6th Sep 2005 07:02
Taylor Woodrow PLC06 September 2005 TAYLOR WOODROW plc INTERIM RESULTS STATEMENT (for the six months to 30 June 2005) Delivering shareholder value Highlights •Housing profit from operations * up 1% to £195.4million (2004: £194.2 million) •Housing operating margin * up 0.8 percentage points to 16.8% (2004: 16.0%) •Profit before tax down 3% to £170.4 million (2004: £175.9 million) •Basic earnings per share down 2% to 20.8 pence (2004: 21.2 pence) •Re-balanced interim dividend up 50% to 4.5 pence per share (2004 interim: 3.0 pence). Total dividends for the year to be increased by 20%. •Net gearing down by 6.8 percentage points to 44.1% (2004: 50.9%) •Record housing landbank up 17% at 74,567 plots (Dec 2004: 63,701 plots) •Record housing order book up 9% at £1.59 billion (2004: £1.46 billion) Iain Napier, Chief Executive of Taylor Woodrow, said today: "In the first half of 2005, Taylor Woodrow has continued to benefit from adiversified market strategy. Overseas profit from operations * increased by 39%and at the same time we have managed our UK housing business well in a moredifficult market. The performance from our overseas markets continues to be excellent. The outlookin the UK remains uncertain for the rest of this year, although the longer termmarket fundamentals are strong." * Profit from operations and operating margins are pre-exceptional pensioncredits and before joint ventures' interest and tax (see Note 3); joint venturerevenue is used in the margin calculation (see Note 3). - ends- A presentation to analysts will be made at 10.30 hrs. This presentation will bebroadcast live on www.taylorwoodrow.com. The 2005 interim results are the first to be reported under IFRS. The interim2004 figures have been restated to reflect IFRS. A summary of 2004 full yearresults under IFRS accounting treatment, with a reconciliation to UK GAAP, isavailable on www.taylorwoodrow.com. High resolution photographs are available to the media free of charge atwww.newscast.co.uk, +44 (0)20 7608 1000. For further information, please contactIan Morris 0121 600 8520 / 07816 518 767Taylor Woodrow Public Relations John Holland-Kaye 0121 600 8394 / 07816 517 200Taylor Woodrow Investor Relations Charles Cook / Ben Woodford 020 7861 3232Bell Pottinger Financial Review Overall The markets in which we operate share fundamental characteristics that underpingrowing demand for new homes. In the UK, this is sustained primarily by acontinued under-supply of new housing in a country that already has the oldesthousing stock in Europe. While demographic trends point to increases in numbersof households, the ability of our industry to meet demand is hampered by adysfunctional planning regime that chronically fails to deliver enough land onwhich to build. In North America, we have chosen to operate in markets that are likely tobenefit from above average growth. Our US markets are all in the sunbelt andbenefit from migration from the colder Northern states. Arizona and Florida arealso very popular among the growing market for retirement and second homes. TheOntario market also benefits from immigration and economic growth. Spain represents a huge opportunity for us from Europeans seeking retirement orsecond homes, and we offer the reassurance of a familiar name with almost 40years experience in that market. Results Revenue for the six months to 30 June 2005 was up 1 per cent at £1,449.3m(2004: £1,436.2m). Profit before tax was 3 per cent lower than the previous yearat £170.4m (2004: £175.9m), as a slight increase in housing profit was offset bya smaller contribution from property and construction. As at 30 June 2005, total equity before minority interests was £1,789.9m (2004:£1,565.2m). Net debt was £789.5m (2004: £796.7m). Net gearing was 44.1 per cent(2004: 50.9 per cent). Basic earnings per share were 20.8 pence (2004: 21.2 pence). Equity per shareincreased by 15 per cent to 317.0 pence. Group Housing H1 '05 H1 '04 FY '04 (restated) (restated)Revenue, including joint ventures £m 1,163.9 1,215.4 2,876.6Profit from Operations* £m 195.4 194.2 448.8Operating Margin* % 16.8% 16.0% 15.6%Home completions 5,065 5,521 13,092 Overall group housing had a satisfactory first half, with an improvement inaverage sales price - up 1 per cent to £200k (2004: £198k) - and operatingmargins* - up by 0.8 percentage points to 16.8 per cent - helping to offset areduction in volumes. Housing profit from operations (pre-exceptional items andbefore joint ventures' interest and tax) rose 0.6 per cent to £195.4m (2004:£194.2m). Forty-five per cent of our profits came from our overseas operations in thefirst half of 2005 (2004: 32 per cent). This reflects both our decision toincrease investment into those markets over the last few years, and theircurrent strength relative to the UK. We remain well placed to grow our housing business, with the group order book up9 per cent to £1.59bn (2004: £1.46bn) and the group landbank up 17 per cent at74,567 plots (December 2004: 63,701 plots). * Throughout the financial review, the profit from operations and operatingmargins are pre-exceptional pension credits and before joint ventures' interestand tax (see Note 3); joint venture revenue is used in the margin calculation(see Note 3). UK Housing H1 '05 H1 '04 FY '04 (restated) (restated)Revenue, including joint ventures £m 681.2 823.6 1,936.2Profit from Operations* £m 108.1 131.5 301.1Operating Margin* % 15.9% 16.0% 15.6%Home completions 3,194 3,869 9,053 In the UK, the housing market was challenging, with overall demand lower than inthe extremely strong first half of 2004. We made good progress by improving ourforward sales position, versus 2004 year-end, managing our cost base andproviding for future growth by increasing the landbank.Against the market average, the company delivered a strong sales performance inthe first half of 2005. However, the market has been much more difficult than inthe exceptionally strong trading environment in the first half of 2004. Ourhalf-year order book stood at £602m, compared to £733m at the same period lastyear and £407m at year-end 2004. Average selling prices were lower at £195k (H1 2004: £199k), with the reductionmainly attributable to a slightly higher proportion of social and apartmentcompletions than in the same period last year, and on a square footage basiswere broadly flat. Operating margins* were broadly flat at 15.9 per cent (H1 2004: 16.0 per cent).This includes the benefit of higher than usual land sales, primarily theQuartermile project in Edinburgh. We continue to focus on cost control through supply chain management, use ofstandard products and pull through from strategic land. Although planningremains difficult, we have been successful in securing consents on strategicland, for example, with the approval for 2,300 homes in Swindon. As a result ofthis and prudent purchasing in the land market, we have increased our landbankby 8 per cent to around 34,974 plots (December 2004: 32,459 plots). Our strategic landbank remains strong with some 20,000 gross acres representing75,000 potential plots. Typically, land acquired this way is secured for prices10 to 15 per cent less than through the open market, and this has helped us tofurther reduce the average cost of plots in our landbank. Fifteen per cent ofcompletions in the first half came from plots originally sourced from ourstrategic landbank (H1 2004: 12 per cent). Around 40 per cent of our landbankhas been sourced through our strategic land programme. Benefits from this willbe realised in future years. North America Housing H1 '05 H1 '04 FY '04 (restated) (restated)Revenue, including joint ventures £m 445.3 360.5 863.9Profit from Operations* £m 74.4 53.9 127.6Operating Margin* % 16.7% 15.0% 14.8%Home completions 1,668 1,500 3,635 Our operation in North America had an extremely strong first half, benefitingfrom the increased investment over the past few years, as well as from a strongmarket. Profit from operations increased by 38 per cent to £74.4m (2004:£53.9m), driven by 11 per cent growth in home completions, 10 per cent growth inaverage sales price to £216k (2004: £197k) and a 1.7 percentage pointimprovement in operating margins*. In US dollar terms, profit grew 40 per cent. We continue to improve our forward sales position with the order book 40 percent higher than in June 2004, at US$1.64bn and an increase in the landbank by27 per cent to 38,073 plots (December 2004: 30,009 plots). More than half ourlandbank is controlled through options rather than owned, which improves capitalefficiency. In Florida, the market remains strong. In the first half of 2005, we completed297 homes (2004: 202) at an average sales price of US$535k (2004: US$560k) as aresult of the Company's move into more affordable attached products. We expectto see a substantial profit contribution from our beachfront high risedevelopments in the second half of 2005 with three buildings scheduled to close. Our California operations have continued to perform strongly. Completions in thefirst half of 2005 were 307 homes (2004: 273) with an average sales price ofUS$797k (2004: US$772k). The Arizona division continues to perform exceptionallywell, and is capitalizing on a buoyant market. Home completions increased by 36per cent to 509 (2004: 375) with average sales price up 20 per cent to US$206k(2004: US$172k). In Ontario, Canada, completions in the first half of 2005 were down 20% to 496homes (2004: 617) largely due to the timing of high-rise developments. Theaverage sales price was up 15% to Can$333k (2004: Can$290k), driven by a greaterproportion of low-rise homes sales. Spanish Housing H1 '05 H1 '04 FY '04 (restated) (restated)Revenue, including joint ventures £m 37.4 31.3 76.5Profit from Operations £m 12.9 8.8 20.1Operating Margin % 34.5% 28.1% 26.3%Home completions 203 152 404 Our Spanish housing operations enjoyed a very strong first half. Completionsincreased by 34 per cent, with average sales prices down by 13 per cent to £163k(2004: £188k) reflecting a change in geographic mix. Profits from operationsrose to £12.9m for the half-year, up 47 per cent on the first six months of2004, while operating margins grew by 6.4 percentage points to 34.5 per cent. The order book increased 10 per cent to £86m (2004: £78m) and we invested forfuture growth by increasing our landbank by 23 per cent to 1,520 plots (December2004: 1,233 plots). Other Operations In the construction business, the profit from operations before exceptionalpension credits, was 42 per cent lower at £7.5m (2004: £13.0m), with thereduction largely accounted for by lower income from PFI disposals. Profitbefore tax was £9.4m (2004: £14.9m). The company continued to perform in linewith our expectations increasing its external order book by 9 per cent. Internalwork in the order book was reduced, reflecting the housing operation's overallshift away from high-rise, city centre developments over the past few years. Overall, the property business broke even in the first half of the year. Thesale of the K2 development at St Katharine's Dock was completed on 1st July,with gross profit of £17.4m to be recorded in the second half of 2005. The Future Our strategy of increasing investment in our international markets has servedTaylor Woodrow well. Our focus remains on balancing growth through investment inour international operations, where we achieve high returns on capital, andimproving the efficiency of our UK operations. We operate in markets with good long-term characteristics where underlyingdemand for new homes can be expected to be maintained into the future. We willcontinue to pursue our policy of enhancing shareholder value by allocating ourresources and managing risk in order to achieve optimal returns. Dividends The board has declared an interim dividend of 4.5 pence per share (2004 interim:3.0 pence per share), an increase of 50 per cent. This dividend will be paid on1st November 2005 to shareholders on the register at close of business on 30thSeptember 2005. In declaring this dividend, the board is moving towards are-balancing of the levels of interim and final dividends. It is the currentintention to increase 2005 full-year dividends by 20 per cent, reflecting theBoard's progressive dividend policy and its confidence in the long-termprospects for the Group. The company offers shareholders the opportunity to use their dividends topurchase shares on the market under the terms of the Dividend Re-InvestmentPlan. Further details are available on the Company's website,www.taylorwoodrow.com, and will be included in the 2005 interim report andaccounts, which will be sent to ordinary shareholders (other than those who haveelected for electronic communications) on 20th September 2005. Copies of the2005 interim report will also be available from that date on the Company'swebsite and from the registered office at 2 Princes Way, Solihull, WestMidlands, B91 3ES. Other The company wishes to encourage shareholders to receive certain companycommunications, including the annual report and accounts and interim reports,electronically via its website. For further information, and to register forelectronic communications, please go to www.taylorwoodrow.com . INDEPENDENT REVIEW REPORT TO TAYLOR WOODROW PLC IntroductionWe have been instructed by the company to review the financial information forthe six months ended 30 June 2005 which comprises the income statement,statement of recognised income and expense, reconciliation of movements inequity, balance sheet as at 30 June 2005, cash flow statement, and related notes1 to 9. We have read the other information contained in the interim report andconsidered whether it contains any apparent misstatements or materialinconsistencies with the financial information. This report is made solely to the company in accordance with Bulletin 1999/4issued by the Auditing Practices Board. Our work has been undertaken so that wemight state to the company those matters we are required to state to them in anindependent review report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other thanthe company, for our review work, for this report, or for the conclusions wehave formed. Directors' responsibilitiesThe interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority which require that the accountingpolicies and presentation applied to the interim figures are consistent withthose applied in preparing the preceding annual accounts except where anychanges, and the reasons for them, are disclosed. International Financial Reporting StandardsAs disclosed in note 2, the next annual financial statements of the group willbe prepared in accordance with International Financial Reporting Standards asadopted for use in the EU. Accordingly, the interim report has been prepared inaccordance with the recognition and measurement criteria of IFRS and thedisclosure requirements of the Listing Rules. Review work performedWe conducted our review in accordance with the guidance contained in Bulletin1999/4 issued by the Auditing Practices Board for use in the United Kingdom. Areview consists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with International Standards on Auditing (UK andIreland) and therefore provides a lower level of assurance than an audit.Accordingly, we do not express an audit opinion on the financial information. Review conclusionOn the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2005. Deloitte & Touche LLPChartered AccountantsLondon5 September 2005 Consolidated income statement for the six months to 30 June 2005 Year to 31 Six months to 30 June December Note 2005 2004 2004 £m £m £m Continuing operationsRevenue: Group and shareof joint ventures 3 1,449.3 1,436.2 3,361.2Less share of jointventures (28.1) (20.5) (49.7) -------- -------- --------Consolidated revenue 3 1,421.2 1,415.7 3,311.5Cost of sales (1,150.5) (1,117.0) (2,649.6) -------- -------- --------Gross profit 270.7 298.7 661.9Profit on disposal ofproperties and investments 10.1 18.6 21.7Administrative expenses (86.0) (72.5) (179.9)Share of results of jointventures 5.9 3.0 8.8 -------- -------- --------Profit from operations 3 200.7 247.8 512.5 Interest receivable 3.9 3.5 6.3Finance costs (2004includes £41.1m of anexceptional loss onrepurchase of 9.5% firstmortgage debenture) (34.2) (75.4) (114.9) -------- -------- --------Profit before tax 170.4 175.9 403.9 Tax 4 (52.8) (54.0) (123.0) -------- -------- --------Profit for the period 117.6 121.9 280.9 -------- -------- -------- Attributable to:Equity holders of theparent 117.1 121.7 280.3Minority interest 0.5 0.2 0.6 -------- -------- -------- 117.6 121.9 280.9 -------- -------- --------Earnings per shareFrom continuingoperationsBasic 6 20.8p 21.2p 49.1p -------- -------- -------- Diluted 6 20.6p 21.0p 48.8p -------- -------- -------- Consolidated statement of recognised income and expense for the six months to30 June 2005 Six months to Year to 31 30 June December 2005 2004 2004 £m £m £m Exchange differences ontranslation of foreignoperations 4.1 (10.5) (6.5)Actuarial gains on definedbenefit pension schemes - - 15.6Tax on actuarial gainstaken directly to equity - - (5.0) -------- -------- --------Net income recogniseddirectly in equity 4.1 (10.5) 4.1Profit for the period 117.1 121.7 280.3 -------- -------- --------Total recognised incomeand expense for the period 121.2 111.2 284.4 -------- -------- -------- Reconciliation of movements in consolidated equity for the six months to 30 June2005 Six months to Year to 31 30 June December Note 2005 2004 2004 £m £m £m Profit for the period 117.1 121.7 280.3Dividends on equity shares 5 (45.5) (37.4) (53.9)Other recognised incomeand expenses relating to the period (net) 4.1 (10.5) 4.1New share capitalsubscribed 3.4 2.2 3.7Proceeds from sale of ownshares 4.1 0.4 3.2Purchase of own shares - (25.2) (50.3)Share-based payments 2.4 1.3 3.4Increase/(decrease) inshare-based payment taxreserve 1.5 - (0.4) -------- -------- --------Net increase in equity 87.1 52.5 190.1Opening equity 1,702.8 1,512.7 1,512.7 -------- -------- --------Closing equity 1,789.9 1,565.2 1,702.8 -------- -------- -------- Consolidated balance sheet at 30 June 2005 30 June 30 June 31 December 2005 2004 2004 £m £m £m Non-current assetsGoodwill 363.5 356.6 363.2Property and plant 24.0 26.7 24.2Investment property - 13.9 -Interests in joint ventures 91.8 95.1 87.0Other financial assets 18.5 18.3 26.5Deferred tax assets 71.7 68.5 71.1 ------- ------- ------- 569.5 579.1 572.0 ------- ------- -------Current assetsInventories 2,756.7 2,594.8 2,422.2Trade and other receivables 354.5 291.6 282.5Cash and cash equivalents 97.1 177.0 114.9 ------- ------- ------- 3,208.3 3,063.4 2,819.6 ------- ------- ------- Total assets 3,777.8 3,642.5 3,391.6 ------- ------- ------- Current liabilitiesTrade and other payables (754.4) (739.9) (700.2)Tax liabilities (40.2) (43.2) (67.8)Debenture loans (15.1) (30.8) (16.2)Bank overdrafts and loans (23.2) (12.8) (16.5) ------- ------- ------- (832.9) (826.7) (800.7) ------- ------- ------- Net current assets 2,375.4 2,236.7 2,018.9 ------- ------- ------- Non-current liabilitiesTrade and other payables (123.4) (121.9) (83.1)Debenture loans (633.1) (629.7) (620.7)Bank loans (215.2) (300.4) (0.3)Retirement benefit obligation (145.4) (160.9) (146.3)Deferred tax liabilities (4.2) (8.2) (6.8)Long-term provisions (32.6) (28.6) (29.9) ------- ------- ------- (1,153.9) (1,249.7) (887.1) ------- ------- ------- Total liabilities (1,986.8) (2,076.4) (1,687.8) ------- ------- ------- Net assets 1,791.0 1,566.1 1,703.8 ------- ------- ------- EquityShare capital 147.1 146.5 146.7Share premium account 750.8 747.2 748.1Revaluation reserve 0.7 0.7 0.7Own shares (51.3) (37.6) (57.8)Share-based payment tax reserve 4.3 3.2 2.8Capital redemption reserve 31.5 31.5 31.5Other reserve 4.9 4.5 4.8Translation reserve (2.5) (10.2) (6.5)Retained earnings 904.4 679.4 832.5 ------- ------- -------Equity attributable to equityholders of the parent 1,789.9 1,565.2 1,702.8Minority interests 1.1 0.9 1.0 ------- ------- -------Total equity 1,791.0 1,566.1 1,703.8 ------- ------- ------- Consolidated cash flow statement for the six months to 30 June 2005 Year to 31 Six months to 30 June December Note 2005 2004 2004 £m £m £m Net cash (used in)/fromoperating activities 7 (256.2) (110.8) 198.1 Investing activitiesInterest received 3.9 3.5 6.3Dividends received from joint ventures 1.7 0.9 2.2Proceeds on disposal ofproperties, plant and investments 4.3 171.8 189.9Purchases of properties,plant and investments (2.8) (5.0) (8.5)Amounts invested in joint ventures (18.2) (10.7) (21.2)Amounts repaid by joint ventures 21.4 3.0 12.5 -------- -------- -------Net cash from investing activities 10.3 163.5 181.2 -------- -------- -------Financing activitiesEquity dividends paid - - (53.9)Dividends paid bysubsidiaries to minority shareholders (0.4) (0.3) (0.7)Issue of ordinary sharecapital by Taylor Woodrow plc 3.4 2.2 3.7Proceeds from sale of own shares 4.1 0.4 3.2Purchase of own shares - (25.2) (50.3)Redemption of preference shares - (100.0) (100.0)New debenture loans raised - 334.3 334.4New bank loans raised 280.0 264.4 339.4Repayment of debenture loans (1.3) (99.3) (116.6)Repayment of bank loans (65.1) (396.3) (771.4)Increase in bank overdrafts 6.5 2.7 6.0 -------- -------- -------Net cash from/(used in)financing activities 227.2 (17.1) (406.2) -------- -------- ------- Net (decrease)/increase incash and cash equivalents (18.7) 35.6 (26.9) Cash and cash equivalentsat beginning of year 114.9 143.8 143.8 Effect of foreign exchangerate changes 0.9 (2.4) (2.0) -------- -------- -------Cash and cash equivalentsat end of year 97.1 177.0 114.9 -------- -------- ------- Notes to the accounts for six months to 30 June 2005 1. General information The interim financial report has been prepared in accordance with InternationalFinancial Reporting Standards (IFRSs). The information for the year ended 31 December 2004 does not constitutestatutory accounts as defined in section 240 of the Companies Act 1985. A copyof the statutory accounts for that year prepared under UK GAAP has beendelivered to the Registrar of Companies. The auditors' report on those accountswas unqualified. 2. Accounting policies Taylor Woodrow plc will be presenting its 31 December 2005 accounts inaccordance with applicable International Financial Reporting Standards (IFRSs)which are effective (or available for early adoption) at 31 December 2005. The same accounting policies and methods of computation have been followed inthis interim financial report. These have been published by the Group on 6September 2005, which are available on the Group's website onwww.taylorwoodrow.com. These accounting policies have been used consistently indealing with items which are considered material. The disclosures concerning the transition from UK GAAP to IFRSs, namely thereconciliations of equity at 1 January 2004 (the date of transition to IFRSs),at 31 December 2004 (date of last UK GAAP financial statements) and at 30 June2004 and the reconciliations of profit and cash flow for 2004, as required byIFRS 1, and for the six months ended 30 June 2004, were published on the Group'swebsite www.taylorwoodrow.com on 6 September 2005. Main statement reconciliations from UK GAAP to IFRS for the above periods andperiod ends were also published with the Group's high level review of the effectof transition to IFRS reporting on 18 April 2005 on the Group's website,www.taylorwoodrow.com. Some minor amendments to those reconciliations, inrespect of balance sheet disclosure of financial instruments, have now beenreflected in the reconciliations published on 6 September 2005. 3. Business segments For management purposes, the Group is currently organised into five operatingdivisions - Housing - United Kingdom, Housing - North America, Housing - Spainand Gibraltar, Property and Construction. These divisions are the basis on whichthe Group reports its primary segment information. Segment information about these businesses is presented below. Housing Housing Housing United North Spain and HousingSix months Kingdom America Gibraltar Total Property Construction Consolidatedto 2005 2005 2005 2005 2005 2005 2005 30 June 2005 £m £m £m £m £m £m £m Revenue:External sales 672.6 426.1 37.4 1,136.1 52.5 232.6 1,421.2Inter-segmentsales - - - - - 44.5 44.5Eliminations - - - - - (44.5) (44.5) ------- ------ ------- ------ ------- -------- -------Total revenue 672.6 426.1 37.4 1,136.1 52.5 232.6 1,421.2Share of jointventures'revenue 8.6 19.2 - 27.8 - 0.3 28.1 ------- ------ ------- ------ ------- -------- -------Group andshare of jointventures 681.2 445.3 37.4 1,163.9 52.5 232.9 1,449.3 ------- ------ ------- ------ ------- -------- ------- Inter-segment construction revenue relates to construction contracts conductedon an arms-length basis. Result:Profit before joint ventures 106.5 68.4 12.9 187.8 - 7.0 194.8Share of joint ventures' profit 1.6 6.0 - 7.6 - 0.5 8.1 ------- ------ ------- ------ ------- -------- ------- Profit* 108.1 74.4 12.9 195.4 - 7.5 202.9Share of joint ventures' interest and tax (2.2) - - (2.2) - - (2.2) ------- ------ ------- ------ ------- -------- ------- Profit from operations 105.9 74.4 12.9 193.2 - 7.5 200.7 ------- ------ ------- ------ ------- -------- ------- Capital employed 1,653.6 477.8 48.7 2,180.1 118.9 (82.0) 2,217.0 ------- ------ ------- ------ ------- -------- -------Goodwill 363.5Net debt (789.5) ------- ------ ------- ------ ------- -------- ------- Net assets 1,791.0 ------- ------ ------- ------ ------- -------- ------- Return on average capital employed* 13.8% 37.5% 56.2% 19.4% - - Operating Margin* 15.9% 16.7% 34.5% 16.8% - 3.2% ------- ------ ------- ------ ------- -------- ------- *Capital employed is pre-goodwill and average is based on prior year-end; profitis profit from operations before joint ventures' interest and tax; margin isbased on group and share of joint ventures' revenue. Housing Housing Housing United North Spain and HousingSix months Kingdom America Gibraltar Total Property Construction Consolidatedto 2004 2004 2004 2004 2004 2004 2004 30 June 2004 £m £m £m £m £m £m £m Revenue:External sales 808.4 355.2 31.3 1,194.9 29.6 191.2 1,415.7Inter-segmentsales - - - - - 68.7 68.7Eliminations (68.7) (68.7) ------- ------- ------- ------- ------- ------- -------Total revenue 808.4 355.2 31.3 1,194.9 29.6 191.2 1,415.7Share of jointventures'revenue 15.2 5.3 - 20.5 - - 20.5 ------- ------- ------- ------- ------- ------- -------Group andshare of jointventures 823.6 360.5 31.3 1,215.4 29.6 191.2 1,436.2 ------- ------- ------- ------- ------- ------- ------- Result:Profit before joint ventures and exceptional items 128.6 52.0 8.8 189.4 16.3 13.0 218.7 Share of joint ventures' profit 2.9 1.9 - 4.8 - - 4.8 ------- ------- ------- ------- ------- ------- ------- Profit beforeexceptional items 131.5 53.9 8.8 194.2 16.3 13.0 223.5Exceptional cost of salepension credit 6.9 1.2 8.1 9.8 17.9Exceptionaladministrative pension credit 4.8 0.9 - 5.7 - 2.5 8.2 ------- ------- ------- ------- ------- ------- ------- Profit* 143.2 56.0 8.8 208.0 16.3 25.3 249.6Share of joint ventures'interest and tax (1.8) - - (1.8) - - (1.8) ------- ------- ------- ------- ------- ------- ------- Profitfrom operations 141.4 56.0 8.8 206.2 16.3 25.3 247.8 ------- ------- ------- ------- ------- ------- ------- Capitalemployed 1,561.2 371.3 37.3 1,969.8 149.9 (113.5) 2,006.2 ------- ------- ------- ------- ------- ------- ------- Goodwill 356.6Net debt (796.7) ------- ------- ------- ------- ------- ------- -------Net assets 1,566.1 ------- ------- ------- ------- ------- ------- ------- Return on average capitalemployed* 17.4% 30.5% 49.3% 20.5% 15.2% - Operating Margin* 16.0% 15.0% 28.1% 16.0% 55.1% 6.8% ------- ------- ------- ------- ------- ------- ------- *Capital employed is pre-goodwill and average is based on prior year-end; profitis profit from operations before joint ventures' interest and tax; margin isbased on group and share of joint ventures' revenue. Housing Housing Housing United North Spain and HousingYear to Kingdom America Gibraltar Total Property Construction Consolidatedto 2004 2004 2004 2004 2004 2004 2004 31 December 2004 £m £m £m £m £m £m £m RevenueExternal sales 1,899.1 851.3 76.5 2,826.9 74.2 410.4 3,311.5Inter-segmentsales 134.9 134.9Eliminations - - - - - (134.9) (134.9) ------- ------- ------- ------- ------- ------- -------Total revenue 1,899.1 851.3 76.5 2,826.9 74.2 410.4 3,311.5Share of jointventures'revenue 37.1 12.6 - 49.7 - - 49.7 ------- ------- ------- ------- ------- ------- -------Group andshare of jointventures 1,936.2 863.9 76.5 2,876.6 74.2 410.4 3,361.2 ------- ------- ------- ------- ------- ------- ------- Result:Profit before joint ventures andexceptionalitems 294.2 120.1 20.1 434.4 26.7 17.8 478.9Share of joint ventures'profit 6.9 7.5 - 14.4 - - 14.4 ------- ------- ------- ------- ------- ------- ------- Profit beforeexceptional items 301.1 127.6 20.1 448.8 26.7 17.8 493.3Exceptional cost of salepension credit 6.6 0.4 7.0 9.8 16.8Exceptionaladministrative pensioncredit 5.0 0.5 - 5.5 - 2.5 8.0 ------- ------- ------- ------- ------- ------- ------- Profit* 312.7 128.5 20.1 461.3 26.7 30.1 518.1Share of joint ventures'interest and tax (5.5) (0.1) - (5.6) - - (5.6) ------- ------- ------- ------- ------- ------- ------- Profit from operations 307.2 128.4 20.1 455.7 26.7 30.1 512.5 ------- ------- ------- ------- ------- ------- ------- Capitalemployed 1,482.4 315.9 43.1 1,841.4 142.1 (104.1) 1,879.4 ------- ------- ------- ------- ------- ------- -------Goodwill 363.2Net debt (538.8) ------- ------- ------- ------- ------- ------- -------Net assets 1,703.8 ------- ------- ------- ------- ------- ------- ------- Return on average capitalemployed* 20.5% 39.2% 52.2% 24.5% 12.7% - Operating Margin* 15.6% 14.8% 26.3% 15.6% 36.0% 4.3% ------- ------- ------- ------- ------- ------- ------- *Capital employed is pre-goodwill and average is based on prior year-end; profitis profit from operations before joint ventures' interest and tax; margin isbased on group and share of joint ventures' revenue. 4. Taxation Six months to 30 Year to 31 June December 2005 2004 2004 £m £m £m Current taxationUK corporation tax 15.9 29.1 66.6Foreign taxation 38.4 19.6 60.4 Deferred taxationUK 6.0 (0.2) (0.8)Overseas (7.5) 5.5 (3.2) -------- -------- -------- 52.8 54.0 123.0 -------- -------- -------- Corporation tax for the interim period is charged at 31.0 % (six months to 30June 2004: 30.7%), representing the best estimate of the weighted average annualcorporation tax rate expected for the full financial year. 5. Dividends Six months to Year to 31 30 June December 2005 2004 2004 £m £m £m Final dividend for theyear to 31 December 2004of 8.1p (2003: 6.5p) per share 45.5 37.4 37.4Interim dividend for theyear to 31 December 2004of 3.0p per share - - 16.5 -------- -------- -------- 45.5 37.4 53.9 -------- -------- -------- Six months to 30 June 2005 2004 £m £m Proposed interim dividend for the year to 31December 2005 of 4.5p (2004: 3.0p) per share 25.4 16.5 -------- -------- The proposed interim dividend was approved by the Board on 5 September 2005 andhas not been included as a liability as at 30 June 2005. 6. Earnings per share Six months to Year to 31 30 June DecemberEarnings per share 2005 2004 2004 Basic 20.8p 21.2p 49.1pDiluted 20.6p 21.0p 48.8pAdjusted basic 20.8p 23.0p 51.1pAdjusted basic diluted 20.6p 22.9p 50.8p -------- -------- -------- The calculation of basic, diluted, adjusted basic and adjusted basic dilutedearnings per share is based on the following data: Six months to Year to 31 30 June DecemberEarnings 2005 2004 2004 £m £m £mEarnings for basicearnings per share anddiluted earnings per share 117.1 121.7 280.3Add/(less):Curtailment of pensionsliability - (26.1) (24.8)Loss on repurchase of debt - 41.1 41.1Less: Tax effect of aboveitems - (4.5) (4.9) -------- -------- --------Earnings for adjustedbasic earnings per shareand adjusted basic dilutedearnings per share 117.1 132.2 291.7 -------- -------- -------- Six months to Year to 31 30 June December 2005 2004 2004Weighted average number of shares m m m For basic earnings pershare and adjusted basic earnings per share 562.9 573.6 570.4Weighted average ofdilutive options 3.0 3.8 3.1Weighted average ofdilutive awards underbonus plans 1.2 0.9 1.0 -------- -------- -------- For diluted earnings pershare and adjusted basicdiluted earnings per share 567.1 578.3 574.5 -------- -------- -------- 7. Note to the consolidated cash flow statement Six months to Year to 31 30 June December 2005 2004 2004 £m £m £m Profit from operations 200.7 247.8 512.5Adjustments for:Exchange adjustments - (1.8) 6.3Depreciation of plant 2.9 2.8 6.7Gain on disposal ofproperty, plant andinvestments (10.1) (18.6) (21.7)Share of joint ventures'operating profit (5.9) (3.0) (8.8)Increase/(decrease) inprovisions 2.3 (6.5) (1.6) -------- -------- -------- Operating cash flowsbefore movement in workingcapital 189.9 220.7 493.4Increase in inventories (314.4) (169.1) (12.2)(Increase)/decrease inreceivables (63.9) 20.4 42.1Increase/(decrease) inpayables 54.6 (51.6) (112.8) -------- -------- --------Cash (used in)/generatedby operations (133.8) 20.4 410.5Income taxes paid (82.3) (45.2) (98.4)Interest paid (40.1) (86.0) (114.0) -------- -------- --------Net cash (used in)/fromoperating activities (256.2) (110.8) 198.1 -------- -------- -------- Net Debt 31 30 June 30 June December 2005 2004 2004 £m £m £m Cash and cash equivalents 97.1 177.0 114.9Debenture loans (648.2) (660.5) (636.9)Bank overdrafts and bank loans (238.4) (313.2) (16.8) -------- -------- -------- (789.5) (796.7) (538.8) -------- -------- -------- Cash and cash equivalents (which are presented as a single class of asset on theface of the balance sheet) comprise cash at bank and other short-term highlyliquid investments with a maturity of three months or less. 8. Events after the balance sheet date On 1 July 2005 the Group legally completed the sale of its K2 developmentproperty for £117.0m, generating a gross profit of £17.4m. This sale will berecognised in the second half of 2005. 9. Related party transactions Transactions between the company and its subsidiaries, which are relatedparties, have been eliminated on consolidation and are not disclosed in thisnote. Transactions between the Group and its joint ventures are as follows: The Group purchased land from joint ventures for £2.8m during the six months to30 June 2005 (six months to 30 June 2004: £2.4m; year to 31 December 2004:£6.6m). Balances with joint ventures were as follows: 31 30 June 30 June December 2005 2004 2004 £m £m £m Amounts owed by joint ventures 89.6 96.1 83.9 -------- -------- -------- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Taylor Wimpey