Interim Results-Part 2

Berkeley Group Holdings (The) PLC 08 December 2006 Consolidated Income Statement Six months Six months Year ended ended ended 31 October 31 October 30 April 2006 2005 2006 Unaudited Unaudited Audited Notes Â£'000 Â£'000 Â£'000 ____________________________________________________________________________________ Continuing operations Revenue 2(a) 381,153 503,063 917,926 Cost of sales (271,311) (379,143) (686,166) Gross profit 109,842 123,920 231,760 Net operating expenses (39,438) (34,727) (70,885) Operating profit 2(b) 70,404 89,193 160,875 Interest receivable 3 5,797 10,682 19,968 Finance costs 3 (794) (16,472) (27,304) Share of post tax results of joint ventures 2(c) 6,052 2,610 11,562 Profit on ordinary activities before taxation 81,459 86,013 165,101 Taxation 4 (21,560) (24,352) (43,736) Profit on ordinary activities after taxation 59,899 61,661 121,365 Discontinued operations Profit from discontinued operations 5 - 80,782 80,782 Profit for the financial period 59,899 142,443 202,147 ____________________________________________________________________________________ Dividends per Ordinary Share - - - ____________________________________________________________________________________ Earnings per Ordinary Share - Basic 6 49.8p 118.7p 168.4p _____________________________________________________________________ | | | - Continuing | | operations 49.8p 51.4p 101.1p | | - Discontinued | | operations - 67.3p 67.3p | |_____________________________________________________________________| - Diluted 6 49.6p 118.0p 167.4p _____________________________________________________________________ | | | - Continuing | | operations 49.6p 51.1p 100.5p | | - Discontinued | | operations - 66.9p 66.9p | |_____________________________________________________________________| _____________________________________________________________________________________ Consolidated Statement of Recognised Income and Expense Six months Six months Year ended ended ended 31 October 31 October 30 April 2006 2005 2006 Unaudited Unaudited Audited Â£'000 Â£'000 Â£'000 ___________________________________________________________________________________ Profit for the financial period 59,899 142,443 202,147 Actuarial (loss) / gain recognised in the pension scheme (673) (529) 1,925 Deferred tax on actuarial (loss) / gain recognised in the pension scheme 202 159 (578) ___________________________________________________________________________________ Total recognised income for the period 59,428 142,073 203,494 ___________________________________________________________________________________ Consolidated Balance Sheet At 31 October At 31 October At 30 April 2006 2005 2006 Unaudited Unaudited Audited Notes Â£'000 Â£'000 Â£'000 ___________________________________________________________________________________ Assets Non-current assets Property, plant and equipment 2,123 2,555 2,252 Investments accounted for using equity method 61,546 65,158 68,995 Deferred tax assets 25,446 10,739 18,285 ___________________________________________________________________________________ 89,115 78,452 89,532 ___________________________________________________________________________________ Current assets Inventories 754,788 879,121 763,873 Trade and other receivables 26,280 43,696 23,692 Cash and cash equivalents 322,047 568,650 220,670 ___________________________________________________________________________________ 1,103,115 1,491,467 1,008,235 ___________________________________________________________________________________ Liabilities Current liabilities Borrowings (85) (85) (85) Trade and other payables (231,496) (248,620) (202,267) Current tax liabilities (31,956) (25,674) (32,589) ___________________________________________________________________________________ (263,537) (274,379) (234,941) ___________________________________________________________________________________ Net current assets 839,578 1,217,088 773,294 ___________________________________________________________________________________ Total assets less current liabilities 928,693 1,295,540 862,826 ___________________________________________________________________________________ Non-current liabilities Borrowings - (497,302) - Retirement benefit obligation (1,773) (12,515) (10,342) Other non-current liabilities (19,767) (17,358) (15,294) ___________________________________________________________________________________ (21,540) (527,175) (25,636) ___________________________________________________________________________________ Net assets 907,153 768,365 837,190 ___________________________________________________________________________________ Shareholders' equity Share capital 24,164 24,164 24,164 Share premium 264 264 264 Capital redemption reserve 6,091 6,091 6,091 Other reserve (961,299) (961,299) (961,299) Retained profit 1,805,405 1,670,122 1,735,475 Joint ventures' reserves 32,528 29,023 32,495 ___________________________________________________________________________________ Total equity 7 907,153 768,365 837,190 ___________________________________________________________________________________ Consolidated Cash Flow Statement Six months Six months Year ended ended ended 31 October 31 October 30 April 2006 2005 2006 Unaudited Unaudited Audited Notes Â£'000 Â£'000 Â£'000 ______________________________________________________________________________________ Cash flows from operating activities Cash generated from operations 103,786 116,533 276,435 Dividends from joint ventures 6,016 - 5,396 Interest received 5,797 10,682 19,968 Interest paid (64) (29,586) (37,384) Tax paid (21,422) (18,893) (35,413) Net cash from operating activities 8 94,113 78,736 229,002 ______________________________________________________________________________________ Cash flows from investing activities Purchase of tangible fixed assets (747) (778) (1,419) Sale of tangible fixed assets 206 356 467 Purchase of shares in joint ventures - - (10) Sale of shares in joint ventures 10 - - Disposal of subsidiary undertaking - 250,736 250,736 Overdraft balance of subsidiary disposed - 572 572 Expenses relating to disposal of subsidiary - (2,765) (2,765) Movements in loans with joint ventures 7,795 (454) (858) Net cash from investing activities 7,264 247,667 246,723 ______________________________________________________________________________________ Cash flows from financing activities Repayment of loan stock - (3) (3) Repayment of bank loan - (102,698) (600,000) Net cash used in financing activities - (102,701) (600,003) Net increase in cash and cash equivalents 101,377 223,702 (124,278) Cash and cash equivalents at start of the period 220,670 344,948 344,948 ______________________________________________________________________________________ Cash and cash equivalents at end of the period 322,047 568,650 220,670 ______________________________________________________________________________________ 1 Basis of preparation These interim financial statements are prepared on a basis consistent with the accounting policies adopted by the Group in the preparation of the Group's annual financial statements for the year ended 30 April 2006, and comply with the Listing Rules of the Financial Services Authority. As permitted, the Group has elected not to apply IAS 34 'Interim Financial Statements' in preparing the interim financial statements. 2 Analysis by activity Six months Six months Year ended ended ended 31 October 2006 31 October 2005 30 April 2006 Unaudited Unaudited Audited Continuing operations Â£'000 Â£'000 Â£'000 __________________________________________________________________________________ (a) Revenue Residential housebuilding 375,223 495,826 890,539 Commercial property and other activities 5,930 7,237 27,387 __________________________________________________________________________________ 381,153 503,063 917,926 __________________________________________________________________________________ (b) Operating profit Residential housebuilding 69,191 87,770 156,846 Commercial property and other activities 1,213 1,423 4,029 __________________________________________________________________________________ 70,404 89,193 160,875 __________________________________________________________________________________ (c) Share of post tax results of joint ventures Residential housebuilding 6,012 2,610 11,469 Commercial property and other activities 40 - 93 __________________________________________________________________________________ 6,052 2,610 11,562 __________________________________________________________________________________ All revenue and profit disclosed in the table above relate to continuing activities of the Group and are derived from activities performed in the United Kingdom. Included in Group residential housebuilding revenue and operating profit are Â£3,247,000 and Â£1,631,000 in respect of land sales (2005: Â£528,000 and Â£467,000). 3 Net finance costs Six months Six months Year ended ended ended 31 October 2006 31 October 2005 30 April 2006 Unaudited Unaudited Audited Continuing operations Â£'000 Â£'000 Â£'000 __________________________________________________________________________________ Interest receivable 5,797 10,682 19,968 Finance costs Interest payable on bank loans and overdrafts (291) (15,657) (26,153) Other finance costs (503) (815) (1,151) __________________________________________________________________________________ (794) (16,472) (27,304) __________________________________________________________________________________ Finance costs - net 5,003 (5,790) (7,336) __________________________________________________________________________________ 4 Taxation Six months Six months Year ended ended ended 31 October 2006 31 October 2005 30 April 2006 Unaudited Unaudited Audited Continuing operations Â£'000 Â£'000 Â£'000 __________________________________________________________________________________ Current tax UK corporation tax payable (21,909) (25,049) (35,158) Adjustments in respect of previous periods 1,120 276 469 (20,789) (24,773) (34,689) Deferred tax (771) 421 (9,047) __________________________________________________________________________________ (21,560) (24,352) (43,736) __________________________________________________________________________________ 5 Profit from discontinued operations The Group completed the sale of The Crosby Group plc ('Crosby') to Lend Lease Corporation Limited on 8 July 2005 for consideration of Â£250,736,000 which included the settlement of Â£151,306,000 of intercompany balances. The profit from discontinued operations which was included within the consolidated income statement for the six months ended 31 October 2005 and the year ended 30 April 2006 was Â£80,782,000. 6 Earnings per Ordinary Share Earnings per Ordinary Share is based on the profit for the financial period of Â£59,899,000 (2005: Â£142,443,000) and the weighted average number of Ordinary Shares in issue during the period of 120,246,800 (2005: 120,007,731). For diluted earnings per Ordinary Share, the weighted average number of Ordinary Shares in issue is adjusted to assume the conversion of all dilutive potential Ordinary Shares. The dilutive potential Ordinary Shares relate to shares granted under employee share schemes where the exercise price is less than the average market price of the Ordinary Shares during the period. The effect of the dilutive potential Ordinary Shares is 463,133 shares (2005: 740,873), which gives a diluted weighted average number of Ordinary Shares of 120,709,933 (2005: 120,748,604). 7 Statement of Changes in Shareholders' Equity Six months Six months Year ended ended ended 31 October 31 October 30 April 2006 2005 2006 Unaudited Unaudited Audited Â£'000 Â£'000 Â£'000 __________________________________________________________________________________ Profit for the financial period 59,899 142,443 202,147 Actuarial (loss) / gain recognised in the pension scheme (673) (529) 1,925 Deferred tax on actuarial loss / (gain) recognised in the pension scheme 202 159 (578) Credit in respect of employee share schemes 2,805 3,173 6,347 Deferred tax in respect of employee share schemes 7,730 2,210 6,440 __________________________________________________________________________________ Net movement on shareholders' equity 69,963 147,456 216,281 Opening shareholders' equity 837,190 620,909 620,909 __________________________________________________________________________________ Closing shareholders' equity 907,153 768,365 837,190 __________________________________________________________________________________ 8 Notes to the Consolidated Cash Flow Statement Six months Six months Year ended ended ended 31 October 31 October 30 April 2006 2005 2006 Unaudited Unaudited Audited Â£'000 Â£'000 Â£'000 __________________________________________________________________________________ Net cash flows from operating activities Continuing operations Profit for the period 59,899 61,661 121,365 Adjustments for: - Taxation 21,560 24,352 43,736 - Depreciation 665 799 1,648 - Loss/(profit) on sale of property, plant and equipment 5 (100) (114) - Interest income (5,797) (10,682) (19,968) - Finance costs 794 16,472 27,304 - Share of results of joint ventures after tax (6,052) (2,610) (11,562) - Non-cash charge in respect of share awards 2,805 3,173 6,347 Changes in working capital: - Decrease in inventories 9,085 39,424 154,672 - (Increase) / decrease in receivables (2,588) (6,712) 13,292 - Increase / (decrease) in payables 32,801 9,802 (41,242) - Decrease in employee benefit obligations (9,391) (304) (301) __________________________________________________________________________________ Cash generated from continuing operating activities 103,786 135,275 295,177 Dividends from joint ventures 6,016 - 5,396 Interest received 5,797 10,682 19,968 Interest paid (64) (29,456) (37,254) Taxation (21,422) (18,893) (35,413) __________________________________________________________________________________ Net cash from continuing operating activities 94,113 97,608 247,874 __________________________________________________________________________________ Discontinued operations Profit for the period - 80,782 80,782 Adjustments for: - Taxation - 348 348 - Depreciation - 58 58 - Finance costs - 130 130 - Profit on disposal of subsidiary undertaking - (79,746) (79,746) - Non-cash movement in profit on disposal of subsidiary - 707 707 Changes in working capital: - Increase / (decrease) in inventories - (15,785) (15,785) - Decrease in receivables - 5,925 5,925 - (Increase) / decrease in payables - (11,161) (11,161) __________________________________________________________________________________ Cash generated from discontinued operating activities - (18,742) (18,742) Interest paid - (130) (130) __________________________________________________________________________________ Net cash from discontinued operating activities - (18,872) (18,872) __________________________________________________________________________________ Net cash from operating activities 94,113 78,736 229,002 __________________________________________________________________________________ Other net cash flows from discontinued operations Net cash from investing activities - 248,556 248,556 __________________________________________________________________________________ 8 Notes to the Consolidated Cash Flow Statement continued Six months Six months Year ended ended ended 31 October 31 October 30 April 2006 2005 2006 Unaudited Unaudited Audited Â£'000 Â£'000 Â£'000 ______________________________________________________________________________________ Reconciliation of net cash flow to net cash / (debt) Net increase / (decrease) in cash and cash equivalents 101,377 223,702 (124,278) Cash outflow from decrease in debt - 102,701 600,003 Movement in net cash / (debt) in the period 101,377 326,403 475,725 Opening net cash / (debt) 220,585 (255,140) (255,140) ______________________________________________________________________________________ Closing net cash 321,962 71,263 220,585 ______________________________________________________________________________________ At 31 October At 31 October At 30 April 2006 2005 2006 Unaudited Unaudited Audited Â£'000 Â£'000 Â£'000 ______________________________________________________________________________________ Net cash Cash and cash equivalents 322,047 568,650 220,670 Borrowings (85) (497,387) (85) ______________________________________________________________________________________ Net cash 321,962 71,263 220,585 ______________________________________________________________________________________ 9 Events after the Balance Sheet date: acquisition of subsidiary On 6 November 2006 at an Extraordinary General Meeting, the shareholders of The Berkeley Group Holdings plc approved the offer by its wholly-owned subsidiary, The Berkeley Group plc, to acquire from RWE Thames Water plc the 50 per cent of the ordinary share capital of St James Group Limited that it did not already own. Following completion of the acquisition on 7 November 2006, The Berkeley Group plc held one hundred per cent of the ordinary share capital of St James Group Limited. The Berkeley Group plc made payments to RWE Thames Water plc to complete the acquisition of Â£97,500,000. Of this: â€¢ Â£68,600,000 related to the purchase of the ordinary share capital of St James Group Limited owned by RWE Thames Water plc; and â€¢ Â£28,900,000 related to the settlement and refinancing of shareholder loans owed by St James Group Limited to RWE Thames Water plc. Transaction expenses were approximately Â£1,900,000. In the six months ended 31 October 2006, the Group has accounted for the results of St James Group Limited using the equity method of accounting for its fifty per cent interest in the joint venture. Following completion on 7 November 2006 of its acquisition of the 50 per cent interest in St James Group Limited that it did not already own, the Group will consolidate the results of St James Group Limited as a wholly owned subsidiary from this date forward. 10 Interim accounts These interim accounts are unaudited but have been reviewed by the auditors whose review report is set out below. The abridged financial information relating to the year ended 30 April 2006 does not constitute statutory accounts for the purposes of Section 240 of the Companies Act 1985. A copy of the statutory accounts for the year ended 30 April 2006 under IFRS has been filed with the Registrar of Companies. The report of the auditors on these financial statements was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. These interim results were approved by the Board on 8 December 2006 and the interim statement, which is available for inspection at the Company's Registered Office, will be sent by mail to shareholders in December 2006. Independent review report to The Berkeley Group Holdings plc Introduction We have been instructed by the company to review the financial information for the six months ended 31 October 2006 which comprises the Consolidated Income Statement, the Consolidated Statement of Recognised Income and Expense, the Consolidated Balance Sheet, the Consolidated Cash Flow Statement and related notes. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by the directors. The Listing Rules of the Financial Services Authority require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. This interim report has been prepared in accordance with the basis set out in Note 1. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the disclosed accounting policies have been applied. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit and therefore provides a lower level of assurance. Accordingly we do not express an audit opinion on the financial information. This report, including the conclusion, has been prepared for and only for the company for the purpose of the Listing Rules of the Financial Services Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 31 October 2006. PricewaterhouseCoopers LLP Chartered Accountants, London 8 December 2006 This information is provided by RNS The company news service from the London Stock Exchange

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