RNS Number:0226Z
Taylor Woodrow PLC
28 February 2006
TAYLOR WOODROW plc PRELIMINARY RESULTS STATEMENT
(for the year ended 31 December 2005)
Highlights
* Profit before tax up 2 per cent to #411.0 million (2004: #403.9 million)
* Group Housing profit from operations* up 1.6 per cent to #456 million -
almost 50 per cent from overseas.
* Basic earnings per share up 3 per cent to 50.6 pence (2004: 49.1 pence)
* Dividends per share up 21 per cent to 13.4 pence (2004: 11.1 pence)
* Equity shareholders' funds per share up 11 per cent to 338.4 pence
(2004: 303.8 pence)
* Net gearing reduced from 31.6 per cent to 23.7 per cent.
* Record group housing order book at #1.32 billion
* Record group housing landbank at 75,160 plots. #773 million spend on
land, up 39 per cent
* Profit from operations and operating margins are pre-exceptional pension
credits in 2004 and before joint ventures' interest and tax (see Note 1). The
Group's share of joint venture revenue is used in the margin calculation (see
Note 1).
Norman Askew, Chairman of Taylor Woodrow, said today:
"2005 has shown the benefits of our strategy of operating in different
geographical and product markets and allocating capital where we see the best
opportunities."
Iain Napier, Chief Executive of Taylor Woodrow, subsequently commented:
"2005 was another year of good progress for Taylor Woodrow.
Despite a challenging UK market, we have made good progress on strategy by
improving our forward sales position, managing our cost base and providing for
future growth through increasing the landbank. Our North American business
continued its strong performance, benefiting from high levels of capital
investment over the last three years. We are confident of another year of growth
in our overseas businesses and are well-placed to benefit from any continued
improvement in customer confidence in the UK."
-ends-
International Financial Reporting Standards (IFRS)
Whilst the financial information included in this preliminary announcement has
been prepared in accordance with International Financial Reporting Standards
(IFRS), this announcement does not itself contain sufficient information to
comply with IFRS. The Company expects to publish full financial statements that
comply with IFRS on 28 March 2006. All 2004 comparatives have been restated to
comply with IFRS and a full reconciliation of the 2004 income statement, balance
sheet and cashflow can be found in the notes to the financial statements when
published and at www.taylorwoodrow.com.
A presentation to analysts will be made at 10.00 hrs. This presentation will be
broadcast live on taylorwoodrow.com.
For further information please contact
Ian Morris 0121 600 8520 / 07816 518 767
Taylor Woodrow Media Enquiries
Jonathan Drake 0121 600 8394 / 07816 517 039
Taylor Woodrow Investor Relations
Ben Woodford / Dan de Belder 020 7861 3232
Bell Pottinger
Operating Performance Review
Results
Consolidated revenue for the year to 31 December 2005 was up 5 per cent at
#3,476.9m (2004: #3,311.5m). Profit before tax was 2 per cent up on the previous
year at #411.0m (2004: #403.9m), with an increase in housing profit* accompanied
by a smaller contribution from property and construction.
At 31 December 2005, equity shareholders' funds was #1,928.4m (2004: #1,702.8m).
Net debt was #456.9m (2004: #538.8m). Net gearing was 23.7 per cent (2004: 31.6
per cent).
Basic earnings per share were 50.6 pence (2004: 49.1 pence). Equity
shareholders' funds per share increased by 11.4 per cent to 338.4 pence.
Group Housing
2005 2004
Revenue, including joint ventures #m 2,864.9 2,876.6
Profit from Operations * #m 456.0 448.8
Operating Margin * % 15.9 15.6
Home completions 12,516 13,092
Despite challenging conditions in UK markets, we were able to improve average
sales prices by 3 per cent to #204k ( 2004: #199k ) with operating margins up
0.3 percentage points to 15.9 per cent through our very strong performance in
North America. This helped offset the effects of an overall reduction in volumes
as housing profit from operations* rose 2 per cent to #456.0m (2004: #448.8m).
49 per cent of 2005 operating profits came from overseas operations (2004: 33
per cent). This reflects both our decision to increase investment into those
markets over the last few years, and their relative strength compared to the UK.
We remain well placed for continuing growth of our housing business, with the
group order book up 16.5 per cent to #1.32bn (2004: #1.13bn) and the group
landbank up 18 per cent at 75,160 plots (2004: 63,701 plots).
UK Housing
2005 2004
Revenue including share of joint ventures #m 1,647.4 1,936.2
Profit from Operations * #m 233.4 301.1
Operating Margin * % 14.2 15.6
Home completions 8,178 9,053
During 2005, the UK housing market was challenging, with overall demand lower
than in 2004. We made good progress on strategy by improving our forward sales
position, managing our cost base and providing for future growth through
increasing the landbank.
Against the market average, the company delivered a strong sales performance
with a rate of sales generally exceeding industry norms. Our order book at 31
December 2005 increased to #411m, compared to #407m at year-end 2004. Lower
average selling prices at #185k (2004: #197k), are attributable to a very
competitive market and a higher proportion of social and apartment completions
than last year. The average square footage of our homes in the UK also fell as a
consequence from 1,032 sq ft to 960 sq ft.
Operating margins* fell to 14.2 per cent (2004: 15.6 per cent). This includes
the benefit of higher than usual land sales during the year, primarily due to
the disposal of our interest in the Quartermile project in Edinburgh, the sale
of which was completed in January.
We continue to focus on operational performance, reducing overhead costs through
supply chain management, use of standard products and pull through from
strategic land. Through our logistics business, WCL we have managed to reduce
materials costs, improve quality and speed up delivery times by implementing an
integrated solution that works in partnership with our key materials suppliers.
Although planning remains difficult, we have been successful in securing
consents on strategic land and our strategic landbank remains strong with some
18,300 gross acres representing 80,000 potential plots. Typically, land acquired
this way is secured on option at a discount to the open market, and this has
helped us to manage the average cost of plots in our landbank. The benefits of
such investment are starting to be realised, with 19 per cent of completions in
2005 coming from plots originally sourced from our strategic landbank (2004: 18
per cent). Around 41 per cent of our current landbank has been sourced through
our strategic land programme, with benefits to be realised in future years.
As a result of this and prudent purchasing in the land market, we have increased
our landbank by 8 per cent to 34,985 plots (2004: 32,459 plots). Our land bank
cost per plot remains competitive at #37K (2004: #37K). 68 per cent of our
developments in the UK in 2005 were on brownfield sites (2004: 64%).
North America Housing
2005 2004
Revenue including share of joint ventures #m 1,141.8 863.9
Profit from Operations * #m 199.6 127.6
Operating Margin * % 17.5 14.8
Home completions 3,932 3,635
Our operations in North America had an excellent year, benefiting from increased
investment and careful target marketing that enabled us to participate more
fully in these strong markets. Profit from operations* increased by 56 per cent
to #199.6m (2004: #127.6m), driven by 8.2 per cent growth in home completions
and a 2.7 percentage point improvement in operating margins.
We continue to improve our forward sales position with the order book 14 per
cent higher (excluding high-rise, 38 per cent) than at year-end 2004, at
US$1.42bn and an increase in the landbank by 26 per cent to 37,910 plots
(2004: 30,009 plots).
More than half our landbank is controlled through options rather than owned,
which improves capital efficiency. We also continue actively to manage our land
bank by selling plots to other builders where we consider it to be value
creating.
In Florida, where we offer a wide range of middle market to luxury homes and
condominiums targeted to move-up families, retirees, and second home purchasers,
the market is still strong. During 2005, we completed 752 homes (2004: 505) at
an average sales price increasing to US$727k (2004: US$544k). These results were
enhanced significantly by three high-rise beachfront condominiums that completed
in the second half of the year.
The market also remained strong in 2005 in California, with our home completions
up 3% at 721 homes (2004: 697) but some parts of the market are showing signs of
cooling after several years of exceptional price appreciation. We have therefore
continued to operate mainly in the stronger mid-market as opposed to the luxury
segment. We have also expanded our footprint in California by re-entering the
Palm Springs market. The average sales price in 2005 was US$835k (2004:
US$776k).
Our Arizona division serves the Phoenix metropolitan area and continued its
exceptional performance, targeting entry level and mid-market homebuyers.
Although recent sales releases have suggested some moderation in the market
Phoenix remains one of the fastest growing cities in the US, benefiting from
migration from other less affordable markets. Home completions increased by 20
per cent to 1,009 (2004: 841) with average sales price up 14 per cent to US$209k
(2004: US$183k).
In Texas we are growing our homebuilding operations in both Austin and Houston.
We are targeting the move-up segment by leveraging our existing reputation as a
high quality community developer. Home completions increased by 102 per cent to
190 (2004: 94) with average sales price down 4 per cent to US$424k (2004:
US$440k).
In Ontario, Canada, the group trades under the Monarch brand which benefits from
a long-standing reputation for quality and value. Operating in the greater
Toronto area and southern Ontario, Monarch builds both low-rise, mid-market
family homes and high-rise condominiums as well as affordable, urban town-homes.
Completions in the year of 2005 were 1,260 homes (2004: 1,498). The average
sales price was Can$326k (2004: Can$302k).
Given the strength of its landbank and forward sales book, our North American
business is well placed to drive continued growth.
Spain & Gibraltar Housing
2005 2004
Revenue #m 75.7 76.5
Profit from Operations #m 23.0 20.1
Operating Margin % 30.4 26.3
Home completions 406 404
Trading under the Taylor Woodrow brand in Spain, we operate on the Costa del
Sol, Costa Blanca and in Mallorca. Developments range from high-value villa-type
community and country-club projects to homes targeted at the local market.
Completions increased by 1 per cent, with average sales prices down by 5 per
cent to #169k (2004: #178k) reflecting a change in geographic mix. Profits from
operations rose to #23.0m, up 14 per cent on 2004, while operating margins grew
by 4.1 percentage points to 30.4 per cent.
The order book increased 8 per cent at #81m (2004: #75m) and we invested for
future growth by increasing our landbank by 84 per cent to 2,265 plots (2004:
1,233 plots)
In Gibraltar, Taylor Woodrow serves the luxury second home market through
apartment and penthouse developments.
Construction
Our Construction business continues to build on its reputation with a growing
portfolio of blue-chip and public sector clients, including Tesco, Texaco and
the NHS. The profit from operations* was #8.8m (2004:#17.8m), with more than 50
per cent of the reduction accounted for by lower income from PFI disposals.
Property
The disposal of the final substantive part of the company's historic property
portfolio was achieved with the sale of the K2 development at St Katharine's
Dock. Completed on 1 July 2005, this achieved a gross profit of #17.4m. Overall,
the property business recorded a profit from operations of #15.7m (2004:
#26.7m).
Shareholders' funds
Equity shareholders' funds at the end of 2005 were #1,928.4m, up from #1,702.8m
at the end of 2004. Equity shareholders' funds per share rose to 338.4 pence at
the end of 2005. This represents an increase of 11.4 per cent from the previous
year.
Shareholders' returns
Basic earnings per share increased by 3.1 per cent to 50.6 pence. The proposed
final dividend of 8.9 pence produces a total return of 13.4 pence per ordinary
share, an increase of 21 per cent over last year.
During the year, the board decided to re-balance the levels of interim and final
dividends to reflect a more usual weighting of profits between the first and
second halves of the financial year. The dividend is covered 3.8 times by
earnings.
Cash flow
Operating cashflows before movements in working capital were #461.1m (2004:
#493.4m). inventories increased by #204.9m which was partly funded by an
increase in creditors of #112.6m. Of this latter increase, #92m is represented
by an increase in land creditors. Cash generated by operations was #359.7m
(2004: #410.5m). Income taxes and interest payments totalled #229.5m (2004:
#212.4m), resulting in net cash flows from operating activities being down by 34
per cent to #130.2m (2004: #198.1m).
Treasury Management and Funding
Net debt at the year end stood at #456.9m (2004: #538.8m) equivalent to net
gearing of 23.7 per cent (2004: 31.6 per cent). Interest on borrowings, less
interest receivable, was #54.4m (2004: #60.0m) (See note 2). Average net debt
for the year was #823.4m (2004: #946.9m). At the year end Taylor Woodrow had
undrawn committed revolving credit facilities totaling #685m.
Taxation
The effective tax rate in 2005 is 30.3 per cent (2004: 30.4 per cent).
Pensions
At 31 December 2005, the IAS 19 deficit net of deferred tax was #154 million
(2004: #100 million). The increase has been caused by continuing falls in the
yield of AA - credit rated corporate bonds. The company has commenced discussion
with the trustees with a view to reaching agreement on the means of mitigating
this deficit.
Outlook for 2006
We look forward to another year of growth in North America based upon a strong
forward order book and well-positioned landbank. We aim to be over 80 per cent
forward sold by the half year. Our selected markets remain robust with Florida
and Texas in particular continuing to enjoy stronger than normal demand.
Whilst we have seen encouraging increases in both visitor numbers and
reservations, together with a decline in cancellation rates, compared to the
same period in 2005, it is still too early to predict the UK market for 2006.
UK reservations are slightly ahead of last year although we are currently
operating off fewer sites than this time last year. Our site opening programme
will result in average site numbers increasing by around 4 per cent on 2005
providing for growth in home completions over the year. A greater proportion of
our homes will be standard house types increasing average size with higher ASPs.
The UK housing market remains very attractive in the medium term continuing to
be fundamentally underpinned by supply-demand imbalance, relatively low interest
rates and generally benign economic conditions.
We will continue to invest in and grow our businesses in Spain and Gibraltar.
Construction is likely to remain stable.
We will maintain our strategy of a balanced portfolio with the UK, North America
and Spain providing alternative growth channels and the capacity to mitigate
exposure to any one market.
Consolidated income statement for the year ended to 31 December 2005
Note 2005 2004
#m #m
Continuing operations
Revenue: Group and share of joint ventures 1 3,556.4 3,361.2
Less share of joint ventures (79.5) (49.7)
-------- --------
Consolidated revenue 1 3,476.9 3,311.5
Cost of sales (2,831.7) (2,649.6)
-------- --------
Gross profit 645.2 661.9
Profit on disposal of properties
and investments 10.2 21.7
Administrative expenses (195.4) (179.9)
Share of results of joint ventures 15.0 8.8
-------- --------
Profit from operations 1 475.0 512.5
Interest receivable 8.3 6.3
Finance costs 2 (72.3) (114.9)
-------- --------
Profit before tax 411.0 403.9
Tax 3 (124.5) (123.0)
-------- --------
Profit for the year 286.5 280.9
-------- --------
Attributable to:
Equity holders of the parent 285.7 280.3
Minority interest 0.8 0.6
-------- --------
286.5 280.9
-------- --------
Earnings per share
From continuing operations
Basic 5 50.6p 49.1p
-------- --------
Diluted 5 49.8p 48.8p
-------- --------
Consolidated statement of recognised income and expense for the year ended to
31 December 2005
2005 2004
#m #m
-------- --------
Net exchange differences on translation of foreign operations 36.4 (6.5)
Actuarial (losses)/gains on defined benefit pension schemes (73.3) 15.6
Tax on actuarial (losses)/gains taken directly to
equity 22.0 (5.0)
-------- --------
Net (expense)/income recognised directly in equity (14.9) 4.1
Profit for the year 286.5 280.9
-------- --------
Total recognised income for the year 271.6 285.0
-------- --------
Attributable to:
Equity holders of parent 270.8 284.4
Minority interests 0.8 0.6
-------- --------
271.6 285.0
-------- --------
Reconciliation of movements in consolidated equity for the year to
31 December 2005
Note 2005 2004
#m #m
Total recognised income for the year 271.6 285.0
Dividends on equity shares 4 (71.3) (53.9)
New share capital subscribed 9.8 3.7
Proceeds from sale of own shares 7.3 3.2
Purchase of own shares - (46.9)
Share-based payment credit 5.9 -
Increase/(decrease) in share-based payment tax reserve 1.2 (0.4)
Credit to equity relating to own shares 1.3 -
Increase in other reserve 0.6 -
Decrease in minority interests (0.9) (0.7)
-------- --------
Net increase in equity 225.5 190.0
Opening equity 1,703.8 1,513.8
-------- --------
Closing equity 1,929.3 1,703.8
-------- --------
Consolidated balance sheet at 31 December 2005
2005 2004
#m #m
Non-current assets
Goodwill 363.9 363.2
Property and plant 24.4 24.2
Investment property - -
Interests in joint ventures 92.1 87.0
Other financial assets 17.8 26.5
Deferred tax assets 101.2 71.1
------- --------
599.4 572.0
------- --------
Current assets
Inventories 2,699.6 2,422.2
Trade and other receivables 301.3 282.5
Cash and cash equivalents 197.3 114.9
------- --------
3,198.2 2,819.6
------- --------
Total assets 3,797.6 3,391.6
------- --------
Current liabilities
Trade and other payables (822.1) (709.7)
Tax liabilities (61.6) (67.8)
Debenture loans (6.5) (16.2)
Bank overdrafts and loans (9.0) (16.5)
------- --------
(899.2) (810.2)
------- --------
Net current assets (2,299.0) 2,009.4
------- --------
Non-current liabilities
Trade and other payables (76.2) (73.6)
Debenture loans (638.0) (620.7)
Bank loans (0.7) (0.3)
Retirement benefit obligation (222.5) (146.3)
Deferred tax liabilities (0.9) (6.8)
Long-term provisions (30.8) (29.9)
------- --------
(969.1) (877.6)
------- --------
------- --------
Total liabilities (1,868.3) (1,687.8)
------- --------
------- --------
Net assets 1,929.3 1,703.8
------- --------
Equity
Share capital 148.0 146.7
Share premium account 756.2 748.1
Revaluation reserve 0.5 0.7
Own shares (53.9) (57.8)
Share-based payment tax reserve 4.0 2.8
Capital redemption reserve 31.5 31.5
Other reserve 5.4 4.8
Translation reserve 29.9 (6.5)
Retained earnings 1,006.8 832.5
------- --------
Equity attributable to equity holders of the parent 1,928.4 1,702.8
Minority interests 0.9 1.0
------- --------
Total equity 1,929.3 1,703.8
------- --------
Consolidated cash flow statement for the year to 31 December 2005
Note 2005 2004
#m #m
Net cash from operating activities 6 130.2 198.1
Investing activities
Interest received 8.3 6.3
Dividends received from joint ventures 3.0 2.2
Proceeds on disposal of properties, plant
and investments 13.9 189.9
Purchases of properties, plant and
investments (6.3) (8.5)
Amounts invested in joint ventures (22.8) (21.2)
Amounts repaid by joint ventures 27.2 12.5
-------- --------
Net cash from investing activities 23.3 181.2
-------- --------
Financing activities
Equity dividends paid (71.3) (53.9)
Dividends paid by subsidiaries to minority
shareholders (0.9) (0.7)
Issue of ordinary share capital 9.8 3.7
Proceeds from sale of own shares 7.3 3.2
Purchase of own shares - (50.3)
Redemption of preference shares - (100.0)
New debenture loans raised 1.8 334.4
New bank loans raised 410.2 339.4
Repayment of debenture loans (18.5) (116.6)
Repayment of bank loans (416.2) (771.4)
Increase in bank overdrafts (2.3) 6.0
-------- --------
Net cash used in financing activities (80.1) (406.2)
-------- --------
-------- --------
Net increase/(decrease) in cash and cash 73.4 (26.9)
equivalents
Cash and cash equivalents at beginning of year 114.9 143.8
Effect of foreign exchange rate changes 9.0 (2.0)
-------- --------
Cash and cash equivalents at end of year 197.3 114.9
-------- --------
Notes to the financial statements for the year to 31 December 2005
1. 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 Housing Property Construction Consolidated
United North Spain and Total
Kingdom America Gibraltar
2005 #m #m #m #m #m #m #m
Revenue:
External sales 1,607.9 1,102.1 75.7 2,785.7 192.0 499.2 3,476.9
Inter-segment
sales 4.8 - - 4.8 - 71.1 75.9
Eliminations (4.8) - - (4.8) - (71.1) (75.9)
------- ------ ------- ------ ------- -------- --------
Total revenue 1,607.9 1,102.1 75.7 2,785.7 192.0 499.2 3,476.9
Share of joint
ventures'
revenue 39.5 39.7 - 79.2 - 0.3 79.5
------- ------ ------- ------ ------- -------- --------
Group and
share of joint
ventures 1,647.4 1,141.8 75.7 2,864.9 192.0 499.5 3,556.4
------- ------ ------- ------ ------- -------- --------
Inter-segment construction and housing revenue relates to construction contracts
conducted on an arms-length basis.
Result:
Profit before
joint 227.4 185.6 23.0 436.0 15.7 8.3 460.0
ventures
Share of joint
ventures'
profit 6.0 14.0 - 20.0 - 0.5 20.5
------- ------ ------- ------ ------- -------- --------
Profit* 233.4 199.6 23.0 456.0 15.7 8.8 480.5
Share of joint
ventures'
interest and
tax (5.4) (0.1) - (5.5) - - (5.5)
------- ------ ------- ------ ------- -------- --------
Profit from 228.0 199.5 23.0 450.5 15.7 8.8 475.0
operations
Interest 8.3
receivable
Finance costs (72.3)
------- ------ ------- ------ ------- -------- --------
Profit before 411.0
tax
Tax (124.5)
------- ------ ------- ------ ------- -------- --------
Profit for the
year 286.5
------- ------ ------- ------ ------- -------- --------
*Profit is profit from operations before joint ventures' interest and tax.
Other
information:
Property and
plant additions 0.9 1.4 0.1 2.4 - 3.8 6.2
Depreciation -
plant 1.1 0.8 0.2 2.1 - 3.7 5.8
------- ------ ------- ------ ------- -------- --------
Notes to the financial statements for the year to 31 December 2005
1. Business segments continued
Housing Housing Housing Total Property Construction Consolidated
United North Spain and Housing
Kingdom America Gibraltar
2005 2005 2005
2005 #m #m #m #m #m #m #m
Assets:
Segment assets 2,160.2 746.9 121.5 3,028.6 25.2 152.6 3,206.4
Share of joint
ventures'
assets 133.7 55.9 - 189.6 - - 189.6
Eliminations (133.5) (26.1) - (159.6) - - (159.6)
------- ------- ------- ------- ------- ------- -------
2,160.4 776.7 121.5 3,058.6 25.2 152.6 3,236.4
------- ------- ------- ------- ------- -------
Goodwill 363.9
Cash and cash
equivalents 197.3
-------
Consolidated
total assets 3,797.6
-------
Liabilities:
Segment
liabilities (575.3) (281.1) (64.0) (920.4) (17.4) (276.3) (1,214.1)
Share of joint
ventures'
liabilities (133.5) (26.1) - (159.6) - - (159.6)
Eliminations 133.5 26.1 - 159.6 - - 159.6
------- ------- ------- ------- ------- ------- -------
(575.3) (281.1) (64.0) (920.4) (17.4) (276.3) (1,214.1)
Gross debt (654.2)
-------
Consolidated
total liabilities (1,868.3)
-------
Capital 1,585.1 495.6 57.5 2,138.2 7.8 (123.7) 2,022.3
employed
Goodwill 363.9
Net debt (456.9)
-------
Net assets 1,929.3
Notes to the financial statements for the year to 31 December 2005
1. Business segments continued
Housing Housing Housing Housing Property Construction Consolidated
United North Spain and Total
Kingdom America Gibraltar
2004 2004 2004 2004 2004 2004 2004
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
item 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
item* 301.1 127.6 20.1 448.8 26.7 17.8 493.3
Exceptional item* 11.6 0.9 - 12.5 - 12.3 24.8
------- ------- ------- ------- ------- ------- -------
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
Interest
receivable 6.3
Finance costs (114.9)
------- ------- ------- ------- ------- ------- -------
Profit before tax 403.9
Tax (123.0)
------- ------- ------- ------- ------- ------- -------
Profit for the
year 280.9
-------
The exceptional item relates to the curtailment of pension liability.
Other
information:
Property and
plant additions 1.7 1.0 0.1 2.8 - 3.4 6.2
Depreciation -
plant 2.0 0.8 0.3 3.1 - 3.6 6.7
------- ------- ------- ------- ------- ------- -------
Notes to the financial statements for the year to 31 December 2005
1. Business segments continued
Housing Housing Housing Housing Property Construction Consolidated
United North Spain and Total
Kingdom America Gibraltar
2004 2004 2004 2004 2004 2004 2004
2004 #m #m #m #m #m #m #m
Assets:
Segment assets 1,998.6 517.8 81.1 2,597.5 159.4 121.9 2,878.8
Share of joint
ventures'
assets 147.7 49.2 - 196.9 - 0.1 197.0
Eliminations (150.0) (12.2) - (162.2) - (0.1) (162.3)
------- ------- ------- ------- ------- ------- -------
1,996.3 554.8 81.1 2,632.2 159.4 121.9 2,913.5
Goodwill 363.2
Cash and cash
equivalents 114.9
-------
Consolidated
total assets 3,391.6
-------
Liabilities:
Segment
liabilities (513.9) (238.9) (38.0) (790.8) (17.3) (226.0) (1,034.1)
Share of joint
ventures'
liabilities (150.0) (12.2) - (162.2) - (0.1) (162.3)
Eliminations 150.0 12.2 - 162.2 - 0.1 162.3
------- ------- ------- ------- ------- ------- -------
(513.9) (238.9) (38.0) (790.8) (17.3) (226.0) (1,034.1)
------- ------- ------- ------- ------- -------
Gross debt (653.7)
-------
Consolidated
total
liabilities (1,687.8)
-------
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
-------
Geographical segments
The Group's operations are located primarily in the United Kingdom and North
America. The Group's housing divisions are already segmented geographically
above. The property division is located in the United Kingdom. The construction
division is primarily located in the United Kingdom.
The following table provides an analysis of the Group's sales by geographical
market, irrespective of the origin of the goods/services:
Sales revenue by geographical market
2005 2004
#m #m
United Kingdom 2,248.4 2,336.5
North America 1,102.1 851.3
Rest of the world 126.4 123.7
-------- --------
3,476.9 3,311.5
-------- --------
Notes to the financial statements for the year to 31 December 2005
1. Business segments continued
The following is an analysis of the carrying amount of segment assets, and
additions to property and plant, analysed by the geographical area in which the
assets are located:
Carrying amount of Additions to property
segment assets and plant
2005 2004 2005 2004
#m #m #m #m
United Kingdom 2,725.5 2,638.6 1.2 2.7
North America 902.2 633.2 1.4 1.0
Rest of the
world 169.9 119.8 3.6 2.5
-------- -------- -------- --------
3,797.6 3,391.6 6.2 6.2
-------- -------- -------- --------
2. Finance costs
2005 2004
#m #m
Interest on bank overdrafts and loans 20.6 31.5
Interest on debenture loans 42.1 33.5
5.09875% preference dividend - 1.3
-------- --------
Interest on borrowings 62.7 66.3
Exceptional loss on repurchase of 9.5% first mortgage
debenture stock 2014 - 41.1
Amortisation of discount on land creditors 5.4 3.2
Notional interest on pension liability 4.2 4.3
-------- --------
72.3 114.9
-------- --------
3. Taxation
2005 2004
#m #m
-------- --------
Current tax:
UK Corporation tax: Current year 111.8 66.1
Prior year (9.7) 1.8
Relief for foreign tax (63.0) (1.3)
Foreign tax: Current year 82.3 60.8
Prior year 14.2 (0.4)
-------- --------
135.6 127.0
-------- --------
Deferred tax:
UK: Current year 9.0 (1.3)
Prior year 1.2 0.5
Foreign: Current year (7.3) (4.7)
Prior year (14.0) 1.5
-------- --------
(11.1) (4.0)
-------- --------
-------- --------
124.5 123.0
-------- --------
UK Corporation tax is calculated at 30% (2004: 30%) of the estimated assessable
profit for the year. Taxation for other jurisdictions is calculated at the rates
prevailing in the respective jurisdictions.
Notes to the financial statements for the year to 31 December 2005
4. Dividends
2005 2004
#m #m
Amounts recognised as distributions to equity holders
in the year:
Final dividend for the year to 31 December 2004 of 8.1p
(2003: 6.5p) per share 45.5 37.4
Interim dividend for the year to 31 December 2005 of 4.5p
per share (2004: 3.0p) 25.8 16.5
-------- --------
71.3 53.9
-------- --------
2005 2004
#m #m
Proposed final dividend for the year to 31 December 2005
of 8.9p (2004: 8.1p) per share 52.7 45.5
-------- --------
The proposed final dividend is subject to approval at the Annual General Meeting
and has not been included as a liability in these financial statements.
5. Earnings per share
Earnings per share 2005 2004
Basic 50.6p 49.1p
Diluted 49.8p 48.8p
Adjusted basic 50.6p 51.1p
Adjusted diluted 49.8p 50.8p
-------- --------
The calculation of basic, diluted, adjusted basic and adjusted diluted earnings
per share is based on the following data:
Earnings 2005 2004
#m #m
Earnings for basic earnings per share and diluted
earnings per share 285.7 280.3
Add/(less):
Curtailment of pensions liability - (24.8)
Loss on repurchase of debt - 41.1
Less: Tax effect of above items - (4.9)
-------- --------
Earnings for adjusted basic and adjusted diluted
earnings per share 285.7 291.7
-------- --------
Weighted average number of shares 2005 2004
m m
For basic and adjusted basic earnings per share 564.6 570.4
Weighted average of dilutive options 7.8 3.1
Weighted average of dilutive awards under bonus plans 1.1 1.0
-------- --------
For diluted and adjusted diluted earnings per share 573.5 574.5
-------- --------
Notes to the financial statements for the year to 31 December 2005
6. Note to the consolidated cash flow statement
2005 2004
#m #m
Profit from operations 475.0 512.5
Adjustments for:
Exchange adjustments - 6.3
Depreciation of plant 5.8 6.7
Share-based payment charge 5.9 -
Gain on disposal of property, plant and investments (10.2) (21.7)
Share of joint ventures' operating profit (15.0) (8.8)
Decrease in provisions (0.4) (1.6)
-------- --------
Operating cash flows before movement in working
capital 461.1 493.4
Increase in inventories (204.9) (12.2)
(Increase)/decrease in receivables (9.1) 42.1
Increase/(decrease) in payables 112.6 (112.8)
-------- --------
Cash generated by operations 359.7 410.5
Income taxes paid (153.7) (98.4)
Interest paid (75.8) (114.0)
-------- --------
Net cash from operating activities 130.2 198.1
Net Debt 2005 2004
#m #m
Cash and cash equivalents 197.3 114.9
Debenture loans (644.5) (636.9)
Bank overdrafts and bank loans (9.7) (16.8)
-------- --------
(456.9) (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.
7. Statutory Accounts
The Preliminary Accounts were approved by the board of directors on 27 February
2006. These accounts do not constitute the company's statutory accounts for the
years ended 31 December 2005 or 2004 (as restated for IFRS) but are derived from
those accounts. Statutory accounts for 2004 have been delivered to the Registrar
of Companies and those for 2005 will be delivered following the company's annual
general meeting. The auditors have reported on these accounts; their reports
were unqualified and did not contain a statement under section 237 (2) or (3) of
the Companies Act 1985.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UBUURNKRUUUR
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