m £mUnited Kingdom corporation tax charge at 30% (2005: 30%)Current year 169 339Adjustments in respect of prior years (15) (79) Overseas corporation taxCurrent year 2,077 1,774Adjustments in respect of prior years (418) (154) --------- -------Total current tax charge 1,813 1,880 --------- ------- Deferred tax:United Kingdom deferred tax 444 234Overseas deferred tax 123 (245) --------- -------Deferred tax charge/(credit) 567 (11) --------- ------- Total tax charge 2,380 1,869 ========= ======= This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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