27th Jun 2005 10:57
AMEC PLC27 June 2005 AMEC plc 27 June 2005 RESTATEMENT OF ACCOUNTS UNDER IFRS Overview AMEC announces the restatement of its 2004 accounts and 2003 consolidatedbalance sheet under International Financial Reporting Standards ("IFRS"). Thisfinancial information was previously prepared under UK Generally AcceptedAccounting Principles ("UK GAAP"). AMEC will prepare its accounts for the six months ending 30 June 2005 andthereafter under IFRS. Following this announcement, guidance to investors on the board's expectationswill be based on IFRS. The adjustments required to restate the results and financial position from UKGAAP to IFRS are in line with guidance previously given by the company. Restated financial information The main highlights arising from the restatement of financial information are asfollows: •AMEC's net assets as at 31 December 2004 increased by nearly £40 million as a result of applying IFRS. In summary, this is the aggregate result of writing back goodwill previously amortised, removing proposed dividends, bringing the full assets and liabilities (net) of pension schemes on to the balance sheet and the reversal of the surplus arising from an external revaluation of land and buildings undertaken in December 2004. •AMEC's three principal UK funded pension schemes had an aggregate pre -tax surplus of nearly £120 million as at 31 December 2004 under IAS 19 'Employee Benefits'. •In accordance with the transitional arrangements, AMEC has not applied IAS 39 'Financial Instruments: Recognition and Measurement' in the restated accounts, but chosen to apply it with effect from 1 January 2005. The effect of implementing IAS 39 will be to reduce the opening net assets as at 1 January 2005 by about £25 million (net of tax), principally as a result of valuing interest and inflation rate derivatives in several PPP concessions. •The adoption of IFRS, including the impact of IAS 39, will therefore result in an increase in net assets of £15 million as at 1 January 2005. After taking account of both this and the share placing in January 2005, pro forma shareholders funds as at 31 December 2004 would have increased by over £100 million. Underlying financial performance Under IFRS, underlying profit before tax for the year ended 31 December 2004 was£120.0 million. This is before taking into account the effect of those standardsthat add to volatility in reported earnings, due to the required use of fairvalue accounting. In 2004, these standards, IFRS 2 'Shared based Payment' andIAS 19 'Employee Benefits', resulted in a charge for share options granted of£1.8 million and an increased charge for pensions of £2.6 million. IFRS will not affect the underlying trading performance of AMEC in 2005. Theboard had previously included in its expectations for 2005 a £3 million chargein respect of share options granted. This is also now confirmed under IFRS. Theboard is now able to confirm the pension charge will be up to £5 million higherunder IAS 19 than it would have been under UK GAAP for the year ending 31December 2005. The directors have not applied the draft IFRIC Interpretations D12-D14 onservice concessions to AMEC's PPP activities. These draft Interpretations haveattracted considerable comment and could change during their finalisation. AMECwill continue to use FRS 5: 'Reporting the substance of transactions' as thebasis for its accounting until the Interpretations are finalised so as tominimise the changes required to its accounting policies. Full details of the restated financial information may be found in an IFRSrestatement report on AMEC's website at www.amec.com in the investors section.In addition to this, there is a short presentation that reconciles the financialinformation prepared under UK GAAP to that under IFRS and which explains theprincipal adjustments and the reasons for making them. As previously announced, AMEC will make a trading statement on Thursday 30 June 2005 before entering the closed period ahead of the company's 2005 interim results. A telephone conference call for analysts and investors will be held at 10.30am on Thursday 30 June 2005 when Stuart Siddall, Finance Director will answer questions on the restated financial information and the trading update. AMEC expects to announce interim results for the six months ending 30 June 2005 on Thursday 1 September 2005. Enquiries to:AMEC plc + 44 (0)20 7634 0000 Analysts/Investors:Stuart Siddall, Finance DirectorNeil Jamieson, Director of Investor Relations Media:Juliet Sychrava, Director of Corporate CommunicationsCharles Reynolds, Head of Media Relations AMEC plc is an international project management and services company thatdesigns, delivers and supports infrastructure assets for customers worldwideacross the public and private sectors. AMEC employs 44,000 people in more than40 countries, generating annual turnover of around £5 billion. AMEC's shares aretraded on the London Stock Exchange where the company is listed in the SupportServices sector (LSE: AMEC.L). Internet users will be able to view this announcement, together with otherinformation about AMEC plc, at the company's web site www.amec.com ENDS This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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