Final Results
Pendragon PLC
09 February 2006
FOR IMMEDIATE RELEASE 9 February 2006
PRELIMINARY RESULTS TO 31 DECEMBER 2005
Pendragon PLC, the UK's largest car dealership group, today reports preliminary
results for the twelve months to 31 December 2005.
Highlights:
• Turnover £3.3 billion (2004 £3.2 billion)
• Operating margin pre exceptionals 3.0% (2004 2.8%)
• Profit before tax and exceptional items up 11.7% to £59.3 million (2004 £53.1 million)
• Adjusted earnings per share up 11.3% to 33.4p (2004 30.0p)
• Dividend up 29.4% to 13.2p (2004 10.2p)
• Gearing 70% (2004 112%)
• Successful completion of the integration of CD Bramall
Trevor Finn, Chief Executive, commented:
'We have had a successful year in 2005, not only in respect of our good
financial results, but also in completing the integration of the CD Bramall
business ahead of schedule, creating partnerships with manufacturers previously
not represented and strengthening our balance sheet.
We are looking forward to a year of new challenges and believe that we can take
the business forward in 2006 and retain our position as the clear leader in the
industry.'
Enquiries:
Pendragon PLC Trevor Finn, Chief Executive Tel: 01623 725114
David Forsyth, Finance Director
Finsbury Rupert Younger Tel: 0207 2513801
Gordon Simpson
Introduction
We have had a successful year in 2005, not only in respect of our good financial
results, but also in completing the integration of the CD Bramall business ahead
of schedule, creating partnerships with manufacturers previously not represented
and strengthening our balance sheet. We added 50 franchises at 20 locations in
2005, of which 25 of the franchises are on greenfield sites. The achievement of
our objectives, in a year when the new car market was down by five per cent,
underlines the strength in depth of our management team and the robustness of
our business model.
Results and dividend
Group sales, for the year ended 31 December 2005, have risen to £3.3 billion
compared to £3.2 billion in 2004. Profit before tax and exceptionals is up by
11.7 per cent to £59.3 million from £53.1 million in 2004. Earnings per share on
this basis increased 11.3 per cent to 33.4 pence. On a statutory basis,
including exceptionals and goodwill impairment, pre tax profit was £63.8 million
and earnings per share were 34.8 pence.
The proposed final dividend of 6.6 pence, together with the interim dividend of
6.6 pence, gives a full year dividend of 13.2 pence, an increase of 29.4 per
cent. The uplift in the dividend reflects both the confidence the board has in
the future prospects of the Group and the step up in the earnings capacity after
the major acquisition made in 2004.
We reduced net debt in the year by £69.8 million to £177.0 million which
represents gearing of 70 per cent. We have managed our cash well during the year
and at the same time taken advantage of investment opportunities in new
businesses. We have clearly shown over the past two years that we have, as with
previous major acquisitions undertaken with debt, controlled the enlarged
business and generated the cash to reduce our debt quickly.
Our strategy is to continue to grow with the manufacturers we currently
represent and to introduce new brands where we believe this to be in line with
our long term plans. We have an integrated business model, industry leading
management information across each of our franchise focused groups and
innovative activities in our customer services centre, all of which are
delivering benefits to the business.
Operational review
The good results we have delivered this year are particularly pleasing against a
backdrop of a less buoyant UK new car market. We also made excellent progress
with our new Pinnacle dealer management system with over 100 implementations in
the group during the year.
The integration of CD Bramall was completed during the year and, the acquisition
finance to buy the shares of approximately £230.0 million, which was put in
place at the beginning of 2004, has now been repaid in line with our plan.
We have made a number of acquisitions and greenfield start ups in 2005, most of
which occurred in the second half. Although these have been dilutive overall,
they have enabled us to build relationships with manufacturers not already
represented.
Summary Financial Statement
£m 2005 2004
------------------------------------------------------------------------------
Turnover 3,284.5 3,168.2
Underlying operating profit 98.8 87.7
Exceptional operating costs (2.9) (6.6)
Operating profit before other income 95.9 81.1
Other income - gain on sale of fixed assets 7.4 18.9
Operating profit 103.3 100.0
Finance costs / share of JV (39.5) (34.6)
Profit before tax 63.8 65.4
Earnings per share - basic 34.8p 37.1p
Earnings per share - adjusted 33.4p 30.0p
Dividend per share 13.2p 10.2p
------------------------------------------------------------------------------
Underlying operating profit of £98.8 million (2004: £87.7 million) less interest
of £39.5 million (2004: £34.6 million) gives profit before tax and exceptionals
of £59.3 million (2004: £53.1 million), an increase of 11.7 per cent.
Trading Environment
The UK market experienced a five per cent fall in new car registrations with the
total market standing at just above 2.4 million cars. The private retail market
suffered the most, down 10 per cent, reflecting the weaker economy. Sales to the
lower margin fleet and business sectors were down just 0.3 per cent.
The strong demand seen in recent years for commercial vehicles also tailed off
with an overall reduction in units registered of one per cent. The reduction was
entirely in the light commercial van sector which accounts for over 80 per cent
of registrations in this market. Registrations of trucks rose 4.5 per cent
although this was mostly achieved in the first half of the year.
Overall the US market remained stable with sales of cars and light trucks up by
0.5 per cent to almost 17.0 million. New car sales were mixed in respect of the
range of brands we currently represent in California; Land Rover, Mercury and
SAAB improved, whilst Jaguar, Aston Martin and Lincoln sold fewer units. In
Germany the market for the products we sell remained weak. Jaguar registrations
fell almost 20 per cent, Land Rover was broadly static year on year and Aston
Martin increased albeit from a very small base.
The principal activity of our business is the sale and servicing of motor
vehicles. We also operate a number of commercial vehicle dealerships. Within the
business there are distinct areas of activity; new vehicle sales, used vehicle
sales, aftersales and support services. In 2005 new vehicle sales accounted for
30 per cent of gross profit, used car sales for 18 per cent, aftersales 43 per
cent and support services 9 per cent.
Motor Vehicle Retail Business
We have businesses in three of the largest car markets, UK, USA and Germany. The
business in the UK accounted for 94.7 per cent of our underlying operating
profits in 2005.
UK
We own and operate 275 franchised dealers from 219 sites in the UK. This
includes 25 commercial vehicle dealerships. We have a national network of
dealerships from Scotland to the south coast of England with a diverse portfolio
of franchises consisting of specialist, luxury, volume and commercial vehicles.
During the year we undertook a rebranding of the UK dealerships. Our volume
dealerships have been branded as Evans Halshaw whilst the premium marques are
now trading under the name Stratstone. We believe that there are benefits in
terms of marketing and advertising in having two distinct brands, each of which
has sufficient scale throughout the UK. This enables marketing and advertising
expenditure to be more specifically targeted and facilitates the use of other
media such as television which has previously not been cost effective.
Our premium brands include Aston Martin, BMW, Ferrari, Jaguar, Land Rover,
Maserati, Mercedes-Benz, Mini, Porsche, Saab and Volvo. In 2005 we have added
Cadillac, Honda and Alfa Romeo franchises. In total, specialist and luxury
franchises represent 47 per cent of our portfolio.
The principal volume franchises are Ford and Vauxhall. We also represent
Peugeot, Citroen, Hyundai and Nissan. During the year we added Kia and Fiat to
the volume franchises we represent.
Commercial vehicle franchises include DAF, Iveco, LDV and Mitsubishi. We also
have five sites selling Harley-Davidson and Japanese motorcycles.
Revenue Gross Profit Gross Margin Underlying Underlying
£m % Operating Profit Operating Margin %
-----------------------------------------------------------------------------------------------------
Existing 2,832.0 377.9 13.3 81.7 2.9
Acquired 58.2 8.1 13.9 (2.1) (3.7)
Disposed 65.4 10.6 16.2 0.4 0.6
Total 2005 2,955.6 396.6 13.4 80.0 2.7
Total 2004 2,881.8 388.7 13.5 70.3 2.4
-----------------------------------------------------------------------------------------------------
Revenue has increased by £73.8 million. After eliminating the impact of the
acquisitions and disposals we have made over the last 24 months, revenue on a
like for like basis in the UK is down 2.7 per cent which is broadly in line with
the reduction in UK new car sales.
The underlying operating margin on existing businesses has moved ahead to 2.9
per cent compared to 2.7 percent in 2004. The underlying operating profit
includes an operating loss of £2.3 million versus a profit of £2.0 million for
2004 in respect of our MG Rover business. Excluding the MG Rover losses our
existing dealership underlying operating margin would have been 3.0 per cent.
All our MG Rover sites have now either been closed, with a view to disposing of
the property, or refranchised where we expect the contribution from these sites
to be positive in 2006.
Of the premium brands Aston Martin, Jaguar and Porsche again had a good year. We
improved results in our Mercedes-Benz group which had been disrupted in the
previous year due to a number of site relocations. Land Rover was up on the
previous year with the introduction of the Range Rover Sport which has proved to
be very popular in the 4x4 sector. We opened eight Cadillac sites during the
year. Although the volume of Cadillac sales has been low in 2005 we anticipate
that the new small Cadillac, which arrives this year, will help establish the
brand and move our Cadillac business towards break even by the end of the year.
We now operate 12 sales points for the brand and anticipate this to grow to 18
by the end of this year. Other premium brand franchise points acquired were Alfa
Romeo, Honda, Jaguar, Lotus, SAAB and Volvo.
Sales volumes in our Ford business were down year on year. In addition, margins
have been squeezed due to the lower demand and the over supply situation in the
national network for the majority of the year. Levels of stocks have now come
down and this we believe will help improve returns for us in this brand in 2006.
During the year we disposed of Ford dealerships in Exeter and Torquay, which
lost £0.3 million in the first eight months of the year. Similar to Ford, the
volume of sales for Vauxhall declined year on year, although not to the same
extent. Margins in this business were also under pressure in the year. Of our
other volume brands we were pleased with the performance of our Peugeot
dealerships which improved profits against the prior year.
We opened or acquired 20 volume franchises in the year. These represented
Citroen, Fiat, Hyundai, Kia and Vauxhall and in a number of cases have replaced
the MG Rover sales points. The new businesses, both premium and volume,
contributed revenue of £58.2 million with an operating loss of £2.1 million. The
loss reflects the start up nature of many of the additions plus they
predominantly came on stream towards the end of the second half of the year when
new car sales are at their lowest.
We remain one of the biggest commercial vehicle retailers in the UK and, against
the background of another strong market, we saw the performance of this group
move forward in the year with sales ahead of the previous year on a like for
like basis. In June we sold our Mercedes-Benz trucks business which prior to
sale made operating profits of £1.4 million (2004: £2.3 million).
Prior to disposal or closure Exeter and Torquay Ford, Mercedes Trucks and MG
Rover contributed revenue of £65.4 million and an operating profit of £0.4
million.
USA
We have again moved the profitability of our US business forward compared to the
prior year. In addition to the cost savings we made in 2004, we have had a more
successful year with Land Rover. Range Rover and Range Rover Sport models
continue to be very popular in the southern California market.
Revenue Gross Profit Gross Margin % Underlying Underlying
£m Operating Profit Operating Margin %
--------------------------------------------------------------------------------------------
Existing 196.2 31.3 15.9 7.7 3.9
Acquired 21.3 2.3 10.8 (0.7) (3.3)
Total 2005 217.6 33.6 15.4 7.0 3.2
Total 2004 170.0 28.9 17.0 6.1 3.6
Revenue has increased £26.2 million at our existing dealers with Land Rover
sales in Los Angeles, Newport Beach and Mission Viejo making the biggest
contribution. Gross margins have fallen, mainly due to a number of large fleet
deals for Lincoln Mercury products which were dilutive and also due to weaker
demand for Jaguar products. The underlying operating margin has improved to 3.9
per cent.
Two SAAB dealerships were acquired in January 2005. These contributed revenue of
£21.3 million and an operating loss of £0.7 million. We now operate twelve
franchises from nine locations in southern California. The portfolio of brands
consists of Jaguar, Land Rover, Aston Martin, SAAB, Lincoln and Mercury. Whilst
the portfolio remains concentrated on a few brands, we are continuing with our
plan to introduce other franchises as we move the business forward.
Germany
The performance of our German businesses continues to be disappointing. In total
we operate five sites in Munich and Frankfurt with ten franchises: five Jaguar,
three Land Rover and two Aston Martin.
In comparative terms it is a small part of the group contributing just over 1
per cent of revenue and an underlying operating loss of £1.8 million (2004: loss
of £2.1 million).
Support Services
We provide a broad range of support services to both the Pendragon group and to
outside customers. The services are provided by a number of specialist
businesses, which principally comprise:
• Contract hire and leasing
• Computer software solutions
• Wholesale parts distribution
• Shared services (Loxley House)
Revenue Gross Profit Gross Margin % Underlying Underlying
£m Operating Profit Operating Margin %
---------------------------------------------------------------------------------------------
Total 2005 143.5 41.6 29.0 13.6 9.5
Total 2004 144.9 36.3 25.0 13.4 9.2
Contract Hire and Leasing
Our contract hire and leasing business made an
operating profit of £6.1 million (2004: £6.0 million). The total fleet size at
the year end was eleven thousand vehicles compared to twelve thousand at the end
of 2004. We have combined the back office functions of Bramall Contracts and
Pendragon Contracts which will lead to improved efficiency in the operation of
our contract hire and leasing business.
Pinewood Technologies
Pinewood is responsible for the computer and telecoms network for the group as
well as providing services to third party customers. The focus of activity in
the year for Pinewood has, like last year, been the development, sale and
installation of the new dealer management system, Pinnacle. We now have 128 of
our dealerships on the new Pinnacle system and plan to have a further 72 on the
system by the end of this year. Demand from external customers has continued to
grow. Also within Pinewood Technologies is CFC, which provides software
solutions for the management of small fleets, contract hire and workshops.
Shared Services
During the year we continued to expand the call centre activities. Customer
prospecting services for our Citroen and SAAB businesses were introduced and we
centralised the warranty claims handling function for our BMW business. We
started to incorporate our Mercedes-Benz businesses into the call centre model
towards the end of the year and will complete this in the first half of 2006.
International Financial Reporting Standards
Up to December 2004 Pendragon reported its results under UK Generally Accepted
Accounting Principles (UK GAAP). Following adoption of Regulation 1606/2002 by
the European Parliament in July 2002 all EU listed companies are required to
report their consolidated financial statements under International Financial
Reporting Standards (IFRS) for accounting periods beginning on or after 1
January 2005. These accounts are the group's first annual report under IFRS and
the comparatives have been restated in line with the new policies. The changes
arising with the adoption of IFRS to the income statement are relatively
insignificant, whilst the net assets of the group increased by £34.7 million as
at 1 January 2004 with a restatement in the value of property which is in part
offset by the pension fund deficit that has been recognised and an increase in
the deferred tax liability of the group. A full report detailing the changes to
Pendragon accounting policies and their financial effect was published on 22
July 2005 and is available on the company's website
(http://www.pendragonplc.com).
The principal changes the group has made to its accounting policies on adoption
of IFRS to those presented in the financial statements for the year ended
31 December 2004 are as follows:
a) Tangible fixed assets - land and buildings have been restated to fair value
as at 1 January 2004.
b) Employee share options - the fair value of the options granted to employees
are expensed to the income statement.
c) Goodwill - is no longer amortised but is tested instead for impairment at
least once a year.
d) Intangible assets - are recognised on acquisition if they can be separately
identified and reliably measured.
e) Dividends - final dividends recognised once approved at AGM or interim
dividends when approved by directors.
f) Deferred tax - provided in full including capital gains that have been rolled
over.
g) Leases - buildings are treated as fixed assets if they are long term and all
the risks and rewards have substantially transferred to the group.
h) Revenue recognition - contract hire vehicles remain on balance sheet as fixed
assets if the group has a future repurchase commitment. Profit is spread over
the period of the lease.
i) Employee pensions - the full deficit on the pension schemes is recognised on
balance sheet, and future costs will be calculated in accordance with the
'corridor' approach.
j) Financial instruments - assets and liabilities of financial derivatives are
recognised on balance sheet.
k) Inventories - stocks held on the balance sheet has been restated to include
all vehicles invoiced to the group including those that are on interest free
stocking plans. Under the previous treatment interest free vehicles were not
included in the balance sheet total.
Outlook
Last year we achieved our integration goals with CD Bramall and repaid the debt
we incurred to buy that business and dealt with the closure of MG Rover. The new
car market in the UK was less buoyant than the previous year and therefore
profits more difficult to achieve.
January 2006 new car registrations in the UK were down by 13.3 per cent compared
to 2005. Some of the January fall can be attributed to the higher than normal
registrations of diesel cars in December 2005. Industry forecasts are for a UK
car market down just under three per cent for the whole of this year and a
decline of 5 per cent would be our current view.
We are looking forward to a year of new challenges and believe that we can take
the business forward in 2006 and retain our position as the clear leader in the
industry.
Consolidated Income Statement
Year ended 31 December 2005
2005 2004
£m £m
-------------------------------------------------------------------------------
Revenue 3,284.5 3,168.2
Cost of sales (2,816.8) (2,718.1)
-------------------------------------------------------------------------------
Gross profit 467.7 450.1
Operating expenses (371.8) (369.0)
-------------------------------------------------------------------------------
Operating profit before other income 95.9 81.1
-------------------------------------------------------------------------------
Operating profit before other income, analysed as:
Before exceptional items 98.8 87.7
Goodwill impairment (1.1) (1.9)
Closure and integration costs (1.8) (4.7)
-------------------------------------------------------------------------------
Operating profit before other income 95.9 81.1
-------------------------------------------------------------------------------
Other income - gains on the sale of businesses and property 7.4 18.9
-------------------------------------------------------------------------------
Operating profit 103.3 100.0
Finance costs (54.9) (45.9)
Finance income 15.3 11.3
-------------------------------------------------------------------------------
Net finance costs (39.6) (34.6)
Share of post tax profit from joint venture 0.1 -
-------------------------------------------------------------------------------
Profit before taxation 63.8 65.4
Income tax expense (20.7) (19.7)
-------------------------------------------------------------------------------
Profit for the year attributable to equity shareholders 43.1 45.7
-------------------------------------------------------------------------------
Basic earnings per ordinary share 34.8p 37.1p
Diluted earnings per ordinary share 33.9p 36.0p
Consolidated Balance Sheet
At 31 December 2005
2005 2004
£m £m
-------------------------------------------------------------------------------
Non-current assets
Property, plant and equipment 394.0 471.8
Goodwill 166.3 172.8
Other intangible assets 1.2 1.6
Derivative financial instruments 6.5 -
Deferred tax assets 29.6 30.0
Investment in joint venture 1.4 -
-------------------------------------------------------------------------------
Total non-current assets 599.0 676.2
-------------------------------------------------------------------------------
Current assets
Inventories 641.8 654.2
Trade and other receivables 161.6 135.8
Cash and cash equivalents 82.1 114.3
Non current assets classified as held for sale 18.9 -
-------------------------------------------------------------------------------
Total current assets 904.4 904.3
-------------------------------------------------------------------------------
Total assets 1,503.4 1,580.5
-------------------------------------------------------------------------------
Current liabilities
Bank overdrafts (4.7) -
Interest bearing loans and borrowings (5.5) (72.4)
Trade and other payables (855.5) (864.5)
Current tax payable (19.1) (18.5)
Provisions (0.7) (0.6)
-------------------------------------------------------------------------------
Total current liabilities (885.5) (956.0)
-------------------------------------------------------------------------------
Non-current liabilities
Interest bearing loans and borrowings (255.4) (288.7)
Deferred tax liabilities (37.3) (35.5)
Retirement benefit obligations (71.4) (78.3)
Provisions (1.2) (1.6)
-------------------------------------------------------------------------------
Total non-current liabilities (365.3) (404.1)
-------------------------------------------------------------------------------
Total liabilities (1,250.8) (1,360.1)
-------------------------------------------------------------------------------
Net assets 252.6 220.4
-------------------------------------------------------------------------------
Capital and reserves
Called up share capital 32.8 32.8
Share premium account 56.8 56.8
Capital redemption reserve 2.5 2.5
Other reserves 12.6 12.6
Translation reserve (0.1) (0.3)
Retained earnings 148.0 116.0
-------------------------------------------------------------------------------
Total equity 252.6 220.4
-------------------------------------------------------------------------------
Consolidated Cash Flow Statement
Year ended 31 December 2005
2005 2004
£m £m
-------------------------------------------------------------------------------
Cash flow from operating activities
Profit after taxation 43.1 45.7
Adjustment for income from joint venture (0.1) -
Adjustment for taxation 20.7 19.7
Adjustment for interest 39.6 34.6
-------------------------------------------------------------------------------
Operating profit 103.3 100.0
Depreciation and amortisation 47.5 58.7
Share based payments 0.4 0.3
Profit on sale of businesses and property (7.4) (18.9)
Goodwill impairment 1.1 1.9
Changes in inventories (8.4) (9.8)
Changes in trade and other receivables (28.4) 24.2
Changes in trade and other payables 22.6 30.1
Changes in provisions (0.3) 0.9
-------------------------------------------------------------------------------
Cash generated from operations 130.4 187.4
Taxation paid (16.6) (19.3)
Interest received 1.3 0.5
Interest paid (44.5) (26.9)
-------------------------------------------------------------------------------
Net cash from operating activities 70.6 141.7
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Cash flows from investing activities
Business acquisitions (35.1) (232.5)
Proceeds from sale of businesses 16.2 17.9
Purchase of investment in joint venture (6.5) -
Purchase of property, plant and equipment (154.4) (132.5)
Proceeds from sale of property, plant and equipment 193.5 133.3
Receipts from sales of own shares 0.3 0.8
-------------------------------------------------------------------------------
Net cash used in investing activities 14.0 (213.0)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Cash flows from financing activities
Payment of capital element of finance lease rentals (1.0) (11.4)
Repayment of unsecured bank loans (73.2) (92.2)
Repayment of loan notes (32.7) (0.5)
Proceeds from the issue of unsecured loans - 294.6
Dividends paid to shareholders (15.6) (9.8)
-------------------------------------------------------------------------------
Net cash (outflow) / inflow from financing activities (122.5) 180.7
-------------------------------------------------------------------------------
Effects of exchange rate changes on cash held 1.0 (0.3)
-------------------------------------------------------------------------------
Net (decrease) / increase in cash and cash equivalents (36.9) 109.1
Opening cash and cash equivalents 114.3 5.2
-------------------------------------------------------------------------------
Closing cash and cash equivalents 77.4 114.3
-------------------------------------------------------------------------------
Group Consolidated Statement of Changes in Equity
Capital
Share Share redemption Other Translation Retained Total
capital premium reserve reserves reserve earnings
£m £m £m £m £m £m £m
---------------------------------------------------------------------------------------------------------------
Balance at 1 January 2004 32.8 56.8 2.5 12.6 - 77.1 181.8
---------------------------------------------------------------------------------------------------------------
Currency translation differences - - - - (0.3) - (0.3)
Share based payments - - - - - 2.2 2.2
---------------------------------------------------------------------------------------------------------------
Net expense recognised directly
in equity - - - - (0.3) 2.2 1.9
Profit attributable to equity
shareholders - - - - - 45.7 45.7
---------------------------------------------------------------------------------------------------------------
Total recognised income and expense
for 2004 - - - - (0.3) 47.9 47.6
---------------------------------------------------------------------------------------------------------------
Dividends - - - - - (9.8) (9.8)
Disposal of own shares in share trusts - - - - - 0.8 0.8
---------------------------------------------------------------------------------------------------------------
- - - - - (9.0) (9.0)
---------------------------------------------------------------------------------------------------------------
Balance at 31 December 2004 32.8 56.8 2.5 12.6 (0.3) 116.0 220.4
Adoption of IAS 39 - - - - - 0.4 0.4
---------------------------------------------------------------------------------------------------------------
Balance at 1 January 2005 32.8 56.8 2.5 12.6 (0.3) 116.4 220.8
Currency translation differences - - - - 0.2 - 0.2
Share based payments - - - - - 3.8 3.8
---------------------------------------------------------------------------------------------------------------
Net expense recognised directly in
equity - - - - 0.2 3.8 4.0
Profit attributable to equity
shareholders - - - - - 43.1 43.1
---------------------------------------------------------------------------------------------------------------
Total recognised income and expense
for 2005 - - - - 0.2 46.9 47.1
---------------------------------------------------------------------------------------------------------------
Dividends - - - - - (15.6) (15.6)
Disposal of own shares in share trusts - - - - - 0.3 0.3
---------------------------------------------------------------------------------------------------------------
- - - - - (15.3) (15.3)
---------------------------------------------------------------------------------------------------------------
Balance at 31 December 2005 32.8 56.8 2.5 12.6 (0.1) 148.0 252.6
---------------------------------------------------------------------------------------------------------------
Notes to the Preliminary Statements
1. Dividends
Subject to final approval at the Annual General Meeting, the final dividend
of 6.6p per share (2004 : 6.0p) will be paid on 2 May 2006 to shareholders
appearing on the register at the close of business on 31 March 2006. An
interim dividend of 6.6p per share (2004 : 4.2p) was paid in October 2005 which
makes a total of 13.2p (2004 : 10.2p) for the financial year.
2. Earnings per share
---------------------------------------------------------------------------
2005 2005 2004 2004
Earnings per Total Earnings per Total
share share
pence £m pence £m
---------------------------------------------------------------------------
Basic earnings per share 34.8 43.1 37.1 45.7
Adjusting items:
Profit on business and (6.0) (7.4) (15.4) (18.9)
property disposals
Goodwill impairment 0.9 1.1 1.5 1.9
Operating exceptional 1.5 1.8 3.8 4.7
costs
Tax effect of adjusting items 2.2 2.8 3.0 3.5
---------------------------------------------------------------------------
Adjusted earnings per share 33.4 41.4 30.0 36.9
---------------------------------------------------------------------------
Diluted earnings per share 33.9 43.1 36.0 45.7
---------------------------------------------------------------------------
The calculation of basic, adjusted and diluted earnings
per share is based on the following number of shares in
issue (millions)
2005 2004
number number
---------------------------------------------------------------------------------------------
Weighted average number of ordinary shares in issue 123.9 123.0
Weighted average number of dilutive shares under option 3.4 3.9
---------------------------------------------------------------------------------------------
Weighted average number of shares in issue taking
account of applicable outstanding share options 127.3 126.9
---------------------------------------------------------------------------------------------
The directors consider that the adjusted earnings per share figures provides
a better measure of comparative performance.
3. Finance costs
2005 2004
£m £m
--------------------------------------------------------------------------------
Interest payable on bank borrowings 11.1 13.2
Interest payable on loan notes 8.9 8.6
Vehicle stocking plan interest 18.6 9.4
Interest payable on finance leases 0.1 0.4
Unwinding of discounts in contract
hire residual values 2.5 2.9
Interest on pension scheme obligations 13.8 11.6
--------------------------------------------------------------------------------
55.0 46.1
Less : interest capitalised (0.1) (0.2)
--------------------------------------------------------------------------------
54.9 45.9
--------------------------------------------------------------------------------
4. Finance income
2005 2004
£m £m
--------------------------------------------------------------------------------
Fair value gains - interest rate swaps 0.4 -
Interest receivable on bank deposits 0.8 0.5
Interest on pension scheme assets 13.6 10.8
Other interest receivable 0.5 -
--------------------------------------------------------------------------------
15.3 11.3
--------------------------------------------------------------------------------
5. Cash and cash equivalents
2005 2004
£m £m
--------------------------------------------------------------------------------
Bank balances and cash equivalents 82.1 114.3
Bank overdrafts (4.7) -
--------------------------------------------------------------------------------
77.4 114.3
--------------------------------------------------------------------------------
6. Net debt
2005 2004
£m £m
--------------------------------------------------------------------------------
Cash and cash equivalents (see note 5) 77.4 114.3
Current borrowings (4.0) (71.3)
Non-current borrowings (253.4) (285.3)
Derivative financial instruments held under
fair value hedges of debt instruments 6.5 -
Obligations under finance leases (3.5) (4.5)
--------------------------------------------------------------------------------
(177.0) (246.8)
--------------------------------------------------------------------------------
7. Annual Report
The above financial information does not constitute the company's statutory
accounts for the years ended 31 December 2005 or 2004. Statutory accounts
for 2004, which were prepared under UK GAAP, have been delivered to the
registrar of companies, and those for 2005, prepared under International
Financial Reporting standards as adopted by the EU, will be delivered in due
course. The auditors have reported on those accounts; their reports were
(i) unqualified, (ii) did not include references to any matters to which the
auditors drew attention by way of emphasis without qualifying their reports
and (iii) did not contain statements under section 237 (2) or (3) of the
Companies Act 1985. Full financial statements for the year ended 31 December
2005, will shortly be posted to shareholders, and after adoption at the
Annual General Meeting on 28 April 2005 will be delivered to the registrar.
Copies of this announcement are available from Pendragon PLC, Loxley House,
2 Oakwood Court, Little Oak Drive, Annesley, Nottinghamshire NG15 0DR.
This information is provided by RNS
The company news service from the London Stock Exchange
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