Interim Results
MITIE Group PLC
28 November 2005
MITIE Group PLC
INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2005
'MITIE will continue to grow by listening to our customers, understanding their
needs and delivering services that meet those needs.'
Ian R Stewart, Chief Executive
• Revenue up by 14.5% and profit from continuing operations up by 7.8%
• Strong performance from Support Services with profit growth of 18.3%
• Property Services increased profits by 12.8%
• Challenging six months for Engineering Services
• Acquisition of two security companies for up to £12.4m
• Dividend up 18.8% to 1.9p
FINANCIAL HIGHLIGHTS 2005 2004
Revenue £449.2m £392.4m up 14.5%
Profit before tax - continuing operations* £23.4m £21.7m up 7.8%
Profit for the period (after tax) £14.1m £12.6m up 11.5%
Basic Earnings per share 4.3p 3.6p up 17.6%
Dividend per share 1.9p 1.6p up 18.8%
*Figures are shown before other operating income of £nil (2004: £1.3m) relating
to the profit on sale of a freehold property (shown as exceptional under UK GAAP
in the prior year).
Notes:
MITIE: Management Incentive Through Investment Equity
ACTIVITY: MITIE, the support services company, maintains, manages and improves
buildings and infrastructure for its customers.
FOR FURTHER INFORMATION:
Ian Stewart, Chief Executive, MITIE Group PLC Mobile: 07979 701002
Ruby McGregor-Smith, Chief Operating Officer, MITIE Group PLC Mobile: 07979 701004
John Telling, Head of Corporate Affairs, MITIE Group PLC Mobile: 07979 701006
On 28 November at UBS Investment Bank, 1 Finsbury Avenue Press Room: 020 7567 0560
Switchboard: 020 7567 8000
Chief Executive's Review
Overview
We have seen measured progress in the period and have achieved good levels of
growth in revenue and profit. We have grown pre-tax profit before other
operating income (£1.3m in the previous year) by 7.8% to £23.4m. Our Engineering
Services business has undergone some restructuring and continues to operate in a
challenging market.
•Revenue was £449.2m, an increase of 14.5% over last year.
•Profit before tax (before other operating income) on an IFRS basis
grew by 7.8% to £23.4m.
•The underlying profit from continuing operations before the impact
of acquisitions on a former UK GAAP basis* was £23.6m representing 10.5%
growth year on year.
•Earnings per share grew by 17.6% to 4.3p
•Our forward order book has increased, with 92% of budgeted revenue
secured for this financial year as at 30 September 2005.
Markets
The markets in which MITIE operates cover all parts of the economy with around
40% of work coming from the public sector and 60% from the private sector. This
diversified business portfolio helps strengthen the long-term sustainability of
our revenue stream and create consistent growth. MITIE has a comparatively low
market share of the total outsourced market and therefore good opportunities for
growth.
Revenue visibility
We continue to experience good visibility of earnings due to the long-term
nature of contracts in the business, with 92% of budgeted revenue for this
financial year secured as at 30 September 2005.
Acquisitions
MITIE announced the acquisition of two security companies in the six months to
30 September 2005. Intruder International Ltd, a specialist provider of
electronic security solutions in the UK, which focuses on networked security
solutions, was acquired on 3 May 2005 for up to £4.2m. The Watch Security Ltd, a
provider of manned guarding and electronic security solutions, based in Warwick
and operating throughout the Midlands, was purchased on 30 June 2005 for up to
£8.2m. These acquisitions have advanced the development of a national electronic
security business to complement our existing manned guarding business. They have
also completed our national footprint for security, enabling us to provide our
customers with a more comprehensive service and to compete for larger, national
contracts. They are both being successfully integrated into the business and are
fully embracing the MITIE ethos and culture.
Pensions
Subject to the approval of the Pension Trustees, it the intention of the Board
to make a one-off contribution of £7.75m in this financial year to fund the
current actuarial deficit on the MITIE Group PLC Pension Scheme (the Group's
principal defined benefit pension scheme).
Discontinued operations
Included in discontinued losses this year is a £2.4m settlement relating to the
disposal of the Access Contracting businesses in June 2002. This amount was paid
in October 2005.
* former UK GAAP is based on the Group's accounting policies in existence at 31
March 2005 and does not take account of any changes to UK GAAP since that date.
Board Changes
I was delighted when the Board accepted the Nomination Committee's
recommendation that Ruby McGregor-Smith should be appointed Chief Operating
Officer. She will be responsible for all operations and will continue to act as
Group Finance Director until a successor is appointed. The recruitment process
for her replacement is in progress.
Ishbel Macpherson was appointed as a Non-Executive Director on 28 July 2005. She
brings considerable financial and banking experience to MITIE.
Dividend
The Board has declared an interim dividend of 1.9p per share (2004: 1.6p), an
increase of 18.8%.
The dividend will be paid on 31 March 2006 to Shareholders on the Register at
the close of business on 10 March 2006. The dividend cover, based on the Group's
profit for the period, is 2.4 times.
Business Review
Support Services
The Support Services activities within MITIE are Cleaning, Catering, Landscape,
Pest Control, Security, Managed Services and Engineering Maintenance.
Growth is in line with management's expectations. We are experiencing good
levels of contract retentions and there are a large number of new opportunities
available.
Cleaning
Cleaning has won new contracts in all regions and had a solid first half. Wins
include work with Kellogg's in Manchester, EMI in Kensington, Motorola, City of
York Council and Bruntwood Estates.
Our retail cleaning business has continued to secure additional work with Tesco
and has been awarded work with Homebase Stores in the South of England, the
Fishergate Shopping Centre in Preston and St James Shopping Centre in Edinburgh,
where the service offering has also been expanded to include engineering
maintenance.
Contract retentions across the business include North Middlesex Hospital, Lloyds
TSB and South Wales Magistrates Courts.
The Historic Royal Palaces contract, which comprises prestigious properties such
as Hampton Court Palace and Kensington Palace, has recently been retained on
re-bid and also extended to include the Tower of London, where MITIE Security
also already operates.
MITIE Waste & Environmental has been awarded work with Brent Cross Shopping
Centre. The University College London cleaning contract was retained and
extended earlier this year to include MITIE's waste and environmental services.
This specialist business has also won four Green Apple Environment Awards for
excellence in environmental awareness for clients Novartis Pharmaceuticals,
Foster & Partners, United Business Media and Brent Cross Shopping Centre. They
also won the Premises and Facilities Management Sustainability Award in
partnership with our client Hewlett Packard.
Cleaning has once again been nominated for a number of Kimberly-Clark Golden
Services Awards and was successful in two categories, for Birmingham Midshires
and for the Dover Harbour Board.
Catering
Catering has launched its 'City Living' concept, developed by our chefs and
nutritionists, that looks at how food can help reduce stress, improve energy and
beat off illness when commuting and working in the City. Results will be used to
redesign menus to provide customers with more information about the food they
eat.
Catering has been successful in winning a five-year contract with Hamleys Toy
Store on Regent Street, London, where our caterers are working with Hamleys to
provide a cafe bar with a new kids zone hosting children's parties, themed
brunches, afternoon teas and also catering services for corporate events at the
store.
Landscape
Our landscaping business continues to grow and consolidate its position in the
marketplace. Notable contract wins include those with Yorkshire Metropolitan
Housing, two NHS Trusts in the West Midlands and Shropshire, Keele University
and Tyneside Metro.
Landscape has also renewed several contracts with King Sturge Management and
their ground maintenance contract at BOC, Windlesham that was also extended to
include tropical plant maintenance. Their multi-site contract with Lloyds TSB
for over 700 sites across the UK has had a successful start.
Pest Control
Pest Control is experiencing margin pressure as major competitors strive to
maintain market share. However, they have been awarded contracts with the Open
University and the University of Central England and continue to pursue
aggressively new business opportunities.
Security
The acquisitions of Watch and Intruder have been covered earlier in this Review.
These new businesses fit in with our strategy to provide a total security
solution nationwide. MITIE Security is now ranked as number seven in the UK
guarding market by revenue and, with the national footprint now complete, aims
to increase its market share with more national contracts.
During the period, MITIE Security has been awarded contracts with Goodrich, in
partnership with MITIE Cleaning, the Royal Liver Building and have extended
their contract with the London Borough of Islington.
The business is progressing well and is on track to meet the necessary deadlines
for the licensing of its employees.
Managed Services
Working with MITIE Engineering Maintenance, Managed Services has secured a
three-year contract with the Department for Culture, Media and Sport, delivering
facilities management, full maintenance and fabric services to four of their
buildings in central London. It has also been awarded an FM contract with
T-Mobile that will cover 10 major T-Mobile buildings, 15 switch centres and 130
retail outlets across the UK. In addition, Managed Services has been awarded an
extension to its contract with Monteray in Scotland.
MITIE PFI, which provides facilities management to PFI school projects,
continues its success. MITIE PFI has invested a total of £20,000 in two PFI
schools projects in Darlington and Haverstock. During the first six months of
the year MITIE PFI has been awarded facilities management contracts for the
Combined Secondary Schools Project for Leeds City Council and the Ealing 2,
Boldon in South Tyneside, Argyll & Bute and Kent projects. All contracts are for
a period of between 25 and 28 years.
MITIE Business Services has recently won a contract to deliver mail and
distribution, reprographics and general office services to the London office of
3i and have been awarded the management of the mail and distribution services at
ABN Amro, an extension to the central reprographic services currently provided
to the bank. It has also been awarded the contract to provide reception services
to Osborne Clarke's London offices, where MITIE already provides cleaning and
hospitality catering services.
MITIE's work with East London Business Alliance was recently recognised when we
were awarded one of Morgan Stanley's highest awards for Corporate Social
Responsibility, the Local Community Initiative Award 2005. MITIE has already
placed 27 people from disadvantaged areas of East London into full-time
employment through ELBA. The new 'Real Apprentice' scheme is the first of its
kind in London and highlights the power of public and private sector businesses
working in harmony to benefit the local community.
Engineering Maintenance
Engineering Maintenance has been successful in winning a five-year contract to
provide full mechanical and engineering (M&E) and fabric maintenance services to
four major United States Air Force bases. Other contracts awarded in the period
include a three-year contract with AIG and a five-year contract for 23 NHS
buildings in and around Barnet and Enfield, both to provide full M&E and fabric
maintenance services. Engineering Maintenance has also been awarded an M&E
maintenance and reactive repairs contract with MOD sites at Warminster and
Larkhill.
Engineering Maintenance retained its contract with Microsoft, where MITIE
Cleaning also provides services, for a further three years. The contract covers
Microsoft's main head office campus in Thames Valley Park, Reading, as well as
regional offices in London, Chertsey and Edinburgh. The Alliance & Leicester
customer service centre at Carlton Park, Leicester was also retained for a
further five years.
Property Services
Property Services is achieving success in the social housing market.
Property Services has made a substantial investment in the social housing market
and is beginning to see increased activity and success in this market sector. It
has secured significant contract awards from housing associations, registered
social landlords and arm's-length management organisations in Leeds, Glasgow,
Dumfries and Galloway, Brunel, Southampton and with Family Housing Association.
These contracts span across the Decent Homes initiative, responsive and planned
maintenance and are, in the main, governed by partnering agreements. Other
significant awards include a major refurbishment for Brunel Care, a contract
renewal for maintenance with Sentinel Housing Group and cyclical painting
contracts with Ipswich Borough Council and Cambridge Services.
A major fit-out of the Media Centre at BBC Broadcast Centre in White City has
been completed by our specialist fit-out business, MITIE Interiors, together
with extensive fast-track projects for Landflex, UBS, CEPOL Centrex, Great
Portland Estates and Standard Life. MITIE Roofing has won extensive business
from HM Prison Service for buildings in East Anglia, Dorset and Devon. MITIE
Fire Protection is providing services to BAA on Terminal 5 at Heathrow Airport.
Engineering Services
Engineering Services continues to experience difficult trading conditions.
The trading climate continues to be challenging, with market changes leading to
a need for some restructuring of the business. This includes consolidating
businesses in London and the South East, to form a single cohesive company, with
an increased capability and wider experience across the full range of activities
to take advantage of increased opportunities. The market conditions in the
Pharmaceutical and Cleanrooms sector have changed with clients no longer seeing
benefits from value added engineering; this has resulted in us closing two of
our companies.
Our strategy of growth in the specialist retail sector has again shown
outstanding results. Increased activity by Primark and Marks & Spencer has
resulted in a full order book for the retail business extending into the next
financial year. Other notable contracts secured include Land Securities
Trillium, Porcelanosa, Surrey County Council, Royal College of Anaesthetists and
Care Homes in Gloucestershire and Shropshire. Additional work has also been
awarded by the British Library, The Grosvenor House Hotel, The Palace of
Westminster, Gloucester Police and Ascot Racecourse.
By targeting opportunities in Education we have won work at the universities of
Bristol, Birmingham, Plymouth, Middlesex, UCL and Manchester and Filton
Colleges, as well as at schools and academies across the UK.
Outlook
Markets continue to be competitive across all of our businesses. The fact that
we are able to achieve good growth levels is a tribute to the determination of
our people and the quality of our services. MITIE will continue to grow by
listening to our customers, understanding their needs and delivering services
that meet those needs. The Board is confident that we will achieve our targets
for the year.
Consolidated Income Statement
Year to
Six months to 30 September 31 March
2005 2004 2005
(unaudited) (unaudited) (unaudited)
£m £m £m
Continuing operations
Revenue 449.2 392.4 799.7
Cost of sales (362.8) (319.5) (638.9)
Gross profit 86.4 72.9 160.8
Other operating income - 1.3 1.5
Administration expenses (64.5) (52.2) (116.7)
Profit from operations 21.9 22.0 45.6
Profit from operations excluding
other operating income 21.9 20.7 44.1
Investment income 1.2 0.9 2.1
Finance income 0.3 0.1 0.2
Profit before tax 23.4 23.0 47.9
Tax (6.9) (6.6) (13.9)
Profit for the period from
continuing operations 16.5 16.4 34.0
Discontinued operations
Loss for the period from
discontinued operations (2.4) (3.8) (3.8)
Profit for the period 14.1 12.6 30.2
Attributable:
Equity holders of the parent 13.0 11.2 27.0
Minority interest 1.1 1.4 3.2
14.1 12.6 30.2
Earnings per share (EPS)
- basic 4.3p 3.6p 8.8p
- diluted 4.2p 3.6p 8.7p
EPS excluding discontinued operations:
- basic 5.1p 4.9p 10.1p
- diluted 5.0p 4.9p 10.0p
Consolidated Statement of Recognised Income and Expense
Year to
Six months to 30 September 31 March
2005 2004 2005
(unaudited) (unaudited) (unaudited)
£m £m £m
Actuarial losses on defined benefit
pension schemes (4.3) (3.5) (1.5)
Expense in relation to share-based
payments 0.3 0.2 0.5
Tax credit on items taken directly
to equity 1.1 1.1 0.3
Net expense recognised directly in
equity (2.9) (2.2) (0.7)
Profit for the period from
operations 14.1 12.6 30.2
Total recognised income for the
financial period 11.2 10.4 29.5
Attributable to:
Equity holders of the parent 10.1 9.0 26.3
Minority interests 1.1 1.4 3.2
Summary Group Balance Sheet
At 30 September At 31 March
2005 2004 2005
(unaudited) (unaudited) (unaudited)
£m £m £m
Non-current assets
Goodwill and intangibles 70.3 52.7 52.7
Property, plant and equipment 31.2 27.6 27.2
Deferred tax assets 4.4 3.6 3.0
Total non-current assets 105.9 83.9 82.9
Current assets
Inventories 6.1 6.7 6.3
Trade and other receivables 212.7 164.2 180.0
Cash and cash equivalents 62.6 50.5 61.5
Total current assets 281.4 221.4 247.8
Total assets 387.3 305.3 330.7
Current liabilities
Trade and other payables (196.1) (145.3) (159.9)
Tax liabilities (8.0) (4.5) (7.4)
Obligations under finance leases (0.3) (1.1) (0.2)
Total current liabilities (204.4) (150.9) (167.5)
Net current assets 77.0 70.5 80.3
Non-current liabilities
Retirement benefit obligation (11.4) (10.1) (7.6)
Obligation under finance leases (0.8) (0.2) (0.8)
Deferred tax liabilities (0.2) - -
Long-term provisions (13.7) (9.8) (9.2)
Total non-current liabilities (26.1) (20.1) (17.6)
Total liabilities (230.5) (171.0) (185.1)
Net assets 156.8 134.3 145.6
Equity
Share capital 7.7 7.6 7.6
Share premium account 12.4 10.3 11.5
Merger reserve 52.0 44.2 44.1
Revaluation reserve (0.2) (0.3) (0.2)
Capital redemption reserve 0.3 0.2 0.3
Other reserve 0.4 1.0 0.6
Share-based payment reserve 1.0 0.4 0.7
Retained earnings 74.0 64.4 71.4
Equity attributable to equity
holders of the parent 147.6 127.8 136.0
Minority interests 9.2 6.5 9.6
Total equity 156.8 134.3 145.6
Summary Group Cash Flow Statement
Year to
Six months to 30 September 31 March
2005 2004 2005
(unaudited) (unaudited) (unaudited)
£m £m £m
Net cash inflow from operating
activities
Profit from operations before
interest and taxation 21.9 22.0 45.6
(Loss)/profit from discontinued
operations (2.4) 1.0 1.0
Depreciation 4.6 5.9 10.7
Share based payment expense 0.3 0.2 0.5
Profit on sale of property, plant
and equipment (0.2) (1.4) (1.8)
Decrease / (increase) in working
capital 5.2 (10.7) (9.3)
Cash generated from operations 29.4 17.0 46.7
Minority dividends paid (0.1) (0.1) (0.1)
Interest received 1.3 1.0 2.3
Income tax paid (7.5) (6.4) (13.5)
Net cash generated from operating
activities 23.1 11.5 35.4
Net cash used in investing
activities
Purchase of property, plant and
equipment (7.4) (9.5) (14.0)
Purchase of subsidiary undertakings (9.4) (0.2) (0.2)
Disposals of property, plant and
equipment 0.9 3.2 3.2
Disposal of subsidiary undertaking - 8.9 8.9
Net cash (outflow)/inflow from
investing activities (15.9) 2.4 (2.1)
Net cash used in financing
activities
Repayments of obligations under
finance leases (0.1) (0.1) (0.3)
Issue of share capital 1.0 1.0 3.0
Share buybacks (1.6) (9.6) (14.9)
Equity dividends paid (5.4) (4.2) (9.1)
Net cash outflow from financing (6.1) (12.9) (21.3)
Net increase in cash and cash
equivalents 1.1 1.0 12.0
Notes
1 Basis of preparation
The Group's interim results for the six months ended 30 September 2005 are the
first to be prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union. Consequently, a number of the
accounting policies adopted in the preparation of these interim financial
statements are different from those adopted in the financial statements for the
year ended 31 March 2005, which were prepared under UK GAAP.
Details of the changes in accounting policies arising from the adoption of IFRS,
together with restated information for the six months ended 30 September 2004
and for the year ended 31 March 2005, have been provided in the attached
supplementary guidance on IFRS. The accounting policies set out in that document
have been consistently applied to all periods presented in these interim
financial statements with the exception of the impact of IAS 32 and IAS 39
Financial Instruments. In accordance with IFRS 1 First Time Adoption of
International Financial Reporting Standards, the Group has elected not to
restate comparative information for the impact of IAS 32 and IAS 39, but has
only adopted these standards in the interim financial statements for the six
months ended 30 September 2005. This adoption had no impact on the financial
statements.
These interim financial statements do not constitute full statutory accounts and
are unaudited and unreviewed.
The financial information for the year ended 31 March 2005 does not represent
full accounts within the meaning of Section 240 of the Companies Act 1985. The
statutory accounts for this period, which were prepared under UK GAAP, have been
filed with the Registrar of Companies. The auditors' report on those accounts
was unqualified.
2 Segmental analysis
Six months to 30 September 2005 Six months to 30 September 2004
Revenue Profit Profit Profit Revenue Profit Profit Profit
before before margin before before margin
tax interest tax interest
and tax and tax
£m £m £m % £m £m £m %
Support
Services 238.7 16.0 15.2 6.7 206.6 13.5 12.9 6.5
Property
Services 78.2 4.4 4.3 5.6 64.1 3.9 3.7 6.0
Engineering
Services 132.3 3.0 2.7 2.2 121.7 4.3 3.9 3.5
Continuing
operations
before other
operating
income 449.2 23.4 22.2 5.2 392.4 21.7 20.5 5.5
Other
operating
income - - - - - 1.3 1.3 -
Continuing
operations 449.2 23.4 22.2 5.2 392.4 23.0 21.8 5.9
Discontinued
operations - (2.4) (2.4) - 18.9 (3.5) (3.2) -
Total 449.2 21.0 19.8 - 411.3 19.5 18.6 -
Included within the Support Services segment for the six months ended 30
September 2005 are amounts that relate to companies acquired in the period;
turnover of £6,349,000 and pre-tax losses of £31,000 (including integration
costs).
Six months to 30 September
2005 2004
Total Total
Revenue £m £m
Support Services
Cleaning 98.8 92.6
Catering 7.3 6.4
Landscape 1.8 1.0
Pest Control 2.5 2.4
Security 36.5 24.6
Managed Services 46.6 46.0
Engineering Maintenance 45.2 33.6
Total Support Services 238.7 206.6
Property Services 78.2 64.1
Engineering Services 132.3 121.7
Total continuing operations 449.2 392.4
Discontinued operations - 18.9
Total 449.2 411.3
3 Dividend
The proposed interim dividend of 1.9p (2004: 1.6p) per Ordinary Share will be
paid on 31 March 2006 to Shareholders on the Register on 10 March 2006.
4 Earnings per share
Basic diluted earnings per share have been calculated in accordance with IAS33
'Earnings Per Share'.
The calculation of the basic and diluted EPS is based on the following data:
6 months to 6 months to Year to
30 September 30 September 31 March
2005 2004 2005
million million million
Number of shares
Weighted average number of ordinary
shares for the purpose of basic EPS 303.7 308.1 306.4
Effect of dilutive potential
ordinary shares:share options 2.8 0.8 4.1
Weighted average number of
ordinary shares for the purpose of
diluted EPS 306.5 308.9 310.5
6 months ended 6 months ended Year ended
30 September 30 September 31 March
2005 2004 2005
Earnings Per share Earnings Per share Earnings Per share
amount amount amount
£m pence £m pence £m pence
Basic EPS
Earnings for
the purposes
of basic
EPS
being net
profit
attributable
to the
equity
holders of
MITIE Group
PLC 13.0 4.3p 11.2 3.6p 27.0 8.8p
Add back:
Losses from
discontinued
activities 2.4 0.8p 3.8 1.3p 3.8 1.3p
Basic
earnings
before
discontinued
activities 15.4 5.1p 15.0 4.9p 30.8 10.1p
Diluted
EPS
Earnings for
the purpose
of
diluted EPS 13.0 4.2p 11.2 3.6p 27.8 8.7p
Diluted
earnings
before
discontinued
activities 15.4 5.0p 15.0 4.9p 30.8 10.0p
Headline
EPS
Basic
earnings
before
discontinued
activities 15.4 5.1p 15.0 4.9p 30.8 10.1p
Other
operating
income - - (1.3) (0.5p) (1.5) (0.5p)
Headline
earnings per
Ordinary
Share 15.4 5.1p 13.7 4.4p 29.3 9.6p
5 Purchase of subsidiary undertakings
MITIE MITIE MITIE
MITIE Air MITIE Air Business Engineering Engineering MITIE MITIE
Conditioning Conditioning Services Services Services Security Security
(Wales) Ltd (West) Ltd Ltd (Retail) (Swansea) (North) Scotland) Total
Ltd Ltd Ltd Ltd
£m £m £m £m £m £m £m £m
Minority
interest 0.1 0.1 1.1 0.1 0.2 0.2 0.1 1.9
Goodwill 0.4 0.3 4.9 - 0.6 1.2 0.1 7.5
Total
purchase 0.5 0.4 6.0 0.1 0.8 1.4 0.2 9.4
consideration
Shares issued
-
MITIE Group
PLC 0.4 0.4 5.1 0.1 0.7 1.1 0.2 8.0
Deferred
consideration - - 0.7 - 0.1 0.1 - 0.9
Cash
consideration
being
cash outflow
in the period 0.1 - 0.2 - - 0.2 - 0.5
5 Purchase of subsidiary undertakings (continued)
On 3 May 2005 MITIE acquired a 100% interest in the ordinary share capital of
Intruder International Ltd. In the period from 1 November 2004 to acquisition
the profit after taxation was £0.1m (Year to 31 October 2004 was £0.3m).
The provisional net assets acquired and the related consideration were as
follows:
£m
Intangible assets 0.1
Property, plant and equipment 1.2
Inventories 0.1
Trade and other receivables 1.0
Cash and cash equivalents 0.4
Trade and other payables (0.8)
Current tax liabilities (0.1)
Loans (0.8)
Net assets acquired 1.1
Goodwill 3.1
Total consideration 4.2
Satisfied by:
Cash 4.0
Directly attributable costs 0.2
Net cash outflow arising on acquisition:
Cash consideration 4.2
Cash and cash equivalents acquired (0.4)
Net cash outflow 3.8
On 30 June 2005 MITIE acquired a 100% interest in the ordinary share capital of
The Watch Security Ltd. In the period from 1 July 2004 to acquisition the profit
after taxation was £0.4m (Year to 30 June 2004 was £0.3m).
The provisional net assets acquired and the related consideration were as
follows:
£m
Property, plant and equipment 0.8
Inventories 0.1
Trade and other receivables 1.9
Cash and cash equivalents 1.1
Trade and other payables (2.4)
Current tax liabilities (0.1)
Loans (0.1)
Net assets acquired 1.3
Goodwill 6.9
Total consideration 8.2
Satisfied by:
Cash 6.0
Deferred consideration 2.0
Purchase consideration 8.0
Directly attributable costs 0.2
Total consideration 8.2
Net cash outflow arising on acquisition:
Cash consideration 6.2
Cash and cash equivalents acquired (1.1)
Net cash outflow 5.1
6 Reserves
Called Share
up Share Capital based
share premium Merger Revaluation redemption Other payment Retained
capital account reserve reserve reserve reserve reserve earnings Total
£m £m £m £m £m £m £m £m £m
At beginning
of year 7.6 11.5 44.1 (0.2) 0.3 0.6 0.7 71.4 136.0
Shares issued
and net
premium
arising in
respect of
acquisitions 0.1 - 7.9 - - - - - 8.0
Shares issued
and net
premium
in connection
of exercise
of
share
options - 0.9 - - - (0.2) - - 0.7
Own shares
acquired - - - - - - - (1.6) (1.6)
Profit for the
period
attributable
to equity
holders of the
parent - - - - - - - 13.0 13.0
Dividend
paid - - - - - - - (5.6) (5.6)
Expense in
relation to
share
based payments - - - - - - 0.3 - 0.3
Net actuarial
loss on
defined
benefit
pension
schemes - - - - - - - (4.3) (4.3)
Tax credit on
items taken
directly to
equity - - - - - - - 1.1 1.1
Balance at 30
September 2005 7.7 12.4 52.0 (0.2) 0.3 0.4 1.0 74.0 147.6
Copies of this statement will be posted to all Shareholders and will be
available to the public from the Company's Head Office at 8 Monarch Court, The
Brooms, Emersons Green, Bristol, BS16 7FH.
International Financial Reporting Standards ('IFRS')
Supplementary guidance on conversion to IFRS for the year to 31 March 2006.
Contents
•Summary
•Introduction
•IFRS 1 - First-time Adoption of International Financial Reporting Standards
•Key IFRS adjustments and their impact on the financial statements
•Accounting policies under IFRS
•Restatement of balance sheet as at 1 April 2004 (the opening balance sheet under
IFRS)
•Reconciliation for the year ended 31 March 2005
- Profit and loss
- Equity
Appendix
•Unaudited reconciliation for 6 months to 30 September 2004
- Profit and loss
- Equity
Summary
IFRS are new financial reporting standards applicable to the Group for the first
time in the interim report for the six months to 30 September 2005. The Group is
required to apply these new standards retrospectively to the Group's results for
all comparative financial information, as if the Group had reported under IFRS
in previous accounting periods. Certain exemptions exist for the first set of
accounts prepared on this basis and are detailed in the document below.
There is no change to the underlying performance of the Group. The only change
to cash or cash flows under IFRS is a reclassification of current asset
investments to cash equivalents.
The restatements result in the following changes:
•an increase of £3.4m in the full-year profit before tax to 31 March
2005 to £47.9m, and an increase of £1.7m for the six-month period ended 30
September 2004 to £23.0m; and
•an increase in net assets at 31 March 2005 of £3.8m, a decrease in
net assets of £0.3m at 30 September 2004 and a decrease in net assets of £0.2m
at 1 April 2004.
Restatements arise primarily as a result of:
•goodwill is no longer amortised;
•goodwill written off directly to reserves under UK GAAP prior to
1998 is not included in determining the loss on disposal of MITIE Generation
Ltd;
•recognition of defined benefit pension scheme liabilities;
•inclusion of fair value charges in relation to share-based
payments;
•dividend liabilities only recognised in the accounts when authorised; and
•change in the recognition of deferred tax assets.
Introduction
To date the consolidated financial statements of MITIE Group PLC (the Group)
have been prepared in accordance with UK Generally Accepted Accounting
Principles (UK GAAP). For the current financial year it is required to prepare
these in accordance with International Accounting Standards (IAS) and
International Financial Reporting Standards (IFRS) and related interpretations
as adopted by the European Union (EU). References to IFRS throughout this
document refer to both IAS and IFRS.
The first Annual Report under IFRS will be for the year ending 31 March 2006 and
the first interim results reported under IFRS are for the six months ended 30
September 2005. This statement explains the differences that arise when the
Group's results are prepared under IFRS compared to UK GAAP. It sets out
reconciliations of the Group's balance sheets from UK GAAP to IFRS as at 1 April
2004 (the opening balance sheet as at the date of transition to IFRS), at 30
September 2004 and at 31 March 2005.
In addition, this statement sets out reconciliations of the Group's profit and
loss accounts prepared under UK GAAP to those prepared in accordance with IFRS
for the six months to 30 September 2004 and for the year to 31 March 2005.
This statement has been prepared by management using its best knowledge of the
expected standards and interpretations of the International Accounting Standards
Board (IASB), facts, circumstances and accounting policies that will be applied
when the Company prepares its first complete set of IFRS financial statements as
at 31 March 2006. Until such time, it is possible that the IFRS comparatives for
2005 and the accompanying opening balance sheet in this document may require
adjustment.
IFRS 1 - First-time Adoption of International Financial Reporting Standards
IFRS 1 establishes the transitional arrangements for the preparation of the
first set of financial statements in accordance with IFRS. In general, IFRS is
required to be applied retrospectively so that previous financial information is
also reported under IFRS for comparative purposes.
Outlined below is the Group's effective position on the transitional
arrangements under IFRS 1.
Business combinations
The Group has elected not to apply IFRS 3 retrospectively to business
combinations that took place before 1 April 2004.
The Group will account for acquisitions prior to 1 April 2004 as follows:
•the carrying amount of goodwill recognised under UK GAAP at 1 April
2004 will not be adjusted to reflect any intangible assets acquired;
•from 1 April 2004 goodwill will no longer be amortised but will be
reviewed annually for impairment; and
•goodwill written off directly to reserves under UK GAAP prior to
1998 will not be included in determining any subsequent profit or loss on
disposal.
Employee benefits
Under IFRS 1, the Group will elect to take advantage of the exemption, which
allows cumulative actuarial gains or losses on defined benefit pension schemes
at the date of transition to IFRS to be recognised immediately. Going forward,
actuarial gains and losses will be recognised in full in the period in which
they occur, being reported in the consolidated statement of recognised income
and expense.
Share based payments
Following IFRS 2, the Group has applied fair value to all grants of equity
instruments after 7 November 2002 that had not vested by 1 April 2005.
At 1 April 2004, the cumulative IFRS 2 charge has been shown within a separate
Share based Payment Reserve within Equity.
Going forward (in accordance with IFRS 2), the imputed fair value at the date of
grant of options issued under savings-related and executive share option schemes
will be charged to profit from operations on a straight-line basis over the
vesting period.
Key IFRS adjustments and their impact on the financial statements
IFRS 2 - Share based payments
Under IFRS 2, share awards must be measured at fair value at grant date and
should be recognised as an expense to operating profit on a straight-line basis
over the vesting period. No expense was required under UK GAAP.
The Group has valued all share option awards granted since 7 November 2002 (a
date specified in IFRS 2) that vest after the effective date of IFRS 2 on 1
April 2004. The Group has used the Black-Scholes model for the valuations.
The impact is to reduce the Group's reported operating profit. This is £0.5m for
the year ended 31 March 2005 and £0.2m for the period ended 30 September 2004.
Related deferred tax assets amounting to £0.0m at 1 April 2004, £0.1m at 30
September 2004 and £0.2m at 31 March 2005 have been recognised and will be
released when the share options vest and are exercised.
IFRS 3 - Business combinations
Under IFRS 3, goodwill is no longer amortised and, instead, is assessed annually
for impairment. Goodwill arising on acquisitions before 1 April 2004 will not be
restated.
As a result of this change, the Group's operating profit will be increased by
the goodwill previously amortised under UK GAAP. For the year to 31 March 2005,
this was £2.8m and for the half year to 30 September 2004, it totalled £1.4m.
In the year ended 31 March 2005 the loss on disposal of MITIE Generation Ltd
included £5.0m of goodwill which arose on acquisition prior to FRS10 Goodwill
and which had previously been written off in reserves. Under IFRS, this goodwill
remains written off in reserves and does not get included in the loss on sale.
The loss on sale of MITIE Generation Ltd has been adjusted to £3.8m.
IAS 10 - Events after the balance sheet date
Under IAS 10, dividends proposed after the balance sheet date are not recognised
as a liability at the balance sheet date. Dividends are therefore recorded in
the Group's financial statements in the period in which they are authorised.
Dividends proposed, but not approved at the balance sheet date have been
reversed from the financial statements. This increased the net assets of the
Group by £4.5m at 1 April 2004, £4.8m at 30 September 2004 and £5.6m at 31 March
2005.
IAS 12 - Income taxes
Due to the changes required in respect of pension liabilities and share based
payments, additional deferred tax on these adjustments has been recognised in
full.
IAS 19 - Employee benefits
The key impact on the Group will be accounting for retirement benefits for
defined benefit pension schemes. The Group has previously accounted for these
schemes using SSAP 24 and in accordance with the transition rules under FRS 17.
The adoption of IAS 19 does not result in a significant change to operating
profit. The impact on the Group's balance sheet at 1 April 2004 will be to
recognise a pension liability of £7.1m (equal to the deficit in the defined
benefit pension schemes). The net impact is to reduce shareholders' equity by
£5.0m (after deferred tax).
At 30 September 2004 the Group's pension liability amounted to £10.1m (£7.1m,
net of deferred tax).
At 31 March 2005 the Group's pension liability amounted to £7.6m (£5.3m, net of
deferred tax).
Presentation of financial statements
The income statement and balance sheet contained within this document have been
presented substantially in accordance with IAS 1 'Presentation of Financial
Statements'.
This format and presentation may require modification as best practice develops
and any further guidance is issued.
Reconciliation of equity at 1 April 2004
UK
GAAP IFRS
IFRS 2
Share IAS 12
based IAS 10 Deferred IAS 19
payments Dividends tax Pensions
£m £m £m £m £m £m
Non-current assets
Goodwill and intangibles 51.9 - - - - 51.9
Property, plant and equipment 40.3 - - - - 40.3
Deferred tax assets - - - 0.3 2.1 2.4
Total non-current assets 92.2 - - 0.3 2.1 94.6
Current assets
Inventories 7.1 - - - - 7.1
Trade and other receivables 151.9 - - - - 151.9
Cash and cash equivalents 49.5 - - - - 49.5
Total current assets 208.5 - - - - 208.5
Total assets 300.7 - - 0.3 2.1 303.1
Current liabilities
Trade and other payables (146.3) - - - - (146.3)
Tax liabilities (6.5) - - - - (6.5)
Obligations under finance leases (0.1) - - - - (0.1)
Proposed dividend (4.5) - 4.5 - - -
Total current liabilities (157.4) - 4.5 - - (152.9)
Net current assets 51.1 - 4.5 0.3 2.1 55.6
Non-current liabilities
Retirement benefit obligations - - - - (7.1) (7.1)
Deferred tax liabilities (0.1) - - - - (0.1)
Long-term provisions (7.4) - - - - (7.4)
Total non-current liabilities (7.5) - - - (7.1) (14.6)
Total liabilities (164.9) - 4.5 - (7.1) (167.5)
Net assets 135.8 - 4.5 0.3 (5.0) 135.6
Equity
Share capital 7.7 - - - - 7.7
Share premium account 9.8 - - - - 9.8
Merger reserve 40.9 - - - - 40.9
Revaluation reserves (0.4) - - - - (0.4)
Capital redemption reserve - - - - - -
Other reserve 1.0 - - - - 1.0
Share based payment reserve - 0.2 - - - 0.2
Retained earnings 70.2 (0.2) 4.5 0.3 2.1 69.8
Equity attributable to equity
holders of the parent 129.2 - 4.5 0.3 (5.0) 129.0
Minority interest 6.6 - - - - 6.6
Total equity 135.8 - 4.5 0.3 (5.0) 135.6
Summary of significant accounting policies under IFRS
The significant accounting polices adopted in the preparation of the Group's
IFRS financial information are set out below.
Basis of preparation
The consolidated financial information have been prepared on the historical cost
basis. The consolidated financial information are presented substantially in
accordance with IAS 1 'Presentation of Financial Statements'. However, this
format and presentation may require modification as best practice develops and
any further guidance is issued.
Basis of consolidation
The consolidated financial statements comprise the financial statements of MITIE
Group PLC and all its subsidiaries. The financial statements of the subsidiaries
are in accordance with UK Generally Accepted Accounting Principles (UK GAAP).
Adjustments are made in the consolidated accounts to bring into line any
dissimilar accounting policies that may exist between UK GAAP and IFRS.
All intercompany balances and transactions, including unrealised profits arising
from intra-group transactions, have been eliminated in full.
Subsidiaries are consolidated from the date on which control is transferred to
the Group and cease to be consolidated from the date on which control is
transferred out of the Group.
Goodwill
Goodwill arising on consolidation represents the excess of the cost of
acquisition over the Group's interest in the fair value of the identifiable
assets and liabilities of a subsidiary, associate or jointly-controlled entity
at the date of acquisition. Cost of acquisition includes all deferred amounts
that become payable in the future.
Goodwill is recognised as an asset and reviewed for impairment at least
annually. Any impairment is recognised immediately in profit or loss and is not
subsequently reversed.
On disposal of a subsidiary, associate or jointly-controlled entity, the
attributable amount of goodwill is included in the determination of the profit
or loss on disposal.
Goodwill arising on acquisitions before the date of transition to IFRS has been
retained at the previous UK GAAP amounts subject to being tested for impairment
at that date. Goodwill written off to reserves under UK GAAP prior to 1998 has
not been reinstated and is not included in determining any subsequent profit or
loss on disposal.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and any impairment in value. Depreciation is charged so as to write off the cost
of the assets over their estimated useful lives and is calculated on a
straight-line basis as follows:
Freehold buildings and long leasehold property - over 50 years
Leasehold improvements - period of the lease
Plant and equipment - 3-14 years
The carrying values of property, plant and equipment are reviewed for impairment
when events or changes in circumstances indicate the carrying value may not be
recoverable. If any such indication exists and where the carrying values exceed
the estimated recoverable amount, the assets or cash-generating units are
written down to their recoverable amount. The recoverable amount of property,
plant and equipment is the greater of net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset.
Investments
All investments are initially recorded at cost, being the fair value of the
consideration given and including acquisition charges associated with the
investment. Subsequently, they are reviewed for impairment if events or changes
in circumstances indicate the carrying value may not be recoverable.
Foreign currency
Transactions in foreign currencies are recorded at the rate of exchange at the
date of transaction or, if hedged, at the forward contract rate. Monetary assets
and liabilities denominated in foreign currencies at the balance sheet date are
reported at the rates of exchange prevailing at that date or, if appropriate, at
the forward contract rate.
Leasing
Finance leases, which transfer to the Group substantially all the risks and
benefits incidental to ownership of the leased item, are capitalised at the
inception of the lease at the fair value of the leased item or, if lower, at the
present value of the minimum lease payments. Lease payments are apportioned
between the finance charges and reduction of the lease liability so as to
achieve a constant rate of interest on the remaining balance of the liability.
Finance charges are charged directly against income.
Capitalised leased assets are depreciated over the shorter of the estimated life
of the asset or the lease term. Leases where the lessor retains substantially
all the risks and benefits of ownership of the asset are classified as operating
leases. Operating lease payments are recognised as an expense in the income
statement on a straight-line basis over the lease term. Any lease incentives are
amortised over the lesser of the life of the operating lease or to the first
opportunity for termination.
Inventories
Inventories are stated at the lower of cost and net realisable value.
Costs represent materials, direct labour and overheads. Net realisable value is
based on estimated selling price, less further costs expected to be incurred to
completion and disposal. Provision is made for obsolete, slow moving or
defective items where appropriate.
Revenue
Revenue is recognised to the extent that it is probable that the economic
benefits will flow to the Group and the revenue can be reliably measured. Other
than in respect of long-term contracts, described below, revenue represents fee
income recognised in respect of services provided during the period (stated net
of value added tax).
Revenue is earned solely within the United Kingdom.
Revenue from long-term contracts represents the sales value of work done in the
year, including fees invoiced and estimates in respect of amounts to be invoiced
after the year-end. Profits are recognised on long-term contracts where the
final outcome can be estimated reliably. In calculating this, the percentage of
completion method is used based on the proportion of costs incurred to the total
estimated cost. Cost includes direct staff costs and outlays. Full provision is
made for all known or anticipated losses on each contract immediately such
losses are forecast.
Gross amounts due from customers are stated at the proportion of the anticipated
net sales value earned to date, less amounts billed on account. To the extent
that fees paid on account exceed the value of work performed, they are included
in creditors as gross amounts due to customers.
Revenue from bundled contracts consists of various components which operate
independently of each other and for which reliable fair values can be
established. Accordingly, each component is accounted for separately as if it
were an individual contractual arrangement.
Tax
The tax expense represents the sum of the tax currently payable and deferred
tax.
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the balance sheet liability method. Deferred
tax liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available, against which deductible temporary
differences can be utilised. Such assets and liabilities are not recognised if
the temporary difference arises from goodwill or from the initial recognition
(other than in a business combination) of other assets and liabilities in a
transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised. Deferred tax is
charged or credited in the income statement, except when it relates to items
charged or credited directly to equity, in which case the deferred tax is also
dealt with in equity.
Pension schemes
The Group operates two defined benefit pension schemes. The Group also operates
a fully insured defined contribution pension scheme, the assets of which are
held in independently administered funds.
Payments to the defined contribution pension schemes are charged as an expense
as they fall due.
For the defined benefit pension schemes, the cost of providing benefits is
determined using the Projected Unit Credit Method, with actuarial valuations
being carried out at each balance sheet date. Actuarial gains and losses are
recognised in full in the period in which they occur. They are recognised
outside profit or loss and presented in the statement of recognised income and
expense.
Past service cost is recognised immediately to the extent that the benefits are
already vested, and otherwise is amortised on a straight-line basis over the
average period until the benefits become vested.
The retirement benefit obligation recognised in the balance sheet represents the
present value of the defined benefit obligation as adjusted for unrecognised
past service cost, and as reduced by the fair value of scheme assets. Any asset
resulting from this calculation is limited to past service cost, plus the
present value of available refunds and reductions in future contributions to the
plan.
Provisions
Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event and it is possible that an outflow of
resources embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation. Where the
Group expects some or all of a provision to be reimbursed, for example under an
insurance contract, the reimbursement is recognised as a separate asset but only
when the reimbursement is virtually certain. The expense relating to any
provision is presented in the income statement net of any reimbursement. If the
effect of the time value of money is material, provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and, where appropriate,
the risks specific to the liability. Where discounting is used, the increase in
the provision due to the passage of time is recognised as a borrowing cost.
Pre-contract costs
All bid costs are expensed through the income statement up to the point where
contract award (or full recovery of costs) is virtually certain. Bid costs
incurred after this point are then capitalised within trade and other
receivables. On the contract award these bid costs are amortised through the
income statement over the contract period by reference to the stage of
completion of the contract activity at the balance sheet date.
Share based payments
The Group operates a number of executive and employee share schemes. For all
grants of share options and awards, the fair value as at the date of grant is
calculated using the Black-Scholes model and the corresponding expense is
recognised over the vesting period.
The Group has taken advantage of the transitional provisions of IFRS2 in respect
of equity-settled awards and has applied IFRS2 only to equity-settled awards
granted after 7 November 2002 that had not vested before 1 April 2005.
Reconciliation of profit for the year ended 31 March 2005
UK
GAAP IFRS
IFRS 2
Share IFRS 3 IAS 12
based Business Deferred IAS 19
payment combinations tax Pensions
£m £m £m £m £m £m
Continuing operations
Revenue 799.7 - - - - 799.7
Cost of sales (638.9) - - - - (638.9)
Gross profit 160.8 - - - - 160.8
Other operating income 1.5 - - - - 1.5
Administration expenses (119.9) (0.5) 2.8 - 0.9 (116.7)
Profit from operations 42.4 (0.5) 2.8 - 0.9 45.6
Investment income 2.1 - - - - 2.1
Finance income - - - - 0.2 0.2
Profit before tax 44.5 (0.5) 2.8 - 1.1 47.9
Tax (14.1) 0.2 - - - (13.9)
Profit for the year from
continuing operations 30.4 (0.3) 2.8 - 1.1 34.0
Discontinued operations
Loss for the period from
discontinued operations (8.8) - 5.0 - - (3.8)
Profit for the period 21.6 (0.3) 7.8 - 1.1 30.2
Attributable to:
Equity holders of the parent 18.4 (0.3) 7.8 - 1.1 27.0
Minority interest 3.2 - - - - 3.2
21.6 (0.3) 7.8 - 1.1 30.2
Earnings per share
Basic 6.0p 8.8p
Diluted 5.9p 8.7p
Earnings per share before
discontinued operations
Basic 9.1p 10.1p
Diluted 9.0p 10.0p
The amount shown above as the loss for the period from discontinued operations
on a UK GAAP basis is calculated as follows: £m
Revenue 18.9
Cost of sales (12.6)
Gross profit 6.3
Administration expenses (5.3)
Profit before tax 1.0
Tax (0.2)
Profit for the period from discontinued operations 0.8
Exceptional loss on sale of discontinued operations (9.6)
Loss for the period from discontinued operations (8.8)
Reconciliation of equity at 31 March 2005 (date of last UK GAAP Statements)
UK
GAAP IFRS
IFRS 2
Share IFRS 3 IAS 12
based Business IAS 10 Deferred IAS 19
payment combinations Dividends tax Pensions
£m £m £m £m £m £m £m
Non-current
assets
Goodwill and
intangibles 49.9 - 2.8 - - - 52.7
Property, plant
and equipment 27.2 - - - - - 27.2
Deferred tax
assets - 0.2 - - 0.5 2.3 3.0
Total non-current
assets 77.1 0.2 2.8 - 0.5 2.3 82.9
Current assets
Inventories 6.3 - - - - - 6.3
Trade and other
receivables 180.0 - - - - - 180.0
Cash and cash
equivalents 61.5 - - - - - 61.5
Total current
assets 247.8 - - - - - 247.8
Total assets 324.9 0.2 2.8 - 0.5 2.3 330.7
Current
liabilities
Trade and other
payables (159.9) - - - - - (159.9)
Tax liabilities (7.4) - - - - - (7.4)
Obligations under
finance leases (0.2) - - - - - (0.2)
Proposed dividend (5.6) - - 5.6 - - -
Total current
liabilities (173.1) - - 5.6 - - (167.5)
Net current assets 74.7 - - 5.6 - - 80.3
Non-current
liabilities
Retirement benefit
obligation - - - - - (7.6) (7.6)
Deferred tax
liabilities (0.8) - - - - - (0.8)
Long-term
provisions (9.2) - - - - - (9.2)
Total non-current
liabilities (10.0) - - - - (7.6) (17.6)
Total liabilities (183.1) - - 5.6 - (7.6) (185.1)
Net assets 141.8 0.2 2.8 5.6 0.5 (5.3) 145.6
Equity
Share capital 7.6 - - - - - 7.6
Share premium
account 11.5 - - - - - 11.5
Merger reserve 44.1 - - - - - 44.1
Revaluation
reserves (0.2) - - - - - (0.2)
Capital redemption
reserve 0.3 - - - - - 0.3
Other reserve 0.6 - - - - - 0.6
Share based
payment reserve - 0.7 - - - - 0.7
Retained earnings 68.3 (0.5) 2.8 5.6 0.5 (5.3) 71.4
Equity
attributable to
equity holders
of the parent 132.2 0.2 2.8 5.6 0.5 (5.3) 136.0
Minority interest 9.6 - - - - - 9.6
Total equity 141.8 0.2 2.8 5.6 0.5 (5.3) 145.6
Appendix
Unaudited reconciliation of profit for six months to 30 September 2004
UK
GAAP IFRS
IFRS 2
Share IFRS 3 IAS 12
based Business Deferred IAS 19
payment combinations tax Pensions
£m £m £m £m £m £m
Continuing operations
Revenue 392.4 - - - - 392.4
Cost of sales (319.5) - - - - (319.5)
Gross profit 72.9 - - - - 72.9
Other operating income 1.3 - - - - 1.3
Administration expenses (53.8) (0.2) 1.4 - 0.4 (52.2)
Profit from operations 20.4 (0.2) 1.4 - 0.4 22.0
Investment income 0.9 - - - - 0.9
Finance income - - - - 0.1 0.1
Profit before tax 21.3 (0.2) 1.4 0.5 23.0
Tax (6.7) 0.1 - - (6.6)
Profit for the period from
continuing operations 14.6 (0.1) 1.4 - 0.5 16.4
Discontinued operations
Loss for the period from
discontinued operations (8.8) - 5.0 - - (3.8)
Profit for the period 5.8 (0.1) 6.4 - 0.5 12.6
Attributable to:
Equity holders of the parent 4.4 (0.1) 6.4 - 0.5 11.2
Minority interest 1.4 - - - - 1.4
5.8 (0.1) 6.4 - 0.5 12.6
Earnings per share
Basic 1.4p 3.6p
Diluted 1.4p 3.6p
Earnings per share before
discontinued operations
Basic 4.5p 4.9p
Diluted 4.5p 4.9p
The amount shown above as the loss for the period from discontinued
operations on a UK GAAP basis is calculated as follows: £m
Revenue 18.9
Cost of sales (12.6)
Gross profit 6.3
Administration expenses (5.3)
Profit before tax 1.0
Tax (0.2)
Profit for the period from discontinued operations 0.8
Exceptional loss on sale of discontinued operations (9.6)
Loss for the period from discontinued operations (8.8)
Appendix
Unaudited reconciliation of equity at 30 September 2004
UK
GAAP IFRS
IFRS 2
Share IFRS 3 IAS 12
based Business IAS 10 Deferred IAS 19
payment combinations Dividends tax Pensions
£m £m £m £m £m £m £m
Non-current
assets
Goodwill and
intangibles 51.3 - 1.4 - - - 52.7
Property, plant
and equipment 27.6 - - - - - 27.6
Deferred tax
assets - 0.1 - - 0.5 3.0 3.6
Total non-current
assets 78.9 0.1 1.4 - 0.5 3.0 83.9
Current assets
Inventories 6.7 - - - - - 6.7
Trade and other
receivables 164.2 - - - - - 164.2
Cash and cash
equivalents 50.5 - - - - - 50.5
Total current
assets 221.4 - - - - - 221.4
Total assets 300.3 0.1 1.4 - 0.5 3.0 305.3
Current
liabilities
Trade and other
payables (145.3) - - - - - (145.3)
Tax liabilities (4.5) - - - - - (4.5)
Obligations under
finance leases (1.1) - - - - - (1.1)
Proposed dividend (4.8) - - 4.8 - - -
Total current
liabilities (155.7) - - 4.8 - - (150.9)
Net current assets 65.7 - - 4.8 - - 70.5
Non-current
liabilities
Retirement benefit
obligation - - - - - (10.1) (10.1)
Deferred tax
liabilities (0.2) - - - - - (0.2)
Long-term
provisions (9.8) - - - - - (9.8)
Total non-current
liabilities (10.0) - - - - (10.1) (20.1)
Total liabilities (165.7) - - 4.8 - (10.1) (171.0)
Net assets 134.6 0.1 1.4 4.8 0.5 (7.1) 134.3
Equity
Share capital 7.6 - - - - - 7.6
Share premium
account 10.3 - - - - - 10.3
Merger reserve 44.2 - - - - - 44.2
Revaluation
reserves (0.3) - - - - - (0.3)
Capital redemption
reserve 0.2 - - - - - 0.2
Other reserve 1.0 - - - - - 1.0
Share based
payment reserve - 0.4 - - - - 0.4
Retained earnings 65.1 (0.3) 1.4 4.8 0.5 (7.1) 64.4
Equity attributable to
equity holders
of the parent 128.1 0.1 1.4 4.8 0.5 (7.1) 127.8
Minority interest 6.5 - - - - - 6.5
Total equity 134.6 0.1 1.4 4.8 0.5 (7.1) 134.3
Copies of this statement will be posted to all Shareholders and will be
available to the public from the Company's Head Office at 8 Monarch Court, The
Brooms, Emersons Green, Bristol, BS16 7FH.
Financial Calendar
Shares ex-dividend 8 March 2006
Record date for interim dividend 10 March 2006
Payment date for interim dividend of 1.6p per 2.5p share 31 March 2006
Preliminary results for the year to 31 March 2006 22 May 2006
Annual General Meeting 27 July 2006
MITIE Group PLC,
8 Monarch Court,
The Brooms,
Emersons Green,
Bristol, BS16 7FH
T 0117 970 8800
F 0117 302 6743
E group@mitie.co.uk
www.mitie.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
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