Interim Results

Redrow PLC 28 February 2008 Thursday 28 February Redrow plc Interim Results for the six months to December 2007 â€¢ Profit before tax of Â£35.8m (2006/07: Â£54.7m) from continuing operations â€¢ Group legal completions at 2,111 (2006/07: 2,214) â€¢ Homes average selling price maintained at Â£162,800 (2006/07: Â£162,400) â€¢ High quality forward land increased to 25,750 plots â€¢ Strong balance sheet with gearing at 40% (Dec 2006: 35%) â€¢ Net assets per share of 367.9p at 31 December 2007 â€¢ Completed disposal of interest in Framing Solutions joint venture â€¢ Interim dividend per share increased by 19% to 9.3p (2006/07: 7.8p) Alan Bowkett, Chairman of Redrow plc, said: 'Visitor levels have increased in the New Year but the markets in which we are operating are clearly challenging. Redrow is very focused upon the key elements of our business with tight control of cost and cash flow. We are continuing to differentiate our business through a strong product offer to our customers and are pursuing our long term approach to sourcing land. We have an experienced and committed management team to position Redrow to capitalise on the opportunities that will arise when confidence improves.' Enquiries: Redrow plc Neil Fitzsimmons, Chief Executive 0207 404 5959 David Arnold, Group Finance Director 01244 520044 Brunswicks Patrick Handley / Jayne Rosefield 0207 404 5959 There will be an analyst and investor meeting at 09:00 BST. A live audio webcast and slide presentation of this event will be available at 09:00 BST on www.redrowplc.co.uk. Participants can also dial-in to hear the presentation live at 09:00 on +44 (0)20 8609 1270. The full half-yearly financial report for the half year ended 31 December 2007 will be available on www.redrowplc.co.uk. Playback will be available by phone on 0800 358 2189 or 020 8609 0289 passcode: 204876#. CHAIRMAN'S STATEMENT Introduction As has been well reported, the condition of the UK housing market has clearly been affected by the combined effects of higher interest rates and the credit squeeze since the autumn of 2007. This has resulted in significantly slower sales activity across the housing market and the new homes industry. In Redrow, we continue to be focused upon the key elements of our business with particular attention to the tight management control of cost and cash flow. We are continuing with our strategy to differentiate our business through the delivery of a strong product offer that embraces good design and specification for our customers. In conjunction with this we are pursuing our long term approach to sourcing land opportunities at higher margins for the medium term benefit of our business. Group Results In the six months ended December 2007, Group turnover was Â£353.1m (06/07: Â£387.7m). Group legal completions were 2,111, a reduction of 4.7% on the corresponding period in the last financial year. Profit before tax from continuing operations was Â£35.8m (06/07: Â£54.7m) and earnings per share on the same basis were 15.8p (06/07: 24.0p). Basic earnings per share were 14.6p (06/ 07: 23.8p). The Board anticipates proposing a 20% increase in the full year dividend in line with its previous commitment. An interim dividend of 9.3p per share will be paid to shareholders on 2 May 2008, representing an increase of 19% (06/07: 7.8p). Homes The Homes business legally completed 1,960 new homes in the period (06/07: 2,214) at an average selling price of Â£162,800 (06/07: Â£162,400). Turnover from home sales was Â£319.1m (06/07: Â£359.6m) reflecting the reduced volume of legal completions which was a consequence of the sales environment in which we were operating. Our business is focused on creating value either through the development of sites ourselves or through the release of value through land sales which are now separately disclosed within turnover. The 2006/07 results have been restated to reflect this disclosure but there is no impact upon the earnings for either period. In the first six months, turnover relating to land sales was Â£6.8m (06/ 07: Â£21.5m) taking total turnover in the Homes business to Â£325.9m (06/07: Â£381.1m). The gross profit on the sale of homes declined to Â£59.0m (06/07: Â£74.2m) which was a result of both the lower number of completions and profitability per home. We have previously highlighted that margins would weaken due to the impact of the higher cost of land on more recently acquired sites but gross margins also came under pressure as pricing became more competitive and selling costs increased. On some sites where construction was nearing completion we accelerated sales to save site overheads in response to the market conditions. Strong management of cost coupled with the benefits of last year's reorganisation to make our structure more efficient helped reduce overheads in our Homes operations to Â£19.9m (06/07: Â£22.7m). Reported overheads also benefited by Â£1.8m from the impact of a lower share price on long term management bonuses. Overhead recovery was slightly improved at 6.2% of home sales turnover (06/07: 6.3%) despite the lower levels of activity. Operating margins from home sales were 12.3% as compared with 14.3% in the corresponding period in 2006/07. Activity in the land market reacted to the prevailing sales environment and we became more selective in our land disposals. Profits from land sales in the first half were below our anticipated level at Â£2.8m and were Â£5.0m lower than in the corresponding period last year. We have exchanged contracts to sell land which leads us to a current expectation that full year land sale profits will be at a similar level to last year (06/07 full year: Â£15.1m). The operating profit in the Homes business for the six months to December 2007 was Â£41.9m (06/07: Â£59.3m). Mixed Use & Regeneration Our Mixed Use & Regeneration activities performed slightly ahead of our expectations, with turnover of Â£27.2m (06/07: Â£6.6m) and an operating profit of Â£2.4m (06/07: Â£2.2m). Redrow Regeneration legally completed 151 homes as it finished Phase 1 of the Barking Town Square development. Phase 2 is now under construction and comprises 272 new homes and 40,000 sq ft of commercial space. The first revenues from this phase are expected in 2008/09 with 123 units sold and 22,000 sq ft of the commercial space already pre let. We currently expect our joint venture company established to redevelop land at Watford Junction railway station to submit a planning application in the next twelve months. As regards Mixed Use activities, we are currently constructing 24,000 sq ft of offices in the first phase of our scheme at Lichfield and further units are under construction at Buckshaw Village, Chorley. At both locations interest in the available units remains encouraging although we expect no significant contribution in the second half. We also have future opportunities for commercial income streams at Vision in Devonport, Cheswick in Bristol and Stratford upon Avon. Discontinued Activities - Framing Solutions We announced in September 2007 our intention to exit the Framing Solutions joint venture which manufactured and erected light steel frames for use in residential construction. In line with this objective we completed the disposal of our interest in this business on 3 January 2008 and as a consequence a post tax loss of Â£1.9m associated with this discontinued operation is reflected in the first half results with no further impact expected. Profit for the Period Group operating profit from continuing operations before financing costs was Â£44.9m (06/07: Â£61.7m). Financing costs in the period at Â£8.7m (06/07: Â£6.9m) were virtually unchanged from the second half of the last financial year but were higher than the first half of 2006/07 reflecting a combination of higher interest rates and average debt levels. We expect the second half interest charge to be at a broadly similar level to the first half. After deducting Â£0.4m representing Redrow's share of the loss in its joint ventures after interest and taxation, the Group's profit before tax from continuing operations was Â£35.8m (06/07: Â£54.7m). The tax rate on continuing operations for the full year is expected to be 29.5% and as a consequence, profit for the period from continuing operations was Â£25.2m (06/07: Â£38.3m). Taking into account discontinued operations, reported profit for the period was Â£23.3m (06/07: Â£37.9m). Balance Sheet and Return on Capital Employed The net debt level at the end of December 2007 of Â£238.0m (Dec 06: Â£189.2m) was lower than had been anticipated at the time of our Preliminary Results announcement in September as a consequence of our cautious approach to land acquisition. During the last six months net debt increased by Â£60.4m. The investment in land increased by Â£5.2m to Â£646.6m but as a consequence of our limited activity in the land market, land creditors reduced by Â£31.6m and we expect a further reduction in the second half as we anticipate remaining selective in completing acquisitions of new sites. Investment in site infrastructure, coupled with construction momentum from the summer months relative to the sales rates we experienced in the autumn, resulted in work in progress increasing during the period by Â£25.2m to Â£358.3m. Our management of work in progress relative to rate of sale is an important focus and construction activity has been reduced where appropriate for the second half of our financial year. We carefully control our exposure to part exchange properties and at December 2007 this investment was only Â£10.2m as compared with Â£9.8m at June 2007. The Group's capital employed was Â£826.2m (Dec 06: Â£725.6m) of which Â£17.5m related to Mixed Use and Regeneration as we continued to carefully manage our investment in speculative commercial development and we completed Phase 1 of the Barking Town Square development in Redrow Regeneration. We will see some increase in the second half as we move forward with construction on Phase 2 of this development. Return on capital employed for the six month period based upon continuing operations was 11.2% (06/07: 18.0%). Our land acquisition strategy coupled with the controls within the business on work in progress continue to be focused on reducing capital employed in the context of the markets in which we are now operating. Land Bank Redrow remains committed to a long term approach to sourcing development opportunities. As at the end of December, the forward land bank stood at 25,750 plots (Dec 2006: 25,000) which were either allocated or have a realistic opportunity to secure planning. Opportunities with the prospect of short term conversion to the current land bank at Exeter, Taunton, Lydney, High Wycombe, Northampton and Kettering comprising over 2,300 plots continue to progress through the planning system. The major regeneration of the former Royal Ordnance site at Bishopton to the west of Glasgow for some 2,500 new homes and over 100 acres of commercial and mixed use space which we are promoting jointly with the owner BAE Systems was confirmed as a Community Growth Area during the period by the Scottish Executive. We continue to adopt a prudent accounting approach for our forward land by fully providing for all option and pre-development costs until the land has a planning consent and is acquired by us. Consequently the balance sheet does not recognise the potential value of the options within our forward land bank. Option agreements are effective tools for securing long term supply for the benefit of the business at market values prevailing at the time of acquisition. Acquisition of land in the current market was marked by a selective approach focused on financial returns, high quality locations and strong product mix. We were able to take advantage in the market to secure improved terms which should benefit the business in the future. The Group's current land bank was 19,900 plots at the end of December (Dec 2006: 21,200 plots), of which 16,300 plots (Dec 2006: 16,850 plots) were owned with planning with the remainder of 3,600 plots (Dec 2006: 4,350 plots) generally controlled under contract awaiting the grant of a planning consent. Within our Homes business the average plot cost at the end of December 2007 increased to Â£39,200 (Dec 2006: Â£33,300), reflecting both the product mix and geographic location with an increased proportion of our land bank in the southern part of England. Competition in the land market is softening in many areas as developers assess the future direction of the housing market. Our strategy over the coming months will be to remain careful in terms of commitments to new acquisitions until the position regarding the housing market becomes more certain and to position ourselves to be able to take advantage of better margin opportunities as these arise. We anticipate trading from a similar number of outlets in 2008/09 as in the current financial year. Product and Cost A key objective in our business is to use our broad product range to provide attractive and sustainable homes for buyers through our design led approach as a point of differentiation. We continue to promote the use of core housetypes to drive efficiency in our construction process, enhance quality and ensure tight management of build cost without impairing the quality of the offering to our customers. Our strength in central procurement has held like for like housebuild cost increases over the last twelve months to less than 1% and we are constructively engaging with our business partners to reduce our cost base without devaluing the quality of our product. Sub-contractor rates are responding to the current market environment. We are exercising close control over site and office overhead costs to ensure we operate efficiently and effectively. Sales Market Sales in the six months to December 2007 were affected by the market conditions and the Group forward sales of 1,694 new homes (Dec 2006: 1,871) were just under 10% lower than at the corresponding date last year. The interest rate reductions that took place in December and February are welcome. Visitor levels and website activity have picked up in the New Year with cancellation rates showing some improvement as compared with the autumn market. However, prospective buyers are cautious and sales are being affected by the tightening in mortgage availability. Our short term focus remains on implementing sales strategies that are appropriate to each site with a marketing approach that provides reassurance to prospective customers. Based on our current assessment of the more challenging housing market, we anticipate legal completions for the Group in the financial year to June 2008 being just over 3% lower than our previous expectations, resulting in a 10% reduction as compared with last year. Reflecting the competitiveness of the sales market, net selling prices after incentives are under pressure which will lead to some further weakening in gross margins from home sales over the second half. Prospects We continue to promote our long term approach to land acquisition whilst in the short term we exercise caution in the current land market. We are focused on delivering products that offer a mix of homes appropriate to each location and which will appeal to our customer base. The benefits that good design and specification brings to our business in delivering value and in making our product attractive to our customers are integral parts of our heritage which will stand as points of differentiation for Redrow. Our overall expectation remains that 2008 will present a more difficult trading environment than the industry has experienced for many years with lower levels of confidence in the housing market. It is difficult to assess when confidence will improve as this will depend upon a number of factors including the cost of borrowing, mortgage availability and general economic conditions. However, the fundamental need to increase the supply of new homes in the UK remains a key element in Government policy and is a positive for our future. We have an experienced and committed management team to address the challenges we currently face. Our strategy remains to position Redrow to capitalise on improvements in our markets and to take advantage of the opportunities that will arise when confidence returns. Alan Bowkett Chairman Responsibility Statement The Directors confirm that, to the best of our knowledge: (i) this condensed set of financial statements has been prepared in accordance with IAS 34, as adopted by the European Union; (ii) the interim management report contained herein includes a fair review of the information required by DTR 4.2.7 (indication of important events during the first six months and a description of the uncertainties for the remaining six months of the financial year) and DTR 4.2.8 (disclosure of related party transactions and changes therein). The Directors of Redrow plc are listed in the Redrow plc Annual Report and Accounts for the year ended 30 June 2007. By order of the Board Neil Fitzsimmons David Arnold Chief Executive Group Finance Director 27 February 2008 27 February 2008 Consolidated Income Statement (Unaudited) 12 months 6 months ended ended 31 December 30 June Restated Restated 2007 2006 2007 Note Â£m Â£m Â£m Revenue 2 353.1 387.7 834.3 Cost of sales (287.6) (302.4) (651.3) Gross profit 65.5 85.3 183.0 Administrative expenses (20.6) (23.6) (46.4) Operating profit before financing costs 2 44.9 61.7 136.6 Financial income 2.1 0.3 1.6 Financial expenses (10.8) (7.2) (16.9) Net financing costs 2 (8.7) (6.9) (15.3) Share of loss of joint ventures after 2 (0.4) (0.1) (0.2) interest and taxation Profit before tax from continuing operations 2 35.8 54.7 121.1 Income tax expense 2, 3 (10.6) (16.4) (36.1) Profit for the period from continuing operations 2 25.2 38.3 85.0 Discontinued operations 12 (1.9) (0.4) (0.6) Profit for the period 2 23.3 37.9 84.4 Earnings per share from continuing operations Basic earnings per share 5 15.8p 24.0p 53.3p Diluted earnings per share 5 15.8p 23.9p 53.2p Earnings per share including discontinued operations Basic earnings per share 5 14.6p 23.8p 52.9p Diluted earnings per share 5 14.6p 23.7p 52.8p Consolidated Statement of Recognised Income and Expense (Unaudited) 12 months 6 months ended ended 31 December 30 June 2007 2006 2007 Â£m Â£m Â£m Effective portion of changes in fair value of interest rate cash flow hedges (1.2) 0.4 1.3 Deferred tax on change in fair value of interest rate cash 0.4 (0.1) (0.4) flow hedges Actuarial gains/(losses) on defined benefit pension scheme 0.2 (2.4) 5.8 Deferred tax on actuarial gains/(losses) taken directly to (0.1) 0.7 (1.7) Equity Net expense recognised directly in equity (0.7) (1.4) 5.0 Profit for the period 23.3 37.9 84.4 Total recognised income and expense for the period 22.6 36.5 89.4 Consolidated Balance Sheet (Unaudited) As at As at 31 December 30 June 2007 2006 2007 Note Â£m Â£m Â£m Assets Intangible assets 0.4 0.3 0.3 Plant, property and equipment 24.6 25.7 24.6 Investments 1.7 2.5 3.7 Deferred tax assets 3.6 3.6 3.4 Derivative financial instruments 0.1 0.5 0.6 Retirement benefit surplus 7.1 - 6.1 Trade and other receivables 4.7 1.4 4.1 Total non-current assets 42.2 34.0 42.8 Inventories 6 1,020.3 915.0 988.7 Investments 0.9 - - Trade and other receivables 18.4 33.2 28.5 Derivative financial instruments 0.5 0.3 1.1 Cash and cash equivalents 9 2.5 3.6 12.2 Total current assets 1,042.6 952.1 1,030.5 Total assets 1,084.8 986.1 1,073.3 Equity Issued capital 10 16.0 16.0 16.0 Share premium 58.3 56.3 58.1 Hedge reserve 0.4 0.6 1.2 Other reserves 7.9 7.9 7.9 Retained earnings 505.6 455.6 494.6 Total equity 11 588.2 536.4 577.8 Liabilities Bank loans 9 209.9 177.1 169.7 Trade and other payables 7 31.2 37.3 48.8 Deferred tax liabilities 3.0 1.5 3.0 Retirement benefit obligations - 2.6 - Derivative financial instruments 0.1 - - Long-term provisions 2.2 4.5 3.4 Total non-current liabilities 246.4 223.0 224.9 Bank overdrafts and loans 9 30.6 15.7 20.1 Trade and other payables 7 205.4 197.4 233.8 Derivative financial instruments 0.1 - - Current income tax liabilities 14.1 13.6 16.7 Total current liabilities 250.2 226.7 270.6 Total liabilities 496.6 449.7 495.5 Total equity and liabilities 1,084.8 986.1 1,073.3 Consolidated Cash Flow Statement (Unaudited) 12 months 6 months ended ended 31 December 30 June 2007 2006 2007 Note Â£m Â£m Â£m Cash flow from operating activities Operating profit before financing costs 44.9 61.7 136.6 Depreciation and amortisation 0.9 1.1 2.3 Adjustment for non-cash items (2.2) (3.5) 3.1 Operating profit before changes in working 43.6 59.3 142.0 capital and provisions Decrease/(increase) in trade and other 9.5 (8.3) (6.3) receivables Increase in inventories (31.6) (65.4) (139.1) (Decrease)/increase in trade and other payables (45.4) 1.4 49.6 Decrease in retirement benefit provision and (2.2) (5.9) (15.7) other provisions Cash generated from operations (26.1) (18.9) 30.5 Interest paid (8.6) (5.6) (13.9) Tax paid (13.1) (17.3) (35.2) Net cash from operating activities (47.8) (41.8) (18.6) Cash flows from investing activities Acquisition of plant, property and equipment (1.7) (2.9) (5.2) Proceeds from sale of plant, property and 0.8 - 2.6 equipment Interest received 1.5 0.1 0.9 Payments to joint ventures - continuing operations (0.2) - (1.8) Payments to joint ventures - discontinued operations (0.4) (0.4) (0.5) Net cash from investing activities - (3.2) (4.0) Cash flows from financing activities Issue of bank borrowings 8 139.0 87.5 170.0 Repayment of bank borrowings 8 (99.0) (42.0) (132.0) Issue costs of bank borrowings (0.1) - (0.1) Purchase of own shares - (0.5) (0.5) Dividends paid 4 (12.5) (13.9) (26.3) Proceeds from issue of share capital 0.2 0.1 1.9 Net cash from financing activities 27.6 31.2 13.0 Decrease in net cash and cash equivalents (20.2) (13.8) (9.6) Net cash and cash equivalents at the beginning of the period (7.9) 1.7 1.7 Net cash and cash equivalents at the end 9 (28.1) (12.1) (7.9) of the period NOTES (Unaudited) 1. Accounting Policies The above results, Responsibility Statement and accompanying notes are extracted from the condensed consolidated half-yearly financial information for the half year ended 31 December 2007. These results do not comprise statutory accounts within the meaning of Section 240 of the Companies Act 1985. Statutory accounts for the year ended 30 June 2007 were approved by the Board of Directors on 10 September 2007 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 237 of the Companies Act 1985. The half-yearly financial statements have been prepared using accounting policies and presentation consistent with those applied in the preparation of the Group's consolidated financial statements for the year ended 30 June 2007, apart from the following changes: a. Revenue Recognition Sales of residential land holdings have historically not represented a material part of the Group's strategy and, because of this, have not been included within revenue for the Homes' business. With the increased focus on optimising the Group's land bank through land sales and swaps which may form a more frequent part of ordinary trading for Redrow, we have amended our revenue recognition policy to include residential land sales revenue within revenue for the Homes' business. The change in accounting policy does not affect reported cash flows and earnings. The impact is to increase reported revenue by Â£6.8m (2006: Â£21.5m). b. Financial Instruments The Group adopted IFRS 7 'Financial Instruments: disclosures' on 1 July 2007. IFRS 4, 'Insurance Contracts', revised implementation guidance, is effective when an entity adopts IFRS 7. As this half-yearly report contains only condensed financial statements, and as there are no material financial instrument related transactions in the period, full IFRS 7 disclosures are not required at this stage. The full IFRS 7 disclosures, including the sensitivity analysis to market risk and capital disclosures required by the amendment of IAS 1, will be given in the annual financial statements. c. New Standards In addition to the above the following new standards, amendments to standards or interpretations are mandatory for the first time for the financial year ending 30 June 2008: IFRIC 10, 'Interims and Impairment', effective for annual periods beginning on or after 1 November 2006. This interpretation has not had any impact on the timing or recognition of impairment losses as the Group already accounted for such amounts using principles consistent with IFRIC 10. The following new standards, amendments to standards and interpretations have been issued, but are not effective for the financial year ending 30 June 2008 and have not been early adopted. IFRIC 14, IAS 19 - 'The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction' effective for annual periods beginning on or after 1 January 2008. 2a. Segmental information - Income 12 months ended 6 months ended 31 December 30 June Restated Restated 2007 2006 2007 Â£m Â£m Â£m Revenue Homes - home sales 319.1 359.6 757.0 - land sales 6.8 21.5 38.6 325.9 381.1 795.6 Mixed Use & Regeneration 27.2 6.6 38.7 353.1 387.7 834.3 Homes - gross profit 61.8 82.0 174.7 Homes - administrative expenses (19.9) (22.7) (45.0) Homes - operating profit 41.9 59.3 129.7 Mixed Use & Regeneration - operating profit 2.4 2.2 6.6 44.3 61.5 136.3 Add back share of joint venture operating losses 0.6 0.2 0.3 Operating profit before financing costs 44.9 61.7 136.6 Net financing costs (8.7) (6.9) (15.3) 36.2 54.8 121.3 Share of loss of joint ventures after interest and taxation (0.4) (0.1) (0.2) Profit before tax from continuing operations 35.8 54.7 121.1 Income tax expense (10.6) (16.4) (36.1) Profit for the period from continuing operations 25.2 38.3 85.0 Discontinued operations (1.9) (0.4) (0.6) Profit for the period 23.3 37.9 84.4 2b. Segmental information - Balance Sheet As at As at 31 December 30 June 2007 2006 2007 Â£m Â£m Â£m Segment assets Homes 1,066.7 955.4 1,018.3 Mixed Use & Regeneration 25.2 28.4 43.2 Framing Solutions - share of joint venture 0.9 1.8 1.8 1,092.8 985.6 1,063.3 Elimination of inter-segment items (10.5) (3.1) (2.2) 1,082.3 982.5 1,061.1 Cash and cash equivalents 2.5 3.6 12.2 Consolidated total assets 1,084.8 986.1 1,073.3 Segment liabilities Homes 245.1 239.5 269.8 Mixed Use & Regeneration 7.4 6.9 21.4 252.5 246.4 291.2 Elimination of inter-segment items (10.5) (3.1) (2.2) 242.0 243.3 289.0 Borrowings 240.5 192.8 189.8 Consolidated total liabilities 482.5 436.1 478.8 Current income tax liabilities 14.1 13.6 16.7 Total equity 588.2 536.4 577.8 3. Income Taxes Income tax expense is recognised based on management's best estimate of the weighted average annual income tax rate expected for the full financial year. The estimated average annual tax rate used for the year to 30 June 2008 is 29.5%, taking into consideration the reduction in the corporation tax rate from 30% to 28% from 1 April 2008. 4. Dividends 12 months ended 6 months ended 31 December 30 June 2007 2006 2007 Â£m Â£m Â£m Amounted recognised as distributions to equity holders in the period: 2006 final dividend paid of 8.7p per share - 13.9 13.9 2007 interim dividend paid of 7.8p per share - - 12.4 2007 final dividend paid of 7.8p per share 12.5 - - 12.5 13.9 26.3 The Directors have declared an interim dividend of 9.3p per share (2006: 7.8p) which was approved by the board on 27 February 2008. This gives an interim dividend of Â£14.9m (2006: Â£12.4m) which will be paid on 2 May 2008 to shareholders whose names are on the Register of Members at the close of business on 7 March 2008. The shares will become ex-dividend on 5 March 2008. In accordance with IAS 10 'Events after the Balance Sheet Date' the interim dividend has not been included as a liability as at 31 December 2007. 5. Earnings per share The basic earnings per share calculation for the 6 months ended 31 December 2007 is based on the weighted number of shares in issue during the period of 159.8m (2006: 159.4m) excluding those held in trust under the Redrow Long Term Incentive Plan, which are treated as cancelled. Diluted earnings per share has been calculated after adjusting the weighted average number of shares in issue for all potentially dilutive shares held under unexercised options. 6 months ended 31 December 2007 Earnings No. of shares Per share Â£m millions pence Basic earnings per share for continuing operations 25.2 159.8 15.8 Effect of share options and SAYE - 0.1 - Diluted earnings per share for continuing operations 25.2 159.9 15.8 Basic earnings per share including discontinued operations is 14.6p (diluted - 14.6p). 6 months ended 31 December 2006 Earnings No. of shares Per share Â£m millions pence Basic earnings per share for continuing operations 38.3 159.4 24.0 Effect of share options and SAYE - 0.4 (0.1) Diluted earnings per share for continuing operations 38.3 159.8 23.9 Basic earnings per share including discontinued operations is 23.8p (diluted - 23.7p). 12 months ended 30 June 2007 Earnings No. of shares Per share Â£m millions pence Basic earnings per share for continuing operations 85.0 159.5 53.3 Effect of share options and SAYE - 0.4 (0.1) Diluted earnings per share for continuing operations 85.0 159.9 53.2 Basic earnings per share including discontinued operations is 52.9p (diluted - 52.8p). 6. Inventories As at As at 31 December 30 June 2007 2006 2007 Â£m Â£m Â£m Land for development 646.6 576.5 641.4 Work in progress 358.3 323.8 333.1 Stock of showhomes 15.4 14.7 14.2 1,020.3 915.0 988.7 7. Land Creditors (included in trade and other payables) As at As at 31 December 30 June 2007 2006 2007 Â£m Â£m Â£m Due within one year 61.4 52.9 75.4 Due in more than one year 31.2 37.3 48.8 92.6 90.2 124.2 8. Borrowings and loans 12 months 6 months ended ended 31 December 30 June 2007 2006 2007 Â£m Â£m Â£m Opening net book amount 170.0 132.0 132.0 Issue of bank borrowings 139.0 87.5 170.0 Repayment of bank borrowings (99.0) (42.0) (132.0) Closing net book amount 210.0 177.5 170.0 At 31 December 2007, the Group had total unsecured bank borrowing facilities of Â£525.0m, representing Â£480.0m committed facilities and Â£45.0m uncommitted facilities. 9. Analysis of net debt As at As at 31 December 30 June 2007 2006 2007 Â£m Â£m Â£m Cash and cash equivalents 2.5 3.6 12.2 Bank overdrafts and loans - current liabilities (30.6) (15.7) (20.1) (28.1) (12.1) (7.9) - non-current liabilities (209.9) (177.1) (169.7) (238.0) (189.2) (177.6) 10. Share capital As at As at 31 December 30 June 2007 2006 2007 Â£m Â£m Â£m Authorised 330,000,000 ordinary shares of 10p each 33.0 33.0 33.0 Allotted, called up and fully paid 16.0 16.0 16.0 Number of ordinary shares of 10p each Movement in the period was as follows At 1 July 2007 159,827,039 Share options exercised 58,682 At 31 December 2007 159,885,721 11. Reconciliation of movements in consolidated equity 12 months 6 months ended ended 31 December 30 June 2007 2006 2007 Â£m Â£m Â£m Profit for the period 23.3 37.9 84.4 Dividends on equity shares (12.5) (13.9) (26.3) Other recognised income and expense relating to the period (net) (0.7) (1.4) 5.0 Shares issued at a premium 0.2 0.1 1.9 Movement in LTSIP/SAYE 0.1 (0.1) (1.0) Net increase in equity 10.4 22.6 64.0 Opening equity 577.8 513.8 513.8 Closing equity 588.2 536.4 577.8 12. Discontinued operations - disposal of interest in joint venture On 3 January 2008, the Group completed the disposal of its interest in its Framing Solutions joint venture. The loss on disposal has been included in the half-yearly results for the period and disclosed accordingly as discontinued operations. Financial information relating to the business for the period is as follows: 12 months 6 months ended ended 31 December 30 June 2007 2006 2007 Â£m Â£m Â£m Revenue 1.6 1.8 3.9 Expenses (2.2) (2.3) (4.8) Loss before tax (0.6) (0.5) (0.9) Tax on loss 0.2 0.1 0.3 Loss after tax on discontinued operations (0.4) (0.4) (0.6) Loss on disposal (2.0) - - Tax on disposal 0.5 - - (1.5) - - Share of loss after interest and taxation on Framing Solutions joint venture (1.9) (0.4) (0.6) Investing cash flows for discontinued operations amounted to an outflow of Â£0.4m in the period. The Group reported net loans outstanding at December 2007 with Framing Solutions of Â£nil (December 2006: Â£1.2m, June 2007: Â£1.4m). The Group undertook transactions with its Framing Solutions joint venture in the normal course of business during the financial period. This consisted of the purchase of lightweight steel frames totalling Â£2.4m (2006: Â£2.9m). At the end of the period, the balance owed to Framing Solutions by the Group was Â£1.7m (2006: Â£1.5m). 13. Shareholder Enquiries The Registrar is Computershare Investor Services PLC. Shareholder enquiries should be addressed to the Registrar at the following address: Registrars Department PO Box 82 The Pavilions Bridgwater Road Bristol BS99 7NH This information is provided by RNS The company news service from the London Stock Exchange

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Tuesday, 14th May 2024

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VOD OTB CURY

Currys impressed this morning as sales performance improved after Christmas, whilst the reshaped Vodafone also found support from full yar earnings. On The Beach was however looking stranded as the cost of living crisis continues to bite.

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