Interim Results

Gleeson(M J)Group PLC 31 March 2006 Friday 31 March 2006 M J GLEESON GROUP PLC Interim Announcement Gleeson (whose principal businesses are currently homes and regeneration, development and investment property, and civil engineering for the water industry) announces its results for the half year ended 31 December 2005. The first half of Gleeson's financial year is traditionally much the weaker of the two. Six months ending / at 31 December 2005 2004 Revenue - continuing (Â£m) 179.3 174.6 Pre-tax profit - continuing (Â£m) 0.7 7.5 Earnings per share - continuing, diluted (p) 1.2 19.6 Dividend per share (p) 1.6 1.5 NAV per share (p) 287 308 â€¢Today, the outcome of the Group's strategic review is also being announced. Henceforth, focus will be on housing regeneration, commercial property development, and strategic land trading. â€¢Although Homes and Regeneration made an operating loss of Â£1.2m (2004/05: profit of Â£2.2m), it retains the potential to make the substantial profit budgeted for the current year. The level of activity in the housing market has seen a noticeable increase since Christmas, and housing regeneration schemes are expected to make a material contribution to the second half divisional result. â€¢Development and Investment Property also retains the potential to make its budgeted profit contribution, albeit this will be less than what was achieved last year. â€¢The Engineering Division has a strong and secure forward order book through to 2010 from its six AMP 4 Alliances. In addition, the Division has significant opportunities to secure single large contracts in AMP 4. Enquiries: M J Gleeson Group plc 020-8644 4321 Terry Massingham (Chief Executive) Paul Wallwork (Finance Director) Close Brothers Corporate Finance Limited Peter Alcaraz 020-7655 3139 Bankside Consultants Limited Charles Ponsonby 020-7367 8851 INTERIM STATEMENT This Interim Announcement reports the Group's results for the half year to 31 December 2005. Comment is also made on prospects, in particular for the rest of the year to 30 June 2006. Reference should additionally be made to today's announcement of the outcome of the Group's Strategic Review, which heralds a substantial change of direction to focus on housing regeneration, commercial property development and strategic land trading. The benefit of these changes will mainly be felt in future financial years. FINANCIAL REVIEW The financial statements for the half year to 31 December 2005 are the first to be prepared by the Group under International Financial Reporting Standards ('IFRS'). The comparative figures for the half year to 31 December 2004 and the year to 30 June 2005, which were prepared under UK GAAP, have been restated accordingly. In the half year to 31 December 2005, on revenue of Â£179.3m (2004/05: Â£174.6m), the operating profit was Â£2.0m (2004/05: Â£8.8m) and the pre-tax profit amounted to Â£0.7m (2004/05: Â£7.5m). After tax of Â£0.1m (2004/05: credit of Â£2.3m) and a loss for discontinued operations of Â£3.7m (2004/05: Â£15.4m), the loss for the period totalled Â£3.1m (2004/05: Â£5.6m). This equates to a total loss per share (diluted) of 5.9p (2004/05: 11.1p). Period end equity totalled Â£147.9m (2004/05: Â£158.7m), equivalent to NAV per share of 287p (2004/05: 308p). Net borrowings of Â£102.3m (2004/05: Â£88.6m) at the period end, a seasonally high point, represented gearing of 69% (2004/05: 56%). Net finance costs, however, totalled Â£2.1m (2004/05: Â£3.0m). INTERIM DIVIDEND In the light of the Group's attractive prospects following implementation of the Strategic Review, the Board has declared an interim dividend per share of 1.6p (2004/05: 1.5p), up 6.7%, which will be paid on 30 June 2006 to shareholders on the register at close of business on 2 June 2006, with an ex-dividend date of 31 May 2006. OPERATING REVIEW Homes and Regeneration Homes and Regeneration made an operating loss of Â£1.2m (2004/05: profit of Â£2.2m) on revenue of Â£46.4m (2004/05: Â£50.1m). In the half year, a total of 245 units were sold (2004/05: 281) at an average selling price of Â£176,000 (2004/05: Â£178,000). Of these, Homes accounted for 158 units (2004/05: 258) at an average selling price of Â£214,000 (2004/05: Â£201,000) and Regeneration 87 units (2004/05: 23) at an average selling price of Â£107,000 (2004/05: Â£88,000). The performance of Homes reflected a difficult market in the period with both margins and volumes under pressure. In addition, there has been a change in the accrual rate for old site and maintenance costs, which has resulted in the first half of the year being adversely impacted. This will be recovered in the second half. Development and Investment Property Development and Investment Property made an operating profit of Â£1.8m (2004/05: Â£1.6m) on revenue of nil (2004/05: Â£1.5m). Rents from investment properties totalled Â£1.2m (2004/05: Â£2.3m), the reduction reflecting the extensive sales made in the half year to 30 June 2005. Construction Services (continuing) The continuing elements of Construction Services made an operating profit of Â£4.9m (2004/05: Â£7.1m) on revenue of Â£132.9m (2004/05: Â£123.0m). Construction Services (discontinued) The Â£3.7m (2005/05: Â£15.4m) loss in the period for this discontinued operation reflects a re-assessment of the likely out-turn costs of the projects for which the Group retains a liability, including the overheads involved in managing them to conclusion. POST-BALANCE SHEET EVENT As announced on 24 March 2006, the Group disposed of Gleeson MCL Limited to Morgan Sindall plc for a cash consideration of Â£23.3m. Gleeson MCL is a construction services business involved in railway engineering contracting, in particular work for and in partnership with London Underground Limited. PROSPECTS Homes and Regeneration Despite Homes' modest first half, Homes and Regeneration retains the potential to make the substantial profit budgeted for the current year. The level of activity in the housing market has seen a noticeable increase since Christmas, with sales in the last eight weeks 30% up on the same period a year ago. Homes and Regeneration will, however, now do well to exceed last year's unit sales of 726 (a 36% increase on the previous year). Regeneration is currently on site at Beswick and Grove Village in Manchester, at Norfolk Park in Sheffield and at Liverpool City Centre Inner Core South, and these schemes are expected to make a material contribution to the second half divisional result. Looking further ahead, Regeneration will benefit from schemes at North Huyton on Merseyside, Burnley, Oldham and Doncaster, as well as from its membership of the National Development Panel with which English Partnerships proposes to develop its extensive portfolio of NHS sites across the country. Together, these arrangements will provide the Group with a secure long-term flow of activity. Many new opportunities are arising and the Group expects to benefit from a number of these in the coming months. Development and Investment Property Development and Investment Property also retains the potential to make its budgeted profit contribution, albeit this will be less than what was achieved last year. At the period end, the Group had 16 schemes under development. At the period end, the Group owned 13 investment properties with an aggregate book value of Â£33.8m. Subsequently, terms have been agreed for the sale of one substantial investment property and two other investment properties are projected for sale before the year end. Construction Services The Engineering Division has a strong and secure forward order book through to 2010 from its AMP4 Alliances with Anglian Water, Northumbrian Water, Severn Trent Water, South West Water, Thames Water and Yorkshire Water, as well as its work for Scottish Water. The Division also has significant opportunities to secure single large contracts in AMP4. Dermot Gleeson Chairman 31 March 2006 CONSOLIDATED INCOME STATEMENT For the six months to 31 December 2005 Unaudited Unaudited Unaudited Six months to Six months to Year to 31 December 31 December 30 June 2005 2004 2005 Â£000 Â£000 Â£000 Restated Restated Continuing operations Revenue 179,285 174,581 418,068 Cost of sales (160,656) (151,390) (358,605) --------- --------- --------- Gross profit 18,629 23,191 59,463 Other operating income 1,349 2,372 6,855 Administrative expenses (17,448) (16,219) (31,817) Share of results of joint ventures (518) (576) (765) --------- --------- --------- Operating profit 2,012 8,768 33,736 Investment revenues 764 1,761 11,061 Finance costs (2,091) (3,032) (6,577) --------- --------- --------- Profit before tax 685 7,497 38,220 Tax (70) 2,359 4,622 --------- --------- --------- --------- Profit for the period from continuing operations 615 9,856 42,842 Discontinued operations Loss for the period from discontinued operations (3,665) (15,422) (51,609) --------- --------- --------- Loss for the period (3,050) (5,566) (8,767) ========= ========= ========= ========= Earnings/(loss) per share Continuing operations Basic 1.21p 19.38p 84.21p Diluted 1.20p 19.62p 83.47p Discontinued operations Basic (7.19p) (30.33p) (101.45p) Diluted (7.14p) (30.71p) (100.55p) CONSOLIDATED BALANCE SHEET At 31 December 2005 Unaudited Unaudited Unaudited 31 December 2005 31 December 2004 30 June 2005 Â£000 Â£000 Â£000 Restated Restated Non-current assets Goodwill 4,794 4,794 4,794 Property, plant and equipment 11,826 22,927 20,602 Investment property 37,503 61,661 33,053 Investments in joint ventures 1,362 1,951 1,876 Other investments 11,308 2,016 4,123 Deferred tax assets 5,173 1,253 4,946 ---------- ----------- ---------- 71,966 94,602 69,394 ========== =========== ========== Current assets Inventories 175,064 179,883 176,089 Trade and other receivables 140,973 127,906 129,960 Cash and cash equivalents 63 92 70 ---------- ----------- ---------- 316,100 307,881 306,119 ========== =========== ========== Assets held for sale 12,672 - 12,252 ---------- ----------- ---------- Total assets 400,738 402,483 387,765 ========== =========== ========== Current liabilities Bank overdrafts (102,339) (88,740) (60,819) Trade and other payables (136,574) (155,075) (136,379) UK corporation tax (5,582) - (5,598) Liabilities directly associated with assets classified as held for sale (8,364) - (33,620) ---------- ----------- ---------- Total liabilities (252,859) (243,815) (236,416) ========== =========== ========== ---------- ----------- ---------- Net assets 147,879 158,668 151,349 ========== =========== ========== Equity Called up share capital 1,029 1,029 1,029 Share premium account 3,762 3,762 3,762 Capital redemption reserve 120 120 120 Equity reserve 6,028 3,974 5,108 Revaluation reserve 3,158 3,541 2,715 Retained earnings 133,782 146,242 138,615 ---------- ----------- ---------- Total equity 147,879 158,668 151,349 ========== =========== ========== CONSOLIDATED CASH FLOW STATEMENT For the six months to 31 December 2005 Unaudited Unaudited Unaudited Six months to Six months to Year to 31 December 31 December 30 June 2005 2004 2005 Â£000 Â£000 Â£000 Restated Restated Net cash flow from operating activities (33,171) (24,400) (24,725) Investing activities Purchase of investment in joint ventures - - (25) Purchase of subsidiary undertakings - - (8,467) Net cash acquired with subsidiary undertakings - - 2,071 Interest received 738 258 697 Rents received 1,326 2,372 4,743 Purchase of property, plant and equipment (3,122) (4,771) (7,183) Proceeds on disposal of property, plant and equipment 8,225 521 1,599 Proceeds on disposal of investment properties 1,865 7,800 46,259 Proceeds on disposal of investments 737 1,364 2,058 Net investment (loans)/receip ts (3,177) 196 (1,911) Sale of business assets (14,678) - - ---------- ----------- ---------- Net cash used in investing activities (8,086) 7,740 39,841 Financing activities (Purchase)/sal e of own shares (270) - 71 Dividends paid - (54) (4,002) ---------- ----------- ---------- Net cash used in financing activities (270) (54) (3,931) Net (decrease)/inc rease in cash and cash equivalents (41,527) (16,714) 11,185 Cash and cash equivalents at beginning of period (60,749) (71,934) (71,934) ---------- ----------- ---------- Cash and cash equivalents at end of period (102,276) (88,648) (60,749) ---------- ----------- ---------- CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE Unaudited Unaudited Unaudited Six months to Six months to Year to 31 December 31 December 30 June 2005 2004 2005 Â£000 Â£000 Â£000 Loss for period (3,050) (5,566) (8,767) ---------- ---------- ---------- Revaluation of property, plant and equipment (204) (65) (66) Deferred tax on revaluation of property, 54 132 (132) plant and equipment ---------- ---------- ---------- Net (losses)/gains not recognised in the (150) 67 (198) income statement ========== ========== ========== Total recognised expense for the period (3,200) (5,499) (8,965) attributable to equity shareholders ========== ========== ========== CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY Unaudited Unaudited Unaudited Six months to Six months to Year to 31 December 31 December 30 June 2005 2004 2005 Â£000 Â£000 Â£000 Opening shareholders' equity 151,349 164,167 164,167 Revaluation of property, plant and equipment (204) (65) (66) Deferred taxation on revaluation of property, 54 132 (132) plant and equipment Employees' award scheme (270) - 71 Loss for the period (3,050) (5,566) (8,767) Dividends - - (3,924) ----------- ---------- ---------- Closing shareholders' equity 147,879 158,668 151,349 =========== ========== ========== Notes to the Interim Report 1. Basis of preparation European Union (EU) law requires that the next annual financial statements of the Group, for the year ending 30 June 2006, be prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU (adopted IFRS). This Interim financial information has been prepared on the basis of the recognition and measurement requirements of IFRS in issue that are either endorsed by the EU and effective (or available for early adoption) at 30 June 2006 or are expected to be endorsed and effective (or available for early adoption) at 30 June 2006. Based on these adopted and unadopted IFRS, the Directors have made assumptions about the accounting policies expected to be applied, which are as set out below, for the year ending 30 June 2006. In addition, the adopted IFRS that will be effective (or available for early adoption) in the financial statements for the year ending 30 June 2006 are still subject to change and to additional interpretations and therefore cannot be determined with certainty. Accordingly, the accounting policies for that annual period will be determined finally only when the financial statements are prepared for the year ending 30 June 2006. The results for the six months to 31 December 2005 and the comparative figures for the six months to 31 December 2004 are unaudited. The comparative figures for the year ended 30 June 2005 are not the Company's statutory accounts for that financial year. Those accounts, which were prepared under UK Generally Accepted Accounting Practice (GAAP), have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain statements under section 237 (2) or (3) of the Companies Act 1985. The comparative figures for the six months ended 31 December 2004 and for the year ended 30 June 2005 have been restated for the adoption of IFRS. The principal differences between UK GAAP and IFRS for the Group are set out in note 2(a). Note 2(b) sets out the effect of International Accounting Standard (IAS) 32 and IAS 39 on M J Gleeson Group plc. IFRS transitional information is shown in note 6. 2. Accounting policies Details of significant amendments to the Group's accounting policies (as set out in the Report and Accounts for the year ended 30 June 2005) resulting from the adoption of IFRS are included in notes (a) and (b). With the exception of those changes detailed therein, the accounting policies used are consistent with those disclosed in the Report and Accounts for the year ended 30 June 2005. (a) Principal differences between UK GAAP and IFRS There are seven principal differences which give rise to changes in the Group's reported profits and losses and net assets as set out in the Report and Accounts for the year ended 30 June 2005 and Interim Report 2005 for the six months ended 31 December 2004. These are categorised as follows: i) Sales and marketing costs ii) Deferred land payments ii) Property transactions iii) Lease incentives iv) Property revaluations v) Provisions (disclosure item) vi) Other adjustments, including: proposed dividends deferred taxation share-based payments joint ventures goodwill and intangible assets i) Sales and marketing costs Under UK GAAP, sales and marketing costs for the Homes and Regeneration and Property Divisions are capitalised in site work in progress and written off through cost of sales as the site progresses. Under IAS 2 'Inventories', costs relating to sales and marketing activities are required to be written off as incurred. ii) Deferred land payments Under UK GAAP, deferred land payments (land creditors) are included in 'creditors' at their gross value. Under IAS 2 'Inventories', imputed interest is recognised on deferred land payments with the result that the land creditors are carried in the balance sheet at net present value and the value of land held on the balance sheet in inventories is reduced. The unwinding of the imputed interest (or discount) on land creditors is charged to finance cost and the reduction in land values in inventories will result in an eventual reduction in cost of sales as the land is traded out. Land debtors are also recognised at net present value with the unwinding of the imputed interest (or discount) on land debtors credited to net finance costs. iii) Property transactions Under UK GAAP, where property developments are sold in advance of construction, turnover and profit are recognised over the life of the contract in accordance with Statement of Standard Accounting Practice (SSAP) 9 'Stocks and Long-Term Contracts.' Under IAS 18 'Revenue', where property developments are sold in advance of construction being completed, revenue and profit are recognised from the point of sale, and as the significant outstanding acts of construction and development are completed. iv) Lease incentives Under UK GAAP, lease incentives were spread to the first break clause of the lease. Under IAS 17 'Leases', lease incentives must be spread over the total period of the lease. v) Property revaluations Under UK GAAP, property revaluations were taken to the revaluation reserve and on disposal the balance was shown as a reserve movement. Under IAS 40 'Investment Property', revaluation movements are taken to the face of the income statement rather than reserves and deferred taxation provided. vi) Provisions (disclosure item) Under UK GAAP, provisions for losses on long-term contracts were either deducted from work in progress or included in creditors depending on the circumstances. Under IAS 11 'Construction Contracts', this is now disclosed under two headings - Amounts due from customers for contract work or Amounts due to customers for contract work. vii) Other adjustments Other changes to accounting policies that have an impact on restated net assets and profit and losses under IFRS are as follows: â€¢Proposed dividends Under UK GAAP as applicable for the year ended 30 June 2005, proposed dividends were recognised as a liability in the period to which they relate. Under IAS 10 'Events after the Balance Sheet Date', dividends are not recognised as a liability until they are appropriately authorised and no longer at the discretion of the Company. â€¢Deferred taxation IAS 12 'Income Taxes' requires deferred tax to be recognised on all temporary differences and not just timing differences as previously under UK GAAP. Deferred tax liabilities are recognised in full, but deferred tax assets are only recognised if future taxable profits are available to cover the assets. â€¢Share-based payments As permitted by the exemption from retrospective application in IFRS 1, the Group has adopted IFRS 2 'Share-based Payments' for all payments granted after 7 November 2002. This requires that share-based payments granted after that date should be valued at the fair value of the shares at the date of grant and recognised as an expense over the vesting period. This affects the Sharesave and Long-Term Incentive Plan schemes. The fair value of these shares at date of award is calculated using the Black Scholes model. â€¢Joint ventures (disclosure item) Under IFRS, the results of joint ventures may be accounted for either under the net equity method or proportional consolidation. The Group reported its joint ventures under UK GAAP using the net equity method and has opted to continue to follow this method. Under the net equity method, trading results from joint ventures are shown net of tax within profit before tax. This has no impact on net assets or on profit after tax. â€¢Goodwill and intangible assets Under UK GAAP, goodwill is amortised on a straight line basis over its useful economic life (in the case of M J Gleeson Group plc, for up to 20 years), tested for impairment and provided for as necessary. Under IFRS 3 'Business Combinations', goodwill is no longer amortised but is carried at cost and subject to annual review for impairment at 30 June. It is effectively frozen at 30 June 2004 with amounts amortised subsequently under UK GAAP being reinstated. (b) Other differences between UK GAAP and IFRS i) Financial instruments The recognition, measurement and presentation of financial instruments is dealt with under IAS 32 and IAS 39. Under UK GAAP, there was no comprehensive standard which addressed the accounting for financial instruments as applicable for the year ended 30 June 2005. Financial Reporting Standard (FRS) 13 'Derivatives and other financial instruments' in the UK required disclosures to be made in respect of financial instruments but these were less comprehensive than IAS 32 and IAS 39. The Group's IFRS accounting policies under IAS 32 and IAS 39 are as follows: â€¢ The Group and its joint ventures use derivative financial instruments to hedge their exposure to interest rate risks. In accordance with its treasury policy, the Group does not hold derivative financial instruments for trading purposes; however, derivatives that do not qualify for hedge accounting are accounted for as trading instruments. â€¢ Derivatives are initially recognised at cost on the date that the contract is entered into and subsequently re-measured in future periods at their fair value. The gain or loss on re-measurement to fair value is recognised immediately through the income statement. â€¢ A number of the Group's PFI joint ventures have entered into interest rate derivatives as a means of hedging interest rate risk under cash flow hedges, which are initially recognised at fair value. The effective part of the change in fair value of these derivatives is recognised directly in equity. Any ineffective portion is recognised immediately in the income statement. Amounts accumulated in equity are recycled to the income statement in the periods when the hedged items will affect profit or loss. The fair value of interest rate derivatives is the estimated amount that the Group would receive or pay to terminate the derivative at the balance sheet date. 3. Segmental analysis Unaudited Unaudited Unaudited Six months to Six months to Year to 31 December 31 December 30 June 2005 2004 2005 Â£000 Â£000 Â£000 Restated Restated Analysis of revenue on operations: Continuing: Homes - United Kingdom 46,432 50,076 159,036 Property - United Kingdom - 1,475 3,999 ---------- --------- -------- 46,432 51,551 163,035 Construction Services: United Kingdom 132,829 122,443 254,236 Jersey 24 587 797 ---------- --------- -------- 132,853 123,030 255,033 ---------- --------- -------- 179,285 174,581 418,068 ---------- --------- -------- Discontinued: Construction Services 8,758 91,697 171,277 ---------- --------- -------- Profit/(loss) on activities: Continuing: Homes (1,189) 2,150 16,366 Property 1,806 1,632 7,970 Construction Services 4,867 7,110 13,605 Central costs (2,954) (1,548) (3,440) Joint ventures (518) (576) (765) ---------- --------- -------- 2,012 8,768 33,736 ---------- --------- -------- Discontinued: Construction Services (3,665) (15,422) (51,609) ---------- --------- -------- Investment income 764 1,761 11,061 Finance costs (2,091) (3,032) (6,577) ---------- --------- -------- Loss before tax (2,980) (7,925) (13,389) Tax (70) 2,359 4,622 ---------- --------- -------- Loss for the period from continuing operations (3,050) (5,566) (8,767) ---------- --------- -------- 4. Notes to the consolidated cash flow statement Unaudited Unaudited Unaudited Six months to Six months to Year to 31 December 31 December 30 June 2005 2004 2005 Â£000 Â£000 Â£000 Restated Restated Operating profit 2,012 8,768 33,736 Adjusted for: 1,673 2,778 5,421 Depreciation of property, plant and equipment Profit on disposal of property, plant and equipment (3,649) (288) (583) Loss on discontinued operations (3,665) (15,422) (44,153) Share of loss of joint ventures 518 576 765 Restructuring costs 2,166 - (4,252) Other operating income (1,349) (2,372) (6,855) ---------- --------- --------- Operating cash flows before movements in working capital (2,294) (5,960) (15,921) Decrease/(incr ease) in inventories 2,583 (323) 13,473 Increase in receivables (27,701) (8,650) (10,755) Decrease in payables (1,784) (5,945) (2,437) ---------- --------- --------- Cash utilised from operations (29,196) (20,878) (15,640) Income taxes paid (827) (1,726) (4,248) Interest paid (3,148) (1,796) (4,837) ---------- --------- --------- Net cash flow from operating activities (33,171) (24,400) (24,725) ---------- --------- --------- 5. Post balance sheet event On 24 March 2006, the Group announced the disposal of its wholly-owned subsidiary, Gleeson MCL, for a total consideration of Â£23.3 million. Consideration comprised Â£15.2 million for goodwill and Â£8.1 million for estimated net assets at completion, subject to a completion accounts process. The estimated net assets disposed of included cash of Â£4.8m. Accordingly, the Group's balance sheet as at 31 December 2005 shows the net assets as being held for sale (except for cash and cash equivalents and bank overdrafts). 6. Reconciliations on transition to IFRS (a) Unaudited income statement reconciliation for the six months to 31 December 2005 Unaudited IAS 10 IAS 11 IAS 12 IAS 17 UK GAAP Post Construction Income Accounting balance contracts taxes for leases sheet dividends Â£000 Â£000 Â£000 Â£000 Â£000 Continuing operations Revenue 178,835 - - - - Cost of sales (162,624) - 1,917 - - Gross profit 16,211 - 1,917 - - Other operating 1,326 - - - 23 income Administrative (15,377) - (2,142) - - expenses Share of (454) - - - - results of joint ventures Operating 1,706 - (225) - 23 profit Investment 764 - - - - revenues Finance costs (2,036) - - - - Profit before 434 - (225) - 23 tax Tax (251) - - 221 - Profit for the 183 - (225) 221 23 period from continuing operations Discontinued operations Loss for the (3,665) - - - - period from discontinued operations Loss for the (3,482) - (225) 221 23 period Dividends (821) 821 - - - (4,303) 821 (225) 221 23 6. Reconciliations on transition to IFRS (a) Unaudited income statement reconciliation for the six months to 31 December 2005 IAS 18 IAS 31 IAS 38 IAS 39 IAS 40 Revenue Interest Intangible Financial Revaluation in joint assets instruments: of ventures recognition investment and properties measurement Â£000 Â£000 Â£000 Â£000 Â£000 Continuing operations Revenue 450 - - - - Cost of sales (10) - - 61 - Gross profit 440 - - 61 - Other - - - - - operating income Administrative - - 154 - - expenses Share of - (79) - 15 - results of joint ventures Operating 440 (79) 154 76 - profit Investment - - - - - revenues Finance costs - - - (55) - Profit before 440 (79) 154 21 - tax Tax - - - 8 - Profit for the 440 (79) 154 29 - period from continuing operations Discontinued operations Loss for the - - - - - period from discontinued operations Loss for the 440 (79) 154 29 - period Dividends - - - - - 440 (79) 154 29 - 6. Reconciliations on transition to IFRS (a) Unaudited income statement reconciliation for the six months to 31 December 2005 IFRS 2 Unaudited Share-based Taxation IFRS payments effect of transition Â£000 Â£000 Â£000 Continuing operations Revenue - - 179,285 Cost of sales - - (160,656) Gross profit - - 18,629 Other - - 1,349 operating income Administrative (83) - (17,448) expenses Share of - - (518) results of joint ventures Operating (83) - 2,012 profit Investment - - 764 revenues Finance costs - - (2,091) Profit before (83) - 685 tax Tax - (48) (70) Profit for the (83) (48) 615 period from continuing operations Discontinued operations Loss for the - - (3,665) period from discontinued operations Loss for the (83) (48) (3,050) period Dividends - - - (83) (48) (3,050) 6. Reconciliations on transition to IFRS (b) Unaudited balance sheet reconciliation at 31 December 2005 Unaudited IAS 10 IAS 11 IAS 12 IAS 17 IAS 18 UK GAAP Post Construction Income Accounting Revenue balance contracts taxes for leases sheet dividends Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Non-current assets Goodwill 4,333 - - - - - Property, plant and 11,826 - - - - - equipment Investment property 37,503 - - - - - Investments in joint 1,605 - - - - - ventures Other investments 11,308 - - - - - Deferred tax assets - - - 366 - - 66,575 - - 366 - - Current assets Inventories 178,119 - (2,142) - - - Trade and other 146,273 - - - 366 - receivables Cash and cash 63 - - - - - equivalents 324,455 - (2,142) - 366 - Assets held for sale 12,672 - - - - - Total assets 403,702 - (2,142) 366 366 - Current liabilities Bank overdrafts (102,339) - - - - - Trade and other (137,728) - - - - - payables UK corporation tax (5,582) - - - - - Liabilities directly (8,364) - - - - - associated with assets classified as held for sale Dividends (4,129) 4,129 - - - - Total liabilities (258,142) 4,129 - - - - Net assets 145,560 4,129 (2,142) 366 366 - Equity Called up share 1,029 - - - - - capital Share premium 3,762 - - - - - account Capital redemption 120 - - - - - reserve Equity reserve - - - - - - Revaluation reserve 4,512 - - (34) - - Retained earnings 136,137 4,129 (2,142) 400 366 - Total equity 145,560 4,129 (2,142) 366 366 - 6. Reconciliations on transition to IFRS (b) Unaudited balance sheet reconciliation at 31 December 2005 IAS 31 IAS 37 IAS 38 IAS 39 IAS 40 Interest Provisions Intangible Financial Revaluation in joint assets instruments: of ventures recognition investment and properties measurement Â£000 Â£000 Â£000 Â£000 Â£000 Non-current assets Goodwill - - 461 - - Property, plant and - - - - - equipment Investment property - - - - - Investments in joint - - - (243) - ventures Other investments - - - - - Deferred tax assets - - - - - - - 461 (243) - Current assets Inventories - - - (913) - Trade and other - (1,750) - (316) - receivables Cash and cash - - - - - equivalents - (1,750) - (1,229) - Assets held for sale - - - - - Total assets - (1,750) 461 (1,472) - Current liabilities Bank overdrafts - - - - - Trade and other - 1,750 - (596) - payables UK corporation tax - - - - - Liabilities directly - - - - - associated with assets classified as held for sale Dividends - - - - - Total liabilities - 1,750 - (596) - Net assets - - 461 (2,068) - Equity Called up share - - - - - capital Share premium - - - - - account Capital redemption - - - - - reserve Equity reserve - - - - - Revaluation reserve (179) - - - (1,141) Retained earnings 179 - 461 (2,068) 1,141 Total equity - - 461 (2,068) - 6. Reconciliations on transition to IFRS (b) Unaudited balance sheet reconciliation at 31 December 2005 IFRS 2 Unaudited Share-based Taxation Reclassification IFRS payments effect of transition Â£000 Â£000 Â£000 Â£000 Non-current assets Goodwill - - - 4,794 Property, plant and - - - 11,826 equipment Investment property - - - 37,503 Investments in joint - - - 1,362 ventures Other investments - - - 11,308 Deferred tax assets - 999 3,808 5,173 - 999 3,808 71,966 Current assets Inventories - - - 175,064 Trade and other 208 - (3,808) 140,973 receivables Cash and cash - - - 63 equivalents 208 - (3,808) 316,100 Assets held for sale - - - 12,672 Total assets 208 999 - 400,738 Current liabilities Bank overdrafts - - - (102,339) Trade and other - - - (136,574) payables UK corporation tax - - - (5,582) Liabilities directly - - - (8,364) associated with assets classified as held for sale Dividends - - - - Total liabilities - - - (252,859) Net assets 208 999 - 147,879 Equity Called up share - - - 1,029 capital Share premium - - - 3,762 account Capital redemption - - - 120 reserve Equity reserve 6,028 - - 6,028 Revaluation reserve - - - 3,158 Retained earnings (5,820) 999 - 133,782 Total equity 208 999 - 147,879 6. Reconciliations on transition to IFRS (c) Unaudited income statement reconciliation for the year to 30 June 2005 Audited IAS 10 IAS 11 IAS 12 IAS 17 UK GAAP Post Construction Income Accounting balance contracts taxes for leases sheet dividends Â£000 Â£000 Â£000 Â£000 Â£000 Continuing operations Revenue 418,591 - - - - Cost of sales (363,286) - 4,525 - - Gross profit 55,305 - 4,525 - - Other 4,743 - - - 40 operating income Administrative (27,067) - (4,796) - - expenses Share of (363) - - - - results of joint ventures Operating 32,618 - (271) - 40 profit Investment 11,061 - - - - revenues Finance costs (5,255) - - - - Profit before 38,424 - (271) - 40 tax Tax 4,235 - - (375) - Profit for the 42,659 - (271) (375) 40 period from continuing operations Discontinued operations Loss for the (51,609) - - - - period from discontinued operations Loss for the (8,950) - (271) (375) 40 period Dividends (4,080) 156 - - - (13,030) 156 (271) (375) 40 6. Reconciliations on transition to IFRS (c) Unaudited income statement reconciliation for the year to 30 June 2005 IAS 18 IAS 31 IAS 38 IAS 39 IAS 40 Revenue Interest Intangible Financial Revaluation in joint assets instruments: of ventures recognition investment and properties measurement Â£000 Â£000 Â£000 Â£000 Â£000 Continuing operations Revenue - - - (523) - Cost of sales - - - 156 - Gross profit - - - (367) - Other - - - - 2,072 operating income Administrative - - 307 - - expenses Share of - (23) 379 - results of joint ventures Operating - (23) 307 (746) 2,072 profit Investment - - - - - revenues Finance costs - - - (1,322) - Profit before - (23) 307 (2,068) 2,072 tax Tax - - - 127 - Profit for the - (23) 307 (1,941) 2,072 period from continuing operations Discontinued operations Loss for the - - - - - period from discontinued operations Loss for the - (23) 307 (1,941) 2,072 period Dividends - - - - - - (23) 307 (1,941) 2,072 6. Reconciliations on transition to IFRS (c) Unaudited income statement reconciliation for the year to 30 June 2005 IFRS 2 Unaudited Share-based Taxation IFRS payments effect of transition Â£000 Â£000 Â£000 Continuing operations Revenue - - 418,068 Cost of sales - - (358,605) Gross profit - - 59,463 Other - - 6,855 operating income Administrative (261) - (31,817) expenses Share of - - (765) results of joint ventures Operating (261) - 33,736 profit Investment - - 11,061 revenues Finance costs - - (6,577) Profit before (261) - 38,220 tax Tax - 635 4,622 Profit for the (261) 635 42,842 period from continuing operations Discontinued operations Loss for the - - (51,609) period from discontinued operations Loss for the (261) 635 (8,767) period Dividends - - (3,924) (261) 635 (12,691) 6. Reconciliations on transition to IFRS (d) Unaudited balance sheet reconciliation at 30 June 2005 Audited IAS 10 IAS 11 IAS 12 IAS 17 UK GAAP Post Construction Income Accounting balance contracts taxes for leases sheet dividends Â£000 Â£000 Â£000 Â£000 Â£000 Non-current assets Goodwill 4,487 - - - - Property, plant 20,602 - - - - and equipment Investment 33,053 - - - - property Investments in 2,142 - - - - joint ventures Other investments 4,123 - - - - Deferred tax - - - 91 - assets 64,407 - - 91 - Current assets Inventories 178,970 - (1,917) - - Trade and other 135,157 - - - 343 receivables Cash and cash 70 - - - - equivalents 314,197 - (1,917) - 343 Assets held for 12,252 - - - - sale Total assets 390,856 - (1,917) 91 343 Current liabilities Bank overdrafts (60,819) - - - - Trade and other (137,095) - - - - payables UK corporation (5,598) - - - - tax Liabilities (33,620) - - - - directly associated with assets classified as held for sale Dividends (3,308) 3,308 - - - Total liabilities (240,440) 3,308 - - - Net assets 150,416 3,308 (1,917) 91 343 Equity Called up share 1,029 - - - - capital Share premium 3,762 - - - - account Capital 120 - - - - redemption reserve Equity reserve - - - - - Revaluation 4,841 - - (88) - reserve Retained earnings 140,664 3,308 (1,917) 179 343 Total equity 150,416 3,308 (1,917) 91 343 6. Reconciliations on transition to IFRS (d) Unaudited balance sheet reconciliation at 30 June 2005 IAS 18 IAS 31 IAS 37 IAS 38 IAS 39 Revenue Interest in Provisions Intangible Financial joint assets instruments: ventures recognition and measurement Â£000 Â£000 Â£000 Â£000 Â£000 Non-current assets Goodwill - - - 307 - Property, plant - - - - - and equipment Investment - - - - - property Investments in - - - - (266) joint ventures Other investments - - - - - Deferred tax - - - - - assets - - - 307 (266) Current assets Inventories 10 - - - (974) Trade and other - - (1,500) - (523) receivables Cash and cash - - - - - equivalents 10 - (1,500) - (1,497) Assets held for - - - - - sale Total assets 10 - (1,500) 307 (1,763) Current liabilities Bank overdrafts - - - - - Trade and other (450) - 1,500 - (334) payables UK corporation - - - - - tax Liabilities - - - - - directly associated with assets classified as held for sale Dividends - - - - - Total liabilities (450) - 1,500 - (334) Net assets (440) - - 307 (2,097) Equity Called up share - - - - - capital Share premium - - - - - account Capital - - - - - redemption reserve Equity reserve - - - - - Revaluation - (258) - - - reserve Retained earnings (440) 258 - 307 (2,097) Total equity (440) - - 307 (2,097) 6. Reconciliations on transition to IFRS (d) Unaudited balance sheet reconciliation at 30 June 2005 IAS 40 IFRS 2 Unaudited Revaluation Share-based Taxation Reclassification IFRS of payments effect of investment transition properties Â£000 Â£000 Â£000 Â£000 Â£000 Non-current assets Goodwill - - - - 4,794 Property, plant - - - - 20,602 and equipment Investment - - - - 33,053 property Investments in - - - - 1,876 joint ventures Other investments - - - - 4,123 Deferred tax - - 1,047 3,808 4,946 assets - - 1,047 3,808 69,394 Current assets Inventories - - - - 176,089 Trade and other - 291 - (3,808) 129,960 receivables Cash and cash - - - - 70 equivalents - 291 - (3,808) 306,119 Assets held for - - - - 12,252 sale Total assets - 291 1,047 - 387,765 Current liabilities Bank overdrafts - - - - (60,819) Trade and other - - - - (136,379) payables UK corporation - - - - (5,598) tax Liabilities - - - - (33,620) directly associated with assets classified as held for sale Dividends - - - - - Total liabilities - - - - (236,416) Net assets - 291 1,047 - 151,349 Equity Called up share - - - - 1,029 capital Share premium - - - - 3,762 account Capital - - - - 120 redemption reserve Equity reserve - 5,108 - - 5,108 Revaluation (1,780) - - - 2,715 reserve Retained earnings 1,780 (4,817) 1,047 - 138,615 Total equity - 291 1,047 - 151,349 6. Reconciliations on transition to IFRS (e) Unaudited income statement reconciliation for the six months to 31 December 2004 Unaudited IAS 10 IAS 11 IAS 12 IAS 17 UK GAAP Post Construction Income Accounting balance contracts taxes for leases sheet dividends Â£000 Â£000 Â£000 Â£000 Â£000 Continuing operations Revenue 174,581 - - - - Cost of sales (153,413) - 1,987 - - Gross profit 21,168 - 1,987 - - Other operating income 2,340 - - - 32 Administrative expenses (13,909) - (2,370) - - Share of results of (171) - - - - joint ventures Operating profit 9,428 - (383) - 32 Investment revenues 1,761 - - - - Finance costs (2,461) - - - - Profit before tax 8,728 - (383) - 32 Tax 2,407 - - (342) - Profit for the period 11,135 - (383) (342) 32 from continuing operations Discontinued operations Loss for the period from (15,422) - - - - discontinued operations Loss for the period (4,287) - (383) (342) 32 Dividends (772) 772 - - - (5,059) 772 (383) (342) 32 6. Reconciliations on transition to IFRS (e) Unaudited income statement reconciliation for the six months to 31 December 2004 IAS 18 IAS 31 IAS 38 IAS 39 Revenue Interest Intangible Financial in joint assets instruments: ventures recognition and measurement Â£000 Â£000 Â£000 Â£000 Continuing operations Revenue - - - - Cost of sales - - - 36 Gross profit - - - 36 Other operating income - - - - Administrative expenses - - 154 - Share of results of joint - (50) - (355) ventures Operating profit - (50) 154 (319) Investment revenues - - - - Finance costs - - - (571) Profit before tax - (50) 154 (890) Tax - - - - Profit for the period - (50) 154 (890) from continuing operations Discontinued operations Loss for the period from - - - - discontinued operations Loss for the period - (50) 154 (890) Dividends - - - - - (50) 154 (890) 6. Reconciliations on transition to IFRS (e) Unaudited income statement reconciliation for the six months to 31 December 2004 IAS 40 IFRS 2 Unaudited Revaluation Share-based Taxation IFRS of payments effect of investment transition properties Â£000 Â£000 Â£000 Â£000 Continuing operations Revenue - - - 174,581 Cost of sales - - - (151,390) Gross profit - - - 23,191 Other operating income - - - 2,372 Administrative expenses - (94) - (16,219) Share of results of - - - (576) joint ventures Operating profit - (94) - 8,768 Investment revenues - - - 1,761 Finance costs - - - (3,032) Profit before tax - (94) - 7,497 Tax - - 294 2,359 Profit for the period - (94) 294 9,856 from continuing operations Discontinued operations Loss for the period from - - - (15,422) discontinued operations Loss for the period - (94) 294 (5,566) Dividends - - - - - (94) 294 (5,566) 6. Reconciliations on transition to IFRS (f) Unaudited balance sheet reconciliation at 31 December 2004 Unaudited IAS 10 IAS 11 IAS 12 IAS 17 IAS 18 UK GAAP Post Construction Income Accounting Revenue balance contracts taxes for leases sheet dividends Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Non-current assets Goodwill 4,640 - - - - - Property, plant 22,927 - - - - - and equipment Investment 61,661 - - - - - property Investments in 2,320 - - - - - joint ventures Other investments 2,016 - - - - - Deferred tax - - - 389 - - assets 93,564 - - 389 - - Current assets Inventories 182,765 - (2,029) - - 10 Trade and other 128,805 - - - 335 - receivables Cash and cash 92 - - - - - equivalents 311,662 - (2,029) - 335 10 Assets held for - - - - - - sale Total assets 405,226 - (2,029) 389 335 10 Current liabilities Bank overdrafts (88,740) - - - - - Trade and other (156,344) - - - - (450) payables UK corporation - - - - - - tax Liabilities - - - - - - directly associated with assets classified as held for sale Dividends (3,924) 3,924 - - - - Total liabilities (249,008) 3,924 - - - (450) Net assets 156,218 3,924 (2,029) 389 335 (440) Equity Called up share 1,029 - - - - - capital Share premium 3,762 - - - - - account Capital 120 - - - - - redemption reserve Equity reserve - - - - - - Revaluation 7,881 - - 176 - - reserve Retained earnings 143,426 3,924 (2,029) 213 335 (440) Total equity 156,218 3,924 (2,029) 389 335 (440) 6. Reconciliations on transition to IFRS (f) Unaudited balance sheet reconciliation at 31 December 2004 IAS 31 IAS 37 IAS 38 IAS 39 Interest Provisions Intangible Financial in joint assets instruments: ventures recognition and measurement Â£000 Â£000 Â£000 Â£000 Non-current assets Goodwill - - 154 - Property, plant - - - - and equipment Investment - - - - property Investments in - - - (369) joint ventures Other investments - - - - Deferred tax - - - - assets - - 154 (369) Current assets Inventories - - - (863) Trade and other - (1,533) - - receivables Cash and cash - - - - equivalents - (1,533) - (863) Assets held for - - - - sale Total assets - (1,533) 154 (1,232) Current liabilities Bank overdrafts - - - - Trade and other - 1,533 - 186 payables UK corporation tax - - - - Liabilities - - - - directly associated with assets classified as held for sale Dividends - - - - Total liabilities - 1,533 - 186 Net assets - - 154 (1,046) Equity Called up share - - - - capital Share premium - - - - account Capital redemption - - - - reserve Equity reserve - - - - Revaluation (231) - - - reserve Retained earnings 231 - 154 (1,046) Total equity - - 154 (1,046) 6. Reconciliations on transition to IFRS (f) Unaudited balance sheet reconciliation at 31 December 2004 IAS 40 IFRS 2 Unaudited Revaluation Share-based Taxation Reclassification IFRS of payments effect of investment transition properties Â£000 Â£000 Â£000 Â£000 Â£000 Non-current assets Goodwill - - - - 4,794 Property, plant - - - - 22,927 and equipment Investment - - - - 61,661 property Investments in - - - - 1,951 joint ventures Other investments - - - - 2,016 Deferred tax - - 706 158 1,253 assets - - 706 158 94,602 Current assets Inventories - - - - 179,883 Trade and other - 457 - (158) 127,906 receivables Cash and cash - - - - 92 equivalents - 457 - (158) 307,881 Assets held for - - - - - sale Total assets - 457 706 - 402,483 Current liabilities Bank overdrafts - - - - (88,740) Trade and other - - - - (155,075) payables UK corporation - - - - - tax Liabilities - - - - - directly associated with assets classified as held for sale Dividends - - - - - Total liabilities - - - - (243,815) Net assets - 457 706 - 158,668 Equity Called up share - - - - 1,029 capital Share premium - - - - 3,762 account Capital - - - - 120 redemption reserve Equity reserve - 3,974 - - 3,974 Revaluation (4,285) - - - 3,541 reserve Retained earnings 4,285 (3,517) 706 - 146,242 Total equity - 457 706 - 158,668 6. Reconciliations on transition to IFRS (g) Unaudited balance sheet reconciliation at 1 July 2004 Audited IAS 10 IAS 11 IAS 12 IAS 17 IAS 18 UK GAAP Post Construction Income Accounting Revenue balance contracts taxes for leases sheet dividends Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Non-current assets Goodwill 4,794 - - - - - Property, plant 23,173 - - - - - and equipment Investment 61,661 - - - - - property Investments in 2,423 - - - - - joint ventures Other investments 2,212 - - - - - Deferred tax - - - 599 - - assets 94,263 - - 599 - - Current assets Inventories 182,096 - (1,646) - - 10 Trade and other 133,423 - - - 303 - receivables Cash and cash 87 - - - - - equivalents 315,606 - (1,646) - 303 10 Assets held for - - - - - - sale Total assets 409,869 - (1,646) 599 303 10 Current liabilities Bank overdrafts (72,021) - - - - - Trade and other (166,793) - - - - (450) payables UK corporation (6,434) - - - - - tax Liabilities - - - - - - directly associated with assets classified as held for sale Dividends (3,230) 3,152 - - - - Total liabilities (248,478) 3,152 - - - (450) Net assets 161,391 3,152 (1,646) 599 303 (440) Equity Called up share 1,029 - - - - - capital Share premium 3,762 - - - - - account Capital 120 - - - - - redemption reserve Equity reserve - - - - - - Revaluation 8,821 - - 44 - - reserve Retained earnings 147,659 3,152 (1,646) 555 303 (440) Total equity 161,391 3,152 (1,646) 599 303 (440) 6. Reconciliations on transition to IFRS (g) Unaudited balance sheet reconciliation at 1 July 2004 IAS 31 IAS 37 IAS 38 IAS 39 IAS 40 Interest Provisions Intangible Financial Revaluation in joint assets instruments: of investment ventures recognition properties and measurement Â£000 Â£000 Â£000 Â£000 Â£000 Non-current assets Goodwill - - - - - Property, plant - - - - - and equipment Investment - - - - - property Investments in - - - (14) - joint ventures Other investments - - - - - Deferred tax - - - - - assets - - - - - Current assets Inventories - - - (899) - Trade and other - (3,148) - - - receivables Cash and cash - - - - - equivalents - (3,148) - (899) - Assets held for - - - - - sale Total assets - (3,148) - (913) - Current liabilities Bank overdrafts - - - - - Trade and other - 3,148 - 757 - payables UK corporation - - - - - tax Liabilities - - - - - directly associated with assets classified as held for sale Dividends - - - - - Total liabilities - 3,148 - 757 - Net assets - - - (156) - Equity Called up share - - - - - capital Share premium - - - - - account Capital - - - - - redemption reserve Equity reserve - - - - - Revaluation (281) - - - (4,848) reserve Retained earnings 281 - - (156) 4,848 Total equity - - - (156) - 6. Reconciliations on transition to IFRS (g) Unaudited balance sheet reconciliation at 1 July 2004 IFRS 2 Unaudited Share-based Taxation Reclassification IFRS payments effect of transition Â£000 Â£000 Â£000 Â£000 Non-current assets Goodwill - - -- 4,794 Property, plant - - - 23,173 and equipment Investment - - - 61,661 property Investments in - - - 2,409 joint ventures Other investments - - - 2,212 Deferred tax - 412 158 1,169 assets - 412 158 95,418 Current assets Inventories - - - 179,561 Trade and other 552 - (158) 130,972 receivables Cash and cash - - - 87 equivalents 552 - (158) 310,620 Assets held for - - - - sale Total assets 552 412 - 406,038 Current liabilities Bank overdrafts - - - (72,021) Trade and other - - - (163,338) payables UK corporation - - - (6,434) tax Liabilities - - - - directly associated with assets classified as held for sale Dividends - - - (78) Total liabilities - - - (241,871) Net assets 552 412 - 164,167 Equity Called up share - - - 1,029 capital Share premium - - - 3,762 account Capital - - - 120 redemption reserve Equity reserve 2,867 - - 2,867 Revaluation - - - 3,736 reserve Retained earnings (2,315) 412 - 152,653 Total equity 552 412 - 164,167 This information is provided by RNS The company news service from the London Stock Exchange

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Monday, 8th July 2024

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Ocado shares jump on news of expanded operations in Japan, Marston’s finds support after news it will exit the brewing business and Britvic also rallies after management recommend upgraded bid from Carlsberg.

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