31st Mar 2006 07:03
Gleeson(M J)Group PLC31 March 2006 Friday 31 March 2006 M J GLEESON GROUP PLC Interim Announcement Gleeson (whose principal businesses are currently homes and regeneration,development and investment property, and civil engineering for the waterindustry) announces its results for the half year ended 31 December 2005. Thefirst half of Gleeson's financial year is traditionally much the weaker of thetwo. Six months ending / at 31 December 2005 2004Revenue - continuing (£m) 179.3 174.6Pre-tax profit - continuing (£m) 0.7 7.5Earnings per share - continuing, diluted (p) 1.2 19.6Dividend per share (p) 1.6 1.5NAV per share (p) 287 308 •Today, the outcome of the Group's strategic review is also being announced. Henceforth, focus will be on housing regeneration, commercial property development, and strategic land trading. •Although Homes and Regeneration made an operating loss of £1.2m (2004/05: profit of £2.2m), it retains the potential to make the substantial profit budgeted for the current year. The level of activity in the housing market has seen a noticeable increase since Christmas, and housing regeneration schemes are expected to make a material contribution to the second half divisional result. •Development and Investment Property also retains the potential to make its budgeted profit contribution, albeit this will be less than what was achieved last year. •The Engineering Division has a strong and secure forward order book through to 2010 from its six AMP 4 Alliances. In addition, the Division has significant opportunities to secure single large contracts in AMP 4. Enquiries: M J Gleeson Group plc 020-8644 4321Terry Massingham (Chief Executive)Paul Wallwork (Finance Director) Close Brothers Corporate Finance LimitedPeter Alcaraz 020-7655 3139 Bankside Consultants LimitedCharles Ponsonby 020-7367 8851 INTERIM STATEMENT This Interim Announcement reports the Group's results for the half year to 31December 2005. Comment is also made on prospects, in particular for the rest ofthe year to 30 June 2006. Reference should additionally be made to today's announcement of the outcome ofthe Group's Strategic Review, which heralds a substantial change of direction tofocus on housing regeneration, commercial property development and strategicland trading. The benefit of these changes will mainly be felt in futurefinancial years. FINANCIAL REVIEW The financial statements for the half year to 31 December 2005 are the first tobe prepared by the Group under International Financial Reporting Standards("IFRS"). The comparative figures for the half year to 31 December 2004 and theyear to 30 June 2005, which were prepared under UK GAAP, have been restatedaccordingly. In the half year to 31 December 2005, on revenue of £179.3m (2004/05: £174.6m),the operating profit was £2.0m (2004/05: £8.8m) and the pre-tax profit amountedto £0.7m (2004/05: £7.5m). After tax of £0.1m (2004/05: credit of £2.3m) and aloss for discontinued operations of £3.7m (2004/05: £15.4m), the loss for theperiod totalled £3.1m (2004/05: £5.6m). This equates to a total loss per share(diluted) of 5.9p (2004/05: 11.1p). Period end equity totalled £147.9m (2004/05: £158.7m), equivalent to NAV pershare of 287p (2004/05: 308p). Net borrowings of £102.3m (2004/05: £88.6m) atthe period end, a seasonally high point, represented gearing of 69% (2004/05:56%). Net finance costs, however, totalled £2.1m (2004/05: £3.0m). INTERIM DIVIDEND In the light of the Group's attractive prospects following implementation of theStrategic Review, the Board has declared an interim dividend per share of 1.6p(2004/05: 1.5p), up 6.7%, which will be paid on 30 June 2006 to shareholders onthe register at close of business on 2 June 2006, with an ex-dividend date of 31May 2006. OPERATING REVIEW Homes and Regeneration Homes and Regeneration made an operating loss of £1.2m (2004/05: profit of£2.2m) on revenue of £46.4m (2004/05: £50.1m). In the half year, a total of 245 units were sold (2004/05: 281) at an averageselling price of £176,000 (2004/05: £178,000). Of these, Homes accounted for 158units (2004/05: 258) at an average selling price of £214,000 (2004/05: £201,000)and Regeneration 87 units (2004/05: 23) at an average selling price of £107,000(2004/05: £88,000). The performance of Homes reflected a difficult market in theperiod with both margins and volumes under pressure. In addition, there has beena change in the accrual rate for old site and maintenance costs, which hasresulted in the first half of the year being adversely impacted. This will berecovered in the second half. Development and Investment Property Development and Investment Property made an operating profit of £1.8m (2004/05:£1.6m) on revenue of nil (2004/05: £1.5m). Rents from investment properties totalled £1.2m (2004/05: £2.3m), the reductionreflecting the extensive sales made in the half year to 30 June 2005. Construction Services (continuing) The continuing elements of Construction Services made an operating profit of£4.9m (2004/05: £7.1m) on revenue of £132.9m (2004/05: £123.0m). Construction Services (discontinued) The £3.7m (2005/05: £15.4m) loss in the period for this discontinued operationreflects a re-assessment of the likely out-turn costs of the projects for whichthe Group retains a liability, including the overheads involved in managing themto conclusion. POST-BALANCE SHEET EVENT As announced on 24 March 2006, the Group disposed of Gleeson MCL Limited toMorgan Sindall plc for a cash consideration of £23.3m. Gleeson MCL is aconstruction services business involved in railway engineering contracting, inparticular work for and in partnership with London Underground Limited. PROSPECTS Homes and Regeneration Despite Homes' modest first half, Homes and Regeneration retains the potentialto make the substantial profit budgeted for the current year. The level of activity in the housing market has seen a noticeable increase sinceChristmas, with sales in the last eight weeks 30% up on the same period a yearago. Homes and Regeneration will, however, now do well to exceed last year'sunit sales of 726 (a 36% increase on the previous year). Regeneration is currently on site at Beswick and Grove Village in Manchester, atNorfolk Park in Sheffield and at Liverpool City Centre Inner Core South, andthese schemes are expected to make a material contribution to the second halfdivisional result. Looking further ahead, Regeneration will benefit from schemesat North Huyton on Merseyside, Burnley, Oldham and Doncaster, as well as fromits membership of the National Development Panel with which English Partnershipsproposes to develop its extensive portfolio of NHS sites across the country.Together, these arrangements will provide the Group with a secure long-term flowof activity. Many new opportunities are arising and the Group expects to benefit from anumber of these in the coming months. Development and Investment Property Development and Investment Property also retains the potential to make itsbudgeted profit contribution, albeit this will be less than what was achievedlast year. At the period end, the Group had 16 schemes under development.At the period end, the Group owned 13 investment properties with an aggregatebook value of £33.8m. Subsequently, terms have been agreed for the sale of onesubstantial investment property and two other investment properties areprojected for sale before the year end. Construction Services The Engineering Division has a strong and secure forward order book through to2010 from its AMP4 Alliances with Anglian Water, Northumbrian Water, SevernTrent Water, South West Water, Thames Water and Yorkshire Water, as well as itswork for Scottish Water. The Division also has significant opportunities tosecure single large contracts in AMP4. Dermot GleesonChairman 31 March 2006 CONSOLIDATED INCOME STATEMENT For the six months to 31 December 2005 Unaudited Unaudited Unaudited Six months to Six months to Year to 31 December 31 December 30 June 2005 2004 2005 £000 £000 £000 Restated Restated Continuing operationsRevenue 179,285 174,581 418,068Cost of sales (160,656) (151,390) (358,605) --------- --------- ---------Gross profit 18,629 23,191 59,463 Otheroperatingincome 1,349 2,372 6,855Administrativeexpenses (17,448) (16,219) (31,817)Share ofresults ofjoint ventures (518) (576) (765) --------- --------- ---------Operatingprofit 2,012 8,768 33,736 Investmentrevenues 764 1,761 11,061Finance costs (2,091) (3,032) (6,577) --------- --------- ---------Profit beforetax 685 7,497 38,220 Tax (70) 2,359 4,622 --------- --------- --------- ---------Profit for theperiod fromcontinuingoperations 615 9,856 42,842 Discontinued operationsLoss for theperiod fromdiscontinuedoperations (3,665) (15,422) (51,609) --------- --------- ---------Loss for theperiod (3,050) (5,566) (8,767) ========= ========= ========= ========= Earnings/(loss) per shareContinuing operationsBasic 1.21p 19.38p 84.21pDiluted 1.20p 19.62p 83.47pDiscontinued operationsBasic (7.19p) (30.33p) (101.45p)Diluted (7.14p) (30.71p) (100.55p) CONSOLIDATED BALANCE SHEET At 31 December 2005 Unaudited Unaudited Unaudited 31 December 2005 31 December 2004 30 June 2005 £000 £000 £000 Restated Restated Non-current assetsGoodwill 4,794 4,794 4,794Property, plant andequipment 11,826 22,927 20,602Investment property 37,503 61,661 33,053Investments in jointventures 1,362 1,951 1,876Other investments 11,308 2,016 4,123Deferred tax assets 5,173 1,253 4,946 ---------- ----------- ---------- 71,966 94,602 69,394 ========== =========== ==========Current assetsInventories 175,064 179,883 176,089Trade and otherreceivables 140,973 127,906 129,960Cash and cash equivalents 63 92 70 ---------- ----------- ---------- 316,100 307,881 306,119 ========== =========== ========== Assets held for sale 12,672 - 12,252 ---------- ----------- ----------Total assets 400,738 402,483 387,765 ========== =========== ========== Current liabilitiesBank overdrafts (102,339) (88,740) (60,819)Trade and other payables (136,574) (155,075) (136,379)UK corporation tax (5,582) - (5,598)Liabilities directlyassociated with assetsclassified as held forsale (8,364) - (33,620) ---------- ----------- ----------Total liabilities (252,859) (243,815) (236,416) ========== =========== ========== ---------- ----------- ----------Net assets 147,879 158,668 151,349 ========== =========== ========== EquityCalled up share capital 1,029 1,029 1,029Share premium account 3,762 3,762 3,762Capital redemptionreserve 120 120 120Equity reserve 6,028 3,974 5,108Revaluation reserve 3,158 3,541 2,715Retained earnings 133,782 146,242 138,615 ---------- ----------- ----------Total equity 147,879 158,668 151,349 ========== =========== ========== CONSOLIDATED CASH FLOW STATEMENT For the six months to 31 December 2005 Unaudited Unaudited Unaudited Six months to Six months to Year to 31 December 31 December 30 June 2005 2004 2005 £000 £000 £000 Restated Restated Net cash flowfrom operatingactivities (33,171) (24,400) (24,725) Investing activitiesPurchase ofinvestment injoint ventures - - (25)Purchase ofsubsidiaryundertakings - - (8,467)Net cashacquired withsubsidiaryundertakings - - 2,071Interestreceived 738 258 697Rents received 1,326 2,372 4,743Purchase ofproperty,plant andequipment (3,122) (4,771) (7,183)Proceeds ondisposal ofproperty,plant andequipment 8,225 521 1,599Proceeds ondisposal ofinvestmentproperties 1,865 7,800 46,259Proceeds ondisposal ofinvestments 737 1,364 2,058Net investment(loans)/receipts (3,177) 196 (1,911)Sale ofbusinessassets (14,678) - - ---------- ----------- ----------Net cash usedin investingactivities (8,086) 7,740 39,841 Financing activities(Purchase)/sale of ownshares (270) - 71Dividends paid - (54) (4,002) ---------- ----------- ----------Net cash usedin financingactivities (270) (54) (3,931) Net(decrease)/increase in cashand cashequivalents (41,527) (16,714) 11,185 Cash and cashequivalents atbeginning ofperiod (60,749) (71,934) (71,934) ---------- ----------- ----------Cash and cashequivalents atend of period (102,276) (88,648) (60,749) ---------- ----------- ---------- CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE Unaudited Unaudited Unaudited Six months to Six months to Year to 31 December 31 December 30 June 2005 2004 2005 £000 £000 £000 Loss forperiod (3,050) (5,566) (8,767) ---------- ---------- ---------- Revaluation ofproperty,plant andequipment (204) (65) (66)Deferred taxon revaluationof property, 54 132 (132)plant and equipment ---------- ---------- ----------Net(losses)/gainsnot recognisedin the (150) 67 (198)income statement ========== ========== ==========Totalrecognisedexpense forthe period (3,200) (5,499) (8,965)attributable to equityshareholders ========== ========== ========== CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY Unaudited Unaudited Unaudited Six months to Six months to Year to 31 December 31 December 30 June 2005 2004 2005 £000 £000 £000 Openingshareholders'equity 151,349 164,167 164,167Revaluation ofproperty,plant andequipment (204) (65) (66)Deferredtaxation onrevaluation ofproperty, 54 132 (132)plant and equipment Employees'award scheme (270) - 71Loss for theperiod (3,050) (5,566) (8,767)Dividends - - (3,924) ----------- ---------- ----------Closingshareholders'equity 147,879 158,668 151,349 =========== ========== ========== Notes to the Interim Report 1. Basis of preparation European Union (EU) law requires that the next annual financial statements ofthe Group, for the year ending 30 June 2006, be prepared in accordance withInternational Financial Reporting Standards (IFRS) as adopted by the EU (adoptedIFRS). This Interim financial information has been prepared on the basis of therecognition and measurement requirements of IFRS in issue that are eitherendorsed by the EU and effective (or available for early adoption) at 30 June2006 or are expected to be endorsed and effective (or available for earlyadoption) at 30 June 2006. Based on these adopted and unadopted IFRS, the Directors have made assumptionsabout the accounting policies expected to be applied, which are as set outbelow, for the year ending 30 June 2006. In addition, the adopted IFRS that willbe effective (or available for early adoption) in the financial statements forthe year ending 30 June 2006 are still subject to change and to additionalinterpretations and therefore cannot be determined with certainty. Accordingly,the accounting policies for that annual period will be determined finally onlywhen the financial statements are prepared for the year ending 30 June 2006. Theresults for the six months to 31 December 2005 and the comparative figures forthe six months to 31 December 2004 are unaudited. The comparative figures for the year ended 30 June 2005 are not the Company'sstatutory accounts for that financial year. Those accounts, which were preparedunder UK Generally Accepted Accounting Practice (GAAP), have been reported on bythe Company's auditors and delivered to the Registrar of Companies. The reportof the auditors was unqualified and did not contain statements under section 237(2) or (3) of the Companies Act 1985. The comparative figures for the six months ended 31 December 2004 and for theyear ended 30 June 2005 have been restated for the adoption of IFRS. Theprincipal differences between UK GAAP and IFRS for the Group are set out in note2(a). Note 2(b) sets out the effect of International Accounting Standard (IAS)32 and IAS 39 on M J Gleeson Group plc. IFRS transitional information is shown in note 6. 2. Accounting policies Details of significant amendments to the Group's accounting policies (as set outin the Report and Accounts for the year ended 30 June 2005) resulting from theadoption of IFRS are included in notes (a) and (b). With the exception of thosechanges detailed therein, the accounting policies used are consistent with thosedisclosed in the Report and Accounts for the year ended 30 June 2005. (a) Principal differences between UK GAAP and IFRS There are seven principal differences which give rise to changes in the Group'sreported profits and losses and net assets as set out in the Report and Accountsfor the year ended 30 June 2005 and Interim Report 2005 for the six months ended31 December 2004. These are categorised as follows: i) Sales and marketing costsii) Deferred land paymentsii) Property transactionsiii) Lease incentivesiv) Property revaluationsv) Provisions (disclosure item)vi) Other adjustments, including:proposed dividendsdeferred taxationshare-based paymentsjoint venturesgoodwill and intangible assets i) Sales and marketing costsUnder UK GAAP, sales and marketing costs for the Homes and Regeneration andProperty Divisions are capitalised in site work in progress and written offthrough cost of sales as the site progresses. Under IAS 2 'Inventories', costsrelating to sales and marketing activities are required to be written off asincurred. ii) Deferred land paymentsUnder UK GAAP, deferred land payments (land creditors) are included in'creditors' at their gross value. Under IAS 2 'Inventories', imputed interest isrecognised on deferred land payments with the result that the land creditors arecarried in the balance sheet at net present value and the value of land held onthe balance sheet in inventories is reduced. The unwinding of the imputedinterest (or discount) on land creditors is charged to finance cost and thereduction in land values in inventories will result in an eventual reduction incost of sales as the land is traded out. Land debtors are also recognised at netpresent value with the unwinding of the imputed interest (or discount) on landdebtors credited to net finance costs. iii) Property transactionsUnder UK GAAP, where property developments are sold in advance of construction,turnover and profit are recognised over the life of the contract in accordancewith Statement of Standard Accounting Practice (SSAP) 9 'Stocks and Long-TermContracts.' Under IAS 18 'Revenue', where property developments are sold inadvance of construction being completed, revenue and profit are recognised fromthe point of sale, and as the significant outstanding acts of construction anddevelopment are completed. iv) Lease incentivesUnder UK GAAP, lease incentives were spread to the first break clause of thelease. Under IAS 17 'Leases', lease incentives must be spread over the totalperiod of the lease. v) Property revaluationsUnder UK GAAP, property revaluations were taken to the revaluation reserve andon disposal the balance was shown as a reserve movement. Under IAS 40'Investment Property', revaluation movements are taken to the face of the incomestatement rather than reserves and deferred taxation provided. vi) Provisions (disclosure item)Under UK GAAP, provisions for losses on long-term contracts were either deductedfrom work in progress or included in creditors depending on the circumstances.Under IAS 11 'Construction Contracts', this is now disclosed under two headings- Amounts due from customers for contract work or Amounts due to customers forcontract work. vii) Other adjustmentsOther changes to accounting policies that have an impact on restated net assetsand profit and losses under IFRS are as follows: •Proposed dividends Under UK GAAP as applicable for the year ended 30 June 2005, proposed dividendswere recognised as a liability in the period to which they relate. Under IAS 10'Events after the Balance Sheet Date', dividends are not recognised as aliability until they are appropriately authorised and no longer at thediscretion of the Company. •Deferred taxation IAS 12 'Income Taxes' requires deferred tax to be recognised on all temporarydifferences and not just timing differences as previously under UK GAAP.Deferred tax liabilities are recognised in full, but deferred tax assets areonly recognised if future taxable profits are available to cover the assets. •Share-based payments As permitted by the exemption from retrospective application in IFRS 1, theGroup has adopted IFRS 2 'Share-based Payments' for all payments granted after 7November 2002. This requires that share-based payments granted after that dateshould be valued at the fair value of the shares at the date of grant andrecognised as an expense over the vesting period. This affects the Sharesave andLong-Term Incentive Plan schemes. The fair value of these shares at date ofaward is calculated using the Black Scholes model. •Joint ventures (disclosure item) Under IFRS, the results of joint ventures may be accounted for either under thenet equity method or proportional consolidation. The Group reported its jointventures under UK GAAP using the net equity method and has opted to continue tofollow this method. Under the net equity method, trading results from jointventures are shown net of tax within profit before tax. This has no impact onnet assets or on profit after tax. •Goodwill and intangible assets Under UK GAAP, goodwill is amortised on a straight line basis over its usefuleconomic life (in the case of M J Gleeson Group plc, for up to 20 years), testedfor impairment and provided for as necessary. Under IFRS 3 'BusinessCombinations', goodwill is no longer amortised but is carried at cost andsubject to annual review for impairment at 30 June. It is effectively frozen at30 June 2004 with amounts amortised subsequently under UK GAAP being reinstated. (b) Other differences between UK GAAP and IFRS i) Financial instrumentsThe recognition, measurement and presentation of financial instruments is dealtwith under IAS 32 and IAS 39. Under UK GAAP, there was no comprehensive standardwhich addressed the accounting for financial instruments as applicable for theyear ended 30 June 2005. Financial Reporting Standard (FRS) 13 'Derivatives andother financial instruments' in the UK required disclosures to be made inrespect of financial instruments but these were less comprehensive than IAS 32and IAS 39. The Group's IFRS accounting policies under IAS 32 and IAS 39 are as follows: • The Group and its joint ventures use derivative financial instrumentsto hedge their exposure to interest rate risks. In accordance with its treasurypolicy, the Group does not hold derivative financial instruments for tradingpurposes; however, derivatives that do not qualify for hedge accounting areaccounted for as trading instruments. • Derivatives are initially recognised at cost on the date that thecontract is entered into and subsequently re-measured in future periods at theirfair value. The gain or loss on re-measurement to fair value is recognisedimmediately through the income statement. • A number of the Group's PFI joint ventures have entered into interestrate derivatives as a means of hedging interest rate risk under cash flowhedges, which are initially recognised at fair value. The effective part of thechange in fair value of these derivatives is recognised directly in equity. Anyineffective portion is recognised immediately in the income statement. Amountsaccumulated in equity are recycled to the income statement in the periods whenthe hedged items will affect profit or loss. The fair value of interest ratederivatives is the estimated amount that the Group would receive or pay toterminate the derivative at the balance sheet date. 3. Segmental analysis Unaudited Unaudited Unaudited Six months to Six months to Year to 31 December 31 December 30 June 2005 2004 2005 £000 £000 £000 Restated RestatedAnalysis of revenue on operations:Continuing:Homes - UnitedKingdom 46,432 50,076 159,036Property -United Kingdom - 1,475 3,999 ---------- --------- -------- 46,432 51,551 163,035Construction Services:United Kingdom 132,829 122,443 254,236Jersey 24 587 797 ---------- --------- -------- 132,853 123,030 255,033 ---------- --------- -------- 179,285 174,581 418,068 ---------- --------- --------Discontinued:ConstructionServices 8,758 91,697 171,277 ---------- --------- --------Profit/(loss) on activities:Continuing:Homes (1,189) 2,150 16,366Property 1,806 1,632 7,970ConstructionServices 4,867 7,110 13,605Central costs (2,954) (1,548) (3,440)Joint ventures (518) (576) (765) ---------- --------- -------- 2,012 8,768 33,736 ---------- --------- --------Discontinued:ConstructionServices (3,665) (15,422) (51,609) ---------- --------- --------Investmentincome 764 1,761 11,061Finance costs (2,091) (3,032) (6,577) ---------- --------- --------Loss beforetax (2,980) (7,925) (13,389)Tax (70) 2,359 4,622 ---------- --------- --------Loss for theperiod fromcontinuingoperations (3,050) (5,566) (8,767) ---------- --------- -------- 4. Notes to the consolidated cash flow statement Unaudited Unaudited Unaudited Six months to Six months to Year to 31 December 31 December 30 June 2005 2004 2005 £000 £000 £000 Restated Restated Operatingprofit 2,012 8,768 33,736Adjusted for: 1,673 2,778 5,421Depreciation of property, plant andequipmentProfit ondisposal ofproperty,plant andequipment (3,649) (288) (583) Loss ondiscontinuedoperations (3,665) (15,422) (44,153) Share of lossof jointventures 518 576 765Restructuringcosts 2,166 - (4,252)Otheroperatingincome (1,349) (2,372) (6,855) ---------- --------- ---------Operating cashflows beforemovements inworkingcapital (2,294) (5,960) (15,921)Decrease/(increase) ininventories 2,583 (323) 13,473Increase inreceivables (27,701) (8,650) (10,755)Decrease inpayables (1,784) (5,945) (2,437) ---------- --------- ---------Cash utilisedfromoperations (29,196) (20,878) (15,640)Income taxespaid (827) (1,726) (4,248)Interest paid (3,148) (1,796) (4,837) ---------- --------- ---------Net cash flowfrom operatingactivities (33,171) (24,400) (24,725) ---------- --------- --------- 5. Post balance sheet event On 24 March 2006, the Group announced the disposal of its wholly-ownedsubsidiary, Gleeson MCL, for a total consideration of £23.3 million.Consideration comprised £15.2 million for goodwill and £8.1 million forestimated net assets at completion, subject to a completion accounts process.The estimated net assets disposed of included cash of £4.8m. Accordingly, theGroup's balance sheet as at 31 December 2005 shows the net assets as being heldfor sale (except for cash and cash equivalents and bank overdrafts). 6. Reconciliations on transition to IFRS (a) Unaudited income statement reconciliation for the six months to 31 December 2005 Unaudited IAS 10 IAS 11 IAS 12 IAS 17 UK GAAP Post Construction Income Accounting balance contracts taxes for leases sheet dividends £000 £000 £000 £000 £000 Continuing operations Revenue 178,835 - - - -Cost of sales (162,624) - 1,917 - -Gross profit 16,211 - 1,917 - - Other operating 1,326 - - - 23income Administrative (15,377) - (2,142) - -expenses Share of (454) - - - -results of joint ventures Operating 1,706 - (225) - 23profit Investment 764 - - - -revenues Finance costs (2,036) - - - -Profit before 434 - (225) - 23tax Tax (251) - - 221 -Profit for the 183 - (225) 221 23period from continuing operations Discontinued operations Loss for the (3,665) - - - -period from discontinued operations Loss for the (3,482) - (225) 221 23period Dividends (821) 821 - - - (4,303) 821 (225) 221 23 6. Reconciliations on transition to IFRS (a) Unaudited income statement reconciliation for the six months to 31 December 2005 IAS 18 IAS 31 IAS 38 IAS 39 IAS 40 Revenue Interest Intangible Financial Revaluation in joint assets instruments: of ventures recognition investment and properties measurement £000 £000 £000 £000 £000 Continuing operations Revenue 450 - - - -Cost of sales (10) - - 61 -Gross profit 440 - - 61 - Other - - - - -operating income Administrative - - 154 - -expenses Share of - (79) - 15 -results of joint ventures Operating 440 (79) 154 76 -profit Investment - - - - -revenues Finance costs - - - (55) -Profit before 440 (79) 154 21 -tax Tax - - - 8 -Profit for the 440 (79) 154 29 -period from continuing operations Discontinued operations Loss for the - - - - -period from discontinued operations Loss for the 440 (79) 154 29 -period Dividends - - - - - 440 (79) 154 29 - 6. Reconciliations on transition to IFRS (a) Unaudited income statement reconciliation for the six months to 31 December 2005 IFRS 2 Unaudited Share-based Taxation IFRS payments effect of transition £000 £000 £000 Continuing operations Revenue - - 179,285Cost of sales - - (160,656)Gross profit - - 18,629 Other - - 1,349operating income Administrative (83) - (17,448)expenses Share of - - (518)results of joint ventures Operating (83) - 2,012profit Investment - - 764revenues Finance costs - - (2,091)Profit before (83) - 685tax Tax - (48) (70)Profit for the (83) (48) 615period from continuing operations Discontinued operations Loss for the - - (3,665)period from discontinued operations Loss for the (83) (48) (3,050)period Dividends - - - (83) (48) (3,050) 6. Reconciliations on transition to IFRS (b) Unaudited balance sheet reconciliation at 31 December 2005 Unaudited IAS 10 IAS 11 IAS 12 IAS 17 IAS 18 UK GAAP Post Construction Income Accounting Revenue balance contracts taxes for leases sheet dividends £000 £000 £000 £000 £000 £000 Non-current assets Goodwill 4,333 - - - - -Property, plant and 11,826 - - - - -equipment Investment property 37,503 - - - - -Investments in joint 1,605 - - - - -ventures Other investments 11,308 - - - - -Deferred tax assets - - - 366 - - 66,575 - - 366 - -Current assets Inventories 178,119 - (2,142) - - -Trade and other 146,273 - - - 366 -receivables Cash and cash 63 - - - - -equivalents 324,455 - (2,142) - 366 - Assets held for sale 12,672 - - - - - Total assets 403,702 - (2,142) 366 366 - Current liabilities Bank overdrafts (102,339) - - - - -Trade and other (137,728) - - - - -payables UK corporation tax (5,582) - - - - -Liabilities directly (8,364) - - - - -associated with assets classified as held for sale Dividends (4,129) 4,129 - - - -Total liabilities (258,142) 4,129 - - - - Net assets 145,560 4,129 (2,142) 366 366 - Equity Called up share 1,029 - - - - -capital Share premium 3,762 - - - - -account Capital redemption 120 - - - - -reserve Equity reserve - - - - - -Revaluation reserve 4,512 - - (34) - -Retained earnings 136,137 4,129 (2,142) 400 366 -Total equity 145,560 4,129 (2,142) 366 366 - 6. Reconciliations on transition to IFRS (b) Unaudited balance sheet reconciliation at 31 December 2005 IAS 31 IAS 37 IAS 38 IAS 39 IAS 40 Interest Provisions Intangible Financial Revaluation in joint assets instruments: of ventures recognition investment and properties measurement £000 £000 £000 £000 £000 Non-current assets Goodwill - - 461 - -Property, plant and - - - - -equipment Investment property - - - - -Investments in joint - - - (243) -ventures Other investments - - - - -Deferred tax assets - - - - - - - 461 (243) -Current assets Inventories - - - (913) -Trade and other - (1,750) - (316) -receivables Cash and cash - - - - -equivalents - (1,750) - (1,229) - Assets held for sale - - - - - Total assets - (1,750) 461 (1,472) - Current liabilities Bank overdrafts - - - - -Trade and other - 1,750 - (596) -payables UK corporation tax - - - - -Liabilities directly - - - - -associated with assets classified as held for sale Dividends - - - - -Total liabilities - 1,750 - (596) - Net assets - - 461 (2,068) - Equity Called up share - - - - -capital Share premium - - - - -account Capital redemption - - - - -reserve Equity reserve - - - - -Revaluation reserve (179) - - - (1,141)Retained earnings 179 - 461 (2,068) 1,141Total equity - - 461 (2,068) - 6. Reconciliations on transition to IFRS (b) Unaudited balance sheet reconciliation at 31 December 2005 IFRS 2 Unaudited Share-based Taxation Reclassification IFRS payments effect of transition £000 £000 £000 £000 Non-current assets Goodwill - - - 4,794Property, plant and - - - 11,826equipment Investment property - - - 37,503Investments in joint - - - 1,362ventures Other investments - - - 11,308Deferred tax assets - 999 3,808 5,173 - 999 3,808 71,966Current assets Inventories - - - 175,064Trade and other 208 - (3,808) 140,973receivables Cash and cash - - - 63equivalents 208 - (3,808) 316,100 Assets held for sale - - - 12,672 Total assets 208 999 - 400,738 Current liabilities Bank overdrafts - - - (102,339)Trade and other - - - (136,574)payables UK corporation tax - - - (5,582)Liabilities directly - - - (8,364)associated with assets classified as held for sale Dividends - - - -Total liabilities - - - (252,859) Net assets 208 999 - 147,879 Equity Called up share - - - 1,029capital Share premium - - - 3,762account Capital redemption - - - 120reserve Equity reserve 6,028 - - 6,028Revaluation reserve - - - 3,158Retained earnings (5,820) 999 - 133,782Total equity 208 999 - 147,879 6. Reconciliations on transition to IFRS (c) Unaudited income statement reconciliation for the year to 30 June 2005 Audited IAS 10 IAS 11 IAS 12 IAS 17 UK GAAP Post Construction Income Accounting balance contracts taxes for leases sheet dividends £000 £000 £000 £000 £000 Continuing operations Revenue 418,591 - - - -Cost of sales (363,286) - 4,525 - -Gross profit 55,305 - 4,525 - - Other 4,743 - - - 40operating income Administrative (27,067) - (4,796) - -expenses Share of (363) - - - -results of joint ventures Operating 32,618 - (271) - 40profit Investment 11,061 - - - -revenues Finance costs (5,255) - - - -Profit before 38,424 - (271) - 40tax Tax 4,235 - - (375) -Profit for the 42,659 - (271) (375) 40period from continuing operations Discontinued operations Loss for the (51,609) - - - -period from discontinued operations Loss for the (8,950) - (271) (375) 40period Dividends (4,080) 156 - - - (13,030) 156 (271) (375) 40 6. Reconciliations on transition to IFRS (c) Unaudited income statement reconciliation for the year to 30 June 2005 IAS 18 IAS 31 IAS 38 IAS 39 IAS 40 Revenue Interest Intangible Financial Revaluation in joint assets instruments: of ventures recognition investment and properties measurement £000 £000 £000 £000 £000 Continuing operations Revenue - - - (523) -Cost of sales - - - 156 -Gross profit - - - (367) - Other - - - - 2,072operating income Administrative - - 307 - -expenses Share of - (23) 379 -results of joint ventures Operating - (23) 307 (746) 2,072profit Investment - - - - -revenues Finance costs - - - (1,322) -Profit before - (23) 307 (2,068) 2,072tax Tax - - - 127 -Profit for the - (23) 307 (1,941) 2,072period from continuing operations Discontinued operations Loss for the - - - - -period from discontinued operations Loss for the - (23) 307 (1,941) 2,072period Dividends - - - - - - (23) 307 (1,941) 2,072 6. Reconciliations on transition to IFRS (c) Unaudited income statement reconciliation for the year to 30 June 2005 IFRS 2 Unaudited Share-based Taxation IFRS payments effect of transition £000 £000 £000 Continuing operations Revenue - - 418,068Cost of sales - - (358,605)Gross profit - - 59,463 Other - - 6,855operating income Administrative (261) - (31,817)expenses Share of - - (765)results of joint ventures Operating (261) - 33,736profit Investment - - 11,061revenues Finance costs - - (6,577)Profit before (261) - 38,220tax Tax - 635 4,622Profit for the (261) 635 42,842period from continuing operations Discontinued operations Loss for the - - (51,609)period from discontinued operations Loss for the (261) 635 (8,767)period Dividends - - (3,924) (261) 635 (12,691) 6. Reconciliations on transition to IFRS (d) Unaudited balance sheet reconciliation at 30 June 2005 Audited IAS 10 IAS 11 IAS 12 IAS 17 UK GAAP Post Construction Income Accounting balance contracts taxes for leases sheet dividends £000 £000 £000 £000 £000 Non-current assets Goodwill 4,487 - - - -Property, plant 20,602 - - - -and equipment Investment 33,053 - - - -property Investments in 2,142 - - - -joint ventures Other investments 4,123 - - - -Deferred tax - - - 91 -assets 64,407 - - 91 -Current assets Inventories 178,970 - (1,917) - -Trade and other 135,157 - - - 343receivables Cash and cash 70 - - - -equivalents 314,197 - (1,917) - 343 Assets held for 12,252 - - - -sale Total assets 390,856 - (1,917) 91 343 Current liabilities Bank overdrafts (60,819) - - - -Trade and other (137,095) - - - -payables UK corporation (5,598) - - - -tax Liabilities (33,620) - - - -directly associated with assets classified as held for sale Dividends (3,308) 3,308 - - -Total liabilities (240,440) 3,308 - - - Net assets 150,416 3,308 (1,917) 91 343 Equity Called up share 1,029 - - - -capital Share premium 3,762 - - - -account Capital 120 - - - -redemption reserve Equity reserve - - - - -Revaluation 4,841 - - (88) -reserve Retained earnings 140,664 3,308 (1,917) 179 343Total equity 150,416 3,308 (1,917) 91 343 6. Reconciliations on transition to IFRS (d) Unaudited balance sheet reconciliation at 30 June 2005 IAS 18 IAS 31 IAS 37 IAS 38 IAS 39 Revenue Interest in Provisions Intangible Financial joint assets instruments: ventures recognition and measurement £000 £000 £000 £000 £000 Non-current assets Goodwill - - - 307 -Property, plant - - - - -and equipment Investment - - - - -property Investments in - - - - (266)joint ventures Other investments - - - - -Deferred tax - - - - -assets - - - 307 (266)Current assets Inventories 10 - - - (974)Trade and other - - (1,500) - (523)receivables Cash and cash - - - - -equivalents 10 - (1,500) - (1,497) Assets held for - - - - -sale Total assets 10 - (1,500) 307 (1,763) Current liabilities Bank overdrafts - - - - -Trade and other (450) - 1,500 - (334)payables UK corporation - - - - -tax Liabilities - - - - -directly associated with assets classified as held for sale Dividends - - - - -Total liabilities (450) - 1,500 - (334) Net assets (440) - - 307 (2,097) Equity Called up share - - - - -capital Share premium - - - - -account Capital - - - - -redemption reserve Equity reserve - - - - -Revaluation - (258) - - -reserve Retained earnings (440) 258 - 307 (2,097)Total equity (440) - - 307 (2,097) 6. Reconciliations on transition to IFRS (d) Unaudited balance sheet reconciliation at 30 June 2005 IAS 40 IFRS 2 Unaudited Revaluation Share-based Taxation Reclassification IFRS of payments effect of investment transition properties £000 £000 £000 £000 £000 Non-current assets Goodwill - - - - 4,794Property, plant - - - - 20,602and equipment Investment - - - - 33,053property Investments in - - - - 1,876joint ventures Other investments - - - - 4,123Deferred tax - - 1,047 3,808 4,946assets - - 1,047 3,808 69,394Current assets Inventories - - - - 176,089Trade and other - 291 - (3,808) 129,960receivables Cash and cash - - - - 70equivalents - 291 - (3,808) 306,119 Assets held for - - - - 12,252sale Total assets - 291 1,047 - 387,765 Current liabilities Bank overdrafts - - - - (60,819)Trade and other - - - - (136,379)payables UK corporation - - - - (5,598)tax Liabilities - - - - (33,620)directly associated with assets classified as held for sale Dividends - - - - -Total liabilities - - - - (236,416) Net assets - 291 1,047 - 151,349 Equity Called up share - - - - 1,029capital Share premium - - - - 3,762account Capital - - - - 120redemption reserve Equity reserve - 5,108 - - 5,108Revaluation (1,780) - - - 2,715reserve Retained earnings 1,780 (4,817) 1,047 - 138,615Total equity - 291 1,047 - 151,349 6. Reconciliations on transition to IFRS (e) Unaudited income statement reconciliation for the six months to 31 December2004 Unaudited IAS 10 IAS 11 IAS 12 IAS 17 UK GAAP Post Construction Income Accounting balance contracts taxes for leases sheet dividends £000 £000 £000 £000 £000 Continuing operations Revenue 174,581 - - - -Cost of sales (153,413) - 1,987 - -Gross profit 21,168 - 1,987 - - Other operating income 2,340 - - - 32Administrative expenses (13,909) - (2,370) - -Share of results of (171) - - - -joint ventures Operating profit 9,428 - (383) - 32 Investment revenues 1,761 - - - -Finance costs (2,461) - - - -Profit before tax 8,728 - (383) - 32 Tax 2,407 - - (342) -Profit for the period 11,135 - (383) (342) 32from continuing operations Discontinued operations Loss for the period from (15,422) - - - -discontinued operations Loss for the period (4,287) - (383) (342) 32 Dividends (772) 772 - - - (5,059) 772 (383) (342) 32 6. Reconciliations on transition to IFRS (e) Unaudited income statement reconciliation for the six months to 31 December2004 IAS 18 IAS 31 IAS 38 IAS 39 Revenue Interest Intangible Financial in joint assets instruments: ventures recognition and measurement £000 £000 £000 £000 Continuing operations Revenue - - - -Cost of sales - - - 36Gross profit - - - 36 Other operating income - - - -Administrative expenses - - 154 -Share of results of joint - (50) - (355)ventures Operating profit - (50) 154 (319) Investment revenues - - - -Finance costs - - - (571)Profit before tax - (50) 154 (890) Tax - - - -Profit for the period - (50) 154 (890)from continuing operations Discontinued operations Loss for the period from - - - -discontinued operations Loss for the period - (50) 154 (890) Dividends - - - - - (50) 154 (890) 6. Reconciliations on transition to IFRS (e) Unaudited income statement reconciliation for the six months to 31 December2004 IAS 40 IFRS 2 Unaudited Revaluation Share-based Taxation IFRS of payments effect of investment transition properties £000 £000 £000 £000 Continuing operations Revenue - - - 174,581Cost of sales - - - (151,390)Gross profit - - - 23,191 Other operating income - - - 2,372Administrative expenses - (94) - (16,219)Share of results of - - - (576)joint ventures Operating profit - (94) - 8,768 Investment revenues - - - 1,761Finance costs - - - (3,032)Profit before tax - (94) - 7,497 Tax - - 294 2,359Profit for the period - (94) 294 9,856from continuing operations Discontinued operations Loss for the period from - - - (15,422)discontinued operations Loss for the period - (94) 294 (5,566) Dividends - - - - - (94) 294 (5,566) 6. Reconciliations on transition to IFRS (f) Unaudited balance sheet reconciliation at 31 December 2004 Unaudited IAS 10 IAS 11 IAS 12 IAS 17 IAS 18 UK GAAP Post Construction Income Accounting Revenue balance contracts taxes for leases sheet dividends £000 £000 £000 £000 £000 £000 Non-current assets Goodwill 4,640 - - - - -Property, plant 22,927 - - - - -and equipment Investment 61,661 - - - - -property Investments in 2,320 - - - - -joint ventures Other investments 2,016 - - - - -Deferred tax - - - 389 - -assets 93,564 - - 389 - -Current assets Inventories 182,765 - (2,029) - - 10Trade and other 128,805 - - - 335 -receivables Cash and cash 92 - - - - -equivalents 311,662 - (2,029) - 335 10Assets held for - - - - - -sale Total assets 405,226 - (2,029) 389 335 10Current liabilities Bank overdrafts (88,740) - - - - -Trade and other (156,344) - - - - (450)payables UK corporation - - - - - -tax Liabilities - - - - - -directly associated with assets classified as held for sale Dividends (3,924) 3,924 - - - -Total liabilities (249,008) 3,924 - - - (450) Net assets 156,218 3,924 (2,029) 389 335 (440) Equity Called up share 1,029 - - - - -capital Share premium 3,762 - - - - -account Capital 120 - - - - -redemption reserve Equity reserve - - - - - -Revaluation 7,881 - - 176 - -reserve Retained earnings 143,426 3,924 (2,029) 213 335 (440)Total equity 156,218 3,924 (2,029) 389 335 (440) 6. Reconciliations on transition to IFRS (f) Unaudited balance sheet reconciliation at 31 December 2004 IAS 31 IAS 37 IAS 38 IAS 39 Interest Provisions Intangible Financial in joint assets instruments: ventures recognition and measurement £000 £000 £000 £000 Non-current assets Goodwill - - 154 -Property, plant - - - -and equipment Investment - - - -property Investments in - - - (369)joint ventures Other investments - - - -Deferred tax - - - -assets - - 154 (369)Current assets Inventories - - - (863)Trade and other - (1,533) - -receivables Cash and cash - - - -equivalents - (1,533) - (863)Assets held for - - - -sale Total assets - (1,533) 154 (1,232)Current liabilities Bank overdrafts - - - -Trade and other - 1,533 - 186payables UK corporation tax - - - -Liabilities - - - -directly associated with assets classified as held for sale Dividends - - - -Total liabilities - 1,533 - 186 Net assets - - 154 (1,046) Equity Called up share - - - -capital Share premium - - - -account Capital redemption - - - -reserve Equity reserve - - - -Revaluation (231) - - -reserve Retained earnings 231 - 154 (1,046)Total equity - - 154 (1,046) 6. Reconciliations on transition to IFRS (f) Unaudited balance sheet reconciliation at 31 December 2004 IAS 40 IFRS 2 Unaudited Revaluation Share-based Taxation Reclassification IFRS of payments effect of investment transition properties £000 £000 £000 £000 £000 Non-current assets Goodwill - - - - 4,794Property, plant - - - - 22,927and equipment Investment - - - - 61,661property Investments in - - - - 1,951joint ventures Other investments - - - - 2,016Deferred tax - - 706 158 1,253assets - - 706 158 94,602Current assets Inventories - - - - 179,883Trade and other - 457 - (158) 127,906receivables Cash and cash - - - - 92equivalents - 457 - (158) 307,881Assets held for - - - - -sale Total assets - 457 706 - 402,483Current liabilities Bank overdrafts - - - - (88,740)Trade and other - - - - (155,075)payables UK corporation - - - - -tax Liabilities - - - - -directly associated with assets classified as held for sale Dividends - - - - -Total liabilities - - - - (243,815) Net assets - 457 706 - 158,668 Equity Called up share - - - - 1,029capital Share premium - - - - 3,762account Capital - - - - 120redemption reserve Equity reserve - 3,974 - - 3,974Revaluation (4,285) - - - 3,541reserve Retained earnings 4,285 (3,517) 706 - 146,242Total equity - 457 706 - 158,668 6. Reconciliations on transition to IFRS (g) Unaudited balance sheet reconciliation at 1 July 2004 Audited IAS 10 IAS 11 IAS 12 IAS 17 IAS 18 UK GAAP Post Construction Income Accounting Revenue balance contracts taxes for leases sheet dividends £000 £000 £000 £000 £000 £000 Non-current assets Goodwill 4,794 - - - - -Property, plant 23,173 - - - - -and equipment Investment 61,661 - - - - -property Investments in 2,423 - - - - -joint ventures Other investments 2,212 - - - - -Deferred tax - - - 599 - -assets 94,263 - - 599 - -Current assets Inventories 182,096 - (1,646) - - 10Trade and other 133,423 - - - 303 -receivables Cash and cash 87 - - - - -equivalents 315,606 - (1,646) - 303 10 Assets held for - - - - - -sale Total assets 409,869 - (1,646) 599 303 10 Current liabilities Bank overdrafts (72,021) - - - - -Trade and other (166,793) - - - - (450)payables UK corporation (6,434) - - - - -tax Liabilities - - - - - -directly associated with assets classified as held for sale Dividends (3,230) 3,152 - - - -Total liabilities (248,478) 3,152 - - - (450) Net assets 161,391 3,152 (1,646) 599 303 (440) Equity Called up share 1,029 - - - - -capital Share premium 3,762 - - - - -account Capital 120 - - - - -redemption reserve Equity reserve - - - - - -Revaluation 8,821 - - 44 - -reserve Retained earnings 147,659 3,152 (1,646) 555 303 (440)Total equity 161,391 3,152 (1,646) 599 303 (440) 6. Reconciliations on transition to IFRS (g) Unaudited balance sheet reconciliation at 1 July 2004 IAS 31 IAS 37 IAS 38 IAS 39 IAS 40 Interest Provisions Intangible Financial Revaluation in joint assets instruments: of investment ventures recognition properties and measurement £000 £000 £000 £000 £000 Non-current assets Goodwill - - - - -Property, plant - - - - -and equipment Investment - - - - -property Investments in - - - (14) -joint ventures Other investments - - - - -Deferred tax - - - - -assets - - - - -Current assets Inventories - - - (899) -Trade and other - (3,148) - - -receivables Cash and cash - - - - -equivalents - (3,148) - (899) - Assets held for - - - - -sale Total assets - (3,148) - (913) - Current liabilities Bank overdrafts - - - - -Trade and other - 3,148 - 757 -payables UK corporation - - - - -tax Liabilities - - - - -directly associated with assets classified as held for sale Dividends - - - - -Total liabilities - 3,148 - 757 - Net assets - - - (156) - Equity Called up share - - - - -capital Share premium - - - - -account Capital - - - - -redemption reserve Equity reserve - - - - -Revaluation (281) - - - (4,848)reserve Retained earnings 281 - - (156) 4,848Total equity - - - (156) - 6. Reconciliations on transition to IFRS (g) Unaudited balance sheet reconciliation at 1 July 2004 IFRS 2 Unaudited Share-based Taxation Reclassification IFRS payments effect of transition £000 £000 £000 £000 Non-current assets Goodwill - - -- 4,794Property, plant - - - 23,173and equipment Investment - - - 61,661property Investments in - - - 2,409joint ventures Other investments - - - 2,212Deferred tax - 412 158 1,169assets - 412 158 95,418Current assets Inventories - - - 179,561Trade and other 552 - (158) 130,972receivables Cash and cash - - - 87equivalents 552 - (158) 310,620 Assets held for - - - -sale Total assets 552 412 - 406,038 Current liabilities Bank overdrafts - - - (72,021)Trade and other - - - (163,338)payables UK corporation - - - (6,434)tax Liabilities - - - -directly associated with assets classified as held for sale Dividends - - - (78)Total liabilities - - - (241,871) Net assets 552 412 - 164,167 Equity Called up share - - - 1,029capital Share premium - - - 3,762account Capital - - - 120redemption reserve Equity reserve 2,867 - - 2,867Revaluation - - - 3,736reserve Retained earnings (2,315) 412 - 152,653Total equity 552 412 - 164,167 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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