IFRS STATEMENT- Amendment

Redrow PLC 30 November 2005 30 November 2005 Redrow plc The announcement with RNS Number 8568U issued by Redrow at 7.00 am this morning appeared under the incorrect headline of 'Final Results' instead of 'IFRS Restatement'. The attached text, which is unchanged from that released this morning, replaces that announcement and deals with the Group's Transition to IFRS. Transition to International Financial Reporting Standards Redrow plc, in preparation for the adoption of International Financial Reporting Standards (IFRS) for the year ended 30 June 2006, is today holding a meeting with analysts to present its restated financial statements for the year ended 30 June 2005 and the six months ended 31 December 2004. Redrow plc's first published financial statements under IFRS will be in respect of the six months ending 31 December 2005 with the first Annual Report and Accounts prepared on this basis being available for the year ending 30 June 2006. Key Points No impact upon the Group's strategy or its capability to deliver shareholder value into the future Cashflows unaffected Reported revenue unchanged Profit before tax for the year ended 30 June 2005 restated to Â£139.0m (Reported UK GAAP: Â£141.1m) Basic earnings per share restated to 60.7p (Reported UK GAAP: 62.1p) Reporting Timetable: H1 2005/06 Trading Update - 5 January 2006 2005/06 Interim Results Announcement - - 7 March 2006 Full year 2005/06 Trading Update - 6 July 2006 2005/06 Preliminary Announcement - 12 September 2006 Enquiries: Redrow plc David Arnold, Group Finance Director 01244 520044 Brunswick Nina Coad 020 7404 5959 Redrow plc Preliminary information in respect of the transition to International Financial Reporting Standards Contents Page Introduction 3 Executive Summary 4 Transitional Arrangements 5 Summary of the Principal Impacts 6 - 8 Accounting Policies 9 - 12 Consolidated Income Statement 13 Consolidated Statement of Recognised Income and Expense 14 Consolidated Balance Sheet 15 Consolidated Cash Flow Statement 16 Appendices 17 - 22 Introduction For all accounting periods up to and including the year ended 30 June 2005, Redrow plc has prepared its financial statements in accordance with UK Generally Accepted Accounting Principles (UK GAAP). For accounting periods commencing on or after 1 January 2005, all listed companies throughout the European Union (EU) are required to prepare consolidated financial statements in accordance with International Financial Reporting Standards (IFRS). As a result, Redrow plc's first published financial statements under IFRS will be in respect of the six months ending 31 December 2005, with the first Annual Report and Accounts prepared on this basis being available for the year ending 30 June 2006. As comparative figures are required to be provided, the effective date of transition to IFRS is 1 July 2004, and hence the balance sheet as at 1 July 2004 has been restated to form the opening balance sheet under IFRS. This document provides an analysis of the effects on Redrow plc's consolidated financial statements of the transition from UK GAAP to IFRS, together with previously published UK GAAP information for the year ended 30 June 2005 and the six months ended 31 December 2004 restated on an IFRS basis. The Group's statutory financial statements for the year ended 30 June 2005, prepared under UK GAAP, have been filed with the Registrar of Companies. The report of the auditors on these financial statements was unqualified and did not contain a Statement under either section 237(2) or section 237(3) of the Companies Act 1985. The restated information has been prepared in accordance with IFRS that are either endorsed by the EU and effective, or are expected to be endorsed and effective at 30 June 2006, the Group's first annual reporting date at which it is required to use IFRS. However, these, and best practice regarding the interpretation and application of IFRS, are subject to ongoing review, and therefore the information contained within this document may be subject to change prior to the publication of the Annual Report and Accounts for the year ending 30 June 2006. Executive Summary It is important to note that for Redrow plc, the move to IFRS: â€¢ will not impact its strategy or its capability to deliver shareholder value into the future â€¢ will leave cashflows unaffected â€¢ will not impact the ability of Redrow plc to pay dividends or adversely impact its dividend policy Redrow did not carry any goodwill in its balance sheet at 1 July 2004 or 30 June 2005 and therefore Redrow is unaffected by the impact of IFRS 3: Business Combinations in respect of the need to test goodwill for impairment at each reporting date. The adoption of IFRS has the following impact on the key reported results for the year ended 30 June 2005: Reported UK GAAP IFRS Change Â£m Â£m Â£m Group revenue 780.4 780.4 - Profit before taxation 141.1 139.0 -2.1 Profit after taxation 98.7 96.5 -2.2 Net Assets/Total Equity 459.0 452.5 -6.5 Earnings per share (basic) 62.1p 60.7p -1.4p Earnings per share (diluted) 61.9p 60.5p -1.4p Appendices A to F provide reconciliations of the differences between the reported results under UK GAAP and IFRS. Transitional Arrangements IFRS 1 'First-time Adoption of International Financial Reporting Standards' is the standard outlining the rules for first-time adoption of IFRS. IFRS 1 requires a company to adopt accounting policies which comply with the IFRS effective at the closing balance sheet date for its first consolidated financial statements prepared under IFRS. The adopted accounting policies are then applied retrospectively in order to determine its opening balance sheet under IFRS at the date of transition. IFRS 1 does however permit a number of exemptions from full retrospective application to assist the transition to IFRS. Redrow plc intends to apply the following exemptions: IAS 19: 'Employee Benefits' Redrow plc intends to take advantage of the option to recognise all cumulative actuarial gains and losses arising in its pension scheme in full in its balance sheet at 1 July 2004, the effective date of transition to IFRS. From 1 July 2004, as permitted under the revised IAS 19 issued in December 2004, it is intended to recognise actuarial gains and losses in full in the period in which they are incurred in reserves via the statement of recognised income and expense. IFRS 2: Share-based Payment Redrow plc intends to take advantage of the transitional provisions allowing the application of IFRS 2 to grants of share options that took place after 7 November 2002 which had not vested at the effective date of transition to IFRS. IFRS 3: Business Combinations Redrow plc intends to apply IFRS 3 prospectively from 1 July 2004, the effective date of transition to IFRS. IFRS 1: Revaluation as Deemed Cost At 1 July 2004, as permitted under UK GAAP FRS 15 transitional arrangements, Redrow plc carried a freehold property at its revalued amount less accumulated depreciation. This revaluation was undertaken at 30 June 1989 on an open market basis. An IFRS 1 exemption allows the use of this fair value as deemed cost at the effective date of transition to IFRS and Redrow plc intends to adopt this treatment. IAS 39: Financial Instruments: Recognition and Measurement Redrow plc intends to adopt IAS 39 with effect from 1 July 2004, its effective date of transition to IFRS. Summary of the Principal Impacts The principal impacts in respect of the transition to IFRS upon the previously reported UK GAAP financial statements of Redrow plc are: 1. IAS 19 : Employee Benefits 2. IAS 2 : Inventories 3. IAS 39 : Financial Instruments 4. IFRS 2 : Share-based Payment 5. IAS 10 : Events after the Balance Sheet Date 6. IAS 38 : Intangible Assets 7. IAS 31 : Interests in Joint Ventures 1. IAS 19: Employee Benefits Defined contribution pension schemes are unaffected by IAS 19. In respect of its defined benefit pension scheme, Redrow plc is required under IAS 19 to recognise the net surplus or deficit in the scheme on its balance sheet. IAS 19 also requires that a provision be made in respect of holiday pay due to employees, where the holiday year-end does not coincide with that of the financial year-end. The impact on the opening balance sheet at 1 July 2004 is to recognise a net deficit of Â£6.1m representing a gross deficit of Â£7.9m in respect of the pension deficit, a Â£0.8m provision in respect of holiday pay and a deferred tax asset of Â£2.6m. The principal components of the defined benefit pensions charge to the consolidated income statement are the current service cost and finance costs. Current service cost has been included in administrative expenses to the extent that it exceeds the UK GAAP charge, resulting in an increase in administrative expenses of Â£0.4m and an increase in finance costs of Â£0.3m in the year ended 30 June 2005. Actuarial gains of Â£0.7m in the year ended 30 June 2005 have been taken directly to reserves as permitted under IAS 19 (December 2004 amendment) via the statement of recognised income and expense. At 30 June 2005, the restated IFRS balance sheet recognised a net deficit of Â£6.1m with both pension deficit and holiday pay provisions unchanged. 2. IAS 2: Inventories In accordance with IAS 2, all marketing and selling costs are excluded from the cost of inventories and are expensed as incurred. Under UK GAAP, Redrow plc included certain direct selling costs in arriving at the cost of work in progress, as permitted under SSAP 9. The impact of this change on the opening balance sheet at 1 July 2004 is to reduce work in progress by Â£9.6m and create a deferred tax asset of Â£2.9m. The overall impact on net assets is a reduction of Â£6.7m. The adoption of IFRS will generally lead to earlier recognition of direct selling costs than was the case under UK GAAP. This arises because previously, direct selling costs were reflected within the reported gross profit of each home as it legally completed. Since selling costs are usually borne prior to legal completion, recognition of these costs as incurred will be reflected earlier. There was a Â£0.9m impact on the reported cost of sales for the year ended 30 June 2005 as a result of the adoption of IAS 2. Due to the product mix and number of new developments being marketed in the financial year ending June 2006, the implementation of IAS 2 is likely to have a slightly greater impact upon the gross margin than in the previous year. At 30 June 2005, the restated IFRS balance sheet showed a Â£10.5m reduction in work in progress partly offset by the creation of a Â£3.2m deferred tax asset resulting in a Â£7.3m reduction in net assets. 3. IAS 39: Financial Instruments: Recognition and Measurement i) Land Creditors 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 on the deferred settlement terms. The liability is then increased to the settlement value over the period of the deferral. The value of the discount is expensed through net financing costs in the consolidated income statement. The impact on the opening balance sheet at 1 July 2004 was to reduce land creditors by Â£3.2m, reduce the land balance by Â£8.4m, recognise a deferred tax asset of Â£1.6m and reduce opening reserves by Â£3.6m. The IFRS treatment of land creditors has an impact on the timing of the costs charged to the income statement. This will generally result in the finance element in respect of the land creditor being expensed in advance of the compensating improvement in gross profit as a result of legal completions generally continuing beyond the settlement date of the land creditor for the majority of projects. Cost of sales for the year ended 30 June 2005 reduced by Â£1.2m with net financing costs increasing by Â£2.5m as a result of the timing of the value of discount being expensed. At 30 June 2005, the revised IFRS balance sheet had a reduction in land creditors of Â£5.5m, a decrease in the value of land held in stock of Â£12.0m, a deferred tax asset of Â£1.9m and a reduction in reserves of Â£4.6m. ii) Financial Instruments and Trade Receivables Under IAS 39, the fair value of the Group's cashflow hedging arrangements must be recognised in the balance sheet. Any gains or losses on the fair value of the cashflow hedging arrangements are taken to reserves until they are realised. Long term trade debtors are to be held at discounted present value, hence recognising a financing element. The debtor is then increased to settlement value over the period of the deferred terms. The impact on the opening balance sheet at 1 July 2004 was to recognise a Â£1.4m asset in respect of derivative financial instruments, a Â£0.4m deferred tax liability and a Â£1.0m hedge reserve. Trade receivables reduce by Â£0.2m with an associated Â£0.1m deferred tax asset and a Â£0.1m reduction in retained earnings. At 30 June 2005, the IFRS revised balance sheet impact was a Â£0.2m reduction in net assets following a net Â£1.1m charge direct to the hedge reserve via the statement of recognised income and expense. 4. IFRS 2: Share-based Payment In accordance with IFRS 2, a charge has been recognised for share options granted on or after 7 November 2002. The charge is spread over the vesting period, with adjustments made to reflect the actual and expected number of shares vesting at the year-end. The Black Scholes option pricing model has been used to determine the extent of the charge. The impact on the opening balance sheet as at 1 July 2004 was a Â£0.1m increase in deferred tax assets. The impact on the income statement for the year ended 30 June 2005 was an increase in administrative expenses of Â£0.2m. At 30 June 2005, the IFRS revised balance sheet impact was a Â£0.2m increase in deferred tax assets. 5. IAS 10: Events After the Balance Sheet Date Under IAS 10, the declaration of a dividend after the reporting date is no longer an adjusting post balance sheet event as it was under UK GAAP. Accordingly, the final dividends for the years ended 30 June 2004 and 30 June 2005 do not constitute a liability at the respective balance sheet dates under IAS 10. The impact on the opening balance sheet as at 1 July 2004 was a Â£9.5m increase in net assets. The impact on the balance sheet at 30 June 2005 was an increase in net assets of Â£11.5m. 6. IAS 38: Intangible Assets Under IAS 38, eligible software development costs that were previously held within tangible fixed assets under UK GAAP must now be classified as intangible fixed assets. As this is a balance sheet re-categorisation, with no change in depreciation rates, there is no impact on the income statement. The impact on the opening balance sheet as at 1 July 2004 was a reduction of Â£0.4m of plant, property and equipment with a corresponding Â£0.4m increase in intangible assets. The impact on the balance sheet as at 30 June 2005 was a reduction of Â£0.2m of plant, property and equipment with a corresponding increase of Â£0.2m in intangible assets. 7. IAS 31: Interests in Joint Ventures Redrow intends to account for jointly-controlled entities using the equity method of accounting. Under IAS 31, such an approach requires the results of jointly-controlled entities to be reflected as a separate item on a post tax basis and disclosed immediately before profit before tax. This contrasts with UK GAAP, where the results are disclosed at an operating profit level with the jointly-controlled entities' financing costs and tax charges included within the corresponding headings for the Group income statements. Appendix A sets out the presentational impact upon the UK GAAP reported results of the adjustments required under IAS 31 for the six months ended 31 December 2004 and twelve months ended 30 June 2005. Accounting Policies This section outlines the more important accounting policies which have been applied in the preparation of the consolidated financial statements presented in this document: Basis of Consolidation The consolidated financial statements incorporate the financial statements of Redrow plc and all its subsidiaries, together with the Group's share of the results and share of net assets of jointly-controlled entities made up to 30 June each year, i.e. the financial statements of Redrow plc and entities controlled by Redrow plc (and its subsidiaries). Control is achieved where Redrow plc has the power to govern the financial and operating policies of an entity. a) Subsidiaries The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal. The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured at their fair value at the date of acquisition. Any excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets represents goodwill. Goodwill is subject to an annual impairment review, with any reduction in value being taken straight to the income statement. Adjustments are made as necessary to the financial statements of subsidiaries to ensure consistency with the policies adopted by the Group. All significant inter-company transactions and balances between Group companies are eliminated on consolidation. b) Interests in Joint Ventures A joint venture is a contractual arrangement whereby the Group and other parties undertake an economic activity which is subject to joint control. Joint venture arrangements which involve the establishment of a separate entity in which each venturer has an interest are referred to as jointly-controlled entities. The Group reports its interests in jointly-controlled entities using the equity method of accounting - the Group's share of profit after tax is shown separately on the face of the income statement and its share of net assets is included within non-current assets in the balance sheet as an investment. When the Group transacts with its jointly-controlled entities, unrealised profits and losses are eliminated to the extent of the Group's interest in the joint venture, except where unrealised losses provide evidence of impairment of the asset transferred. Where joint venture arrangements are undertaken directly, the Group's share of jointly-controlled assets and liabilities are recognised in the relevant subsidiary company and classified according to their nature. Revenue and Profit Recognition Revenue represents the fair value received and receivable in respect of the sale of residential housing and commercial land and developments net of value added tax and discounts. This is recognised on legal completion. Profit is recognised on legal completion. Net Finance Costs Interest income is recognised on a time-apportioned basis by reference to the principal outstanding and the applicable interest rate. Borrowing costs are recognised in the income statement on an accruals basis in the period in which they are incurred. Income Tax Income tax comprises current tax and deferred tax. Current tax is based on taxable profits for the year and any appropriate adjustment to tax payable in respect of prior years. Taxable profit differs from profit before taxation per the income statement as it excludes income or expenditure items which are never chargeable or allowable for tax or which are chargeable or deductible in other accounting periods. Deferred tax is provided in full, using the balance sheet liability method, on temporary differences arising between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the calculation of taxable profit. Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax liabilities are recognised for all temporary differences. Deferred tax is calculated at the rates expected to apply when the asset or liability is settled. Deferred tax is credited or charged in the Income Statement unless it relates to items credited or charged through the Statement of Recognised Income and Expense when it is also credited or charged through that statement. Intangible Assets - Computer Software Acquired computer software licences are capitalised on the basis of costs incurred to bring to use the specific software and are amortised over their estimated useful lives of three years. Property, Plant and Equipment Freehold property comprises offices or other buildings held for administrative purposes. Freehold property is shown at cost (or deemed cost at opening balance sheet date under the IFRS 1 transitional rules) less the subsequent depreciation of buildings. Long leasehold property comprises offices. The building element of the lease is accounted for as a finance lease and the land element of the lease is accounted for as an operating lease. All other property, plant and equipment is stated at historic cost less depreciation. Historic cost includes any costs directly attributable to bringing the assets to the location and condition necessary for them to be capable of operating in the manner intended by management. Land is not depreciated. Depreciation on other assets, excluding assets in the course of construction, is charged so as to write off the cost of assets to their residual values over their estimated useful lives, on a straight line basis as follows: Buildings 50 years Plant & machinery 5 - 10 years Fixtures & fittings 3 - 5 years The gain or loss arising on the disposal of an asset represents the difference between the sales proceeds and the carrying amount of the asset and is recognised in the income statement. In the parent company books, the investment in its subsidiaries is held at cost. Leases Leases in which substantially all of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Rentals payable under operating leases are charged to work in progress or income on a straight line basis over the term of the relevant lease. Leases classified as finance leases are those where substantially all of the risks and rewards of ownership pass to the lessee. Assets held under finance leases are recognised as assets of the Group at their fair value at the date of acquisition or the present value of monthly lease payments if lower. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Inventories Inventories are stated at the lower of cost and net realisable value less cash on account. Cost comprises land and associated acquisition costs, direct materials and sub-contract work, other direct costs and those overheads (based on normal operating capacity) that have been incurred in bringing the inventories to their present location and condition. Net realisable value represents the estimated selling price in the normal course of business less relevant variable marketing, selling and distribution expenses. Employee Benefits a) Pension Obligation The Group operates a contributory pension scheme for all its staff. The scheme is externally invested and comprises two sections: a defined benefit section and a defined contribution section. A defined benefit plan is a pension plan which defines an amount of pension benefit that an employee will receive on retirement. It is funded through payments to trustee-administered funds, determined by actuarial valuations carried out on at least a triennial basis. A defined contribution plan is a pension plan under which the Group pays agreed contributions into a separate fund for each employee and any subsequent pension payable to a specific employee is determined by the amount accumulated in their individual fund. The liability recognised in the balance sheet in respect of the defined benefit section of the scheme is the present value of the defined benefit obligation at the balance sheet date, less the fair value of plan assets. The defined benefit obligation is determined using the projected unit credit method on an annual basis by an independent scheme actuary. Under IAS 19, revised December 2004, actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity as they arise in full via the statement of recognised income and expenses. Scheme service costs are charged to gross contribution and administrative expenses as appropriate and scheme finance costs are included in net financing costs. Past service costs are recognised immediately to the extent that the benefits are already vested, or otherwise amortised on a straight line basis over the vesting period, if they are conditional on the employees remaining in service for a further period. In respect of the defined contribution section of the scheme, contributions are recognised as an employee benefit expense when they are due. The Group has no further payment obligations in respect of the defined contribution section of the Scheme once the contributions have been paid. b) Bonus Plans The Group recognises a liability and an expense for bonuses where contractually obliged. Derivative Financial Instruments Derivative financial instruments are initially recorded at cost and are re-measured to fair value at each reporting date. The effective portion of changes in the fair value of derivative financial instruments which are designated and which qualify as cashflow hedges are recognised directly in equity in a hedge reserve. The gains or losses relating to the ineffective portion are recognised in the income statement immediately they arise. Dividend Distribution Dividend distribution to the Company's shareholders is recognised as a liability in the Group's financial statements in the period in which the dividends are declared and appropriately authorised. Consolidated Income Statement Unaudited Unaudited Year Ended Six Months Ended 30 June 2005 31 December 2004 Â£m Â£m Continuing operations Revenue 780.4 373.8 Cost of sales (583.7) (278.0) Gross profit 196.7 95.8 Administrative expenses (42.7) (21.2) Operating profit before financing costs 154.0 74.6 Financial income 0.8 0.4 Financial expenses (13.4) (6.3) Net financing costs (12.6) (5.9) Share of loss of joint ventures after interest and taxation (2.4) (0.4) Profit before tax 139.0 68.3 Income tax expense (42.5) (20.6) Profit for the period 96.5 47.7 Earnings per share Basic earnings per share 60.7p 30.0p Diluted earnings per share 60.5p 29.9p Consolidated Statement of Recognised Income and Expense Unaudited Unaudited Year Ended Six Months Ended 30 June 2005 31 December 2004 Â£m Â£m Effective portion of changes in fair value of interest rate cash (1.6) (0.8) flow hedges Deferred tax on change in fair value of interest rate cash flow 0.5 0.2 hedges Share-based payment recognised in the income statement 0.2 - Deferred tax on share-based payment recognised in the income (0.1) - statement Actuarial gains on defined benefit pension scheme 0.7 1.5 Deferred tax on actuarial gains taken directly to equity (0.2) (0.5) Net expense recognised directly in equity (0.5) 0.4 Profit for the period 96.5 47.7 Total recognised income and expense for the period 96.0 48.1 Consolidated Balance Sheet Unaudited Unaudited As at As at 30 June 2005 31 December 2004 Â£m Â£m Assets Plant, property and equipment 24.1 22.6 Intangible assets 0.2 0.3 Investments 2.6 1.9 Deferred tax assets 8.1 6.9 Trade and other receivables 0.5 0.5 Total non-current assets 35.5 32.2 Inventories 761.0 730.8 Trade and other receivables 12.2 15.5 Derivative financial instruments 0.3 0.6 Cash and cash equivalents 23.7 0.4 Total current assets 797.2 747.3 Total assets 832.7 779.5 Equity Issued capital 15.9 15.9 Share premium 54.2 53.5 Hedge reserve (0.1) 0.4 Other reserves 7.9 8.2 Retained earnings 374.6 331.3 Total equity 452.5 409.3 Liabilities Bank overdrafts and loans 103.8 108.8 Trade and other payables 47.2 27.4 Deferred tax liabilities 1.8 1.9 Retirement benefit obligations 7.9 6.7 Long-term provisions 2.1 2.1 Total non-current liabilities 162.8 146.9 Bank overdrafts and loans 23.1 43.7 Trade and other payables 170.1 155.9 Derivative financial instruments 0.5 - Tax liabilities 23.7 23.7 Total current liabilities 217.4 223.3 Total liabilities 380.2 370.2 Total equity and liabilities 832.7 779.5 Consolidated Cash Flow Statement Unaudited Unaudited Year Ended Six Months Ended 30 June 2005 31 December 2004 Â£m Â£m Cash flow from operating activities Profit for the period 154.0 74.6 Depreciation 2.2 0.8 Adjustment for non-cash items (3.4) (0.9) Operating profit before changes in working capital and 152.8 74.5 provisions Increase in trade and other receivables (1.3) (21.3) Increase in inventories (65.8) (35.3) Increase/(decrease) in trade and other payables 13.8 (4.1) (Decrease) in provisions and employee benefits - (1.2) Cash generated from operations 99.5 12.6 Interest paid (10.6) (4.2) Tax paid (39.8) (18.2) Net cash from operating activities 49.1 (9.8) Cash flows from investing activities Acquisition of property, plant and equipment (5.4) (1.2) Proceeds from sale of plant and equipment 1.4 - Interest received 0.8 - Purchase of own shares (0.7) (0.2) Payments to joint ventures (3.1) (0.5) Net cash from investing activities (7.0) (1.9) Cash flows from financing activities (Repayment of) / increase in bank borrowings (0.5) 4.5 Issue costs of bank borrowings (0.8) (0.8) Dividends paid (15.2) (9.5) Proceeds from issue of share capital 1.0 0.2 Net cash from financing activities (15.5) (5.6) Net increase/ (decrease) in cash and cash equivalents 26.6 (17.3) Cash and cash equivalents at the beginning of the period (26.0) (26.0) Cash and cash equivalents at the end of the period 0.6 (43.3) Adjustment of UK GAAP profit to reflect Joint Venture treatment required under IFRS APPENDIX A See Summary of Principal Impacts Paragraph 7 Unaudited Unaudited Unaudited Unaudited Year Ended Year Ended Six Months Six Months 30 June 30 June Ended Ended 2005 2005 31 December 31 December Â£m Â£m 2004 2004 Â£m Â£m Operating Profit including share of losses of joint ventures per UK GAAP statutory accounts 151.0 73.6 Add back share of losses of joint ventures 3.3 0.6 UK GAAP Operating Profit pre joint ventures 154.3 74.2 Interest payable per UK GAAP statutory accounts (9.9) (4.5) Add back share of interest from joint ventures 0.1 - UK GAAP Interest payable pre joint ventures (9.8) (4.5) (2.4) (0.4) Less share of joint ventures after interest and taxation Profit before taxation 142.1 69.3 Tax on profit on ordinary activities per UK GAAP statutory accounts (42.4) (20.7) Less tax credit arising on losses of joint ventures (1.0) (0.2) Revised income tax expense (43.4) (20.9) Profit on ordinary activities after taxation 98.7 (48.4) Reconciliation of Equity (Unaudited) APPENDIX B As at 1 July 2004 Previously IAS 19 IAS 2 IAS 39 IAS 39 IFRS 2 Reported Employee Inventories Land Financial Share-based Under Benefits Creditors Instruments Payment UK GAAP Summary of Principal 1 2 3i 3ii 4 Impacts paragraph Â£m Â£m Â£m Â£m Â£m Â£m Assets Plant, property and equipment 22.5 Intangible assets - Investments 1.8 Deferred tax assets - 2.6 2.9 1.6 0.1 0.1 Derivative financial instruments - 0.5 Trade and other receivables 0.5 (0.2) Total non-current assets 24.8 2.6 2.9 1.6 0.4 0.1 Inventories 713.4 (9.6) (8.4) Trade and other receivables 11.1 Derivative financial instruments - 0.9 Cash and cash equivalents 1.2 Total current assets 725.7 - (9.6) (8.4) 0.9 - Total assets 750.5 2.6 (6.7) (6.8) 1.3 0.1 Equity Issued capital 15.9 Share premium 53.2 Hedge reserve - 1.0 Other reserves 8.2 Retained earnings 299.3 (6.1) (6.7) (3.6) (0.1) 0.1 Total equity 376.6 (6.1) (6.7) (3.6) 0.9 0.1 Liabilities Bank overdrafts and loans 104.7 Trade and other payables 29.7 (2.6) Deferred tax liabilities 1.7 0.4 Retirement benefit obligations - 7.9 Long-term provisions 2.2 Total non-current liabilities 138.3 7.9 - (2.6) 0.4 - Bank overdrafts and loans 27.2 Trade and other payables 187.2 0.8 (0.6) Tax liabilities 21.2 Total current liabilities 235.6 0.8 - (0.6) - - Total liabilities 373.9 8.7 - (3.2) 0.4 - Total equity and liabilities 750.5 2.6 (6.7) (6.8) 1.3 0.1 Net Assets 376.6 (6.1) (6.7) (3.6) 0.9 0.1 Reconciliation of Equity (Unaudited) APPENDIX B As at 1 July 2004 IAS 10 IAS 38 Effect of Restated Dividend Intangible Transition Under Assets To IFRS IFRS Summary of Principal 5 6 Impacts paragraph Â£m Â£m Â£m Â£m Assets Plant, property and equipment (0.4) (0.4) 22.1 Intangible assets 0.4 0.4 0.4 Investments - 1.8 Deferred tax assets 7.3 7.3 Derivative financial instruments 0.5 0.5 Trade and other receivables (0.2) 0.3 Total non-current assets - - 7.6 32.4 Inventories (18.0) 695.4 Trade and other receivables - 11.1 Derivative financial instruments 0.9 0.9 Cash and cash equivalents - 1.2 Total current assets - - (17.1) 708.6 Total assets - - (9.5) 741.0 Equity Issued capital - 15.9 Share premium - 53.2 Hedge reserve 1.0 1.0 Other reserves - 8.2 Retained earnings 9.5 (6.9) 292.4 Total equity 9.5 - (5.9) 370.7 Liabilities Bank overdrafts and loans - 104.7 Trade and other payables (2.6) 27.1 Deferred tax liabilities 0.4 2.1 Retirement benefit obligations 7.9 7.9 Long-term provisions - 2.2 Total non-current liabilities - - 5.7 144.0 Bank overdrafts and loans - 27.2 Trade and other payables (9.5) (9.3) 177.9 Tax liabilities - 21.2 Total current liabilities (9.5) - (9.3) 226.3 Total liabilities (9.5) - (3.6) 370.3 Total equity and liabilities - - (9.5) 741.0 Net Assets 9.5 - (5.9) 370.7 Reconciliation of Profit (Unaudited) APPENDIX C 6 months to 31 December 2004 Previously IAS 19 IAS 2 IAS 39 IFRS 2 Effect of Restated Reported Employee Inventories Land Share-based Transition Under Under Benefits Creditors Payment To IFRS IFRS UK GAAP Summary of Principal Impacts paragraph 1 2 3i 4 Â£m Â£m Â£m Â£m Â£m Â£m Â£m Continuing Operations Revenue 373.8 - 373.8 Cost of Sales (278.7) 0.1 0.6 0.7 (278.0) Gross Profit 95.1 - 0.1 0.6 - 0.7 95.8 Administrative expenses (20.9) (0.2) (0.1) (0.3) (21.2) Operating Profit before financing 74.2 (0.2) 0.1 0.6 (0.1) 0.4 74.6 costs Financial income 0.4 - 0.4 Financial expenses (4.9) (0.1) (1.3) (1.4) (6.3) Net Financing Costs (4.5) (0.1) - (1.3) - (1.4) (5.9) Share of loss of joint ventures after interest and taxation (0.4) - (0.4) Profit Before Tax 69.3 (0.3) 0.1 (0.7) (0.1) (1.0) 68.3 Income tax expense (20.9) 0.1 - 0.2 - 0.3 (20.6) Profit for the Period 48.4 (0.2) 0.1 (0.5) (0.1) (0.7) 47.7 Earnings per share (basic) 30.5p 30.0p Earnings per share (diluted) 30.4p 29.9p Reconciliation of Equity (Unaudited) APPENDIX D As at 31 December 2004 Previously IAS 19 IAS 2 IAS 39 IAS 39 Reported Employee Inventories Land Financial Under Benefits Creditors Instruments UK GAAP Summary of Principal 1 2 3i 3ii Impacts paragraph Â£m Â£m Â£m Â£m Â£m Assets Plant, property and equipment 22.9 Intangible assets - Investments 1.9 Deferred tax assets - 2.2 2.9 1.7 0.1 Derivative financial instruments - Trade and other receivables 0.7 (0.2) Total non-current assets 25.5 2.2 2.9 1.7 (0.1) Inventories 749.2 (9.5) (8.9) Trade and other receivables 15.5 Derivative financial instruments - 0.6 Cash and cash equivalents 0.4 Total current assets 765.1 - (9.5) (8.9) 0.6 Total assets 790.6 2.2 (6.6) (7.2) 0.5 Equity Issued capital 15.9 Share premium 53.5 Hedge reserve - 0.4 Other reserves 8.2 Retained earnings 341.7 (5.3) (6.6) (4.1) (0.1) Total equity 419.3 (5.3) (6.6) (4.1) 0.3 Liabilities Bank overdrafts and loans 108.8 Trade and other payables 29.9 (2.5) Deferred tax liabilities 1.7 0.2 Retirement benefit obligations - 6.7 Long-term provisions 2.1 Total non-current liabilities 142.5 6.7 - (2.5) 0.2 Bank overdrafts and loans 43.7 Trade and other payables 161.4 0.8 (0.6) Tax liabilities 23.7 Total current liabilities 228.8 0.8 - (0.6) - Total liabilities 371.3 7.5 - (3.1) 0.2 Total equity and liabilities 790.6 2.2 (6.6) (7.2) 0.5 Net Assets 419.3 (5.3) (6.6) (4.1) 0.3 Reconciliation of Equity (Unaudited) APPENDIX D As at 31 December 2004 IAS 10 IAS 38 Effect of Restated Dividend Intangible Transition Under Assets To IFRS IFRS Summary of Principal Impacts paragraph 5 6 Â£m Â£m Â£m Â£m Assets Plant, property and equipment (0.3) (0.3) 22.6 Intangible assets 0.3 0.3 0.3 Investments - 1.9 Deferred tax assets 6.9 6.9 Derivative financial - - instruments Trade and other receivables (0.2) 0.5 Total non-current assets - - 6.7 32.2 Inventories (18.4) 730.8 Trade and other receivables - 15.5 Derivative financial instruments 0.6 0.6 Cash and cash equivalents - 0.4 Total current assets - - (17.8) 747.3 Total assets - - (11.1) 779.5 Equity Issued capital - 15.9 Share premium - 53.5 Hedge reserve 0.4 0.4 Other reserves - 8.2 Retained earnings 5.7 (10.4) 331.3 Total equity 5.7 - (10.0) 409.3 Liabilities Bank overdrafts and loans - 108.8 Trade and other payables (2.5) 27.4 Deferred tax liabilities 0.2 1.9 Retirement benefit obligations 6.7 6.7 Long-term provisions - 2.1 Total non-current liabilities - - 4.4 146.9 Bank overdrafts and loans - 43.7 Trade and other payables (5.7) (5.5) 155.9 Tax liabilities - 23.7 Total current liabilities (5.7) - (5.5) 223.3 Total liabilities (5.7) - (1.1) 370.2 Total equity and liabilities - - (11.1) 779.5 Net Assets 5.7 - (10.0) 409.3 Reconciliation of Profit (Unaudited) APPENDIX E 12 months to 30 June 2005 Previously IAS 19 IAS 2 IAS 39 IFRS 2 Effect of Restated Reported Employee Inventories Land Share-based Transition Under Under Benefits Creditors Payment To IFRS IFRS UK GAAP Summary of Principal 1 2 3i 4 Impacts paragraph Â£m Â£m Â£m Â£m Â£m Â£m Â£m Continuing Operations Revenue Cost of Sales 780.4 - 780.4 (584.0) (0.9) 1.2 0.3 (583.7) Gross Profit 196.4 - (0.9) 1.2 - 0.3 196.7 Administrative expenses (42.1) (0.4) (0.2) (0.6) (42.7) Operating Profit before financing costs 154.3 (0.4) (0.9) 1.2 (0.2) (0.3) 154.0 Financial income 0.8 - 0.8 Financial expenses (10.6) (0.3) (2.5) (2.8) (13.4) Net Financing Costs (9.8) (0.3) - (2.5) - (2.8) (12.6) Share of loss of joint ventures after interest and taxation (2.4) - (2.4) Profit Before Tax 142.1 (0.7) (0.9) (1.3) (0.2) (3.1) 139.0 Income tax expense (43.4) 0.2 0.3 0.3 0.1 0.9 (42.5) Profit for the Period 98.7 (0.5) (0.6) (1.0) (0.1) (2.2) 96.5 Earnings per share (basic 62.1p 60.7p Earnings per share (diluted) 61.9p 60.5p Reconciliation of Equity (Unaudited) APPENDIX F As at 30 June 2005 Previously IAS 19 IAS 2 IAS 39 IAS 39 IFRS 2 Reported Employee Inventories Land Financial Share-based Under Benefits Creditors Instruments Payment UK GAAP Summary of Principal 1 2 3i 3ii 4 Impacts paragraph Â£m Â£m Â£m Â£m Â£m Â£m ASSETS Non-current assets Plant, property and equipment 24.3 Intangible assets - Investments 2.6 Deferred tax assets - 2.6 3.2 1.9 0.2 0.2 Derivative financial - instruments Trade and other receivables 0.7 (0.2) 27.6 2.6 3.2 1.9 - 0.2 Current assets Inventories 783.5 (10.5) (12.0) Trade and other receivables 12.2 Derivative financial instruments - 0.3 Cash and cash equivalents 23.7 819.4 - (10.5) (12.0) 0.3 - Total assets 847.0 2.6 (7.3) (10.1) 0.3 0.2 Equity Issued capital 15.9 Share premium 54.2 Hedge reserve - (0.1) Other reserves 7.9 Retained earnings 381.0 (6.1) (7.3) (4.6) (0.1) 0.2 Total equity 459.0 (6.1) (7.3) (4.6) (0.2) 0.2 Liabilities Non-current liabilities Bank overdrafts and loans 103.8 Trade and other payables 52.4 (5.2) Deferred tax liabilities 1.8 Retirement benefit obligations - 7.9 Long-term provisions 2.1 160.1 7.9 - (5.2) - - Current liabilities Bank overdrafts and loans 23.1 Trade and other payables 181.1 0.8 (0.3) Derivative financial instruments - 0.5 Tax liabilities 23.7 227.9 0.8 - (0.3) 0.5 - Total liabilities 388.0 8.7 - (5.5) 0.5 - Total equity and liabilities 847.0 2.6 (7.3) (10.1) 0.3 0.2 Net Assets 459.0 (6.1) (7.3) (4.6) (0.2) 0.2 Reconciliation of Equity (Unaudited) APPENDIX F As at 30 June 2005 IAS 10 IAS 38 Effect of Restated Dividend Intangible Transition Under Assets To IFRS IFRS Summary of Principal Impacts paragraph 5 6 Â£m Â£m Â£m Â£m ASSETS Non-current assets Plant, property and equipment (0.2) (0.2) 24.1 Intangible assets 0.2 0.2 0.2 Investments - 2.6 Deferred tax assets 8.1 8.1 Derivative financial - - instruments Trade and other receivables (0.2) 0.5 - - 7.9 35.5 Current assets Inventories (22.5) 761.0 Trade and other receivables - 12.2 Derivative financial instruments 0.3 0.3 Cash and cash equivalents - 23.7 - - (22.2) 797.2 Total assets - - (14.3) 832.7 Equity Issued capital - 15.9 Share premium - 54.2 Hedge reserve (0.1) (0.1) Other reserves - 7.9 Retained earnings 11.5 (6.4) 374.6 Total equity 11.5 - (6.5) 452.5 Liabilities Non-current liabilities Bank overdrafts and loans - 103.8 Trade and other payables (5.2) 47.2 Deferred tax liabilities - 1.8 Retirement benefit obligations 7.9 7.9 Long-term provisions - 2.1 - - 2.7 162.8 Current liabilities Bank overdrafts and loans - 23.1 Trade and other payables (11.5) (11.0) 170.1 Derivative financial instruments 0.5 0.5 Tax liabilities - 23.7 (11.5) - (10.5) 217.4 Total liabilities (11.5) - (7.8) 380.2 Total equity and liabilities - - (14.3) 832.7 Net Assets 11.5 - (6.5) 452.5 This information is provided by RNS The company news service from the London Stock Exchange

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Redrow (RDW)

Friday, 17th May 2024

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BT.A LAND FA.

BT Group continues to bask in yesterday’s well received earnings news and FireAngel jumps on clarity over getting a possible takeover across the line but Land Securities investors fail to find inspiration despite macroeconomic woes easing.

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