21st Feb 2006 07:01
Crest Nicholson PLC21 February 2006 Crest Nicholson PLC Preliminary information on the implementation of International Financial Reporting Standards For the year ended 31 October 2005 Contents Introduction Basis of preparation Transitional arrangements Summary of the impact of IFRS adoption Significant changes in accounting policies and impact on the financialstatements Consolidated income statement Consolidated statement of recognised income and expense Consolidated balance sheet Consolidated cash flow statement Reconciliation of profit For the year ended 31 October 2005 For the six months ended 30 April 2005 Reconciliation of equity As at 31 October 2005 As at 30 April 2005 As at 1 November 2004 Note A PDF version of this announcement can be found on the Company's website -www.crestnicholson.com under Investor Relations. Introduction In the Preliminary Announcement made on 25 January 2006, Crest Nicholson PLCgave a summary of the impact of changes of accounting policy. This announcementprovides further, more detailed, information on the changes already reported. For all accounting periods up to and including the year ended 31 October 2005Crest Nicholson PLC has prepared its financial statements under UK GenerallyAccepted Accounting Principles (UK GAAP). For later accounting periods, theGroup is required to prepare its consolidated financial statements in accordancewith International Financial Reporting Standards as adopted by the EuropeanUnion (IFRS). Crest Nicholson's first results under this basis will be its interim results forthe six months ending 30 April 2006. The Group's first annual report under IFRSwill be for the year ending 31 October 2006. As the Group publishes comparativeinformation for one year in its Annual Report, the effective date of transitionto IFRS is 1 November 2004. This summary provides an analysis of the effects of the change from UK GAAP toIFRS on Crest Nicholson's financial statements and previously publishedinformation has been restated in the following sections. The full disclosuresrequired will be included in the financial statements for the year ending 31October 2006. As explained in the Preliminary Announcement made on 25 January 2006, a thoroughreview of Crest's accounting policies has been performed to coincide with theimplementation of IFRS. As a result, under IFRS, revenue on housing units willbe recognised upon legal completion rather than on build completion. Inaddition, all land and land creditors, under IFRS will be recognised at thepoint of unconditional exchange. These policies are in line with the majority ofthe peer group and will enhance comparability. Basis of preparation The information has been prepared in accordance with standards andinterpretations issued by the International Accounting Standards Board. Theseare subject to ongoing review and endorsement by the European Commission andsubject to change. Consequently, information in this document may requireupdating for any subsequent amendments to IFRS required for first time adoptionand for interpretations that Crest Nicholson may elect to adopt. The preliminary information contained in this document on the implementation ofIFRS is not the Company's statutory financial statements and has not beenaudited. The statutory financial statements for the year ended 31 October 2005,prepared under UK GAAP, have been reported on by the auditors. The report of theauditors was unqualified and did not contain a statement under section 237(2) or(4) of the Companies Act 1985. The statutory accounts for the year ended 31October 2005 have not yet been filed with the Registrar of Companies but willshortly be available on the Company's website www.crestnicholson.com. Transitional arrangements The rules for first time adoption of IFRS are set out in IFRS 1 'First TimeAdoption of International Financial Reporting Standards'. In general a companyis required to define its IFRS accounting policies and apply theseretrospectively to determine its opening balance sheet under IFRS. The standardallows a number of exceptions to this general principle to assist companies asthey make the transition to reporting under IFRS. These are set out as follows: • The Company has taken advantage of the transitional provisions allowing the application of IFRS 2: Share-based Payment to be limited to grants of share options that took place after 7 November 2002. • The Company has taken advantage of the option provided by IAS 19: Employee Benefits to account for variations in actuarial gains and losses in respect of the defined benefit pension scheme in full immediately in the statement of recognised income and expense. The Company has adopted IAS 32 and 39 with effect from 1 November 2004, the dateof transition to IFRS. No adjustments have been made for any changes in estimates made at the time ofapproval of the UK GAAP financial statements on which the preliminary IFRSfinancial statements are based, in accordance with IFRS 1. Summary of the impact of IFRS adoption Based on the accounting policies adopted, the impact on the key performanceindicators of the transition to IFRS including the change in accounting policyto legal completion for housing revenue recognition is as follows: 31 October 2005 30 April 2005 UK GAAP IFRS UK GAAP IFRS £m £m £m £mOperating profit including joint ventures 94.9 99.9 43.7 58.5 Profit before tax 79.2 78.9 35.9 48.3 Basic earnings per share 47.0p 48.2p 21.5p 30.2p Net assets 367.4 266.1 348.6 254.3 The detailed reconciliations of the movements for the Income Statement andBalance Sheet are given in subsequent sections. The changes in policies which affect the restated numbers are: • The recognition of revenue on land and commercial sales under IFRS has resulted in timing differences compared to UK GAAP in some cases, for example when substantial acts are still to be performed • The recognition of revenue on housing sales at legal completion instead of build completion. This change is not an IFRS requirement but the Group has decided to bring this accounting policy in line with its peer group to enhance comparability and to obtain operational benefits from bringing the cash collection and profit recognition points together. • The recognition of sales and marketing costs as incurred and not expensed in line with sales • The recognition of dividends only once declared or paid • The recognition of the pension scheme deficit on the Balance Sheet • The presentation of jointly controlled operations on a line by line basis • The classification of the preference shares as debt rather than as part of shareholders' funds • The impact of IAS 39 on US dollar denominated debt and related hedging instruments • The discounting of deferred payments for land to present value, with a notional interest charge being applied over the deferral period • The recognition of land stock and land creditors only at the point of unconditional exchange • The recognition of a charge for share based payments under IFRS 2 Significant changes in accounting policies and impact on the financial statements Revenue recognition (IAS 18) Under IFRS, similar to UK GAAP, revenue in respect of land sales and sales ofcommercial property is recognised when the significant risks and rewards ofownership have been transferred. However, under IFRS, if the seller is obligedto perform any significant acts after the time of sale, revenue is recognised asthese acts are performed. This has resulted in a change in the timing of revenuerecognition. The effect on the opening balance sheet at transition is to increase inventoriesby £44.8m, reduce debtors by £46.1m, increase creditors by £8.8m, increasedeferred tax asset by £3.1m and hence reduce net assets by £7.0m. For the yearended 31 October 2005, this has resulted in a decrease in turnover of £29.3m andin operating profit of £1.1m with a related tax credit of £0.3m. Legal completion Crest Nicholson has hitherto recognised income on housing sales at the later ofexchange of contracts and build completion. Although this is acceptable for thepurposes of IFRS, one of the principal objectives of the new standards is toimprove comparability. The Group has, therefore, decided to move its housingincome recognition point from exchanged and build complete to legal completion,which accords with the majority of its peer group. This also has the operationalbenefits of bringing cash collection and profit recognition together. The effect on the opening balance sheet at transition is to increase inventoriesby £112.8m, reduce debtors by £155.9m, increase deferred tax assets by £12.9m,reduce investments in joint ventures by £0.6m and hence reduce net assets by£30.8m. For the year ended 31 October 2005, this has resulted in an increase inturnover of £27.0m and in operating profit of £11.2m with a related tax chargeof £3.4m. Inventories (IAS 2) IAS 2 requires sales and marketing costs to be written off as incurred and notcapitalised in work in progress and expensed in line with sales. The impact onthe opening balance sheet has been to reduce shareholders' funds by £8.7m, workin progress by £12.4m and increase the deferred tax asset by £3.7m. For the yearto 31 October 2005 gross profit is reduced by £4.7m. Events after the balance sheet date (IAS 10) Under IAS 10 only dividends declared before the Balance Sheet date can be shownas a liability. Crest Nicholson's final dividend is declared at the AnnualGeneral Meeting. Consequently, there is a requirement to remove the liabilityfor the final dividends for the years ended 31 October 2004 and 2005. The impacttherefore, is to increase the net assets of the opening Balance Sheet by £9.3mand the net assets as at 31 October 2005 by £9.8m. Employee benefits (IAS 19) The Group has taken advantage of the option provided by IAS 19 to account forvariations in actuarial gains and losses, in respect of the defined benefitscheme, in full immediately in the statement of recognised income and expense.The defined contribution scheme is unaffected by IAS 19. The impact on the opening balance sheet is to reduce net assets by £22.8m, dueto the recognition of a pension deficit of £30.3m, a deferred tax asset of £9.8mand the release of the £2.3m prepayment which arose in prior years. At 31October 2005 a £26.1m reduction in net assets is recognised, including a grossdeficit of £35.3m and a deferred tax asset of £11.2m. An actuarial loss of £3.3mnet of tax is taken to reserves. Joint ventures Jointly controlled entities under IFRS are accounted for using the equity methodof accounting. The results of jointly controlled entities are shown as aseparate item on a post-tax basis. The Group has one joint venture which is not a legal entity. Under IFRS thiswill be accounted for as a jointly controlled operation. The results of thisjoint venture will therefore be presented on a line by line basis in the incomestatement and balance sheet. The presentational impact of these changes is set out in the attachedreconciliations. Financial instruments (IAS 32 & IAS 39) IAS 32 covers the disclosure and presentation of financial instruments, whileIAS 39 covers their recognition and measurement. Preference shares IAS 32 requires preference shares to be classified as a liability as opposed toa component of equity, with the relevant dividend treated as a financing chargeas opposed to a distribution. The impact of this change is to reduceshareholders' funds in the opening balance sheet by £38.0m and to increasefinancing charges for the year to 31 October 2005 by £2.1m. The preferenceshares were repurchased in November 2005. Hedging instruments The Group holds £110m of US Private Placement loans ("USPP") held in dollars.The USPP were entered into to provide long term finance to the Group. Toeliminate all forward foreign exchange risk in relation to the loan capitalvalues, all USPP Dollar capital cash flows were swapped into sterling cash flowson issue. In addition, these swap arrangements hedge the fixed US Dollarinterest rate cash flows into fixed UK Sterling interest rate cash flows. Crest Nicholson has designated these derivatives as partly a fair value hedge ofthe foreign exchange variability of the loan principal and partly a cashflowhedge of exposure to variability in cash flows associated with the highlyprobable forecast interest flows. These derivatives are held at fair value inthe balance sheet under IAS 39. The USPP loans are accounted for under IFRS onan amortised cost basis and retranslated at the spot exchange rate at eachperiod end. The impact of adopting IAS 39 on the opening balance sheet as at 1 November 2004is to revalue the USPP at the year end exchange rate, thereby reducing loans by£19.5m. A fair value liability of £16.8m is also recognised in respect of thehedging swaps relating to these loans, giving rise to an unrealised hedgereserve of £1.9m and a related deferred tax liability of £0.8m. This has no impact on the net profit of the Group for the year ended 31 October2005. The fair value of the USPP as at 31 October 2005 results in a reduction ofthe loan liabilities of £16.3m. The fair value of the derivatives is £19.2m,giving rise to a negative hedge reserve of £2.0m and a related deferred taxasset of £0.9m. Deferred payments In accordance with IAS 39, the deferred payments arising from land creditors areto be held at discounted present value, hence recognising a financing elementover the period of the deferred settlement terms. The land creditor is thenincreased to the settlement value over the period of financing, with thefinancing element charged as interest expense through the income statement. The value of land held on the balance sheet and the corresponding land creditoris reduced by the financing element. The reduction in land value in inventorieswill result in an eventual reduction in cost of sales as the land is traded out.For the year ended 31 October 2005, this has resulted in an increase inoperating profit of £0.3m and the inclusion of notional interest of £3.0mtogether with a related deferred tax credit of £0.8m. Land creditors In addition, the Group has changed its policy on the recognition of land assetsand land creditors. These will now be recognised only at unconditional exchangeof contracts. This change is not an IFRS requirement, but the Group has decidedto bring this accounting policy in line with its peer group. The effect on the opening balance sheet at transition is to reduce inventoriesby £209.6m and reduce creditors by a similar amount. Share-based payments (IFRS 2) In accordance with IFRS 2, Crest Nicholson has recognised a charge for the SAYEscheme and employee share options granted after 7 November 2002. The fair valuehas been calculated using a binomial option-pricing model. A fair value chargecontinues to be made for the LTIP scheme. The charge is spread over the vestingperiod and is adjusted to reflect the actual and expected level of vesting. Theoperating profit impact for 2005 is a charge of £0.5m. Conclusion The transition to IFRS does not have a material effect on the consolidatedfinancial profits of Crest Nicholson PLC and there is no impact on CrestNicholson's cash flows and dividend policy. Consolidated Income Statement Year to Six months to 31 October 2005 30 April 2005 £m £mRevenue 699.0 350.6Cost of sales (547.2) (266.9) ----------- -----------Gross profit 151.8 83.7Operating costs (53.3) (26.1)Share of results from joint ventures 1.4 0.9 ----------- -----------Profit from operations 99.9 58.5Finance costs (21.0) (10.2) ----------- -----------Profit before tax 78.9 48.3Income tax expense (25.0) (14.6) ----------- -----------Profit for the period 53.9 33.7 =========== =========== Earnings per shareBasic 48.2p 30.2pDiluted 47.8p 29.9p Consolidated Statement of Recognised Income and Expense Year to Six months to 31 October 2005 30 April 2005 £m £mCash flow hedges: effective portion ofchanges in fair value (3.9) (2.7)Actuarial losses on defined benefit schemes (3.3) (0.3) ----------- -----------Net expense recognised directly in equity (7.2) (3.0)Profit for the period 53.9 33.7 ----------- -----------Total recognised income for the period 46.7 30.7 =========== =========== Consolidated Balance Sheet 31 October 2005 30 April 2005 1 November 2004 £m £m £mASSETSNon-current assetsProperty, plant andequipment 2.5 2.7 2.5Investments in jointventures 11.7 15.1 16.0Deferred tax assets 31.2 26.4 29.6 ----------- ----------- ----------- 45.4 44.2 48.1 ----------- ----------- ----------- Current assetsInventories 745.1 762.8 729.9Trade and otherreceivables 33.5 50.5 34.7Cash and cash equivalents 57.0 7.2 10.9 ----------- ----------- ----------- 835.6 820.5 775.5 ----------- ----------- -----------Total assets 881.0 864.7 823.6 ----------- ----------- ----------- LIABILITIESCurrent liabilitiesBank overdrafts and loans (12.9) (9.6) (3.2)Current tax liabilities (12.7) (11.2) (12.8)Trade and other payables (258.4) (258.4) (264.7) ----------- ----------- ----------- (284.0) (279.2) (280.7) ----------- ----------- ----------- Non-current liabilitiesBank and other loans (225.8) (232.7) (204.6)Forward currency swaps (19.2) (23.6) (16.8)Trade and other payables (47.4) (40.6) (56.7)Retirement benefitobligations (35.3) (30.8) (30.3)Provisions (2.6) (2.9) (1.1)Deferred tax liabilities (0.6) (0.6) (1.4) ----------- ----------- ----------- (330.9) (331.2) (310.9) ----------- ----------- ----------- Total liabilities (614.9) (610.4) (591.6) ----------- ----------- -----------Net assets 266.1 254.3 232.0 =========== =========== =========== SHAREHOLDERS' EQUITYOrdinary share capital 11.2 11.2 11.2Share premium 57.7 57.4 56.9Hedge reserve (2.0) (0.8) 1.9Retained earnings 199.2 186.5 162.0 ----------- ----------- -----------Total shareholders' equity 266.1 254.3 232.0 =========== =========== =========== Consolidated Cash Flow Statement Year to Six months to 31 October 2005 30 April 2005 £m £mCash flow from operating activitiesProfit for the period 53.9 33.7 Adjustments for:Interest 21.0 10.2Tax 25.0 14.6Share of profit of joint ventures (1.4) (0.9)Depreciation charge 1.0 0.5Share based payment charge 0.6 0.3 ----------- -----------Operating profit before working capitalchanges 100.1 58.4 Changes in working capitalIncrease in inventories (15.2) (32.9)Decrease/(increase) in trade and otherreceivables 1.4 (15.7)Decrease in trade and other payables (17.6) (22.8) ----------- -----------Cash from/(used in) operations 68.7 (13.0)Interest and preference dividends paid (18.0) (8.3)Tax paid (24.1) (12.3) ----------- -----------Net cash inflow/(outflow) from operatingactivities 26.6 (33.6) ----------- ----------- Cash flows from investing activities:Purchases of property, plant and equipment (1.0) (0.7)Repayment of loans to joint ventures 5.6 1.8Interest received 0.4 0.1 ----------- -----------Net cash from investing activities 5.0 1.2 ----------- ----------- Cash flows from financing activities:Increase in bank and other loans 18.0 31.0Share issues 0.8 0.6Dividends paid (14.0) (9.3) ----------- -----------Net cash from financing activities 4.8 22.3 ----------- ----------- Net increase/(decrease) in cash and cashequivalents 36.4 (10.1)Cash and cash equivalents at beginning ofperiod 7.7 7.7 ----------- -----------Cash and cash equivalents at end of period 44.1 (2.4) =========== =========== Reconciliation of Profit For the year to 31 October 2005 UK GAAP IAS 18 IAS 2 IAS 10 IAS 19 IAS 31 IAS 32/39 IAS 39 IAS 39 IFRS2 GAAP Revenue Legal Invent- Dividend Retirement Joint Preference Currency Deferred Share recogni Comple ories Benefits Ventures shares Swap payment based tion tion Payments £m £m £m £m £m £m £m £m £m £m £m Revenue 701.7 (29.3) 27.0 (0.4) Cost of (555.3) 28.2 (16.1) (4.7) 0.7 sales ------- -------- -------- ------- ------- -------- ------- -------- ------- ------- -------- Gross 146.4 (1.1) 10.9 (4.7) 0.3 profit Operating (53.1) 0.3 (0.5)costs Share of 1.6 0.3 (0.5)resultsfromjoint ventures ------- -------- -------- ------- ------- -------- ------- -------- ------- ------- -------- Profitfrom 94.9 (1.1) 11.2 (4.7) 0.3 (0.5) 0.3 (0.5) operations Finance (15.7) (0.2) (2.1) (3.0) costs ------- -------- -------- ------- ------- -------- ------- -------- ------- ------- -------- Profitbefore 79.2 (1.1) 11.2 (4.7) 0.1 (0.5) (2.1) (2.7) (0.5) tax Income taxexpense (24.5) 0.3 (3.4) 1.4 (0.1) 0.5 0.8 ------- -------- -------- ------- ------- -------- ------- -------- ------- ------- --------Profit forthe 54.7 (0.8) 7.8 (3.3) - - - (2.1) - (1.9) (0.5)period ======= ======== ======== ======= ======= ======== ======= ======== ======= ======= ======= Earningsper share Basic 47.0p (0.7p) 7.0p (3.0p) - - - - - (1.7p) (0.4p) Diluted 46.7p (0.7p) 6.9p (3.0p) - - - - - (1.7p) (0.4p) CONTINUED... Reconciliation of Profit For the year to 31 October 2005 Effect Of Restated Transition under IFRS IFRS £m £m Revenue (2.7) 699.0 Cost of 8.1 (547.2) sales ------- -------- Gross 5.4 151.8 profit Operating (0.2) (53.3)costs Share of resultsfromjoint (0.2) 1.4 ventures ------- -------- Profitfrom operations 5.0 99.9 Finance (5.3) (21.0) costs ------- -------- Profitbefore (0.3) (78.9)tax Income tax (0.5) (25.0)expense ------- -------- Profit forthe (0.8) 53.9period ======= ======== Earnings per share Basic 1.2p 48.2p Diluted 1.1p 47.8p Reconciliation of Profit For the six months to 30 April 2005 UK IAS 18 Legal IAS 2 IAS 10 IAS 19 IAS 31 IAS 32/39 IAS 39 IAS 39 GAAP Revenue Completion Inventories Dividend Retirement Joint Preference Currency Deferred recognition Benefits Ventures shares Swap payments £m £m £m £m £m £m £m £m £m £m Revenue 310.7 (5.8) 45.7 Cost of (241.4) 6.0 (31.1) (0.6) 0.2 sales ------- -------- -------- -------- ------- -------- ------- -------- ------- ------- Gross 69.3 0.2 14.6 (0.6) 0.2 profit Operating (26.2) 0.1 costs Share ofresultsfromjoint 0.6 0.5 (0.2) ventures ------- -------- -------- -------- ------- -------- ------- -------- ------- ------- Profitfrom 43.7 0.2 15.1 (0.6) 0.1 (0.2) 0.2 operations Finance (7.8) (1.0) (1.4) costs ------- -------- -------- -------- ------- -------- ------- -------- ------- ------- Profitbefore 35.9 0.2 15.1 (0.6) 0.1 (0.2) (1.0) (1.2) tax Income taxexpense (10.9) (4.5) 0.2 0.2 0.4 ------- -------- -------- -------- ------- -------- ------- -------- ------- ------- Profit forthe 25.0 0.2 10.6 (0.4) 0.1 - (1.0) - (0.8) period ======= ======== ======== ======== ======= ======== ======= ======== ======= ======= Earningsper share Basic 21.5p 0.2p 9.5p (0.4p) - 0.1p - - - (0.7p) Diluted 21.3p 0.2p 9.4p (0.4p) - 0.1p - - - (0.7p) CONTINUED.... Reconciliation of Profit For the six months to 30 April 2005 IFRS2 Effect Restated Share of under Based transition IFRS Payments IFRS £m £m £m Revenue 39.9 350.6 Cost of (25.5) (266.9)sales ------- -------- -------- Gross 14.4 83.7 profit Operating 0.1 (26.1) costs Share ofresultsfromjoint 0.3 0.9 ventures ------- -------- -------- Profitfrom 14.8 58.5 operations Finance (2.4) (10.2) costs ------- -------- -------- Profit 12.4 48.3before tax Income tax (3.7) (14.6) expense ------- -------- ------- Profit forthe - 8.7 33.7period ======= ======== ======== Earnings per share Basic - 8.7p 30.2p Diluted - 8.6p 29.9p Reconciliation of Equity As at 31 October 2005 UK GAAP IAS 18 IAS 2 IAS 10 IAS 19 IAS 31 IAS 32/39 IAS 39 IAS 39 Revenue Legal Inventories Dividend Retirement Joint Preference Currency Deferred recognition Completion Benefits Ventures shares Swap payments £m £m £m £m £m £m £m £m £m £m ASSETS Non-currentassets Property,plant andequipment 2.5 Investmentsin joint 41.2 (0.4) (29.1) ventures Deferred taxasset - 3.4 9.7 5.1 11.2 0.9 0.9 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- 43.7 3.4 9.3 5.1 11.2 (29.1) 0.9 0.9 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Currentassets Inventories 640.1 69.6 96.7 (17.1) 33.4 (7.4) Trade andotherreceivables 227.2 (65.7) (129.0) (2.0) 3.6 (0.6) Cash and cashequivalents 57.0 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- 924.3 3.9 (32.3) (17.1) (2.0) 37.0 (8.0) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total assets 968.0 7.3 (23.0) (12.0) 9.2 7.9 0.9 (7.1) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- LIABILITIESCurrentliabilities Bankoverdraftsand loans (12.9) Current taxliabilities (12.7) Trade andother (274.0) (15.1) 9.8 (6.3) payables ------ ------- ------- ------- ------- ------- ------- ------- ------- ------- (299.6) (15.1) 9.8 (6.3) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Non-currentliabilities Bank andother loans (204.1) (38.0) 16.3 Forwardcurrency (19.2) swaps Trade andother (93.7) (1.6) 4.9 payables Retirementbenefitobligations (35.3) Provisions (2.6) Deferred taxliabilities (0.6) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- 301.0) (35.3) (1.6) (38.0) (2.9) 4.9 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Totalliabilities (600.6) (15.1) 9.8 (35.3) (7.9) (38.0) (2.9) 4.9 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Net assets 367.4 (7.8) (23.0) (12.0) 9.8 (26.1) - (38.0) (2.0) (2.2) ======= ======= ======= ======= ======= ======= ======= ======= ======= ======= SHAREHOLDERS'EQUITYOrdinaryshare 49.2 (38.0) capital Share premium 57.7 Hedge reserve - (2.0) Retainedearnings 260.5 (7.8) (23.0) (12.0) 9.8 (26.1) (2.2) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Totalshareholders'equity 367.4 (7.8) (23.0) (12.0) 9.8 (26.1) - (38.0) (2.0) (2.2) ======= ======= ======= ======= ======= ======= ======= ======= ======= ======= CONTINUED.... Reconciliation of Equity As at 31 October 2005 Land Effect of Restated creditors Transition under IFRS IFRS ASSETS Non-currentassets Property, 2.5 plant andequipment Investments (29.5) 11.7 venturesin joint Deferred tax 31.2 31.2asset ------- ------- ------- 1.7 45.4 ------- ------- ------- Current assets Inventories (70.2) 105.0 745.1 Trade and (193.7) 33.5 otherreceivables Cash and cash 57.0equivalents ------- ------- ------- (70.2) (88.7) 835.6 ------- ------- ------- Total assets (70.2) (87.0) 881.0 ------- ------- ------- LIABILITIESCurrentliabilities Bank (12.9)overdraftsand loans Current tax (12.7)liabilities Trade andother 27.2 15.6 (258.4) payables ------ ------- ------- 27.2 15.6 (284.0) ------- ------- ------- Non-currentliabilities Bank and (21.7) (225.8)other loans Forward (19.2) (19.2)currency swaps Trade and 43.0 46.3 (47.4) other payables Retirement (35.3) (35.3) benefitobligations Provisions - (2.6) Deferred tax - (0.6)liabilities ------- ------- ------- 43.0 (29.9) (330.9) ------- ------- ------- Total 70.2 (14.3) (614.9)liabilities ------- ------- ------- Net assets - (101.3) 266.1 ======= ======= ======= SHAREHOLDERS'EQUITY Ordinary (38.0) 11.2share capital Share premium 57.7 Hedge reserve (2.0) (2.0) Retained (61.3) 199.2earnings ------- ------- ------- Total - (101.3) 266.1shareholders'equity ======= ======= ======= Reconciliation of Equity As at 30 April 2005 UK GAAP IAS 18 IAS 2 IAS 10 IAS 19 IAS 31 IAS 32/39 IAS 39 IAS 39 Revenue Legal Inventories Dividend Retirement Joint Preference Currency Deferred recognition Completion Benefits Ventures shares Swap payments £m £m £m £m £m £m £m £m £m £m ASSETS Non-currentassets Property,plant andequipment 2.7 Investmentsin joint 20.1 (0.2) (4.8) ventures Deferred taxasset - 3.1 8.6 3.9 9.9 0.4 0.5 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- 22.8 3.1 8.4 3.9 9.9 (4.8) 0.4 0.5 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Currentassets Inventories 786.0 50.0 81.7 (13.0) 33.6 (6.2) Trade andotherreceivables 210.6 (47.4) (110.3) (2.1) (0.3) Cash and cashequivalents 7.2 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- 1,003.8 2.6 (28.6) (13.0) (2.1) 33.6 (6.5) Total assets 1,026.6 5.7 (20.2) (9.1) 7.8 28.8 0.4 (6.0) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- LIABILITIESCurrentliabilities Bankoverdraftsand (9.6) loans Current taxliabilities (11.2) Trade andother (289.8) (12.5) 4.7 (27.2) payables ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- (310.6) (12.5) 4.7 (27.2) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Non-currentliabilities Bank andother (217.1) (38.0) 22.4 loans Forwardcurrency - (23.6) swaps Trade andother (146.8) (1.6) 4.9 payables Retirementbenefitobligations - (30.8) Provisions (2.9) Deferred taxliabilities (0.6) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- (367.4) (30.8) (1.6) (38.0) (1.2) 4.9 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Totalliabilities (678.0) (12.5) 4.7 (30.8) (28.8) (38.0) (1.2) 4.9 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Net assets 348.6 (6.8) (20.2) (9.1) 4.7 (23.0) - (38.0) (0.8) (1.1) ======= ======= ======= ======= ======= ======= ======= ======= ======= ======= SHAREHOLDERS'EQUITY Ordinaryshare 49.2 (38.0) capitalShare premium 57.4 Hedge reserve (0.8) Retainedearnings 242.0 (6.8) (20.2) (9.1) 4.7 (23.0) (1.1) ------ ------- ------- ------- ------- ------- ------- ------- ------- ------- Total 348.6 (6.8) (20.2) (9.1) 4.7 (23.0) - (38.0) (0.8) (1.1) shareholders'equity ======= ======= ======= ======= ======= ======= ======= ======= ======= ======= CONTINUED.... Reconciliation of Equity As at 30 April 2005 Land Effect of Restated creditors Transition under IFRS IFRS £m £m £m ASSETS Non-current assets Property, 2.7plant andequipment Investments (5.0) 15.1in joint ventures Deferred tax 26.4 26.4asset ------- ------- ------- 21.4 44.2 ------- ------- ------- Currentassets Inventories (169.3) (23.2) 762.8 Trade and 160.1 50.5otherreceivables Cash and cash 7.2equivalents ------- ------- ------- (169.3) (183.3) 820.5 Total assets (169.3) (161.9) 864.7 ------- ------- ------- LIABILITIESCurrentliabilities Bank (9.6)overdraftsand loans Current tax (11.2)liabilities Trade and 66.4 31.4 (258.4)other payables ------- ------- ------- 66.4 31.4 (279.2) ------- ------- ------- Non-currentliabilities Bank and (15.6) (232.7)other loans Forward (23.6) (23.6)currency swaps Trade and 102.9 106.2 (40.6)other payables Retirement (30.8) (30.8)benefitobligations Provisions - (2.9) Deferred tax - (0.6)liabilities ------- ------- ------- 102.9 36.2 (331.2) ------- ------- ------- Total 169.3 67.6 (610.4)liabilities ------- ------- ------- Net assets - (94.3) 254.3 ======= ======= ======= SHAREHOLDERS'EQUITY Ordinaryshare (38.0) 11.2 capital 57.4Share premium Hedge reserve (0.8) (0.8) Retained (55.5) 186.5earnings ------ ------- ------- Total (94.3) 254.3shareholders'equity ======= ======= ======= Reconciliation of Equity As at 1 November 2004 UK GAAP IAS 18 IAS 2 IAS 10 IAS 19 IAS 31 IAS 32/39 IAS 39 IAS 39 Revenue Legal Inventories Dividend Retirement Joint Preference Currency Deferred recognition Completion Benefits Ventures shares Swap payments £m £m £m £m £m £m £m £m £m £m ASSETS Non-currentassets Property,plant andequipment 2.5 Investmentsin 21.2 (0.6) (4.6) jointventures Deferred taxasset - 3.1 12.9 3.7 9.8 0.1 ------- ------- ------- ------- ------- ------- ------- -------- ------- ------- 23.7 3.1 12.3 3.7 9.8 (4.6) 0.1 ------- ------- ------- ------- ------- ------- ------- -------- ------- ------- Currentassets Inventories 771.9 44.8 112.8 (12.4) 22.4 (5.5) Trade andotherreceivables 239.4 (46.1) (155.9) (2.3) (0.4) Cash and cashequivalents 10.9 ------- ------- ------- ------- ------- ------- ------- -------- ------- ------- 1,022.2 (1.3) (43.1) (12.4) (2.3) 22.4 (5.9) ------- ------- ------- ------- ------- ------- ------- -------- ------- ------- Total assets 1,045.9 1.8 (30.8) (8.7) 7.5 17.8 (5.8) ------- ------- ------- ------- ------- ------- ------- -------- ------- ------- LIABILITIES Currentliabilities Bankoverdraftsand (3.2) loans Current taxliabilities (12.8) Trade andother (288.4) (8.8) 9.3 (17.8) payables ------- ------- ------- ------- ------- ------- ------- -------- ------- ------- (304.4) (8.8) 9.3 (17.8) ------- ------- ------- ------- ------- ------- ------- -------- ------- ------- Non-currentliabilities Bank andother (186.1) (38.0) 19.5 loans Forwardcurrency - (16.8) swaps Trade andother 5.5 payables (225.3) Retirementbenefitobligations - (30.3) Provisions (1.1) Deferred taxliabilities (0.6) (0.8) ------- ------- ------- ------- ------- ------- ------- -------- ------- ------- (413.1) (30.3) (38.0) 1.9 5.5 ------- ------- ------- ------- ------- ------- ------- -------- ------- ------- Totalliabilities (717.5) (8.8) 9.3 (30.3) (17.8) (38.0) 1.9 5.5 ======= ======= ======= ======= ======= ======= ======= ======== ======= ======= Net assets 328.4 (7.0) (30.8) (8.7) 9.3 (22.8) - (38.0) 1.9 (0.3) ======= ======= ======= ======= ======= ======= ======= ======== ======= ======= SHAREHOLDERS'EQUITY Share capital 49.2 (38.0) Share premium 56.9 Hedge reserve - 1.9 Retainedearnings 222.3 (7.0) (30.8) (8.7) 9.3 (22.8) (0.3) ------- ------- ------- ------- ------- ------- ------- -------- ------- ------- Totalshareholders'equity 328.4 (7.0) (30.8) (8.7) 9.3 (22.8) - (38.0) 1.9 (0.3) ======= ======= ======= ======= ======= ======= ======= ======== ======= ======= CONTINUED.... Reconciliation of Equity As at 1 November 2004 Land Effect of Restated creditors Transition under IFRS IFRS £m £m £m ASSETS Non-currentassets Property, 2.5plant andequipment Investments (5.2) 16.0in jointventures Deferred tax 29.6 29.6asset ------- ------- ------- 24.4 48.1 ------- ------- ------- Currentassets Inventories (204.1) (42.0) 729.9 Trade and (204.7) 34.7otherreceivables Cash and cash 10.9equivalents ------- ------- ------- (204.1) (246.7) 775.5 ------- ------- ------- Total assets (204.1 ) (222.3) 823.6 ------- ------- ------- LIABILITIES Currentliabilities Bank (3.2)overdraftsand loans Current tax (12.8)liabilities Trade and 41.1 23.7 (264.7)other payables ------- ------- ------- 41.0 23.7 (280.7) ------- ------- ------- Non-currentliabilities Bank and (18.5) (204.6)other loans Forward (16.8) (16.8)currency swaps Trade and 163.1 168.6 (56.7) other payables Retirement (30.3) (30.3)benefitobligations Provisions - (1.1) Deferred tax (0.8) (1.4)liabilities 163.1 102.2 (310.9) ------- ------- ------- Total 204.1 125.9 (591.6)liabilities ======= ======= ======= Net assets - (96.4) 232.0 ======= ======= ======= SHAREHOLDERS'EQUITY Share capital (38.0) 11.2 Share premium 56.9 Hedge reserve 1.9 1.9 Retained (60.3) 162.0earnings Total - (96.4) 232.0 shareholders'equity ======= ======= ======= This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Crest Nicholson