16th Mar 2005 07:01
Unite Group PLC16 March 2005 Date: 16 March 2005On behalf of: The UNITE Group plc ("UNITE" or "the Company")Embargoed until: 0700hrs The UNITE GROUP plcPreliminary Results for the Year Ended 31 December 2004 The UNITE Group plc, the UK's largest student landlord, today releases thepreliminary announcement of its results for the year ended 31 December 2004.The key highlights are: • Net asset value per share up 10% to 332p (2003: 5.6% growth to 302p) • Property portfolio up 17% to £1.1 billion (2003: £0.95 billion) • Rental income up 39% to £66.8 million • Operating profits from completed portfolio up 41% to £41 million • Operating margins improved to 62.1% (2003: 60.5%) • Loss (before goodwill amortisation) reduced sharply to £1.1 million (2003: £5.2 million) • Significant progress in diversifying capital base during 2004 Commenting on the results, Geoffrey Maddrell, Chairman of The UNITE Group plc,said: "2004 has unquestionably been a year of achievement for UNITE with strongperformance against all objectives. Net asset value remains the key indicatorof the value of our business: at 332p per share as at 31 December 2004 (2003:302p), this has grown by some 10% during the year, with the total portfolio nowvalued at £1.1 billion. "The successful introduction of strategic asset disposals and joint ventures,involving in total some £173 million of assets, has helped firmly establish ourasset class in the broader investment community and have provided much neededtransactional evidence for the market. We will build on this success in 2005. He continues: "The Group has benefited from its consistency of strategy and fromthe positive market conditions which existed throughout the year. With thebenefit of this stable foundation, robust business model and positive market weplan to build on this success in 2005 gaining further from our economies ofscale; developing further the investment market for student accommodation;increasing the diversity and flexibility of our capital base; and pursuing astrategy of managed growth across our business and portfolio." A presentation will be held today at 0930hrs at Tower 42, 25 Old Broad Street,London EC2N 1HQ and a copy of the presentation can be found on UNITE's website:www.unite-group.co.uk Enquiries: The UNITE Group plc Nicholas Porter, Chief Executive Officer Tel: 020 7902 5055Mark Allan, Group Finance Director Tel: 020 7902 5062www.unite-group.co.uk Redleaf Communications Ltd Tel: 020 7955 1410Emma Kane/James White Mob: 07876 338339 CHAIRMAN'S STATEMENT At the beginning of 2004 I set out an important new phase in our strategy, as webegan to reach the scale of operations envisaged at the time we first came tothe public market. This new phase, designed to build on our position as theUK's largest provider of student accommodation, focused on three core themes:enhancing the quality of our investment portfolio whilst maintaining an annualprogramme of steady but significant portfolio growth; enhancing our customerservice through the development and training of our people and market research;and restructuring our capital base whilst continuing the strong operatingperformance of the business and improving margins. With this in mind, I amdelighted to report on a year of strong performance. • Net asset value per share grew by 10.0% to 332p (2003: 5.6% growth, 302p);• our asset disposals and joint ventures, involving in total some £173 million of assets (based on Estimated values at completion), have helped firmly establish our asset class in the broader investment community and have provided much needed transactional evidence for the market;• Full year pre tax losses (before goodwill amortisation) reduced sharply to £1.1 million from £5.2 million in 2003. Financial results Net asset value remains the key indicator to the value of our business. At 332pper share as at 31 December 2004 (2003: 302p), this has grown by 10% during theyear, driven predominantly by our continued development activity. During theyear the business successfully delivered 5,104 new bed spaces into ourinvestment portfolio and also increased the number of confirmed deliveries for2005 to 4,677 beds (including assets held in joint ventures) with another 5,759beds also secured and fully funded for delivery in 2006 and beyond. Pipelinevisibility remains a key strength of the business. Taking into account the new beds delivered during the year, our completed andmanaged portfolio grew by 24% to 26,319 bed spaces, and was valued at £991million as at 31 December 2004, excluding 1,246 beds sold to Morley during theyear and now managed on their behalf. Rental income for the year was up 39% to£66.8 million, again due mainly to the larger portfolio, but also reflectingstrong like-for-like revenue growth (6.8% between academic years 2003/04 and2004/05). Operating profits from the completed portfolio were up 41% to £41 million,growth at this level outpacing turnover growth as a result of continued scalebenefits and asset stabilisation. This is reflected in our operating marginwhich, adjusted for the lease cost element of the sale and leaseback transactionwith Morley, again increased to 62.1%, up from 60.5% for 2003. New borrowing associated with our continued development activity contributed toan increase in net debt to £731 million and an increase in our balance sheetgearing to 198% (31 December 2003: 182%). Importantly, however, this level ofgearing has not increased when compared to that as at 30 June 2004 (199%); theGroup has begun to demonstrate its ability to manage its gearing through assetdisposals and joint ventures whilst continuing to grow its portfolio. This higher level of borrowing resulted in an increase in the Group's interestcosts. Although average gearing during the year increased by 40%, portfoliointerest cover was largely maintained at 1.11 times (2003: 1.15 times).Taking the aforementioned items into account, portfolio profit increasedmarginally to £4.0 million from £3.9 million in 2003. Finally, the introduction of joint ventures, coupled with the sale of certainnon core parts of larger development sites, has introduced a new element to theGroup's profit and loss account. These activities contributed £1.2 million tothe Group's profit before interest and tax in 2004 and a contribution to profitsfrom this source is expected to continue in the future. Dividend In accordance with our stated policy, the Board is pleased to recommend a finaldividend of 1.67 pence per share, making a total dividend of 2.5 pence per sharefor the year (2003: 2.5 pence). The dividend will be paid on 13 May 2005 toshareholders on the register as at 15 April 2005. Business performance Our 26,319 bed portfolio of completed accommodation (2003: 21,215 beds) remainsin demand, as evidenced by our average occupancy rate of 95% of available roomsentering the 2004/05 academic year (2003: 96%) and the strong like-for-likerevenue growth of 6.8% achieved in the current academic year. UNITE is committed to growing its portfolio through continued development andhas built up a wealth of expertise and a strong reputation with both land ownersand local planning authorities in this area over the past 12 years. As aresult, despite a challenging development market, site availability remainsgenerally good; we continue to work well in partnership with planningauthorities to deliver new high quality schemes, whilst our overall targetdevelopment margins have been achieved. Set against this background is our development pipeline of some 10,436 beds.All of these beds are fully funded and will contribute greatly to the overallquality of our future investment portfolio. We have remained successful in combating build cost inflation through ourinvestment in modular construction and through contractor partnering.Inflationary pressures in this area continue but, despite this, we expect to beable to contain any future reduction in development margins to a small andmanageable level. The performance of our modular construction division during 2004 has beenencouraging. It exceeded its production volume target for the year, achievingoverall output of some 2,530 modules together with the associated componentry.At these levels of production the facility is fully competitive with traditionalconstruction. In the more benign inflationary environment of the manufacturingsector, and with production volumes expected to increase further in 2005, thisdivision is well positioned for further improvements in performance. Market conditions Market conditions in 2004 were, and remain, positive for UNITE both in terms ofstudent occupier demand and our evolving asset class. In the UK highereducation sector, student numbers continue to grow, with increased demand bothfrom UK domiciled students and from international students seeking to benefitfrom the strong reputation of our University system. As importantly, the strongcommercial property market and the resulting yield compression across the moretraditional asset classes has brought alternative investment options, such asstudent accommodation, into sharper relief for investors. Against a back-dropwhich now sees the reference Investment Property Databank ("IPD") initial yieldsubstantially below 6%, the average initial yield across our portfolio of 6.56%looks increasingly attractive. Customers As the UK's largest student landlord, UNITE has a responsibility to all itsstakeholders to ensure that it continually seeks to improve its understandingof, and services to, its customers. We fully recognise the fact that our success is reliant on continuing to providea high quality, affordable accommodation experience and we have introduced anumber of important initiatives during the course of the year to this effect.This includes the introduction of broadband technology across the estate andincreased staffing resource at the property level. Some of these initiativeshave impacted slightly on margins for 2004 but will start to deliver positiveimprovements in the short term. People During 2004 we continued our focus on personal and professional development andthe strengthening and deepening of UNITE's management team. We were able to makeinternal promotions, supported by succession planning and intensive managementdevelopment. This included promoting two internal candidates to lead two of ouroperating divisions. Our investment in training for the business as a whole has had a significantimpact on improving customer service and motivating staff. Overall, our workforce grew by 209 to 773 and our level of employeesatisfaction, measured by an external survey, grew to that of the upper decileof companies in the UK. Outlook 2004 has unquestionably been a year of achievement for UNITE. The Group hasbeen able to benefit from its consistency of strategy and from the positivemarket conditions which existed throughout the year. With the benefit of its stable foundation, robust business model and thepositive market we plan to build on our success in the coming year gainingfurther from our economies of scale; developing further the investment marketfor student accommodation; increasing the diversity and flexibility of ourcapital base; and pursuing a strategy of managed growth across our business andportfolio. Consolidated profit and loss accountfor the year ended 31 December 2004 Note 2004 2003 £'000 £'000 Turnover 2 74,623 48,055 Cost of sales (24,678) (12,848)Gross Profit 49,945 35,207 Administrative expenses - ordinary (14,154) (15,110) - goodwill amortisation (2,665) (5,570) (16,819) (20,680) Group operating profit 33,126 14,527Profit/(Loss) on disposal of investment properties 23 (125) Profit on ordinary activities before interest and taxation 33,149 14,402 Interest receivable 4 1,137 681Interest payable and similar charges 4 (38,098) (25,871)Loss on ordinary activities before taxation andgoodwill amortisation (1,147) (5,218) Loss on ordinary activities before taxation (3,812) (10,788) Taxation 5 - - Loss on ordinary activities after taxation (3,812) (10,788)Dividends paid and proposed 6 (2,780) (2,702) Retained loss for the financial period (6,592) (13,490) Loss per shareBasic 7 3.5p 10.0pExcluding goodwill amortisation and deferred tax 7 1.0p 4.8pDiluted 7 3.5p 10.0p All of the above activities for the current year relate to continuingoperations. Consolidated statement of total recognised gains and lossesfor the year ended 31 December 2004 Note 2004 2003 £000 £000 Profit/(Loss) for the financial year (3,812) (10,788) Unrealised surplus on revaluation of properties 43,137 31,308Unrealised surplus on revaluation of properties in joint 1,125 -ventureTotal recognised gains and losses for the financial year 40,450 20,520 Consolidated balance sheetat 31 December 2004 Note 2004 2003 £000 £000 £000 £000Fixed assetsIntangible assets 2,475 5,140Tangible assets Investment and development properties 8 1,110,450 948,792 Other tangible fixed assets 18,099 19,726 1,128,549 968,518 Investment in Joint Ventures 9Share of gross assets 7,246 -Share of gross liabilities (6,121) - 1,125 - 1,132,149 973,658 Current assetsStocks 13,401 2,769Debtors 32,325 20,072Cash at bank and in hand 37,582 24,980 83,308 47,821 Creditors: amounts falling due within oneyearShort term build facilities and otherborrowings(including convertible debt) (106,153) (107,664)Other creditors (76,777) (75,823) (182,930) (183,487)Net current liabilities (99,622) (135,666) Total assets less current liabilities 1,032,527 837,992 Creditors: amounts falling due after morethan one yearLong term borrowings (662,906) (511,200) Net assets 369,621 326,792 Capital and reservesCalled up share capital 12 27,825 27,054Share premium account 141,324 136,936Merger reserve 40,177 40,177Revaluation reserve 196,914 161,786Profit and loss account (36,619) (39,161) Equity shareholders' funds 369,621 326,792 Net asset value per share 332p 302p Consolidated cash flow statementfor the year ended 31 December 2004 Note 2004 2003 £000 £000 Cash flow from operating activities 13 22,963 23,513Returns on investments and servicing of finance 14 (45,619) (32,062)Capital expenditure 14 (114,687) (172,127)Equity dividends paid (2,728) (2,689) Cash outflow before financing (140,071) (183,365)Financing 14 148,907 192,767 Increase in cash in the year 8,836 9,402 Reconciliation of net cash flow to movement in net debtfor the year ended 31 December 2004 Note 2004 2003 £000 £000 Increase in cash in the year 8,836 9,402Cash flow from increase in debt and lease financing (148,007) (192,766) Change in net debt resulting from cash flows (139,171) (183,364)Loan stock converted into ordinary shares 4,259 856Amortisation of debt issue costs (2,681) (1,389) Movement in net debt in the year (137,593) (183,897)Net debt at beginning of year 15 (593,884) (409,987) Net debt at end of year 15 (731,477) (593,884) Note of consolidated historical cost profits and lossesfor the year ended 31 December 2004 2004 2003 £000 £000 Reported loss on ordinary activities before taxation (3,812) (10,788)Realisation of property revaluation gains of previous 8,331 1,422years Historical cost profit/(loss) on ordinary activities 4,519 (9,366)before taxation Historical cost profit/(loss) for the year retained after 1,739 (12,068)taxation and dividends Reconciliation of movements in shareholders' fundsfor the year ended 31 December 2004 Group Group 2004 2003 £000 £000 (Loss)/profit attributable to ordinary shareholders (3,812) (10,788)Dividends paid and proposed (2,780) (2,702) Retained loss for the year (6,592) (13,490)Net surplus on revaluations 44,262 31,308Net proceeds of new share capital subscribed 5,159 856 Net addition to shareholders' funds 42,829 18,674Opening equity shareholders' funds 326,792 308,118 Closing equity shareholders' funds 369,621 326,792 Notes 1 Basis of preparation The group accounts include the accounts of the company and its subsidiaryundertakings, all of which are made up to 31 December 2004. The financial information set out in this preliminary announcement is preparedon the basis of the accounting policies set out in the most recent set of annualFinancial Statements. The financial information set out in this document does not constitute thecompany's statutory accounts for the years ended 31 December 2004 or 2003 but itis derived from those accounts. Statutory accounts for 2003 have been deliveredto the Registrar of Companies, and those for 2004 will be delivered followingthe company's annual general meeting. The auditors have reported on thoseaccounts; their reports were unqualified and did not contain a statement undersection 237 (2) or (3) of the Companies Act 1985. The statutory accounts for 2004 will be finalised on the basis of the financialinformation presented by the directors in this preliminary announcement and willbe delivered to the Registrar of Companies following the company's annualgeneral meeting. This preliminary announcement was approved by the board of directors on 16 March2004 and satisfies the provisions of section 240 of the Companies Act 1985regarding the publication of non-statutory accounts. 2 Segmental analysis of operations 2004 2003 £000 £000TurnoverInvestment activities 66,808 48,055Development activities 7,815 -Corporate activities - - 74,623 48,055Profit before interest and taxInvestment activities 40,951 29,088Development activities - ordinary (1,215) (4,975)Corporate costs (3,945) (4,016)(Loss)/profit on disposal of investment properties 23 (125)Goodwill amortisation - re investment activities (150) (150) - re development activities (2,515) (5,420) 33,149 14,402Net AssetsInvestment activities 326,771 268,336Development activities 42,850 58,456Corporate activities - - 369,621 326,792Portfolio profit is calculated as follows:Profit before interest and taxation on investment activities - as above 40,951 29,088Net interest payable (36,961) (25,190) 3,990 3,898 Included in the development loss for the period to 31 December 2003 is the lossrelating to the under recovery of manufacturing overheads £1,246,000 which, inline with expectations, has not recurred. 3 Profit on ordinary activities before taxation 2004 2003 £000 £000 Profit on ordinary activities before taxation is stated after charging/(crediting):Auditors' remuneration 180 205Fees paid to the auditor in respect of other services 249 27Depreciation and other amounts written off tangible fixed assets 2,354 2,524(Profit)/loss on disposal of fixed assets (23) 125Amortisation of goodwill 2,665 5,570Hire of plant and machinery - including rentals payable under operating 413 367leasesHire of other assets - including rentals payable under operating leases 1,395 979 £95,700 was paid to the auditors in respect of refinancing work and has beencapitalised (2003: £nil) 4 Net Interest payable 2004 2003 £000 £000Amounts payable on bank loans and overdraftsOn loans not wholly repayable within five years 2,959 544On loans wholly repayable within five years 27,235 15,213On bank overdrafts 82 106Amounts payable on other loansOn asset backed bonds 18,700 18,730On convertible unsecured loan stock 209 433On unsecured loan notes 16 156Costs written off on refinancing 99 -Finance charges payable in respect of hire purchase agreements 92 155 49,392 35,337Transfer to cost of investment and development properties (11,294) (9,466) 38,098 25,871Less: Interest receivable (1,137) (681) 36,961 25,190 5 Taxation (a) Analysis of charge in the year There was no liability to taxation in respect of either year for the Group orits joint venture undertaking. (b) Factors affecting the tax charge for the year The tax credit on the loss on ordinary activities has been reduced from theamount that would arise from applying the prevailing corporation tax rate to theGroup's losses, as follows: 2004 2003 £000 £000UK corporation tax at 30% (1,144) (3,236)Permanently disallowable expenditure 2,425 1,784Capital gains in excess of accounting profit 2,230 -Consolidation adjustments not deductible for tax 4,953 4,175Non-taxable profits and capitalised expenditure deductible (2,277) (1,944)Excess tax losses (utilised) not utilised in year (1,421) 2,631Excess of capital allowances over depreciation (4,766) (3,410) - - A proportion of the profits arising in joint ventures has been distributed toGroup companies, in whose accounts the related tax charges have been provided. (c) Factors that may affect future tax charges Deferred taxation balances arising in the Group are set out in detail in note11. In accordance with FRS19, the deferred tax in respect of property revaluationsurpluses has not been provided. 6 Dividends 2004 2003 £000 £000 EquityInterim dividend paid of 0.83p (2003: 0.83p) per 25p ordinary share 921 895Final dividend proposed of 1.67p (2003: 1.67p) per 25p ordinary share 1,859 1,807 2,780 2,702 7 Loss per share Basic loss per share has been calculated using a weighted average number ofshares of 109,477,518 (2003: 107,859,284) as follows: Losses EPS After goodwill Before goodwill After goodwill Before goodwill amortisation amortisation amortisation amortisation £000 £000 pence penceYear ended 31 December 2004Basic loss (3,812) (1,147) (3.48) (1.05) Year end 31 December 2003Basic loss (10,788) (5,218) (10.00) (4.84) The share options and convertible loan stock in issue during 2003 and 2004 donot give rise to any dilutive potential ordinary shares and therefore the basicand diluted loss per share are the same. 8 Investment and development properties Properties held Investment Developments in for future Properties progress development Total £000 £000 £000 £000GroupCost or valuation and net bookvalue At beginning of year 788,304 124,281 36,207 948,792Additions 827 179,869 2,558 183,254Disposals (49,041) (557) (15,135) (64,733)Transfers 218,723 (198,017) (20,706) -Revaluations 32,647 10,490 - 43,137 At 31 December 2004 991,460 116,066 2,924 1,110,450 At 31 December 2003 788,304 124,281 36,207 948,792 8 Investment and development properties Included within investment and development properties are the following valuesin respect of leasehold interests: Properties held Investment Developments in for future Total Total Properties progress development 2004 2003 £000 £000 £000 £000 £000Cost or valuation and netbook valueLong leasehold 162,350 27,095 307 189,752 140,117Short leasehold 13,300 - - 13,300 11,980 175,650 27,095 307 203,052 152,097 The valuation of investment and development properties comprise: 2004 2003 £000 £000GroupHistorical cost 914,661 787,006Revaluation 195,789 161,786 1,110,450 948,792 Investment properties were valued as at 31 December 2004, on the basis of "market value" as defined in the RICS Appraisal and Valuation Manual issued bythe Royal Institution of Chartered Surveyors by CB Richard Ellis Ltd and MessrsKing Sturge & Co, Chartered Surveyors as external valuers. Development properties have been incorporated at valuations by the directors atacquisition or when planning permission and appropriate construction contractsare in place, plus subsequent expenditure. These valuations were based oncompleted property valuations by CB Richard Ellis Ltd and Messrs King Sturge &Co, Chartered Surveyors. CB Richard Ellis have valued 43% of the portfolio and Messrs King Sturge 57% byreference to completed value. The total interest included in Group properties at 31 December 2004 was£33,370,545 (2003: £25,177,350). Total internal costs relating tomanufacturing, construction and development costs of group properties, whichhave been deducted in arriving at the revaluation uplifts recognised on theseproperties, amount to £33,343,953 at 31 December 2004 (2003: £25,805,000). 9 Investment in joint venture Interest in joint venture 2004 2003 £000 £000GroupCost or valuation and net book valueAt beginning of year - - Share of operating profit for year - -Share of interest payable for year - - Share of retained profit for year - -Share of revaluation surplus 1,125 -At end of year 1,125 - The Group's joint venture in student villages with Lehman Brothers is held as a75% interest in the ordinary shares of LDC (Project 110) Ltd, a companyincorporated in England and Wales, whose principal activity is the constructionand letting of investment property. Under the Articles of Association, the Groupcannot exercise control over this company and its interest amounts to a 51%share of the profits and assets of the joint venture. The value of the Group's interest in the joint venture is held at an amountequivalent to its share of the underlying net asset value of the undertaking. The amounts included in respect of the joint venture comprise the following: Interest in joint venture 2004 2003 £000 £000Share of assetsFixed assets 7,099 -Current assets 147 - 7,246Share of liabilities -Due within one year (1,926) -Due after one year (4,195) -Share of net assets 1,125 - 10 Analysis of debt Group 2004 2003 £000 £000 Bank loans, other loans and overdrafts falldue: In one year or less, or on demand 105,778 107,163 Between one and two years 66,648 125,099 Between two and five years 83,249 121,103 In five years or more 512,228 263,835 767,903 617,200 The amounts falling due after more than five years consist: £252,499,678 (2003: £255,712,370) in respect of asset backed bonds which bearfixed interest at rates between 5.926% and 8.549% and are repayable on a slidingscale with final repayment in October 2027. £259,728,460 (2003: £8,123,200) in respect of various bank loans repayable byinstalments predominantly by November 2011 and being interest at variable ratesbetween 1.25% and 1.4% above LIBOR. Debt is disclosed net of issue costs of £12,009,675 (2003: £11,627,000). The maturity of obligations under hire purchase agreements is as follows: 2004 2003 £000 £000GroupWithin one year 431 596In the second to fifth years 826 1,260Less future finance charges (101) (192) 1,156 1,664 The Group has various borrowing facilities available to it. The undrawncommitted facilities available at 31 December 2004 in respect of which allconditions precedent had been met at that date were as follows: 2004 2003 £000 £000 Expiring in one year or lessBuild facilities 38,355 47,086Other facilities 5,000 5,000 43,355 52,086 In addition, there are further committed facilities available where not allconditions precedent have yet been met amounting to £226m. Of this amount £54mremains available for completed properties and £172m for development properties. Security for the Group's property development and investment financing is by wayof first charges, and in some instances second charges, over the properties towhich they relate. In certain instances, cross guarantees are provided withinthe Group. Fair value of financial liabilities Set out below is a comparison by category of the book value and fair values ofthe Group's financial liabilities, excluding variable rate loans, at 31 December2004: Book value Fair value £000 £000 Primary financial instruments held or issued to finance the Group'soperations: Short term financial liabilities and current position of long term 1,947 2,025borrowings Long term borrowings 269,664 280,487 271,611 282,512Derivative and other financial instruments held to manage the interestrateprofile: Interest rate swaps - 9,347 At 31 December 2004 271,611 291,859 At 31 December 2003 272,726 278,266 The fair values of the interest rate swaps and caps and long term fixed ratedebt have been determined by reference to prices available from the markets onwhich the instruments are traded. All the other fair values have beencalculated by discounting future cash flows at prevailing interest rates. 11 Provisions for liabilities and charges The movement on the deferred tax balances and other provisions during the yearended 31 December 2004 were as follows: Deferred taxation Other Total Total 2004 2004 2004 2003 £'000 £'000 £'000 £'000GroupAt 1 January 2004 - - - -Capitalised interest 3,314 - 3,314 3,544Accelerated capital allowances 5,605 - 5,605 1,576Intra-group profits taxed but not relieved (4,347) - (4,347) (4,171)Tax losses available (4,572) - (4,572) (949)At 31 December 2004 - - - -The deferred tax balances at 31 December 2004arose as follows: Amount provided Amount not Amount Amount not 2004 provided 2004 provided 2003 provided 2003 £'000 £'000 £'000 £'000GroupCapitalised interest 10,619 - 7,305 -Accelerated capital allowances 12,370 - 6,765 -Intra-group profits taxed (16,952) - (12,605) -Tax losses (6,037) (1,200) (1,465) (5,786)Potential tax on property valuation surplus - 51,456 - 49,595Capital gain on investment in joint ventures 338 -At 31 December 2004 - 50,594 - 43,809 No provision has been made for tax arising on the revaluation of properties,since the disposal of properties is not envisaged by the Directors. 12 Called up share capital 2004 2003 £000 £000Authorised 155,000,000 (2003: 155,000,000) ordinary shares of 25p each 38,750 38,750 Allotted, called up and fully paid Number of shares £000 At beginning of year 108,213,432 27,054Loan notes converted 2,453,219 613Share options exercised and scrip dividends 634,544 158 At end of year 111,301,195 27,825 13 Reconciliation of operating profit to operating cash flows 2004 2003 £000 £000 Group operating profit 33,126 14,527Depreciation and amortisation charges 5,019 8,094Increase in stocks (10,632) (1,218)Increase in debtors (8,230) (1,563)Increase in creditors and provisions 3,680 3,673Net cash inflow from operating activities 22,963 23,513 14 Analysis of cash flows 2004 2003 £000 £000 Returns on investment and servicing of financeInterest received 1,137 681Interest paid (47,768) (32,743)Gain on refinancing 1,012 - Net cash flow from returns on investment and servicing of finance (45,619) (32,062)Capital expenditurePurchase of tangible fixed assets (175,695) (178,723)Disposal of tangible fixed assets 61,008 6,596 Net cash flow from capital expenditure (114,687) (172,127) FinancingIssue of share capital 900 1Net receipts on bank loans 150,131 197,324Movement on loan notes (1,616) (3,909)Capital element of hire purchase payments (508) (649) Net cash flow from financing 148,907 192,767 15 Analysis of net debt At 1 January At 31 December 2004 Cash flow Other changes 2004 £000 £000 £000 £000 Cash at bank and in hand 24,980 12,602 - 37,582Bank overdraft (5,320) (3,766) - (9,086) 19,660 8,836 - 28,496 FinancingDebt due within one year (101,843) 892 4,259 (96,692)Debt due after one year (510,037) (149,407) (2,681) (662,125)Hire purchase agreements (1,664) 508 - (1,156) (613,544) (148,007) 1,578 (759,973) Net debt at end of year (593,884) (139,171) 1,578 (731,477) Cash at bank and in hand includes £6.9m (2003:£nil) held in a bank account drawnfrom a facility put in place in November 2004. This amount is only availablefor general Group use once certain criteria are met, which is expected by occurby Autumn 2005. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Unite