RNS Number:1243U
Luminar PLC
15 November 2005
Luminar plc
Profit before taxation pre-exceptional items up 5%
Reduced net debt
Half year to Half year to Growth / Growth /
1 September 29 August (Reduction) (Reduction)
2005 2004
#m #m #m %
Profit before taxation - pre-exceptional items 19.9 18.9 1.0 5%
Profit before taxation - post-exceptional items 23.4 13.6 9.8 72%
EPS from continuing operations - pre-exceptional items 17.7p 16.5p 1.2p 7%
EPS from continuing operations - post-exceptional items 22.5p 11.5p 11.0p 96%
Net debt 140.3 180.4 (40.1) (22)%
The Company has reported its results for the half year to 1 September 2005 for
the first time under IFRS - operating profit pre-exceptional items for the half
year to 29 August 2004 was #26.1m under IFRS (UK GAAP #32.0m before goodwill
amortisation) after ongoing IFRS adjustments of #1.3m and reclassification of
operating profit from discontinued operations of #4.6m.
Half Year Highlights
- Performance in line with the Company's plans, with like for like sales
for core businesses flat on prior year
- Continued good progress towards re-focusing the Company following the
disposal of the Enterprise division
- Pre-tax profit on continuing operations pre-exceptional items up #1m to
#20m,(2004 - #19m)
- Seven re-branded units opened in the first half performing well
- EPS from continuing operations pre-exceptional items up 7% to 17.7p,
(2004 - 16.5p)
- Net debt reduced by #40m in 12 months to #140m, (2004 - #180m), with net
debt reduced by #25m during the first half
- 10% increase in level of the proposed interim dividend to 4.44p
- Current trading: like for like sales for the nine weeks since 1
September -0.5%. (year to date like for like sales are flat)
Stephen Thomas, Chief Executive, said:
"Despite a difficult trading environment, which has continued into the second
half, the Company has made significant progress in its transformation. Our
Branded units are performing well.
The impact of licencing reform remains unpredictable, but the Company is
operationally prepared to meet this challenge.
We are cautiously optimistic about the balance of the financial year".
15 November 2005
Enquiries
Luminar plc
Stephen Thomas, Chief Executive Tel: 020 7457 2020 (today)
Nick Beighton, Finance Director Tel: 01908 544100 (thereafter)
College Hill
Matthew Smallwood Tel: 020 7457 2020
Introduction
Luminar plc today presents its results for the half year to 1 September 2005.
The market in which the Company trades has remained difficult and highly
competitive. Against this background the Company's performance has been in line
with its plans.
The Company is continuing to make encouraging progress in the execution of its
strategy of refocusing the business around a high quality brand and market led
business with good and stable long term cash returns on capital. The successful
disposal of the 49 units comprising the Enterprise division for consideration of
#27m was completed during June 2005.
Financial
Turnover from continuing operations for the half year to 1 September 2005 was
#154.4m, (2004 - #158.8m). The half year to 1 September 2005 contains #1.8m
(2004 - #8.9m) of sales relating to single sites which have been closed pending
sale or refurbishment. Excluding these sites closed pending disposal or
refurbishment turnover from continuing operations is up #2.7m. Despite the
difficult market conditions like for like sales for core businesses remained
flat on prior year. The gross margin has been maintained at 82% (2004 - 82%) as
a result of a combination of better buying and more targeted drinks promotions.
Operating profit pre-exceptional items on continuing operations is #24.6m (2004
- #26.1m), with operating margin maintained at 16%. The reduction in profits is
due to a reduced contribution from the Entertainment segment and the impact of
the re-branding programme on units undergoing refurbishment.
Total administrative expenses before exceptional items were #102.4m, (2004 -
#103.7m) down 1% on the prior year. Included within administrative expenses
before exceptional items are corporate costs of #10.7m (2004 - #10.3m) including
one off costs of #0.3m.
Earnings before interest, tax, depreciation and amortisation (EBITDA) from
continuing operations pre-exceptional items is down #0.6m to #41.4m (2004 -
#42.0m), although EBITDA margin has increased to 27% (2004 - 26%).
Net finance costs have reduced to #4.7m (2004 - #7.2m), from the prior year
levels, as a result of lower average net debt levels during the first half of
2005. Profit before tax on continuing operations pre-exceptional items is up
#1.0m to #19.9m, (2004 - #18.9m).
With the effective tax rate on continuing operations pre-exceptional items at
35%, (2004 - 36%), earnings per share from continuing operations are up 7% to
17.7p, (2004 - 16.5p).
Exceptional items before tax relating to continuing operations were income of
#3.5m, (2004 - #5.3m charge). These exceptional items primarily arise from the
decision to exit from selected single sites, a realised profit on the sale and
leaseback of the Company's Hemel Hempstead complex, together with expenses
associated with the strategic re-organisation of the group. Profit before tax on
continuing operations post-exceptional items is up #9.8m to #23.4m (2004 -
#13.6m).
Segmental Review
The performance of the Company's segments have been set out in line with the
principles of IFRS. Accordingly, the Company has taken the opportunity to
simplify the segmental structure along the lines in which the business segments
are effectively managed. The performance of each segment is discussed below, but
is summarised in the following table:
Units Revenue Revenue per unit Profit from operations * * Profit from
operations per
unit * *
H1 H1 H1 H1 2004 H1 H1 H1 2005 H1 2004
2005 2004 2005 2005 2004
# #m #m #'000 #'000 #m % #m % #'000 #'000
Dancing 110 91.0 88.4 827 803 25.9 28.5 25.8 29.2 235 234
Entertainment 80 52.4 55.3 655 691 8.7 16.6 10.3 18.6 108 128
Core business 190 143.4 143.7 755 756 34.6 24.1 36.1 25.1 182 190
Non-core trading * 16 9.9 10.5 618 656 2.0 20.2 1.9 18.1 125 118
Non-core other * 21 1.1 4.6 n/a n/a (1.3) (118.0) (1.6) (34.8) n/a n/a
Continuing operations *** 227 154.4 158.8 680 699 35.3 22.9 36.4 22.9 156 160
* Non-core is one segment including trading and closed units currently
presented within continuing operations which do not
align with the Company's strategy of a high quality branded and
market led business
** Profit from operations is stated before exceptional items
*** Profit from continuing operations is stated before corporate costs
A reconciliation outlining the changes to the composition of the Company's
segments is included as an appendix to the financial information.
Dancing
The dancing segment contains both branded and unbranded dancing units.
Sales for dancing units totalled #91.0m, (2004 - #88.4m), an increase of 3%,
with a like for like sales increase of 6%. During the period a further seven
(2004 - two) units were branded, one Oceana and six Lava and Ignite venues,
bringing the total number of branded units to 38. The re-branded units continue
to offer superior performance and returns on capital.
Operating profit contribution was #25.9m, (2004 - #25.8m), and operating margin
maintained 29%, (2004 - 29%). This represents a small dilution of operating
profit, mainly due to the impact of the increased refurbishment and re-branding
programme on the units undergoing upgrading.
Entertainment
The Entertainment segment has performed relatively poorly over the last six
months. Total sales were #52.4m, (2004 - #55.3m), with like for like sales down
6%. The Entertainment segment was subject to a potential disposal. The Board
suspended the process in mid-July as it considered the Company was unlikely to
obtain an acceptable value from the transaction. The segment was ring-fenced
from the Dancing unit business and a new managing director recruited to drive
the segment forward and restore the original proposition of dining, dancing and
drinking. The new management team has started to make good progress in turning
around the segment's performance.
The operating profit was #8.7m (2004 - #10.3m), which represents a margin of 17%
(2004 - 19%). Although this represents a 2% dilution on the prior year this
continues to represent good profitability performance for the high street sector
in which this concept competes.
Non-core
The non-core segment contains units that do not align with the Company's
strategy of a high quality branded and market led business. These non-core units
comprise trading units (16) and closed units pending disposal (21). Other units
classified by the Company as non-core comprise the Enterprise division disposed
of in the first half and non-core bars held-for-sale which have been presented
within discontinued operations under IFRS.
Total sales from non-core, including those units presented as discontinued
operations, were #28.0m, (2004 - #44.3m).
Cash flow and Net Debt
The Company continues to reduce its net debt through operational cash flow and
disposal of non-core assets. Net debt at the end of the period totalled #140.3m,
(2004 - #180.4m). Cash flow from operations at #33.2m, (2004 - #33.4m), was
maintained at prior year levels, including exceptional cash flows of #1.1m (2004
- #nil). Cash flow from operations before cash flows in respect of exceptional
items was #34.3m, (2004 - #33.4m).
Capital expenditure during the first half totalled #24.6m, (2004 - #15.1m), the
increase resulting from acceleration of the re-branding and refurbishment
programme during 2005/6.
Two single sites were disposed of in the first half for proceeds of #2.0m.
Proceeds of #22.3m were received on completion of the sale of the Enterprise
division in the first half. Cash costs associated with the disposal totalled
#2.0m.
Cash proceeds of #17.0m relating to the sale and leaseback of the Hemel
Hempstead complex have been received since the half year end. Agreement has been
reached to sell a further five properties for proceeds of #2.5m - the proceeds
on these disposals were slightly above net book value.
Additional proceeds from the disposal of the Enterprise division of #2.3m have
been received since the half year end, and a further #0.9m is due to be received
during the second half.
Dividend
The Board has declared an increase of 10% in the interim dividend to 4.44p (2004
- 4.04p), which will be paid on 6 January 2006 to shareholders on the register
at 9 December 2005. The level of increase in the dividend reflects the Board's
confidence in the current re-branding strategy and the future performance of the
Company.
Management
Nick Beighton joined the Board as Finance Director in August from Matalan plc.
David Crabtree also joined the business as Managing Director of the
Entertainment Division in July. Work is continuing to strengthen the management
teams and to improve management processes. The business is currently moving its
Admin centre premises to Milton Keynes enabling it to centralise most of its
head office and back office activities.
Current Trading
Trading in October was below previous trends. Like for like sales from core
businesses for the nine weeks since the half year were down 0.5% - like for
likes sales from core businesses for the year to date including the 9 weeks
since the half year end remain flat on prior year.
The market remains highly competitive, and it is expected that trading
conditions will remain difficult. Throughout this period the Board has continued
to be encouraged with the performance of the branded dancing units, although the
unbranded units have been under greater pressure through a lack of a clear
proposition.
The initial impact of the forthcoming licensing reform presents one of the
biggest changes to the market place for many years, and it is difficult to
predict its impact. The Board is confident that the Company has put in place
sound operational plans to deal with the forthcoming changes, and remains
cautiously optimistic about the balance of the financial year.
Independent Review Report to Luminar plc
Introduction
We have been instructed by the Company to review the financial information for
the half year ended 1 September 2005 which comprises the consolidated income
statement, the consolidated balance sheet, the consolidated cash flow statement
and the related notes. We have read the other information contained in the
interim report and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information.
Directors' Responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority.
As disclosed in note 1, the next annual financial statements of the Group will
be prepared in accordance with International Financial Reporting Standards,
adopted for use in the European Union. This interim report has been prepared in
accordance with the basis set out in note 1.
The accounting policies are consistent with those that the directors intend to
use in the next annual financial statements. As explained in note 1, there is,
however, a possibility that the directors may determine that some changes are
necessary when preparing the full annual financial statements for the year
ending 2 March 2006 for the first time in accordance with IFRS, as adopted for
use in the European Union. The IFRS standards and IFRIC interpretations that
will be applicable and adopted for use in the European Union at 2 March 2006 are
not known with certainty at the time of preparing this interim financial
information.
Review Work Performed
We conducted our review in accordance with the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the disclosed accounting policies have
been applied. A review excludes audit procedures such as tests of control and
verification of assets, liabilities and transactions. It is substantially less
in scope than an audit and therefore provides a lower level of assurance.
Accordingly we do not express an opinion on the financial information. This
report, including the conclusion, has been prepared for and only for the Company
for the purpose of the Listing Rules of the Financial Services Authority and for
no other purpose. We do not, in producing this report, accept or assume
responsibility for any other purpose or to any other person to whom this report
is shown or into whose hands it may come save where expressly agreed by our
prior consent in writing.
Review Conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the half year ended
1 September 2005.
PricewaterhouseCoopers LLP
Chartered Accountants
London
15 November 2005
Consolidated Income Statement (unaudited)
for the half year ended 1 September 2005
Half year ended 1 September 2005 Half year ended 29 August 2004 Year ended 27 February 2005
Pre- Exceptional Total Pre- Exceptional Total Pre- Exceptional Total
exceptional items exceptional items exceptional items
items items items
Note #m #m #m #m #m #m #m #m #m
Continuing
operations
Revenue 2 154.4 - 154.4 158.8 - 158.8 317.8 - 317.8
Cost of sales (27.4) - (27.4) (29.0) - (29.0) (55.7) - (55.7)
Gross profit 127.0 - 127.0 129.8 - 129.8 262.1 - 262.1
Administrative (102.4) 3.5 (98.9) (103.7) (5.3) (109.0) (205.2) (27.1) (232.3)
expenses
Profit / (loss) from
operations 2 24.6 3.5 28.1 26.1 (5.3) 20.8 56.9 (27.1) 29.8
Investment income 3 1.5 - 1.5 0.6 - 0.6 1.1 - 1.1
Finance costs 3 (6.2) - (6.2) (7.8) - (7.8) (14.3) - (14.3)
Profit / (loss)
before taxation 19.9 3.5 23.4 18.9 (5.3) 13.6 43.7 (27.1) 16.6
Tax on profit / 4 (6.9) - (6.9) (6.8) 1.6 (5.2) (9.8) 5.0 (4.8)
(loss)
Profit / (loss) for
the period from
continuing
operations 13.0 3.5 16.5 12.1 (3.7) 8.4 33.9 (22.1) 11.8
(Loss) / profit from
discontinued
operations 8 (0.3) (2.1) (2.4) 5.1 - 5.1 12.9 (23.1) (10.2)
Profit / (loss) for
the period 9 12.7 1.4 14.1 17.2 (3.7) 13.5 46.8 (45.2) 1.6
Earnings per share
from continuing
operations 6
Basic 22.5p 11.5p 16.1p
Diluted 22.5p 11.5p 16.1p
Earnings per share 6
from continuing and
discontinued
operations
Basic 19.2p 18.4p 2.2p
Diluted 19.2p 18.4p 2.2p
Dividends per share 5 9.76p 8.87p 12.91p
Consolidated Balance Sheet (unaudited)
at 1 September 2005
1 September 2005 29 August 2004 27 February 2005
#m #m #m
Non-current assets
Goodwill 203.1 208.0 203.1
Other Intangible assets 1.0 1.2 1.1
Property Plant & Equipment 413.9 480.7 413.5
Other non-current assets 7.5 11.4 7.6
625.5 701.3 625.3
Current assets
Inventories 3.4 4.0 3.0
Trade and other receivables 33.0 9.8 5.1
Cash and cash equivalents 46.7 46.4 22.6
83.1 60.2 30.7
Assets classified as held-for-sale 15.5 - 44.6
98.6 60.2 75.3
Current liabilities
Trade and other payables (43.2) (49.4) (38.2)
Provisions (0.7) (1.0) (0.6)
Current tax liabilities (24.6) (11.3) (11.8)
Bank loans and overdraft - (45.7) (0.9)
Obligations under finance leases (0.1) (0.1) (0.1)
Financial instruments (0.9) - -
(69.5) (107.5) (51.6)
Liabilities classified as held-for-sale (3.8) - (8.8)
(73.3) (107.5) (60.4)
Net current assets / (liabilities) 25.3 (47.3) 14.9
Total assets less current liabilities 650.8 654.0 640.2
Non-current liabilities
Bank loans (179.1) (174.0) (179.1)
Obligations under finance leases (7.2) (7.1) (7.1)
Deferred income (8.7) (5.0) (4.7)
Provisions (3.7) (2.0) (3.2)
Deferred tax liabilities (58.5) (64.3) (59.1)
(257.2) (252.4) (253.2)
Net assets 393.6 401.6 387.0
Capital and reserves
Share capital 18.3 18.3 18.3
Share premium 60.9 60.9 60.9
Capital reserve 2.3 2.3 2.3
Merger reserve 280.2 313.7 280.2
Equity reserve 0.4 0.2 0.3
Retained earnings 31.5 6.2 25.0
Equity shareholders' funds 393.6 401.6 387.0
Consolidated Cash Flow Statement (unaudited)
for the half year ended 1 September 2005
Half year ended Half year ended Year ended
1 September 2005 29 August 2004 27 February 2005
Note #m #m #m
Net cash flow from operating activities
Cash generated from operations 10 33.2 49.0 99.9
Adjustments for:
Tax received / (paid) 5.5 (7.8) (6.8)
Debt issue costs paid - - (0.9)
Interest paid (5.5) (7.8) (14.3)
Net cash from operating activities 33.2 33.4 77.9
Cash flows from investing activities
Purchase of property, plant and equipment (24.6) (15.1) (50.1)
Proceeds from sale of property, plant and equipment 2.2 3.0 11.4
Costs associated with sale and leaseback (0.7) - -
Proceeds received on disposal of the Enterprise 8 22.3 - -
division
Costs associated with disposal of the Enterprise (2.0) - -
division
Interest received 1.5 0.6 1.1
Net cash from investing activities (1.3) (11.5) (37.6)
Cash flows from financing activities
Repayment of long term borrowings - (24.2) (24.6)
Repayment of finance lease obligations - - -
Repayment of short term loan note (0.9) - -
Repayment of secured loan - - (38.4)
Dividends paid 5 (7.1) (6.5) (9.5)
Net cash from financing activities (8.0) (30.7) (72.5)
Net increase/(decrease) in cash and cash equivalents 10 23.9 (8.8) (32.2)
Cash and cash equivalents at beginning of period * 23.0 55.2 55.2
Cash and cash equivalents at end of period * 46.9 46.4 23.0
* Cash and cash equivalents of #46.9m (Aug 04 - #46.4m, Feb 05 - #23.0m)
contain cash and cash equivalents presented within assets classified as
held-for-sale of #0.2m, (Aug 04 - #nil, Feb 05 - #0.4m).
Notes to the Interim Financial Information
for the half year ended 1 September 2005
1 Basis of Preparation
The Group has previously prepared its financial statements under UK Generally
Accepted Accounting Principles, (UK GAAP). Following a directive by the European
Parliament in July 2002, the Group is required to prepare its 2005/6
consolidated financial statements in accordance with International Financial
Reporting Standards, (IFRS).
Accordingly this interim report has been prepared using IFRS accounting policies
consistent with those which management expect to apply in the Group's first IFRS
Annual Report and Financial Statements for the year ending 2 March 2006. The
accounting policies followed in this interim report are the same as those
published within the investors section of the Group's website,
www.luminar.co.uk.
IFRS currently in issue are subject to ongoing review and endorsement by the
European Commission, as well as possible amendment by the IASB, and therefore
are subject to possible change. Further standards or interpretations may also be
issued that could be applicable for the full year consolidated financial
statements. These potential changes could result in the need to change the basis
of accounting or presentation of certain financial information from that
presented in this document.
This interim report for the half year ended 1 September 2005 does not constitute
statutory financial statements as defined in section 240 of the Companies Act
2005. Comparative annual figures for the year ended 27 February 2005 set out
within this report have been extracted from the "The Effect of the Adoption of
International Reporting Standards on Comparative Information" as published by
the Group on 9 November 2005, as adjusted for changes to the composition of
discontinued operations as outlined in note 11 (viii). Statutory consolidated
financial statements for the Group for the year ended 27 February 2005, prepared
in accordance with UK GAAP, on which the auditors gave an unqualified opinion,
have been filed with the Registrar of Companies.
2 Segmental reporting
The Group is principally engaged as owner, developer and operator of theme bars,
nightclubs and restaurants.
For management purposes, the Group is currently organised into three main
business segments - Dancing, Entertainment and Non-Core operations. Segmental
information about these businesses is presented below.
Half year ended 1 September 2005
Dancing Entertainment Non-Core Corporate Consolidated
costs
#m #m #m #m #m
Total revenue 91.0 52.4 11.0 - 154.4
Operating profit
before exceptional
items 25.9 8.7 0.7 (10.7) 24.6
Exceptional items 8.5 (1.2) (0.1) (3.7) 3.5
Segment result 34.4 7.5 0.6 (14.4) 28.1
Net finance costs (4.7)
Profit before taxation 23.4
Tax (6.9)
Profit for the period
from continuing
operations 16.5
Loss from discontinued
operations (2.4)
Profit for the period 14.1
Half year ended 29 August 2004
Dancing Entertainment Non-Core Corporate Consolidated
costs
#m #m #m #m #m
Total revenue 88.4 55.3 15.1 - 158.8
Operating profit
before exceptional
items 25.8 10.3 0.3 (10.3) 26.1
Exceptional items - - (5.3) - (5.3)
Segment result 25.8 10.3 (5.0) (10.3) 20.8
Net finance costs (7.2)
Profit before taxation 13.6
Tax (5.2)
Profit for the period
from continuing
operations 8.4
Profit from
discontinued
operations 5.1
Profit for the period 13.5
Year ended 27 February 2005
Dancing Entertainment Non-Core Corporate Consolidated
costs
#m #m #m #m #m
Total revenue 179.7 109.7 28.4 - 317.8
Operating profit before
exceptional items 55.4 21.2 1.1 (20.8) 56.9
Exceptional items (3.4) (1.5) (22.2) - (27.1)
Segment result 52.0 19.7 (21.1) (20.8) 29.8
Net finance costs (13.2)
Profit before taxation 16.6
Tax (4.8)
Profit for the period
from continuing
operations 11.8
Loss from discontinued
operations (10.2)
Profit for the period 1.6
3 Finance costs
Half year ended Half year ended Year ended
1 September 2005 29 August 2004 27 February 2005
#m #m #m
Interest payable on bank borrowings (5.3) (7.5) (13.8)
Interest payable on loan note - - (0.1)
Interest payable on obligations under finance (0.2) (0.2) (0.4)
leases
Other interest payable (0.2) (0.1) (0.1)
Total borrowing costs (5.7) (7.8) (14.4)
Less amounts included in the cost of qualifying 0.1 - 0.1
assets
Losses arising on derivatives held for trading (0.6) - -
Finance costs (6.2) (7.8) (14.3)
Income on bank deposits 0.7 0.6 1.1
Other interest receivable 0.8 - -
Investment income 1.5 0.6 1.1
Finance costs - net (4.7) (7.2) (13.2)
4 Taxation
Half year ended Half year ended Year ended
1 September 2005 29 August 2004 27 February 2005
#m #m #m
Current tax
- Continuing operations (7.4) (6.4) (7.3)
- Discontinued operations 0.1 (0.6) 0.8
(7.3) (7.0) (6.5)
Deferred tax
- Continuing operations 0.5 1.2 2.5
- Discontinued operations (1.6) 1.1 6.6
(1.1) 2.3 9.1
Taxation (8.4) (4.7) 2.6
5 Dividends
Half year ended Half year ended Year ended
1 September 2005 29 August 2004 27 February 2005
#m #m #m
Ordinary shares - final dividend paid: 9.76p
per share (Aug 04 & Feb 05: 8.87p) per share 7.1 6.5 6.5
Ordinary shares - interim dividend paid: nil p
per share (Feb 05: 4.04p per share) - - 3.0
7.1 6.5 9.5
In addition, the directors are proposing an interim dividend in respect of the
financial year ended 2 March 2006 of 4.44p per share which will absorb an
estimated #3.3 million of shareholders' funds. It is proposed it will be paid
on 6 January 2006. This has not been included as a liability within these
financial statements.
6 Earnings per share
The calculation of the basic earnings per share is based on the earnings
attributed to ordinary shareholders divided by the weighted average number of
shares in issue during the year. The calculation of diluted earnings per share
is based on the basic earnings per share, adjusted to allow for the issue of
shares and the post tax effect of interest, on the assumed conversion of all
dilutive options and other dilutive potential ordinary shares.
An alternative measure of earnings per share from continuing operations
pre-exceptional items has been included below as the director's believe that
this measure of earnings per share is more reflective of the on-going trading of
the Group.
Half year ended 1 September 2005
Earnings Weighted Per share amount
average number
of shares (in
#m millions) (pence)
Basic EPS
Earnings attributable to ordinary 14.1 73.2 19.2p
shareholders
Effect of dilutive securities - options - 0.2 -
Diluted EPS 14.1 73.4 19.2p
Basic EPS from continuing operations 16.5 73.2 22.5p
Diluted EPS from continuing operations 16.5 73.4 22.5p
Basic EPS from discontinued operations (2.4) 73.2 (3.3)p
Diluted EPS from discontinued operations (2.4) 73.4 (3.3)p
EPS from continuing operations
pre-exceptional items
Basic EPS from continuing operations
pre-exceptional items 13.0 73.2 17.7p
Diluted EPS from continuing operations
pre-exceptional items 13.0 73.4 17.7p
Half year ended 29 August 2004
Earnings Weighted Per share amount
average number
of shares
#m (in millions) (pence)
Basic EPS
Earnings attributable to ordinary 13.5 73.2 18.4p
shareholders
Diluted EPS 13.5 73.2 18.4p
Basic EPS from continuing operations 8.4 73.2 11.5p
Diluted EPS from continuing operations 8.4 73.2 11.5p
Basic EPS from discontinued operations 5.1 73.2 6.9p
Diluted EPS from discontinued operations 5.1 73.2 6.9p
EPS from continuing operations
pre-exceptional items
Basic EPS from continuing operations
pre-exceptional items 12.1 73.2 16.5p
Diluted EPS from continuing operations
pre-exceptional items 12.1 73.2 16.5p
Year ended 27 February 2005
Earnings Weighted Per share amount
average number
of shares
#m (in millions) (pence)
Basic EPS
Earnings attributable to ordinary 1.6 73.2 2.2p
shareholders
Effect of dilutive securities - options - 0.1 -
Diluted EPS 1.6 73.3 2.2p
Basic EPS from continuing operations 11.8 73.2 16.1p
Diluted EPS from continuing operations 11.8 73.3 16.1p
Basic EPS from discontinued operations (10.2) 73.2 (13.9)p
Diluted EPS from discontinued operations (10.2) 73.3 (13.9)p
EPS from continuing operations
pre-exceptional items
Basic EPS from continuing operations
pre-exceptional items 33.9 73.2 46.3p
Diluted EPS from continuing operations
pre-exceptional items 33.9 73.3 46.3p
7 Exceptional Items
The Group recognised exceptional items before tax on continuing operations as
follows:
Half year ended Half year ended Year ended
1 September 2005 29 August 2004 27 February 2005
#m #m #m
Impairment of property, plant and equipment
- on units held for resale (3.9) - (7.1)
- on trading units (1.3) (5.3) (10.5)
Reversal of prior year impairment of
property, plant and equipment 3.1 - -
(2.1) (5.3) (17.6)
Provision for onerous lease commitments - - (3.8)
Impairment of goodwill - - (4.9)
Realised profit / (loss) on disposals 1.7 - (0.8)
Costs relating to re-organisation and
rationalisation (1.5) - -
Profit on sale and leaseback 5.4 - -
3.5 (5.3) (27.1)
The impairment of property, plant and equipment on units held for resale of
#3.9m, (Aug 04 - #nil, Feb 05 - #7.1m), is required to write down to fair value
less costs to sell the carrying value of assets intended to be disposed of in
the short term. These units represent "single sites" held for resale, and not
discrete businesses operated by the Group.
The impairment of trading units of #1.3m, (Aug 04 - #5.3m, Feb 05 - #10.5m),
principally reflects the difference between the net present value of cash
generating units, i.e., discrete trading units, and their carrying value.
The reversal of impairment charges recognised in prior periods of #3.1m, (Aug 04
- #nil, Feb 05 - #nil), reflects amendments to estimates of fair value less
costs to sell of single sites held for sale, and a reversal of impairment
charges recognised in prior periods where the trigger causing the original
impairment to be recognised has reversed.
A profit on disposal of #1.7m (Aug 04 - #nil, Feb 05 - #0.8m charge), has been
realised in respect of the disposal of "single sites" held for resale.
Costs of rationalisation and re-organisation of #1.5m, (Aug 04 - #nil, Feb 05 -
#nil), have been incurred in respect of the strategic review of the
Entertainment division, together with costs associated with the back-office
rationalisation.
A profit of #5.4m, (Aug 04 - #nil, Feb 05 - #nil), has been realised on the sale
and leaseback of the Group's Hemel Hempstead complex, which became unconditional
on 1 September 2005. Deferred income of #4.5m, relating to proceeds receivable
above the fair value of the complex, has been recognised on balance sheet and
will be amortised to the income statement over the life of the lease. The cash
proceeds of #17.0m have been received during September 2005.
Other exceptional items recognised in 2004/5 relate to provisions for onerous
lease commitments on properties where it is unlikely a sub-let will be possible
in the foreseeable future, (#3.8m charge) and an impairment of goodwill
following the annual impairment review required under IFRS 3, (#4.9m charge).
The Group incurred an exceptional charge before tax on discontinued operations
as follows:
Half year ended Half year ended Year ended
1 September 2005 29 August 2004 27 February 2005
#m #m #m
Impairment on property, plant and equipment
- on units held for resale - - (24.9)
Other costs associated with disposals - - (1.5)
Realised loss on disposal of the Enterprise (2.1) - -
division
(2.1) - (26.4)
An exceptional loss on disposal of the Enterprise division, #2.1m, (Aug 04 -
#nil, Feb 05 - #nil), has been recognised on completion of the sale during the
first half, (as outlined in note 8).
A charge of #26.4m was recognised in the period to 27 February 2005,
representing a write-down to fair value less costs to sell of non-core
businesses held for resale of #24.9m, together with a provision for other costs
associated with the disposal of these businesses of #1.5m.
8 Discontinued operations
The results of the discontinued operations, comprising the Enterprise division
and non-core bars, both within the Non-Core segment, included within the
consolidated income statement were as follows:
Half year ended Half year ended Year ended
1 September 2005 29 August 2004 27 February 2005
#m #m #m
Revenue 17.0 29.2 57.3
Expenses (15.8) (24.6) (48.5)
Profit before tax 1.2 4.6 8.8
Attributable tax (expenses) / credits (1.5) 0.5 4.1
(Loss) / Profit after tax before exceptional (0.3) 5.1 12.9
items
Exceptional items:
Re-measurement to held-for-sale - - (26.4)
Loss on disposal of the Enterprise division (2.1) - -
Attributable tax (expenses) / credits - - 3.3
Net (loss) / profit attributable to
discontinued operations (2.4) 5.1 (10.2)
On 10 June 2005, the Group completed the disposal of its wholly owned
subsidiary, Candu Entertainment Limited, which held the 49 nightclubs forming
the major part of its Enterprise division. The net loss realised on the
disposal during the first half totalled #2.1m.
Total consideration for the disposal totalled #26.8m, of which initial cash
consideration represented #22.6m, deferred contingent consideration recognised
on satisfaction of these contingencies represented #3.2m, with additional
deferred contingent consideration not yet accrued within the financial
statements totalling #1.0m. Cash disposed on the sale of the Enterprise division
totalled #0.3m.
Consolidated net assets disposed amounted to #27.2m, with costs associated with
the transaction above those charged in the period to 27 February 2005 totalling
#0.7m.
9 Reconciliation of movements in shareholders' funds
Share Share Capital Merger Equity Retained Total
Capital Premium Reserve Reserve Reserve Profit
#m #m #m #m #m #m #m
Brought forward at 1 March 18.3 60.9 2.3 313.7 0.1 (0.8) 394.5
2004
Profit for the period - - - - - 13.5 13.5
Dividends paid - - - - - (6.5) (6.5)
Share based payment expense - - - - 0.1 - 0.1
Carried forward at 29 August
2004 18.3 60.9 2.3 313.7 0.2 6.2 401.6
Brought forward at 1 March 18.3 60.9 2.3 313.7 0.1 (0.8) 394.5
2004
Profit for the period - - - - - 1.6 1.6
Dividends paid - - - - - (9.5) (9.5)
Share based payment expense - - - - 0.2 - 0.2
Deferred taxation on share
based payments - - - - - 0.2 0.2
Transfer to merger reserve - - - (33.5) - 33.5 -
Carried forward at 27 February
2005 18.3 60.9 2.3 280.2 0.3 25.0 387.0
Brought forward at 28 February 18.3 60.9 2.3 280.2 0.3 25.0 387.0
2005
Adjustment for implementation
of IAS 39 - - - - - (0.5) (0.5)
Restated brought forward at 28
February 2005 18.3 60.9 2.3 280.2 0.3 24.5 386.5
Profit for the period - - - - - 14.1 14.1
Dividends paid - - - - - (7.1) (7.1)
Share based payment expense - - - - 0.1 - 0.1
Carried forward at 1 September
2005 18.3 60.9 2.3 280.2 0.4 31.5 393.6
10 Cash flow from operating activities and net debt
Half year ended Half year ended Year ended
1 September 2005 29 August 2004 27 February 2005
#m #m #m
Profit before taxation - continuing 23.4 13.6 16.6
operations
(Loss) / profit before taxation -
discontinued operations (0.9) 4.6 (17.6)
Profit / (loss) before taxation 22.5 18.2 (1.0)
Depreciation, amortisation and impairment 18.8 21.8 80.4
(Profit) / loss on sale of property,
plant & equipment (2.3) (0.7) 0.8
Profit on sale and leaseback (5.4) - -
Loss on disposal of subsidiary 2.1 - -
undertakings
Interest income and financing costs 4.7 7.2 13.2
40.4 46.5 93.4
(Increase) / decrease in inventories (0.4) (0.1) 0.1
(Increase) / decrease in receivables (3.8) (1.6) 2.2
(Decrease) / increase in trade and other
payables (2.6) 3.5 1.0
(Decrease) / increase in provisions (0.4) 0.7 3.2
Net cash inflow from operating activities 33.2 49.0 99.9
The movement in net debt in the period is analysed as follows:
Half year ended Half year ended Year ended
1 September 2005 29 August 2004 27 February 2005
#m #m #m
(Increase) / decrease in cash in the year (23.9) 8.8 32.2
Non-cash changes - increase in finance
lease liabilities - 5.3 5.4
Cash outflow from repayment of finance (0.9) (24.2) (63.0)
Movement in net debt in the period (24.8) (10.1) (25.4)
Opening net debt 165.1 190.5 190.5
Closing net debt 140.3 180.4 165.1
11 Reconciliation of profit and net assets under UK GAAP to IFRS
Luminar plc reported under UK GAAP in its previously published annual financial
statements for the period ended 27 February 2005, and its interim financial
statements for the period to 29 August 2004. The analysis below shows a
reconciliation of profit and net assets as previously reported under UK GAAP to
the revised net assets and profit under IFRS. In addition there is a
reconciliation of net assets under UK GAAP to IFRS as at the transition date for
the Group, being 1 March 2004.
(i) Reconciliation of Consolidated Income Statement for the year ended 27
February 2005
Less:
IFRS adjustment
IFRS for
Adjustments discontinued
UK GAAP operations IFRS
#m #m #m #m
Continuing operations
Revenue 375.1 - 62.4 312.7
Cost of sales (69.9) - (15.7) (54.2)
Gross profit 305.2 - 46.7 258.5
Administrative expenses before
exceptional items
- pre goodwill amortisation (238.2) (1.3) (38.3) (201.2)
- goodwill amortisation (12.9) 12.9 - -
- total (251.1) 11.6 (38.3) (201.2)
Profit from operations before
exceptional items 54.1 11.6 8.4 57.3
Exceptional items (55.0) 1.5 (26.4) (27.1)
(Loss) / Profit from operations (0.9) 13.1 (18.0) 30.2
Investment income 1.1 - - 1.1
Finance costs (13.9) (0.4) - (14.3)
(Loss) / Profit before taxation (13.7) 12.7 (18.0) 17.0
Tax on (loss) / profit (1.7) 4.3 7.4 (4.8)
(Loss) / Profit for the financial period
from continuing operations (15.4) 17.0 (10.6) 12.2
Loss from discontinued operations - - 10.6 (10.6)
Dividends (10.1) 10.1 - -
(Loss) / Profit transferred to reserves (25.5) 27.1 - 1.6
Principal adjustments affecting profit from operations before exceptional items
from UK GAAP to IFRS include:
* Cessation of goodwill amortisation of #12.9m following the
implementation of IFRS 3;
* Incremental depreciation #1.5m following review of residual values,
(#2.4m charge), and reduced depreciation following transitional impairment of
property, plant and equipment, (#0.9m credit);
* Reduction of rentals charged under operating leases by #0.4m following
capitalisation of the building element of certain of the Group's leases as
finance leases under IAS 17, see note 11 (vi f);
* Charge of #0.2m recognised in respect of share based payments.
Changes to finance costs represent additional interest of #0.4m relating to
incremental finance lease liabilities recognised, and the changes to exceptional
items are outlined below, see note 11 (ix).
(ii) Consolidated Balance Sheet at 27 February 2005
UK GAAP IFRS IFRS adjustment UK GAAP IFRS
Adjustments for Merger
Note held-for-sale Reserve
operations Adjustment
#m #m #m #m #m
Non-current assets
Goodwill (a) 199.8 3.3 - - 203.1
Other intangible assets (b) 0.1 1.0 - - 1.1
Property Plant & Equipment (c) 435.7 (20.9) (1.3) - 413.5
Other non-current assets (d) - 11.2 (3.6) - 7.6
635.6 (5.4) (4.9) - 625.3
Current assets
Inventories 3.8 - (0.8) - 3.0
Trade and other receivables 6.2 - (1.1) - 5.1
Cash and cash equivalents 23.0 - (0.4) - 22.6
33.0 - (2.3) - 30.7
Assets classified as held-for-sale 41.4 (4.0) 7.2 - 44.6
74.4 (4.0) 4.9 - 75.3
Current liabilities
Trade and other payables (45.7) 0.5 7.0 - (38.2)
Provisions - (0.8) 0.2 - (0.6)
Current tax liabilities (11.3) (0.5) - - (11.8)
Proposed dividends (e) (7.1) 7.1 - - -
Bank loans and overdrafts (0.9) - - - (0.9)
Obligations under finance leases (f) - (0.1) - - (0.1)
(65.0) 6.2 7.2 - (51.6)
Liabilities classified as held-for-sale - - (8.8) - (8.8)
(65.0) 6.2 (1.6) - (60.4)
Net current assets 9.4 2.2 3.3 - 14.9
Total assets less current liabilities 645.0 (3.2) (1.6) - 640.2
Non-current liabilities
Bank loans (179.1) - - - (179.1)
Obligations under finance leases (f) - (7.1) - - (7.1)
Deferred income (g) - (5.2) 0.5 - (4.7)
Provisions (h) (9.4) 3.6 2.6 - (3.2)
Deferred tax liabilities (i) (15.7) (41.9) (1.5) - (59.1)
(204.2) (50.6) 1.6 - (253.2)
Net assets 440.8 (53.8) - - 387.0
Capital and reserves
Share capital 18.3 - - - 18.3
Share premium 60.9 - - - 60.9
Capital reserve 2.3 - - - 2.3
Merger reserve (j) 342.4 (14.5) - (47.7) 280.2
Equity reserve (k) - 0.3 - - 0.3
Retained earnings 16.9 (39.6) - 47.7 25.0
Equity shareholders' funds 440.8 (53.8) - - 387.0
IFRS adjustments are explained below, see note 11 (vi).
(iii) Reconciliation of Income Statement for the half year to 29 August 2004
Less:
IFRS IFRS adjustment
Adjustments for discontinued
UK GAAP operations * IFRS
#m #m #m #m
Continuing operations
Revenue 188.0 - 29.2 158.8
Cost of sales (36.4) - (7.4) (29.0)
Gross profit 151.6 - 21.8 129.8
Administrative expenses before
exceptional items
- pre goodwill amortisation (119.6) (1.3) (17.2) (103.7)
- goodwill amortisation (6.5) 6.5 - -
- total (126.1) 5.2 (17.2) (103.7)
Profit from operations before
exceptional items 25.5 5.2 4.6 26.1
Exceptional items - (5.3) - (5.3)
Profit / (Loss) from operations 25.5 (0.1) 4.6 20.8
Investment income 0.6 - - 0.6
Finance costs (7.6) (0.2) - (7.8)
Profit / (Loss) before taxation 18.5 (0.3) 4.6 13.6
Tax on (loss) / profit (8.1) 3.4 0.5 (5.2)
Profit for the financial period from
continuing operations 10.4 3.1 5.1 8.4
Profit from discontinued operations - - (5.1) 5.1
Dividends (3.0) 3.0 - -
Profit transferred to reserves 7.4 6.1 - 13.5
IFRS adjustments are explained below, see note 11 (vi).
* Discontinued operations are presented above despite no disposal groups being
held-for-sale at 29 August 2004 as these items are discontinued in the period to
1 September 2005, and appear as discontinued operations when presented as
comparatives within the 2006 interim financial information. Discontinued
operations at 1 September 2005 represent the Enterprise division and non-core
bars held-for-sale.
(iv) Consolidated Balance Sheet at 29 August 2004
UK GAAP IFRS UK GAAP IFRS
Adjustments Merger
Note Reserve
Adjustment
#m #m #m #m
Non-current assets
Goodwill (a) 206.2 1.8 - 208.0
Other intangible assets (b) 0.1 1.1 - 1.2
Property Plant & Equipment (c) 514.4 (33.7) - 480.7
Other non-current assets (d) - 11.4 - 11.4
720.7 (19.4) - 701.3
Current assets
Inventories 4.0 - - 4.0
Trade and other receivables 9.8 - - 9.8
Cash and cash equivalents 46.4 - - 46.4
60.2 - - 60.2
Current liabilities
Trade and other payables (48.8) (0.6) - (49.4)
Provisions - (1.0) - (1.0)
Current tax liabilities (11.7) 0.4 - (11.3)
Proposed dividends (e) (3.0) 3.0 - -
Bank loans and overdraft (45.7) - - (45.7)
Obligations under finance leases (f) - (0.1) - (0.1)
(109.2) 1.7 - (107.5)
Net current assets / (liabilities) (49.0) 1.7 - (47.3)
Total assets less current liabilities 671.7 (17.7) - 654.0
Non-current liabilities
Bank loans (174.0) - - (174.0)
Obligations under finance leases (f) - (7.1) - (7.1)
Deferred income (g) - (5.0) - (5.0)
Provisions (h) (3.3) 1.3 - (2.0)
Deferred tax liabilities (i) (20.7) (43.6) - (64.3)
(198.0) (54.4) - (252.4)
Net assets 473.7 (72.1) - 401.6
Capital and reserves
Share capital 18.3 - - 18.3
Share premium 60.9 - - 60.9
Capital reserve 2.3 - - 2.3
Merger reserve (j) 342.4 (11.1) (17.6) 313.7
Equity reserve (k) - 0.2 - 0.2
Retained earnings 49.8 (61.2) 17.6 6.2
Equity shareholders' funds 473.7 (72.1) - 401.6
IFRS adjustments are explained below, see note 11 (vi).
(v) Consolidated Balance Sheet at 29 February 2004
UK GAAP IFRS UK GAAP IFRS
Adjustments Merger
Note Reserve
Adjustment
#m #m #m #m
Non-current assets
Goodwill (a) 212.7 (4.7) - 208.0
Other intangible assets (b) 0.1 1.1 - 1.2
Property Plant & Equipment (c) 517.6 (33.1) - 484.5
Other non-current assets (d) - 11.6 - 11.6
730.4 (25.1) - 705.3
Current assets
Inventories 3.9 - - 3.9
Trade and other receivables 8.0 - - 8.0
Cash and cash equivalents 55.2 - - 55.2
67.1 - - 67.1
Current liabilities
Trade and other payables (44.8) 0.1 - (44.7)
Provisions - (0.7) - (0.7)
Current tax liabilities (12.2) - - (12.2)
Proposed dividends (e) (6.5) 6.5 - -
Bank loans and overdraft (38.4) - - (38.4)
(101.9) 5.9 - (96.0)
Net current (liabilities) / assets (34.8) 5.9 - (28.9)
Total assets less current liabilities 695.6 (19.2) - 676.4
Non-current liabilities
Bank loans (204.6) - - (204.6)
Loan notes (0.9) - - (0.9)
Obligations under finance leases (f) - (1.8) - (1.8)
Deferred income (g) - (5.0) - (5.0)
Provisions (h) (3.9) 1.0 - (2.9)
Deferred tax liabilities (i) (19.9) (46.8) - (66.7)
(229.3) (52.6) - (281.9)
Net assets 466.3 (71.8) - 394.5
Capital and reserves
Share capital 18.3 - - 18.3
Share premium 60.9 - - 60.9
Capital reserve 2.3 - - 2.3
Merger reserve (j) 342.4 (11.1) (17.6) 313.7
Equity reserve (k) - 0.1 - 0.1
Retained earnings 42.4 (60.8) 17.6 (0.8)
Equity shareholders' funds 466.3 (71.8) - 394.5
(vi) Explanation of reconciling items between UK GAAP and IFRS
On transition to IFRS, the Group has recognised the following adjustments in
reconciling between UK GAAP and IFRS:
(a) Goodwill is no longer amortised under IFRS, but instead is reviewed annually
for impairment. Goodwill amortisation of #12.9m charged in the year to 27
February 2005 has therefore been reversed for IFRS reporting. Following a
transitional and annual impairment review, impairment charges of #4.7m and #4.9m
have been recorded at 29 February 2004 and in the year to 27 February 2005
respectively.
(b) Under IAS 38, software not integral to the operation of the related hardware
is classified as an intangible asset rather than as property, plant and
equipment as under UK GAAP. A balance sheet reclassification of #1.1m at 29
February 2004 and #1.0m at 27 February 2005 has therefore been recorded on
transition to IFRS.
(c) Following the provisions of IAS 36, the Group has recognised an impairment
charge of #21.9m at transition after testing all individual cash generating
units for impairment because of a market capitalisation trigger. In the year to
27 February 2005, impairment charges of #9.3m recognised under UK GAAP, and
depreciation charges of #0.9m, have subsequently been reversed as a result of
the recognition of the transitional impairment under IFRS.
Further GAAP differences within property, plant and equipment relate to the
classification of software, (see (b)), lease premiums, (see (d)), assets
relating to properties held under finance leases, (see (f)), and incremental
depreciation of #2.4m for the period to 27 February 2005 following a review of
residual values at transition date as required by IAS 16.
(d) Under IAS 17, premiums paid to acquire leasehold properties are recorded as
other non-current assets and not as property, plant and equipment as under UK
GAAP. A reclassification adjustment of #11.6m and #11.2m at transition and 27
February 2005 has therefore been made to classify these assets as other
non-current assets. These premiums still have to be charged to the income
statement over the life of the lease, however under IFRS this charge is
classified as rental expense not depreciation, with a consequential reduction of
EBITDA by #0.4m when reporting under IFRS.
(e) Under IAS 10, dividends proposed are not classified as liabilities until the
period in which they are approved and authorised - as a result the liabilities
recognised under UK GAAP at transition and in the balance sheet as at 27
February 2005 of #6.5m and #7.1m respectively have been reversed.
(f) Under IAS 17, the property element of certain of the Group's leases have
been classified as finance leases. A liability and the related asset have been
recognised on balance sheet, and rental expense replaced with a depreciation
charge on the asset and finance costs on the liability.
(g) Following the provisions of IAS 17, incentives received to enter leases are
recognised as income over the life of the lease, rather than to the first rent
review date as under UK GAAP. As a result, additional deferred income of #5.0m
at transition and 27 February 2005 has been brought back on balance sheet.
(h) As a result of the recognition of certain of the Group's leases as finance
leases, (see (f) above), provisions for onerous lease commitments relating to
the property element of leases now classified as finance leases have been
reversed.
(i) As a result of the implementation of IAS 12, deferred tax has been
recognised on temporary differences between the tax base cost and the carrying
value of assets and liabilities in the financial statements. Under FRS 19,
deferred tax was recognised on all timing differences expected to reverse in the
future. An additional liability of #46.8m as at transition date, and #41.9m as
at 27 February 2005 has therefore been recognised on adoption of IAS 12.
(j) Following impairments of goodwill and property, plant and equipment as a
result of the implementation of IFRS, (see (a) and (c) above), the Group has
transferred those losses relating to units acquired through the Northern Leisure
acquisition to the merger reserve. A merger reserve adjustment has also been
recorded to transfer to the merger reserve losses in respect of the impairment
of Northern Leisure units recognised under UK GAAP in the periods to 29 February
2004 and 27 February 2005 respectively.
(k) On adoption of IFRS 2, the Group has recognised a charge of #0.2m for the
year to 27 February 2005 in respect of share based payment arrangements granted
subsequent to 7 November 2002. Under UK GAAP, the intrinsic value of these
awards was nil, as the market value of the shares equated to the option price as
at the date of grant, therefore no charge was previously recognised within the
Group's UK GAAP financial statements.
(vii) Explanation of material adjustments to the cash flow
for the year to 27 February 2005
Cash outflows in respect of taxation of #6.8m during the year ended 27 February
2005 have been classified as part of operating cash flows under IFRS, where
previously these payments were included in a separate category of cash flows
under UK GAAP.
Interest paid of #13.9m during the year ended 27 February 2005 has been
classified as part of operating cash flows under IFRS, whereas this outflow was
classified under returns on investment and servicing of finance under UK GAAP.
Interest received of #1.1m has been classified as part of investing activities
under IFRS, whereas under UK GAAP this inflow has been categorised within
returns on investment and servicing of finance. Interest paid under IFRS totals
#14.3m as an additional #0.4m of interest on the property element of leases
treated as finance leases, included within operating cash flows as rental
expense under UK GAAP, has been classified as interest paid under IFRS.
There are no other material differences between the cash flow statement
presented under IFRS and the cash flow statement presented under UK GAAP.
(viii) Discontinued Operations
The composition of discontinued operations for the year to 27 February 2005
represent the composition of the disposal groups within the restatement to IFRS,
representing the Enterprise division and the non-core bars held-for-sale, as at
the balance sheet date, i.e., 27 February 2005.
Subsequent to the year end the composition of these disposal groups has changed.
The discontinued operations presented for the comparative half year to 29 August
2004 and the year to 27 February 2005 presented within this interim financial
information represent the composition of the disposal groups as at 1 September
2005.
Results of units which were within discontinued operations as at 27 February
2005, but are no longer within the relevant disposal groups at 1 September 2005,
have been reclassified to within continuing operations within the primary
statements for all periods presented.
(ix) Exceptional Items
The differences to the amount and presentation of exceptional items under IFRS
for the period to 27 February 2005 is as follows:
UK GAAP IFRS Sub total Less IFRS IFRS
adjustments adjustment
Discontinued Continuing
#m #m #m #m #m
Impairment of property, plant and equipment
- on units held (36.2) 4.2 (32.0) (24.9) (7.1)
for sale
- on trading units (10.3) (0.2) (10.5) - (10.5)
(46.5) 4.0 (42.5) (24.9) (17.6)
Impairment of - (4.9) (4.9) - (4.9)
goodwill
Provision for onerous lease (6.2) 2.4 (3.8) - (3.8)
commitments
Other costs associated with (1.5) - (1.5) (1.5) -
disposal
Realised profit / (loss) on (0.8) - (0.8) - (0.8)
disposals
(55.0) 1.5 (53.5) (26.4) (27.1)
The changes to exceptional items as recognised under UK GAAP are as follows:
* A net credit to exceptional items of #4.0m, representing a reversal of
impairment charges of #9.3m as a result of earlier recognition under IFRS at
transition date following a market capitalisation impairment trigger, offset
by an additional impairment of #5.3m on closed properties held under finance
leases under IFRS;
* Impairment of goodwill of #4.9m following annual impairment test required
under IFRS 3;
* Reduction of the provision for onerous lease commitments by #2.4m for the
building element of leases recognised as finance leases under IAS 17.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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