Interim Results

Barr(A.G.) PLC 27 September 2005 FOR IMMEDIATE RELEASE 27 September 2005 A.G.BARR p.l.c. INTERIM RESULTS A.G.BARR p.l.c. the Scottish based manufacturer of soft drinks including the popular IRN-BRU, Tizer and Orangina brands, announces its interim results today for the 6 months ended 30th July 2005. Key Points * Profit on ordinary activities before tax and exceptional items increased by 5.7% to £8.7 million (2004: £8.2 million) * Profit on ordinary activities before tax including exceptional costs of £0.7 million related to restructuring in Scotland was £8 million (2004: £8.2 million) * Turnover versus the comparable period was flat at £66.3 million. * IRN-BRU and Diet IRN-BRU both gained market share. * Interim dividend increased by 5.4% to 9.75p per share (2004: 9.25p). * Infrastructure investment programme in Scotland - on time and on budget. Commenting Roger White, Chief Executive, said: 'There is a considerable momentum of change in both the soft drinks market and within our company operations. I am pleased to report that we are continuing to make good financial progress at the same time as we accelerate the development of our brands and product portfolio. The investment programme in our Scottish sales and logistics infrastructure announced earlier this year commenced in April and we have so far made very good progress towards all our financial and operational objectives. Trading in the first 7 weeks of the second half is in line with our business plans.' For further information: A.G.Barr Robin Barr, Chairman Roger White, Chief Executive Iain Greenock, Finance Director Tel: 0141 554 1899 Buchanan Communications Tim Thompson/Nicola Cronk Tel: 020 7466 5000 A.G.BARR p.l.c. Interim Statement Profit on ordinary activities before taxation for the six months to 30th July 2005 - excluding exceptional items of £0.7 million - was up 5.7%, at £8.7 million on a turnover of £66.3 million. Exceptional items were, as anticipated, related to the reorganisation of our Scottish sales and logistics operations. The business has continued to perform well under both difficult market conditions and a substantial level of operational change. The carbonated drinks market remained sluggish during this period. Some brands continued to chase short-term volume but we are convinced that a value growth strategy and sustained brand development is the optimum long-term approach. Although half year turnover was flat we are pleased to report further improvement in the market share of IRN-BRU and Diet IRN-BRU. In addition we are now starting to see encouraging results from the roll out of the Phenomenal Campaign in England. The cost of promotion within the industry has continued to rise as competition has intensified in the market place. However we have again increased our spend on developing brand equity in contrast to many in our sector who have cut back on marketing in the period in order to increase promotional spending. Input costs, in particular for energy and oil based products, have increased during the last six months but we have maintained margins by a combination of cost controls, efficiency gains and the implementation of some modest price increases across the portfolio. At the end of May we concluded a new long term franchise agreement in respect of the Orangina brand in the UK with Cadbury Schweppes plc. This arrangement has given both parties the confidence to invest significantly behind the Orangina brand leading to the relaunch of Orangina as a premium high juice product. The first stage of this process was the start of a new television campaign in July. The market for soft drinks is going through a period of change. We have increased activity in new product development, in particular in the 'Good For You' soft drinks sectors. The further development of the St Clements brand has begun with the introduction of St Clements Squeeze and our Simply brand continues to grow with several new products launched in the period. In addition to our own brands we have commenced a sales programme with the Snapple range of still fruit products launched through our direct to store system. Snapple is a major brand in USA, owned by Cadbury Schweppes. Good progress has been made in our major infrastructure project in Scotland. Two sales locations at Irvine and Wishaw have been consolidated into our Glasgow operation and construction work on our new Cumbernauld warehouse is now well underway. Overall the project is currently on time and on budget across all its constituent parts and will, upon completion, deliver significant improvements to our operations. Given the increase in underlying profit and the very satisfactory financial position of the company your directors have declared an interim dividend of 9.75p per share, payable on 28th October 2005. This is a 5.4% increase on the interim dividend paid last year. Shareholders will note that this Interim Report has been expanded considerably in comparison to that which was published last year. This reflects the requirement for UK listed companies to adopt the new International Financial Reporting Standards (IFRS). Turnover to date during the second half of the year is in line with our business plan and has benefited from the year on year improvement in weather. Although competition in our key sectors remains particularly intense the combination of our plans for existing brands and the ongoing development of new products and partnerships should allow us to meet market expectations for the full year. Robin Barr, Chairman Roger White, Chief Executive 27th September, 2005 A.G.BARR p.l.c. Consolidated Income Statement Restated Restated 6 months 6 months Year ended ended ended 30.07.05 31.07.04 29.01.05 Notes £000 £000 £000 ------------------------- -------- --------- -------- --------- Revenue 66,290 66,272 127,222 Cost of sales 31,130 31,235 63,729 ------------------------- -------- --------- -------- --------- Gross profit 35,160 35,037 63,493 Net operating expenses 27,287 27,352 48,490 ------------------------- -------- --------- -------- --------- Operating profit before exceptional 7,873 7,685 15,003 items Exceptional items 5 677 - - ------------------------- -------- --------- -------- --------- Operating profit 7,196 7,685 15,003 Finance income 797 521 1,288 Finance costs (2) (3) (3) ------------------------- -------- --------- -------- --------- Profit on ordinary activities before tax 7,991 8,203 16,288 Tax on profit on ordinary activities 6 2,359 2,201 4,728 ------------------------- -------- --------- -------- --------- Profit attributable to equity 5,632 6,002 11,560 shareholders -------- --------- -------- --------- ------------------------- Basic earnings per share 30.22p 32.11p 61.85p ------------------------- -------- --------- -------- --------- Fully diluted earnings per share 28.72p 30.36p 58.77p ------------------------- -------- --------- -------- --------- Dividend per share paid 19.50p 17.00p 26.25p ------------------------- -------- --------- -------- --------- Dividend paid (£'000) 3,795 3,308 5,108 ------------------------- -------- --------- -------- --------- Dividend per share proposed 10 9.75p 9.25p 19.50p ------------------------- -------- --------- -------- --------- Dividend proposed (£'000) 1,897 1,800 3,795 Consolidated Statement of Recognised Income and Expense Restated Restated 6 months 6 months Year ended ended ended 30.07.05 31.07.04 29.01.05 £000 £000 £000 -------------------------------- --------- -------- --------- Actuarial gain recognised on defined benefit pension schemes - - 476 -------------------------------- --------- -------- --------- Net income recognised directly in equity - - 476 Profit for the period 5,632 6,002 11,560 -------------------------------- --------- -------- --------- Total recognised income and expense for the period 5,632 6,002 12,036 -------------------------------- --------- -------- --------- Attributable to equity shareholders 5,632 6,002 12,036 -------------------------------- --------- -------- --------- A.G.BARR p.l.c. Consolidated Balance Sheet Restated Restated As at As at As at 30.07.05 31.07.04 29.01.05 Notes £000 £000 £000 -------------------------- ------- --------- -------- --------- Non-current assets Property, plant and equipment 7 37,074 38,063 37,315 Deferred tax assets 5,852 5,751 5,600 -------------------------- ------- --------- -------- --------- 42,926 43,814 42,915 -------------------------- ------- --------- -------- --------- Current assets Inventories 8,414 9,843 9,172 Trade and other receivables 29,934 26,128 20,991 Cash at bank 33,845 31,983 34,958 -------------------------- ------- --------- -------- --------- 72,193 67,954 65,121 -------------------------- ------- --------- -------- --------- Total assets 115,119 111,768 108,036 -------------------------- ------- --------- -------- --------- Current liabilities Trade and other payables 27,443 29,429 22,393 Current tax 2,707 2,784 2,550 Borrowings - 17 - -------------------------- ------- --------- -------- --------- 30,150 32,230 24,943 -------------------------- ------- --------- -------- --------- Non-current liabilities Retirement benefit obligations 17,044 18,085 17,044 Provisions 615 624 619 Deferred tax liabilities 4,850 4,916 4,975 -------------------------- ------- --------- -------- --------- 22,509 23,625 22,638 -------------------------- ------- --------- -------- --------- Capital and reserves attributable to equity shareholders Called up share capital 4,865 4,865 4,865 Share premium account 905 905 905 Own shares held 8 (4,010) (3,042) (3,100) Share awards reserve 1,147 492 826 Retained earnings 59,553 52,693 56,959 -------------------------- ------- --------- -------- --------- 62,460 55,913 60,455 -------------------------- ------- --------- -------- --------- -------------------------- ------- --------- -------- --------- Total equity and liabilities 115,119 111,768 108,036 -------------------------- ------- --------- -------- --------- A.G.BARR p.l.c. Consolidated Cash Flow Statement Restated Restated 6 months 6 months Year ended ended ended 30.07.05 31.07.04 29.01.05 £000 £000 £000 -------------------------------- --------- --------- --------- Operating activities Profit on ordinary activities before tax 7,991 8,203 16,288 Adjustments for: Interest receivable (797) (521) (1,288) Interest payable 2 3 3 Depreciation of property, plant and equipment 2,901 2,808 5,559 Share option costs 114 181 364 Gain on sale of property, plant and equipment (7) (8) (17) Government grants written back (4) (4) (9) -------------------------------- ---------- ---------- ---------- Operating cash flows before movements in working capital 10,200 10,662 20,900 Decrease in inventories 758 575 1,246 Increase in receivables (8,012) (5,858) (756) Increase in payables 4,981 8,275 427 Decrease in retirement benefit obligation - - (565) Employee share scheme 825 138 176 -------------------------------- ---------- ---------- ---------- Cash generated by operations 8,752 13,792 21,428 Tax on profit paid (2,357) (2,069) (4,433) -------------------------------- ---------- ---------- ---------- Net cash from operating activities 6,395 11,723 16,995 -------------------------------- ---------- ---------- ---------- Investing activities Proceeds on sale of property, plant and equipment 81 110 215 Purchase of property, plant and equipment (3,595) (1,707) (2,959) Interest received 797 521 1,288 Interest paid (2) (3) (3) -------------------------------- ---------- ---------- ---------- Net cash used in investing activities (2,719) (1,079) (1,459) -------------------------------- ---------- ---------- ---------- Financing activities Purchase of own shares (2,718) (290) (390) Sale of own shares 1,724 - - Dividends paid (3,795) (3,308) (5,108) -------------------------------- ---------- ---------- ---------- Net cash used in financing activities (4,789) (3,598) (5,498) -------------------------------- ---------- ---------- ---------- Net (decrease) / increase in cash (1,113) 7,046 10,038 -------------------------------- ---------- ---------- ---------- Cash at beginning of period 34,958 24,920 24,920 Cash at end of period 33,845 31,966 34,958 -------------------------------- ---------- ---------- ---------- A.G.BARR p.l.c. Notes to the Accounts 1. Basis of preparation These interim financial statements do not constitute statutory accounts and are unaudited. These condensed consolidated financial statements of A.G.BARR p.l.c. have been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting, and are covered by IFRS 1, First-time Adoption of IFRS, because they are part of the period covered by the group's first IFRS financial statements for the year ending 28th January 2006. A copy of this announcement is distributed to all registered shareholders of the company and is available for members of the public upon application to the Company Secretary at 1306 Gallowgate, Glasgow G31 4DS and on our corporate website at www.agbarr.co.uk. 2. Accounting policies The policies set out below have been consistently applied to all the periods presented and will apply for the full year. Consolidated financial statements of A.G.BARR p.l.c. until 29th January 2005 have been prepared in accordance with UK Generally Accepted Accounting Principles (UK GAAP). UK GAAP differs in certain respects from IFRS. When preparing the consolidated interim financial statements for 2005, management has amended certain accounting, valuation and consolidation methods applied in the UK GAAP financial statements to comply with IFRS. There have been no other changes to the accounting policies. The comparative figures in respect of the interim period ended 31st July 2004 and the year ended 29th January 2005 have been restated to reflect these adjustments. Reconciliations and descriptions of the effect of the transition from U.K. GAAP to IFRS on the group's equity and its net income are given in the notes to the statements on pages 07 to 15. Comparative U.K. GAAP figures for the year ended 29th January 2005 have been extracted from the statutory accounts of the company on which the auditors gave an unqualified report and which have been filed with the Registrars of Companies. 3. Adoption of new and revised International Financial Reporting Standards In the current period, the group has adopted all of the new and revised Standards and Interpretations issued by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) of the IASB that are relevant to its operations and effective for accounting periods beginning on or after 1st January 2005. The group has elected to recognise all cumulative actuarial gains and losses in relation to employee benefit schemes at the date of transition. The group has recognised actuarial gains and losses in full for the year in which they occur in the Consolidated Statement of Recognised Income and Expense in accordance with the amendment to IAS 19, issued on 16th December 2004. At the half year the assets and liabilities of the scheme are estimated to be unchanged from the values included at the previous year end. This amendment to IAS 19 is yet to be endorsed by the EU. A.G.BARR p.l.c. Notes to the Accounts 4. Segment information The group's primary basis of segmentation is by geography. For management purposes, the group is currently organised into one business segment being the manufacture, sale and distribution of soft drinks. The group operates predominantly in the UK, with some worldwide operations. The directors are of the opinion that the group has two reportable geographical segments as defined by IAS 14 Segment Reporting. Geographic segments Total Inter-segment External Profit attributable to equity Revenue Revenue Revenue shareholders £000 £000 £000 £000 £000 £000 ---------------- ------- -------- -------- -------- -------- -------- 30th July 2005 UK 66,044 124 65,920 13,704 - - Worldwide 370 - 370 85 - - ---------------- ------- -------- -------- -------- -------- -------- Consolidated 66,414 124 66,290 13,789 - - ---------------- ------- -------- -------- -------- -------- -------- 31st July 2004 UK 66,043 141 65,902 - 13,449 - Worldwide 370 - 370 - 33 - ---------------- ------- -------- -------- -------- -------- -------- Consolidated 66,413 141 66,272 - 13,482 - ---------------- ------- -------- -------- -------- -------- -------- 29th January 2005 UK 126,878 232 126,646 - - 26,665 Worldwide 576 - 576 - - 33 ---------------- ------- -------- -------- -------- -------- -------- Consolidated 127,454 232 127,222 - - 26,698 ---------------- ------- -------- -------- -------- -------- -------- ---------------- ------- -------- -------- -------- -------- -------- Result 13,789 13,482 26,698 Unallocated corporate expenses 5,916 5,797 11,695 Exceptional items 677 - - ---------------- -------- -------- -------- Operating profit 7,196 7,685 15,003 Finance income 797 521 1,288 Finance costs (2) (3) (3) ---------------- -------- -------- -------- Profit on ordinary activities before tax 7,991 8,203 16,288 Tax on profit on ordinary activities 2,359 2,201 4,728 ---------------------- -------- -------- -------- Profit attributable to equity shareholders 5,632 6,002 11,560 ---------------------- -------- -------- -------- 5. Exceptional items During the period the group commenced the re-organisation of its sales and logistics facilities in Scotland which will ultimately lead to a consolidated facility at its existing Cumbernauld factory site. This followed a full consultation period with all affected employees and receipt of planning approval for the major site development. At the interim date the decision had been made to close the operations at Irvine and Wishaw, resulting in redundancy costs of £677,000 for the half year. 6. Corporation tax charge The interim period tax charge is accrued based on the estimated average annual effective income tax rate of 30% (6 months ended 31st July 2004: 30%) A.G.BARR p.l.c. Notes to the Accounts 7. Property plant and equipment 6 months 6 months Year ended ended ended 30.07.05 31.07.04 29.01.05 £000 £000 £000 ---------------------------- -------- -------- -------- At beginning of period 37,315 39,601 39,601 Additions 2,734 1,372 3,471 Disposals (74) (102) (198) Depreciation (2,901) (2,808) (5,559) ---------------------------- --------- --------- --------- At end of period 37,074 38,063 37,315 ---------------------------- --------- --------- --------- During the current period the group also spent £1.1m on the construction of additional facilities at Cumbernauld. This is included within Trade and other receivables as capital work in progress. 8. Own shares held 6 months 6 months Year ended ended ended 30.07.05 31.07.04 29.01.05 £000 £000 £000 ---------------------------- --------- --------- --------- At beginning of period 3100 3066 3066 Shares purchased 2718 290 390 Options exercised (1740) (34) (69) Transfer to Retained earnings (68) (280) (287) ---------------------------- --------- --------- --------- At end of period 4010 3042 3100 ---------------------------- --------- --------- --------- The shares held in the company were purchased to meet future requirements of the company's employee share schemes. These shares are held at cost. 9. Contingencies and commitments As at As at As at 30.07.05 31.07.04 29.01.05 £000 £000 £000 Commitments for the acquisition of property, plant and equipment 12,643 434 1,948 10. Post Balance Sheet events The interim dividend of 9.75p per shares was approved by the board on 27th September 2005 and will be paid to shareholders on 28th October 2005. The ex-div and record date will be 5th October 2005 and 7th October 2005 respectively. 11. Related party disclosures Transactions between the company and its subsidiaries, which are related companies, have been eliminated on consolidation. A.G.BARR p.l.c. Reconciliations of U.K. GAAP to IFRS Reconciliation of Income Statements - for year ended 29th January, 2005 Effect of transition UK GAAP to IFRS IFRS Notes £000 £000 £000 -------------------- --------- --------- --------- --------- Revenue 127,222 - 127,222 Cost of sales 63,729 - 63,729 -------------------- --------- --------- --------- --------- Gross profit 63,493 - 63,493 Net operating expenses a,c,d 49,170 (680) 48,490 -------------------- --------- --------- --------- --------- Operating profit 14,323 680 15,003 Finance income 1,288 - 1,288 Finance cost (3) - (3) -------------------- --------- --------- --------- --------- Profit on ordinary activities before tax 15,608 680 16,288 Tax on profit on ordinary b,c,d 4,600 128 4,728 activities --------- --------- --------- --------- -------------------- Profit attributable to equity 11,008 552 11,560 shareholders --------- --------- --------- --------------------------- - for six months ended 31st July, 2004 Effect of transition UK GAAP to IFRS IFRS Notes £000 £000 £000 -------------------- --------- --------- --------- --------- Revenue 66,272 - 66,272 Cost of sales 31,235 - 31,235 -------------------- --------- --------- --------- --------- Gross profit 35,037 - 35,037 Net operating expenses a,c,d 27,639 (287) 27,352 -------------------- --------- --------- --------- --------- Operating profit 7,398 287 7,685 Finance income 521 - 521 Finance cost (3) - (3) -------------------- --------- --------- --------- --------- Profit on ordinary activities before tax 7,916 287 8,203 Tax on profit on ordinary c,d 2,373 (172) 2,201 activities --------- --------- --------- --------- -------------------- Profit attributable to equity shareholders 5,543 459 6,002 --------------------------- --------- --------- --------- A.G.BARR p.l.c. Notes to the Reconciliations of the Income Statements a) A pension deficit is recognised under IFRS but was not under UK GAAP. The pension cost for the group defined benefit pension schemes was reduced by £565,000 for the year to January 2005: £283,000 for the six months to July 2004. b) The adjustment to the costs of the defined benefit pension scheme in a) above increased the deferred tax expense by £313,000 for the year to January 2005. c) The introduction of IFRS 2 Share Based Payments has resulted in all share options and awards made on or after 7th November 2002 being revalued to reflect their fair value over the vesting period of the award. This resulted in a cost reduction of £120,000 for the year to January 2005: £7,000 for the six months to July 2004. This has resulted in a reduced deferred tax charge for the year to January 2005 of £177,000: £168,000 for the six months to July 2004. d) The optional exemption to adopt the fair value of certain of the company's properties to be their deemed cost at the transition date to IFRS, as permitted by IFRS 1, has been incorporated. This has resulted in an increase to the depreciation charge of £5,000 for the year to January 2005: £3,000 for the six months to July 2004. The related deferred tax charge has decreased by £8,000 for the year to January 2005: £4,000 for the six months to July 2004. Explanation of material adjustments to the cash flow statement for the year to 29th January, 2005 Tax paid on profits in the relevant period is now classified as operating cash flow under IFRS but was included as a separate category of tax cash flow under UK GAAP. This was £4,433,000 for the year to January 2005: £2,069,000 for the six months to July 2004. There are no other material differences in the cash flow statements presented under IFRS and previously presented under UK GAAP. A.G.BARR p.l.c. Reconciliations of U.K. GAAP to IFRS Reconciliation of equity at 29th January, 2005 Effect of transition UK GAAP to IFRS IFRS Notes £000 £000 £000 ------------------------- ------------ ------- ------- ------- Non-current assets Property, plant and equipment d 37,264 51 37,315 Deferred tax assets a,c 116 5,484 5,600 ------------------------- ------------ -------- -------- -------- 37,380 5,535 42,915 ------------------------- ------------ -------- -------- -------- Current assets Inventories 9,172 - 9,172 Trade and other receivables 20,991 - 20,991 Cash 34,958 - 34,958 ------------------------- ------------ -------- -------- -------- 65,121 - 65,121 ------------------------- ------------ -------- -------- -------- Total assets 102,501 5,535 108,036 ------------------------- ------------ -------- -------- -------- Current Liabilities Trade and other payables b,c 26,627 (4,234) 22,393 Current tax 2,550 - 2,550 ------------------------- ------------ -------- -------- -------- 29,177 (4,234) 24,943 ------------------------- ------------ -------- -------- -------- Non-current liabilities Retirement benefit obligations a - 17,044 17,044 Provisions 619 - 619 Deferred tax liabilities d 4,935 40 4,975 ------------------------- ------------ -------- -------- -------- 5,554 17,084 22,638 ------------------------- ------------ -------- -------- -------- Capital and reserves attributable to equity shareholders Share capital 4,865 - 4,865 Share premium account 905 - 905 Own shares held c (2,809) (291) (3,100) Share awards reserve c - 826 826 Retained earnings a,b,c,d 64,809 (7,850) 56,959 ------------------------- ------------ -------- -------- -------- 67,770 (7,315) 60,455 ------------------------- ------------ -------- -------- -------- ------------------------- ------------ -------- -------- -------- Total equity and liabilities 102,501 5,535 108,036 ------------------------- ------------ -------- -------- -------- A.G.BARR p.l.c. Reconciliation of equity at 31st July, 2004 Effect of transition UK GAAP to IFRS IFRS Notes £000 £000 £000 Non-current assets Property, plant and equipment d 38,010 53 38,063 Deferred tax assets a,c 150 5,601 5,751 38,160 5,654 43,814 Current assets Inventories 9,843 - 9,843 Trade and other receivables 26,128 - 26,128 Cash 31,983 - 31,983 67,954 - 67,954 Total assets 106,114 5,654 111,768 Current Liabilities Trade and other payables a,b,c 31,734 (2,305) 29,429 Current tax 2,784 - 2,784 Borrowings 17 - 17 34,535 (2,305) 32,230 Non-current liabilities Retirement benefit obligations a - 18,085 18,085 Provisions 624 - 624 Deferred tax liabilities d 4,872 44 4,916 5,496 18,129 23,625 Capital and reserves attributable to equity shareholders Share capital 4,865 - 4,865 Share premium account 905 - 905 Own shares held c (2,826) (216) (3,042) Share awards reserve c - 492 492 Retained earnings a,b,c,d 63,139 (10,446) 52,693 66,083 (10,170) 55,913 Total equity and liabilities 106,114 5,654 111,768 A.G.BARR p.l.c. Reconciliations of U.K. GAAP to IFRS Reconciliation of equity at 1st February, 2004 Effect of transition UK GAAP to IFRS IFRS Notes £000 £000 £000 ------------------------- ------------- ------- ------- ------- Non-current assets Property, plant and equipment d 39,545 56 39,601 Deferred tax assets a,c 199 5,380 5,579 ------------------------- ------------- ------- ------- ------- 39,744 5,436 45,180 ------------------------- ------------- ------- ------- ------- Current assets Inventories 10,418 - 10,418 Trade and other receivables 20,126 - 20,126 Cash 24,937 - 24,937 ------------------------- ------------- ------- ------- ------- 55,481 - 55,481 ------------------------- ------------- ------- ------- ------- Total assets 95,225 5,436 100,661 ------------------------- ------------- ------- ------- ------- Current Liabilities Trade and other payables b,c 24,763 (3,418) 21,345 Current income tax liabilities 2,445 - 2,445 Borrowings 17 - 17 ------------------------- ------------- ------- ------- ------- 27,225 (3,418) 23,807 ------------------------- ------------- ------- ------- ------- Non-current liabilities Retirement benefit obligations a - 18,085 18,085 Provisions 628 - 628 Deferred tax liabilities d 4,956 48 5,004 ------------------------- ------------- ------- ------- ------- 5,584 18,133 23,717 ------------------------- ------------- ------- ------- ------- Capital and reserves attributable to equity shareholders Share capital 4,865 - 4,865 Share premium account 905 - 905 Own shares held c (2,750) (316) (3,066) Share awards reserve c - 291 291 Retained earnings a,b,c,d 59,396 (9,254) 50,142 ------------------------- ------------- ------- ------- ------- 62,416 (9,279) 53,137 ------------------------- ------------- ------- ------- ------- ------------------------- ------------- ------- ------- ------- Total equity and liabilities 95,225 5,436 100,661 ------------------------- ------------- ------- ------- ------- A.G.BARR p.l.c. Notes to the reconciliations of equity a. Under the previous UK GAAP the net deficit in the defined benefit pension schemes and the related deferred tax asset were not recognised in the balance sheet. Under IFRS the deficit in the schemes and related deferred tax asset are recognised on the face of the balance sheet. A decrease of £283,000 in the cost for the period to July 2004 under IAS has resulted in a matching decrease in the pension creditor within Trade and other payables. As at As at As at 29.01.05 31.07.04 01.02.04 £0000 £0000 £0000 Retirement benefit obligation (17,044) (18,085) (18,085) recognised Increase in Deferred tax asset 5,113 5,426 5,426 Decrease to Trade and other - 283 - payables ------------ ------------ ------------ ---------------------- Decrease in Retained earnings (11,931) (12,376) (12,659) ---------------------- ------------ ------------ ------------ b. Under UK GAAP proposed dividends could be recognised as a liability in the year to which they related. Under IFRS the proposed dividend unapproved at the period end date is not an expense of the period. The proposed dividend at the end of each period has been derecognised, increasing Retained earnings and decreasing Trade and other payables as follows: As at As at As at 29.01.05 31.07.04 01.02.04 £0000 £0000 £0000 Decrease in Trade and other 3,795 1,800 3,309 payables ------------ ------------ ------------ ---------------------- Increase in Retained earnings 3,795 1,800 3,309 c. The introduction of IFRS 2 Share Based Payments has resulted in all share options and awards made after 7th November 2002 being revalued to fair value and expensed over the vesting period of the award. This has resulted in the following changes: As at As at As at 29.01.05 31.07.04 01.02.04 £000 £000 £000 Increase in Share awards reserve (826) (492) (291) Decrease in Trade and other payables 439 222 109 Increase/(decrease) in Deferred tax 371 175 (46) assets Increase in Own shares held 291 216 316 ------------------------- --------- ------------ ------------- Increase in Retained earnings 275 121 88 d. Management has applied the fair value as the deemed cost exemption in respect of several properties. The fair value of the property at 1st February 2004 was assessed at £6,775,000 against a carrying amount under UK GAAP of £6,719,000. The depreciated fair value at 31st July 2004 was £6,730,000 (UK GAAP: £6,676,000) and at 29th January 2005 was £6,686,000 (UK GAAP: £6,635,000) The related deferred tax liability has increased by £48,000 as at 1st February 2004: £44,000 as at 31st July 2004 and £40,000 as at 29th January 2005. 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