28th Jul 2005 09:00
BBA Group PLC28 July 2005 BBA Group Plc28th July 2005 RESTATEMENT OF 2004 RESULTS TO IFRS BBA Group Plc today announces the restatement of its results for the year ended31 December 2004 in accordance with International Financial Reporting Standards("IFRS"). This announcement is intended to facilitate the understanding of theimpact of IFRS on BBA's statutory accounts ahead of the announcement of its 2005Interim Results on 1 September 2005, which will be prepared in accordance withIFRS. The primary areas of IFRS which result in the restatement are: •Recognition of full net liability on employee defined benefit pension schemes; •Dividend liabilities only recognised when declared; •The requirement not to amortise goodwill arising on acquisitions; •Recognition of a fair value charge in relation to employee share options; and, •Recognition of additional deferred tax assets and liabilities. The implementation of IFRS has only a limited impact on the underlying reportedfinancial performance and the financial position of BBA. For the year ended 31December 2004, the restatement under IFRS results in a decrease in normalisedprofit before tax* of £3.9m to £124.2m and an increase in net assets of £12.2m.Statutory profit for the period has been increased by £18.1m to £67.9m. The Group's ability to generate strong free cash flow and its dividend policyremain unchanged. * Profit before tax excluding restructuring costs and non-recurring items. Enquiries: Andrew Wood BBA 020 7514 3999 Lucie Anne Brailsford Brunswick 020 7404 5959 BBA Group plcRestatement of Financial Statements under International Financial ReportingStandards Introduction International Financial Reporting Standards ("IFRS") including InternationalAccounting Standards ("IAS") will apply for the first time for BBA Group plc'sreporting of the 2005 results. This will include the Interim Results for the sixmonths to 30 June 2005, as well as the Annual Report and Accounts for the yearended 31 December 2005, together with all comparative information. This announcement outlines how the previously reported financial information for2004 would have been reported under IFRS. The major areas impacted by the introduction of IFRS are discussed below. Included as appendices to this announcement are: •the consolidated balance sheet at 30 June 2004 and 31 December 2004; •the consolidated income statement for the six month period ended 30 June 2004 and year ended 31 December 2004; •the consolidated statement of recognised income and expenses for the six month period ended 30 June 2004 and year ended 31 December 2004; •the consolidated cash flow statement for the six month period ended 30 June 2004 and year ended 31 December 2004; •an extract from the segmental report for the six month period ended 30 June 2004 and year ended 31 December 2004; and, •accounting policies applicable under IFRS. Basis of Preparation The financial information presented in this document has been prepared on thebasis of all International Financial Reporting Standards, includingInternational Accounting Standards and interpretations issued by theInternational Accounting Standards Board ("IASB") and its committees and asinterpreted by any regulatory bodies applicable to the Group. These are subjectto ongoing amendment by the IASB and subsequent endorsement by the EuropeanCommission and are therefore subject to possible change. As a result,information contained within this document will require updating for anysubsequent amendments to IFRS required for first time adoption. In preparingthis financial information, the Group has assumed that the European Commissionwill endorse the amendment to IAS 19, "Employee Benefits - Actuarial Gains andLosses, Group Plans and Disclosures". The Group's auditors, Deloitte, have audited the Group's IFRS consolidatedbalance sheet at 31 December 2004 and the consolidated income statement and cashflow statement for the year ended 31 December 2004 and have given an unqualifiedreport on the results of their work to the Directors. Their unqualified reportstated that, in their opinion, the consolidated balance sheet at 31 December2004 and the consolidated income statement and cash flow statement for the yearended 31 December 2004 under IFRS had been properly prepared in accordance withthe basis of preparation described above. Their report also contained anemphasis of matter in respect of the uncertainties set out in the basis ofpreparation. In addition, the Group's auditors have reviewed the Group's IFRS consolidatedbalance sheet at 30 June 2004 and the consolidated income statement and cashflow statement for the half year ended 30 June 2004 and have given anunqualified report on the results of their work to the Directors. Financial Statements Format The financial statements contained within this announcement are presented inaccordance with IAS 1 "Presentation of Financial Statements". IAS 1 prescribes those key line items which should be separately disclosed onthe face of the income statement. Also, additional line items, headings andsub-totals should be presented when relevant to the understanding of theentity's financial performance. The Group believes that items that werepreviously disclosed under UK GAAP as 'exceptional items' continue to berelevant to the understanding of the financial statements, and will therefore bereported separately under IFRS as either 'restructuring costs' or 'non-recurringincome and expenses'. The Group has reviewed its segmental reporting in light of the requirements ofIAS 14 "Segmental Reporting" and has recognised that it is appropriate to make adistinction between the 'Airport Services' and 'Maintenance, Repair andOverhaul' businesses. Previously, these two segments were reported in aggregateunder the heading 'Aviation'. Since IAS 14 requires that central costs areallocated on a reasonable basis, only those costs which are incurred in relationto the support of the business units have been allocated across the segments. Asa result, there is an amount that is disclosed separately as 'unallocatedcorporate' which principally relates to plc costs which would not have beenincurred by the operating divisions. Key Impacts i) IFRS 2 "Share-based Payments" IFRS 2 requires the recognition of a charge in the income statement forshare-based payments based on the fair value of the award as at the date ofgrant. The Group has recognised a charge in the income statement for the fair value ofoutstanding share options granted to employees after 7 November 2002. The fairvalue of the options has been calculated using the Black-Scholes valuation modeland charged over the relevant option vesting periods. The Group has adopted the exemption which allows it not to apply IFRS 2"Share-based payments" retrospectively to options granted on or before 7November 2002. The charge relating to IFRS 2 amounts to £1.5m for the six months to 30 June2004 and £3.0m for the year to 31 December 2004. ii) IFRS 3 "Business Combinations" IFRS 3 requires that goodwill arising on acquisitions is not amortised, but isinstead subject to annual impairment testing in accordance with IAS 36"Impairment of Assets". BBA has applied the exemption allowing it not to restatebusiness combinations prior to 1 January 2004. Furthermore, IFRS 3 requires the measurement of intangible assets arising onacquisition. Unlike goodwill, intangible assets will continue to be amortisedover the life of the asset. During 2004, BBA acquired Airport Group International, Boker Aeroclean, Tenotexand a number of FBOs. In relation to these acquisitions the balance sheet hasbeen adjusted to reflect a reclassification from goodwill to intangible assetsof nil at 30 June 2004 and £2.7m at 31 December 2004. Amortisation of acquiredintangible assets is nil in the six months to 30 June 2004 and £0.1m in the yearto 31 December 2004. These changes result in an increase in operating profit from continuingoperations for the six months to 30 June 2004 of £10.1m and for the year to 31December 2004 of £20.7m. Net assets are increased by £10.1m at 30 June 2004 and£20.0m (net of a £0.7m foreign exchange loss on translation) at 31 December2004. iii) IAS 10 "Events after the Balance Sheet Date" IAS 10 requires that dividends declared after the balance sheet date should notbe recognised as a liability at the balance sheet date as the liability does notrepresent a present obligation as defined by IAS 37, "Provisions, ContingentLiabilities and Contingent Assets". As a result, net assets have been increased by £15.1m at 30 June 2004, being theinterim proposed dividend for 2004, and by £35.9m at 31 December 2004, being thefinal proposed dividend for 2004. iv) IAS 12 "Income Taxes" IAS 12 requires recognition of a deferred tax asset relating to the temporarydifference between the tax basis and carrying value (nil) of goodwill writtenoff to reserves prior to the introduction of FRS 10 "Goodwill and IntangibleAssets". The Group has also recognised a deferred tax liability for temporarydifferences relating to certain fixed assets without tax bases which wereacquired as part of previous business combinations and were non qualifying itemsunder UK tax law. Additionally, deferred tax has been provided on the adjustments outlined in thisannouncement which has the effect of further reducing BBA's deferred taxliabilities. These changes result in an increased taxation charge in the six months to 30June 2004 of £0.8m and for the year to 31 December 2004 of £2.5m. Net assetshave been increased by £12.1m at 30 June 2004, and £11.2m at 31 December 2004. v) IAS 19 "Employee Benefits" The Group has adopted the option within the amendment to IAS 19 to recognise thenet pension obligation of all Group plans at the transition date, with theobligation set against opening reserves. All actuarial gains and losses after the transition date are recognised in fullthrough the statement of recognised income and expenses. This change results in a £0.2m reduction in operating profit from continuingoperations for the six months to 30 June 2004, and in the year ended 31 December2004 a £2.0m gain on curtailment of two defined benefit pension schemesrecognised within other non-recurring income and expenses and a further £0.7mgain recognised within administration expenses. Net assets have been reduced at30 June 2004 by £37.4m and at 31 December 2004 by £51.4m. The difference betweenthese two balances arose primarily due to the latest triennial actuarialvaluation becoming available in the second half of 2004. vi) IAS 28 "Investments in Associates" IAS 28 requires the amount to be included within operating profit for share ofprofit of associates to be net of the relevant share of the associate's own taxcharge. This is in contrast to UK GAAP where the share of tax of associates wasincluded within taxation. The reclassification of the relevant tax charge results in a reduction inoperating profit from continuing operations and reduction in taxation for theperiod to 30 June 2004 of £1.0m; and a reduction in operating profit fromcontinuing operations and reduction in taxation for the year to 31 December 2004of £1.7m. vii) IAS 38 "Intangible Assets" The Group currently capitalises certain software expenditures and licenses,which are required to be disclosed as intangible assets. Under UK GAAP these were already being written-off over their useful lives,therefore there will be no effect on profit or net assets. There is however areclassification from tangible assets and other debtors to intangible assets. viii) IAS 32 "Financial Instruments: Disclosure and Presentation" and IAS 39"Financial Instruments: Recognition and Measurement" IAS 39 requires all derivative financial instruments to be recognised in thebalance sheet at their fair values and for other financial instruments to berecognised at amortised cost or fair value. The Group has adopted the exemption given in IFRS 1 not to restate comparativesfor IAS 32 and IAS 39 at the transition date of 1 January 2004. The IFRSReconciliation of the balance sheet as at 31 December 2003 within the BBA Group2004 Annual Report included a decrease in shareholders' equity of £50.9mrelating to the debt element of the 6.75 per cent Cumulative RedeemableConvertible Preference Shares. These preference shares were converted during thefirst half of 2005 and will therefore have no impact on the 30 June 2005 balancesheet. As a result of this, and the deferral of application of IAS 32 until 1January 2005 this item is no longer reflected in the IFRS restatement. The Group has adopted IAS 32 and IAS 39 in full with effect from 1 January 2005,the primary result of which is the recognition of derivative financialinstruments on the balance sheet at fair value. The impact of these items at 31December 2004 would have been to increase net assets by £1.8m. 2005 Interim Results BBA Group will report its interim results for 2005 on 1 September 2005. As previously announced, BBA disposed of its 40% share in Finotech GmbH on 30June 2005. The results of Finotech will therefore be reported as part ofdiscontinuing operations. The comparative results for 2004 will also be restatedas a result to include Finotech's 2004 results in discontinuing operations. APPENDIX 1 GROUP BALANCE SHEETFULL YEAR 2004-------------------------------------------------------------------------------------------------------------As at 31 December 2004 UK GAAP IFRS 2 IFRS 3 IAS 10 IAS 12 IAS 19 IAS 38 IFRS IFRS Share Post Income Based Business Balance tax Employee Intangible FORMAT Payments Combinations Sheet Benefits Assets Events £m £m £m £m £m £m £m £m-------------------------------------------------------------------------------------------------------------Intangible assets: Goodwill 352.3 17.4 0.7 370.4 Licences & software 11.8 11.3 23.1 Acquired intangible assets - 2.6 2.6 Property, plant and equipment 724.5 (11.3) 713.2 Interests in associates 33.4 33.4Trade and other receivables due afterone year 18.8 18.8------------------------------------------------------------------------------------------------------------- 1,140.8 - 20.0 - 0.7 - - 1,161.5-------------------------------------------------------------------------------------------------------------CURRENT ASSETSInventories 219.3 219.3 Trade and other receivables due withinone year 341.7 341.7 Deferred tax asset - - Cash and cash equivalents 134.0 134.0------------------------------------------------------------------------------------------------------------- 695.0 695.0-------------------------------------------------------------------------------------------------------------Total assets 1,835.8 - 20.0 - 0.7 - - 1,856.5------------------------------------------------------------------------------------------------------------- CURRENT LIABILITIES Trade and other payables due within oneyear (289.6) 35.9 (253.7) Tax liabilities (54.8) (54.8) Obligations under finance leases (2.8) (2.8) Bank overdrafts and loans (47.8) (47.8) Short-term provisions (2.3) (2.3)------------------------------------------------------------------------------------------------------------- (397.3) - - 35.9 - - - (361.4)------------------------------------------------------------------------------------------------------------- NON-CURRENTLIABILITIES Other payables due after one year (2.7) (3.5) (0.3) (6.5) Retirement benefit obligations (18.8) (51.1) (69.9) Obligations under finance leases (36.4) (36.4) Bank loans (620.6) (620.6) Deferred tax liabilties (76.7) 10.5 (66.2) Long-term provisions (24.2) (24.2)------------------------------------------------------------------------------------------------------------- (779.4) (3.5) - - 10.5 (51.4) - (823.8)-------------------------------------------------------------------------------------------------------------Total Liabilities (1,176.7) (3.5) - 35.9 10.5 (51.4) - (1,185.2)-------------------------------------------------------------------------------------------------------------Net assets 659.1 (3.5) 20.0 35.9 11.2 (51.4) - 671.3------------------------------------------------------------------------------------------------------------- EQUITY Share capital 169.0 169.0 Share premium account 285.3 285.3 Revaluation reserves 3.9 3.9 Treasury shares (7.4) (7.4) Capital reserve 14.5 0.7 15.2 Hedging and translation (17.6) (17.6)reserves Retained earnings 211.4 (4.2) 20.0 35.9 11.2 (51.4) 222.9------------------------------------------------------------------------------------------------------------- Total equity 659.1 (3.5) 20.0 35.9 11.2 (51.4) - 671.3 Equity attributable to: Ordinary shareholders 602.8 (3.5) 20.0 35.9 11.2 (51.4) - 615.0 Preference shareholders 56.2 56.2 Minority interests 0.1 0.1------------------------------------------------------------------------------------------------------------- 659.1 (3.5) 20.0 35.9 11.2 (51.4) - 671.3------------------------------------------------------------------------------------------------------------- GROUP BALANCE SHEETH1 2004--------------------------------------------------------------------------------------------------------------------As at 30 June UK GAAP IFRS 2 IFRS 3 IAS 10 IAS 12 IAS 19 IAS 38 IFRS2004 IFRS Share Based Business Post Balance Income tax Employee Intangible FORMAT Payments Combinations Sheet Events Benefits Assets £m £m £m £m £m £m £m £m--------------------------------------------------------------------------------------------------------------------Intangibleassets: Goodwill 310.8 10.1 320.9 Licences & software 8.1 12.0 20.1 Acquired intangible assets - - Property,plant andequipment 730.4 (12.0) 718.4 Interests inassociates 29.0 29.0 Trade andotherreceivablesdue after oneyear 19.2 19.2-------------------------------------------------------------------------------------------------------------------- 1,097.5 - 10.1 - - - - 1,107.6-------------------------------------------------------------------------------------------------------------------- CURRENT ASSETS Inventories 218.9 218.9 Trade andotherreceivablesdue within oneyear 242.2 242.2 Deferred tax - -asset Cash and cashequivalents 106.8 106.8-------------------------------------------------------------------------------------------------------------------- 567.9 567.9--------------------------------------------------------------------------------------------------------------------Total assets 1,665.4 - 10.1 - - - - 1,675.5-------------------------------------------------------------------------------------------------------------------- CURRENTLIABILITIES Trade andother payablesdue within oneyear (254.0) 15.1 (1.8) (240.7) Tax liabilities (52.2) (52.2) Obligationsunder financeleases (6.2) (6.2) Bankoverdrafts andloans (485.8) (485.8) Short-termprovisions (1.0) (1.0)-------------------------------------------------------------------------------------------------------------------- (799.2) - - 15.1 - (1.8) - (785.9)-------------------------------------------------------------------------------------------------------------------- NON-CURRENTLIABILITIES Other payablesdue after oneyear (1.5) (2.2) (0.5) (4.2) Retirementbenefitobligations (19.3) (35.1) (54.4) Obligationsunder financeleases (44.0) (44.0) Bank loans (16.4) (16.4) Deferred taxliabilties (73.1) 12.1 (61.0) Long-termprovisions (25.5) (25.5)-------------------------------------------------------------------------------------------------------------------- (179.8) (2.2) - - 12.1 (35.6) - (205.5)--------------------------------------------------------------------------------------------------------------------TotalLiabilities (979.0) (2.2) - 15.1 12.1 (37.4) - (991.4)-------------------------------------------------------------------------------------------------------------------- Net assets 686.4 (2.2) 10.1 15.1 12.1 (37.4) - 684.1--------------------------------------------------------------------------------------------------------------------EQUITY Share capital 169.2 169.2 Share premiumaccount 285.0 285.0 Revaluationreserves 3.9 3.9 Treasury shares (7.7) (7.7) Capitalreserve 14.5 0.5 15.0 Hedging andtranslationreserves (29.8) (29.8) Retainedearnings 251.3 (2.7) 10.1 15.1 12.1 (37.4) 248.5--------------------------------------------------------------------------------------------------------------------Total equity 686.4 (2.2) 10.1 15.1 12.1 (37.4) - 684.1 Equityattributable to: Ordinaryshareholders 630.2 (2.2) 10.1 15.1 12.1 (37.4) - 627.9 Preferenceshareholders 56.2 56.2 Minority - -interests-------------------------------------------------------------------------------------------------------------------- 686.4 (2.2) 10.1 15.1 12.1 (37.4) - 684.1-------------------------------------------------------------------------------------------------------------------- Appendix 2GROUP INCOME STATEMENTFULL YEAR 2004 ----------------------------------------------------------------------------------------------------Year Ended 31 UK GAAP IFRS 2 IFRS 3 IAS 12 IAS 19 IAS 28 IFRSDecember 2004 IFRS Share Based Business Income Tax Employee Associates FORMAT Payments Combinations Benefits £m £m £m £m £m £m £m----------------------------------------------------------------------------------------------------CONTINUINGOPERATIONS Revenue 1,371.6 - - - - - 1,371.6 Cost of sales (1,087.6) (1,087.6)----------------------------------------------------------------------------------------------------Gross profit 284.0 - - - - - 284.0 Distributioncosts (64.0) (64.0) Administrative expenses (115.8) (3.0) 20.7 0.7 (97.4) Otheroperatingincome/(expenses) 3.9 3.9 Share ofresults ofassociates 11.3 (1.7) 9.6----------------------------------------------------------------------------------------------------Operatingprofit fromcontinuingoperationsbeforerestructuringcosts andnon-recurringitems 119.4 (3.0) 20.7 - 0.7 (1.7) 136.1 Restructuringcosts (22.7) (22.7) Othernon-recurringincome andexpenses * (3.0) 2.0 (1.0)----------------------------------------------------------------------------------------------------Operatingprofit fromcontinuingoperations 93.7 (3.0) 20.7 - 2.7 (1.7) 112.4 Investmentincome 31.1 0.2 31.3 Finance costs (43.2) (43.2)----------------------------------------------------------------------------------------------------Profit beforetax 81.6 (3.0) 20.7 - 2.9 (1.7) 100.5 Tax (25.7) (2.5) 1.7 (26.5)----------------------------------------------------------------------------------------------------Profit for theperiod fromcontinuingoperations 55.9 (3.0) 20.7 (2.5) 2.9 - 74.0---------------------------------------------------------------------------------------------------- DISCONTINUINGOPERATIONSOperating lossfromdiscontinuingoperations (0.3) - (0.3) Loss ondisposal (7.9) (7.9) Tax 2.1 2.1----------------------------------------------------------------------------------------------------Loss for theperiod fromdiscontinuingoperations (6.1) - - - - - (6.1)---------------------------------------------------------------------------------------------------- Profit for theperiod 49.8 (3.0) 20.7 (2.5) 2.9 - 67.9 ---------------------------------------------------------------------------------------------------- * Other non-recurring income and expenses includes £3.0m of aborted acquisitioncosts and £2m of gains on defined benefit pension scheme curtailment GROUP INCOME STATEMENTH1 2004-------------------------------------------------------------------------------------------------Period ended 30 UK GAAP IFRS 2 IFRS 3 IAS 12 IAS 19 IAS 28 IFRSJune 2004 IFRS Share Based Business Income Tax Employee Associates FORMAT Payments Combinations Benefits £m £m £m £m £m £m £m-------------------------------------------------------------------------------------------------CONTINUINGOPERATIONS Revenue 675.1 - - - - - 675.1Cost of sales (528.1) (528.1)-------------------------------------------------------------------------------------------------Gross profit 147.0 - - - - - 147.0 Distributioncosts (32.4) (32.4) Administrativeexpenses (61.5) (1.5) 10.1 (0.2) (53.1) Otheroperatingincome/(expenses) 1.7 1.7 Share ofresults ofassociates 6.0 (1.0) 5.0-------------------------------------------------------------------------------------------------Operatingprofit fromcontinuingoperationsbeforerestructuringcosts andnon-recurringitems 60.8 (1.5) 10.1 - (0.2) (1.0) 68.2 Restructuringcosts (2.8) (2.8)-------------------------------------------------------------------------------------------------Othernon-recurringincome andexpenses (1.6) (1.6) Operatingprofit fromcontinuingoperations 56.4 (1.5) 10.1 - (0.2) (1.0) 63.8 Investmentincome 10.8 0.1 10.9 Finance costs (16.0) (16.0)-------------------------------------------------------------------------------------------------Profit beforetax 51.2 (1.5) 10.1 - (0.1) (1.0) 58.7 Tax (16.1) (0.8) 1.0 (15.9)-------------------------------------------------------------------------------------------------Profit for theperiod fromcontinuingoperations 35.1 (1.5) 10.1 (0.8) (0.1) - 42.8------------------------------------------------------------------------------------------------- DISCONTINUINGOPERATIONSOperating loss - - -fromdiscontinuingoperations Loss ondisposal (1.3) (1.3) Tax 0.1 0.1-------------------------------------------------------------------------------------------------Loss for theperiod fromdiscontinuingoperations (1.2) - - - - - (1.2)------------------------------------------------------------------------------------------------- Profit for theperiod 33.9 (1.5) 10.1 (0.8) (0.1) - 41.6 ------------------------------------------------------------------------------------------------- * Other non-recurring income and expenses includes £1.6m of aborted acquisitioncosts Appendix 3GROUP STATEMENT OF RECOGNISED INCOME AND EXPENSESFULL YEAR 2004-------------------------------------------------------------------------------------------------------Year Ended 31 UK GAAP IFRS 2 IFRS 3 IAS 10 IAS 12 IAS 19 IFRSDecember 2004 IFRS Share Based Business Post Balance Income tax Employee FORMAT Payments Combinations Sheet Events Benefits £m £m £m £m £m £m £m------------------------------------------------------------------------------------------------------- Profit forperiod 49.8 (3.0) 20.7 - (2.5) 2.9 67.9 Exchangedifference onretranslationof net assetsof subsidiaryundertakings (56.2) (0.7) (0.5) (0.9) (58.3) Gains /(losses) onnet assethedges 38.6 38.6 Actuarialgains/(losses)on definedbenefitpensionschemes - (15.7) (15.7) Deferred taxon itemstransferred toequity - (0.7) (0.7)-------------------------------------------------------------------------------------------------------Totalrecognisedincome andexpenses forthe period 32.2 (3.0) 20.0 - (3.7) (13.7) 31.8------------------------------------------------------------------------------------------------------- RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' EQUITYFULL YEAR 2004 -------------------------------------------------------------------------------------------------------Year Ended 31 UK GAAP IFRS 2 IFRS 3 IAS 10 IAS 12 IAS 19 IFRSDecember 2004 IFRS Share Based Business Post Balance Income tax Employee FORMAT Payments Combinations Sheet Events Benefits £m £m £m £m £m £m £m------------------------------------------------------------------------------------------------------- Profit for theperiod 49.8 (3.0) 20.7 - (2.5) 2.9 67.9 Non-equitydividends (3.8) (3.8) Equitydividends (51.0) 1.6 (49.4)------------------------------------------------------------------------------------------------------- (5.0) (3.0) 20.7 1.6 (2.5) 2.9 14.7Exchangedifferences ontranslation(net) (17.6) - (0.7) - (0.5) (0.9) (19.7) Movement ontreasuryshares 1.0 1.0Shares issued 0.2 0.2 Equitymovement inshare optionschemes - 0.4 0.4 Actuarialgains/(losses)on definedbenefitpensionschemes - - - - - (15.7) (15.7) Deferred taxon itemstransferred toequity - - - - (0.7) - (0.7) Minorityinterests (0.1) (0.1)-------------------------------------------------------------------------------------------------------Movement inshareholders'equity (21.5) (2.6) 20.0 1.6 (3.7) (13.7) (19.9) Shareholders'equity atbeginning ofperiod 680.6 (0.9) 34.3 14.9 (37.7) 691.2-------------------------------------------------------------------------------------------------------Shareholders'equity at endof period 659.1 (3.5) 20.0 35.9 11.2 (51.4) 671.3------------------------------------------------------------------------------------------------------- GROUP STATEMENT OF RECOGNISED INCOME AND EXPENSESH1 2004-------------------------------------------------------------------------------------------------------Period ended 30 UK GAAP IFRS 2 IFRS 3 IAS 10 IAS 12 IAS 19 IFRSJune 2004 IFRS Share Based Business Post Balance Income tax Employee FORMAT Payments Combinations Sheet Events Benefits £m £m £m £m £m £m £m------------------------------------------------------------------------------------------------------- Profit forperiod 33.9 (1.5) 10.1 - (0.8) (0.1) 41.6 Exchangedifference onretranslationof net assetsof subsidiaryundertakings (29.8) 0.1 0.4 (29.3) Gains /(losses) onnet assethedges 17.8 17.8 Actuarial gains/ - -(losses) ondefined benefitpension schemesDeferred taxon itemstransferred toequity - (2.1) (2.1)-------------------------------------------------------------------------------------------------------Totalrecognisedincome andexpenses forthe period 21.9 (1.5) 10.1 - (2.8) 0.3 28.0------------------------------------------------------------------------------------------------------- RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' EQUITYH1 2004--------------------------------------------------------------------------------------------------Period ended UK GAAP IFRS 2 IFRS 3 IAS 10 IAS 12 IAS 19 IFRS30 June IFRS Share Based Business Post Balance Income tax Employee2004 FORMAT Payments Combinations Sheet Events Benefits £m £m £m £m £m £m £m--------------------------------------------------------------------------------------------------Profit forthe period 33.9 (1.5) 10.1 - (0.8) (0.1) 41.6 Non-equitydividends (1.9) (1.9) Equitydividends (15.1) (19.2) (34.3)-------------------------------------------------------------------------------------------------- 16.9 (1.5) 10.1 (19.2) (0.8) (0.1) 5.4Exchangedifferenceson translation (net) (12.0) - - - 0.1 0.4 (11.5) Movement ontreasuryshares 0.9 0.9 Shares issued - - Equitymovement inshare optionschemes - 0.2 0.2 Actuarial gains/(losses) ondefinedbenefitpensionschemes - - - - - - - Deferred taxon itemstransferredto equity - - - - (2.1) - (2.1)Minority interests - ---------------------------------------------------------------------------------------------------Movement inshareholders'equity 5.8 (1.3) 10.1 (19.2) (2.8) 0.3 (7.1) Shareholders'equity atbeginning ofperiod 680.6 (0.9) 34.3 14.9 (37.7) 691.2--------------------------------------------------------------------------------------------------Shareholders'equity at endof period 686.4 (2.2) 10.1 15.1 12.1 (37.4) 684.1-------------------------------------------------------------------------------------------------- Appendix 4GROUP CASH FLOW STATEMENTFull Year 2004---------------------------------------------------------------------------------------------------Year ended 31 UK GAAP IFRS 2 IFRS 3 IAS 19 IAS 28 IAS 38 IFRSDecember 2004 IFRS Share Based Business Employee Associates Intangible FORMAT Payments Combinations Benefits Assets £m £m £m £m £m £m £m---------------------------------------------------------------------------------------------------OperatingactivitiesOperatingprofit - continuing 93.7 (3.0) 20.7 2.7 (1.7) 112.4 operations - discontinuing (0.3) (0.3) operations Share ofprofit fromassociates (11.3) 1.7 (9.6)---------------------------------------------------------------------------------------------------Profit fromoperations 82.1 (3.0) 20.7 2.7 - 102.5 Depreciationof property,plant andequipment 73.6 (3.5) 70.1 Depreciationof intangibleassets - 0.1 3.5 3.6 Goodwillamortisation 20.8 (20.8) - Profit on sale of tangiblefixed assets - - Decrease inprovisions (0.4) (0.4) Othernon-cash items 7.7 3.0 (2.7) 8.0---------------------------------------------------------------------------------------------------Operating cashflow beforeworkingcapital 183.8 - - - - - 183.8 Increase inworkingcapital (38.4) (38.4)---------------------------------------------------------------------------------------------------Cash generatedby operations 145.4 - - - - - 145.4Income taxespaid (13.0) (13.0)---------------------------------------------------------------------------------------------------Net cashinflow fromoperatingactivities 132.4 - - - - - 132.4---------------------------------------------------------------------------------------------------InvestingactivitiesDividendsreceived fromassociates 0.9 0.9 Purchase ofproperty,plant andequipment (56.5) (56.5) Purchase ofintangibleassets (5.2) (5.2) Disposal ofproperty,plant andequipment 5.7 5.7 Acquisition ofsubsidiaries (85.4) (85.4) Disposal ofsubsidiaries 0.2 0.2 Investment inassociates (0.8) (0.8) Deferredconsiderationpaid fromprior yearactivities (1.7) (1.7)---------------------------------------------------------------------------------------------------Net cashoutflow frominvestingactivities (142.8) - - - - - (142.8) FinancingactivitiesInterestreceived 30.4 30.4 Interest paid (42.5) (42.5)Interestelement offinance leasespaid (1.4) (1.4) Preferencedividend paid (3.8) (3.8) Dividends paid (49.4) (49.4)Proceeds fromissue ofordinaryshares 1.2 1.2 Increase /(decrease) inloans 67.4 67.4 Increase /(decrease) infinance leases (15.5) (15.5) Increase /(decrease) inoverdrafts 3.8 3.8 Decrease /(increase) inother liquidassets 7.6 7.6---------------------------------------------------------------------------------------------------Net cashoutflow fromfinancingactivities (2.2) - - - - - (2.2)---------------------------------------------------------------------------------------------------Increase /(decrease) incash and cashequivalents (12.6) - - - - - (12.6)---------------------------------------------------------------------------------------------------Cash and cashequivalents atbeginning ofyear 154.7 154.7 Exchange (8.1) (8.1)---------------------------------------------------------------------------------------------------Cash and cashequivalents atend of year 134.0 - - - - - 134.0---------------------------------------------------------------------------------------------------Net debt atbeginning ofperiod (459.5) (459.5) Increase /(decrease) incash and cashequivalents (12.6) (12.6) (Increase) /decrease inloans (67.4) (67.4) (Increase) /decrease infinance leases 15.5 15.5 (Increase) /decrease inoverdrafts (3.8) (3.8) (Increase) /decrease inother liquidassets (7.6) (7.6) Finance leasesacquired (1.9) (1.9) Bank loansacquired (10.7) (10.7) Exchange 36.4 36.4---------------------------------------------------------------------------------------------------Net debt atend of period (511.6) - - - - - (511.6)--------------------------------------------------------------------------------------------------- GROUP CASH FLOW STATEMENTH1 2004---------------------------------------------------------------------------------------------------Period ended 30 UK GAAP IFRS 2 IFRS 3 IAS 19 IAS 28 IAS 38 IFRSJune 2004 IFRS Share Based Business Employee Associates Intangible FORMAT Payments Combinations Benefits Assets £m £m £m £m £m £m £m---------------------------------------------------------------------------------------------------Operatingactivities Operatingprofit - continuing 56.4 (1.5) 10.1 (0.2) (1.0) 63.8 operations - discontinuing - - operations Share ofprofit fromassociates (6.0) 1.0 (5.0)---------------------------------------------------------------------------------------------------Profit fromoperations 50.4 (1.5) 10.1 (0.2) 58.8 Depreciationof property,plant andequipment 37.6 (1.8) 35.8 Depreciationof intangibleassets - 1.8 1.8Goodwillamortisation 10.1 (10.1) - Profit on saleof tangiblefixed assets (0.4) (0.4) Decrease inprovisions (2.6) (2.6) Othernon-cash items 0.9 1.5 0.2 2.6---------------------------------------------------------------------------------------------------Operating cashflow beforeworkingcapital 96.0 - - - - - 96.0 Increase inworkingcapital (16.1) (16.1)---------------------------------------------------------------------------------------------------Cash generatedby operations 79.9 - - - - - 79.9Income taxespaid (6.6) (6.6)---------------------------------------------------------------------------------------------------Net cashinflow fromoperatingactivities 73.3 - - - - - 73.3---------------------------------------------------------------------------------------------------InvestingactivitiesDividendsreceived fromassociates 0.2 0.2 Purchase ofproperty,plant andequipment (23.3) (23.3) Purchase of intangibleassets - - Disposal ofproperty,plant andequipment 1.3 1.3 Acquisition ofsubsidiaries (7.6) (7.6) Disposal of - -subsidiariesInvestment inassociates (0.8) (0.8) Deferredconsiderationpaid fromprior yearactivities (0.2) (0.2)---------------------------------------------------------------------------------------------------Net cashoutflow frominvestingactivities (30.4) - - - - - (30.4)--------------------------------------------------------------------------------------------------- FinancingactivitiesInterestreceived 10.2 10.2 Interest paid (16.6) (16.6) Interestelement offinance leasespaid (0.9) (0.9) Preferencedividend paid (1.9) (1.9) Dividends paid (34.3) (34.3) Proceeds fromissue ofordinaryshares 0.9 0.9 Increase /(decrease) inloans (13.0) (13.0) Increase /(decrease) infinance leases (3.8) (3.8) Increase /(decrease) inoverdrafts (22.8) (22.8) Decrease / (increase) inother liquidassets - ----------------------------------------------------------------------------------------------------Net cashoutflow fromfinancingactivities (82.2) - - - - - (82.2)---------------------------------------------------------------------------------------------------Increase /(decrease) incash and cashequivalents (39.3) - - - - - (39.3)---------------------------------------------------------------------------------------------------Cash and cashequivalents atbeginning ofyear 154.7 154.7 Exchange (8.6) (8.6)Related Shares:
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