Interim Results:Part II of II

Berkeley Group Holdings (The) PLC 09 December 2004 The Berkeley Group Holdings plc Consolidated Profit and Loss Account (Unaudited) ----------------------- ------ ---------- --------- --------- Notes Six months Six months Year ended 31 ended 31 ended 30 October 2004 October 2003 April 2004 Unaudited Unaudited Audited (Restated*) (Restated*) Â£'000 Â£'000 Â£'000 ----------------------- ------ ---------- --------- --------- Turnover including share of joint ventures 2 (a) 587,357 635,199 1,396,133 Less: share of joint ventures' turnover (68,692) (59,449) (123,690) ----------------------- ------ ---------- --------- --------- Turnover - continuing operations 518,665 575,750 1,272,443 Cost of sales (374,709) (419,157) (965,238) ----------------------- ------ ---------- --------- --------- Gross profit 143,956 156,593 307,205 Net operating expenses (43,165) (47,013) (94,404) ----------------------- ------ ---------- --------- --------- Operating profit - continuing operations 100,791 109,580 212,801 Share of operating profit in joint ventures 10,663 10,596 21,924 ----------------------- ------ ---------- --------- --------- Total operating profit including share of joint ventures 2 (b) 111,454 120,176 234,725 Merger expenses 1 (1,536) - - ----------------------- ------ ---------- --------- --------- Profit on ordinary activities before interest and taxation 3 109,918 120,176 234,725 Net interest receivable/(payable) 630 (3,890) (4,958) ----------------------- ------ ---------- --------- --------- Profit on ordinary activities before taxation 4 110,548 116,286 229,767 Taxation on profit on ordinary activities (32,612) (34,648) (67,747) ----------------------- ------ ---------- --------- --------- Profit on ordinary activities after taxation 77,936 81,638 162,020 Dividends - (7,089) (26,596) ----------------------- ------ ---------- --------- --------- Retained profit for the period 77,936 74,549 135,424 ----------------------- ------ ---------- --------- --------- Dividends per Ordinary Share - 5.8p 22.3p ----------------------- ------ ---------- --------- --------- Earnings per Ordinary Share - basic 5 65.4p 64.5p 130.4p - diluted 5 64.7p 64.3p 129.7p ----------------------- ------ ---------- --------- --------- * See note 1 The Berkeley Group Holdings plc Consolidated Balance Sheet (Unaudited) At At At 31 October 31 October 30 April 2004 2003 2004 Unaudited Unaudited Audited (Restated*) (Restated*) Â£'000 Â£'000 Â£'000 ------------------------------ --------- --------- --------- Fixed assets Tangible assets 10,462 16,016 13,996 Investments - 5 - Joint ventures - Share of gross assets 197,678 232,758 216,431 - Share of gross liabilities (126,884) (168,955) (148,524) ------------------------------ --------- --------- --------- 70,794 63,803 67,907 ------------------------------ --------- --------- --------- 81,256 79,824 81,903 ------------------------------ --------- --------- --------- Current Assets Stocks 1,070,871 1,080,288 1,066,275 Debtors 108,416 184,558 172,301 Investments - 62,609 - Cash at bank and in hand 349,311 96,691 245,306 ------------------------------ --------- --------- --------- 1,528,598 1,424,146 1,483,882 ------------------------------ --------- --------- --------- Creditors (amounts falling due within one year) Borrowings (25,106) (120) (25,120) Other creditors (290,632) (273,973) (313,476) ------------------------------ --------- --------- --------- (315,738) (274,093) (338,596) ------------------------------ --------- --------- --------- Net current assets 1,212,860 1,150,053 1,145,286 ------------------------------ --------- --------- --------- Total assets less current liabilities 1,294,116 1,229,877 1,227,189 ------------------------------ --------- --------- --------- Creditors (amounts falling due after more than one year) Borrowings (75,000) (100,000) (75,000) Other creditors (15,743) (4,214) (9,579) ------------------------------ --------- --------- --------- (90,743) (104,214) (84,579) ------------------------------ --------- --------- --------- Net assets 1,203,373 1,125,663 1,142,610 ------------------------------ --------- --------- --------- Capital and reserves Share capital 30,200 31,881 30,516 Share premium - - - Capital redemption reserve - - - Other reserve (961,299) 427,067 431,055 Retained profit 2,100,518 632,080 652,725 Joint ventures' reserves 33,454 34,135 27,814 ------------------------------ --------- --------- --------- Equity shareholders' funds 1,202,873 1,125,163 1,142,110 Equity minority interest 500 500 500 ------------------------------ --------- --------- --------- 1,203,373 1,125,663 1,142,610 ------------------------------ --------- --------- --------- Net assets per Ordinary Share 1,005p 888p 944p ------------------------------ --------- --------- --------- * See note 1 The Berkeley Group Holdings plc Consolidated Cash Flow Statement (Unaudited) Six months Six months Year ended 31 ended 31 ended 30 October 2004 October 2003 April 2004 Unaudited Unaudited Audited (Restated*) (Restated*) Â£'000 Â£'000 Â£'000 ------------------------------- ---------- --------- --------- Net cash inflow from continuing operating activities 164,171 193,241 435,959 Dividends from joint ventures 510 355 9,865 Returns on investments and servicing of finance 1,525 (2,498) (1,704) Taxation (29,534) (29,102) (62,594) Capital expenditure and financial investment 6,486 18 (25,642) Acquisitions and disposals (1,536) - 6,781 Equity dividends paid (19,676) (18,324) (25,414) ------------------------------- ---------- --------- --------- Net cash inflow before financing 121,946 143,690 337,251 Financing (17,941) (104,102) (149,048) ------------------------------- ---------- --------- --------- Increase in cash in the period 104,005 39,588 188,203 ------------------------------- ---------- --------- --------- Reconciliation of net cash flow to movement in net cash/ (debt) ------------------------------- ---------- --------- --------- Increase in cash in the period 104,005 39,588 188,203 Cash outflow from decrease in debt 14 100,033 100,033 ------------------------------- ---------- --------- --------- Movement in net cash/(debt) in the period 104,019 139,621 288,236 Opening net cash/(debt) 145,186 (143,050) (143,050) ------------------------------- ---------- --------- --------- Closing net cash/(debt) 249,205 (3,429) 145,186 ------------------------------- ---------- --------- --------- Reconciliation of operating Six months Six months Year profit to operating cash ended 31 ended 31 ended 30 flows October 2004 October 2003 April 2004 Unaudited Unaudited Audited (Restated*) (Restated*) Â£'000 Â£'000 Â£'000 ------------------------------- ---------- --------- --------- Operating profit 100,791 109,580 212,801 Depreciation 1,358 1,428 3,085 Profit on sale of tangible fixed assets (400) (161) (618) Profit on sale of fixed asset investments - - (144) Stocks -(increase)/decrease (4,596) 70,815 84,828 Debtors - decrease 63,588 65,152 77,131 Investments - (increase)/decrease - (517) 62,047 Creditors - increase/(decrease) 2,677 (53,629) (4,762) Non-cash charge in respect of share awards 753 573 1,591 ------------------------------- ---------- --------- --------- Net cash inflow from continuing operating activities 164,171 193,241 435,959 ------------------------------- ---------- --------- --------- * See note 1 The Berkeley Group Holdings plc Consolidated Statement of Total Recognised Gains and Losses ------------------------------- ---------- --------- --------- Six months Six months Year ended 31 ended 31 ended 30 October 2004 October 2003 April 2004 Unaudited Unaudited Audited (Restated*) (Restated*) Â£'000 Â£'000 Â£'000 ------------------------------- ---------- --------- --------- Profit for the financial period 77,936 81,638 162,020 ------------------------------- ---------- --------- --------- Total recognised gains for the period 77,936 81,638 162,020 Prior year adjustment (see note 1) (338) ------------------------------- ---------- --------- --------- Total gains recognised since last annual report 77,598 ------------------------------- ---------- --------- --------- * See note 1 Reconciliation of Movements in Shareholders' Funds ------------------------------- ---------- --------- --------- Six months Six months Year ended 31 ended 31 ended 30 October 2004 October 2003 April 2004 Unaudited Unaudited Audited (Restated*) (Restated*) Â£'000 Â£'000 Â£'000 ------------------------------- ---------- --------- --------- Profit for the period 77,936 81,638 162,020 Dividends - (7,089) (26,596) ------------------------------ ---------- --------- --------- Retained earnings 77,936 74,549 135,424 Share buy-backs (20,656) (7,863) (52,363) New shares issued 9,797 4,592 7,217 Issue/redemption expenses (2,746) - - Contribution on exercise of share options (4,321) (1,298) (2,240) Credit in respect of employee share schemes 753 573 1,591 Consideration paid for purchase of own shares held in Employee Share Ownership Trusts - - (2,129) ------------------------------ ---------- --------- --------- Net additions to equity shareholders' funds 60,763 70,553 87,500 ------------------------------ ---------- --------- --------- Opening equity shareholders' funds as previously stated 1,144,532 1,056,156 1,056,156 Prior period adjustment (see note 1) (2,422) (1,546) (1,546) ------------------------------ ---------- --------- --------- Opening equity shareholders' funds as restated 1,142,110 1,054,610 1,054,610 ------------------------------ ---------- --------- --------- Closing equity shareholders' funds 1,202,873 1,125,163 1,142,110 ------------------------------ ---------- --------- --------- * See note 1 The Berkeley Group Holdings plc Notes to the Interim Report 1. Basis of preparation The interim accounts of The Berkeley Group Holdings plc have been prepared in accordance with the accounting policies set out in the audited financial statements of The Berkeley Group plc for the year ended 30 April 2004, apart from the exceptions described below. From 1 May 2004, the Group has adopted UITF Abstracts 17 (revised 2003) and 38 in respect of employee share schemes and Employee Share Ownership Trusts. The cost of awards made under the share schemes is now calculated with reference to the fair value of the award at the date of grant rather than the cost of shares purchased by the Group to satisfy the award. In addition, the cost of shares held by the Group's Employee Share Ownership Trusts, previously shown as an asset in investments in the balance sheet, is now deducted from shareholders' funds. The comparative figures have been restated to reflect the impact of these changes. Retained profit for the six months ended 31 October 2003 and for the year ended 30 April 2004, as published last year, has been reduced by Â£528,000 and Â£479,000 respectively to reflect the impact of the revision to UITF 17. Shareholders' funds at 1 May 2003, 31 October 2003 and 1 May 2004 have been reduced by Â£1,546,000, Â£1,345,000 and Â£2,422,000 respectively, to reflect the impact of the revision to UITF 17 and the deduction of the cost of the shares from shareholders' funds. The Group cash flow statement has also been restated to show the relevant cash flows in financing activities rather than capital expenditure and financial investment. Scheme of Arrangement and capital restructure In June 2004, The Berkeley Group plc announced proposals for the return of Â£12 per existing ordinary share to shareholders by way of a capital reorganisation, incorporating a Scheme of Arrangement. Following approval by shareholders in September 2004 and ratification by the Court on 25 October 2004, shareholders, on 26 October 2004, exchanged each existing ordinary share in The Berkeley Group plc for a newly issued Unit (each Unit comprising one new ordinary share of a nominal value of Â£0.05, one 2004 B preference share of a nominal value of Â£5.00, one 2006 B preference share of a nominal value of Â£2.00, one 2008 B preference share of a nominal value of Â£1.60 and one 2010 B preference share of a nominal value of Â£3.21) in The Berkeley Group Holdings plc ('the Company'), thereby introducing the Company as the new parent holding company of The Berkeley Group plc and its subsidiaries. The Company issued the shares comprised in 120,798,270 Units credited as fully paid at the aggregate nominal value of Â£11.86, which was the closing price of an ordinary share in The Berkeley Group plc on 25 October 2004. The Directors intend to return the Â£12 per unit to shareholders by January 2011 with cash payments in respect of the B shares, subject to having sufficient funding and distributable reserves, as follows: Class of B share Expected Record Date Proceeds per Share ------------ --------------- -------------- 2004 B Share 26 November 2004 Â£5 2006 B Share 29 December 2006 Â£2 2008 B Share 31 December 2008 Â£2 2010 B Share 31 December 2010 Â£3 ------------ --------------- -------------- Total Â£12 ------------ --------------- -------------- The return to shareholders has been facilitated by the Court approved reduction of capital that became effective on 28 October 2004. Through this reduction of capital, he nominal amount of each Unit was reduced to Â£0.25 (each Unit comprising one new ordinary share of a nominal value of Â£0.05, one 2004 B preference share of a nominal value of Â£0.05, one 2006 B preference share of a nominal value of Â£0.05, one 2008 B preference share of a nominal value of Â£0.05 and one 2010 B preference share of a nominal value of Â£0.05) . This reduction has created distributable reserves of Â£1,402 million to facilitate the return of Â£12 per Unit. The Berkeley Group Holdings plc Notes to the Interim Report (continued) 1 Basis of preparation (continued) With implementation of the Scheme of Arrangement under section 425 of the Companies Act, the Company acquired 100% of the issued share capital of The Berkeley Group plc. In the opinion of the Directors, the Scheme of Arrangement is a group reconstruction rather than an acquisition, since the shareholders in the Company are the same as the former shareholders in The Berkeley Group plc and the rights of each shareholder, relative to the others, are unchanged and no minority interest in the net assets of the group is altered. Accordingly, the Directors have adopted merger rather than acquisition accounting principles in drawing up these interim accounts, having regard to the overriding requirement of section 227(6) of the Companies Act 1985 for the accounts to give a true and fair view of the Group's results and financial position. The Directors consider that it is not practicable to quantify the effect of this departure from the Companies Act 1985 requirements. The interim accounts are presented as if the Scheme of Arrangement had been effective on 1 May 2004, except for the effect of the capital restructure and subsequent reduction of capital which was sanctioned by the Court on 25 October 2004. The consolidated profit and loss account combines the results of The Berkeley Group plc for the six months ended 31 October 2004 with those of the Company for the period since its incorporation to 31 October 2004. The comparative figures relate to The Berkeley Group plc as restated for the effect of the Scheme of Arrangement. ------------------------------ ---------- --------- --------- Six months Six months Year ended 31 ended 31 ended 30 October 2004 October 2003 April 2004 Unaudited Unaudited Audited (Restated*) (Restated*) Â£'000 Â£'000 Â£'000 ------------------------------ ---------- --------- --------- 2. Analysis by Activity a) Turnover ------------------------------ ---------- --------- --------- Residential housebuilding Group 474,177 555,862 1,130,162 Joint ventures 67,553 56,859 120,977 ------------------------------ ---------- --------- --------- 541,730 612,721 1,251,139 ------------------------------ ---------- --------- --------- Commercial property and other activities Group 44,488 19,888 142,281 Joint ventures 1,139 2,590 2,713 ------------------------------ ---------- --------- --------- 45,627 22,478 144,994 ------------------------------ ---------- --------- --------- 587,357 635,199 1,396,133 ------------------------------ ---------- --------- --------- b) Operating profit ------------------------------ ---------- --------- --------- Residential housebuilding Group 96,256 104,948 198,586 Joint ventures 10,378 9,860 19,836 ------------------------------ ---------- --------- --------- 106,634 114,808 218,422 ------------------------------ ---------- --------- --------- Commercial property and other activities Group 4,535 4,632 14,215 Joint ventures 285 736 2,088 ----------------------------- ---------- --------- --------- 4,820 5,368 16,303 ----------------------------- ---------- --------- --------- 111,454 120,176 234,725 ----------------------------- ---------- --------- --------- All turnover and profit relate to continuing activities of the Group and are derived from activities performed in the United Kingdom. Included in Group residential housebuilding turnover and operating margin is Â£3,800,000 and Â£1,264,000 in respect of land sales (2003: Â£9,424,000 and Â£2,264,000). The Berkeley Group Holdings plc Notes to the Interim Report (continued) ------------------------------ ---------- --------- --------- Six months Six months Year ended 31 ended 31 ended 30 October 2004 October 2003 April 2004 Unaudited Unaudited Audited Â£'000 Â£'000 Â£'000 ------------------------------ ---------- --------- --------- 3. Net interest payable Interest receivable 6,092 1,898 4,770 Interest payable on bank loans and overdrafts (3,700) (4,055) (6,207) Interest payable - share of joint ventures (1,762) (1,733) (3,521) ------------------------------ ---------- --------- --------- 630 (3,890) (4,958) ------------------------------ ---------- --------- --------- 4. Taxation (Restated*) (Restated*) ------------------------------ ---------- --------- --------- Current tax UK corporation tax payable (29,371) (34,291) (65,040) Share of joint ventures' tax (2,773) (2,631) (5,184) Adjustments in respect of previous periods 341 - 481 ------------------------------ ---------- --------- --------- Deferred tax (31,803) (36,922) (69,743) (809) 2,274 1,996 ------------------------------ ---------- --------- --------- (32,612) (34,648) (67,747) ------------------------------ ---------- --------- --------- * See note 1 5. Earnings per Ordinary Share Earnings per Ordinary Share is based on the profit after taxation of Â£77,936,000 (2003 restated Â£81,638,000) and the weighted average number of Ordinary Shares in issue during the period of 119,248,313 (2003: 126,489,348). For diluted earnings per Ordinary Share, the weighted average number of Ordinary Shares in issue is adjusted to assume the conversion of all dilutive potential Ordinary Shares. The dilutive potential Ordinary Shares relate to shares granted under employee share schemes where the exercise price is less than the average market price of the Ordinary Shares during the period. The effect of the dilutive potential Ordinary Shares is 1,252,873 shares (2003: 506,367), which gives a diluted weighted average number of Ordinary Shares of 120,501,186 (2003: 126,995,715). 6. These interim accounts are unaudited but have been reviewed by the auditors whose review report is set out below. The abridged financial information relating to the year ended 30 April 2004 is an extract from the latest financial statements of the Berkeley Group plc, which have been filed with the Registrar of Companies, restated as described in Note 1. The report of the auditors on these financial statements was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. The financial information summarised above does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. 7. The interim results were approved by the Board on 9 December 2004 and the interim statement, which is available for inspection at the Company's Registered Office, will be sent by mail to shareholders in December 2004. Independent Review Report to The Berkeley Group Holdings plc Introduction We have been instructed by the Company to review the financial information which comprises the profit and loss account, the balance sheet, the 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. Director's responsibilities The interim report, including the financial information contained therein, is the responsibility of, and had 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 should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with 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 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 United Kingdom Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit 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 six months ended 31 October 2004. PricewaterhouseCoopers LLP Chartered Accountants London 9 December 2004 Notes: (a) The maintenance and integrity of The Berkeley Group Holdings plc website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the interim report since it was initially presented on the website. (b) Legislation in the United Kingdom governing the preparation and dissemination of financial information may differ from legislation in other jurisdictions. This information is provided by RNS The company news service from the London Stock Exchange

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