RNS Number:8698Q
Taylor Woodrow PLC
06 September 2005
TAYLOR WOODROW plc INTERIM RESULTS STATEMENT
(for the six months to 30 June 2005)
Delivering shareholder value
Highlights
*Housing profit from operations * up 1% to #195.4million (2004: #194.2
million)
*Housing operating margin * up 0.8 percentage points to 16.8% (2004:
16.0%)
*Profit before tax down 3% to #170.4 million (2004: #175.9 million)
*Basic earnings per share down 2% to 20.8 pence (2004: 21.2 pence)
*Re-balanced interim dividend up 50% to 4.5 pence per share (2004
interim: 3.0 pence). Total dividends for the year to be increased by 20%.
*Net gearing down by 6.8 percentage points to 44.1% (2004: 50.9%)
*Record housing landbank up 17% at 74,567 plots (Dec 2004: 63,701 plots)
*Record housing order book up 9% at #1.59 billion (2004: #1.46 billion)
Iain Napier, Chief Executive of Taylor Woodrow, said today:
"In the first half of 2005, Taylor Woodrow has continued to benefit from a
diversified market strategy. Overseas profit from operations * increased by 39%
and at the same time we have managed our UK housing business well in a more
difficult market.
The performance from our overseas markets continues to be excellent. The outlook
in the UK remains uncertain for the rest of this year, although the longer term
market fundamentals are strong."
* Profit from operations and operating margins are pre-exceptional pension
credits and before joint ventures' interest and tax (see Note 3); joint venture
revenue is used in the margin calculation (see Note 3).
- ends-
A presentation to analysts will be made at 10.30 hrs. This presentation will be
broadcast live on www.taylorwoodrow.com.
The 2005 interim results are the first to be reported under IFRS. The interim
2004 figures have been restated to reflect IFRS. A summary of 2004 full year
results under IFRS accounting treatment, with a reconciliation to UK GAAP, is
available on www.taylorwoodrow.com.
High resolution photographs are available to the media free of charge at
www.newscast.co.uk, +44 (0)20 7608 1000.
For further information, please contact
Ian Morris 0121 600 8520 / 07816 518 767
Taylor Woodrow Public Relations
John Holland-Kaye 0121 600 8394 / 07816 517 200
Taylor Woodrow Investor Relations
Charles Cook / Ben Woodford 020 7861 3232
Bell Pottinger
Financial Review
Overall
The markets in which we operate share fundamental characteristics that underpin
growing demand for new homes. In the UK, this is sustained primarily by a
continued under-supply of new housing in a country that already has the oldest
housing stock in Europe. While demographic trends point to increases in numbers
of households, the ability of our industry to meet demand is hampered by a
dysfunctional planning regime that chronically fails to deliver enough land on
which to build.
In North America, we have chosen to operate in markets that are likely to
benefit from above average growth. Our US markets are all in the sunbelt and
benefit from migration from the colder Northern states. Arizona and Florida are
also very popular among the growing market for retirement and second homes. The
Ontario market also benefits from immigration and economic growth.
Spain represents a huge opportunity for us from Europeans seeking retirement or
second homes, and we offer the reassurance of a familiar name with almost 40
years experience in that market.
Results
Revenue for the six months to 30 June 2005 was up 1 per cent at #1,449.3m
(2004: #1,436.2m). Profit before tax was 3 per cent lower than the previous year
at #170.4m (2004: #175.9m), as a slight increase in housing profit was offset by
a smaller contribution from property and construction.
As at 30 June 2005, total equity before minority interests was #1,789.9m (2004:
#1,565.2m). Net debt was #789.5m (2004: #796.7m). Net gearing was 44.1 per cent
(2004: 50.9 per cent).
Basic earnings per share were 20.8 pence (2004: 21.2 pence). Equity per share
increased by 15 per cent to 317.0 pence.
Group Housing
H1 '05 H1 '04 FY '04
(restated) (restated)
Revenue, including joint ventures #m 1,163.9 1,215.4 2,876.6
Profit from Operations* #m 195.4 194.2 448.8
Operating Margin* % 16.8% 16.0% 15.6%
Home completions 5,065 5,521 13,092
Overall group housing had a satisfactory first half, with an improvement in
average sales price - up 1 per cent to #200k (2004: #198k) - and operating
margins* - up by 0.8 percentage points to 16.8 per cent - helping to offset a
reduction in volumes. Housing profit from operations (pre-exceptional items and
before joint ventures' interest and tax) rose 0.6 per cent to #195.4m (2004:
#194.2m).
Forty-five per cent of our profits came from our overseas operations in the
first half of 2005 (2004: 32 per cent). This reflects both our decision to
increase investment into those markets over the last few years, and their
current strength relative to the UK.
We remain well placed to grow our housing business, with the group order book up
9 per cent to #1.59bn (2004: #1.46bn) and the group landbank up 17 per cent at
74,567 plots (December 2004: 63,701 plots).
* Throughout the financial review, the profit from operations and operating
margins are pre-exceptional pension credits and before joint ventures' interest
and tax (see Note 3); joint venture revenue is used in the margin calculation
(see Note 3).
UK Housing
H1 '05 H1 '04 FY '04
(restated) (restated)
Revenue, including joint ventures #m 681.2 823.6 1,936.2
Profit from Operations* #m 108.1 131.5 301.1
Operating Margin* % 15.9% 16.0% 15.6%
Home completions 3,194 3,869 9,053
In the UK, the housing market was challenging, with overall demand lower than in
the extremely strong first half of 2004. We made good progress by improving our
forward sales position, versus 2004 year-end, managing our cost base and
providing for future growth by increasing the landbank.
Against the market average, the company delivered a strong sales performance in
the first half of 2005. However, the market has been much more difficult than in
the exceptionally strong trading environment in the first half of 2004. Our
half-year order book stood at #602m, compared to #733m at the same period last
year and #407m at year-end 2004.
Average selling prices were lower at #195k (H1 2004: #199k), with the reduction
mainly attributable to a slightly higher proportion of social and apartment
completions than in the same period last year, and on a square footage basis
were broadly flat.
Operating margins* were broadly flat at 15.9 per cent (H1 2004: 16.0 per cent).
This includes the benefit of higher than usual land sales, primarily the
Quartermile project in Edinburgh.
We continue to focus on cost control through supply chain management, use of
standard products and pull through from strategic land. Although planning
remains difficult, we have been successful in securing consents on strategic
land, for example, with the approval for 2,300 homes in Swindon. As a result of
this and prudent purchasing in the land market, we have increased our landbank
by 8 per cent to around 34,974 plots (December 2004: 32,459 plots).
Our strategic landbank remains strong with some 20,000 gross acres representing
75,000 potential plots. Typically, land acquired this way is secured for prices
10 to 15 per cent less than through the open market, and this has helped us to
further reduce the average cost of plots in our landbank. Fifteen per cent of
completions in the first half came from plots originally sourced from our
strategic landbank (H1 2004: 12 per cent). Around 40 per cent of our landbank
has been sourced through our strategic land programme. Benefits from this will
be realised in future years.
North America Housing
H1 '05 H1 '04 FY '04
(restated) (restated)
Revenue, including joint ventures #m 445.3 360.5 863.9
Profit from Operations* #m 74.4 53.9 127.6
Operating Margin* % 16.7% 15.0% 14.8%
Home completions 1,668 1,500 3,635
Our operation in North America had an extremely strong first half, benefiting
from the increased investment over the past few years, as well as from a strong
market. Profit from operations increased by 38 per cent to #74.4m (2004:
#53.9m), driven by 11 per cent growth in home completions, 10 per cent growth in
average sales price to #216k (2004: #197k) and a 1.7 percentage point
improvement in operating margins*. In US dollar terms, profit grew 40 per cent.
We continue to improve our forward sales position with the order book 40 per
cent higher than in June 2004, at US$1.64bn and an increase in the landbank by
27 per cent to 38,073 plots (December 2004: 30,009 plots). More than half our
landbank is controlled through options rather than owned, which improves capital
efficiency.
In Florida, the market remains strong. In the first half of 2005, we completed
297 homes (2004: 202) at an average sales price of US$535k (2004: US$560k) as a
result of the Company's move into more affordable attached products. We expect
to see a substantial profit contribution from our beachfront high rise
developments in the second half of 2005 with three buildings scheduled to close.
Our California operations have continued to perform strongly. Completions in the
first half of 2005 were 307 homes (2004: 273) with an average sales price of
US$797k (2004: US$772k). The Arizona division continues to perform exceptionally
well, and is capitalizing on a buoyant market. Home completions increased by 36
per cent to 509 (2004: 375) with average sales price up 20 per cent to US$206k
(2004: US$172k).
In Ontario, Canada, completions in the first half of 2005 were down 20% to 496
homes (2004: 617) largely due to the timing of high-rise developments. The
average sales price was up 15% to Can$333k (2004: Can$290k), driven by a greater
proportion of low-rise homes sales.
Spanish Housing
H1 '05 H1 '04 FY '04
(restated) (restated)
Revenue, including joint ventures #m 37.4 31.3 76.5
Profit from Operations #m 12.9 8.8 20.1
Operating Margin % 34.5% 28.1% 26.3%
Home completions 203 152 404
Our Spanish housing operations enjoyed a very strong first half. Completions
increased by 34 per cent, with average sales prices down by 13 per cent to #163k
(2004: #188k) reflecting a change in geographic mix. Profits from operations
rose to #12.9m for the half-year, up 47 per cent on the first six months of
2004, while operating margins grew by 6.4 percentage points to 34.5 per cent.
The order book increased 10 per cent to #86m (2004: #78m) and we invested for
future growth by increasing our landbank by 23 per cent to 1,520 plots (December
2004: 1,233 plots).
Other Operations
In the construction business, the profit from operations before exceptional
pension credits, was 42 per cent lower at #7.5m (2004: #13.0m), with the
reduction largely accounted for by lower income from PFI disposals. Profit
before tax was #9.4m (2004: #14.9m). The company continued to perform in line
with our expectations increasing its external order book by 9 per cent. Internal
work in the order book was reduced, reflecting the housing operation's overall
shift away from high-rise, city centre developments over the past few years.
Overall, the property business broke even in the first half of the year. The
sale of the K2 development at St Katharine's Dock was completed on 1st July,
with gross profit of #17.4m to be recorded in the second half of 2005.
The Future
Our strategy of increasing investment in our international markets has served
Taylor Woodrow well. Our focus remains on balancing growth through investment in
our international operations, where we achieve high returns on capital, and
improving the efficiency of our UK operations.
We operate in markets with good long-term characteristics where underlying
demand for new homes can be expected to be maintained into the future. We will
continue to pursue our policy of enhancing shareholder value by allocating our
resources and managing risk in order to achieve optimal returns.
Dividends
The board has declared an interim dividend of 4.5 pence per share (2004 interim:
3.0 pence per share), an increase of 50 per cent. This dividend will be paid on
1st November 2005 to shareholders on the register at close of business on 30th
September 2005. In declaring this dividend, the board is moving towards a
re-balancing of the levels of interim and final dividends. It is the current
intention to increase 2005 full-year dividends by 20 per cent, reflecting the
Board's progressive dividend policy and its confidence in the long-term
prospects for the Group.
The company offers shareholders the opportunity to use their dividends to
purchase shares on the market under the terms of the Dividend Re-Investment
Plan. Further details are available on the Company's website,
www.taylorwoodrow.com, and will be included in the 2005 interim report and
accounts, which will be sent to ordinary shareholders (other than those who have
elected for electronic communications) on 20th September 2005. Copies of the
2005 interim report will also be available from that date on the Company's
website and from the registered office at 2 Princes Way, Solihull, West
Midlands, B91 3ES.
Other
The company wishes to encourage shareholders to receive certain company
communications, including the annual report and accounts and interim reports,
electronically via its website. For further information, and to register for
electronic communications, please go to www.taylorwoodrow.com .
INDEPENDENT REVIEW REPORT TO TAYLOR WOODROW PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 June 2005 which comprises the income statement,
statement of recognised income and expense, reconciliation of movements in
equity, balance sheet as at 30 June 2005, cash flow statement, and related notes
1 to 9. 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.
This report is made solely to the company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the company, for our review work, for this report, or for the conclusions we
have formed.
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 which require that the accounting
policies and presentation applied to the interim figures are consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
International Financial Reporting Standards
As disclosed in note 2, the next annual financial statements of the group will
be prepared in accordance with International Financial Reporting Standards as
adopted for use in the EU. Accordingly, the interim report has been prepared in
accordance with the recognition and measurement criteria of IFRS and the
disclosure requirements of the Listing Rules.
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 accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with International Standards on Auditing (UK and
Ireland) and therefore provides a lower level of assurance than an audit.
Accordingly, we do not express an audit opinion on the financial information.
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 six months
ended 30 June 2005.
Deloitte & Touche LLP
Chartered Accountants
London
5 September 2005
Consolidated income statement for the six months to 30 June 2005
Year to 31
Six months to 30 June December
Note 2005 2004 2004
#m #m #m
Continuing operations
Revenue: Group and share
of joint ventures 3 1,449.3 1,436.2 3,361.2
Less share of joint
ventures (28.1) (20.5) (49.7)
-------- -------- --------
Consolidated revenue 3 1,421.2 1,415.7 3,311.5
Cost of sales (1,150.5) (1,117.0) (2,649.6)
-------- -------- --------
Gross profit 270.7 298.7 661.9
Profit on disposal of
properties and investments 10.1 18.6 21.7
Administrative expenses (86.0) (72.5) (179.9)
Share of results of joint
ventures 5.9 3.0 8.8
-------- -------- --------
Profit from operations 3 200.7 247.8 512.5
Interest receivable 3.9 3.5 6.3
Finance costs (2004
includes #41.1m of an
exceptional loss on
repurchase of 9.5% first
mortgage debenture) (34.2) (75.4) (114.9)
-------- -------- --------
Profit before tax 170.4 175.9 403.9
Tax 4 (52.8) (54.0) (123.0)
-------- -------- --------
Profit for the period 117.6 121.9 280.9
-------- -------- --------
Attributable to:
Equity holders of the
parent 117.1 121.7 280.3
Minority interest 0.5 0.2 0.6
-------- -------- --------
117.6 121.9 280.9
-------- -------- --------
Earnings per share
From continuing
operations
Basic 6 20.8p 21.2p 49.1p
-------- -------- --------
Diluted 6 20.6p 21.0p 48.8p
-------- -------- --------
Consolidated statement of recognised income and expense for the six months to
30 June 2005
Six months to Year to 31
30 June December
2005 2004 2004
#m #m #m
Exchange differences on
translation of foreign
operations 4.1 (10.5) (6.5)
Actuarial gains on defined
benefit pension schemes - - 15.6
Tax on actuarial gains
taken directly to equity - - (5.0)
-------- -------- --------
Net income recognised
directly in equity 4.1 (10.5) 4.1
Profit for the period 117.1 121.7 280.3
-------- -------- --------
Total recognised income
and expense for the period 121.2 111.2 284.4
-------- -------- --------
Reconciliation of movements in consolidated equity for the six months to 30 June
2005
Six months to Year to 31
30 June December
Note 2005 2004 2004
#m #m #m
Profit for the period 117.1 121.7 280.3
Dividends on equity shares 5 (45.5) (37.4) (53.9)
Other recognised income
and expenses relating
to the period (net) 4.1 (10.5) 4.1
New share capital
subscribed 3.4 2.2 3.7
Proceeds from sale of own
shares 4.1 0.4 3.2
Purchase of own shares - (25.2) (50.3)
Share-based payments 2.4 1.3 3.4
Increase/(decrease) in
share-based payment tax
reserve 1.5 - (0.4)
-------- -------- --------
Net increase in equity 87.1 52.5 190.1
Opening equity 1,702.8 1,512.7 1,512.7
-------- -------- --------
Closing equity 1,789.9 1,565.2 1,702.8
-------- -------- --------
Consolidated balance sheet at 30 June 2005
30 June 30 June 31 December
2005 2004 2004
#m #m #m
Non-current assets
Goodwill 363.5 356.6 363.2
Property and plant 24.0 26.7 24.2
Investment property - 13.9 -
Interests in joint ventures 91.8 95.1 87.0
Other financial assets 18.5 18.3 26.5
Deferred tax assets 71.7 68.5 71.1
------- ------- -------
569.5 579.1 572.0
------- ------- -------
Current assets
Inventories 2,756.7 2,594.8 2,422.2
Trade and other receivables 354.5 291.6 282.5
Cash and cash equivalents 97.1 177.0 114.9
------- ------- -------
3,208.3 3,063.4 2,819.6
------- ------- -------
Total assets 3,777.8 3,642.5 3,391.6
------- ------- -------
Current liabilities
Trade and other payables (754.4) (739.9) (700.2)
Tax liabilities (40.2) (43.2) (67.8)
Debenture loans (15.1) (30.8) (16.2)
Bank overdrafts and loans (23.2) (12.8) (16.5)
------- ------- -------
(832.9) (826.7) (800.7)
------- ------- -------
Net current assets 2,375.4 2,236.7 2,018.9
------- ------- -------
Non-current liabilities
Trade and other payables (123.4) (121.9) (83.1)
Debenture loans (633.1) (629.7) (620.7)
Bank loans (215.2) (300.4) (0.3)
Retirement benefit obligation (145.4) (160.9) (146.3)
Deferred tax liabilities (4.2) (8.2) (6.8)
Long-term provisions (32.6) (28.6) (29.9)
------- ------- -------
(1,153.9) (1,249.7) (887.1)
------- ------- -------
Total liabilities (1,986.8) (2,076.4) (1,687.8)
------- ------- -------
Net assets 1,791.0 1,566.1 1,703.8
------- ------- -------
Equity
Share capital 147.1 146.5 146.7
Share premium account 750.8 747.2 748.1
Revaluation reserve 0.7 0.7 0.7
Own shares (51.3) (37.6) (57.8)
Share-based payment tax reserve 4.3 3.2 2.8
Capital redemption reserve 31.5 31.5 31.5
Other reserve 4.9 4.5 4.8
Translation reserve (2.5) (10.2) (6.5)
Retained earnings 904.4 679.4 832.5
------- ------- -------
Equity attributable to equity
holders of the parent 1,789.9 1,565.2 1,702.8
Minority interests 1.1 0.9 1.0
------- ------- -------
Total equity 1,791.0 1,566.1 1,703.8
------- ------- -------
Consolidated cash flow statement for the six months to 30 June 2005
Year to
31
Six months to 30 June December
Note 2005 2004 2004
#m #m #m
Net cash (used in)/from
operating activities 7 (256.2) (110.8) 198.1
Investing activities
Interest received 3.9 3.5 6.3
Dividends received from
joint ventures 1.7 0.9 2.2
Proceeds on disposal of
properties,
plant and investments 4.3 171.8 189.9
Purchases of properties,
plant and
investments (2.8) (5.0) (8.5)
Amounts invested in joint
ventures (18.2) (10.7) (21.2)
Amounts repaid by joint
ventures 21.4 3.0 12.5
-------- -------- -------
Net cash from investing
activities 10.3 163.5 181.2
-------- -------- -------
Financing activities
Equity dividends paid - - (53.9)
Dividends paid by
subsidiaries to
minority shareholders (0.4) (0.3) (0.7)
Issue of ordinary share
capital by
Taylor Woodrow plc 3.4 2.2 3.7
Proceeds from sale of own
shares 4.1 0.4 3.2
Purchase of own shares - (25.2) (50.3)
Redemption of preference
shares - (100.0) (100.0)
New debenture loans raised - 334.3 334.4
New bank loans raised 280.0 264.4 339.4
Repayment of debenture
loans (1.3) (99.3) (116.6)
Repayment of bank loans (65.1) (396.3) (771.4)
Increase in bank overdrafts 6.5 2.7 6.0
-------- -------- -------
Net cash from/(used in)
financing activities 227.2 (17.1) (406.2)
-------- -------- -------
Net (decrease)/increase in
cash and cash equivalents (18.7) 35.6 (26.9)
Cash and cash equivalents
at beginning of year 114.9 143.8 143.8
Effect of foreign exchange
rate changes 0.9 (2.4) (2.0)
-------- -------- -------
Cash and cash equivalents
at end of year 97.1 177.0 114.9
-------- -------- -------
Notes to the accounts for six months to 30 June 2005
1. General information
The interim financial report has been prepared in accordance with International
Financial Reporting Standards (IFRSs).
The information for the year ended 31 December 2004 does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985. A copy
of the statutory accounts for that year prepared under UK GAAP has been
delivered to the Registrar of Companies. The auditors' report on those accounts
was unqualified.
2. Accounting policies
Taylor Woodrow plc will be presenting its 31 December 2005 accounts in
accordance with applicable International Financial Reporting Standards (IFRSs)
which are effective (or available for early adoption) at 31 December 2005.
The same accounting policies and methods of computation have been followed in
this interim financial report. These have been published by the Group on 6
September 2005, which are available on the Group's website on
www.taylorwoodrow.com. These accounting policies have been used consistently in
dealing with items which are considered material.
The disclosures concerning the transition from UK GAAP to IFRSs, namely the
reconciliations of equity at 1 January 2004 (the date of transition to IFRSs),
at 31 December 2004 (date of last UK GAAP financial statements) and at 30 June
2004 and the reconciliations of profit and cash flow for 2004, as required by
IFRS 1, and for the six months ended 30 June 2004, were published on the Group's
website www.taylorwoodrow.com on 6 September 2005.
Main statement reconciliations from UK GAAP to IFRS for the above periods and
period ends were also published with the Group's high level review of the effect
of transition to IFRS reporting on 18 April 2005 on the Group's website,
www.taylorwoodrow.com. Some minor amendments to those reconciliations, in
respect of balance sheet disclosure of financial instruments, have now been
reflected in the reconciliations published on 6 September 2005.
3. Business segments
For management purposes, the Group is currently organised into five operating
divisions - Housing - United Kingdom, Housing - North America, Housing - Spain
and Gibraltar, Property and Construction. These divisions are the basis on which
the Group reports its primary segment information.
Segment information about these businesses is presented below.
Housing Housing Housing
United North Spain and Housing
Six months Kingdom America Gibraltar Total Property Construction Consolidated
to 2005 2005 2005 2005 2005 2005 2005
30 June 2005 #m #m #m #m #m #m #m
Revenue:
External sales 672.6 426.1 37.4 1,136.1 52.5 232.6 1,421.2
Inter-segment
sales - - - - - 44.5 44.5
Eliminations - - - - - (44.5) (44.5)
------- ------ ------- ------ ------- -------- -------
Total
revenue 672.6 426.1 37.4 1,136.1 52.5 232.6 1,421.2
Share of joint
ventures'
revenue 8.6 19.2 - 27.8 - 0.3 28.1
------- ------ ------- ------ ------- -------- -------
Group and
share of joint
ventures 681.2 445.3 37.4 1,163.9 52.5 232.9 1,449.3
------- ------ ------- ------ ------- -------- -------
Inter-segment construction revenue relates to construction contracts conducted
on an arms-length basis.
Result:
Profit before
joint ventures 106.5 68.4 12.9 187.8 - 7.0 194.8
Share of joint
ventures' profit 1.6 6.0 - 7.6 - 0.5 8.1
------- ------ ------- ------ ------- -------- -------
Profit* 108.1 74.4 12.9 195.4 - 7.5 202.9
Share of joint
ventures'
interest and tax (2.2) - - (2.2) - - (2.2)
------- ------ ------- ------ ------- -------- -------
Profit from
operations 105.9 74.4 12.9 193.2 - 7.5 200.7
------- ------ ------- ------ ------- -------- -------
Capital
employed 1,653.6 477.8 48.7 2,180.1 118.9 (82.0) 2,217.0
------- ------ ------- ------ ------- -------- -------
Goodwill 363.5
Net debt (789.5)
------- ------ ------- ------ ------- -------- -------
Net assets 1,791.0
------- ------ ------- ------ ------- -------- -------
Return on average
capital employed* 13.8% 37.5% 56.2% 19.4% - -
Operating Margin* 15.9% 16.7% 34.5% 16.8% - 3.2%
------- ------ ------- ------ ------- -------- -------
*Capital employed is pre-goodwill and average is based on prior year-end; profit
is profit from operations before joint ventures' interest and tax; margin is
based on group and share of joint ventures' revenue.
Housing Housing Housing
United North Spain and Housing
Six months Kingdom America Gibraltar Total Property Construction Consolidated
to 2004 2004 2004 2004 2004 2004 2004
30 June 2004 #m #m #m #m #m #m #m
Revenue:
External sales 808.4 355.2 31.3 1,194.9 29.6 191.2 1,415.7
Inter-segment
sales - - - - - 68.7 68.7
Eliminations (68.7) (68.7)
------- ------- ------- ------- ------- ------- -------
Total
revenue 808.4 355.2 31.3 1,194.9 29.6 191.2 1,415.7
Share of joint
ventures'
revenue 15.2 5.3 - 20.5 - - 20.5
------- ------- ------- ------- ------- ------- -------
Group and
share of joint
ventures 823.6 360.5 31.3 1,215.4 29.6 191.2 1,436.2
------- ------- ------- ------- ------- ------- -------
Result:
Profit before
joint ventures
and exceptional
items 128.6 52.0 8.8 189.4 16.3 13.0 218.7
Share of joint
ventures' profit 2.9 1.9 - 4.8 - - 4.8
------- ------- ------- ------- ------- ------- -------
Profit before
exceptional
items 131.5 53.9 8.8 194.2 16.3 13.0 223.5
Exceptional cost
of sale
pension credit 6.9 1.2 8.1 9.8 17.9
Exceptional
administrative
pension credit 4.8 0.9 - 5.7 - 2.5 8.2
------- ------- ------- ------- ------- ------- -------
Profit* 143.2 56.0 8.8 208.0 16.3 25.3 249.6
Share of joint
ventures'
interest and tax (1.8) - - (1.8) - - (1.8)
------- ------- ------- ------- ------- ------- -------
Profit
from operations 141.4 56.0 8.8 206.2 16.3 25.3 247.8
------- ------- ------- ------- ------- ------- -------
Capital
employed 1,561.2 371.3 37.3 1,969.8 149.9 (113.5) 2,006.2
------- ------- ------- ------- ------- ------- -------
Goodwill 356.6
Net debt (796.7)
------- ------- ------- ------- ------- ------- -------
Net assets 1,566.1
------- ------- ------- ------- ------- ------- -------
Return on average
capital
employed* 17.4% 30.5% 49.3% 20.5% 15.2% -
Operating Margin* 16.0% 15.0% 28.1% 16.0% 55.1% 6.8%
------- ------- ------- ------- ------- ------- -------
*Capital employed is pre-goodwill and average is based on prior year-end; profit
is profit from operations before joint ventures' interest and tax; margin is
based on group and share of joint ventures' revenue.
Housing Housing Housing
United North Spain and Housing
Year to Kingdom America Gibraltar Total Property Construction Consolidated
to 2004 2004 2004 2004 2004 2004 2004
31 December 2004 #m #m #m #m #m #m #m
Revenue
External sales 1,899.1 851.3 76.5 2,826.9 74.2 410.4 3,311.5
Inter-segment
sales 134.9 134.9
Eliminations - - - - - (134.9) (134.9)
------- ------- ------- ------- ------- ------- -------
Total
revenue 1,899.1 851.3 76.5 2,826.9 74.2 410.4 3,311.5
Share of joint
ventures'
revenue 37.1 12.6 - 49.7 - - 49.7
------- ------- ------- ------- ------- ------- -------
Group and
share of joint
ventures 1,936.2 863.9 76.5 2,876.6 74.2 410.4 3,361.2
------- ------- ------- ------- ------- ------- -------
Result:
Profit before
joint ventures
and
exceptional
items 294.2 120.1 20.1 434.4 26.7 17.8 478.9
Share of joint
ventures'
profit 6.9 7.5 - 14.4 - - 14.4
------- ------- ------- ------- ------- ------- -------
Profit before
exceptional
items 301.1 127.6 20.1 448.8 26.7 17.8 493.3
Exceptional cost
of sale
pension credit 6.6 0.4 7.0 9.8 16.8
Exceptional
administrative
pension
credit 5.0 0.5 - 5.5 - 2.5 8.0
------- ------- ------- ------- ------- ------- -------
Profit* 312.7 128.5 20.1 461.3 26.7 30.1 518.1
Share of joint
ventures'
interest and tax (5.5) (0.1) - (5.6) - - (5.6)
------- ------- ------- ------- ------- ------- -------
Profit from
operations 307.2 128.4 20.1 455.7 26.7 30.1 512.5
------- ------- ------- ------- ------- ------- -------
Capital
employed 1,482.4 315.9 43.1 1,841.4 142.1 (104.1) 1,879.4
------- ------- ------- ------- ------- ------- -------
Goodwill 363.2
Net debt (538.8)
------- ------- ------- ------- ------- ------- -------
Net assets 1,703.8
------- ------- ------- ------- ------- ------- -------
Return on average
capital
employed* 20.5% 39.2% 52.2% 24.5% 12.7% -
Operating Margin* 15.6% 14.8% 26.3% 15.6% 36.0% 4.3%
------- ------- ------- ------- ------- ------- -------
*Capital employed is pre-goodwill and average is based on prior year-end; profit
is profit from operations before joint ventures' interest and tax; margin is
based on group and share of joint ventures' revenue.
4. Taxation
Six months to 30 Year to 31
June December
2005 2004 2004
#m #m #m
Current taxation
UK corporation tax 15.9 29.1 66.6
Foreign taxation 38.4 19.6 60.4
Deferred taxation
UK 6.0 (0.2) (0.8)
Overseas (7.5) 5.5 (3.2)
-------- -------- --------
52.8 54.0 123.0
-------- -------- --------
Corporation tax for the interim period is charged at 31.0 % (six months to 30
June 2004: 30.7%), representing the best estimate of the weighted average annual
corporation tax rate expected for the full financial year.
5. Dividends
Six months to Year to 31
30 June December
2005 2004 2004
#m #m #m
Final dividend for the
year to 31 December 2004
of 8.1p
(2003: 6.5p) per share 45.5 37.4 37.4
Interim dividend for the
year to 31 December 2004
of 3.0p
per share - - 16.5
-------- -------- --------
45.5 37.4 53.9
-------- -------- --------
Six months to 30
June
2005 2004
#m #m
Proposed interim dividend for the year to 31
December 2005 of 4.5p (2004: 3.0p) per share 25.4 16.5
-------- --------
The proposed interim dividend was approved by the Board on 5 September 2005 and
has not been included as a liability as at 30 June 2005.
6. Earnings per share
Six months to Year to 31
30 June December
Earnings per share 2005 2004 2004
Basic 20.8p 21.2p 49.1p
Diluted 20.6p 21.0p 48.8p
Adjusted basic 20.8p 23.0p 51.1p
Adjusted basic diluted 20.6p 22.9p 50.8p
-------- -------- --------
The calculation of basic, diluted, adjusted basic and adjusted basic diluted
earnings per share is based on the following data:
Six months to Year to 31
30 June December
Earnings 2005 2004 2004
#m #m #m
Earnings for basic
earnings per share and
diluted earnings per share 117.1 121.7 280.3
Add/(less):
Curtailment of pensions
liability - (26.1) (24.8)
Loss on repurchase of debt - 41.1 41.1
Less: Tax effect of above
items - (4.5) (4.9)
-------- -------- --------
Earnings for adjusted
basic earnings per share
and adjusted basic diluted
earnings per share 117.1 132.2 291.7
-------- -------- --------
Six months to Year to 31
30 June December
2005 2004 2004
Weighted average number of shares m m m
For basic earnings per
share and adjusted basic
earnings per share 562.9 573.6 570.4
Weighted average of
dilutive options 3.0 3.8 3.1
Weighted average of
dilutive awards under
bonus plans 1.2 0.9 1.0
-------- -------- --------
For diluted earnings per
share and adjusted basic
diluted earnings per share 567.1 578.3 574.5
-------- -------- --------
7. Note to the consolidated cash flow statement
Six months to Year to 31
30 June December
2005 2004 2004
#m #m #m
Profit from operations 200.7 247.8 512.5
Adjustments for:
Exchange adjustments - (1.8) 6.3
Depreciation of plant 2.9 2.8 6.7
Gain on disposal of
property, plant and
investments (10.1) (18.6) (21.7)
Share of joint ventures'
operating profit (5.9) (3.0) (8.8)
Increase/(decrease) in
provisions 2.3 (6.5) (1.6)
-------- -------- --------
Operating cash flows
before movement in working
capital 189.9 220.7 493.4
Increase in inventories (314.4) (169.1) (12.2)
(Increase)/decrease in
receivables (63.9) 20.4 42.1
Increase/(decrease) in
payables 54.6 (51.6) (112.8)
-------- -------- --------
Cash (used in)/generated
by operations (133.8) 20.4 410.5
Income taxes paid (82.3) (45.2) (98.4)
Interest paid (40.1) (86.0) (114.0)
-------- -------- --------
Net cash (used in)/from
operating activities (256.2) (110.8) 198.1
-------- -------- --------
Net Debt 31
30 June 30 June December
2005 2004 2004
#m #m #m
Cash and cash equivalents 97.1 177.0 114.9
Debenture loans (648.2) (660.5) (636.9)
Bank overdrafts and bank loans (238.4) (313.2) (16.8)
-------- -------- --------
(789.5) (796.7) (538.8)
-------- -------- --------
Cash and cash equivalents (which are presented as a single class of asset on the
face of the balance sheet) comprise cash at bank and other short-term highly
liquid investments with a maturity of three months or less.
8. Events after the balance sheet date
On 1 July 2005 the Group legally completed the sale of its K2 development
property for #117.0m, generating a gross profit of #17.4m. This sale will be
recognised in the second half of 2005.
9. Related party transactions
Transactions between the company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
note. Transactions between the Group and its joint ventures are as follows:
The Group purchased land from joint ventures for #2.8m during the six months to
30 June 2005 (six months to 30 June 2004: #2.4m; year to 31 December 2004:
#6.6m).
Balances with joint ventures were as follows:
31
30 June 30 June December
2005 2004 2004
#m #m #m
Amounts owed by joint ventures 89.6 96.1 83.9
-------- -------- --------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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