IFRS Statement
Big Yellow Group PLC
27 September 2005
27 September 2005
Big Yellow Group PLC ("Big Yellow" or "the Group")
Unaudited results for the year ended 31 March 2005
under International Financial Reporting Standards ('IFRS')
Big Yellow Group PLC is today announcing the impact of the adoption IFRS on the
Group's income statement and balance sheet for the year ended 31 March 2005.
Overview
The introduction of IFRS affects accounting only. There is no impact on our
underlying business or cash flows.
The main change resulting from the introduction of IFRS is that Big Yellow has
changed the classification and accounting for the majority of its properties to
"investment properties" with a consequential significant impact on the income
statement and balance sheet.
•Big Yellow storage centres are now classified as investment properties
under the provisions of IAS 40. As a consequence they are held on the
balance sheet at fair value having previously been held at cost.
•Investment properties are not depreciated and will be subject to an
external valuation bi-annually with any movements on revaluation recognised
separately in the income statement.
•Deferred tax arising from revaluation of investment property is provided
in full and movements of this provision are now charged through the income
statement.
•In accordance with IAS 40, investment properties which are owned
leasehold are accounted for as finance leases rather than operating leases.
The other principal changes arising from the adoption of IFRS for the March 2005
results are:
•Recognition of the final dividend only after its approval at the Group's
Annual General Meeting.
•Deferred tax provision for potential deduction on exercise of share
options.
•Inclusion of a charge in respect of the fair value of share options.
•Goodwill is subject to an annual impairment review and as a result there
is no charge in the year.
•A fair value adjustment in respect of the Group's fixed interest rate
debt has been debited to the income statement.
Effect on Key Numbers 2004/05
UK GAAP IFRS
£m £m
Profit from Operations 9.7 15.0
Profit before Tax 4.1 42.8
Profit after Tax 2.5 30.1
Net Assets 58.7 159.2
EPS 2.52p 30.15p
Adjusted EPS 2.52p 5.61p
Adjusted NAV per share 185.8p 191.1p
For further information, please contact:
Big Yellow Group PLC 01276 470190
James Gibson, Chief Executive
Weber Shandwick Square Mile 020 7067 0700
Louise Robson or Yvonne Alexander
27 September 2005
Big Yellow Group PLC ("Big Yellow" or "the Group")
Unaudited results for the year ended 31 March 2005
under International Financial Reporting Standards ('IFRS')
Introduction
Under European Union (EU) regulations EU listed companies are required to
prepare consolidated financial statements in accordance with International
Financial Reporting Standards (IFRS) for accounting periods beginning on or
after 1 January 2005. Big Yellow will therefore publish its 2005/6 Interim
Report and 2005/6 Annual Report and Accounts in accordance with IFRS.
The purpose of this document is to
•Explain the basis on which Big Yellow has effected the transition to
IFRS;
•Set out the principal accounting changes between UK GAAP and IFRS as they
affect Big Yellow; and
•Show the impact of the restatement in accordance with IFRS on Big
Yellow's previously reported UK GAAP financial statements for the year ended
31 March 2005.
The financial information has been set out in 2 sections:
Section 1 - Basis of Preparation
This describes the IFRS 1 "First Time Adoption" exemptions that Big Yellow
has elected to take and the assumptions made in implementing IFRS. The
section provides an overview of the impact of IFRS on the financial
statements, and explains the principal differences between UK GAAP and IFRS
affecting Big Yellow's financial statements.
Section 2 - Financial Information for the year ended 31 March 2005
This comprises of a restated Group income statement, Group balance sheet,
Group statement of changes in shareholder's equity, Group cash flow
statement and Group reconciliation of Earnings per share and Net Asset Value
per share
SECTION 1
BASIS OF PREPARATION
1. Qualifications and IFRS 1 exemptions
Qualifications
European Union (EU) regulations require that the Group's financial statements
for the year ended 31 March 2006 are prepared on the basis of IFRS, including
interpretations issued by the Standard Interpretations Committee (SIC) and
International Financial Reporting Interpretations Committee (IFRIC) of the
International Accounting Standards Board. Although the IASB adopted a "stable
platform" in 2004, IFRS has continued, and will continue to evolve. As a result
the financial information contained in this release may be amended before it is
presented as comparative figures in the IFRS accounts to be issued by the Group
for the six months ending 30 September 2005 as well as for the year ending 31
March 2006. Furthermore, the financial information contained in this release
does not constitute a complete set of financial statements including comparative
figures and notes.
IFRS 1 exemptions
The transition to IFRS is governed by the requirements of IFRS 1 "First-time
Adoption of IFRS". The opening IFRS balance sheet on 1 April 2004 (the date of
transition to IFRS) has been prepared using accounting policies which the
Directors expect to be applicable as at 31 March 2006.
IFRS 1 permits companies adopting IFRS for the first time to take certain
exemptions from full retrospective application of IFRS accounting policies. Big
Yellow has taken the following key exemptions:
(a) Business combinations: Big Yellow has chosen not to restate business
combinations that occurred prior to 1 April 2004 to comply with IFRS 3
"Business Combinations". As a result the carrying value of goodwill
recorded under UK GAAP as at 1 April 2004 has been fixed at transition
date.
(b) Share-based payments: IFRS 2 "Share-based Payments" has been applied
retrospectively to equity-settled awards that had not vested as at 1
April 2005 and were granted on or after 7 November 2002.
(c) Financial Instruments: Big Yellow has elected to apply IAS 32 and IAS 39
from 1 April 2005. The Group has decided not to adopt hedge accounting.
In accordance with IFRS 1 Big Yellow has not revised estimates required under
IFRS that were also required under UK GAAP as at 31 March 2004 and 2005, and, in
addition where estimates were not required under UK GAAP, they have been based
on information known at that time, and not subsequent events.
2. Basis of presentation
The preliminary comparative financial statements included in this document are
in accordance with IAS 1 "Presentation of Financial Statements". However, where
no definitive guidance exists in respect of presentation, a UK GAAP approach has
been followed to maintain consistency with previous years. The formats adopted
may therefore require modification in the future as best practice develops and
further guidance is issued.
Over the past 18 months the Group has been working towards the implementation of
IFRS which involved:
•the analysis of each Standard to identify the difference between the Big
Yellow's existing accounting policies under UK GAAP.
•the collection of additional data required to restate Big Yellow's
results in accordance with IFRS with effect from the transition date.
•the ongoing modification of Big Yellow's reporting systems to meet IFRS
requirements.
Progress of the IFRS project has been reported on regularly to the Audit
Committee.
3. Overview of impact of IFRS
A summary of the impact on Big Yellow's 2004/5 profit for the year, earnings per
share and net assets is set out below in paragraphs 3.1 to 3.3. Explanations of
these changes are set out in paragraph 4.
3.1 Income statement
+----------------------------------------+----+--------+--------+-------+
|Impact of IFRS |Para| £'000| £'000| £'000|
|For the year ended 31 March 2005 | | Profit| Tax| Profit|
| | | before| | after|
| | | tax| | tax|
+----------------------------------------+----+--------+--------+-------+
|UK GAAP - Profit for the financial year | | 4,053| (1,531)| 2,522|
+----------------------------------------+----+--------+--------+-------+
|IAS 40 Investment property | 4.1| | | |
+----------------------------------------+----+--------+--------+-------+
| - Reversal of depreciation | | 3,685| (639)| 3,046|
| - Gain on revaluation of properties | | 34,976|(10,493)| 24,483|
| - Leases | | 40| (12)| 28|
+----------------------------------------+----+--------+--------+-------+
|IFRS 2 Share based payments | 4.3| (82)| -| (82)|
+----------------------------------------+----+--------+--------+-------+
|IFRS 3 Business combinations - | 4.4| 97| -| 97|
|elimination of goodwill amortisation | | | | |
+----------------------------------------+----+--------+--------+-------+
|IAS 39 Financial instruments | 4.5| 67| (20)| 47|
+----------------------------------------+----+--------+--------+-------+
|IFRS restated profit for the year | | 42,836|(12,695)| 30,141|
+----------------------------------------+----+--------+--------+-------+
3.2 Earnings per share
+---------------------------------------------------+---------+---------+
|Impact of IFRS | Basic|Adjusted*|
|For the year ended 31 March 2005 | pence| pence|
+---------------------------------------------------+---------+---------+
|UK GAAP | 2.52| 2.52|
+---------------------------------------------------+---------+---------+
|IAS 40 Investment property | | |
+---------------------------------------------------+---------+---------+
| - Reversal of depreciation | 3.68| 3.68|
| - Gain on revaluation of properties | 34.98| -|
| - Leases | 0.04| 0.04|
+---------------------------------------------------+---------+---------+
|IAS 12 Income taxes | (11.16)| (0.65)|
+---------------------------------------------------+---------+---------+
|IFRS 2 Share based payments | (0.08)| (0.08)|
+---------------------------------------------------+---------+---------+
|IFRS 3 Business combinations - elimination of | 0.10| 0.10|
|goodwill amortisation | | |
+---------------------------------------------------+---------+---------+
|IAS 39 Financial instruments | 0.07| -|
+---------------------------------------------------+---------+---------+
|IFRS restated | 30.15| 5.61|
+---------------------------------------------------+---------+---------+
* Adjusted earnings per share as set out above and in section 2.5
3.3 Net assets
+---------------------------------------------------+---------+---------+
|Reconciliation of net assets | Para No | £'000|
+---------------------------------------------------+---------+---------+
| | | |
+---------------------------------------------------+---------+---------+
|Net assets - UK GAAP at 31 March 2005 | | 58,679|
+---------------------------------------------------+---------+---------+
|IAS 40 Investment property | 4.1 | |
+---------------------------------------------------+---------+---------+
| - Revaluation of investment properties | | 133,979|
| - Reversal of depreciation | | 3,685|
| - Short term provisions and leases | | 96|
+---------------------------------------------------+---------+---------+
|IAS 12 Income taxes - effect of revaluation of | 4.2 | (38,727)|
|investment properties | | |
+---------------------------------------------------+---------+---------+
|IFRS 3 Business combinations - goodwill | 4.4 | 97|
|amortisation not charged | | |
+---------------------------------------------------+---------+---------+
|IAS 39 Financial instruments | 4.5 | (153)|
+---------------------------------------------------+---------+---------+
|IAS 10 Events after balance sheet date - | 4.6 | 1,512|
|elimination of proposed dividend | | |
+---------------------------------------------------+---------+---------+
|IFRS restated | | 159,168|
+---------------------------------------------------+---------+---------+
4. Principal differences between UK GAAP and IFRS
There are seven principal differences between UK GAAP and IFRS affecting Big
Yellow and these are described in the following paragraphs:
4.1 Investment properties
Under UK GAAP, Big Yellow held its property at cost less accumulated
depreciation within Tangible Fixed Assets. As a result of the introduction of
IFRS Big Yellow has changed the classification and accounting for its open
storage centres to "investment properties" with a consequential significant
impact on the income statement and balance sheet.
Investment properties are defined by IAS40 as property held by the owner to earn
rentals or for capital appreciation or both rather than for use in the
production or supply of goods or services or for administration purposes. The
property is investment property only if an insignificant portion is held for use
in the production or supply of goods or services or for administrative purposes.
A property interest that is held by a lessee under an operating lease may be
classified and accounted for as investment property if, and only if, the
property would otherwise meet the definition of an investment property and the
lessee uses the fair value model.
All Big Yellow stores lease storage units to customer tenants under operating
leases. Sales of ancillary goods and services, such as packing materials are
insignificant, representing 5-6% of turnover. The purchase of contents insurance
by tenants is directly linked to the rental of units and is not considered
ancillary. Self storage is a defined real estate class with a proven valuation
methodology and the centres are also held for their capital appreciation.
Therefore, all Big Yellow centres, both freehold and leasehold, have been
classified as investment properties under IAS40 and are held in balance sheet at
fair value from 1 April 2004.
The investment properties have been valued as at 31 March 2005 and 30 September
2004 by external valuers, Cushman & Wakefield Healey & Baker ("CWHB"). The
valuations have been carried out in accordance with the RICS Appraisal and
Valuation Standards published by the Royal Institute of Chartered Surveyors (The
Red Book). The methodology is fully explained in Note 22 of the 2005 Annual
Report.
A directors' valuation of the 29 stores open as at 1 April 2004 based on
internal projections prevailing at that time has been used to determine the gain
on revaluation for the year ending 31 March 2005.
Valuations
Investment
properties
£'000
At 31 March 2005
Property valuations 275,230
-----------
Historic cost 148,927
Accumulated depreciation under UK GAAP (11,361)
-----------
Net book value UK GAAP 137,566
Depreciation adjustment under IFRS 3,685
Net book value IFRS 141,251
-----------
Gain on revaluation as at 31 March 2005 133,979
At 31 March 2004
Property valuations 205,450
Net book value 106,447
-----------
Gain on revaluation as at 31 March 2004 99,003
-----------
Gain on revaluation IFRS for year ended 31 March 2005 34,976
-----------
Properties held as tangible fixed assets under UK GAAP
The historic cost net book value of the relevant properties held as tangible
fixed assets under UK GAAP at 31 March 2005 was £137,566,000. As a result of the
adoption of IFRS depreciation charged for the year to 31 March 2005 of
£3,685,000 has been added back to give a historic cost net book value of the
relevant properties under IFRS at 31 March 2005 of £141,251,000. These
properties have been reclassified to Investment Property at the 31 March
2005 external valuation of £275,230,000. The resulting gain on revaluation of
£133,979,000 has been credited to retained earnings.
A similar review was undertaken for the relevant properties at 1 April 2004
which had an historic cost net book value of £106,447,000 and a fair value of
£205,450,000, based on the directors' valuation, resulting in a revaluation surplus
at that date of £99,003,000.
Properties accounted for as leases under UK GAAP
In accordance with IAS40, investment property held under leases is stated gross
of the recognised finance lease liability. This has resulted in a £26,233,000
finance lease creditor and corresponding increase to the disclosed investment
property balance as at 1 April 2004. For the year ending 31 March 2005 operating
lease rent payments have been allocated between a finance lease charge and a
reduction in the outstanding lease creditor so as to achieve a constant
financing rate. The corresponding asset is depreciated over the lease term in
line with the reduction in the creditor. As at 31 March 2005 the finance lease
creditor and asset were £25,659,000. The net effect is to reduce cost of sales
by £2,179,000, with a finance charge of £1,605,000 and a depreciation charge of
£574,000, with no net effect on profit.
Summary carrying value of investment properties under IFRS
Investment property under IFRS at 31 March is therefore comprised of:
2005 2004
£'000 £'000
Net Book Value 141,251 106,447
Gain on revaluation 133,979 99,003
Finance Lease Asset 25,659 26,233
--------------------
300,889 231,683
Summary effect on the income statement (excluding tax)
Gains and losses arising from the changes in fair value of investment property
are included in the income statement of the period in which they arise. For the
year ended 31 March 2005, the effect on the income statement was a revaluation
gain of £34,976,000.
In accordance with IAS40, as Big Yellow uses the fair value model, no
depreciation is provided in respect of investment properties including integral
plant resulting in a credit of £3,685,000. As explained above the finance lease
asset included in the investment property is depreciated over the lease term
resulting in a charge of £574,000 in the year. The total depreciation charge for
the year has reduced by £3,111,000. Operating lease payments of £2,179,000 are
no longer included in cost of sales under IFRS. A further adjustment of £40,000
has been made with respect to rent free payments. The total adjustment to cost
of sales is therefore £5,330,000.
Summary effect on revaluation surplus within reserves
In order to calculate the element of the gain on revaluation that relates to the
year ending 31 March 2005 a directors' valuation of the store portfolio at 1
April 2004 has been carried out. The valuation uses the same methodology used
for the external valuations performed at 30 September 2004 and 31 March 2005 by
CWHB. At 31 March 2004 the 29 open storage centres were valued at £205,450,000
representing a £99,003,000 cumulative uplift on net book value as at that date.
The gain as at 31 March 2005 was £133,979,000.
Other matters affecting property
Assets in the course of construction are accounted for in accordance with IAS16
Property, Plant & Equipment and are held at historic cost as they were under UK
GAAP. On the opening of the store the property is re-classified as Investment
Property and fair valued at the next balance sheet date.
Properties used for administration purposes are accounted for under IAS16.
4.2 Income taxes
IAS12 requires that full provision is made for the deferred tax liability
associated with the revaluation of investment properties. The Group did not
revalue its properties in the balance sheet under UK GAAP. The movement in
deferred tax associated with the gain on revaluation during the year has been
charged to the income statement.
The provision for deferred tax should have regard for the manner in which the
revaluation surplus will be realised. Since the valuation is based on discounted
cash flow of net operating income then the realisation of value will come from
future rental income rather than the sale of the portfolio in the short to
medium term. Deferred tax of 30% on the full amount of the £134.0m surplus has
therefore been provided although the liability will not be incurred while the
Group continues to hold its investment properties.
IAS12 requires a provision in respect of potential Schedule 23 deductions on the
exercise of share options net of charges expensed through the income statement.
The potential deduction has been calculated based on difference between the
share price at 31 March 2005, the respective option prices and the remaining
vesting periods. The resulting figure of £7.16m is adjusted for the £0.16m
charge to date in respect of share based payments and deferred tax at 30%
provided leading to a provision of £2.1m.
£'000
Deferred tax liability under UK GAAP as at 31 March 2005 299
Deferred tax liability under IFRS as at 31 March 2005 39,026
---------
Increase in deferred tax liability as at 31 March 2005 38,727
---------
Income statement movement for year ending 31 March 2005
Revaluation of investment properties 10,493
Depreciation adjustment re qualifying assets 639
Reduction in finance lease creditor 12
Decrease in finance costs on valuation of interest rate swaps 20
---------
11,164
Balance Sheet movement
Share option deductions (2,100)
Revaluations of investment properties 29,701
Fair value adjustment of interest rate swaps (66)
Write off a liability re rent free periods 28
---------
27,563
---------
Total adjustment under IFRS at 31 March 2005 38,727
---------
4.3 Share-based payments
Under IFRS2 "Share based payments" a charge is recognised in the Income
Statement for all share-based payments granted to employees after 7 November
2002 but not yet vested based on the fair values of the grants and the number
expected to become exercisable. The fair value at the date of award is
calculated using an option pricing model (Black-Scholes) and the resulting
values will be amortised through the income statement over the vesting period of
the options to reflect actual and expected levels of vesting.
Application of this standard has resulted in an additional charge to the income
statement of £82,000 for the year ended 31 March 2005 over and above that
already made under UK GAAP in respect of options awarded under the Group's Long
Term Incentive Plan. A charge of £78,000 has been debited to retained earnings
brought forward at 31 March 2004. There is no effect on net assets.
Details of share option awards are contained in the Report on Director's
Remuneration and Note 19 of the 2005 Annual Report.
4.4 Business combinations
Under UK GAAP, goodwill was amortised on a straight line basis over its economic
useful life of up to 20 years, tested for impairment and provided for if
necessary. Under IFRS3 "Business Combinations" goodwill is not amortised but is
carried at cost and subject to an annual review for impairment review at 31
March. The goodwill arising from the purchase of Big Yellow Self Storage Company
Ltd has been assessed as having a fair value in excess of its 1 April 2004 net
book value of £1,432,000. As a consequence the amortisation charged under UK
GAAP for the year to 31 March 2005 of £97,000 has been reversed with a
consequential increase in net assets.
4.5 Financial instruments
IAS 32 and IAS 39 are the standards which govern the accounting for financial
instruments. IAS 32 covers disclosure and presentation, while IAS 39 covers
recognition and measurement, including detailed rules for hedge accounting.
These standards are not considered to have a significant impact on Big Yellow.
Big Yellow's policy in respect of interest rates is to maintain a balance
between flexibility and hedging of interest rate risk. The Group does not apply
hedge accounting to its interest rate swaps. The difference between the carrying
value and the fair value of Big Yellow's financial assets and liabilities was
only a disclosure requirement under UK GAAP, as shown in Note 19 of the 2005
Annual Report. Under IAS 39 changes to the fair value will be reported in the
income statement.
As at 1 April 2004 the fair value of loans was assessed at £220,000 more than
the carrying amount. At 31 March 2005 the fair value had reduced to £153,000
resulting in debit to the income statement of £67,000 for the financial year and
net assets being £153,000 lower under IFRS than that recorded under UK GAAP.
4.6 Events after balance sheet date
Under UK GAAP, proposed dividends are recognised as a liability in the period to
which they related. Under IAS10 "Events after the Balance Sheet Date" only
liabilities actually existing at the balance sheet date are to be provided for.
Final dividends payable do not meet this definition as they are subject to
approval at the Annual General Meeting. As a result the 2005 proposed final
dividend of £1,512,000 provided under UK GAAP has not been recognised in the
year and the net assets at 31 March 2005 under IFRS have increased by that
amount. There is no effect on the income statement.
4.7 Non-current assets held for resale
At 31 March 2005, the cost of surplus land intended for sale of £2,867,000 has
been reclassified from the Fixed Asset class "Assets under the course of
Construction" to "Non-Current Assets Held for Sale" as prescribed by IFRS5. The
figure represents the historic cost of surplus land held at three sites which it
was the Group's intention to sell during the financial year ending 31 March
2006. There is no effect on the profit for the year to 31 March 2005 or the net
assets at that date.
SECTION 2
FINANCIAL INFORMATION FOR THE YEAR ENDED 31 MARCH 2005
2.1 Group income statement
2.2 Group balance sheet
2.3 Group statement of changes in shareholders' equity
2.4 Group cash flow statement
2.5 Group reconciliation of Earnings per share and Net Asset
Value per share
2.1. Group Income Statement
Unaudited Consolidated Income Statement
Year ended 31 March 2005 IFRS2 IFRS3 IAS39 IAS 40
Share based Business Financial Investment Total
UK GAAP payments Combinations Instruments Property Adjustments IFRS
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 33,375 - 33,375
Cost Of Sales (18,254) 5,330 5,330 (12,924)
----------------------------------------------------------------------------------
Gross Profit 15,121 - - - 5,330 5,330 20,451
Administrative expenses (5,436) (82) 97 15 (5,421)
----------------------------------------------------------------------------------
Profit from Operations 9,685 (82) 97 - 5,330 5,345 15,030
Profit on the sale of
investment properties 2 - 2
Gain on revaluation of
properties - 34,976 34,976 34,976
Finance Income 142 - 142
Finance costs (5,776) 67 (1,605) (1,538) (7,314)
----------------------------------------------------------------------------------
Profit before tax 4,053 (82) 97 67 38,701 38,783 42,836
Taxation (1,531) (20) (11,144) (11,164) (12,695)
----------------------------------------------------------------------------------
Profit after tax 2,522 (82) 97 47 27,557 27,619 30,141
----------------------------------------------------------------------------------
Basic Earnings per Share 2.52 30.15
Diluted Earnings per Share 2.48 29.70
2.2 Unaudited Consolidated Balance Sheet
31 March 2005 IFRS2 IFRS3 IFRS5 IAS10 IAS12 IAS39 IAS40
Events
Share after
based Business Assets held balance Income Financial Investment
UK GAAP payments Combinations for sale sheet date Tax Instruments Property IFRS
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Non-current assets
Intangible Assets 1,335 97 1,432
Property, plant
and equipment 177,824 (2,867) (137,566) 37,391
Investment Property 300,889 300,889
---------------------------------------------------------------------------------------------------
179,159 - 97 (2,867) - - 163,323 339,712
---------------------------------------------------------------------------------------------------
Current assets
Inventories 254 254
Trade and other
receivables 8,896 8,896
Cash and cash
equivalents 6,379 6,379
---------------------------------------------------------------------------------------------------
15,529 - - - - - 15,529
---------------------------------------------------------------------------------------------------
Non-current assets
held for sale - 2,867 2,867
---------------------------------------------------------------------------------------------------
Total Assets 194,688 - 97 - - - 163,323 358,108
---------------------------------------------------------------------------------------------------
Current liabilities
Trade and other (3,623) (3,623)
payables
Tax liabilities (32) (32)
Bank overdrafts
and loans -
Short-term provisions (11,569) 1,512 96 (9,961)
---------------------------------------------------------------------------------------------------
(15,224) - - - 1,512 - 96 (13,616)
Net current assets 305 - - - 1,512 - 96 1,913
---------------------------------------------------------------------------------------------------
Non-current
liabilities
Bank Loans (108,348) (153) (108,501)
Finance Lease creditor - (25,659) (25,659)
Deferred tax
liabilities (299) (38,727) (39,026)
Long term
provisions (12,138) (12,138)
---------------------------------------------------------------------------------------------------
(120,785) - - - - (38,727) (153) (25,658) (185,324)
---------------------------------------------------------------------------------------------------
Total Liabilities (136,009) - - - 1,512 (38,727) (153) (25,562) (198,940)
---------------------------------------------------------------------------------------------------
Net Assets 58,679 - 97 - 1,512 (38,727) (153) 131,937 159,168
---------------------------------------------------------------------------------------------------
EQUITY
Share capital 10,073 10,073
Capital Redemption
reserve 1,653 1,653
Share premium account 2,390 2,390
Own shares (812) (812)
Distributable
reserves 42,853 82 1,512 (27,563) (220) 99,059 115,723
Profit for the year
ended 31 March 2005 2,522 (82) 97 (11,164) 67 38,701 30,141
---------------------------------------------------------------------------------------------------
Equity attributable
to equity holders 58,679 - 97 - 1,512 (38,727) (153) 137,760 159,168
2.3 Group statement of changes in shareholders' equity
Unaudited Statement of Changes in Equity
Capital
Share redemption Share Own Distributable
Capital reserve Premium Shares Reserves Total
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 April 2004 UK GAAP 9,940 1,653 1,959 44,839 58,391
IFRS Opening adjustments 72,320 72,320
--------------------------------------------------------------------------
Balance at 1 April 2004 IFRS 9,940 1,653 1,959 117,159 130,711
Issue of shares 133 431 564
Equity share options 108 108
Purchase of own shares (812) (812)
--------------------------------------------------------------------------
Net income recognised directly in equity 133 431 (812) 108 (140)
Profit for the financial year 30,141 30,141
--------------------------------------------------------------------------
Total recognised income and expenses
for the year 133 431 (812) 30,249 30,001
Dividends (1,544) (1,544)
Balance at 31 March 2005 IFRS 10,073 1,653 2,390 (812) 145,864 159,168
2.4 Group cash flow statement
Unaudited Consolidated Cash Flow Statement
for the year ended 31 March 2005
IFRS2 IFRS3 IAS40
Share
based Business Investment Total
UK GAAP payments Combinations Property Adjustments IFRS
£'000 £'000 £'000 £'000 £'000 £'000
Net operating profit 9,685 (82) 97 5,290 5,305 14,990
Depreciation 4,347 (3,071) (3,071) 1,276
Amortisation of goodwill 97 (97) (97) -
Share options expense 82 82 82
Increase in stock 34 - 34
Increase in debtors (561) - (561)
Increase in creditors 1,185 (614) (614) 571
--------------------------------------------------------------------------
Cash generated from operations 14,787 - - 1,605 1,605 16,392
--------------------------------------------------------------------------
Interest paid (4,837) (1,605) (1,605) (6,442)
Loan arrangement fees (415) (415)
Interest received 129 129
--------------------------------------------------------------------------
Net cash from operating activities 9,664 - - - - 9,664
--------------------------------------------------------------------------
Investing activities
Proceeds on disposal of property,
plant and equipment 3,729 - 3,729
Purchases of property, plant &
equipment (45,710) - (45,710)
--------------------------------------------------------------------------
Net cash used in Investing activities (41,981) - - - - (41,981)
--------------------------------------------------------------------------
Financing activities
Dividends paid (1,545) - (1,545)
Issue of ordinary share capital (net
of expenses) 564 - 564
Purchase of own shares (812) - (812)
New bank loans raised 40,000 - 40,000
--------------------------------------------------------------------------
Net cash from Financing activities 38,207 - - - - 38,207
--------------------------------------------------------------------------
Net Increase in cash 5,890 - - - - 5,890
--------------------------------------------------------------------------
2.5 Group reconciliation of Earnings per share and Net Asset Value per share
Earnings Per Share year ended 31 March 2005 UK GAAP Adjustments IFRS
£'000 £'000 £'000
Earnings used for calculation of basic earning per share 2,522 27,619 30,141
Less gain on revaluation of investment properties (34,976) (34,976)
Add back deferred tax in respect of investment properties 10,493 10,493
Add back fair value movement on interest rate swaps net of tax (47) (47)
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Earnings used for calculation of adjusted earnings per share 2,522 3,088 5,611
Weighted average no. of shares 99,971,791 99,971,791
Adjusted basic earnings per share 2.52p 3.09p 5.61p
Net Asset Value per Share
UK GAAP Adjustments IFRS
£'000 £'000 £'000
As per Balance Sheet 58,679 100,489 159,168
Fair Value movement of interest rate swaps (154) 154
Exercise of share options 7,331 7,331
Revaluation uplift on properties 134,983 (134,983)
Add back deferred tax on revaluation surplus 40,194 40,194
Add back deferred tax on fair value of interest rate swaps (46) (46)
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200,839 5,808 206,647
No. of shares 108,120,866 108,120,866
Adjusted net assets per share 185.8p 191.1p
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