16th Nov 2005 07:03
Land Securities Group Plc16 November 2005 16 November 2005 Land Securities Group PLC ("Land Securities" / "the Group")Interim results for the six months ended 30 September 2005 Unaudited consolidated income statement for the six months ended 30 September2005 Six Six Six Six Six Six Year Year Year months months months months months months ended ended ended ended ended ended ended ended ended 31/03/ 31/03/ 31/03/ 30/09/ 30/09/ 30/09/ 30/09/ 30/09/ 30/09/ 2005 2005 2005 2005 2005 2005 2004 2004 2004 Notes Before Except- Total Before Excep- Total Before Except- Total £m exceptional ional £m excep- tional £m except- ional items items tional items ional Items £m £m items £m items £m £m £m Income: Group 3 997.3 - 997.3 962.7 - 962.7 1,858.2 - 1,858.2and share ofjoint venturesLess: share of 3 (122.6) - (122.6) (132.4) - (132.4) (249.1) - (249.1)joint venturesrevenue _______ _______ _______ _______ _______ ______ _______ _______ _______ Group revenue 3 874.7 - 874.7 830.3 - 830.3 1,609.1 - 1,609.1Costs (618.0) - (618.0) (593.4) (5.2) (598.6) (1,120.8) (14.8) (1,135.6) ______ _______ _______ _______ _______ _____ ______ ______ ______ 256.7 - 256.7 236.9 (5.2) 231.7 488.3 (14.8) 473.5 Profit on 3 16.3 - 16.3 9.0 - 9.0 112.0 - 112.0disposal offixed assetpropertiesProfit on 3 - 293.0 293.0 - - - - - -disposal ofjoint ventureNet gain on 3 726.0 - 726.0 407.8 - 407.8 827.9 - 827.9revaluation ofinvestmentpropertiesGoodwill 3 - (64.5) (64.5) - - - - (12.7) (12.7)impairment ______ _______ _______ _______ _______ _____ ______ ______ ______ Operating profit 3 999.0 228.5 1,227.5 653.7 (5.2) 648.5 1,428.2 (27.5) 1,400.7Interest expense 4 (101.8) - (101.8) (99.3) - (99.3) (203.2) (49.8) (253.0)Interest income 4 9.6 - 9.6 9.0 - 9.0 18.3 - 18.3 ______ _______ _______ _______ _______ _____ ______ ______ ______ 906.8 228.5 1,135.3 563.4 (5.2) 558.2 1,243.3 (77.3) 1,166.0Share of the 12 37.4 - 37.4 43.3 - 43.3 76.1 - 76.1profits ofjoint ventures(post tax)Distribution 12 11.7 - 11.7 24.4 - 24.4 65.4 - 65.4received fromjoint venture ______ _______ _______ _______ _______ _____ ______ ______ ______ Profit before tax 3 955.9 228.5 1,184.4 631.1 (5.2) 625.9 1,384.8 (77.3) 1,307.5Income tax expense 5 (265.2) (90.0) (355.2) (174.9) 1.5 (173.4) (265.8) 19.2 (246.6) ______ _______ _______ _______ _______ _____ ______ ______ ______ Profit for the 690.7 138.5 829.2 456.2 (3.7) 452.5 1,119.0 (58.1) 1,060.9financial period ====== ====== ====== ====== ====== ==== ====== ====== ====== Earnings per shareBasic earnings 7 177.26p 97.06p 227.32pper share *Diluted 7 176.46p 96.75p 226.45pearnings pershare * * adjusted earnings per share is given in note 7 Unaudited consolidated statement of recognised income and expense for the sixmonths ended 30 September 2005 Six Six months months Year ended ended ended 30/09/05 30/09/04 31/03/05 £m £m £m Actuarial profits / (losses) on defined benefit pension schemes (net of deferred tax) 3.6 1.2 (3.2)Fair value movement on cash flow hedges taken to equity (net of deferred tax) - Group (3.7) - - - joint ventures (5.1) - - _______ _______ ______Net (loss) / gain recognised directly in equity (5.2) 1.2 (3.2) Profit for the financial period 829.2 452.5 1,060.9 _______ _______ ______Total gains and losses recognised since the last financial statements 824.0 453.7 1,057.7 ====== ====== ====== The notes below form an integral part of these financial statements. Unaudited Unaudited Unaudited Unaudited Consolidated Consolidated Consolidated consolidated balance sheet balance sheet balance sheet balance sheet at at at at 30 September 30 September 30 September 30 September 2005 2005 2005 2005 Notes 30/09/05 30/09/04 31/03/05 £m £m £mNon-current assets Investment properties 9 10,140.4 7,960.7 8,240.1Property, plant and equipment Operating properties 9 554.9 766.9 546.3 Other property, plant and equipment 9 64.9 56.6 57.9Net investment in finance leases 10 221.5 192.5 161.1Goodwill 11 34.3 34.3 34.3Investments in joint ventures 12 697.3 631.7 854.9 _______ _______ ______ 11,713.3 9,642.7 9,894.6 _______ _______ ______Current assets Trading properties and long-term development 13 220.2 120.0 164.0contractsTrade and other receivables 14 409.3 423.1 515.8Short-term investments 8.2 111.5 -Cash and cash equivalents 20.0 5.8 5.0 _______ _______ ______Total current assets 657.7 660.4 684.8 _______ _______ ______Total assets 12,371.0 10,303.1 10,579.4 _______ _______ ______Current liabilities Short-term borrowings and overdrafts 15 (55.4) (25.4) (50.8)Trade and other payables 16 (738.9) (607.8) (595.5) _______ _______ ______Total current liabilities (794.3) (633.2) (646.3) _______ _______ ______Non-current liabilities Non-current payables 17 (76.8) (52.2) (61.6)Borrowings 18 (3,055.0) (2,885.2) (2,392.3)Pension deficit 19 (4.9) (5.8) (10.9)Deferred tax liabilities 20 (1,713.6) (1,237.4) (1,418.0) _______ _______ ______Total non-current liabilities (4,850.3) (4,180.6) (3,882.8) _______ _______ ______Total liabilities (5,644.6) (4,813.8) (4,529.1) _______ _______ ______Net assets 6,726.4 5,489.3 6,050.3 ======== ======== ========Equity Ordinary shares 21 46.9 46.7 46.8Own shares acquired 21 (4.0) (2.1) (2.1)Share based payments 21 4.5 1.7 3.3Share premium 21 37.9 24.3 31.4Capital redemption reserve 21 30.5 23.8 30.5Retained earnings 21 6,610.6 5,394.9 5,940.4 _______ _______ ______Total shareholders' equity 6,726.4 5,489.3 6,050.3 ======== ======== ======== Unaudited consolidated cash flow statement for the six months ended 30 September2005 Six months Six months Year ended ended ended 30/09/05 30/09/04 31/03/05 £m £m £mNet cash generated from operationsCash generated from operations 178.7 201.4 524.4Interest paid (96.2) (102.4) (398.4)Interest received 9.6 9.0 18.3Taxation (corporation tax paid) 7.8 4.4 3.6 ________ ________ ________Net cash inflow from operations 99.9 112.4 147.9 Cash flows from investing activities ________ ________ ________Investment property development expenditure (85.4) (74.0) (215.3)Acquisition of investment properties (785.9) (185.5) (311.9)Other investment property related expenditure (18.4) (31.3) (40.6)Capital expenditure associated with property outsourcing (16.5) (23.9) (122.5) ________ ________ ________Capital expenditure on properties (906.2) (314.7) (690.3)Sale of fixed asset investment properties 433.2 32.2 337.8 Sale of fixed asset operating properties 1.2 22.7 355.3 ________ ________ ________ Net expenditure on properties (471.8) (259.8) 2.8Net expenditure on non-property related fixed assets (12.1) (5.6) (19.3) ________ ________ ________Net cash outflow from capital expenditure (483.9) (265.4) (16.5) Loans (made to) / repaid by joint ventures (5.3) (244.0) (266.5)Distributions from joint ventures 206.9 206.2 245.8Proceeds from sale of joint venture 293.0 - -Slough Estates (net of cash acquired) - - (5.4)Tops Estates (net of cash acquired) (321.2) - - ________ ________ ________Net cash used in investing activities (310.5) (303.2) (42.6) Cash flows from financing activities ________ ________ ________Issue of shares 6.6 8.5 15.7Purchase of own share capital (1.9) (2.1) (2.1)Increase / (decrease) in debt 640.8 186.8 (180.2)Debt repaid on acquisition of Tops Estates (257.9) - -Dividend paid to ordinary shareholders (153.8) (126.9) (175.5) ________ ________ ________Net cash from / (used) in financing activities 233.8 66.3 (342.1) ________ ________ ________ Increase / (decrease) in cash and cash equivalents at end of 23.2 (124.5) (236.8)the period ======== ======== ======== Reconciliation of cash generated from operations Profit for the financial period 829.2 452.5 1,060.9Income tax expense 355.2 173.4 246.6 ________ ________ ________Profit before tax 1,184.4 625.9 1,307.5Distribution received from joint venture (11.7) (24.4) (65.4)Share of the profits of joint ventures (post tax) (37.4) (43.3) (76.1) ________ ________ ________ 1,135.3 558.2 1,166.0Interest income (9.6) (9.0) (18.3)Interest expense 101.8 99.3 253.0 ________ ________ ________Operating profit 1,227.5 648.5 1,400.7 Adjustments for: Depreciation 13.0 10.5 38.4 Profit on disposal of fixed assets (16.3) (9.0) (112.0) Profit on disposal of joint venture (293.0) - - Net gain on revaluation of investment properties (726.0) (407.8) (830.7) Goodwill impairment 64.5 - 12.7 Changes in working capital Decrease / (increase) in stock (40.2) 10.1 (31.2) Increase in debtors (12.2) (51.1) (48.9) (Increase) / decrease in creditors (38.6) 0.2 95.4 ________ ________ ________Net cash generated from operations 178.7 201.4 524.4 ======== ======== ======== 1. Interim results The financial information contained in this report does not constitute statutoryaccounts within the meaning of Section 240 of the Companies Act 1985. TheAnnual Report and Accounts for the year ended 31 March 2005, which were preparedunder UK GAAP and which received an unqualified auditors' report and did notcontain a statement under Section 237(2) or (3) of the Companies Act 1985 andhave been filed with the Registrar of Companies. Prior year comparatives havebeen restated for IFRS conversion adjustments and remain unaudited. Theunaudited financial information contained in this report has been prepared onthe basis of the accounting policies set out in note 23. These interim accounts have been prepared, in so far as applicable, as tomeasurement and presentation in accordance with International AccountingStandards (IAS) and International Financial Reporting Standards (IFRS) issued bythe International Accounting Standards Board (IASB) up to the date of thisannouncement and applicable to the Group for the period under review. All suchstandards have been endorsed by the European Union ("the EU"), with theexception of an amendment to IAS 19 "Retirement Benefits" allowing actuarialgains and losses to be recognised immediately within equity, the endorsement ofwhich is in process. These standards are also collectively referred to as IFRS. The Interim Results for the six months ended 30 September 2005 were approved bythe Directors on 15 November 2005. 2. Transition to International Financial Reporting Standards (IFRS) All listed companies in the EU are required to present their consolidatedfinancial statements for accounting periods beginning on or after 1 January 2005in accordance with IFRS as adopted by the EU. The Group's consolidatedfinancial statements for the year ending 31 March 2006 will therefore bepresented on this basis with IFRS comparatives. This Interim Report has beenprepared on the basis of the IFRS accounting policies expected to be adopted inthe consolidated financial statements for the year ending 31 March 2006. The Group's transition date for the adoption of IFRS is 1 April 2004. The Grouphas also adopted IAS 32 "Financial Instruments: Disclosure and Presentation" andIAS 39 "Financial Instruments: Recognition and Measurement" from 1 April 2004.This transition date has been selected in accordance with IFRS 1 "First-timeadoption of International Financial Reporting Standards". The principal differences for the Group between reporting under IFRS as comparedto UK GAAP are: (i) Recognising revaluation surpluses and deficits in the income statement; (ii) Providing in full for deferred tax on revaluations and charging movements on this provision through the income statement; (iii) Restating the financial effects of the November 2004 debt refinancing; (iv) Showing the Group's share of the profit after tax and net assets of all its joint ventures and joint arrangements as single lines in the income statement and balance sheet respectively; (v) Ceasing to amortise goodwill but instead testing for impairment; and (vi) No longer recognising dividends payable to shareholders prior to their approval by the Annual General Meeting in the case of the final dividend and by the board in the case of the interim dividend. The application of IFRS has also changed the presentation of the cash flowstatement which now shows cash flows derived from three types of activities -operating, investing and financing. In addition, under IFRS, the cash flowstatement includes all cash flows in respect of cash and cash equivalents. Thisis a broader definition of cash than under UK GAAP. At this stage in the development of IFRS, matters such as the interpretation andapplication of IFRS are continuing to evolve. In addition, standards currentlyin issue and endorsed by the EU are subject to interpretation by theInternational Financial Reporting Interpretations Committee ("IFRIC") andfurther standards may be issued and endorsed by the EU before 31 March 2006.These uncertainties could result in the need to change the basis of accountingor presentation of certain financial information from that applied in thepreparation of this document. As a general rule, the Group is required to establish its IFRS accountingpolicies for the year ending 31 March 2006 and apply these retrospectively todetermine its opening IFRS balance sheet at the transition date of 1 April 2004and the comparative information for the year ended 31 March 2005. However,advantage has been taken of certain exemptions afforded by IFRS 1 "First-timeadoption of IFRS" as follows: • Business combinations prior to 1 April 2004; and • The Group has applied IFRS 2 "Share-based payment", retrospectively only to awards made after 7 November 2002 that had not vested at 1 January 2005. The preparation of financial statements in conformity with IFRS requires the useof estimates and assumptions that affect the reported amounts of assets andliabilities at the date of the financial statements and the reported amounts ofrevenues and expenses during the reporting period. Although these estimates arebased on management's best knowledge of the amount, event or actions, actualresults may ultimately differ from those estimates. 3. Segmental information Six months ended 30/09/2005 Six months ended 30/09/2004 Retail London Other Property Total Retail London Other Property Total portfolio portfolio investment outsourcing £m portfolio portfolio investment outsourcing £m £m £m portfolio £m £m £m portfolio £m £m £m ______ _______ ______ _______ _______ ______ _______ _______ ______ ______Group 115.9 131.9 2.4 - 250.2 96.5 121.2 10.4 - 228.1Share of 27.3 - - - 27.3 20.3 - - - 20.3jointventures ______ _______ ______ ______ _______ ______ ______ _______ ______ ______Total rental 143.2 131.9 2.4 - 277.5 116.8 121.2 10.4 - 248.4income ______ _______ ______ ______ _______ ______ ______ _______ ______ ______Group 19.0 19.2 0.1 - 38.3 15.7 14.5 0.9 - 31.1Share of joint 9.0 - - - 9.0 6.3 - - - 6.3ventures ______ _______ ______ ______ _______ ______ ______ _______ ______ ______Total service 28.0 19.2 0.1 - 47.3 22.0 14.5 0.9 - 37.4charge income ______ _______ ______ ______ _______ ______ ______ _______ ______ ______Group - - - 439.2 439.2 - - - 390.6 390.6Share of joint - - - 80.8 80.8 - - - 81.6 81.6ventures ______ _______ ______ ______ _______ ______ ______ _______ ______ ______Total - - - 520.0 520.0 - - - 472.2 472.2propertyservicesincome ______ _______ ______ ______ _______ ______ ______ _______ ______ ______Group - 41.7 3.6 - 45.3 - - 0.1 85.2 85.3Share of joint - - - 5.5 5.5 - - - 24.2 24.2ventures ______ _______ ______ ______ _______ ______ ______ _______ ______ ______Total trading - 41.7 3.6 5.5 50.8 - - 0.1 109.4 109.5property saleproceedsLong-term - 52.6 49.1 - 101.7 - 28.1 67.1 - 95.2developmentcontractincome ______ _______ ______ ______ _______ ______ _______ _______ ______ ______Gross 171.2 245.4 55.2 525.5 997.3 138.8 163.8 78.5 581.6 962.7propertyincome Less: share (36.3) - - (86.3) (122.6) (26.6) - - (105.8) (132.4)of jointventures ______ _______ ______ ______ _______ ______ _______ _______ ______ ______ Revenue 134.9 245.4 55.2 439.2 874.7 112.2 163.8 78.5 475.8 830.3Rents payable (4.1) (1.0) - (91.0) (96.1) (3.7) (0.8) - (88.2) (92.7)Other direct (25.1) (22.4) (0.4) (293.2) (341.1) (14.2) (21.7) (2.4) (238.8) (277.1)property orcontractexpenditureIndirect (11.8) (9.6) (4.8) (4.0) (30.2) (11.2) (8.7) (4.0) (2.4) (26.3)property orcontractexpenditureLong-term - (42.4) (48.6) - (91.0) - (28.1) (67.1) - (95.2)developmentcontractexpenditureBid costs - - - (2.8) (2.8) - - - (0.7) (0.7)Costs of - (34.9) (2.7) - (37.6) - - - (81.8) (81.8)sales oftradingpropertiesDepreciation (0.4) (0.1) (0.1) (11.3) (11.9) - (0.5) (0.1) (13.3) (13.9) ______ _______ ______ ______ _______ ______ _______ _______ ______ ______ 93.5 135.0 (1.4) 36.9 264.0 83.1 104.0 4.9 50.6 242.6Profit on 2.3 14.4 (0.2) (0.2) 16.3 1.7 1.5 0.1 5.7 9.0sale of fixedasset propertiesNet gain on 312.4 412.7 0.6 0.3 726.0 197.4 178.4 32.0 - 407.8revaluationof investmentpropertiesGoodwill (64.5) - - - (64.5) - - - - -impairmentExceptional - - - 293.0 293.0 - - - - -income ______ _______ ______ ______ _______ ______ _______ _______ ______ ______Segment 343.7 562.1 (1.0) 330.0 1,234.8 282.2 283.9 37.0 56.3 659.4result ====== ======= ======== ======= ====== ======= ======= =======Unallocated (7.3) (5.7)expensesExceptional - (5.2)costs ______ ______Operating 1,227.5 648.5profit beforenet financingcostsNet financingcosts - ordinary (92.2) (90.3) - exceptional - - ______ ______ 1,135.3 558.2Share of the profits of joint 37.4 43.3ventures (post tax)Distribution received from joint 11.7 24.4venture ______ ______Profit before tax 1,184.4 625.9 ====== ====== Unallocated expenses are costs incurred centrally which are neither directlyattributable nor reasonably allocatable to individual segments. Year ended Year ended Year ended Year ended Year ended 31/03/2005 31/03/2005 31/03/2005 31/03/2005 31/03/2005 Retail London Other Property Total portfolio portfolio investment outsourcing 2005 £m £m portfolio £m £m £m _______ _______ ______ _______ _____ Group 200.6 249.2 16.5 - 466.3 Share of joint ventures 44.3 - - - 44.3 _______ _______ ______ _______ _____Total rental income 244.9 249.2 16.5 - 510.6 _______ _______ ______ _______ _____ Group 30.9 33.3 1.3 - 65.5 Share of joint ventures 13.8 - - - 13.8 _______ _______ ______ _______ _____Total service charge income 44.7 33.3 1.3 - 79.3 _______ _______ ______ _______ _____ Group - - - 763.6 763.6 Share of joint ventures - - - 165.3 165.3 _______ _______ ______ _______ _____Total property services income - - - 928.9 928.9 _______ _______ ______ _______ _____ Group - 1.0 21.3 100.2 122.5 Share of joint ventures - - - 25.7 25.7 _______ _______ ______ _______ _____Total trading property sale - 1.0 21.3 125.9 148.2proceedsLong-term development contract - 64.4 126.8 - 191.2income _______ _______ ______ _______ _____Gross property income 289.6 347.9 165.9 1,054.8 1,858.2 Less: share of joint ventures (58.1) - - (191.0) (249.1) _______ _______ ______ _______ _____ Revenue 231.5 347.9 165.9 863.8 1,609.1Rents payable (7.7) (1.4) - (183.6) (192.7)Other direct property or contract (38.4) (45.6) (3.9) (446.5) (534.4)expenditureIndirect property or contract (21.0) (16.9) (8.0) (8.1) (54.0)expenditureLong-term development contract - (53.2) (126.4) - (179.6)expenditureBid costs - - - (2.6) (2.6)Costs of sales of trading - (0.8) (15.1) (96.3) (112.2)propertiesDepreciation - (1.1) (0.1) (29.0) (30.2) _______ _______ ______ _______ _____ 164.4 228.9 12.4 97.7 503.4Profit on sale of fixed asset 42.3 29.2 10.0 30.5 112.0propertiesNet gain on revaluation of 397.4 412.1 18.4 - 827.9investment propertiesGoodwill impairment (12.7) - - - (12.7)Exceptional income - - - - - _______ _______ ______ _______ _____Segment result 591.4 670.2 40.8 128.2 1,430.6 ======== ======= ======= =======Unallocated expenses (15.1)Exceptional costs (14.8) _______Operating profit before net 1,400.7financing costsNet financing costs - ordinary (184.9) - exceptional (49.8) _______ 1,166.0 Share of the profits of joint 76.1ventures (post tax)Distribution received from joint 65.4venture _______ Profit before tax 1,307.5 ======= 4. Net finance costs Six months Six months Year ended ended ended 31/03/05 30/09/05 30/09/04 £m £m £mInterest expense Bond and debenture debt (72.4) (71.7) (149.9) Bank borrowings (21.1) (36.1) (55.5) Other interest payable (0.6) (0.5) (0.9) Loans from joint ventures - (0.3) (0.3)Fair value (losses) / gains on interest rate swaps (7.9) 6.7 (0.8)Amortisation of bond exchange de-recognition (note 18) (13.3) - (11.2) _______ ______ _______Expected return on pension scheme assets 3.9 3.3 6.4Interest on pension scheme liabilities (3.7) (3.4) (6.7) _______ ______ _______Net return on pension scheme 0.2 (0.1) (0.3)Finance leases (2.1) (2.3) (4.4)B-share dividends - (0.1) (0.1) _______ ______ _______ (117.2) (104.4) (223.4)Interest capitalised in relation to properties under development 15.4 5.1 20.2 _______ ______ _______Total interest and similar charges payable - ordinary (101.8) (99.3) (203.2) ======= ======= =======Cost of purchase and redemption of bonds and debenture debt - - (49.8) _______ ______ _______Total interest and similar charges payable - exceptional - - (49.8) ======= ======= ======= Interest income Short-term deposits 0.2 3.7 7.1 Other interest receivable 1.7 1.5 2.7 Interest receivable from joint ventures 2.6 - -Finance leases 5.1 3.8 8.5 _______ ______ _______Total interest receivable 9.6 9.0 18.3 ======= ======= =======Net finance costs (92.2) (90.3) (234.7) ======= ======= ======= 5. Income tax expense Six months Six months Year ended ended ended 31/03/05 30/09/05 30/09/04 £m £m £mCurrent tax expense Corporation tax charge / (credit) for the period 123.4 36.5 (66.8)Adjustment for prior years (0.6) 0.7 (26.0)Tax in respect of property disposals 10.3 4.8 46.7 _______ ______ _______Total current tax 133.1 42.0 (46.1) _______ ______ _______Deferred tax expenseOrigination and reversal of timing differences 19.5 13.6 148.6Released in respect of property disposals (15.0) (4.7) (104.2)On valuation surplus 217.6 122.5 248.3 _______ ______ _______Total deferred tax 222.1 131.4 292.7 _______ ______ _______Total income tax expense in the income statement 355.2 173.4 246.6 ======= ======= ======= The tax for the period is lower than the standard rate of corporation tax in theUK (30%). The differences are explained below: Profit on ordinary activities before taxation 1,184.4 625.9 1,307.5 _______ ______ _______Profit on ordinary activities multiplied by rate of corporation tax in the UK 355.3 187.8 392.2of 30% (2004: 30%)Effects of: Deferred tax released in respect of property disposals (15.0) (4.7) (104.2) Corporation tax on disposal of fixed assets 5.9 2.2 13.6 Goodwill impairment 19.3 - 3.8 Joint venture accounting adjustments (8.0) (17.0) (37.7) Prior year corporation tax adjustments (0.6) 0.7 (26.0) Prior year deferred tax adjustments - (0.7) (3.4) Non-allowable expenses and non-taxable items (1.7) 5.1 8.3 _______ ______ _______ 355.2 173.4 246.6 ======= ======= ======= 6. Dividends Six months Six months Year ended ended ended 31/03/05 30/09/05 30/09/04 £m £m £mOrdinary dividends paidFinal dividend for the year ended 31 March 2005 (32.85p per share) 153.8 - -Final dividend for the year ended 31 March 2004 (27.20p per share) - 126.9 126.9Interim dividend for the year ended 31 March 2005 (10.40p per share) - - 48.6 _______ ______ _______ 153.8 126.9 175.5 ======= ======= ======= The board has proposed an interim dividend of 18.15p per share (interim dividendfor the year ended 31 March 2005: 10.40p) As required under IFRS, this dividendis not recognised in the financial statements as it had not been approved by theboard at the balance sheet date. 7. Earnings per shareEarnings Six Six Year months months ended ended ended 31/03/05 30/09/05 30/09/04 £m £m £m Profit for the financial period 829.2 452.5 1,060.9 Revaluation surpluses net of deferred taxation - Group (508.3) (285.4) (579.6) - joint ventures (25.1) (31.8) (48.7)Fixed asset property disposals after current and deferred tax (24.6) (12.9) (178.4)Goodwill impairment 64.5 - 12.7Deferred tax arising from capital allowances on investment properties 4.5 4.1 9.3Mark-to-market adjustment on interest rate swaps (net of deferred tax) 5.5 (3.3) 1.9Eliminate amortisation of bond exchange de-recognition (net of deferred tax) 9.3 - 7.8Deferred tax arising from capitalised interest on investment properties 4.4 1.5 5.2Exceptional costs of debt restructuring - 3.7 45.4Profit on disposal of joint venture (net of taxation) (203.0) - -Adjustment to restate the Group's share of Telereal's earnings from an equity 5.0 0.8 (23.2)to a distribution basis _______ ______ _______Adjusted earnings 161.4 129.2 313.3 ======= ======= ======= Weighted average number of ordinary shares Six Six Year months months ended ended ended 31/03/05 30/09/05 30/09/04 No. m No. m No. m Weighted average number of ordinary shares 468.1 466.3 466.9 Effect of owned shares (0.3) (0.1) (0.2) _______ ______ _______Weighted average number of ordinary shares after adjusting for owned shares 467.8 466.2 466.7 Effect of dilutive share options 2.1 1.5 1.8 _______ ______ _______Weighted average number of ordinary shares adjusted for dilutive instruments 469.9 467.7 468.5 ======= ======= ======= Earnings per share Six Six Year months months ended ended ended 31/03/05 30/09/05 30/09/04 pence pence penceBasic earnings per share 177.26 97.06 227.32 Diluted earnings per share 176.46 96.75 226.45Adjusted earnings per share 34.50 27.71 67.13 Adjusted diluted earnings per share 34.35 27.62 66.87 ======= ======= ======= Adjusted earnings per share is disclosed in order to provide a better indicationof the Group's underlying business performance. Accordingly, it excludes theeffect of all exceptional items, revaluation surpluses and deficits,mark-to-market adjustments on financial instruments used for hedging purposesand the adjustment to interest payable resulting from the amortisation of thebond exchange de-recognition. In addition, the deferred tax arising on capitalallowances in respect of investment properties has been eliminated as experiencehas shown that these allowances are not in practice repayable. Deferred tax oncapitalised interest is also added back as this is effectively a permanenttiming difference. 8. Net assets per shareShareholders' equity 30/09/05 30/09/04 31/03/05 £m £m £m Net assets attributable to equity shareholders 6,726.4 5,489.3 6,050.3 Deferred tax arising on revaluation surpluses - Group 1,332.8 1,074.1 1,117.9 - joint 54.6 36.7 43.8 ventures - acquired 83.3 - 19.0Cumulative mark-to-market adjustment on interest rate swaps (net of deferred tax) 11.5 26.5 2.3- Group- joint ventures 6.4 1.3 1.3Deferred tax arising from capital allowances on investment properties 125.8 104.4 112.7Deferred tax arising from capitalised interest on investment properties 25.6 29.6 32.3Reverse bond exchange de-recognition adjustment (net of deferred tax) (note 18) (385.7) - (395.0) _______ ______ _______Adjusted net assets attributable to equity shareholders 7,980.7 6,761.9 6,984.6 ======= ======= ======= 30/09/05 30/09/04 31/03/05 Number of ordinary shares No. m No. m No. mNumber of ordinary shares 468.6 466.9 467.8 Effect of dilutive share options 2.4 1.5 1.7 _______ ______ _______Number of ordinary shares adjusted for dilutive instruments 471.0 468.4 469.5 ======= ======= ======= Net assets per share 30/09/05 30/09/04 31/03/05 pence pence pence Net assets per share 1435 1176 1293 Diluted net assets per share 1428 1172 1289Adjusted net assets per share 1703 1448 1493 Adjusted diluted net assets per share 1694 1444 1488 ======= ======= ======= Adjusted net assets per share excludes the deferred tax arising on revaluationsurpluses, mark-to-market adjustments on financial instruments used for hedgingpurposes and the bond exchange de-recognition adjustment as this is felt tobetter represent the real liabilities of the Group. In addition, the deferredtax arising on capital allowances in respect of investment properties isexcluded as experience has shown that these allowances do not in practicecrystallise. Deferred tax on capitalised interest is also added back as this iseffectively a permanent timing difference. 9. Non-current assets Property Property Property Property Property Property Investment investment investment outsourcing outsourcing outsourcing Investment Investment Investment properties properties properties Portfolio Development Total Operating Other Total management programme £m and property £m £m £m investment ,plant and properties equipment £m £m Market value at 1 April 2005 8,618.2 747.6 9,365.8- Group and share of joint ventures- less: share of joint ventures (993.9) - (993.9) _______ ______ _______Market value at 1 April 2005 - Group 7,624.3 747.6 8,371.9Less amount included in prepayments in (59.1) (3.7) (62.8)respect of lease incentivesLess properties treated as finance leases (138.9) - (138.9)Plus head leases capitalised 69.9 - 69.9 _______ ______ _______Net book value at 1 April 2005 7,496.2 743.9 8,240.1 546.3 57.9 8,844.3Properties transferred from portfolio (37.2) 37.2 - - - -management into the development programmeduring the period (at 1 April 2005 valuation)Developments completed, let and 205.4 (205.4) - - - -transferred from the development programmeinto portfolio management during the periodProperty acquisitions 1,378.5 - 1,378.5 - - 1,378.5Capital expenditure 18.4 124.9 143.3 16.5 12.6 172.4Capitalised interest - 12.8 12.8 - - 12.8Sales (330.0) (1.3) (331.3) (1.2) (0.5) (333.0)Transfer to inventories (16.0) - (16.0) - - (16.0)Surrender premiums received (11.8) - (11.8) - - (11.8)Depreciation (0.9) - (0.9) (7.0) (5.1) (13.0) _______ ______ _______ _______ ______ _______ 8,702.6 712.1 9,414.7 554.6 64.9 10,034.2Surplus on revaluation 542.3 183.4 725.7 0.3 - 726.0 _______ ______ _______ _______ ______ _______Net book value at 30 September 2005 9,244.9 895.5 10,140.4 554.9 64.9 10,760.2 ======= ======= ======= ======= ======= =======Reconciliation of net book value to marketvalue:Net book value at 30 September 2005 9,244.9 895.5 10,140.4Plus amount included in prepayments in 62.0 7.6 69.6respect of lease incentivesLess head leases capitalised (57.3) - (57.3)Plus properties treated as finance leases 191.9 - 191.9 _______ ______ _______Market value at 30 September 2005 - Group 9,441.5 903.1 10,344.6 - plus: 1,119.6 30.0 1,149.6 share of joint ventures (note 12) _______ ______ _______Market value at 30 September 2005 - Group 10,561.1 933.1 11,494.2and share of joint ventures ======= ======= ======= 10. Net investment in finance leases 30/09/05 30/09/04 31/03/05 £m £m £mNet investment in finance leases 224.2 194.9 165.9Less: amount recoverable in one year (note 14) (2.7) (2.4) (4.8) _______ ______ _______ 221.5 192.5 161.1 ======= ======= ======= 11. Goodwill Six months Six months Year ended ended ended 31/03/05 30/09/05 30/09/04 £m £m £m At beginning of period 34.3 34.3 34.3 Acquired during the period (note 22) 64.5 - 12.7Impaired during the period (64.5) - (12.7) _______ ______ _______At end of period 34.3 34.3 34.3 ======= ======= ======= The goodwill acquired in the period arose on the acquisition of Tops Estates(see note 22), and is principally attributable to the provision of full deferredtax on the revaluation of the investment properties of that Group. As required,the goodwill has been subjected to an impairment review and full provision hasbeen made. 12. Investment in joint ventures Six months ended 30 September 2005 and at 30 September 2005 Summary Scottish Metro Buchanan A2 Limited Martineau Bullring Bristol Other* Telereal Totalfinancial Retail Retail Galleries Partnership Galleries Limited Alliance £m £m £minformation Property Limited Limited £m Limited Partnership £mof Group's Limited Partnership Partnership Partnership £mshare of Partnership £m £m £mjoint £mventures IncomestatementRental 9.3 5.1 4.2 0.2 0.5 6.1 1.9 - - 27.3incomeService 3.4 1.0 1.1 - 0.2 3.3 - - - 9.0charges andotherrecoveriesProperty - - - - - - - - 80.8 80.8servicesincomeProceeds of - - - - - - - - 5.5 5.5sales oftradingproperties _______ ______ _______ _______ ______ _______ _______ ______ _______ _______Revenue 12.7 6.1 5.3 0.2 0.7 9.4 1.9 - 86.3 122.6Rents (0.1) - - - - - - - (17.1) (17.2)payableOther direct (4.5) (1.2) (1.2) - (0.4) (3.2) (0.2) - - (10.7)property orcontractexpenditureIndirect (0.4) (0.4) (0.1) - (0.1) (0.4) - - (7.6) (9.0)property orcontractexpenditureCosts of - - - - - - - - (1.3) (1.3)sales oftradingpropertiesDepreciation - - - - - - - - (7.1) (7.1) _______ ______ _______ _______ ______ _______ _______ ______ _______ _______ 7.7 4.5 4.0 0.2 0.2 5.8 1.7 - 53.2 77.3Profit on - - - - - - - 0.2 0.9 1.1sale offixed assetpropertiesNet gain / 13.1 7.4 2.5 (0.1) (0.4) 13.7 (0.4) - - 35.8(loss) onrevaluation of investmentproperties _______ ______ _______ _______ ______ _______ _______ ______ _______ _______Operating 20.8 11.9 6.5 0.1 (0.2) 19.5 1.3 0.2 54.1 114.2profit /(loss)Net finance (5.1) (4.0) (2.5) (0.1) - - - 0.1 (32.9) (44.5)costs _______ ______ _______ _______ ______ _______ _______ ______ _______ _______ 15.7 7.9 4.0 - (0.2) 19.5 1.3 0.3 21.2 69.7Taxation (3.9) (2.4) (0.8) - 0.1 (4.2) 0.1 - (4.5) (15.6) _______ ______ _______ _______ ______ _______ _______ ______ _______ _______ 11.8 5.5 3.2 - (0.1) 15.3 1.4 0.3 16.7 54.1Adjustment - - - - - - - - (16.7) (16.7)due to netliabilities _______ ______ _______ _______ ______ _______ _______ ______ _______ _______Share of 11.8 5.5 3.2 - (0.1) 15.3 1.4 0.3 - 37.4profits /(losses) ofjointventuresafter tax ======= ======= ======= ======= ======= ======= ======= ====== ======= ======= Distribution received 11.7from Telereal ======= Balance sheet _______ ______ _______ _______ ______ _______ ______ ______ _______ _____Investment 328.2 257.8 161.8 10.6 22.4 278.3 87.0 13.0 - 1,159.1properties **Operating - - - - - - - - - -properties Current assets 16.0 10.1 5.2 0.2 2.6 9.4 7.9 1.3 - 52.7 _______ ______ _______ _______ ______ _______ _____ _____ _______ ______ 344.2 267.9 167.0 10.8 25.0 287.7 94.9 14.3 - 1,211.8 _______ ______ _______ _______ ______ _______ _____ _____ _______ ______Current (14.3) (9.9) (3.4) (4.1) (0.6) (4.1) (3.0) (0.8) - (40.2)liabilitiesNon-current (228.5) (187.2) - - - - (2.3) - - (418.0)liabilities Deferred tax (10.0) (5.0) 0.2 - (1.3) (38.1) (2.1) - - (56.3) _______ ______ _______ _______ ______ _______ _____ _____ _______ ______ (252.8) (202.1) (3.2) (4.1) (1.9) (42.2) (7.4) (0.8) - (514.5)Adjustment due - - - - - - - - - -to netliabilitiesTransferred from - - - - - - - - - -other receivables _______ ______ _______ _______ ______ _______ _____ _____ _______ _______ 91.4 65.8 163.8 6.7 23.1 245.5 87.5 13.5 - 697.3 ======= ======= ======= ======= ======= ======= ===== ===== ======= ======= Market value of 319.8 256.0 165.7 10.6 23.4 284.5 89.6 - - 1,149.6investmentproperties ** ======= ======= ======= ======= ======= ======= ======= ======= ======= =======Net investmentAt 1 April 2005 293.6 39.6 163.5 - 23.5 238.2 82.0 14.5 - 854.9Properties - - - - - - - - - -contributed Cash contributed - 19.8 - - - - - - - 19.8Cost of - - - 6.7 - - - - - 6.7acquisitionShare of post 11.8 5.5 3.2 - (0.1) 15.3 1.4 0.3 16.7 54.1tax profitsTransferred from - - - - - - - - (5.0) (5.0)otherreceivablesDistributions (190.1) - (2.9) - (0.9) - - (1.3) (11.7) (206.9)Fair value (4.0) (1.1) - - - - - - - (5.1)movement on cashflow hedgestaken to equityLoan advances - 2.0 - - 0.6 - 7.1 - - 9.7Loan repayments (19.9) - - - - (8.0) (3.0) - - (30.9) _______ ______ _______ _______ ______ _______ _____ ______ _______ ______At 30 September 91.4 65.8 163.8 6.7 23.1 245.5 87.5 13.5 - 697.32005 ======= ======= ======= ======= ======= ======= =====.. ======= ======= ======= * Other includes the Martineau Limited Partnership and the Ebbsfleet LimitedPartnership ** The difference between the book value and the market value is the amountincluded in prepayments in respect of lease incentives, head leases capitalisedand properties treated as finance leases. Six months ended 30 September 2004 and at 30 September 2004 Summary Scottish Metro Buchanan A2 Limited Martineau Bullring Bristol Other Telereal Totalfinancial Retail Retail Galleries Partner-ship Galleries Limited Alliance £m £m £minformation Property Limited Limited £m Limited Partner- £mof Group's Limited Partner- Partner-ship Partner- shipshare of Partner- ship £m ship £mjoint ship £m £mventures £m IncomestatementRental 8.5 2.8 - - 0.8 6.4 0.9 0.9 - 20.3incomeService 2.7 0.4 - - 0.1 2.9 - 0.2 - 6.3charges andotherrecoveriesProperty - - - - - - - - 81.6 81.6servicesincomeProceeds of - - - - - - - - 24.2 24.2sales oftradingproperties _______ ______ _______ _______ ______ _______ _____ ______ _______ ______Revenue 11.2 3.2 - - 0.9 9.3 0.9 1.1 105.8 132.4Rents (0.6) - - - - - - - (18.2) (18.8)payableOther direct (3.5) (1.2) - - (0.3) (3.1) - (0.2) - (8.3)property orcontractexpenditureIndirect (0.2) - - - - (0.3) - - (6.6) (7.1)property orcontractexpenditureCosts of - - - - - - - - (8.7) (8.7)sales oftradingpropertiesDepreciation - - - - - - - - (6.6) (6.6) _______ ______ _______ _______ ______ _______ _____ ______ _______ ______ 6.9 2.0 - - 0.6 5.9 0.9 0.9 65.7 82.9Profit on - - - - - - - (1.7) 5.1 3.4sale offixed assetpropertiesNet gain on 13.7 4.9 - - 0.5 26.4 - - - 45.5revaluationofinvestmentproperties _______ ______ _______ _______ ______ _______ _____ ______ _______ ______Operating 20.6 6.9 - - 1.1 32.3 0.9 (0.8) 70.8 131.8profit /(loss)Net finance (0.3) (3.2) - - - 0.1 - 0.1 (33.1) (36.4)costs _______ ______ _______ _______ ______ _______ _____ ______ _______ ______ 20.3 3.7 - - 1.1 32.4 0.9 (0.7) 37.7 95.4Taxation (6.1) (1.2) - - (0.2) (7.9) - 1.0 (12.5) (26.9) _______ ______ _______ _______ ______ _______ _____ ______ _______ ______ 14.2 2.5 - - 0.9 24.5 0.9 0.3 25.2 68.5Adjustment - - - - - - - - (25.2) (25.2)due to netliabilities _______ ______ _______ _______ ______ _______ _____ ______ _______ ______Share of 14.2 2.5 - - 0.9 24.5 0.9 0.3 - 43.3profits ofjointventuresafter tax ======= ======= ======= ======= ======= ====== ===== ====== ======= ======= Distribution received 24.4from Telereal ======= Balance sheet _______ ______ ______ ______ ______ _______ _____ ______ ______ _______Investment 271.6 143.5 - - 22.1 264.1 71.1 13.0 - 785.4propertiesOperating - - - - - - - - 1,025.5 1,025.5propertiesCurrent assets 5.4 4.5 - - 2.2 9.8 5.7 2.9 76.0 106.5 _______ ______ ______ ______ ______ _______ _____ ______ ______ _______ 277.0 148.0 - - 24.3 273.9 76.8 15.9 1,101.5 1,917.4 _______ ______ ______ ______ ______ _______ _____ ______ ______ _____..Current (10.0) (3.4) - - (0.4) (8.7) (0.6) (1.2) (65.2) (89.5)liabilitiesNon-current (8.4) (108.6) - - - - (2.4) - (1,088.9) (1,208.3)liabilitiesDeferred tax (6.0) (1.0) - - (1.3) (32.2) - - - (40.5) _______ ______ ______ ______ ______ _______ _____ ______ ______ _______ (24.4) (113.0) - - (1.7) (40.9) (3.0) (1.2) (1,154.1) (1,338.3)Adjustment due to - - - - - - - - 38.0 38.0net liabilitiesTransferred from - - - - - - - - 14.6 14.6other receivables _______ ______ ______ ______ ______ _______ _____ ______ ______ _______ 252.6 35.0 - - 22.6 233.0 73.8 14.7 - 631.7 ======= ======= ====== ====== ====== ====== ===== ====== ====== ======= Market value 262.9 141.7 - - 23.1 270.0 73.8 - - 771.5of investmentproperties ======= ======= ====== ====== ====== ====== ===== ====== ====== ======= Net investmentAt 1 April 2004 250.2 - - - 21.7 209.9 - 44.4 - 526.2Properties - 92.1 - - - - 85.6 - - 177.7contributedCash contributed - 87.2 - - - - - - - 87.2Cost of - - - - - - - - - -acquisition Share of post 14.2 2.5 - - 0.9 24.5 0.9 0.3 24.4 67.7tax profitsTransferred from - - - - - - - - 5.5 5.5other receivablesDistributions - (146.3) - - - - - (30.0) (29.9) (206.2)Fair value - - - - - - - - - -movement on cashflow hedges takento equityLoan advances - 86.2 - - - 4.5 8.7 - - 99.4Loan repayments (11.8) (86.7) - - - (5.9) (21.4) - - (125.8) _______ ______ ______ ______ ______ _______ _____ ______ ______ _______At 30 September 252.6 35.0 - - 22.6 233.0 73.8 14.7 - 631.72004 ======= ======= ====== ====== ====== ====== ===== ====== ====== ======= 13. Trading properties and long-term development contracts 30/09/05 30/09/04 31/03/05 £m £m £mTrading properties 132.2 120.0 108.9Amount recoverable under long-term development contracts less payments on 88.0 - 55.1account _______ _______ ______ 220.2 120.0 164.0 ======= ======= ======= 14. Trade and other receivables 30/09/05 30/09/04 31/03/05 £m £m £mTrade receivables - property investment 35.5 28.2 18.4 - property outsourcing 98.7 117.0 186.8Property sales receivables 3.2 17.8 77.0Other receivables 61.6 82.1 49.2Prepayments and accrued income 207.6 175.6 179.6Amounts receivable under finance leases within one year (note 10) 2.7 2.4 4.8 _______ _______ ______ 409.3 423.1 515.8 ======= ======= ======= 15. Short-term borrowings and overdrafts 30/09/05 30/09/04 31/03/05 £m £m £mBorrowings falling due within one year (note 18) 76.3 24.5 76.3Bond exchange de-recognition adjustment falling due within one year (note (21.8) - (26.5)18)Amounts payable under finance leases falling due within one year (note 18) 0.9 0.9 1.0 _______ _______ ______ 55.4 25.4 50.8 ======= ======= ======= 16. Trade and other payables 30/09/05 30/09/04 31/03/05 £m £m £mTrade creditors 39.5 47.6 42.7Taxation and social security 197.9 130.7 119.8Capital creditors 119.4 77.5 82.5Other creditors 37.1 38.6 34.7Accruals and deferred income 345.0 313.4 315.8 _______ _______ ______ 738.9 607.8 595.5 ======= ======= ======= Capital creditors represent amounts due under contracts to purchase properties,which were unconditionally exchanged at the period end, and for work completedon investment properties but not paid for at the financial period end. Deferredincome principally relates to rents received in advance. 17. Non-current payables 30/09/05 30/09/04 31/03/05 £m £m £mDilapidations 33.4 15.5 17.7Deferred income 19.5 15.8 18.0Other payables 23.9 20.9 25.9 _______ _______ ______ 76.8 52.2 61.6 ======= ======= ======= 18. Borrowings 30/09/05 30/09/04 31/03/05 £m £m £mUnsecured _______ _______ ______ 9.500 per cent Bonds due 2007 - 200.0 -5.875 per cent Bonds due 2013 - 394.9 -9.000 per cent Bonds due 2020 - 197.1 -6.375 per cent Bonds due 2024 - 198.0 -B shares - 6.7 -Amounts payable under finance leases 57.3 73.7 69.9Money market borrowings 70.4 700.6 73.0 _______ _______ ______ 127.7 1,771.0 142.9Secured _______ _______ ______ 5.016 per cent Notes due 2007 181.6 - 181.65.292 per cent Notes due 2015 392.4 - 392.45.425 per cent Notes due 2022 256.3 - 256.35.391 per cent Notes due 2026 209.6 - 209.65.391 per cent Notes due 2027 610.5 - 610.75.376 per cent Notes due 2029 316.1 - 316.15.396 per cent Notes due 2032 321.3 - 321.37.750 per cent Mortgage 2008 - 5.4 -6.375 per cent Mortgage 2008/13 - 32.3 -Acquisition loan notes 2015 129.8 - -10.000 per cent First Mortgage Debenture Stock 2025 - 400.0 -10.000 per cent First Mortgage Debenture Stock 2027 - 200.0 -10.000 per cent First Mortgage Debenture Stock 2030 - 200.0 -Syndicated bank debt 848.2 - 318.0DWP term loan 251.4 264.1 255.2 _______ _______ ______ 3,517.2 1,101.8 2,861.2 _______ _______ ______ 3,644.9 2,872.8 3,004.1Bond exchange de-recognition adjustment (551.0) - (564.3)Fair value of interest rate swaps 16.5 37.8 3.3 _______ _______ ______ 3,110.4 2,910.6 2,443.1Less: borrowings falling due within one year (note 15) (76.3) (24.5) (76.3)Add: bond exchange de-recognition falling due within one year (note 21.8 - 26.515)Less: amounts payable under finance leases (note 15) (0.9) (0.9) (1.0) _______ _______ ______Falling due after one year 3,055.0 2,885.2 2,392.3 ======= . ======= ======= On 3 November 2004 a debt refinancing was completed resulting in the Groupexchanging all of its outstanding bond and debenture debt for new bonds. Thenew Notes do not meet the IAS39 requirement to be substantially different fromthe debt that it replaced. Consequently the book value of the new Notes isreduced to the book value of the original debt ("the bond exchangede-recognition adjustment"). The adjustment will be amortised to zero over thelife of the new Notes. Borrowings Borrowings Borrowings Undrawn Undrawn Undrawn committed committed committed facilities facilities facilities 30/09/05 30/09/04 31/03/05 30/09/05 30/09/04 31/03/05 £m £m £m £m £m £mThe maturity profiles of the Group'sborrowings, and the expiry periods of itsundrawn committed borrowing facilities are:One year or less, or on demand 55.4 25.4 50.8 - - -More than one year but no more than two 180.5 699.0 (7.8) - 1,410.0 -yearsMore than two years but no more than five 861.8 234.1 513.7 1,150.0 - 1,680.0yearsMore than five years 2,012.7 1,952.1 1,886.4 - - - _______ _______ ______ _______ _______ ______ 3,110.4 2,910.6 2,443.1 1,150.0 1,410.0 1,680.0 ======= . ======= ======= ======= ======= ======= The fair value of the Group's borrowings are: 30/09/05 30/09/04 31/03/05 £m £m £mBook value 3,110.4 2,910.6 2,443.1Fair value 3,808.2 3,500.7 3,074.1 _______ _______ ______Excess of fair value over book value (697.8) (590.1) (631.0) ======= ======= ======= 19. Pension deficit Six months Six months Year ended ended ended 31/03/05 30/09/05 30/09/04 £m £m £mAt beginning of period 10.9 17.2 17.2 Charge to operating profit 2.0 2.0 3.7Expected return on pension scheme assets (3.9) (3.3) (6.4)Interest on pension scheme liabilities 3.7 3.4 6.7Employer contributions (2.6) (11.8) (15.2)Actuarial (gains) / losses (5.2) (1.7) 4.9 _______ _______ ______At end of period 4.9 5.8 10.9 ======= ======= ======= 20. Deferred taxation Six months Six months Year ended ended ended 31/03/05 30/09/05 30/09/04 £m £m £mAt beginning of period 1,418.0 1,105.5 1,105.5Net charge for the period 237.1 136.1 396.9Deferred tax charged to equity on movement in the fair value of swaps (1.6) - -Deferred tax credited / (charged) to equity on movement in the pension 1.6 0.5 (1.5)deficitDeferred tax released in respect of property disposals during the period (15.0) (4.7) (104.2)Deferred tax on disposal of a company - - (4.1)Deferred tax on acquisition of a company - in respect of revaluation 64.3 - 19.0surpluses - other 9.2 - 6.4 _______ _______ ______At end of period 1,713.6 1,237.4 1,418.0 ======= ======= ======= Deferred tax is provided as follows: 30/09/05 30/09/04 31/03/05 £m £m £mExcess of capital allowances over depreciation - investment properties 125.8 104.4 112.7 26.0 36.1 22.9- operating propertiesCapitalised interest - investment properties 21.3 25.3 28.0 - operating properties 1.0 4.2 0.9Revaluation surpluses - own 1,332.8 1,074.1 1,117.9 - acquired 83.3 - 19.0Tax losses (23.1) - (37.8)Other temporary timing differences 146.5 (6.7) 154.4 _______ _______ ______ 1,713.6 1,237.4 1,418.0 ======= ======= ======= Tax on capital gains that would become payable by the Group, if it were to 773.1 570.0 626.0dispose of all of its investment properties at the amount stated in thebalance sheetPotential reduction in tax on contingent capital gains if properties were (31.6) (73.0) (90.4)sold within their owning companies _______ _______ ______Tax on contingent capital gains assuming no further mitigation 741.5 497.0 535.6 ======= ======= ======= 21. Shareholders' equity Ordinary Own shares Share Share Capital Profit and Total shares acquired based premium redemption loss £m £m £m payments account reserve account £m £m £m £m At 1 April 2004 46.6 - 0.8 15.9 22.1 5,066.8 5,152.2Repayment of B shares - - - - 8.4 (8.4) -Exercise of options 0.2 - - 15.5 - - 15.7Fair value movement on cash flow hedges - Group - - - - - - - - joint ventures - - - - - - -Fair value of share based payments - - - - - - -Own shares acquired - (2.1) 2.5 - - - 0.4Actuarial losses on defined benefit - - - - - (3.4) (3.4)pension schemesDividend paid (note 6) - - - - - (175.5) (175.5)Profit for the financial period - - - - - 1,060.9 1,060.9 _______ _______ ______ _______ _______ ______ ______At 31 March 2005 46.8 (2.1) 3.3 31.4 30.5 5,940.4 6,050.3 ======= ======= ======= ======= ====== ======= ====== Ordinary Own shares Share Share Capital Profit and Total shares acquired based premium redemption loss £m £m £m payments account reserve account £m £m £m £mAt 1 April 2005 46.8 (2.1) 3.3 31.4 30.5 5,940.4 6,050.3Repayment of B shares - - - - - - -Exercise of options 0.1 - - 6.5 - - 6.6Fair value movement on cash flow hedges - - - - - (3.7) (3.7) - Group - joint ventures - - - - - (5.1) (5.1)Fair value of share based payments - - 1.2 - - - 1.2Own shares acquired - (1.9) - - - - (1.9)Actuarial profits on defined benefit - - - - - 3.6 3.6pension schemesDividend paid (note 6) - - - - - (153.8) (153.8)Profit for the financial period - - - - - 829.2 829.2 _______ _______ ______ _______ _______ ______ ______At 30 September 2005 46.9 (4.0) 4.5 37.9 30.5 6,610.6 6,726.4 ======= ======= ======= ======= ====== ======= ====== At 30 September 2005 the Group owned 327,629 shares in respect of its commitmentto the deferred bonus scheme. 22. Acquisition of Tops Estates PLC The Group acquired Tops Estates PLC on 10 June 2005 for a consideration of£334.1m, including costs. This has been accounted as a business combination. Book value Fair value Fair value at adjustments acquired acquisition £m £m £mFair value of assets acquired Investment properties 573.0 19.6 592.6Debtors 21.9 (7.0) 14.9Cash at bank 12.9 - 12.9Creditors falling due within one year (19.4) - (19.4)Creditors falling due after one year (230.6) (27.3) (257.9)Deferred taxation (9.2) (64.3) (73.5) _______ _______ ______Net assets acquired 348.6 (79.0) 269.6 _______ _______ ______Fair value of consideration Cash 325.3Costs 8.8 _______ 334.1Goodwill (Note 11) (64.5) _______ 269.6 ======= 22. Significant accounting policies (a) Basis of consolidation The consolidated financial statements of the Group include the financialstatements of Land Securities Group PLC ("the Company") and its subsidiariesmade up to 30 September 2005. Subsidiaries are those entities controlled by theCompany. Control exists when the Company has the power, directly or indirectly,to govern the financial and operating policies of an entity so as to obtainbenefits from its activities. The financial statements of subsidiaries areincluded in the consolidated financial statements from the date that controlcommences until the date control ceases. Joint ventures are those entities over whose activities the Group has jointcontrol, established by contractual agreement. Interests in joint ventures areaccounted for using the equity method of accounting as permitted by IAS 31 "Interests in joint ventures" and following the procedures for this method setout in IAS 28 "Investments in associates". The equity method requires theGroup's share of the joint venture's profit or loss for the period to bepresented separately in the income statement and the Group's share of the jointventure's net assets to be presented separately in the balance sheet. Jointventures with net liabilities are carried at zero value in the balance sheetwhere there is no commitment to fund the deficit and any distributions receivedare included in the consolidated profit for the year. Intra-group balances and any unrealised gains and losses arising fromintra-group transactions are eliminated in preparing the consolidated financialstatements. Unrealised gains arising from transactions with joint ventures areeliminated to the extent of the Group's interest in the joint venture concerned.Unrealised losses are eliminated in the same way, but only to the extent thatthere is no evidence of impairment. (b) Goodwill At the date of the Group's transition to IFRS, 1 April 2004, the goodwill in theGroup balance sheet represented that arising on the acquisition of LandSecurities Trillium less amortisation to that date. In accordance with IFRS 1 "First-time adoption of IFRS", this amount has been adopted as the carryingamount of the goodwill for IFRS accounting purposes and the goodwill wasreviewed for impairment at both 31 March 2004 and 31 March 2005. In accordancewith IFRS 3 "Business combinations", the goodwill is not amortised but isreviewed for impairment at each reporting date. The Group's policy onimpairment is set out in (k) below. (c) Derivative financial instruments ("derivatives") The Group uses interest rate swap derivatives to help manage its interest raterisk. In accordance with its treasury policy, the Group does not hold or issuederivatives for trading purposes. Derivatives are recognised initially at cost. Subsequent to initialrecognition, derivatives are stated at fair value. The gain or loss onre-measurement to fair value is recognised immediately in profit or loss unlessthe derivatives qualify for hedge accounting, in which case recognition dependson the nature of the item being hedged. Where a derivative is designated as a hedge of the variability of a highlyprobable forecasted transaction, i.e. an interest payment, the element of thegain or loss on the derivative that is an effective hedge is recognised directlyin equity. When the hedge of a forecasted transaction subsequently results inthe recognition of a financial asset or a financial liability, the associatedgains or losses that were recognised directly in equity are reclassified intoprofit or loss in the same period or periods during which the asset acquired orliability assumed affects profit or loss, i.e. when interest income or expenseis recognised. The gain or loss on any ineffective element of any potentialhedge is recognised in the income statement immediately. (d) Investment properties Investment properties are those properties, either owned by the Group or wherethe Group is a lessee under a finance lease, that are held either to earn rentalincome or for capital appreciation or both. In addition, properties held underoperating leases are accounted for as investment properties when the rest of thedefinition of an investment property is met. In such cases, the operatingleases concerned are accounted for as if they were finance leases. Investment properties are measured initially at cost, including relatedtransaction costs. After initial recognition at cost, investment properties arecarried at their fair values based on a professional valuation made as of eachreporting date. Properties are treated as acquired at the point when the Groupassumes the significant risks and returns of ownership and as disposed whenthese are transferred to the buyer. Investment property is measured on initialrecognition at cost, including related transaction costs. Additions toinvestment properties consist of costs of a capital nature and, in the case ofinvestment properties under development, capitalised interest. Certain internalstaff and associated costs directly attributable to the management of majorschemes during the construction phase are also capitalised. The difference between the fair value of an investment property at the reportingdate and its carrying amount prior to re-measurement is included in the incomestatement as a valuation gain or loss. When the Group begins to redevelop an existing investment property for continuedfuture use as an investment property, the property remains an investmentproperty and is accounted for as such. When the Group begins to redevelop anexisting investment property with a view to sale, the property is transferred totrading properties and held as a current asset. The property is re-measured tofair value as at the date of the transfer with any gain or loss being taken toprofit or loss. The re-measured amount becomes the deemed cost at which theproperty is then carried in trading properties. Property that is being constructed or developed for future use as an investmentproperty, but which has not previously been classified as such, is classified asinvestment property under development within property, plant and equipment.This is recognised initially at cost but is subsequently re-measured to fairvalue at each reporting date. Any gain or loss on re-measurement is takendirect to equity unless any loss in the period exceeds any net cumulative gainpreviously recognised in equity. In the latter case, the amount by which theloss in the period exceeds the net cumulative gain previously recognised istaken to profit or loss. On completion, the property is transferred toinvestment property with any final difference on re-measurement accounted for inaccordance with the foregoing policy. Gross borrowing costs associated with direct expenditure on properties underdevelopment or undergoing major refurbishment are capitalised. The interestcapitalised is calculated using the Group's weighted average cost of borrowingsafter adjusting for borrowings associated with specific developments. Whereborrowings are associated with specific developments, the amount capitalised isthe gross interest incurred on those borrowings less any investment incomearising on their temporary investment. Interest is capitalised as from thecommencement of the development work until the date of practical completion.The capitalisation of finance costs is suspended if there are prolonged periodswhen development activity is interrupted. Interest is also capitalised on thepurchase cost of a site or property acquired specifically for redevelopment inthe short term but only where activities necessary to prepare the asset forredevelopment are in progress. (e) Property, plant and equipment Operating properties These are properties owned and managed by Land Securities Trillium, the Group'sproperty outsourcing business, and which do not satisfy the definition of aninvestment property. Operating properties are stated at cost less accumulateddepreciation. Depreciation is charged to the income statement on astraight-line basis over the estimated useful lives of the properties concerned. The estimated useful lives are as follows: Freehold land - Not depreciatedFreehold buildings - Up to 50 yearsLeasehold properties - Shorter of the unexpired lease term and 50 years Other property, plant and expenditure This category comprises computers, motor vehicles, furniture, fixtures andfittings, and improvements to Group offices. These assets are stated at costless accumulated depreciation and are depreciated on a straight-line basis overtheir estimated useful lives of between two and five years. The residual values and useful lives of all property, plant and equipment arereviewed, and adjusted if appropriate, at least at each financial year-end. (f) Leases A Group company is the lessee i) Operating lease - leases in which substantially all risks and rewards ofownership are retained by another party, the lessor, are classified as operatingleases. Payments, including prepayments, made under operating leases (net of anyincentives received from the lessor) are charged to the income statement on astraight-line basis over the period of the lease. ii) Finance lease - leases of assets where the Group has substantially all therisks and rewards of ownership are classified as finance leases. Finance leasesare capitalised at the lease's commencement at the lower of the fair value ofthe property and the present value of the minimum lease payments. Each leasepayment is allocated between the liability and finance charges so as to achievea constant rate on the finance balance outstanding. The corresponding rentalobligations, net of finance charges, are included in current and non-currentborrowings. The finance charges are charged to the income statement over thelease period so as to produce a constant periodic rate of interest on theremaining balance of the liability for each period. The investment propertiesacquired under finance leases are subsequently carried at their fair value. A Group company is the lessor i) Operating lease - properties leased out to tenants under operating leases areincluded in investment properties in the balance sheet. ii) Finance lease - when assets are leased out under a finance lease, thepresent value of the minimum lease payments is recognised as a receivable. Thedifference between the gross receivable and the present value of the receivableis recognised as unearned finance income. Lease income is recognised over theterm of the lease using the net investment method before tax, which reflects aconstant periodic rate of return. Where only the buildings element of a propertylease is classified as a finance lease, the land element is shown withinoperating leases. (g) Trading properties Trading properties are those properties held for sale and are shown at the lowerof cost and net realisable value. (h) Long-term construction contracts Revenue on long-term contracts is recognised according to the stage reached inthe contract by reference to the value of work completed using the percentage ofcompletion method. An appropriate estimate of the profit attributable to workcompleted is recognised once the outcome of the contract can be estimatedreliably. The gross amount due from customers for contract work is shown as areceivable. The gross amount due comprises costs incurred plus recognisedprofits less the sum of recognised losses and progress billings. Where the sumof recognised losses and progress billings exceeds costs incurred plusrecognised profits, the amount is shown as a liability. (i) Trade and other receivables Trade and other receivables are recognised initially at fair value. A provisionfor impairment of trade receivables is established where there is objectiveevidence that the Group will not be able to collect all amounts due according tothe original terms of the receivables concerned. (j) Cash and cash equivalents Cash and cash equivalents comprises cash balances, deposits held at call withbanks and other short-term highly liquid investments with original maturities ofthree months or less. Bank overdrafts that are repayable on demand and form anintegral part of the Group's cash management are included as a component of cashand cash equivalents for the purpose of the statement of cash flows. (k) Impairment The carrying amounts of the Group's non-financial assets, other than investmentproperty (see (d) above), are reviewed at each reporting date to determinewhether there is any indication of impairment. If any such indication exists,the asset's recoverable amount is estimated (see below). An impairment loss isrecognised in profit or loss whenever the carrying amount of an asset exceedsits recoverable amount. For the purposes of assessing impairment, assets aregrouped together at the lowest levels for which there are separatelyidentifiable cash flows. The recoverable amount of an asset is the greater of its net selling price andits value in use. The value in use is determined as the net present value ofthe future cash flows expected to be derived from the asset, discounted using apre-tax discount rate that reflects current market assessments of the time valueof money and the risks specific to the asset. An impairment loss is reversed if there has been a change in the estimates usedto determine the recoverable amount. An impairment loss is reversed only to theextent that the asset's carrying amount after the reversal does not exceed theamount that would have been determined, net of applicable depreciation, if noimpairment loss had been recognised. (l) Share capital Ordinary shares are classed as equity. External costs directly attributable tothe issue of new shares are shown in equity as a deduction, net of tax, from theproceeds. (m) Borrowings Borrowings other than bank overdrafts are recognised initially at fair valueless attributable transaction costs. Subsequent to initial recognition,borrowings are stated at amortised cost with any difference between the amountinitially recognised and redemption value being recognised in the incomestatement over the period of the borrowings, using the effective interestmethod. Where existing borrowings are exchanged for new borrowings and the terms of theexisting and new borrowings are not substantially different (as defined by IAS39), the new borrowings are recognised initially at the carrying amount of theexisting borrowings. The difference between the amount initially recognised andthe redemption value of the new borrowings is recognised in the income statementover the period of the new borrowings, using the effective interest method. (n) Pensions The Group accounts for pensions under IAS 19 "Employee benefits". In respect ofdefined benefit pension schemes, obligations are measured at discounted presentvalue while scheme assets are measured at their fair value. The operating andfinancing costs of such plans are recognised separately in the income statement. Service costs are spread systematically over the working lives of the employeesconcerned with the charge for the period included in operating costs in theincome statement. Financing costs are recognised in the periods in which theyarise and are included in interest expense. Actuarial gains and losses arisingfrom either experience differing from previous actuarial assumptions or changesto those assumptions are recognised immediately in the statement of recognisedincome and expense. Contributions to defined contribution schemes are expensed as incurred. 22. Significant accounting policies continued (o) Provisions A provision is recognised in the balance sheet when the Group has a constructiveor legal obligation as a result of a past event and it is probable that anoutflow of economic benefits will be required to settle the obligation. If theeffect is material, provisions are determined by discounting the expected futurecash flows at a pre-tax rate that reflects current market assessments of thetime value of money and, where appropriate, the risks specific to the liability. A provision for onerous contracts is recognised when the expected benefits to bederived by the Group from a contract are lower than the unavoidable cost ofmeeting its obligations under the contract. Provision is made for dilapidations that will crystallise in the future where,on the basis of the present condition of the property, an obligation exists atthe reporting date and can be reliably measured. The estimate is revised overthe remaining period of the lease to reflect changes in the condition of thebuilding or other changes in circumstances. The estimate of the obligationtakes account of relevant external advice. (p) Trade and other payables Trade and other payables are stated at cost. (q) Revenue Revenue comprises rental income, service charges and other recoveries fromtenants of the Group's investment and trading properties, property servicesincome earned by its property outsourcing business, proceeds of sales of itstrading properties and income arising on long-term contracts. Rental incomeincludes the net income from managed operations such as car parks, food courts,serviced offices and flats. Service charges and other recoveries include incomein relation to services charges and directly recoverable expenditure togetherwith any chargeable management fees. Property services income representsunitary charges and the recovery of other direct property or contractexpenditure reimbursable by customers. Where revenue is obtained from therendering of services, it is recognised by reference to the stage of completionof the relevant transactions at the reporting date. Rental income from investment property leased out under operating lease isrecognised in the income statement on a straight-line basis over the term of thelease. Lease incentives granted are recognised as an integral part of the netconsideration for the use of the property and are therefore also recognised onthe same, straight-line basis. When property is let out under a finance lease, the Group recognises areceivable at an amount equal to the net investment in the lease at inception ofthe lease. Rentals received are accounted for as repayments of principal andfinance income as appropriate. Minimum lease payments receivable on financeleases are apportioned between finance income and reduction of the outstandingreceivable. Finance income is allocated to each period during the lease term soas to produce a constant periodic rate of interest on the remaining netinvestment in the finance lease. Contingent rents, being those lease paymentsthat are not fixed at the inception of a lease, for example increases arising onrent reviews, are recorded as income in the periods in which they are earned. Where revenue is obtained by the sale of assets, it is recognised when thesignificant risks and returns have been transferred to the buyer. In the caseof sales of properties, this is generally on unconditional exchange except wherepayment or completion is expected to occur significantly after exchange. Forconditional exchanges, sales are recognised as the conditions are satisfied.Sales of investment and other fixed asset properties, which are not included inrevenue, are recognised on the same basis. (r) Expenses Property and contract expenditure, including bid costs incurred prior to theexchange of a contract, is expensed as incurred with the exception ofexpenditure on long-term contracts (see (h) above). Rental payments made under operating lease are recognised in the incomestatement on a straight-line basis over the term of the lease. Lease incentivesreceived are recognised as an integral part of the net consideration for the useof the property and also recognised on a straight-line basis. Minimum lease payments payable on finance leases and operating leases accountedfor as finance leases under IAS 40 are apportioned between finance expense andreduction of the outstanding liability. Finance expense is allocated to eachperiod during the lease term so as to produce a constant periodic rate ofinterest on the remaining liability. Contingent rents (as defined in (q) above)are charged as expense in the periods in which they are incurred. (s) Share-based payments The cost of granting share options and other share-based remuneration toemployees and directors is recognised through the income statement. The Grouphas used the Black-Scholes option valuation model to establish the relevantcosts. The resulting values are amortised through the income statement over thevesting period of the options and other grants. The charge is reversed if itappears probable that applicable performance criteria will not be met. Own shares held in connection with employee share plans or other share-basedpayment arrangements are treated as treasury shares and deducted from equity.No profit or loss is recognised in the income statement on their sale, re-issueor cancellation. (t) Exceptional items Items which are sufficiently material by either their size or nature to requireseparate disclosure are disclosed as exceptional items within the relevantconsolidated income statement category. Items that management consider fall intothis category are presented separately in the consolidated income statement inthe column headed "Exceptional items". Events that may give rise to exceptionalitems include gains or losses on the disposal of fixed asset properties, jointventures or other investments, impairment of assets including goodwill andfinancial restructurings. (u) Income tax Income tax on the profit for the year comprises current and deferred tax.Current tax is the tax payable on the taxable income for the year and anyadjustment in respect of previous years. Deferred tax is provided in full usingthe balance sheet liability method on temporary differences between the carryingamounts of assets and liabilities for financial reporting purposes and theamounts used for taxation purposes. No provision is made for temporary differences (i) arising on the initialrecognition of assets or liabilities that affect neither accounting nor taxableprofit and (ii) relating to investments in subsidiaries to the extent that theywill not reverse in the foreseeable future. In particular, deferred tax is provided on the full difference between theoriginal cost of investment properties and their carrying amounts at thereporting date without taking into account deductions and allowances which wouldonly apply if the properties concerned were to be sold, except where suchproperties are classified as held for sale. Reconciliation of UK GAAP to IFRS In preparing the IFRS accounts, the Group has adjusted amounts reportedpreviously in the financial statements prepared in accordance with UK GAAP. Anexplanation of how the transition has affected the Group's financial performanceand position is set out in the following tables and accompanying narrative. Reconciliation of equity Notes 30/09/05 31/03/05 30/09/04 31/03/04 £m £m £m £mEquity shareholders' funds under UK GAAP * 7,758.2 6,636.6 6,570.2 6,030.1 IFRS adjustmentsDeferred tax on revaluations - Group (i) (1,332.8) (1,117.9) (1,074.1) (953.5) - joint ventures (i) (54.6) (43.8) (36.7) (24.0) - on acquisitions (i) (83.3) (19.0) - -Dividend (ii) 85.1 153.7 48.6 126.8Finance leases - Group 1.4 8.5 (3.7) (9.2) - joint ventures (0.3) (0.3) (0.2) (0.2)Pension deficit (net of deferred tax) (iii) (13.0) (17.7) (14.8) (16.2)Tenant lease incentives (iv), (v) (15.2) (16.5) (15.2) (13.6)Fair value of interest rate swaps - Group (vi) (11.5) (2.3) (26.5) (31.1) - joint ventures (vi) (6.4) (1.3) (1.3) -Non-amortisation of goodwill (Land Securities Trillium) (vii) 3.6 2.4 1.2 -Share based payments (viii) 3.4 3.0 1.7 1.4Write off negative goodwill arising 6.1 6.3 - -Negative investment adjustment (Telereal) - Investment (ix) - 71.1 52.6 47.9 - taxation (ix) - (10.6) (16.1) (10.6)Bond exchange de-recognition (x) 385.7 395.0 - -Other - 3.1 3.6 4.4 _______ _______ ______ ______Equity shareholders' funds under IFRS 6,726.4 6,050.3 5,489.3 5,152.2 ======= ======= ======= ======= * "UK GAAP" referred to in these reconciliations is that existing as at 31March 2005 Notes (i) Deferred tax is required to be provided in full on alldifferences between carrying values for accounts purposes and those fortaxation. In particular, deferred tax is now provided on revaluation surpluses. (ii) Dividends are now only provided when finally approved,either by the Annual General Meeting in the case of final dividends or by theBoard for interim dividends. (iii) The actuarial deficit in the Group's defined benefitpension schemes is now recognised as a liability in the consolidated balancesheet. (iv) Tenant leases which transfer substantially all of the risksand rewards of ownership to the tenant are treated as finance leases. Theproperty is derecognised from the balance sheet and a receivable recognised inits place. (v) The cost of tenant lease incentives, such as rent freeperiods, are now amortised over the term of the leases concerned rather thanover the period to the first review to market rents. (vi) The fair value of all derivatives such as interest rateswaps is now recognised in the Group balance sheet at each reporting date. (vii) Goodwill arising on acquisition is no longer amortised butkept on the balance sheet and reviewed regularly for impairment. (viii) The cost of share-based payments is now recognised throughthe income statement. (ix) Joint ventures cease to be consolidated once their netassets become negative. This is the case with Telereal during the period underreview. (x) The bond exchange which took place in November 2004qualified as an extinguishment of the existing debt and an issue of new debtunder UK GAAP. Under IFRS, this is not the case and the existing debt isreinstated with the difference in redemption amounts being amortised over thelife of the new debt. Reconciliation of profit Notes Six months Six months Year ended ended ended 31/03/05 30/09/05 30/09/04 £m £m £mProfit / (loss) attributable to ordinary shareholder's under UK GAAP 438.2 135.9 (35.8) IFRS adjustmentsRevaluation surplus on investment properties - Group (xi) 726.0 407.8 827.9 - joint ventures (xi) 35.8 45.5 69.5Deferred tax on revaluations - Group (xii) (214.9) (120.6) (164.4) - joint ventures (xii) (10.8) (12.7) (19.8)Taxation on revaluation surpluses realised on disposals of (xiii) (8.5) (2.2) (40.3)investment propertiesFinance leases - Group 3.4 (3.7) (9.4) - joint ventures (0.1) - (0.1)Pension deficit (net of deferred tax) 1.1 0.2 1.9Tenant lease incentives (1.6) (0.8) (3.0)Fair value of non-qualifying interest rate swaps (net of deferred (5.5) 3.3 27.5tax)Non-amortisation of Goodwill (Land Securities Trillium) 1.2 1.2 2.4Share based payments (0.8) (0.6) (0.9)Write off goodwill arising on the acquisition of businesses (64.5) - (12.7)Negative investment adjustment (Telereal) (60.5) (0.8) 23.2B-share dividends - - (0.1)Bond exchange de-recognition - originating adjustment - - 402.8 - adjustment in (9.3) - (7.8) period _______ _______ ______Profit attributable to ordinary shareholder's under IFRS 829.2 452.5 1,060.9 ======= ======= ======= Notes (xi) The surpluses and deficits arising on the periodicrevaluation of the investment property portfolio are now taken through theincome statement. (xii) Deferred tax is provided in full on the revaluationsurpluses and deficits and also taken through the income statement. (xiii) Deferred tax provided on revaluation surpluses does notbecome payable on disposal of the properties concerned and so has to be writtenback through the income statement. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Land Securities