8th Mar 2006 07:02
Mucklow(A.& J.)Group PLC08 March 2006 A & J Mucklow Group plc8 March 2006 INTERIM RESULTS For the six months to 31 December 2005 HIGHLIGHTS •Adjusted (1) profit before tax up 11.2% •Interim dividend increased by 7.4% •Value of investment portfolio increased by 7.4% •Adjusted (3) net asset value up 9.4% €87,000 sq ft of industrial space under construction pre-let SUMMARY Six months ended 31 December 31 December 2005 2004*Profit before tax £22.70 m £8.93 mAdjusted (1) £7.20 m £6.48 m Interim dividend per Ordinary share 6.23 p 5.80 p Earnings per share 27.47 p 13.42 pAdjusted (2) 8.93 p 8.00 p Net asset value per share 344 p 322 pAdjusted (3) 417 p 381 p Equity shareholders' funds £206.62 m £193.42 m Group gearing (net of cash) 1 % (1) % The interim dividend will be paid on 30 June 2006 to holders registered on 2 June 2006. *Restated under IFRS. (1) Excluding gains from the disposal and revaluation of investment property.(2) Excluding gains from the disposal and revaluation of investment property (net of tax) and deferred tax.(3) Excluding deferred tax and including the surplus on trading properties.See note 4 for details of the adjustments. For further information please contact: Rupert Mucklow, Chairman Tel: 0121 504 2121 (direct)A & J Mucklow Group plc Fiona Tooley Tel: 0121 455 8370Citigate Dewe Rogerson Mobile: 07785 703523 www.mucklow.com CHAIRMAN'S STATEMENT These are our first results prepared in accordance with the requirements ofInternational Financial Reporting Standards (IFRS). A detailed explanation ofour accounting policies and adjustments can be found in the notes to the InterimReport (pages 8 to 13), including reconciliations to past results reported underthe previous accounting standards (UK GAAP). The most significant changes to the financial statements, are the inclusion ofrevaluation gains and losses from investment properties, which are now shown inthe income statement (formerly known as profit and loss account), rather than asreserve movements in the balance sheet. A provision also has to be made for anycontingent tax that may arise on the disposal of investment property, which isdeducted from shareholders' funds. The impact of these two items is likely tocause greater fluctuations on future reported profits, but they do not affectcash flow. Results for the six months to 31 December 2005I am pleased to report a good start to the financial year, with pre-tax profitof £22.70m for the first six months under IFRS, compared with £8.93m for thecorresponding period last year. The adjusted profit before tax (1), excludinggains on the revaluation of the property portfolio and profit on disposal ofinvestment properties, increased by 11.2% from £6.48m to £7.20m. The adjusted net asset value per share (2), which includes the current value ofour trading properties, but excludes deferred taxation, increased during thefirst six months by 8.6% from 384p to 417p. The Group's financial position remains strong. The combined value of ourinvestment and trading properties at 31 December 2005 was £260.66m, whileborrowings (net of cash) amounted to £2.92m. Shareholders funds under IFRS were£206.62m, compared with £193.13m at 30 June 2005, after allowing for deferredtaxation and the revaluation surplus on the investment properties. The directors have declared an interim dividend of 6.23p per Ordinary share(2004: 5.80p), an increase of 7.4% over last year. The dividend will be paid on30 June 2006 to shareholders on the register at the close of business on 2 June2006. Investment Portfolio ReviewThe direct property market continued to be extremely competitive in the firstsix months. Aggressive bidding amongst investors and developers and a dwindlingsupply of available stock, has resulted in another reduction in property yieldsand further increases in capital values. In the absence of any rental growth,this persistent demand is driving property values to new levels. DTZ Debenham Tie Leung reviewed the value of our investment properties as at 31December 2005. The investment portfolio, including new developments, was valuedat £244.08m, which produced an increase in value for the six months of £16.72m(3) (7.4%). Occupier demand remained sluggish; however, occupancy levels weremaintained at around 93%. We are still finding it difficult to justify some of the high prices being paidfor sites and investment properties, particularly when they occupy secondarylocations and offer limited growth prospects. We have been diligently pursuing anumber of prime development opportunities, in order to replenish our investmentportfolio, but remain selective and careful not to overpay. During the first six months of the year, we have continued to dispose of noncore assets which no longer meet our long term objectives and have been activelyworking various property assets, to improve income and value. We have alsostarted to rebuild our investment portfolio, by developing some new industrialunits, as well as progressing planning applications for some large mixed useschemes. We sold three office buildings in Edgbaston, Birmingham during the period for£8.08m, which contributed £0.29m to profit before tax. The properties comprisedapproximately 36,500 sq ft in total and were fully let, producing an income of£0.60m per annum. The majority of the leases were due to expire within sixyears. In October 2005 we commenced the development of two speculative industrial unitsat Star Gate, Birmingham, with a total floor area of 87,314 sq ft. Theconstruction cost will be in the region of £3.30m and the buildings are due tobe completed in summer 2006. I am delighted to inform shareholders that, sincestarting on site, we have agreed terms for the letting of both units on 15 yearleases, at a combined rent of £0.50m per annum. The investment is likely to havean end value of around £7.50m. We also intend to start building a further two speculative industrial units atMiddlemarch, Coventry, in the second half year. The units will comprise a totalfloor area of 44,174 sq ft and will cost around £1.70m to construct. Theexpected rental income for the development is £0.25m per annum and theinvestment value will be in the region of £3.5m. The acquisition of a 110,000 sq ft warehouse on a prominent 8.5 acre site, closeto junction 6 of the M5 motorway at Worcester, was completed in October 2005 for£4.9m. We are currently evaluating various options for this site, includingre-developing for offices. We have also been working on some major projects, to unlock value from existingproperties held in the investment portfolio. Our planning application for amixed use scheme, totalling 500,000 sq ft, on the site of our Bull Ring TradingEstate, Birmingham is progressing well. We shall shortly be submitting anapplication for another mixed use scheme, comprising around 150,000 sq ft, on a2.6 acre industrial site, at Tewkesbury Road, Cheltenham. Trading PropertiesWe sold 2.41 acres of residential land at Mellings Farm, Wigan in the first halfyear for £2.35m. The profit on the sale was £2.25m. There are no plans to sellany other trading properties in the current financial year. DTZ Debenham Tie Leung also reviewed the value of the trading properties as at31 December 2005. The majority of the trading properties comprise land withplanning for residential use. The value of the trading properties was £16.58m,which showed a £15.34m increase over book value. OutlookWe are making good progress, but do not expect much rental growth during thecurrent year. Interest savings following last year's debenture buy-back andadditional income generated from new developments should benefit our profitsgoing forward. We are unlikely to see similar rises in property values over the next sixmonths. If long term interest rates remain at current levels, we would expectinvestment values to stabilise. However, looking ahead, we believe that we cancontinue to extract further capital growth from our investment portfolio,through planning enhancement for mixed use schemes and from a selectivedevelopment programme. As a consequence, we remain positive about futureprospects. Rupert J MucklowChairman8 March 2006 (1) Excluding gains from the disposal and revaluation of investment property.(2) Excluding deferred tax and including the surplus on trading properties.See note 4 for details.(3) See note 2 for details of the revaluation uplift. UNAUDITED CONSOLIDATED INCOME STATEMENT For the six months to 31 December 2005 Six months to Year to 31 December 31 December 30 June 2005 2004* 2005* Notes £000 £000 £000--------------------------------------------------------------------------------Gross rental income 7,131 8,571 16,045 Property outgoings (451) (132) (337)--------------------------------------------------------------------------------Net rental income 6,680 8,439 15,708-------------------------------------------------------------------------------- Proceeds on sale of tradingproperties 2,384 1,169 1,256 Carrying value of tradingproperties sold (125) (65) (65) Property outgoings relating totrading properties (4) (27) (29)--------------------------------------------------------------------------------Net income from trading 2,255 1,077 1,162properties--------------------------------------------------------------------------------Profit on disposal ofinvestment 290 924 1,096properties Gain on revaluation ofinvestment 15,205 1,527 11,330properties Administration expenses (1,041) (1,009) (1,944)--------------------------------------------------------------------------------Operating profit 2 23,389 10,958 27,352 Finance income 282 844 1,418 -------------------------------------Finance costs (972) (2,870) (4,408)Exceptional loss on redemptionof debenture - - (14,918) ------------------------------------- Total finance costs (972) (2,870) (19,326)--------------------------------------------------------------------------------Profit before tax 22,699 8,932 9,444 Taxation 3 (6,219) (880) 564--------------------------------------------------------------------------------Profit for the financial period 16,480 8,052 10,008-------------------------------------------------------------------------------- Earnings per share- basic and diluted 4 27.47p 13.42p 16.68p-------------------------------------------------------------------------------- All operations are continuing. *Restated under IFRS. UNAUDITED CONSOLIDATED BALANCE SHEET At 31 December 2005 31 December 31 December 30 June 2005 2004* 2005* Notes £000 £000 £000--------------------------------------------------------------------------------Non-current assetsInvestment and developmentproperties 5 241,332 222,230 225,973Property, plant and equipment 5 2,704 1,012 2,193Trade and other receivables 364 415 418-------------------------------------------------------------------------------- 244,400 223,657 228,584-------------------------------------------------------------------------------- Current assetsTrading properties 1,240 1,238 1,292Trade and other receivables 1,973 1,475 1,979Cash and cash equivalents 15,171 53,049 10,554-------------------------------------------------------------------------------- 18,384 55,762 13,825-------------------------------------------------------------------------------- Total assets 262,784 279,419 242,409 Current liabilitiesTrade and other payables (6,270) (8,375) (6,624)Borrowings (1,512) - -Tax liabilities (3,549) (4,950) (1,904)-------------------------------------------------------------------------------- (11,331) (13,325) (8,528)-------------------------------------------------------------------------------- Non-current liabilitiesBorrowings (16,578) (50,175) (16,578)Deferred tax (28,251) (22,496) (24,169)-------------------------------------------------------------------------------- (44,829) (72,671) (40,747)-------------------------------------------------------------------------------- Total liabilities (56,160) (85,996) (49,275)--------------------------------------------------------------------------------Net assets 206,624 193,423 193,134-------------------------------------------------------------------------------- EquityCalled up ordinary share 14,998 14,998 14,998capitalRevaluation reserve 2,605 949 2,322Redemption reserve 11,162 11,162 11,162Retained earnings 177,859 166,314 164,652--------------------------------------------------------------------------------Total equity 206,624 193,423 193,134-------------------------------------------------------------------------------- Net assets per Ordinary share- Basic and diluted 4 344p 322p 322p- Adjusted 4 417p 381p 384p-------------------------------------------------------------------------------- *Restated under IFRS. UNAUDITED CONSOLIDATED CASH FLOW STATEMENT For the six months ended 31 December 2005 Six months to Year to 31 December 31December 30 June 2005 2004* 2005* £000 £000 £000--------------------------------------------------------------------------------Cash flows from operating activitiesOperating profit 23,389 10,958 27,352Adjustments for non-cash items- Unrealised revaluation gainson investment properties (15,205) (1,527) (11,330)- Profit on disposal ofinvestment properties (290) (924) (1,096)-Depreciation and other non-cash items (71) (40) (69)Other movements arising from operations- Decrease/(increase) in tradingproperties 59 (22) (76)- Decrease/(increase) in debtors 194 (145) (601)- Increase/(decrease) in creditors 2 (569) (2,180)--------------------------------------------------------------------------------Net cash generated from operations 8,078 7,731 12,000 Interest received 239 841 1,413Interest paid (948) (2,846) (19,279)Corporation tax paid (1,149) (1,710) (2,092)--------------------------------------------------------------------------------Net cash inflow/(outflow) fromoperating activities 6,220 4,016 (7,958) Cash flows from investing activitiesAcquisition and property development (6,743) (2,618) (4,401)Sales of investment properties 8,080 21,169 29,581Net expenditure on property,plant and equipment (253) (71) (121)--------------------------------------------------------------------------------Net cash inflow from investingactivities 1,084 18,480 25,059 Cash flows from financing activitiesNet increase/(decrease) in borrowings 1,512 - (33,597)Equity dividends paid (4,175) (3,887) (7,367)Preference dividends paid (24) (24) (47)--------------------------------------------------------------------------------Net cash outflow from financingactivities (2,687) (3,911) (41,011) Net increase/(decrease) in cashand cash equivalents 4,617 18,585 (23,910) Cash and cash equivalents at 1 July 10,554 34,464 34,464--------------------------------------------------------------------------------Cash and cash equivalents atend of period 15,171 53,049 10,554--------------------------------------------------------------------------------Cash and cash equivalents consists of:Cash at bank 563 910 1,213Short-term deposits 14,608 52,139 9,341-------------------------------------------------------------------------------- 15,171 53,049 10,554-------------------------------------------------------------------------------- *Restated under IFRS. UNAUDITED CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE For the six months ended 31 December 2005 Six months to Year to 31 December 31 December 30 June 2005 2004* 2005* £000 £000 £000-------------------------------------------------------------------------------- Gain on revaluation of 1,514 1 1,772property Deferred tax liability on items (329) (10) (547)taken to equity--------------------------------------------------------------------------------Net gain/(loss) recogniseddirectly in equity 1,185 (9) 1,225 Profit for the period 16,480 8,052 10,008--------------------------------------------------------------------------------Total recognised income andexpense for the period 17,665 8,043 11,233-------------------------------------------------------------------------------- *Restated under IFRS. NOTES TO THE INTERIM REPORT 1 Accounting policies Basis of preparation of interim financial information The interim accounts have not been audited or reviewed by the Group's auditors and do not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The statutory accounts for the year ended 30 June 2005, which were prepared under UK Generally Accepted Accounting Principles ("UK GAAP"), were unqualified by the Group's auditors, and did not contain a statement under s237(2) or (3) of the Companies Act 1985 and have been delivered to the Registrar of Companies. Reconciliations to International Financial Reporting Standards ("IFRS") for comparatives are shown at note 7 to this interim report. The preliminary opening balance sheet and IFRS comparatives have been prepared by management using its best knowledge of the expected standards and interpretations of the IASB, facts and circumstances, and accounting policies that will be applied when the Group prepares its first complete set of IFRS financial statements as at 30 June 2006. Therefore, until such time, the possibility cannot be excluded that the preliminary opening balance sheet and IFRS comparatives may require adjustment before constituting the final opening balance sheet and IFRS comparatives. Moreover, under IFRS, only a compete set of financial statements comprising an income statement, the statement of recognised income and expense and the reconciliation of movement in shareholders' equity, balance sheet, cash flow statement, together with comparative financial information and explanatory notes, can provide a fair presentation of the Group's financial position, results of operations and cash flow. The Group's transition date is 1 July 2004. The Group has not adopted IAS 34 'Interim Financial Reporting'. The financial statements are prepared under the historical cost convention, except for the revaluation of investment properties, development properties and owner occupied properties and deferred tax thereon. The Group financial statements consolidate the financial statements of the Company and all its subsidiaries. Control is assumed where the parent company has the power to govern the financial and operational policies of the subsidiary. Unrealised gains and losses on intra group transactions and intra group balances are eliminated from the consolidated results. This interim report was approved by the Board of Directors on 7 March 2006. This interim report will be posted to shareholders and is available for inspection at the Company's registered office during normal office hours. Rental income Gross rental income represents rents receivable for the year. Rent increases arising from rent reviews due during the year are taken into account only to the extent that such reviews have been agreed with tenants at the accounting date. Lease incentives are amortised on a straight line basis over the lease term. Property operating expenses are expensed as incurred. Service charges and other recoverables are credited against the related expense. Profits on sale of investment and trading properties Profits on sale of investment properties and trading properties are taken into account on the completion of contracts. The amount of profit recognised is the difference between sale proceeds and the carrying amount. Cost of properties An amount equivalent to the net development outgoings, including interest, attributable to properties held for development is added to the cost of such properties. A property is regarded as being in the course of development until Practical Completion. Valuation of properties Investment properties held for the long term are valued at the balance sheet date at open market value. Where investment properties are being redeveloped the property continues to be treated as an investment property. Surpluses and deficits attributable to the Group arising from revaluation are recognised in the income statement. Valuation adjustments reflected in retained earnings do not affect distributable profits. Properties under development, which were not previously classified as investment properties, are valued at open market value until practical completion, when they are transferred to investment properties. Valuation surpluses and deficits attributable to properties under development are taken to revaluation reserve until completion, when they are transferred to retained earnings. Where the valuation is below historic cost, the deficit is recognised in the income statement. Owner occupied properties are valued at the balance sheet date at open market value. Valuation changes in owner occupied property are taken to revaluation reserve. Trading properties held for resale are stated at the lower of cost and net realisable value. Depreciation Depreciation is provided on plant and motor vehicles on a straight-line basis over the estimated useful lives of between two and ten years. Government grants Capital grants received relating to the cost of building or refurbishing investment properties are deducted from the cost of the relevant property. Revenue grants are deducted from the related expenditure. Deferred taxation Deferred taxation is provided in full on timing differences that result in an obligation at the balance sheet date to pay more tax, or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in the financial statements. Deferred tax is provided on timing differences arising from the revaluation of fixed assets. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered. Taxation Tax is recognised in the income statement except for items that are reflected directly in equity, where the tax is also recognised in equity. Pension costs The cost to the Group of contributions made to defined contribution plans are expensed as incurred. Acquisitions On the acquisition of a business, including an interest in an associated undertaking, fair values are attributed to the Group's share of separable net assets. Where the cost of acquisition exceeds the fair value attributable to such assets, the difference is treated as purchased goodwill and capitalised in the balance sheet in the year of acquisition. Goodwill is reviewed annually for impairment. Under the Group's previous policy, £134,728 of goodwill has been written off directly to reserves as a matter of accounting policy. This would be credited to the profit and loss account on disposal of the business to which it related. 2 Segmental analysis - primary segments 31 December 31 December 30 June 2005 2004* 2005* £000 £000 £000---------------------------------------------------------------------------------- Investment and development properties ----------------------------------------- - Net rental income 6,680 8,439 15,708 - Profit on disposal 290 924 1,096 - Gain on revaluation 15,205 1,527 11,330 ----------------------------------------- 22,175 10,890 28,134 Trading properties ----------------------------------------- - Proceeds on sales 2,384 1,169 1,256 - Carrying value on sales (125) (65) (65) - Property outgoings (4) (27) (29) ----------------------------------------- 2,255 1,077 1,162 Administration expenses (1,041) (1,009) (1,944)---------------------------------------------------------------------------------- Operating profit 23,389 10,958 27,352---------------------------------------------------------------------------------- The property revaluation surplus has been recognised as follows: Income statement - Investment properties 15,205 1,527 11,330 Statement of recognised income and expense - Development and owner occupied properties 1,514 1 1,772 ---------------------------------------------------------------------------------- Total revaluation surplus for the period 16,719 1,528 13,102---------------------------------------------------------------------------------- All operations and income are derived from the United Kingdom. 3 Taxation Tax charge Current tax - Corporation tax charged at 30% 1,844 1,681 (1,367) - Tax in respect of property disposals 621 1,676 2,145---------------------------------------------------------------------------------- 2,465 3,357 778---------------------------------------------------------------------------------- Deferred tax - Deferred tax on property revaluations 3,554 (1,701) 73 - Other deferred tax 200 (776) (1,415)---------------------------------------------------------------------------------- 3,754 (2,477) (1,342)---------------------------------------------------------------------------------- Total tax recognised in the income statement 6,219 880 (564)---------------------------------------------------------------------------------- Tax recognised in equity Deferred tax 329 10 547---------------------------------------------------------------------------------- *Restated under IFRS. 4 Profit, earnings per share and net asset value per share Profit The adjusted profit before tax has been amended from the profit before tax as follows: 31 December 31 December 30 June 2005 2004* 2005* £000 £000 £000------------------------------------------------------------------------------------ Profit before tax 22,699 8,932 9,444 Premium on redemption of debenture stock - - 14,918 Profit on disposal of investment properties (290) (924) (1,096) Gain on revaluation of investment property (15,205) (1,527) (11,330)------------------------------------------------------------------------------------ Adjusted profit before tax 7,204 6,481 11,936------------------------------------------------------------------------------------ Earnings per share The basic and diluted earnings per share of 27.47p (2004: 13.42p) has been calculated on the basis of the weighted average of 59,991,990 Ordinary shares and earnings of £16.48m (2004: £8.05m). The adjusted earnings per share has been amended from the basic and diluted earnings per share by the following: 31 December 31 December 30 June 2005 2004* 2005* £000 £000 £000------------------------------------------------------------------------------------ Earnings 16,480 8,052 10,008 Profit on disposal of investment properties (290) (924) (1,096) Tax charged on profit on disposal 621 1,676 2,145 of investment properties Gain on revaluation of investment properties (15,205) (1,527) (11,330) Premium on redemption of debenture - - 10,443 stock (net of tax) Deferred tax 3,754 (2,477) (1,342)------------------------------------------------------------------------------------ Adjusted earnings 5,360 4,800 8,828------------------------------------------------------------------------------------ Adjusted earnings per share 8.93p 8.00p 14.71p----------------------------------------------------------------------------------- The Group presents an adjusted earnings per share figure as the directors consider that this is a better indicator of the performance of the Group. There are no dilutive shares. Net asset value per share The net asset value per share has been calculated on the basis of the number of equity shares in issue of 59,991,990 and equity shareholders funds of £206.62m (31 December 2004: £193.42m). The adjusted net asset value per share has been amended as follows: 31 December 31 December 30 June 2005 2004* 2005* £000 £000 £000 Equity shareholders' funds 206,624 193,423 193,134 Valuation of land held as trading 16,584 14,157 14,657 properties Book value of land held as trading (1,240) (1,238) (1,292) properties Deferred tax 28,251 22,496 24,169------------------------------------------------------------------------------------- 250,219 228,838 230,668------------------------------------------------------------------------------------- Adjusted net asset value per share 417p 381p 384p------------------------------------------------------------------------------------- *Restated under IFRS. 5 Properties £000 Investment and development properties 241,530 Owner occupied property 2,550 ----------- Valuation of properties as at 31 December 2005 244,080 Lease incentives (198) Plant and equipment 154 ----------- 244,036 =========== The properties are stated at market value as at 31 December 2005 and are valued by professionally qualified external valuers in accordance with the RICS Appraisal and Valuation Standards published by the Royal Institution of Chartered Surveyors. 6 Reconciliation of movements in equity 31 December 31 December 30 June 2005 2004 2005 £000 £000 £000------------------------------------------------------------------------------------ Opening shareholders' funds - As previously reported (UK GAAP) - 203,242 203,242 - Effect of adopting IFRS - (13,974) (13,974) (note 7)------------------------------------------------------------------------------------ Opening equity shareholders' - 189,268 189,268 funds restated Opening shareholders' funds 193,134 - - Total recognised income and 17,665 8,043 11,233 expense Dividends (4,175) (3,888) (7,367)------------------------------------------------------------------------------------ Closing equity shareholders' 206,624 193,423 193,134 funds------------------------------------------------------------------------------------ 7 Adoption of International Financial Reporting Standards This interim report is the first prepared using IFRS. The accounting policies used are as detailed in note 1 to this report. The tables below show the adjustments applied to the Group's results for the six months ended 31 December 2004 and the year ended 30 June 2005 in moving from the previously reported UK GAAP results to the IFRS results shown in this report. Changes to the income statement 31 December 30 June 2004 2005 Notes £000 £000------------------------------------------------------------------------------------ Profit after tax reported under UK GAAP 6,334 678 Valuation surplus on investment properties a 1,527 11,330 Preference dividend reclassified as interest b (24) (47) Deferred tax on valuation surplus c 1,701 (73) Tax on realised revaluation gains d (1,519) (1,946) Operating lease incentives e 47 95 Deferred tax on operating lease incentives e (14) (29)------------------------------------------------------------------------------------ Profit after tax reported under IFRS 8,052 10,008------------------------------------------------------------------------------------ Notes (a) The valuation surplus on investment properties was previously shown in the statement of total recognised gains and losses. (b) The dividend on the preference shares is now treated as an interest cost to the Group, rather than as a non-equity dividend under UK GAAP. (c) The movement on the deferred tax for contingent chargeable gains is now reflected in the income statement. Previously only the year end balance was shown in a note to the accounts. (d) The tax on investment property disposals was previously split between the profit and loss account and the statement of total recognised gains and losses reflecting the split of profit between the two statements. (e) Operating lease incentives, including the direct cost of arranging new leases, are spread over the lease term under IFRS, rather than the period to the first review (rent frees) or written off as incurred (direct costs of arranging new leases). The deferred tax impact has also been recognised. Changes to net assets - opening balance sheet at 1 July 2004 Notes £000 Net assets under UK GAAP as at 1 July 2004 203,242 IFRS adjustments: ----------- Non-equity (preference) shares a (675) Deferred tax on revaluation surplus b (17,327) Removal of proposed dividends c 3,888 Lease incentives d 200 Deferred tax on lease incentives d (60) ----------- Total IFRS adjustments (13,974) ----------- Net assets under IFRS as at 1 July 2004 189,268 =========== Changes to net assets - comparatives 31 December 30 June 2004 2005 Notes £000 £000 Net assets under UK GAAP 206,080 207,374 Non-equity (preference) shares a (675) (675)----------------------------------------------------------------------------------- Equity shareholders'funds under UK GAAP 205,405 206,699 Deferred tax on revaluation surpluses b (15,635) (17,946) Removal of proposed dividend c 3,480 4,175 Lease incentives d 247 295 Deferred tax on lease incentives d (74) (89)----------------------------------------------------------------------------------- Net assets under IFRS 193,423 193,134----------------------------------------------------------------------------------- Notes(a) Preference shares are treated as debt under IFRS.(b) The deferred tax on contingent chargeable gains is now reflected in net assets. Previously this was shown in a note to the accounts.(c) Dividends are recognised when approved. The final dividend for the year ended 30 June 2005 will be reflected in the 30 June 2006 results as it was approved by shareholders in November 2005.(d) Operating lease incentives, including the direct cost of arranging new leases, are spread over the lease term under IFRS, rather than the period to the first review (rent frees) or written off as incurred (direct costs of arranging new leases). The deferred tax impact of this has also been recognised. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Mucklow (A & J)