Final Results - Part 2

Quintain Estates & Development PLC 07 June 2005 Quintain Estates and Development PLC Consolidated Profit and Loss Account for the year ended 31 March 2005 Notes 2005 2004 Â£000 Â£000 ______ _______ _______ Turnover 83,738 65,200 Less - share of joint ventures' turnover 11a (5,362) (4,716) _______ _______ Group turnover 2/3 78,376 60,484 Cost of sales 2 (38,703) (20,079) _______ _______ Gross profit 2/3 39,673 40,405 Administrative expenses 4 (19,130) (15,959) _______ _______ Group operating profit 20,543 24,446 Share of operating profit in joint ventures 3/11a 4,608 3,601 Share of operating profit in associates 3 195 274 _______ _______ Total operating profit : Group and share of joint ventures and associates 25,346 28,321 Profit on sale of investment properties 3a 6,286 5,898 _______ _______ Profit on ordinary activities before interest and tax 3a 31,632 34,219 Net interest payable and other similar charges 5 (15,869) (18,182) _______ _______ Profit on ordinary activities before taxation 15,763 16,037 Tax on profit on ordinary activities 6 (2,354) - _______ _______ Profit on ordinary activities after taxation 13,409 16,037 Equity minority interests (33) (150) _______ _______ Profit for the financial year 13,376 15,887 Dividends 7 (12,261) (11,338) _______ _______ Retained profit for the financial year 19 1,115 4,549 ====== ====== Earnings per share - basic 8a 10.3p 12.4p ====== ====== - diluted 8a 10.2p 12.3p ====== ====== Dividends per share - interim 7 2.75p 2.75p ====== ====== - final 7 6.75p 6.00p ====== ====== Total 7 9.50p 8.75p ====== ====== The profit and loss account has been prepared on the basis that all operations are continuing operations. Consolidated Statement of Total Recognised Gains and Losses for the year ended 31 March 2005 Notes 2005 2004 Â£000 Â£000 ______ _______ _______ Profit for the financial year: Group 10,289 11,383 Joint ventures 11a 3,087 4,504 _______ _______ 13,376 15,887 Unrealised surplus on revaluation of investment properties 19 113,468 69,327 Share of unrealised surplus on revaluation of investment properties held in: Joint ventures 19 6,400 4,286 Associates 19 226 822 Tax on realisation of revaluation surplus 19 (3,952) (471) Foreign exchange movement 19 127 (798) _______ _______ Total recognised gains and losses relating to the 129,645 89,053 financial year ====== ====== Consolidated Note of Historical Cost Profits and Losses for the year ended 31 March 2005 Notes 2005 2004 Â£000 Â£000 _______ _______ _______ Profit on ordinary activities before taxation 15,763 16,037 Revaluation element of short leasehold amortisation 19 139 159 Realisation of property revaluation gains of previous 19 75,953 8,820 years _______ _______ Historical cost profit on ordinary activities before 91,855 25,016 taxation ====== ====== Historical cost profit for the year retained after taxation, minority interests and dividends 73,255 13,057 ====== ====== Reconciliation of Movements in Equity Shareholders' Funds for the year ended 31 March 2005 Notes 2005 2004 Â£000 Â£000 ______ _______ _______ Profit for the financial year 13,376 15,887 Dividends 7 (12,261) (11,338) _______ _______ 1,115 4,549 Other recognised gains and losses relating to the 116,269 73,166 year Issue of shares less costs 18/19 534 2,287 Purchase of own shares for cancellation 19 (2,243) - Credit relating to Executive Directors' Performance 19 380 195 Share Plan Credit relating to 2004 Unapproved Share Plan 19 232 - Investment in own shares 20 (1,539) - _______ _______ Net addition to equity shareholders' funds 114,748 80,197 Opening shareholders' funds 523,513 443,316 _______ _______ Closing shareholders' funds 638,261 523,513 ====== ====== Balance Sheets as at 31 March 2005 Notes Group Group Company Company 2005 2004 2005 2004 Â£000 Â£000 Â£000 Â£000 ______ _______ _______ _______ _______ Fixed assets Investment properties 3/9 742,876 797,696 - - Other tangible fixed assets 10 9,215 649 221 510 Investment in joint ventures share of gross assets 101,969 56,999 share of gross liabilities (39,946) (25,708) _______ _______ 3/11a 62,023 31,291 13,868 - Investment in associates 3/11b 1,800 5,467 75 1,368 Other fixed asset investments 11c 188 188 348,795 311,195 _______ _______ _______ _______ 816,102 835,291 362,959 313,073 Current assets _______ _______ _______ _______ Stocks: trading properties 17,487 21,707 - - Debtors 12 31,920 28,843 37,011 8,256 Short term investments 13 19 19 - - Cash at bank and in hand 16a 11,744 44,168 2,527 7,313 ______ _______ _______ _______ 61,170 94,737 39,538 15,569 Creditors: amounts falling due within one year 14 (47,295) (61,587) (22,702) (80,015) _____ _______ _____ _______ Net current assets (liabilities) 13,875 33,150 16,836 (64,446) ______ _______ _______ _______ Total assets less current liabilities 829,977 868,441 379,795 248,627 Creditors: amounts falling due after more than one 15 (186,359) (338,811) (165,710) (33,729) year Provisions for liabilities and charges 17 (5,117) (4,671) - - Equity minority interests (240) (1,446) - - _______ _______ _______ _______ Net assets 638,261 523,513 214,085 214,898 ====== ====== ====== ====== Capital and reserves Called up share capital 18 32,298 32,323 32,298 32,323 Share premium account 19 46,575 45,076 46,575 45,076 Revaluation reserve 19 311,606 267,604 - - Other capital reserves 19 112,436 112,330 108,131 108,025 Profit and loss account 19 136,885 66,180 28,620 29,474 Investment in own shares 20 (1,539) - (1,539) - _______ _______ _______ _______ Equity shareholders' funds 638,261 523,513 214,085 214,898 ====== ====== ====== ====== Net asset value per share - basic 8b 495p 405p ====== ====== - diluted 8b 486p 399p ====== ====== Approved by the Board of N G Ellis Director Directors and signed on its behalf by: A R Wyatt Director 7 June 2005 Consolidated Cash Flow Statement for the year ended 31 March 2005 Notes 2005 2004 Â£000 Â£000 ______ _______ _______ Net cash inflow from group operating activities 25a 22,060 6,656 ====== ====== Dividends from joint ventures and associates 2,165 7,871 ====== ====== Returns on investments and servicing of finance Interest received 1,127 911 Interest paid (18,523) (19,239) Issue costs of loans (2,858) (389) ________ ________ Net cash outflow from return on investments and servicing of finance (20,254) (18,717) ======= ======= Corporation tax paid (1,560) (66) ======= ======= Capital expenditure and financial investment Purchase of tangible fixed assets (119,622) (63,760) Proceeds from disposal of tangible fixed assets 287,486 82,639 Loans to joint ventures and associates (20,860) - ________ ________ Net cash inflow from capital expenditure and financial investment 147,004 18,879 ======= ======= Acquisitions and disposals Purchase of shares in subsidiary companies (15,154) (24,786) (Note) Settlement of debt due from vendor - 2,978 Net cash acquired with subsidiary companies - 4 ________ ________ Net cash outflow from acquisitions and disposals (15,154) (21,804) ======= ======= Equity dividends paid (11,318) (10,264) ======= ======= Net cash inflow (outflow) before management of liquid resources and financing 122,943 (17,445) ======= ======= Management of liquid resources 25c 25,772 (22,703) ======= ======= Financing Proceeds from issue of shares 534 2,287 Purchase of own shares for cancellation (2,243) - Investment in own shares (1,539) - Loans drawn down 358,821 105,588 Loan repayments (511,137) (68,376) ________ ________ Net cash (outflow) inflow from financing (155,564) 39,499 ======= ======= Decrease in cash in the year 25b (6,849) (649) ======= ======= Note: The figure for the purchase of shares in subsidiaries consists of the final instalment (Â£13,858,000) of the deferred consideration in respect of the acquisition of Wembley (London) Limited, which occurred in August 2002, and the purchase of an additional 15% of shares in SCI Bureaux Du Chateau Rouge. Notes to the Accounts for the year ended 31 March 2005 1. Accounting policies The principal accounting policies have been applied consistently throughout the year and the preceding year except for the first time application of Urgent Issues Task Force Abstract 38, Accounting for ESOP Trusts, which became effective for accounting periods ending on or after 22 June 2004. In accordance with this abstract, consideration paid by The Quintain Group Employee Benefit Trust for the purchase of the Company's own shares is deducted in arriving at shareholders' funds. Such shares were purchased for the first time in the current financial year. The shares held by the Trust have been treated as if they were cancelled for the purpose of calculating earnings and net assets per share. a) Basis of accounting The accounts have been prepared under the historical cost convention as modified by the revaluation of investment properties either held directly or through joint ventures and associates and in accordance with all applicable accounting standards and the requirements of the Companies Act 1985, except as explained below. b) Basis of consolidation The Group's accounts include the accounts of the Company and its subsidiary undertakings prepared up to 31 March 2005. Unless otherwise stated, the acquisition method of accounting has been adopted. Under this method, the results of subsidiary undertakings acquired or disposed of in the year are included in the consolidated profit and loss account from the date of acquisition or up to the date of disposal. A joint venture is an undertaking in which the Group has a long-term interest and over which it exercises joint control. The Group's share of the profits less losses of joint ventures is included in the consolidated profit and loss account and its interest in their net assets, (other than goodwill), is included in investments in the consolidated balance sheet. Jointly administered arrangements are accounted for on a proportional basis. An associate is an undertaking in which the Group has a long-term interest, usually from 20% to 50% of the equity voting rights, and over which it exercises significant influence. The Group's share of the profits less losses of associates is included in the consolidated profit and loss account and its interest in their net assets (other than goodwill) is included in investments in the consolidated balance sheet. Under section 230 (4) of the Companies Act 1985, the Company is exempt from the requirement to present its own profit and loss account. c) Goodwill Goodwill arising on consolidation is capitalised and amortised through the profit and loss account over a period of 20 years or less in line with the Directors' view of its useful economic life. Negative goodwill, which arises as a result of the fair value of all assets (including property assets) less liabilities acquired exceeding the related purchase consideration, is credited to Other capital reserves in the balance sheet. This treatment does not comply with the Companies Act 1985 and represents a departure from FRS 10, Goodwill and Intangible Assets, which requires that negative goodwill be treated as a fixed asset. Given that negative goodwill relates principally to investment properties acquired, which are neither depreciated nor held for re-sale, the Directors consider that to retain it as a negative asset on the face of the balance sheet indefinitely would not properly reflect the substance of such a transaction nor result in the financial statements giving a true and fair view of the state of affairs of the Group. d) Foreign currencies All assets, liabilities and results denominated in foreign currencies are translated into sterling at rates of exchange ruling at the year end. The rates ruling at the current and previous year ends were as follows: 2005 2004 _______ _______ France Â£1 = â‚¬ 1.46 â‚¬ 1.50 United States Â£1 = US $ 1.88 US $ 1.83 Differences arising from the translation of the net equity investment in overseas subsidiaries are dealt with through reserves. e) Turnover and cost of sales Turnover is stated net of VAT and comprises rental income, proceeds from sales of trading properties, income from leisure operations, commission and fees receivable. Rent increases arising from rent reviews due during the year are taken into account only to the extent that such reviews are agreed with tenants at the accounting date. When rent free periods are granted with new leases, rental income is allocated evenly over the period from the commencement of the lease to the date of the first rent review. Where a tenant inducement does not enhance the value of the property, it is amortised over the period to the earlier of the first rent review, the first tenant break option or the end of the lease term. f) Disposal of properties Sales of properties are recognised in the accounts if an unconditional contract is exchanged by the balance sheet date and the sale is completed before the accounts are approved by the Board. Profits or losses arising from the sale of investment properties are calculated by reference to book value and treated as non-operating items. Those arising from the sale of trading properties are included in the profit and loss account as part of the operating profit of the Group with, if applicable, a transfer between revaluation and revenue reserves. g) Depreciation In accordance with SSAP 19, Accounting for Investment Properties, no depreciation is provided in respect of the Group's freehold investment properties and leasehold investment properties with over 20 years to run. This represents a departure from the provisions of the Companies Act 1985 which requires all properties to be depreciated. Such properties are held not for consumption but for investment and the Directors consider that to depreciate them would not give a true and fair view. Depreciation is only one of the many factors reflected in the annual valuation of properties and accordingly the amount of depreciation which might otherwise have been charged cannot be separately identified or quantified. Depreciation is provided on leasehold investment properties with less than 20 years to run, over the remaining life of the lease and on an operational property included within freehold investment properties, over a period of 50 years. In relation to other tangible fixed assets, depreciation is provided on a straight line basis over the life of the lease for the leasehold interests and over their estimated useful life, usually between three and eight years, in the case of fixtures, fittings and equipment. h) Valuation of properties Investment properties are independently valued annually by external professional valuers at market value. Investment properties under development are stated at estimated market value on completion, supported by independent valuation, less estimated costs to complete. Any surplus or deficit on revaluation is transferred to the revaluation reserve except that deficits below original cost which are expected to be permanent are charged to the profit and loss account. Finance charges incurred on investment properties under development are capitalised within the historical cost from commencement of development until practical completion. Trading properties are included in current assets at the lower of cost and net realisable value except for properties previously held for investment which the Directors have decided to redevelop and sell. These properties are reclassified as trading properties and cost is considered to be the latest valuation prior to their reclassification. This treatment is a departure from the Companies Act 1985 which would normally require current assets to be carried at the lower of cost and net realisable value. The Directors consider that compliance with this requirement would fail to give a true and fair view of historical revaluation surpluses, which remain unrealised by the Group until disposal. i) Other tangible fixed assets Other tangible fixed assets comprising the Group's leasehold interest in its current and new head office premises together with fixtures, fittings and equipment are carried at cost less accumulated depreciation. j) Other investments Fixed asset investments are stated at cost less any provision for impairment in value. k) Financial instruments The Group uses interest rate swaps for hedging purposes in line with its risk management policies to alter the risk profile of existing underlying exposure in respect of floating rate debt. Amounts payable and receivable in respect of interest rate swaps are recognised as adjustments to interest expense over the period of the contracts. l) Deferred taxation Deferred taxation is recognised, without discounting, in respect of all timing differences between the treatment of certain items for taxation and accounting purposes which have arisen but not reversed by the balance sheet date, except as otherwise required by FRS 19, Deferred Taxation. Deferred tax assets are recognised to the extent that they are considered recoverable. m) Pensions The Group makes pre-defined contributions to employees' personal pension plans. 2. Turnover, cost of sales and gross profit These comprised: 2005 2005 2005 2004 2004 2004 Turnover Cost of Gross Turnover Cost of Gross sales profit sales profit Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 ______ _______ ______ ______ ______ ______ Rental income 36,159 (8,746) 27,413 41,993 (12,133) 29,860 Proceeds from sales of trading properties 25,852 (22,036) 3,816 1,863 (1,565) 298 Income from leisure operations 12,112 (5,871) 6,241 12,154 (5,562) 6,592 Other income 4,253 (2,050) 2,203 4,474 (819) 3,655 ______ _______ ______ ______ _______ ______ 78,376 (38,703) 39,673 60,484 (20,079) 40,405 ===== ====== ===== ===== ====== ===== The cost of sales in relation to rental income receivable consisted of: 2005 2004 Â£000 Â£000 _____ _____ Rents payable 1,680 1,312 Property management fees 587 667 Legal and professional fees 804 1,327 Irrecoverable service charges 1,605 1,835 Property amortisation 647 1,137 Other property costs 3,423 5,855 ______ ______ 8,746 12,133 ===== ===== Other property costs in 2004 included Â£3,640,000 in respect of exceptional repairs carried out to two investment properties in the Group's portfolio, Neathouse Place, London SW1 and 36 Gracechurch Street, London EC3. 3. Segmental analysis a) Geographical segmental analysis The geographical split of the Group's business was as follows: 2005 2005 2005 2004 2004 2004 Turnover Profit Net assets Turnover Profit Net before before assets interest interest and tax and tax Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 ______ ______ ______ ______ ______ ______ United Kingdom 76,052 31,451 734,386 57,985 29,637 759,962 France 1,509 742 10,062 1,496 937 8,706 United States 815 (561) - 1,003 3,645 8,354 ______ ______ _______ ______ ______ _______ 78,376 31,632 744,448 60,484 34,219 777,022 ===== ===== ===== ===== Net investment in joint ventures and 63,823 36,758 associate (note 11) Net debt (note 25b) (170,010) (290,267) _______ _______ 638,261 523,513 ====== ====== Turnover by geographical destination is the same as turnover by origin. 3. Segmental analysis (continued) a) Geographical segmental analysis The Group's profit (loss) from the sale of investment properties, either held directly or through its joint ventures and associates, and its interests in associates was as follows: 2005 2005 2005 2004 2004 2004 Own Joint Total Own Joint Total properties venture properties venture and and and and investments associate investments associate in associates properties in associates properties Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 ______ ______ ______ _____ _____ _____ United Kingdom 6,748 709 7,457 3,895 (230) 3,665 United States (1,171) - (1,171) - 2,233 2,233 _____ ______ _____ _____ _____ _____ 5,577 709 6,286 3,895 2,003 5,898 ===== ===== ===== ===== ==== ==== b) Business segmental analysis The analysis of the Group's results by business division was as follows: 2005 2005 2005 2005 2004 2004 2004 2004 Gross Other Total Gross Gross Other Total Gross rental turnover turnover profit rental turnover turnover profit income income Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 ______ _______ ______ ______ ______ _______ _______ _____ Main portfolio 27,484 3,381 30,865 24,023 29,383 2,419 31,802 23,996 Special projects 7,319 36,925 44,244 14,214 11,270 14,708 25,978 15,473 Fund management 1,356 1,911 3,267 1,436 1,340 1,364 2,704 936 ______ ______ ______ ______ ______ ______ ______ _____ 36,159 42,217 78,376 39,673 41,993 18,491 60,484 40,405 ===== ===== ===== ===== ===== ===== ===== ===== 2005 2005 2004 2004 Investment Revaluation Investment Revaluation properties uplift properties uplift at at valuation valuation Â£000 Â£000 Â£000 Â£000 ______ _______ _______ _____ Main portfolio 284,059 18,942 398,341 17,919 Special projects 435,717 93,887 379,435 49,778 Fund management 23,100 639 19,920 1,630 _______ _______ _______ ______ 742,876 113,468 797,696 69,327 ====== ====== ====== ===== 2005 2004 2005 2004 2005 2004 Operating Operating Book value Book value Revaluation Revaluation profit from profit from of of uplift from uplift from joint joint joint joint joint joint ventures ventures ventures ventures ventures ventures and and and and and and associates associates associates associates associates associates Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 ______ ______ ______ ______ _______ _______ Main portfolio - 590 - 46 - - Special projects - - 13,908 1,350 - - Fund management 4,803 3,285 49,915 35,362 6,626 5,108 _______ _______ _______ _______ ______ _______ 4,803 3,875 63,823 36,758 6,626 5,108 ====== ====== ====== ====== ===== ====== 3. Segmental analysis (continued) c) Sector analysis The analysis of the Group's results by sector was as follows: 2005 2005 2005 2005 2004 2004 2004 2004 Gross Other Total Gross Gross Other Total Gross rental turnover turnover profit rental turnover turnover profit income income Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 ______ _______ ______ ______ ______ _______ _______ _____ Healthcare 1,325 1,454 2,779 1,740 1,236 2,955 4,191 2,210 Hotels 2,056 20 2,076 2,015 1,995 1 1,996 1,885 Industrial 4,773 4,183 8,956 5,623 4,180 - 4,180 3,939 Land 2,172 31,747 33,919 9,069 3,007 12,321 15,328 8,366 Leisure 400 787 1,187 71 535 114 649 (713) Offices 14,022 3,887 17,909 13,742 16,472 2,448 18,920 12,287 Retail 11,290 139 11,429 8,501 14,366 652 15,018 12,279 Other 121 - 121 (1,088) 202 - 202 152 ______ ______ _______ _______ _______ ______ _______ _____ 36,159 42,217 78,376 39,673 41,993 18,491 60,484 40,405 ===== ===== ===== ===== ===== ===== ===== ===== 2005 2005 2004 2004 Investment Revaluation Investment Revaluation properties uplift properties uplift at valuation at valuation Â£000 Â£000 Â£000 Â£000 ______ _______ _______ _____ Healthcare 22,300 639 17,345 1,820 Hotels 33,250 (944) 34,050 638 Industrial 75,700 7,507 61,320 4,310 Land 348,958 86,705 237,956 44,281 Leisure 9,265 (28) 11,050 78 Offices 203,174 17,429 215,359 11,428 Retail 49,179 2,061 219,316 6,441 Other 1,050 99 1,300 331 _______ _______ _______ ______ 742,876 113,468 797,696 69,327 ====== ====== ====== ===== 2005 2004 2005 2004 2005 2004 Operating Operating Book value Book value Revaluation Revaluation profit from profit from of of uplift from uplift from joint joint joint joint joint joint ventures ventures ventures ventures ventures ventures and and and and and and associates associates associates associates associates associates Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 ______ ______ ______ ______ _______ _______ Healthcare 4,608 3,029 48,115 31,205 6,400 4,286 Land - - 13,868 1,310 - - Leisure 195 274 - 2,582 - 346 Offices - (18) 40 40 - - Retail - 590 - 47 - - Other - - 1,800 1,574 226 476 _______ _______ _______ _______ ______ _______ 4,803 3,875 63,823 36,758 6,626 5,108 ====== ====== ====== ====== ===== ====== 4. Administrative expenses a) These included: 2005 2004 Â£000 Â£000 ______ ______ Directors' remuneration 2,853 2,095 Cost relating to Executive Directors' Performance Share Plan 380 195 Staff costs 10,121 8,000 ______ ______ Total staff costs 13,354 10,290 Legal and other professional fees 2,258 2,225 Office costs 2,477 2,642 Profit on sale of fixed assets - (18) Depreciation of tangible fixed assets 441 333 Operating lease payments 302 278 General expenses 298 209 ______ ______ 19,130 15,959 ===== ===== In addition to the depreciation charge disclosed above, property amortisation of Â£647,000 (2004: Â£1,137,000) is charged under cost of sales and shown in note 2. b) Fees paid to the auditors and their affiliates: 2005 2004 Â£000 Â£000 _____ _____ Audit: Statutory audit: Group (including parent company) 238 246 Parent company only 30 30 Audit-related regulatory reporting 22 19 ==== ==== Non-audit: Tax due diligence and legal work - 400 Tax compliance 21 241 Tax advisory 47 121 _____ ______ 68 762 ==== ===== The charge in respect of tax due diligence and legal work in 2004 related to the acquisition of Power Securities (Manchester) Limited now renamed Quintain (Manchester) Limited. Fees paid to other accountancy firms were Â£538,000 (2004: Â£255,000) of which Â£376,000 (2004: Â£nil) were capitalised. These fees related mainly to tax advisory services. c) Staff costs: 2005 2004 Â£000 Â£000 ______ ______ Wages and salaries 10,072 8,261 Cost relating to Executive Directors' Performance Share Plan 380 195 Cost relating to 2004 Unapproved Share Plan 232 - Provision for national insurance on unexercised share options and 408 354 rights Social security costs 1,310 895 Pension costs 689 457 Other employment costs 263 128 ______ ______ 13,354 10,290 ===== ===== Details of directors' emoluments, pensions and share option entitlements are contained in the Remuneration Report. Details of directors' interests in the share capital of the Company are contained in the Report of the Directors. This information forms part of these financial statements. 4. Administrative expenses (continued) d) Staff numbers: The average number of persons employed by the Group during the year was as follows: 2005 2004 Number Number ______ ______ Property portfolio management and administration 61 57 Leisure operations 119 113 ______ ______ 180 170 ===== ===== 5. Net interest payable and other similar charges 2005 2004 Â£000 Â£000 ______ ______ Interest payable on bank loans and overdrafts 18,472 19,537 Interest payable on other loans 702 702 ______ ______ 19,174 20,239 Amortisation of financing costs 2,369 647 ______ ______ 21,543 20,886 Profit on termination of swap arrangements (722) - Interest capitalised (5,187) (3,249) Interest receivable (1,454) (830) ______ ______ Group interest charge 14,180 16,807 Share of joint venture and associate interest payable 1,689 1,375 ______ ______ 15,869 18,182 ===== ===== The amortisation of financing costs includes an amount of Â£1,890,000 (2004: Â£nil) written-off in respect of previously capitalised borrowing costs. These loan facilities were cancelled following their replacement by a new Â£475m Syndicated facility. Of the interest capitalised in the year, the amount capitalised to investment properties was Â£4,060,000 (2004: Â£2,815,000) and to trading properties Â£1,127,000 (2004: Â£434,000). Capitalised interest included within trading properties as at 31 March 2005 was Â£814,000 (2004: Â£434,000). The amount of capitalised interest relating to investment properties is shown in note 9. 6. Tax on profit on ordinary activities 2005 2004 Â£000 Â£000 ______ ______ UK Corporation tax on revenue profit for the year 1,535 1,261 Overseas taxation 86 100 ______ ______ Tax on current year revenue profit 1,621 1,361 Adjustments to prior years' UK Corporation tax 287 (307) ______ ______ 1,908 1,054 Deferred tax on origination and reversal of timing differences 446 (1,054) (note 17) ______ ______ 2,354 - ===== ===== Reconciliation of the taxation charge: Tax on revenue profit for the year at 30% (2004: 30%) 4,729 4,811 Capital allowances (2,709) (2,023) Use of prior year UK tax losses (5,406) (1,786) Use of surplus ACT (7,904) - Capitalised interest (1,246) (911) Use of losses and differing tax rates in respect of overseas 9 (1,077) results Disallowable expenditure 1,875 1,336 Profit on sale of investment properties 17,728 1,084 Property revaluation gains (3,952) (471) Capitalised expenses and other timing differences (1,503) 398 Adjustments to prior years' UK Corporation tax 287 (307) ______ ______ 1,908 1,054 ===== ===== The current year Corporation tax charge includes tax payable by the Group on its share of joint venture profits. 7. Dividends 2005 2004 Â£000 Â£000 ______ ______ Interim (paid): 2.75p (2004: 2.75p) per share 3,561 3,556 Final (proposed): 6.75p (2004: 6.00p) per share 8,700 7,757 2003 final dividend on staff share options exercised after the - 25 year end ______ ______ Total: 9.50p (2004: 8.75p) per share 12,261 11,338 ===== ===== 8. Earnings per share and net asset value per share a) Earnings per share 2005 2005 2005 2004 2004 2004 Profit for Weighted Earnings Profit for Weighted Earnings the per share the per financial average financial average share year number year number of shares of shares Â£000 000 pence Â£000 000 pence ______ _______ ______ ______ ______ ______ Basic 13,376 129,349 10.3 15,887 128,182 12.4 ===== ===== Adjustment in respect of 8% Convertible 168 2,000 168 2,000 unsecured loan stock (note 15) Adjustment in respect of employee - 1,031 - - share option arrangements ______ _______ ______ _______ Diluted 13,544 132,380 10.2 16,055 130,182 12.3 ===== ====== ===== ===== ====== ===== In 2004, employee share options did not have a dilutive effect on earnings per share. b) Net asset value per share 2005 2005 2005 2004 2004 2004 Net Number Net asset Net Number Net asset assets of shares value assets of shares value per share per share Â£000 000 pence Â£000 000 pence _______ _______ ______ ______ ______ ______ Basic 638,261 128,891 495 523,513 129,291 405 ===== ==== Adjustment in respect of 8% Convertible 3,000 2,000 3,000 2,000 unsecured loan stock (note 15) Adjustment in respect of employee 9,310 2,919 8,458 2,915 share option arrangements _______ _______ _______ _______ Diluted 650,571 133,810 486 534,971 134,206 399 ====== ====== ====== ====== ====== ==== The number of shares in issue in 2005 has been adjusted in both a) and b) for the 300,000 shares held by The Quintain Group Employee Benefit Trust (note 20). Entitlements under the Executive Directors' Performance Share Plan have been excluded from this calculation as these relate to both a) and b) above as the commitments relate to contingently issuable shares where the conditions had not been met at the balance sheet date. 9. Investment properties The movements in the year in investment properties were as follows: Group Freehold Long Short Total leasehold leasehold Â£000 Â£000 Â£000 Â£000 _______ _______ _______ _______ Cost or valuation: Balance 1 April 2004 614,637 165,658 17,401 797,696 Transfer to stocks: trading properties (900) - - (900) Foreign exchange movement 68 - - 68 Additions 83,049 26,781 1,343 111,173 Interest capitalised 3,982 78 - 4,060 Disposals (194,282) (83,317) (4,075) (281,674) Short leasehold amortisation - - (450) (450) Other property amortisation (197) - - (197) Impairment - (425) - (425) Revaluation surplus attributable to Group 105,973 6,381 1,114 113,468 Revaluation surplus attributable to minority 57 - - 57 interest _______ _______ _______ _______ Balance 31 March 2005 612,387 115,156 15,333 742,876 ====== ====== ====== ====== Included within freehold investment properties is an operational property which has been valued at Â£16,000,000 (2004: Â£12,000,000) having regard to its trading potential and which is subject to annual depreciation. Of the additions shown above, Â£85,774,000 (2004: Â£54,966,000) related to acquisitions. The historical cost of the Group's investment properties as at 31 March 2005 was Â£455,964,000 (2004: Â£531,278,000) and includes capitalised interest of Â£9,533,000 (2004: Â£8,502,000). All the Group's properties were externally valued as at 31 March 2005 on the basis of market value by professionally qualified valuers in accordance with the Appraisal and Valuation Standards of the Royal Institution of Chartered Surveyors. The Group's land holdings in Greenwich, Silvertown and the Wembley Complex have been valued by Savills Commercial Limited. All other properties in the United Kingdom have been valued by Jones Lang LaSalle Limited, Christie & Co, CB Richard Ellis Limited, Tri Hospitality Consulting and Matthews and Goodman. Chateau Rouge, Lille, France has been valued by Savills. The proportion of investment properties valued by each valuer was as follows: 2005 2004 Â£000 % Â£000 % _______ _______ _______ _______ Savills Commercial Limited 376,150 50.7 216,400 27.1 Jones Lang LaSalle Limited 342,600 46.1 540,088 67.7 Other valuers 24,126 3.2 41,208 5.2 _______ _______ _______ _______ 742,876 100.0 797,696 100.0 ====== ====== ====== ====== Copies of the valuation reports of Jones Lang LaSalle and Savills Commercial Limited will be included in the full report and accounts. The figure quoted in the reports of Savills and Jones Lang LaSalle represents 100 percent of the valuation of properties of which the Group owns a share as well as Group occupied properties, properties held in associate undertakings and trading properties. Savills Commercial Limited, Jones Lang LaSalle and Christie & Co provide other professional and agency services to the Group. These organisations have confirmed that the total fees paid by the Group represent less than five percent of their total fee income in any year and that they have adopted policies for the regular rotation of suitably qualified personnel to perform these valuations. 10. Other tangible fixed assets Group Long Short Fixtures, Total leasehold leasehold fittings & property property equipment Â£000 Â£000 Â£000 Â£000 _______ _______ _______ _______ Cost: Balance 1 April 2004 - 825 1,093 1,918 Additions 8,838 12 157 9,007 _______ _______ _______ _______ Balance 31 March 2005 8,838 837 1,250 10,925 ====== ====== ====== ====== Depreciation: Balance 1 April 2004 - (640) (629) (1,269) Charge for the year - (183) (258) (441) _______ _______ _______ _______ Balance 31 March 2005 - (823) (887) (1,710) ====== ====== ====== ====== Net book value: 31 March 2005 8,838 14 363 9,215 ====== ====== ====== ====== 31 March 2004 - 185 464 649 ====== ====== ====== ====== The long leasehold and short leasehold properties were valued as at 31 March 2005 at Â£11,720,000 by Jones Lang LaSalle as professionally qualified valuers on the basis of market value and in accordance with the Appraisal and Valuation Standards of the Royal Institution of Chartered Surveyors. This valuation has not been incorporated in these figures. 10. Other tangible fixed assets (continued) Company Short Fixtures, Total leasehold fittings & property equipment Â£000 Â£000 Â£000 _______ _______ _______ Cost: Balance 1 April 2004 825 911 1,736 Additions 12 66 78 _______ _______ _______ Balance 31 March 2005 837 977 1,814 ====== ====== ====== Depreciation: Balance 1 April 2004 (640) (586) (1,226) Charge for the year (183) (184) (367) _______ _______ _______ Balance 31 March 2005 (823) (770) (1,593) ====== ====== ====== Net book value: 31 March 2005 14 207 221 ====== ====== ====== 31 March 2004 185 325 510 ====== ====== ====== 11. Fixed asset investments a) Investment in joint ventures Group Share of Advances Total net assets Â£000 Â£000 Â£000 _______ _______ _______ Balance 1 April 2004 8,791 22,500 31,291 Transfer from associates 1,293 - 1,293 Additions 1 23,121 23,122 Disposals (53) - (53) Share of profit 3,087 - 3,087 Distributions (3,117) - (3,117) Share of revaluation surplus 6,400 - 6,400 _______ _______ _______ Balance 31 March 2005 16,402 45,621 62,023 ====== ====== ====== The Group's interest in its principal joint ventures was as follows: % of equity Country of Main joint held incorporation venture partners _________ __________ __________ Meridian Delta Limited 49 United Kingdom Lend Lease Europe Limited Meridian Delta Dome Limited 49 United Kingdom Lend Lease Europe Limited Quercus Healthcare Property Unit Trust 26.5 Jersey Norwich Union Life & Pensions Limited 11. Fixed asset investments (continued) a) Investment in joint ventures The Group's share of the results of its principal joint venture operations was as follows: Quercus Meridian Other Group Delta joint share in ventures joint ventures Â£000 Â£000 Â£000 Â£000 _______ _______ _______ _______ Summarised profit and loss accounts Rental income 5,362 - - 5,362 Administrative expenses (754) - - (754) _______ _______ _______ _______ Operating profit 4,608 - - 4,608 Loss on sale of investment properties (22) - - (22) _______ _______ _______ _______ Profit before interest and taxation 4,586 - - 4,586 Net interest payable (1,499) - - (1,499) _______ _______ _______ _______ Profit before taxation 3,087 - - 3,087 ====== ====== ====== ====== Summarised statements of recognised gains and losses Profit retained for the year 3,087 - - 3,087 Share of unrealised surplus on investment properties 6,400 - - 6,400 _______ _______ _______ _______ Total gain 9,487 - - 9,487 ====== ====== ====== ====== Summarised balance sheets Investment properties at valuation 82,462 - - 82,462 Stocks: trading properties - 13,055 - 13,055 Other assets 4,037 2,031 384 6,452 _______ _______ _______ _______ Gross assets 86,499 15,086 384 101,969 Bank loans falling due after more than one (34,107) - - (34,107) year Other liabilities (4,277) (1,218) (344) (5,839) _______ _______ _______ _______ Net external assets 48,115 13,868 40 62,023 ====== ====== ====== ====== Represented by: Joint venture partners' capital 15,074 1,288 40 16,402 Joint venture partners' loans 33,041 12,580 - 45,621 _______ _______ _______ _______ Total investment 48,115 13,868 40 62,023 ====== ====== ====== ====== Investment properties held in Quercus were valued as at 31 March 2005 by Christie & Co, Chartered Surveyors, as professionally qualified valuers on the basis of market value and in accordance with the Appraisal and Valuation Standards of the Royal Institution of Chartered Surveyors. The Quercus joint venture has an accounting period ending on 31 December. The Group's share of its results for the remainder of the financial year has been based on its management accounts. 11. Fixed asset investments (continued) a) Investment in joint ventures Company Â£000 Transfer from associates 1,293 Additions in year 12,575 ______ Balance 31 March 2005 13,868 ===== b) Investment in associates Group Company Â£000 Â£000 _______ _______ Balance 1 April 2004 5,467 1,368 Transfer to joint venture undertakings (1,293) (1,293) Disposals (1,074) - Loan repayments (2,262) - Share of net profit 736 - Share of revaluation surplus 226 - _______ _______ Balance 31 March 2005 1,800 75 ====== ====== Property interests in associated undertakings were valued by Jones Lang LaSalle, Chartered Surveyors, as professionally qualified valuers, on the basis of market value and in accordance with the Appraisal and Valuation Standards of the Royal Institution of Chartered Surveyors. The Group's interest in its principal associate was as follows: % of Other equity member held _______ _______ Aqua Trust 50 Norwich Union Annuity Limited c) Other fixed asset investments Group Company Â£000 Â£000 ______ ______ Unquoted investments: Balance 1 April 2004 and 31 March 2005 188 - ===== ====== Subsidiaries: Balance 1 April 2004 - 311,195 Additions - 37,600 ______ _______ Balance 31 March 2005 - 348,795 ===== ====== Total 31 March 2005 188 348,795 ===== ====== Total 31 March 2004 188 311,195 ===== ====== The unquoted investments are shown at a directors' valuation which equals historical cost. 11. Fixed asset investments (continued) c) Other fixed asset investments The principal subsidiaries whose results are included in the Group financial statements were as follows: Principal activity % of equity % of equity held by held by Company Subsidiary _________________ ____________ ____________ Incorporated in the United Kingdom: Albion Properties Colchester Limited Property investment 100% Albion Properties Norwich Limited Property investment 100% Cadmus Investment Company Limited Property investment 100% Chesterfield Investments (No.1) Limited Property investment 100% Chesterfield Investments (No.5) Limited Property investment 100% Chesterfield (No.9) Limited Property investment 100% Chesterfield Properties Limited Property investment 100% Columbia Centre Holdings Limited Property investment 100% Comchester Properties Limited Property investment 100% Comgrove Properties Limited Property investment 100% Croydon Land Limited Property investment 100% Croydon Land (No.2) Limited Property investment 100% Croydon Properties Limited Property trading 100% The Crystal Peaks Investment Company Property investment 100% Limited English & Overseas Investments plc Property investment 100% English & Overseas Properties plc Property investment 100% Estates Property Investment Company Property investment 100% Limited Listed Offices Limited Property investment 100% Permitobtain Limited Property investment 100% Qhere Limited Property investment 100% Qoin Limited Property investment 100% Quaystone Properties Limited Property investment 100% Quintain (Holdings) Limited Property investment 100% Quintain (Manchester) Limited Property investment 100% Quintain Meridian Limited Property investment 100% Quintain (Oxford) Limited Property investment 100% Quintain (No.1) Limited Property investment 100% Quintain (No.6) Limited Property investment 100% Quintain (No.8) Limited Property investment 100% Quintain Services Limited Management 100% Quintain (Wembley) Limited Property investment 100% Quintain Wembley (Palace of Industries) Property investment 100% (No.1) Limited Quintain Wembley (Palace of Industries) Property investment 100% (No.2) Limited Quocumque Limited Property investment 100% Quondam Estates Investment Limited Property investment 100% Quondam Estates No.2 Limited Property investment 100% Tenstall Limited Property investment 100% Wembley (London) Limited Property investment 100% and provision of leisure facilities Incorporated in Guernsey: Quintain (Guernsey) Limited Property investment 100% Incorporated in France: Continental Investment Development s.a. Holding company 100% SCI Bureaux Du Chateau Rouge Property investment 95% Incorporated in the United States: Chesterfield Holdings Inc. Holding company 100% Chesterfield Investments Inc. Property investment 100% In France, the minority stake in SCI Bureaux Du Chateau Rouge is held by Lille Gestion. The French subsidiaries have accounting periods ending on 31 December. The Group's share of their results for the period 1 January 2005 to 31 March 2005 has been based on their management accounts. All companies operate principally in their countries of incorporation. A complete list of subsidiaries will be annexed to the next annual return delivered to the Registrar of Companies. 12. Debtors Group Group Company Company 2005 2004 2005 2004 Â£000 Â£000 Â£000 Â£000 ______ ______ ______ ______ Trade debtors 13,404 13,091 613 67 Amounts due under contracts for sale 8,419 4,306 - - Amounts due from subsidiary companies - - 30,569 - Other debtors 4,747 8,553 4,561 7,510 Other taxation and social security - - 353 408 Prepayments and accrued income 5,350 2,893 915 271 ______ ______ ______ ______ 31,920 28,843 37,011 8,256 ===== ===== ===== ===== 13. Short term investments Group Group Company Company 2005 2004 2005 2004 Â£000 Â£000 Â£000 Â£000 ______ ______ ______ ______ Treasury stock 19 19 - - ===== ===== ===== ===== The nominal value of the Treasury stock as at 31 March 2005 was Â£16,000 (2004: Â£16,000). 14. Creditors: amounts falling due within one year Group Group Company Company 2005 2004 2005 2004 Â£000 Â£000 Â£000 Â£000 _______ _______ _______ _______ Bank and other loans (secured) 88 60 - - Trade creditors 5,454 5,375 727 3,643 Other creditors 3,704 27,974 956 428 Amounts due to subsidiary undertakings - - - 66,817 Dividend proposed 8,700 7,757 8,700 7,757 Corporation tax payable 6,473 2,191 - - Other taxation and social security 4,821 2,665 2,761 199 Accruals and deferred income 18,055 15,565 9,558 1,171 _______ _______ _______ _______ 47,295 61,587 22,702 80,015 ====== ====== ====== ====== 15. Creditors: amounts falling due after more than one year Group Group Company Company 2005 2004 2005 2004 Â£000 Â£000 Â£000 Â£000 _______ ______ ______ ______ Bank and other loans (secured) 176,178 328,398 165,000 31,000 8% Convertible unsecured loan stock 3,000 3,000 3,000 3,000 10% First Mortgage debenture stock 2011 4,870 4,870 - - (secured) _______ ______ _______ ______ 184,048 336,268 168,000 34,000 Deferred finance costs (2,363) (1,874) (2,363) (271) _______ _______ ______ ______ 181,685 334,394 165,637 33,729 Other creditors 4,674 4,417 73 - _______ _______ ______ ______ 186,359 338,811 165,710 33,729 ====== ====== ===== ===== The loans are secured by floating charges over assets owned by subsidiary undertakings. The 8% unlisted Convertible unsecured loan stock is repayable on 1 April 2007. The loan stock is convertible at any time at the option of the holder into ordinary shares of the Company at a conversion price of 150p per share. The 10% First Mortgage debenture stock 2011 issued by Estates Property Investment Company Limited is secured by fixed and floating charges over the assets of the subsidiary undertaking and has a redemption value of Â£4,617,000. The premium over par arising from fair valuing the debenture on acquisition is amortised over its remaining life. Other creditors include an amount of Â£4,419,000 (2004: Â£4,169,000) which is secured on a property asset. 16. Borrowings a) Financial assets As at 31 March 2005, financial assets comprising cash balances were as follows: Group Group Company Company 2005 2004 2005 2004 Â£000 Â£000 Â£000 Â£000 _______ ______ ______ ______ Sterling 4,369 36,426 2,527 7,313 Euros 7,109 7,384 - - United States dollars 266 358 - - _______ ______ ______ ______ 11,744 44,168 2,527 7,313 ====== ====== ===== ===== b) Financial liabilities The Group is subject to interest rate, liquidity and foreign currency risks. The Group does not speculate in treasury products but uses these only to limit potential interest rate fluctuations. It usually borrows at floating rates of interest based on LIBOR and uses hedging mechanisms to achieve an interest rate profile where the majority of borrowings are fixed or capped. As at 31 March 2005, 92.4% (2004: 75.8%) of the Group's net debt was fixed or protected and the weighted average rate of debt was 6.7% (2004: 6.1%). The Group's policy is to finance its activities with equity and long term debt with a gearing target of 100%. The weighted average tenure of the Group's Sterling debt is 5 years (2004: 5 years). The Group borrows in the same currency as the assets being financed to minimise foreign currency risk. No currency derivatives are used. 16. Borrowings (continued) b) Financial liabilities The maturity profile of the Group's debt was as follows: 2005 2005 2005 2004 2005 2004 Bank loans Other Total Total Undrawn Undrawn and loans debt debt facilities facilities overdrafts Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 _______ _______ _______ _______ _______ _______ Up to one year 88 - 88 60 - - Between one and two years 6,897 - 6,897 53,952 - 635 Between two and five years 165,752 3,000 168,752 177,690 330,000 123,868 Over five years 3,529 4,870 8,399 104,626 - - _______ _______ _______ _______ _______ _______ 176,266 7,870 184,136 336,328 330,000 124,503 ====== ====== ====== ====== ====== ====== After taking account of interest rate swap arrangements, the risk profile of the Group's borrowings as at 31 March 2005 was as follows: 2005 2005 2005 2004 2004 2004 Fixed Floating Total debt Fixed Floating Total debt Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 _______ _______ _______ _______ _______ _______ Sterling 154,877 24,788 179,665 211,377 114,845 326,222 Euros 4,471 - 4,471 4,483 - 4,483 United States dollars - - - 5,623 - 5,623 _______ _______ _______ _______ ______ _______ 159,348 24,788 184,136 221,483 114,845 336,328 ====== ====== ====== ====== ===== ====== The interest rate profile of the Group's fixed rate debt was as follows: Percent 2005 2004 Â£000 Â£000 _______ _______ 4.0 - 5.0 4,471 98,983 5.0 - 6.0 147,007 67,007 6.0 - 7.0 - 42,000 7.0 - 8.0 7,870 13,493 _______ _______ 159,348 221,483 ====== ====== The weighted average rate and the weighted average period of the Group's fixed rate debt as at 31 March 2005 were as follows: 2005 2004 2005 2004 % % years years _____ _____ _____ _____ Sterling 5.6 5.4 9 5 Euros 4.7 4.7 1 2 United States dollars - 7.7 - 5 Group 5.6 5.5 8 5 ==== ==== ==== ==== 16. Borrowings (continued) b) Financial liabilities The fair value of the Group's financial liabilities as at 31 March 2005 was as follows: 2005 2005 2005 2004 Book value Fair Difference Difference / notional value principal Â£000 Â£000 Â£000 Â£000 _______ _______ _______ _______ Fixed rate debt 12,341 12,716 (375) (987) Interest rate swaps 147,007 151,878 (4,871) (6,048) _______ _______ _______ _______ 159,348 164,594 (5,246) (7,035) Forward rate swaps 60,000 63,405 (3,405) (1,340) _______ _______ _______ _______ 219,348 227,999 (8,651) (8,375) ====== ====== ====== ====== The fair values were calculated by J C Rathbone Associates as at 31 March 2005 and reflect the replacement values of the financial instruments used to manage the Group's exposure as at that date. The Group has taken advantage of the exemption under FRS 13 to exclude short term debtors and creditors from these disclosures. Its policies relating to financial instruments are set out in the accounting policies as described in note 1. The maturity profile of the Group's share of floating rate debt held within its joint ventures as at 31 March 2005 was as follows: 2005 2004 Â£000 Â£000 ______ ______ Between two and five years 34,107 23,195 ===== ===== Of this debt, Â£13,250,000 was subject to an interest rate swap at a fixed rate of 5.3% until October 2007 and Â£10,600,000 at 4.9% until January 2009. In 2004, Â£10,000,000 was fixed at 3.6% until October 2004. The remaining debt was borrowed at floating rates. 17. Provisions for liabilities and charges The movement in the year in provisions for liabilities and charges was as follows: Â£000 _____ Balance 1 April 2004 4,671 Amount charged to profit and loss account in the year (note 6) 446 ______ Balance 31 March 2005 5,117 ===== The provisions represent deferred tax comprising: 2005 2004 2005 2004 Provided Provided Not Not provided provided Â£000 Â£000 Â£000 Â£000 _____ ______ ______ ______ Timing differences 5,117 4,671 - - Revaluation surplus - - 57,214 40,069 _____ ______ ______ ______ 5,117 4,671 57,214 40,069 ==== ===== ===== ===== 18. Called up share capital Â£000 ______ Authorised: 200,000,000 shares of 25p each 50,000 ===== Allotted, called up and fully paid: In issue at 1 April 2004: 129,291,457 ordinary shares of 25p each 32,323 Issue of 324,291 shares under Staff Share Option Schemes at between 136p and 287p 81 Purchase and cancellation of 425,000 own shares at 525p (106) ______ In issue at 31 March 2005: 129,190,748 ordinary shares of 25p each 32,298 ===== The options exercised in the year were granted at a price which reflected their full market value. As at the year end, the following commitments to issue shares to employees under various arrangements remained outstanding: Date of grant Number of Exercise Exercise Exercise ordinary price period period shares per share from to ________ _________ _________ _________ Executive Directors' Performance Share Plan 26.09.03 1,000,000 - 26.09.12 27.09.12 ======= Staff Share Option Schemes Approved 06.08.97 11,344 136.0p 06.08.00 05.08.07 22.02.99 6,040 151.5p 22.02.02 21.02.09 13.06.00 29,151 155.3p 13.06.03 12.06.10 04.09.01 9,363 199.5p 04.09.04 03.09.11 17.06.02 30,660 271.0p 17.06.05 16.06.12 20.02.03 12,809 234.2p 20.02.06 19.02.13 13.06.03 117,000 287.0p 13.06.06 12.06.13 02.02.04 8,720 334.0p 02.02.07 01.02.14 13.09.04 129,191 460.0p 13.09.07 12.09.14 _________ 354,278 ======== Unapproved 13.06.00 225,168 155.3p 13.06.03 12.06.07 04.09.01 79,845 155.3p 04.09.04 03.09.08 04.09.01 230,575 199.5p 04.09.04 03.09.08 17.06.02 135,007 155.3p 17.06.05 16.06.09 17.06.02 37,761 199.5p 17.06.05 16.06.09 17.06.02 908,492 271.0p 17.06.05 16.06.09 20.02.03 31,946 234.2p 20.02.06 19.02.10 13.06.03 37,761 199.5p 13.06.06 12.06.10 13.06.03 19,373 271.0p 13.06.06 12.06.10 13.06.03 537,744 287.0p 13.06.06 12.06.10 _________ 2,243,672 ======== 2004 Unapproved Share Plan 13.06.03 27,311 25.0p 13.06.06 12.06.10 02.02.04 7,450 25.0p 02.02.07 01.02.14 02.02.04 10,551 25.0p 02.02.08 01.02.14 02.02.04 11,729 25.0p 02.02.09 01.02.14 13.09.04 264,283 25.0p 13.09.07 12.09.14 _________ 321,324 ======== Total 3,919,274 ======== 19. Reserves Group Share Revaluation Other Other Other Profit premium reserve capital capital capital and loss account reserves reserves reserves account Capital Merger Capital redemption reserve reserve reserve Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 _______ _______ _______ _______ _______ _______ Balance 1 April 2004 45,076 267,604 1,963 106,062 4,305 66,180 Premium on issue of shares less 1,499 - - - - (1,046) costs Purchase of own shares for - - 106 - - (2,243) cancellation Credit relating to Executive Directors' Performance Share Plan - - - - - 380 Credit relating to 2004 Unapproved Share Plan - - - - - 232 Surplus on revaluation of investment properties in: Group - 113,468 - - - - Joint ventures - 6,400 - - - - Associates - 226 - - - - Realisation of property revaluation gains of previous years - (75,953) - - - 75,953 Tax on realisation of revaluation - - - - - (3,952) surplus Foreign exchange movement - - - - - 127 Short leasehold amortisation - (139) - - - 139 Retained profit for the financial - - - - - 1,115 year _______ _______ _______ _______ _______ _______ Balance 31 March 2005 46,575 311,606 2,069 106,062 4,305 136,885 ====== ====== ====== ====== ====== ====== Company Share Other Other Profit premium capital capital and loss account reserves reserves account Capital Merger redemption reserve reserve Â£000 Â£000 Â£000 Â£000 _______ _______ _______ _______ Balance 1 April 2004 45,076 1,963 106,062 29,474 Premium on issue of shares less costs 1,499 - - - Purchase of own shares for cancellation - 106 - (2,243) Credit relating to Executive Directors' Performance Share Plan - - - 380 Credit relating to 2004 Unapproved Share Plan - - - 232 Retained profit for the financial year - - - 777 ______ ______ _______ _______ Balance 31 March 2005 46,575 2,069 106,062 28,620 ====== ====== ====== ====== As permitted by section 230 of the Companies Act 1985, the profit and loss account of the Company is not presented as part of these financial statements. The profit for the year attributable to shareholders dealt with in the financial statements of the Company was Â£13,038,000 (2004: Â£11,697,000). In accordance with UITF 17, Employee Share Schemes, the cost in the year relating to the Executive Directors' Performance Share Plan and the 2004 Unapproved Share Plan has been charged in the profit and loss account and credited to reserves in the balance sheet. 20. Investment in own shares Group and Company 2005 2004 Â£000 Â£000 ______ _____ 300,000 Ordinary shares of 25p in Quintain Estates and Development PLC at cost 1,539 - ===== ===== The Trustee has waived the right to receive dividends, except for a nominal amount on the shares held in the Plan. As at 31 March 2005, these shares had a market value of Â£1,590,000. 21. Capital commitments As at 31 March 2005, the Group had capital commitments of Â£84,410,000 (2004: Â£21,637,000) in relation to its own properties and Â£17,690,000 (2004: Â£11,950,000) in relation to its joint ventures. The Company had no capital commitments (2004: Â£nil). 22. Commitments under operating leases As at 31 March 2005, annual commitments under non-cancellable operating leases in respect of land and buildings were as follows: Group Group Company Company 2005 2004 2005 2004 Â£000 Â£000 Â£000 Â£000 _______ ______ ______ ______ Operating leases which expire: 28 30 28 30 Within one year 235 - 235 - In two to five years 73 235 12 235 Over five years _______ ______ ______ ______ 336 265 275 265 ====== ====== ===== ===== 23. Contingent liabilities The Company has guaranteed the obligations of a jointly administered company, Countryside Properties (Merton Abbey Mills) Limited, in respect of cost and interest overruns arising in connection with a secured bank facility up to a limit of Â£4,575,000. 24. Related party disclosures During the year, the Group received fees amounting to Â£1,364,000 (2004: Â£1,151,000) from the Quercus Property Partnership of which Â£332,000 (2004: Â£31,000) was outstanding at the year end and Â£430,000 (2004: Â£114,000) from the Quart Limited Partnership of which Â£388,000 (2004: Â£96,000) was outstanding at the year end. These fees are in respect of services provided and are included in Other income as shown in note 2. Other amounts due from joint venture undertakings as at 31 March 2005 are shown in note 11a. 25. Notes to the Consolidated Cash Flow Statement a) Reconciliation of group operating profit to net cash inflow from group operating activities 2005 2004 Â£000 Â£000 _______ _______ Group operating profit 20,543 24,446 Depreciation charge 1,088 1,470 Profit on sale of fixed assets - (18) Cost relating to Executive Directors' Performance Share Plan 380 195 Cost relating to 2004 Unapproved Share Plan 232 - Decrease (increase) in debtors 4,147 (734) Decrease in creditors (7,569) (1,746) Decrease (increase) in trading properties 2,814 (16,957) Impairment of investment property 425 - _______ _______ Net cash inflow from group operating activities 22,060 6,656 ====== ====== 25. Notes to the Consolidated Cash Flow Statement (continued) b) Reconciliation of net cash flow movement to net debt 2005 2004 Â£000 Â£000 _______ ________ Decrease in cash in the year (6,849) (649) Cash outflow (inflow) from debt and lease financing 152,315 (37,212) Cash (inflow) outflow from movement in liquid resources (25,772) 22,703 _______ _______ Change in net debt resulting from cash flows 119,694 (15,158) Costs of issue of non-equity finance 2,858 389 Amortisation of issue costs (2,369) (647) Other non-cash movements 74 1,023 _______ _______ Movement in net debt in the year 120,257 (14,393) Net debt, beginning of year (290,267) (275,874) _______ _______ Net debt, end of the year (170,010) (290,267) ====== ======= c) Analysis of net debt As at Cash flow Other As at 1 April 31 March 2004 2005 Â£000 Â£000 Â£000 Â£000 ________ ______ _____ ________ Liquid resources 26,074 (25,772) - 302 Cash 18,113 (6,849) 197 11,461 Debt due after more than one year (334,394) 152,343 366 (181,685) Debt due within one year (60) (28) - (88) ________ _______ ______ ________ (290,267) 119,694 563 (170,010) ======= ====== ===== ======= Liquid resources consist of short term investments and cash which is not available on demand. 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