Interim Results - Part 2
British Land Co PLC
24 November 2004
PRELIMINARY ANNOUNCEMENT OF FINANCIAL RESULTS
For the six month period ended 30 September 2004
Independent review report to The British Land Company PLC
Introduction
We have been instructed by the Company to review the financial information for
the six months ended 30 September 2004 which comprises the Consolidated Profit
and Loss Account, Consolidated Balance Sheet, Consolidated Cash Flow Statement,
Consolidated Statement of Total Recognised Gains and Losses, the Note of
historical cost profits and losses, the Reconciliation of movements in
shareholders' funds and related notes 1 to 19. 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.
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 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 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.
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 September 2004.
Deloitte & Touche LLP
Chartered Accountants
23 November 2004
London
Consolidated Profit & Loss Account for the six months ended 30 September 2004
Year
ended
31 Note 2004 2003
March
2004 Unaudited Unaudited
Audited Restated +
£m £m £m
565.6 Gross rental income 288.0 270.6
(78.9) Less share of joint ventures 9 (35.9) (44.0)
486.7 Gross rental income - Group 252.1 226.6
450.3 Net rental income 231.9 209.4
6.0 Profit on property trading 0.6 6.0
6.2 Other income 3.2 1.6
(40.7) Administrative expenses (22.4) (21.2)
421.8 Operating profit 213.3 195.8
67.5 Share of operating profits of joint 9 33.8 39.1
ventures
32.9 Disposal of fixed assets - including 2 4.7 15.9
amounts from joint ventures (note 9)
522.2 Profit on ordinary activities before 251.8 250.8
interest
(336.2) Net interest payable - including 3 (171.7) (163.9)
amounts from joint ventures (note 9)
186.0 Profit on ordinary activities before 80.1 86.9
taxation
(14.5) Taxation 4 (14.0) (11.4)
171.5 Profit on ordinary activities after 66.1 75.5
taxation
(70.8) Ordinary dividends 5 (27.4) (21.6)
100.7 Retained profit for the period 38.7 53.9
35.1 p Basic earnings per share 6 13.2 p 15.5 p
34.5 p Diluted earnings per share 6 12.7 p 15.2 p
37.0 p Adjusted basic earnings per share* 6 13.3 p 15.8 p
36.3 p Adjusted diluted earnings per share* 6 12.9 p 15.4 p
14.50 p Dividend per share 5 4.80 p 4.43 p
The results stated above relate to the continuing activities of
the Group.
* Adjusted to exclude the capital allowance effects
of FRS 19.
+ Restated as set out in note 1.
Consolidated Balance Sheet as at 30 September 2004
31 March Note 2004 2003
2004 Unaudited Unaudited
Audited Restated +
£m £m £m
Fixed assets
9,251.2 Investment properties 7 9,693.7 8,140.7
Investments in joint
ventures:
1,299.8 Share of gross assets 9 1,320.9 1,428.1
(641.6) Share of gross liabilities 9 (564.5) (766.1)
658.2 756.4 662.0
17.2 Other investments 8 113.9 21.4
(14.1) Negative goodwill (13.7) (9.1)
9,912.5 10,550.3 8,815.0
Current assets
41.6 Trading properties 7 36.0 43.7
67.8 Debtors 10 80.8 80.2
173.7 Cash and deposits 14 128.3 119.8
283.1 245.1 243.7
(869.9) Creditors due within one 11 (512.5) (527.1)
year
(586.8) Net current liabilities (267.4) (283.4)
9,325.7 Total assets less current 10,282.9 8,531.6
liabilities
(4,406.3) Creditors due after one year 12 (4,911.9) (4,096.6)
(149.0) Convertible Bonds 14 (146.9)
(101.1) Provisions for liabilities and 13 (106.1) (92.9)
charges
0.1 Pension asset (liability) 19 0.1 (6.1)
4,669.4 Net assets 5,265.0 4,189.1
Capital and reserves
122.0 Called up share capital 129.5 121.9
1,109.3 Share premium 17 1,251.4 1,107.9
8.1 Capital redemption reserve 17 8.1 8.1
(6.1) Other reserves 17 (10.4) (6.8)
2,615.2 Revaluation reserve 17 3,029.3 2,217.1
820.9 Profit and loss account 17 857.1 740.9
4,669.4 Equity shareholders' funds 5,265.0 4,189.1
+ Restated as set out in note
1.
999 p Adjusted NAV per share: Basic 16 1,054 p 893 p
966 p Fully 16 1,049 p 869 p
diluted
(The Adjusted Net Asset Value (NAV) per share includes the external valuation
surplus on development and trading properties but excludes the capital
allowance effects of FRS19.)
Approved by the Board on 23 November 2004
Other Consolidated Primary Statements for the six months ended 30 September 2004
Year
ended
31 March 2004 2003
2004 Unaudited Unaudited
Audited Restated +
£m £m £m
Statement of total recognised gains and losses
171.5 Profit on ordinary activities 66.1 75.5
after taxation
Unrealised surplus (deficit)
on revaluation:
396.6 - investment 325.5 (1.9)
properties
65.3 - joint ventures 86.3 22.9
0.3 - other investments (0.2) 0.2
462.2 411.6 21.2
0.3 Exchange movements on net (0.3) 0.3
investments
(4.6) Taxation on realisation of prior year (4.8)
revaluations
Fair value adjustment on
consolidation of
(8.3) former joint
ventures
(0.2) Pension scheme movements
Total recognised gains and losses relating to
620.9 the financial period 477.4 92.2
Year
ended
31 March 2004 2003
2004 Unaudited Unaudited
Audited Restated +
£m £m £m
Note of historical cost profits and losses
186.0 Profit on ordinary activities 80.1 86.9
before taxation
72.2 Realisation of prior year (2.5) 30.9
revaluations
Historical cost profit on ordinary activities
258.2 before taxation 77.6 117.8
Historical cost profit for the period retained
168.3 after taxation and dividends 36.2 80.0
+ Restated as set out in note 1.
Other Consolidated Primary Statements for the six months ended 30 September 2004
Year
ended
31 March 2004 2003
2004 Unaudited Unaudited
Audited Restated +
£m £m £m
Reconciliation of movements
in
shareholders' funds
171.5 Profit on ordinary activities after taxation 66.1 75.5
(70.8) Ordinary dividends (27.4) (21.6)
100.7 Retained profit for the 38.7 53.9
period
Revaluation of investment
properties
462.2 and investments 411.6 21.2
0.3 Exchange movements on net investments (0.3) 0.3
(4.6) Taxation on realisation of prior year (4.8)
revaluations
Fair value adjustment on consolidation of
(8.3) former joint ventures
550.3 450.0 70.6
1.7 Shares issued 149.6 0.2
(0.2) Pension scheme movements
(5.0) Purchase and cancellation of own shares (5.0)
(6.7) Purchase of ESOP shares (7.6)
6.0 Adjustment for share and share option awards 3.6
546.1 Increase in shareholders' 595.6 65.8
funds
4,123.3 Opening shareholders' funds (as restated in 4,669.4 4,123.3
note 1)
4,669.4 Closing shareholders' funds 5,265.0 4,189.1
+ Restated as set out in note 1.
Consolidated Cash Flow Statement for the six months ended 30 September 2004
Year ended
31 March
2004 Note 2004 2003
Audited Unaudited Unaudited
£m £m £m
381.4 Net cash inflow from operating activities 15 222.4 206.4
79.7 Dividends received from joint ventures 6.8 1.5
Returns on investments and servicing of finance
12.9 Interest received 2.8 6.2
(301.5) Interest paid (159.8) (147.3)
0.2 Dividends received 0.1
(288.4) (157.0) (141.0)
Taxation
(4.1) UK corporation tax paid (5.1)
(5.5) Foreign tax paid (1.9) (1.0)
(9.6) (7.0) (1.0)
Net cash inflow from operating activities and
163.1 investments after finance charges and 65.2 65.9
taxation
Capital expenditure and financial investment
Purchase of investment properties and
(316.9) development expenditure (136.0) (122.1)
(10.8) Purchase of investments (97.4) (10.2)
171.3 Sale of investment properties 16.4 73.2
20.8 Sale of investments 16.4
(135.6) (217.0) (42.7)
Acquisitions and disposals
(110.2) Purchase of interest in subsidiary companies
Cash at bank acquired with interest in
5.8 subsidiary companies
(34.8) Investment in and loans to joint ventures (3.1)
89.2 Sale of shares in and loans repaid by joint 48.1
ventures
(50.0) (3.1) 48.1
(67.0) Equity dividends paid (51.7) (45.4)
Net cash (outflow) inflow before management
(89.5) of liquid resources and financing (206.6) 25.9
Management of liquid resources
11.9 Decrease in term deposits 10.9 2.7
Financing
1.7 Issue of ordinary shares 0.6 0.2
(5.0) Purchase and cancellation of own shares (5.0)
(6.7) Purchase of ESOP shares (7.6)
50.7 Issue of Meadowhall Shopping Centre 50.7
securitised debt
84.0 Issue of Sainsbury supermarkets securitised
debt
(73.5) Redemption of Broadgate Class D Unsecured (73.5)
Notes 2014
73.4 Increase (decrease) in bank and other 175.4 (17.6)
borrowings
124.6 168.4 (45.2)
47.0 (Decrease) increase in cash 15 (27.3) (16.6)
Notes to the accounts for the six months ended 30 September 2004 (unaudited)
1. Basis of preparation
The interim accounts are not statutory accounts, but are prepared on the basis
of the accounting policies set out in the Group's financial statements for the
year ended 31 March 2004, consistently applied in all material respects.
The figures for the year ended 31 March 2004 have been extracted from the
statutory accounts which have been filed with the Registrar of Companies. The
auditors' report on those accounts was unqualified and did not contain any
statement under section 237 (2) or (3) of the Companies Act 1985.
Restatement of comparative figures for the six months ended 30 September 2003
Financial Reporting Standard 20 'Share-based Payment' and Urgent Issues Task
Force Abstract 38 'Accounting for ESOP Trusts' were adopted in preparing the
financial statements of the Group for the year ended 31 March 2004. No
restatement of the comparative figures for the period ended 30 September 2003 is
necessary as the effect is not considered material.
Comparative figures have been restated following the adoption of Financial
Reporting Standard 17 (FRS 17) 'Retirement Benefits', which requires that the
net assets (liabilities) of the Group's defined benefit pension scheme be
recognised in the balance sheet. FRS 17 was adopted in preparing the financial
statements of the Group for the year ended 31 March 2004. The comparative
figures for the period ended 30 September 2003 have been restated as follows:
Profit and loss account Balance sheet
Period ended Other Profit
30 September 2003 finance after Pension Shareholders'
costs Taxation taxation liability funds
£m £m £m £m £m
As previously stated (11.5) 75.6 4,195.2
Adoption of FRS (0.2) 0.1 (0.1) (6.1) (6.1)
17
As restated (0.2) (11.4) 75.5 (6.1) 4,189.1
2. Disposal of fixed
assets
Year ended
31 March
2004 2004 2003
£m £m £m
25.5 British Land Group 1.7 12.5
7.4 Share of joint ventures (note 9) 3.0 3.4
32.9 4.7 15.9
3. Net interest payable
Year ended
31 March 2004 2003
2004 Restated
£m £m £m
British Land Group
52.2 Payable on: bank loans and overdrafts 29.3 24.0
263.7 other loans 130.2 126.6
315.9 159.5 150.6
(13.3) Deduct: development cost element (2.5) (5.9)
302.6 157.0 144.7
(6.7) Receivable on: deposits and securities (2.7) (3.2)
(6.6) loans to joint ventures (0.3) (4.5)
Other finance (income)
costs:
Expected return on
(1.7) pension scheme assets (1.3) (0.8)
Interest on pension scheme
2.0 liabilities 1.2 1.0
289.6 Total British Land Group 153.9 137.2
Share of joint ventures
6.6 Interest payable on shareholder 0.3 4.5
loans
40.0 Other interest payable 17.5 22.2
(net)
46.6 Total share of joint ventures 17.8 26.7
(note 9)
336.2 Net interest payable 171.7 163.9
4. Taxation
Year ended
31 March 2004 2003
2004 Restated
£m £m £m
(0.4) British Land Group: Corporation 5.7 6.5
tax
5.7 Deferred 5.0 0.1
tax
8.0 Share of joint ventures Corporation 4.1 4.5
(note 9): tax
1.2 Deferred (0.8) 0.3
tax
14.5 14.0 11.4
Contingent tax
The unprovided tax, in relation to equity shareholders' funds of £5,625.0m,
which would arise on the disposal of British Land Group properties, investments
in joint ventures and other investments, at valuation, after available loss
relief, but without recourse to tax structuring is in the region of £660m (31
March 2004: £570m; 30 September 2003: £440m).
Adjusted net assets are £5,461.5m and are stated after adding back the FRS19
provision of £113.6m and the surplus on development and trading properties of
£82.9m. The unprovided tax, in relation to adjusted net assets, which would
arise on the disposal of British Land Group properties, other investments, and
share of properties held in joint ventures, at valuation, after available loss
relief, but without recourse to tax structuring, is in the region of £770m (31
March 2004: £680m; 30 September 2003: 560m).
5. Interim dividend
The interim dividend of 4.8 pence will be paid on 18 February 2005 to
shareholders on the register at the close of business on 21 January 2005.
The current period charge of £27.4m includes a £2.5m final dividend payment for
the year ended 31 March 2004, following conversion of the 6% Irredeemable
Convertible Bonds.
Basic and diluted earnings per share
Basic and diluted earnings per share are calculated on the profit on ordinary
activities after taxation and on the weighted average number of shares in issue
during the period as shown below:
Year ended
31 March 2004 2004 2003
Weighted Weighted Weighted Profit
average Profit average Profit average after
number after number after number taxation
of shares taxation of shares taxation of shares Restated
m £m m £m m £m
Earnings per share
488.1 171.5 Basic 500.3 66.1 488.6 75.5
519.0 179.3 Diluted 519.3 66.1 518.9 78.6
Weighted Weighted Weighted Profit
average Profit average Profit average after
number after number after number taxation
of shares taxation of shares taxation of shares Restated
m £m m £m m £m
Adjusted earnings
per share
488.1 180.6 Basic 500.3 66.8 488.6 77.0
519.0 188.4 Diluted 519.3 66.8 518.9 80.1
Adjusted earnings per share are calculated by excluding £0.7m (31 March 2004:
£9.1m; 30 September 2003: £1.5m) which is the capital allowance effect of FRS
19.
The basic weighted average number of shares has changed as a result of the
conversion on or before 30 July 2004 of the 6% Irredeemable Convertible Bonds.
7. Investment, development and trading
properties
Long Short
Freehold Leasehold Leasehold Total
£m £m £m £m
Investment and development properties
Valuation and cost 1 April 2004 8,857.0 386.5 7.7 9,251.2
Additions 87.5 44.7 132.2
Disposals (16.3) (16.3)
Reallocation (21.9) 22.0 (0.1)
Exchange fluctuations 1.1 1.1
Revaluations 314.2 10.2 1.1 325.5
Valuation and cost 30 September 2004 9,221.6 463.4 8.7 9,693.7
Trading properties
At lower of cost and net realisable value
30 September 2004 27.1 8.4 0.5 36.0
External valuation surplus on development and trading 80.2
properties
Adjustment for UITF 28 - lease incentive 34.5
debtors
Total Group property portfolio valuation 9,844.4
Investment, development and trading properties were valued by external valuers
on the basis of open market value in accordance with the Appraisal and Valuation
Manual published by The Royal Institution of Chartered Surveyors:
£m
United Kingdom: ATIS REAL Weatheralls 9,547.1
FPD Savills 246.5
Republic of Ireland: Jones Lang LaSalle 49.8
Netherlands: CB Richard Ellis B.V. 1.0
Total Group property portfolio valuation 9,844.4
Total external valuation surplus on development and trading
properties
£m
British Land Group 80.2
Share of joint ventures 2.7
82.9
Properties valued at £6,513.3m (31 March 2004: £6,672.8m; 30 September 2003:
£5,772.8m) were subject to a security interest and other properties of non-
recourse companies amounted to £40.4m (31 March 2004: £84.3m; 30 September 2003:
£Nil).
7. Investment, development and trading properties (continued)
Total property valuations including share of joint ventures
31 March
2004 2004 2003
£m £m £m
British Land Group
9,251.2 Investment and development properties 9,693.7 8,140.7
41.6 Trading properties 36.0 43.7
External valuation surplus on development and
92.7 trading properties 80.2 63.7
27.6 Adjustment for UITF 28 - lease incentive 34.5 30.6
debtors
9,413.1 9,844.4 8,278.7
Share of joint ventures
1,221.8 Properties 1,216.6 1,364.9
External valuation surplus on development and
2.3 trading properties 2.7 2.0
2.2 Adjustment for UITF 28 - lease incentive 2.2 3.5
debtors
1,226.3 1,221.5 1,370.4
10,639.4 Total property portfolio valuation 11,065.9 9,649.1
8. Other investments
£m
At 1 April 2004 17.2
Additions 97.4
Disposals (0.5)
Revaluations (0.2)
At 30 September 2004 113.9
9. Joint ventures
British Land's share of profits of joint ventures
Year ended
31 March
2004 2004 2003
£m £m £m
78.9 Gross rental income 35.9 44.0
72.7 Net rental 33.2 41.6
income
(2.3) Profit (loss) on property 1.8 (0.9)
trading
(2.9) Other (1.2) (1.6)
expenditure
67.5 Operating 33.8 39.1
profit
7.4 Disposal of fixed assets 3.0 3.4
74.9 Profit on ordinary activities before 36.8 42.5
interest
(40.0) Net interest payable to third (17.5) (22.2)
parties
(6.6) Interest payable to (0.3) (4.5)
British Land
(46.6) Net interest payable (note (17.8) (26.7)
3)
28.3 Profit on ordinary activities before 19.0 15.8
taxation
(9.2) Taxation (3.3) (4.8)
19.1 Profit on ordinary activities after 15.7 11.0
taxation
The amounts relating to captions shown in bold are recognised at the relevant
point in the Consolidated Profit and Loss account.
The movement for the period:
Equity Loans Total
£m £m £m
At 1 April 586.6 71.6 658.2
2004
Additions 3.0 3.0
Share of profit after taxation attributable to joint ventures 15.7 15.7
Dividends received from joint (6.8) (6.8)
ventures
Revaluations 86.3 86.3
At 30 September 2004 681.8 74.6 756.4
9. Joint ventures (continued)
Summary of British Land's share in joint
ventures
Operating Gross Gross Net
profits assets liabilities investment
£m £m £m £m
BL Fraser Limited 3.1 131.7 (74.9) 56.8
BLT Properties Limited 3.6 148.7 (96.3) 52.4
The Tesco British Land Property Partnership 1.7 75.2 (53.6) 21.6
Tesco BL Holdings Limited 5.7 228.5 (112.9) 115.6
BL Davidson Limited * 8.0 295.2 (146.6) 148.6
BL West 4.7 97.2 (57.4) 39.8
The Scottish Retail Property
Limited Partnership 6.6 280.0 (9.6) 270.4
Other joint 0.4 64.4 (13.2) 51.2
ventures
Total 33.8 1,320.9 (564.5) 756.4
* The Group's share of negative goodwill is included in gross liabilities
and as at 30 September 2004 was £18.3m (31 March 2004: £19.2m;
30 September 2003: £19.6m).
The Group's share of joint venture external net debt is £435.1m (31 March 2004:
£529.8m; 30 September 2003: £634.7m).
The Group's share of the market value of joint venture debt and derivatives as
at 30 September 2004 was £10.8m more than the Group's share of the book value
(31 March 2004: £14.9m; 30 September 2003: £30.2m).
The Group's share of joint venture properties as at 30 September 2004 was
£1,216.6m (31 March 2004: £1,221.8m; 30 September 2003: £1,364.9m).
The Group's share of joint venture contingent tax is included in note 4.
10. Debtors
31 March
2004 2004 2003
£m £m £m
37.3 Trade debtors 41.0 43.6
0.3 Amounts owed by joint ventures 1.5
30.2 Prepayments and accrued income 39.8 35.1
67.8 80.8 80.2
Included in prepayments and accrued income is an amount of £34.5m (31 March
2004: £27.6m; 30 September 2003: £30.6m), relating to lease incentives which are
amortised over the period to the next open market rent review.
11. Creditors due within one year
31 March
2004 2004 2003
£m £m £m
38.5 Debentures and loans * 40.6 34.9
7.3 Overdrafts * 0.1 7.8
439.4 Bank loans * 112.1 178.1
65.2 Trade creditors 53.3 54.0
28.2 Amounts owed to joint 38.5 10.9
ventures
36.7 Corporation tax 35.4 44.0
7.7 Other taxation and social security 6.3 1.1
197.7 Accruals and deferred 201.3 174.7
income
49.2 Proposed dividend 24.9 21.6
869.9 512.5 527.1
* See maturity analysis of net debt - note 14.
12. Creditors due after one year
31 March
2004 2004 2003
£m £m £m
3,842.0 Debentures and loans * 3,823.3 3,374.9
564.3 Bank loans * 1,088.6 721.7
4,406.3 4,911.9 4,096.6
* See maturity analysis of net debt - note 14.
13. Provisions for liabilities and
charges
31 March
2004 2004 2003
£m £m £m
101.1 Deferred 106.1 92.9
tax
The deferred tax liability relates primarily to capital allowances claimed on
plant and machinery within investment properties. When a property is sold and
the agreed disposal value for this plant and machinery is less than original
cost, there is a release of the surplus part of the provision. The entire amount
of the capital allowance provision would be expected to be released on sale.
14. Net debt
31 March
2004
2004 2003
£m Footnote £m £m
Secured on the assets of the Group
97.8 6.5055% Secured Notes 2038 1.1 97.8 97.7
59.2 5.920% Secured Notes 2035 1.2 59.2 59.2
19.7 7.743% Secured Notes 2025 1.3 19.7 19.7
1.9 5.66% 135 Bishopsgate Securitisation 2018 1.4 1.9 1.9
7.1 8.49% 135 Bishopsgate Securitisation 2018 1.4 7.1 7.1
246.7 8 7/8% First Mortgage Debenture Bonds 2035 246.7 246.7
197.3 9 3/8% First Mortgage Debenture Stock 2028 197.3 197.2
12.6 10 1/2% First Mortgage Debenture Stock 2019/24 12.6 12.6
20.4 11 3/8% First Mortgage Debenture Stock 2019/24 20.4 20.4
206.0 6 3/4% First Mortgage Debenture Bonds 2020 1.5 205.9
103.5 6 3/4% First Mortgage Debenture Bonds 2011 1.5 103.2
45.0 Bank loan 1.6 44.9
1,017.2 1,016.7 662.5
Unsecured
573.4 Class A1 5.260% Unsecured Notes 2035 1.2 573.5 573.5
99.1 Class B 5.793% Unsecured Notes 2035 1.2 99.1 99.1
83.8 Class C Fixed Rate Unsecured Notes 2035 1.2 84.3 83.9
73.4 Class C2 6.4515% Unsecured Notes 2032 1.1 73.5 73.4
220.2 Class B 6.0875% Unsecured Notes 2031 1.1 220.3 220.1
146.8 Class A3 5.7125% Unsecured Notes 2031 1.1 146.8 146.7
283.4 Class A2 5.67% Unsecured Notes 2029 1.1 281.1 285.6
212.3 Class A2 (c) 6.457% Unsecured Notes 2025 1.3 212.3 157.1
205.8 Class B2 6.998% Unsecured Notes 2025 1.3 205.8 205.7
20.5 Class B3 7.243% Unsecured Notes 2025 1.3 20.5 20.5
319.1 Class A1 Fixed Rate Unsecured Notes 2024 1.1 321.5 318.9
22.3 5.66% 135 Bishopsgate Securitisation 2018 1.4 21.7 22.8
88.4 8.49% 135 Bishopsgate Securitisation 2018 1.4 86.7 90.0
84.3 Class A1 6.389% Unsecured Notes 2016 1.3 82.2 59.5
85.9 Class B1 7.017% Unsecured Notes 2016 1.3 82.9 88.8
147.4 Class C1 6.7446% Unsecured Notes 2014 1.1 140.3 154.5
44.6 Class A2 5.555% Unsecured Notes 2013 1.2 42.2 47.0
2,710.7 2,694.7 2,647.1
97.4 6.30% Senior US Dollar Notes 2015 2 97.4
1.7 101/4% Bonds 2012 1.7 1.7
97.8 7.35% Senior US Dollar Notes 2007 2 97.8 97.8
0.7 Guaranteed Floating Rate Unsecured Loan Notes 2005 0.5 0.7
966.0 Bank loans and overdrafts 1,155.9 907.6
3,874.3 4,048.0 3,654.9
Convertible Bonds
149.0 6% Subordinated Irredeemable Convertible Bonds 3 146.9
5,040.5 Gross debt 5,064.7 4,464.3
(173.7) Cash and deposits 4 (128.3) (119.8)
4,866.8 Net debt 4,936.4 4,344.5
1 These borrowings are obligations of ringfenced, special purpose
companies, with no recourse to other companies or assets in the
Group.
1,288.1 1.1 Broadgate (Funding) PLC 1,281.3 1,296.9
860.1 1.2 MSC (Funding) PLC 858.3 862.7
628.5 1.3 BLSSP (Funding) PLC 623.4 551.3
119.7 1.4 135 Bishopsgate Financing Ltd 117.4 121.8
309.5 1.5 BL Universal PLC 309.1
45.0 1.6 BLU Nybil Ltd 44.9
2 These borrowings have been hedged into Sterling from the date of
issue.
3 All the outstanding 6% Subordinated Irredeemable Convertible
Bonds were converted into ordinary shares on or before 30 July
2004.
4 Cash and deposits not subject to a security interest amounted to
£42.3m (31 March 2004: £82.5m; 30 September 2003:£29.4m).
14. Net debt (continued)
Maturity analysis of net debt
31 March
2004 2004 2003
£m £m £m
Repayable:
485.2 within one year and on demand 152.8 220.8
345.1 between: one and two years 382.3 480.2
488.6 two and five 1,032.9 526.1
years
572.6 five and ten 539.1 404.2
years
556.6 ten and fifteen 558.6 442.9
years
710.5 fifteen and twenty years 753.1 484.7
791.2 twenty and twenty five years 756.1 780.7
635.0 twenty five and thirty years 583.1 671.1
306.7 thirty and thirty five years 306.7 306.7
149.0 Irredeemable 146.9
5,040.5 Gross debt 5,064.7 4,464.3
(96.2) Cash (61.7) (33.1)
(77.5) Term deposits (66.6) (86.7)
(173.7) Cash and deposits (128.3) (119.8)
4,866.8 Net debt 4,936.4 4,344.5
Maturity of committed undrawn borrowing
facilities
31 March
2004 2004 2003
£m £m £m
Expiring:
45.0 within one year 32.3 56.7
150.0 between: one and two years 20.4 20.0
165.0 two and three years 25.0 170.0
three and four years 286.0 150.0
604.9 four and five years 672.1 355.0
964.9 Total 1,035.8 751.7
Interest rate profile - including effect of
derivatives
31 March
2004 2004 2003
£m £m £m
3,985.7 Fixed rate 4,043.9 3,497.3
100.0 Capped rate 100.0 100.0
781.1 Variable rate (net of cash) 792.5 747.2
4,866.8 Net debt 4,936.4 4,344.5
14. Net debt (continued)
Balance Sheet adjustments
In accordance with Financial Reporting Standard 4 'Capital Instruments', debt
issue costs, less premiums received, have been deducted from the principal
amount of debt in arriving at Balance Sheet values, as detailed below:
31 March
2004 2004 2003
£m £m £m
37.8 Securitised 34.0 45.2
9.8 Debentures 9.6 6.1
0.5 US Dollar Notes 0.5
1.0 Convertible bonds 3.1
49.1 44.1 54.4
In accordance with Financial Reporting Standard 7 'Fair Values in Acquisition
Accounting', on a corporate acquisition, debt is recorded in the Balance Sheet
at fair value. At 30 September 2004, the balance of the fair value adjustment
arising on the Group's acquisition of the remaining 50% interest in BL Universal
PLC was £12.7m (31 March 2004: £13.3m; 30 September 2003: £Nil). This has the
effect of increasing the carrying value of the Group's secured debt in the
Balance Sheet.
Comparison of market values and book values at 30 September 2004
Market Book
Value Value Difference
£m £m £m
Fixed rate debt:
Securitised debt 3,073.5 2,880.4 193.1
Debentures and unsecured bonds 1,177.2 983.0 194.2
Bank and other floating rate debt 1,201.3 1,201.3
Cash and deposits (128.3) (128.3)
5,323.7 4,936.4 387.3
Derivatives
- unrecognised gains (8.7) (8.7)
- unrecognised losses 48.9 48.9
40.2 40.2
Total 5,363.9 4,936.4 427.5
The differences are shown before any tax relief.
15. Notes to the cash flow statement
Reconciliation of operating profit to net cash inflow from operating activities
Year ended
31 March
2004 2004 2003
£m £m £m
421.8 Operating profit 213.3 195.8
(0.2) Dividends received (0.1)
(0.9) Depreciation and release of negative goodw 0.1 0.3
Adjustment for share options, share awards
(3.3) and pension funding 3.7
4.6 Decrease in trading properties 5.6 2.5
15.1 (Increase) decrease in debtors (11.7) 5.4
(55.7) Increase (decrease) in creditors 11.4 2.5
381.4 Net cash inflow from operating activities 222.4 206.4
Analysis of Group net debt
1 30 30
April Cash Non cash September September
2004 flow movements 2004 2003
£m £m £m £m £m
Cash at bank (96.2) 34.5 (61.7) (33.1)
Overdraft 7.3 (7.2) 0.1 7.8
Net cash per
cash flow statement (88.9) 27.3 (61.6) (25.3)
Term debt 4,884.2 175.4 5.0 5,064.6 4,309.6
Convertible Bonds 149.0 (149.0) 146.9
Term deposits (77.5) 10.9 (66.6) (86.7)
Group net debt 4,866.8 213.6 (144.0) 4,936.4 4,344.5
Reconciliation of net cash flow to movement in Group net debt
Year ended
31 March
2004 2004 2003
£m £m £m
4,361.4 Brought forward 4,866.8 4,361.4
Movement in net debt in the
period:
(47.0) Decrease (increase) in cash 27.3 16.6
134.6 Cash inflow (outflow) from movement in 175.4 (40.4)
debt
11.9 Cash inflow from term 10.9 2.7
deposits
99.5 Changes resulting from cash 213.6 (21.1)
flows
405.9 Non cash movements (144.0) 4.2
505.4 69.6 (16.9)
4,866.8 Carried forward 4,936.4 4,344.5
16. Net Asset Value per share
Adjusted
Net Net
Shares Assets Assets
m £m £m
Net Asset Value
(undiluted)
Shareholders' funds as shown on balance sheet 518.2 5,265.0 5,265.0
FRS19 capital allowance effects
British Land Group 106.4
Share of joint ventures 7.2
113.6
Total external valuation surplus on development
and trading properties (note 7) 82.9 82.9
Net assets attributable to 5,461.5 5,347.9
ordinary shares
At 30 September 2004 1,054 p 1,032 p
At 31 March 2004 999 p 976 p
At 30 September 2003 - As restated 893 p 873 p
Fully diluted Net Asset Value
Net assets attributable to 518.2 5,461.5 5,347.9
ordinary shares
Adjust to fully diluted on exercise of share 4.8 23.2 23.2
options
Net assets attributable to fully diluted
ordinary shares 523.0 5,484.7 5,371.1
At 30 September 2004 1,049 p 1,027 p
At 31 March 2004 966 p 944 p
At 30 September 2003 - As restated 869 p 849 p
The adjusted NAV includes the surplus before tax of the external valuation over
the book value of both development and trading properties and after adding back
the FRS19 deferred tax capital allowance provision (as described in note 13)
which is not expected to arise.
17. Reserves
Capital Profit
Share redemption Other Revaluation and loss
premium reserve reserves reserve account Total
£m £m £m £m £m £m
At 1 April 2004 1,109.3 8.1 (6.1) 2,615.2 820.9 4,547.4
Share issues 142.1 142.1
Retained profit for
the period 38.7 38.7
Realisation of prior
year revaluations 2.5 (2.5)
Current period
revaluation 411.6 411.6
Exchange
movements on
net investments (4.3) 4.0 (0.3)
Purchase of ESOP
shares (7.6) (7.6)
Adjustment for share
and share option
awards 3.6 3.6
At 30 September 2004 1,251.4 8.1 (10.4) 3,029.3 857.1 5,135.5
18. Contingent liabilities
Contingent liabilities of the Parent for guarantees to third parties amounted to
£Nil (31 March 2004: £Nil; 30 September 2003: £12.0m).
TPP Investments Limited, a wholly owned ringfenced special purpose subsidiary,
is a partner in The Tesco British Land Property Partnership and, in that
capacity, has entered into a secured bank loan under which its liability is
limited to £43.6m (31 March 2004: £43.6m; 30 September 2003: £Nil) and recourse
is only to the partnership assets.
19. Pension Asset
31 March
2004 2004 2003
£m £m £m
0.1 Surplus (deficit) in scheme 0.1 (8.8)
Related deferred tax asset 2.7
0.1 Net pension asset (liability) 0.1 (6.1)
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