Preliminary Results -9-
November 30 2011 - 2:01AM
UK Regulatory
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b Factors affecting the tax charge for the year
The tax charge for each year is different to the standard rate
of corporation tax in the UK of 27.33% (2010: 28%). The differences
are explained below:
2011 2010
GBPm GBPm
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Loss before tax (64.8) (14.7)
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Loss multiplied by the standard rate of corporation tax
in the UK of 27.33% (2010: 28%) 17.7 4.1
Effects of:
- permanent differences (14.6) (1.0)
- change in future tax rate (1.3) (0.8)
- research and development - 0.9
- adjustment in respect of prior years 2.5 0.1
- losses utilised, previously unrecognised 1.2 0.5
- deferred tax asset brought forward considered irrecoverable (6.9) -
- overseas tax payable (0.1) -
- unrecognised losses (2.3) (2.6)
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Tax (charge)/credit for the year (3.8) 1.2
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c Tax on items charged to Other Comprehensive Income
The income credited directly to equity during the year is as
follows:
2011 2010
GBPm GBPm
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Movement in pension scheme valuations (2.6) 0.2
Deferred tax on items (charged)/credited to Other Comprehensive
Income (2.6) 0.2
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d Net movement in deferred tax
2011 2010
GBPm GBPm
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Deferred tax on items (charged)/credited to equity (2.6) 0.2
Deferred tax recovered from carry back of share-based payment
charges to prior years (1.2) -
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Deferred tax on items (charged)/credited to the Income Statement (6.2) 1.5
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Total deferred tax (charge)/ credit (10.0) 1.7
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Unrecognised deferred tax assets and liabilities are disclosed
in note 9.
The standard rate of Corporation Tax in the UK changed from 28%
to 26% with effect from 1 April 2011. Accordingly, the company's
profits for this accounting period are taxed at an effective rate
of 27.33% and will be taxed at 26% in the future. In addition, a
number of further changes to the UK Corporation tax system were
announced in the March 2011 Budget Statement. Further reductions to
the main rate of corporation tax are proposed to reduce the rate by
1% per annum to 23% by 1 April 2014. Apart from the reduction to
25% from 1 April 2012, these further changes had not been
substantively enacted at the balance sheet date and, therefore, are
not been included in these financial statements.
The proposed reductions to the main rate of corporation tax by
1% per annum to 23% by 1 April 2014 are expected to be enacted
separately each year. The overall effect of the further proposed
changes from 25% to 23%, if these are applied to the net deferred
tax balance as at 31 July 2011, would be to reduce the net deferred
tax asset by approximately GBP0.7m (being GBP0.4m recognised in
2013 and GBP0.3m recognised in 2014).
7 Dividends
2011 2010
GBPm GBPm
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Final paid in respect of the previous year 0p (2010: 3.85p) - 4.3
Interim paid in respect of the current year 0p (2010: 2.25p) - 2.6
Less: dividend waived by employee share ownership trusts - (0.1)
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Total dividends paid - 6.8
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The Directors have not proposed an interim dividend nor a final
dividend for the year to 31 July 2011 and as outlined in the Annual
Report and Financial Statements to 31 July 2010 did not plan to
resume dividend payments until there was evidence of a sustained
increase in demand for our services and consequent improvement in
performance. In addition, there are also restrictions contained
within the new banking facilities, as disclosed in note 12 that
prevent dividends from being paid until the banking facilities have
been repaid in full.
8 Earnings/(loss) per share
2011 2010
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Basic and diluted loss per share (61.7)p (12.1)p
Adjusted (loss)/earnings per share (0.5)p 18.9p
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2011 2010
GBPm GBPm
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Loss for the year (68.6) (13.5)
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Loss for basic and diluted earnings per share (68.6) (13.5)
Adjustments:
- other exceptional costs (net of taxation) 17.9 29.7
- impairment of goodwill 45.3 -
- amortisation of intangible assets arising from business
combinations (net of taxation) 4.8 5.0
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(Loss)/earnings for adjusted (loss)/earnings per share (0.6) 21.2
========================================================== ====== ======
2011 2010
million million
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Weighted average number of ordinary shares 111.2 111.4
Dilutive share options - -
Dilutive Save As You Earn schemes - -
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Diluted weighted average number of ordinary shares 111.2 111.4
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Weighted average number of ordinary shares 111.2 111.4
Average number of shares held by the employee share trusts 1.2 1.4
Share options matured in respect of executive share option
schemes - (0.4)
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Adjusted weighted average number of ordinary shares 112.4 112.4
=========================================================== ======== ========
Basic loss per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of shares during the year.
Diluted loss per share is calculated by adjusting the weighted
average number of ordinary shares in issue on the assumption of
conversion of all dilutive share options in issue and shares under
Save As You Earn schemes. The share price used to calculate diluted
earnings per share is based on a weighted average price of 102.75p
(31 July 2010: 196.31p). Potential ordinary shares are not treated
as dilutive when their conversion would increase earnings per share
or decrease loss per share from continuing operations. As the Group
reported a loss for the year the effects of 1,968,000 (2010:
13,000) anti-dilutive share options were ignored when calculating
earnings per share for 2011.
Adjusted earnings per share is calculated after adding back
shares held by the employee share trusts to the weighted average
number of shares. Earnings are adjusted to exclude exceptional
items (net of taxation). The Directors believe that this additional
measure provides a better indicator of the underlying trends in the
business.
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