IFRS Announcement
Lookers PLC
09 August 2005
9 August 2005
Lookers plc
International Financial Reporting Standards (IFRS)
In advance of releasing its interim results on 5 September 2005, Lookers plc
today announces the impact of complying with IFRS by restating its comparatives
for the half-year ended 30 June 2004, and the year ended 31 December 2004.
Enquiries
Lookers plc
Ken Surgenor - Chief Executive 0161 291 0043
David Dyson - Finance Director 0161 291 0043
Hudson Sandler
James Hill 020 7796 4133
LOOKERS plc
Reconciliation of UK GAAP to IFRS GAAP (unaudited)
Profit after tax Net Assets
Note June 04 Dec 04 June 04 Dec 04
£million £million £million £million
Under UK GAAP 18.5 18.8 87.9 85.7
Dividends - accounted for in period declared
or proposed (a) - - 1.4 2.9
Revaluation of property (b) - -0.1 11.5 11.5
Deferred tax - provide for revaluations and
rollover relief (b) 0.3 0.2 -2.6 -2.7
Pensions - incorporation of deficit on
balance sheet and elimination of SSAP 24
prepayment (c) -0.4 -0.7 -10.9 -14.2
Amortisation of intangible assets (d) - -0.1 - -0.1
Goodwill - amortisation no longer permitted (e) 0.5 1.2 0.5 1.2
Under IFRS GAAP 18.9 19.3 87.8 84.3
Notes
(a)
Under UK Company law, companies were required to provide for their final
dividend in their closing balance sheet and in advance of the dividend being
declared and approved by the Annual General Meeting. Under IAS 10 the dividend
cannot be provided in the year end balance sheet as, at that date, the dividend
did not represent a liability. At 31 December 2004 accrued dividends of
£2,864,000 were removed from other liabilities. At June 2004 the accrued
interim dividends of £1,408,000 were similarly removed from other liabilities.
(b)
The Group has decided to adopt the cost model under IAS 16. IFRS 1 includes an
exemption allowing fair value to be used as deemed cost at the date of
transition. Certain of the Group's properties were revalued on 31 December
2003, but this revaluation was not included in the UK GAAP accounts. The basis
of the revaluation, being open market value was, in the opinion of the
Directors, approximate to fair value and has been adopted as deemed cost on
transition to IFRS. Therefore, at 31 December 2003, net assets were increased
by £11,585,000 and the depreciation charge for the year to 31 December 2004 was
increased by £129,000. An amount of £2,701,000 was transferred to deferred tax
liability relating to the revaluation.
(c)
The Group previously accounted for its participation in the Lookers Pension
Plan, a Group wide defined benefit scheme, under SSAP 24. On adoption of IAS
19, the pension prepayment and related deferred taxation are no longer required.
At 31 December 2004 an amount of £1,586,000 being the SSAP 24 prepayment net
of deferred tax was written off (June 2004: £1,168,000).
Under IAS 19, retirement benefit liabilities are presented gross on the balance
sheet. At 31 December 2004 a liability of £18,051,000 has been provided
together with an associated deferred tax asset of £5,415,000 (June 2004:
£13,900,000 and £4,170,000 respectively).
(d)
Under IAS 38, intangible assets acquired as part of a business combination are
required to be separately identified from goodwill. In August 2004 the Group
acquired FPS, which gave rise to such intangible assets. As a result,
£13,616,000 was reclassified from goodwill to intangible assets. Of this
balance, £113,000 after tax had been amortised by 31 December 2004.
(e)
Under IFRS 3 Goodwill is not amortised but instead must be tested for impairment
at least annually. Opening Goodwill at 1 January 2004 was £10,605,000.
Goodwill of £1,227,000 previously amortised in the year to 31 December 2004 has
been reversed (June 2004: £475,000)
(f)
In accordance with IAS 39, derivatives held by an entity have to be carried at
fair value with movements in the fair value being taken to the income statement.
At 30 June 2004 and 31 December 2004, the Group had a number of interest rate
swaps and an interest rate collar in place, but the net fair value of these was
insignificant.
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