IFRS Restatement
Crest Nicholson PLC
21 February 2006
Crest Nicholson PLC
Preliminary information on the implementation of
International Financial Reporting Standards
For the year ended 31 October 2005
Contents
Introduction
Basis of preparation
Transitional arrangements
Summary of the impact of IFRS adoption
Significant changes in accounting policies and impact on the financial
statements
Consolidated income statement
Consolidated statement of recognised income and expense
Consolidated balance sheet
Consolidated cash flow statement
Reconciliation of profit
For the year ended 31 October 2005
For the six months ended 30 April 2005
Reconciliation of equity
As at 31 October 2005
As at 30 April 2005
As at 1 November 2004
Note
A PDF version of this announcement can be found on the Company's website -
www.crestnicholson.com under Investor Relations.
Introduction
In the Preliminary Announcement made on 25 January 2006, Crest Nicholson PLC
gave a summary of the impact of changes of accounting policy. This announcement
provides further, more detailed, information on the changes already reported.
For all accounting periods up to and including the year ended 31 October 2005
Crest Nicholson PLC has prepared its financial statements under UK Generally
Accepted Accounting Principles (UK GAAP). For later accounting periods, the
Group is required to prepare its consolidated financial statements in accordance
with International Financial Reporting Standards as adopted by the European
Union (IFRS).
Crest Nicholson's first results under this basis will be its interim results for
the six months ending 30 April 2006. The Group's first annual report under IFRS
will be for the year ending 31 October 2006. As the Group publishes comparative
information for one year in its Annual Report, the effective date of transition
to IFRS is 1 November 2004.
This summary provides an analysis of the effects of the change from UK GAAP to
IFRS on Crest Nicholson's financial statements and previously published
information has been restated in the following sections. The full disclosures
required will be included in the financial statements for the year ending 31
October 2006.
As explained in the Preliminary Announcement made on 25 January 2006, a thorough
review of Crest's accounting policies has been performed to coincide with the
implementation of IFRS. As a result, under IFRS, revenue on housing units will
be recognised upon legal completion rather than on build completion. In
addition, all land and land creditors, under IFRS will be recognised at the
point of unconditional exchange. These policies are in line with the majority of
the peer group and will enhance comparability.
Basis of preparation
The information has been prepared in accordance with standards and
interpretations issued by the International Accounting Standards Board. These
are subject to ongoing review and endorsement by the European Commission and
subject to change. Consequently, information in this document may require
updating for any subsequent amendments to IFRS required for first time adoption
and for interpretations that Crest Nicholson may elect to adopt.
The preliminary information contained in this document on the implementation of
IFRS is not the Company's statutory financial statements and has not been
audited. The statutory financial statements for the year ended 31 October 2005,
prepared under UK GAAP, have been reported on by the auditors. The report of the
auditors was unqualified and did not contain a statement under section 237(2) or
(4) of the Companies Act 1985. The statutory accounts for the year ended 31
October 2005 have not yet been filed with the Registrar of Companies but will
shortly be available on the Company's website www.crestnicholson.com.
Transitional arrangements
The rules for first time adoption of IFRS are set out in IFRS 1 'First Time
Adoption of International Financial Reporting Standards'. In general a company
is required to define its IFRS accounting policies and apply these
retrospectively to determine its opening balance sheet under IFRS. The standard
allows a number of exceptions to this general principle to assist companies as
they make the transition to reporting under IFRS. These are set out as follows:
• The Company has taken advantage of the transitional provisions allowing
the application of IFRS 2: Share-based Payment to be limited to grants of
share options that took place after 7 November 2002.
• The Company has taken advantage of the option provided by IAS 19:
Employee Benefits to account for variations in actuarial gains and losses in
respect of the defined benefit pension scheme in full immediately in the
statement of recognised income and expense.
The Company has adopted IAS 32 and 39 with effect from 1 November 2004, the date
of transition to IFRS.
No adjustments have been made for any changes in estimates made at the time of
approval of the UK GAAP financial statements on which the preliminary IFRS
financial statements are based, in accordance with IFRS 1.
Summary of the impact of IFRS adoption
Based on the accounting policies adopted, the impact on the key performance
indicators of the transition to IFRS including the change in accounting policy
to legal completion for housing revenue recognition is as follows:
31 October 2005 30 April 2005
UK GAAP IFRS UK GAAP IFRS
£m £m £m £m
Operating profit including joint ventures 94.9 99.9 43.7 58.5
Profit before tax 79.2 78.9 35.9 48.3
Basic earnings per share 47.0p 48.2p 21.5p 30.2p
Net assets 367.4 266.1 348.6 254.3
The detailed reconciliations of the movements for the Income Statement and
Balance Sheet are given in subsequent sections.
The changes in policies which affect the restated numbers are:
• The recognition of revenue on land and commercial sales under IFRS has
resulted in timing differences compared to UK GAAP in some cases, for
example when substantial acts are still to be performed
• The recognition of revenue on housing sales at legal completion instead
of build completion. This change is not an IFRS requirement but the Group
has decided to bring this accounting policy in line with its peer group to
enhance comparability and to obtain operational benefits from bringing the
cash collection and profit recognition points together.
• The recognition of sales and marketing costs as incurred and not
expensed in line with sales
• The recognition of dividends only once declared or paid
• The recognition of the pension scheme deficit on the Balance Sheet
• The presentation of jointly controlled operations on a line by line
basis
• The classification of the preference shares as debt rather than as part
of shareholders' funds
• The impact of IAS 39 on US dollar denominated debt and related hedging
instruments
• The discounting of deferred payments for land to present value, with a
notional interest charge being applied over the deferral period
• The recognition of land stock and land creditors only at the point of
unconditional exchange
• The recognition of a charge for share based payments under IFRS 2
Significant changes in accounting policies and impact on the financial
statements
Revenue recognition (IAS 18)
Under IFRS, similar to UK GAAP, revenue in respect of land sales and sales of
commercial property is recognised when the significant risks and rewards of
ownership have been transferred. However, under IFRS, if the seller is obliged
to perform any significant acts after the time of sale, revenue is recognised as
these acts are performed. This has resulted in a change in the timing of revenue
recognition.
The effect on the opening balance sheet at transition is to increase inventories
by £44.8m, reduce debtors by £46.1m, increase creditors by £8.8m, increase
deferred tax asset by £3.1m and hence reduce net assets by £7.0m. For the year
ended 31 October 2005, this has resulted in a decrease in turnover of £29.3m and
in operating profit of £1.1m with a related tax credit of £0.3m.
Legal completion
Crest Nicholson has hitherto recognised income on housing sales at the later of
exchange of contracts and build completion. Although this is acceptable for the
purposes of IFRS, one of the principal objectives of the new standards is to
improve comparability. The Group has, therefore, decided to move its housing
income recognition point from exchanged and build complete to legal completion,
which accords with the majority of its peer group. This also has the operational
benefits of bringing cash collection and profit recognition together.
The effect on the opening balance sheet at transition is to increase inventories
by £112.8m, reduce debtors by £155.9m, increase deferred tax assets by £12.9m,
reduce investments in joint ventures by £0.6m and hence reduce net assets by
£30.8m. For the year ended 31 October 2005, this has resulted in an increase in
turnover of £27.0m and in operating profit of £11.2m with a related tax charge
of £3.4m.
Inventories (IAS 2)
IAS 2 requires sales and marketing costs to be written off as incurred and not
capitalised in work in progress and expensed in line with sales. The impact on
the opening balance sheet has been to reduce shareholders' funds by £8.7m, work
in progress by £12.4m and increase the deferred tax asset by £3.7m. For the year
to 31 October 2005 gross profit is reduced by £4.7m.
Events after the balance sheet date (IAS 10)
Under IAS 10 only dividends declared before the Balance Sheet date can be shown
as a liability. Crest Nicholson's final dividend is declared at the Annual
General Meeting. Consequently, there is a requirement to remove the liability
for the final dividends for the years ended 31 October 2004 and 2005. The impact
therefore, is to increase the net assets of the opening Balance Sheet by £9.3m
and the net assets as at 31 October 2005 by £9.8m.
Employee benefits (IAS 19)
The Group has taken advantage of the option provided by IAS 19 to account for
variations in actuarial gains and losses, in respect of the defined benefit
scheme, in full immediately in the statement of recognised income and expense.
The defined contribution scheme is unaffected by IAS 19.
The impact on the opening balance sheet is to reduce net assets by £22.8m, due
to the recognition of a pension deficit of £30.3m, a deferred tax asset of £9.8m
and the release of the £2.3m prepayment which arose in prior years. At 31
October 2005 a £26.1m reduction in net assets is recognised, including a gross
deficit of £35.3m and a deferred tax asset of £11.2m. An actuarial loss of £3.3m
net of tax is taken to reserves.
Joint ventures
Jointly controlled entities under IFRS are accounted for using the equity method
of accounting. The results of jointly controlled entities are shown as a
separate item on a post-tax basis.
The Group has one joint venture which is not a legal entity. Under IFRS this
will be accounted for as a jointly controlled operation. The results of this
joint venture will therefore be presented on a line by line basis in the income
statement and balance sheet.
The presentational impact of these changes is set out in the attached
reconciliations.
Financial instruments (IAS 32 & IAS 39)
IAS 32 covers the disclosure and presentation of financial instruments, while
IAS 39 covers their recognition and measurement.
Preference shares
IAS 32 requires preference shares to be classified as a liability as opposed to
a component of equity, with the relevant dividend treated as a financing charge
as opposed to a distribution. The impact of this change is to reduce
shareholders' funds in the opening balance sheet by £38.0m and to increase
financing charges for the year to 31 October 2005 by £2.1m. The preference
shares were repurchased in November 2005.
Hedging instruments
The Group holds £110m of US Private Placement loans ("USPP") held in dollars.
The USPP were entered into to provide long term finance to the Group. To
eliminate all forward foreign exchange risk in relation to the loan capital
values, all USPP Dollar capital cash flows were swapped into sterling cash flows
on issue. In addition, these swap arrangements hedge the fixed US Dollar
interest rate cash flows into fixed UK Sterling interest rate cash flows.
Crest Nicholson has designated these derivatives as partly a fair value hedge of
the foreign exchange variability of the loan principal and partly a cashflow
hedge of exposure to variability in cash flows associated with the highly
probable forecast interest flows. These derivatives are held at fair value in
the balance sheet under IAS 39. The USPP loans are accounted for under IFRS on
an amortised cost basis and retranslated at the spot exchange rate at each
period end.
The impact of adopting IAS 39 on the opening balance sheet as at 1 November 2004
is to revalue the USPP at the year end exchange rate, thereby reducing loans by
£19.5m. A fair value liability of £16.8m is also recognised in respect of the
hedging swaps relating to these loans, giving rise to an unrealised hedge
reserve of £1.9m and a related deferred tax liability of £0.8m.
This has no impact on the net profit of the Group for the year ended 31 October
2005. The fair value of the USPP as at 31 October 2005 results in a reduction of
the loan liabilities of £16.3m. The fair value of the derivatives is £19.2m,
giving rise to a negative hedge reserve of £2.0m and a related deferred tax
asset of £0.9m.
Deferred payments
In accordance with IAS 39, the deferred payments arising from land creditors are
to be held at discounted present value, hence recognising a financing element
over the period of the deferred settlement terms. The land creditor is then
increased to the settlement value over the period of financing, with the
financing element charged as interest expense through the income statement.
The value of land held on the balance sheet and the corresponding land creditor
is reduced by the financing element. The reduction in land value in inventories
will result in an eventual reduction in cost of sales as the land is traded out.
For the year ended 31 October 2005, this has resulted in an increase in
operating profit of £0.3m and the inclusion of notional interest of £3.0m
together with a related deferred tax credit of £0.8m.
Land creditors
In addition, the Group has changed its policy on the recognition of land assets
and land creditors. These will now be recognised only at unconditional exchange
of contracts. This change is not an IFRS requirement, but the Group has decided
to bring this accounting policy in line with its peer group.
The effect on the opening balance sheet at transition is to reduce inventories
by £209.6m and reduce creditors by a similar amount.
Share-based payments (IFRS 2)
In accordance with IFRS 2, Crest Nicholson has recognised a charge for the SAYE
scheme and employee share options granted after 7 November 2002. The fair value
has been calculated using a binomial option-pricing model. A fair value charge
continues to be made for the LTIP scheme. The charge is spread over the vesting
period and is adjusted to reflect the actual and expected level of vesting. The
operating profit impact for 2005 is a charge of £0.5m.
Conclusion
The transition to IFRS does not have a material effect on the consolidated
financial profits of Crest Nicholson PLC and there is no impact on Crest
Nicholson's cash flows and dividend policy.
Consolidated Income Statement
Year to Six months to
31 October 2005 30 April 2005
£m £m
Revenue 699.0 350.6
Cost of sales (547.2) (266.9)
----------- -----------
Gross profit 151.8 83.7
Operating costs (53.3) (26.1)
Share of results from joint ventures 1.4 0.9
----------- -----------
Profit from operations 99.9 58.5
Finance costs (21.0) (10.2)
----------- -----------
Profit before tax 78.9 48.3
Income tax expense (25.0) (14.6)
----------- -----------
Profit for the period 53.9 33.7
=========== ===========
Earnings per share
Basic 48.2p 30.2p
Diluted 47.8p 29.9p
Consolidated Statement of Recognised Income and Expense
Year to Six months to
31 October 2005 30 April 2005
£m £m
Cash flow hedges: effective portion of
changes in fair value (3.9) (2.7)
Actuarial losses on defined benefit schemes (3.3) (0.3)
----------- -----------
Net expense recognised directly in equity (7.2) (3.0)
Profit for the period 53.9 33.7
----------- -----------
Total recognised income for the period 46.7 30.7
=========== ===========
Consolidated Balance Sheet
31 October 2005 30 April 2005 1 November 2004
£m £m £m
ASSETS
Non-current assets
Property, plant and
equipment 2.5 2.7 2.5
Investments in joint
ventures 11.7 15.1 16.0
Deferred tax assets 31.2 26.4 29.6
----------- ----------- -----------
45.4 44.2 48.1
----------- ----------- -----------
Current assets
Inventories 745.1 762.8 729.9
Trade and other
receivables 33.5 50.5 34.7
Cash and cash equivalents 57.0 7.2 10.9
----------- ----------- -----------
835.6 820.5 775.5
----------- ----------- -----------
Total assets 881.0 864.7 823.6
----------- ----------- -----------
LIABILITIES
Current liabilities
Bank overdrafts and loans (12.9) (9.6) (3.2)
Current tax liabilities (12.7) (11.2) (12.8)
Trade and other payables (258.4) (258.4) (264.7)
----------- ----------- -----------
(284.0) (279.2) (280.7)
----------- ----------- -----------
Non-current liabilities
Bank and other loans (225.8) (232.7) (204.6)
Forward currency swaps (19.2) (23.6) (16.8)
Trade and other payables (47.4) (40.6) (56.7)
Retirement benefit
obligations (35.3) (30.8) (30.3)
Provisions (2.6) (2.9) (1.1)
Deferred tax liabilities (0.6) (0.6) (1.4)
----------- ----------- -----------
(330.9) (331.2) (310.9)
----------- ----------- -----------
Total liabilities (614.9) (610.4) (591.6)
----------- ----------- -----------
Net assets 266.1 254.3 232.0
=========== =========== ===========
SHAREHOLDERS' EQUITY
Ordinary share capital 11.2 11.2 11.2
Share premium 57.7 57.4 56.9
Hedge reserve (2.0) (0.8) 1.9
Retained earnings 199.2 186.5 162.0
----------- ----------- -----------
Total shareholders' equity 266.1 254.3 232.0
=========== =========== ===========
Consolidated Cash Flow Statement
Year to Six months to
31 October 2005 30 April 2005
£m £m
Cash flow from operating activities
Profit for the period 53.9 33.7
Adjustments for:
Interest 21.0 10.2
Tax 25.0 14.6
Share of profit of joint ventures (1.4) (0.9)
Depreciation charge 1.0 0.5
Share based payment charge 0.6 0.3
----------- -----------
Operating profit before working capital
changes 100.1 58.4
Changes in working capital
Increase in inventories (15.2) (32.9)
Decrease/(increase) in trade and other
receivables 1.4 (15.7)
Decrease in trade and other payables (17.6) (22.8)
----------- -----------
Cash from/(used in) operations 68.7 (13.0)
Interest and preference dividends paid (18.0) (8.3)
Tax paid (24.1) (12.3)
----------- -----------
Net cash inflow/(outflow) from operating
activities 26.6 (33.6)
----------- -----------
Cash flows from investing activities:
Purchases of property, plant and equipment (1.0) (0.7)
Repayment of loans to joint ventures 5.6 1.8
Interest received 0.4 0.1
----------- -----------
Net cash from investing activities 5.0 1.2
----------- -----------
Cash flows from financing activities:
Increase in bank and other loans 18.0 31.0
Share issues 0.8 0.6
Dividends paid (14.0) (9.3)
----------- -----------
Net cash from financing activities 4.8 22.3
----------- -----------
Net increase/(decrease) in cash and cash
equivalents 36.4 (10.1)
Cash and cash equivalents at beginning of
period 7.7 7.7
----------- -----------
Cash and cash equivalents at end of period 44.1 (2.4)
=========== ===========
Reconciliation of Profit
For the year to 31 October 2005
UK GAAP IAS 18 IAS 2 IAS 10 IAS 19 IAS 31 IAS 32/39 IAS 39 IAS 39 IFRS2
GAAP Revenue Legal Invent- Dividend Retirement Joint Preference Currency Deferred Share
recogni Comple ories Benefits Ventures shares Swap payment based
tion tion Payments
£m £m £m £m £m £m £m £m £m £m £m
Revenue 701.7 (29.3) 27.0 (0.4)
Cost of (555.3) 28.2 (16.1) (4.7) 0.7
sales ------- -------- -------- ------- ------- -------- ------- -------- ------- ------- --------
Gross 146.4 (1.1) 10.9 (4.7) 0.3
profit
Operating (53.1) 0.3 (0.5)
costs
Share of 1.6 0.3 (0.5)
results
from
joint
ventures ------- -------- -------- ------- ------- -------- ------- -------- ------- ------- --------
Profit
from 94.9 (1.1) 11.2 (4.7) 0.3 (0.5) 0.3 (0.5)
operations
Finance (15.7) (0.2) (2.1) (3.0)
costs ------- -------- -------- ------- ------- -------- ------- -------- ------- ------- --------
Profit
before 79.2 (1.1) 11.2 (4.7) 0.1 (0.5) (2.1) (2.7) (0.5)
tax
Income tax
expense (24.5) 0.3 (3.4) 1.4 (0.1) 0.5 0.8
------- -------- -------- ------- ------- -------- ------- -------- ------- ------- --------
Profit for
the 54.7 (0.8) 7.8 (3.3) - - - (2.1) - (1.9) (0.5)
period ======= ======== ======== ======= ======= ======== ======= ======== ======= ======= =======
Earnings
per share
Basic 47.0p (0.7p) 7.0p (3.0p) - - - - - (1.7p) (0.4p)
Diluted 46.7p (0.7p) 6.9p (3.0p) - - - - - (1.7p) (0.4p)
CONTINUED...
Reconciliation of Profit
For the year to 31 October 2005
Effect Of Restated
Transition under
IFRS IFRS
£m £m
Revenue (2.7) 699.0
Cost of 8.1 (547.2)
sales ------- --------
Gross 5.4 151.8
profit
Operating (0.2) (53.3)
costs
Share of
results
from
joint (0.2) 1.4
ventures ------- --------
Profit
from
operations 5.0 99.9
Finance (5.3) (21.0)
costs ------- --------
Profit
before (0.3) (78.9)
tax
Income tax (0.5) (25.0)
expense ------- --------
Profit for
the (0.8) 53.9
period ======= ========
Earnings
per share
Basic 1.2p 48.2p
Diluted 1.1p 47.8p
Reconciliation of Profit
For the six months to 30 April 2005
UK IAS 18 Legal IAS 2 IAS 10 IAS 19 IAS 31 IAS 32/39 IAS 39 IAS 39
GAAP Revenue Completion Inventories Dividend Retirement Joint Preference Currency Deferred
recognition Benefits Ventures shares Swap payments
£m £m £m £m £m £m £m £m £m £m
Revenue 310.7 (5.8) 45.7
Cost of (241.4) 6.0 (31.1) (0.6) 0.2
sales ------- -------- -------- -------- ------- -------- ------- -------- ------- -------
Gross 69.3 0.2 14.6 (0.6) 0.2
profit
Operating (26.2) 0.1
costs
Share of
results
from
joint 0.6 0.5 (0.2)
ventures ------- -------- -------- -------- ------- -------- ------- -------- ------- -------
Profit
from 43.7 0.2 15.1 (0.6) 0.1 (0.2) 0.2
operations
Finance (7.8) (1.0) (1.4)
costs ------- -------- -------- -------- ------- -------- ------- -------- ------- -------
Profit
before 35.9 0.2 15.1 (0.6) 0.1 (0.2) (1.0) (1.2)
tax
Income tax
expense (10.9) (4.5) 0.2 0.2 0.4
------- -------- -------- -------- ------- -------- ------- -------- ------- -------
Profit
for
the 25.0 0.2 10.6 (0.4) 0.1 - (1.0) - (0.8)
period ======= ======== ======== ======== ======= ======== ======= ======== ======= =======
Earnings
per share
Basic 21.5p 0.2p 9.5p (0.4p) - 0.1p - - - (0.7p)
Diluted 21.3p 0.2p 9.4p (0.4p) - 0.1p - - - (0.7p)
CONTINUED....
Reconciliation of Profit
For the six months to 30 April 2005
IFRS2 Effect Restated
Share of under
Based transition IFRS
Payments IFRS
£m £m £m
Revenue 39.9 350.6
Cost of (25.5) (266.9)
sales ------- -------- --------
Gross 14.4 83.7
profit
Operating 0.1 (26.1)
costs
Share of
results
from
joint 0.3 0.9
ventures ------- -------- --------
Profit
from 14.8 58.5
operations
Finance (2.4) (10.2)
costs ------- -------- --------
Profit 12.4 48.3
before
tax
Income tax (3.7) (14.6)
expense ------- -------- -------
Profit for
the - 8.7 33.7
period ======= ======== ========
Earnings
per share
Basic - 8.7p 30.2p
Diluted - 8.6p 29.9p
Reconciliation of Equity
As at 31 October 2005
UK GAAP IAS 18 IAS 2 IAS 10 IAS 19 IAS 31 IAS 32/39 IAS 39 IAS 39
Revenue Legal Inventories Dividend Retirement Joint Preference Currency Deferred
recognition Completion Benefits Ventures shares Swap payments
£m £m £m £m £m £m £m £m £m £m
ASSETS
Non-current
assets
Property,
plant and
equipment 2.5
Investments
in joint 41.2 (0.4) (29.1)
ventures
Deferred tax
asset - 3.4 9.7 5.1 11.2 0.9 0.9
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
43.7 3.4 9.3 5.1 11.2 (29.1) 0.9 0.9
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Current
assets
Inventories 640.1 69.6 96.7 (17.1) 33.4 (7.4)
Trade and
other
receivables 227.2 (65.7) (129.0) (2.0) 3.6 (0.6)
Cash and cash
equivalents 57.0
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
924.3 3.9 (32.3) (17.1) (2.0) 37.0 (8.0)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total assets 968.0 7.3 (23.0) (12.0) 9.2 7.9 0.9 (7.1)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
LIABILITIES
Current
liabilities
Bank
overdrafts
and loans (12.9)
Current tax
liabilities (12.7)
Trade and
other (274.0) (15.1) 9.8 (6.3)
payables ------ ------- ------- ------- ------- ------- ------- ------- ------- -------
(299.6) (15.1) 9.8 (6.3)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Non-current
liabilities
Bank and
other loans (204.1) (38.0) 16.3
Forward
currency (19.2)
swaps
Trade and
other (93.7) (1.6) 4.9
payables
Retirement
benefit
obligations (35.3)
Provisions (2.6)
Deferred tax
liabilities (0.6)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
301.0) (35.3) (1.6) (38.0) (2.9) 4.9
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total
liabilities (600.6) (15.1) 9.8 (35.3) (7.9) (38.0) (2.9) 4.9
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net assets 367.4 (7.8) (23.0) (12.0) 9.8 (26.1) - (38.0) (2.0) (2.2)
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
SHAREHOLDERS'
EQUITY
Ordinary
share 49.2 (38.0)
capital
Share premium 57.7
Hedge reserve - (2.0)
Retained
earnings 260.5 (7.8) (23.0) (12.0) 9.8 (26.1) (2.2)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total
shareholders'
equity 367.4 (7.8) (23.0) (12.0) 9.8 (26.1) - (38.0) (2.0) (2.2)
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
CONTINUED....
Reconciliation of Equity
As at 31 October 2005
Land Effect of Restated
creditors Transition under
IFRS IFRS
ASSETS
Non-current
assets
Property, 2.5
plant and
equipment
Investments (29.5) 11.7
ventures
in joint
Deferred tax 31.2 31.2
asset
------- ------- -------
1.7 45.4
------- ------- -------
Current
assets
Inventories (70.2) 105.0 745.1
Trade and (193.7) 33.5
other
receivables
Cash and cash 57.0
equivalents
------- ------- -------
(70.2) (88.7) 835.6
------- ------- -------
Total assets (70.2) (87.0) 881.0
------- ------- -------
LIABILITIES
Current
liabilities
Bank (12.9)
overdrafts
and loans
Current tax (12.7)
liabilities
Trade and
other 27.2 15.6 (258.4)
payables ------ ------- -------
27.2 15.6 (284.0)
------- ------- -------
Non-current
liabilities
Bank and (21.7) (225.8)
other loans
Forward (19.2) (19.2)
currency
swaps
Trade and 43.0 46.3 (47.4)
other
payables
Retirement (35.3) (35.3)
benefit
obligations
Provisions - (2.6)
Deferred tax - (0.6)
liabilities
------- ------- -------
43.0 (29.9) (330.9)
------- ------- -------
Total 70.2 (14.3) (614.9)
liabilities
------- ------- -------
Net assets - (101.3) 266.1
======= ======= =======
SHAREHOLDERS'
EQUITY
Ordinary (38.0) 11.2
share
capital
Share premium 57.7
Hedge reserve (2.0) (2.0)
Retained (61.3) 199.2
earnings
------- ------- -------
Total - (101.3) 266.1
shareholders'
equity
======= ======= =======
Reconciliation of Equity
As at 30 April 2005
UK GAAP IAS 18 IAS 2 IAS 10 IAS 19 IAS 31 IAS 32/39 IAS 39 IAS 39
Revenue Legal Inventories Dividend Retirement Joint Preference Currency Deferred
recognition Completion Benefits Ventures shares Swap payments
£m £m £m £m £m £m £m £m £m £m
ASSETS
Non-current
assets
Property,
plant and
equipment 2.7
Investments
in joint 20.1 (0.2) (4.8)
ventures
Deferred tax
asset - 3.1 8.6 3.9 9.9 0.4 0.5
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
22.8 3.1 8.4 3.9 9.9 (4.8) 0.4 0.5
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Current
assets
Inventories 786.0 50.0 81.7 (13.0) 33.6 (6.2)
Trade and
other
receivables 210.6 (47.4) (110.3) (2.1) (0.3)
Cash and cash
equivalents 7.2
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
1,003.8 2.6 (28.6) (13.0) (2.1) 33.6 (6.5)
Total assets 1,026.6 5.7 (20.2) (9.1) 7.8 28.8 0.4 (6.0)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
LIABILITIES
Current
liabilities
Bank
overdrafts
and (9.6)
loans
Current tax
liabilities (11.2)
Trade and
other (289.8) (12.5) 4.7 (27.2)
payables ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(310.6) (12.5) 4.7 (27.2)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Non-current
liabilities
Bank and
other (217.1) (38.0) 22.4
loans
Forward
currency - (23.6)
swaps
Trade and
other (146.8) (1.6) 4.9
payables
Retirement
benefit
obligations - (30.8)
Provisions (2.9)
Deferred tax
liabilities (0.6)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(367.4) (30.8) (1.6) (38.0) (1.2) 4.9
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total
liabilities (678.0) (12.5) 4.7 (30.8) (28.8) (38.0) (1.2) 4.9
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net assets 348.6 (6.8) (20.2) (9.1) 4.7 (23.0) - (38.0) (0.8) (1.1)
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
SHAREHOLDERS'
EQUITY
Ordinary
share 49.2 (38.0)
capital
Share premium 57.4
Hedge reserve (0.8)
Retained
earnings 242.0 (6.8) (20.2) (9.1) 4.7 (23.0) (1.1)
------ ------- ------- ------- ------- ------- ------- ------- ------- -------
Total 348.6 (6.8) (20.2) (9.1) 4.7 (23.0) - (38.0) (0.8) (1.1)
shareholders'
equity ======= ======= ======= ======= ======= ======= ======= ======= ======= =======
CONTINUED....
Reconciliation of Equity
As at 30 April 2005
Land Effect of Restated
creditors Transition under
IFRS IFRS
£m £m £m
ASSETS
Non-current
assets
Property, 2.7
plant and
equipment
Investments (5.0) 15.1
in joint
ventures
Deferred tax 26.4 26.4
asset
------- ------- -------
21.4 44.2
------- ------- -------
Current
assets
Inventories (169.3) (23.2) 762.8
Trade and 160.1 50.5
other
receivables
Cash and cash 7.2
equivalents
------- ------- -------
(169.3) (183.3) 820.5
Total assets (169.3) (161.9) 864.7
------- ------- -------
LIABILITIES
Current
liabilities
Bank (9.6)
overdrafts
and
loans
Current tax (11.2)
liabilities
Trade and 66.4 31.4 (258.4)
other
payables ------- ------- -------
66.4 31.4 (279.2)
------- ------- -------
Non-current
liabilities
Bank and (15.6) (232.7)
other
loans
Forward (23.6) (23.6)
currency
swaps
Trade and 102.9 106.2 (40.6)
other
payables
Retirement (30.8) (30.8)
benefit
obligations
Provisions - (2.9)
Deferred tax - (0.6)
liabilities
------- ------- -------
102.9 36.2 (331.2)
------- ------- -------
Total 169.3 67.6 (610.4)
liabilities
------- ------- -------
Net assets - (94.3) 254.3
======= ======= =======
SHAREHOLDERS'
EQUITY
Ordinary
share (38.0) 11.2
capital 57.4
Share premium
Hedge reserve (0.8) (0.8)
Retained (55.5) 186.5
earnings
------ ------- -------
Total (94.3) 254.3
shareholders'
equity ======= ======= =======
Reconciliation of Equity
As at 1 November 2004
UK GAAP IAS 18 IAS 2 IAS 10 IAS 19 IAS 31 IAS 32/39 IAS 39 IAS 39
Revenue Legal Inventories Dividend Retirement Joint Preference Currency Deferred
recognition Completion Benefits Ventures shares Swap payments
£m £m £m £m £m £m £m £m £m £m
ASSETS
Non-current
assets
Property,
plant and
equipment 2.5
Investments
in 21.2 (0.6) (4.6)
joint
ventures
Deferred tax
asset - 3.1 12.9 3.7 9.8 0.1
------- ------- ------- ------- ------- ------- ------- -------- ------- -------
23.7 3.1 12.3 3.7 9.8 (4.6) 0.1
------- ------- ------- ------- ------- ------- ------- -------- ------- -------
Current
assets
Inventories 771.9 44.8 112.8 (12.4) 22.4 (5.5)
Trade and
other
receivables 239.4 (46.1) (155.9) (2.3) (0.4)
Cash and cash
equivalents 10.9
------- ------- ------- ------- ------- ------- ------- -------- ------- -------
1,022.2 (1.3) (43.1) (12.4) (2.3) 22.4 (5.9)
------- ------- ------- ------- ------- ------- ------- -------- ------- -------
Total assets 1,045.9 1.8 (30.8) (8.7) 7.5 17.8 (5.8)
------- ------- ------- ------- ------- ------- ------- -------- ------- -------
LIABILITIES
Current
liabilities
Bank
overdrafts
and (3.2)
loans
Current tax
liabilities (12.8)
Trade and
other (288.4) (8.8) 9.3 (17.8)
payables ------- ------- ------- ------- ------- ------- ------- -------- ------- -------
(304.4) (8.8) 9.3 (17.8)
------- ------- ------- ------- ------- ------- ------- -------- ------- -------
Non-current
liabilities
Bank and
other (186.1) (38.0) 19.5
loans
Forward
currency - (16.8)
swaps
Trade and
other 5.5
payables (225.3)
Retirement
benefit
obligations - (30.3)
Provisions (1.1)
Deferred tax
liabilities (0.6) (0.8)
------- ------- ------- ------- ------- ------- ------- -------- ------- -------
(413.1) (30.3) (38.0) 1.9 5.5
------- ------- ------- ------- ------- ------- ------- -------- ------- -------
Total
liabilities (717.5) (8.8) 9.3 (30.3) (17.8) (38.0) 1.9 5.5
======= ======= ======= ======= ======= ======= ======= ======== ======= =======
Net assets 328.4 (7.0) (30.8) (8.7) 9.3 (22.8) - (38.0) 1.9 (0.3)
======= ======= ======= ======= ======= ======= ======= ======== ======= =======
SHAREHOLDERS'
EQUITY
Share capital 49.2 (38.0)
Share premium 56.9
Hedge reserve - 1.9
Retained
earnings 222.3 (7.0) (30.8) (8.7) 9.3 (22.8) (0.3)
------- ------- ------- ------- ------- ------- ------- -------- ------- -------
Total
shareholders'
equity 328.4 (7.0) (30.8) (8.7) 9.3 (22.8) - (38.0) 1.9 (0.3)
======= ======= ======= ======= ======= ======= ======= ======== ======= =======
CONTINUED....
Reconciliation of Equity
As at 1 November 2004
Land Effect of Restated
creditors Transition under
IFRS IFRS
£m £m £m
ASSETS
Non-current
assets
Property, 2.5
plant and
equipment
Investments (5.2) 16.0
in
joint
ventures
Deferred tax 29.6 29.6
asset
------- ------- -------
24.4 48.1
------- ------- -------
Current
assets
Inventories (204.1) (42.0) 729.9
Trade and (204.7) 34.7
other
receivables
Cash and cash 10.9
equivalents
------- ------- -------
(204.1) (246.7) 775.5
------- ------- -------
Total assets (204.1 ) (222.3) 823.6
------- ------- -------
LIABILITIES
Current
liabilities
Bank (3.2)
overdrafts
and
loans
Current tax (12.8)
liabilities
Trade and 41.1 23.7 (264.7)
other
payables ------- ------- -------
41.0 23.7 (280.7)
------- ------- -------
Non-current
liabilities
Bank and (18.5) (204.6)
other
loans
Forward (16.8) (16.8)
currency
swaps
Trade and 163.1 168.6 (56.7)
other
payables
Retirement (30.3) (30.3)
benefit
obligations
Provisions - (1.1)
Deferred tax (0.8) (1.4)
liabilities
163.1 102.2 (310.9)
------- ------- -------
Total 204.1 125.9 (591.6)
liabilities
======= ======= =======
Net assets - (96.4) 232.0
======= ======= =======
SHAREHOLDERS'
EQUITY
Share capital (38.0) 11.2
Share premium 56.9
Hedge reserve 1.9 1.9
Retained (60.3) 162.0
earnings
Total - (96.4) 232.0
shareholders'
equity
======= ======= =======
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