Statement re adoption of IFRS
17 June 2005
Keller Group plc
Restatement of financial information for 2004 under International Financial
Reporting Standards ('IFRS')
Keller Group plc ('Keller' or 'the Group') is today presenting its
financial statements prepared in accordance with IFRS for the year ended 31
December 2004 and the six months ended 30 June 2004.
The impact of the transition on key performance measures is as
follows:
31 31 30 June 30 June
December December 2004 2004
2004 2004
UK GAAP IFRS UK GAAP IFRS
Operating profit (before goodwill £33.7m* £33.9m £13.3m £13.2m
amortisation)
Profit before tax (before goodwill £29.5m* £29.7m £11.2m £11.2m
amortisation)
Profit before tax (after goodwill £26.6m £29.7m £9.8m £11.2m
amortisation)
Basic earnings per share (after goodwill 20.5p 24.2p 7.0p 8.6p
amortisation)
Adjusted earnings per share (before 25.1p 24.2p 9.2p 8.6p
goodwill amortisation)
Net assets £101.4m £91.0m £97.0m £85.2m
* stated after £0.1m of amortisation of other intangibles
The decrease in the adjusted earnings per share is entirely due to
a deferred tax charge arising under IFRS as a result of not amortising
goodwill which is deductible for tax purposes. Were the Group not obtaining
this tax cash benefit, the 2004 adjusted earnings per share under IFRS would
be marginally higher than as reported under UK GAAP. This deferred tax charge
is an accounting adjustment only and will not change the cash tax paid by the
Group.
The transition to IFRS will leave:
- Cash flows unaffected
- Dividend policy and ability to pay dividends unchanged
- Banking arrangements unaffected
- Keller's underlying financial and operating performance unaffected
The changes in accounting policies which have the most significant effects on
the restated numbers for the year ended 31 December 2004 are:
- The cessation of goodwill amortisation and the related deferred tax charge
- The retranslation of goodwill at closing exchange rates
- The recognition of pension scheme deficits and the related deferred tax
assets on the balance sheet
- The recognition of dividends only once declared or paid
Keller will be publishing a half year trading update in advance of its Annual
General Meeting on 23 June 2005, and intends to announce its 2005 interim
results, reported under IFRS, on 22 August 2005.
Enquiries:
Keller Group plc Smithfield
James Hind, Group Finance Director Reg Hoare / Rupert Trefgarne
020 8341 6424 020 7360 4900
Restatement of financial information for 2004 under International Financial
Reporting Standards
Introduction
For all accounting periods up to and including the year ended 31
December 2004 Keller has prepared its consolidated financial statements under
UK Generally Accepted Accounting Principles (UK GAAP). For accounting periods
from 1 January 2005, the Group is required to prepare its consolidated
financial statements in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union.
Keller's first results under this basis will be its interim results
for the six months ending 30 June 2005. The Group's first annual report under
IFRS will be for the year ending 31 December 2005. As comparative figures are
provided, the effective date for transition to IFRS is 1 January 2004.
This summary provides an analysis of the effects of the change from
UK GAAP to IFRS on Keller's financial statements, including:
- Summary of the basis of preparation of the IFRS information
- Summary of the impact of IFRS adoption on Keller
- Significant changes in accounting policies
- Accounting policies revised under IFRS (Appendix 1)
- Restated primary statements for the 6 months ended 30 June 2004 and the year
ended 31 December 2004 (Appendix 2)
- Reconciliations of profit and equity for those periods (Appendix 3)
The transition to IFRS will leave:
- Cash flows unaffected
- Dividend policy and ability to pay dividends unchanged
- Banking arrangements unaffected
- Keller's underlying financial and operating performance unaffected
Summary of the basis of preparation of the IFRS information
This financial information has been prepared on the basis of the
accounting policies that are expected to be followed when the Group produces
its first IFRS compliant financial statements for the year ended 31 December
2005. These accounting policies are in accordance with IFRS published by 31
December 2004 as endorsed by the EU, with the exception of IAS 19, and
applying to periods beginning on or after 1 January 2005. The Group has
adopted early the amendments to IAS 19 (Employee Benefits) published in
December 2004. These amendments, if endorsed by the EU, will be effective for
accounting periods commencing on or after 1 January 2006, with earlier
adoption encouraged by the IASB.
A summary of the Group's revised accounting policies is detailed in Appendix 1.
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 transition to reporting under IFRS. Where the Group has
taken advantage of these exemptions they are noted within the accounting
policies section.
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, as required by IFRS 1.
Subject to EU endorsement of IAS 19 (revised) and no further
changes from the IASB or changes in the interpretation of IFRS, this
information is expected to form the basis for comparatives when reporting
financial results for 2005, and for subsequent reporting periods.
Summary of the impact of IFRS adoption on Keller
Based on the accounting policies detailed in Appendix 1, the impact
of the transition on the key performance indicators is as follows:
31 31 30 June 30 June
December December 2004 2004
2004 2004
UK GAAP IFRS UK GAAP IFRS
Operating profit (before goodwill £33.7m* £33.9m £13.3m £13.2m
amortisation)
Profit before tax (before goodwill £29.5m* £29.7m £11.2m £11.2m
amortisation)
Profit before tax (after goodwill £26.6m £29.7m £9.8m £11.2m
amortisation)
Basic earnings per share (after goodwill 20.5p 24.2p 7.0p 8.6p
amortisation)
Adjusted earnings per share (before 25.1p 24.2p 9.2p 8.6p
goodwill amortisation)
Net assets £101.4m £91.0m £97.0m £85.2m
* stated after £0.1m of amortisation of other intangibles
The decrease in the adjusted earnings per share is entirely due to
a deferred tax charge arising under IFRS as a result of not amortising
goodwill which is deductible for tax purposes. This is an accounting
adjustment only and will not change the cash tax paid by the Group.
The detailed reconciliations of the movements for the income
statements and balance sheets are given in Appendix 3.
Key changes in accounting policy for Keller will be:
- Goodwill frozen and subject to an annual impairment review (IFRS 3)
- Goodwill retranslated each period end at closing exchange rates (IAS 21)
- Pension scheme deficit included on balance sheet (IAS 19)
- Recognition of deferred tax asset on pension scheme deficit and
assets/liabilities disclosed gross (IAS 12)
- Recognition of deferred tax liabilities on revalued fixed assets (IAS 12)
- Recognition of fair value of financial instruments relating to interest rate
and currency swaps (IAS 39)
- Change in basis of recognition of the charge for share based payment (IFRS
2)
- Dividends not recognised until declared or paid (IAS 10)
The transition to IFRS will also require some enhanced disclosure
requirements. These disclosures will be included in the financial statements
for the year ending 31 December 2005.
Significant changes in accounting policies and impact on the
financial statements for the year ended 31 December 2004
The following narrative covers the results for the year to 31
December 2004 and the consolidated balance sheet as at that date, illustrating
the nature and magnitude of the changes as a result of restating to IFRS. The
appendices give full and detailed reconciliations for the six months to 30
June 2004 and the year ended 31 December 2004.
Business Combinations - IFRS 3
IFRS 3 requires that goodwill be capitalised at cost and then be
subject to an annual impairment review. Amortisation of goodwill is
prohibited.
Keller has chosen the option to apply IFRS 3 prospectively from the
transition date, rather than restate previous business combinations. Goodwill
has therefore been frozen at net book value on 1 January 2004, and goodwill
which was amortised in 2004 under UK GAAP has been written back.
The operating profit impact for 2004 is the elimination of the
goodwill amortisation charge of £2.9m. There is an associated deferred tax
charge of £0.7m as much of the goodwill continues to be written down for tax
purposes. As noted above, this deferred tax charge does not change the Group's
cash tax payments.
There is no goodwill impairment charge for 2004.
The Effects of Changes in Foreign Exchange Rates - IAS 21
Under UK GAAP, Keller chose to fix acquired overseas goodwill in
sterling at the rate of exchange ruling on the dates of the relevant
acquisitions. IAS 21 requires goodwill to be denominated in local currencies
and retranslated into sterling at each reporting date at closing exchange
rates. The impact of this change is to reduce the carrying value of goodwill
on the Group's consolidated balance sheet as at 31 December 2004 by £10.6m.
Employee Benefits - IAS 19
IAS 19 (as Keller has chosen to apply it - see below) is broadly
similar to UK Financial Reporting Standard 17. However, it has a number of
fundamental differences from SSAP 24, the UK accounting standard on pensions
which was applied in drawing up Keller's 2004 financial statements. The most
significant for Keller is that it requires surpluses or deficits on defined
benefit pension arrangements to be recognised on the balance sheet. The
accounting for defined contribution schemes is unaffected by IAS 19.
The standard permits a number of options for the recognition of
actuarial gains and losses. Keller has chosen to recognise any variations in
full, via the statement of recognised income and expense, as would have been
required under FRS 17. The option to account for actuarial gains and losses in
this way is part of an amendment to IAS 19 which, as noted above, has yet to
be endorsed by the EU. The amendment is effective from 1 January 2006, with
earlier adoption encouraged by the IASB. Assuming the EU endorses the
proposals, Keller's policy will be to apply the revised standard voluntarily
from the date of transition.
The impact on the Group balance sheet is to recognise a gross
pensions deficit of £9.5m and a related deferred tax asset of £3.1m. In
addition, a £0.6m prepayment previously recognised under UK GAAP is released.
The impact on the 2004 operating profit of applying IAS 19 is an increase of
£0.1m. Actuarial losses in the year totalling £1.8m net of tax are taken
directly to reserves.
Income Taxes - IAS 12
IAS 12 requires that full provision be made for temporary
differences between the carrying amount and tax bases of assets and
liabilities. In addition deferred tax assets and liabilities must be disclosed
separately on the balance sheet.
The IFRS balance sheet as at 31 December 2004 includes an
additional £3.1m deferred tax asset relating to the pension fund deficits. It
also includes additional liabilities of £1.5m in respect of fixed assets
revalued on acquisition where, as permitted under UK GAAP, no deferred tax had
previously been provided on the uplift, and £0.7m relating to tax deductible
goodwill amortisation not now being charged to the profit and loss account.
Financial instruments: Recognition and Measurement - IAS 39
IAS 39 addresses the accounting for financial instruments. The
Group has retrospectively adopted the standard. As at 1 January 2004 there was
no material difference between the book value and fair value of the financial
instruments held by the Group. In October 2004, the Group issued US$100
million of loan notes in a US Private Placement (USPP). The USPP was entered
into to provide long term finance to the Group and to provide a partial hedge
against the Group's net investment in the dollar denominated assets. To
eliminate the US interest rate risk in relation to the loan fair values, all
USPP dollar fixed interest payments were swapped into floating on issue. In
addition, $25m were swapped into euros to provide a partial hedge against the
Group's net investment in euro denominated net assets.
The USPP loans are accounted for on an amortised cost basis,
adjusted for the impact of hedge accounting, and retranslated at the spot
exchange rate at each period end.
IAS 39 has no impact on the net profit of the Group for the year
ended 31 December 2004. The fair value of the USPP as at 31 December 2004
results in a reduction in the loan liabilities of £1.3m. The fair value of the
hedges is included on the balance sheet as a liability of £1.3m.
Share-based Payment - IFRS 2
In accordance with IFRS 2, Keller Group has recognised a charge for
employee share options granted after 7 November 2002. The fair value has been
calculated using a stochastic model with the resulting charge being spread
over the performance period and adjusted to reflect the actual and expected
level of vesting.
The impact on the 2004 operating profit of applying IFRS 2 is a
credit of £0.1m.
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. Keller's final dividend is declared at the Annual
General Meeting. Consequently, there is a requirement to remove the liability
for the final dividend for the year ended 31 December 2004. The impact
therefore is to increase the net assets as at 31 December 2004 by £4.8m.
Conclusion
The transition to IFRS has not had a significant effect on Keller's
consolidated financial profit before tax. Adjusted earnings per share have
decreased by 4% to 24.2p entirely as a result of a non-cash deferred tax
charge.
There is no impact on Keller Group's cash flows (including tax
payments) and ability to pay dividends. Keller's banking arrangements are also
unaffected, as is its underlying financial and operating performance.
Appendix 1
Appendix 1 provides a summary of Keller's new accounting policies
under IFRS.
Accounting Policies
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards as endorsed by the
European Union, with the exception of IAS 19, and applying to periods
beginning on or after 1 January 2005. A summary of the Group's accounting
policies is set out below.
Changes in accounting policy
On 1 January 2005 the Company adopted International Financial
Reporting Standards (IFRS). These accounts have been prepared on a consistent
basis under applicable IFRS and the effects of this transition reported in
accordance with IFRS 1 (First-time Adoption of IFRSs).
Basis of consolidation
The Group accounts consolidate the accounts of the parent company
and its subsidiary undertakings made up to 31 December each year. Where
subsidiary undertakings are acquired or sold during the year, the accounts
include the results for the part of the year for which they were subsidiary
undertakings using the acquisition method of accounting.
Revenue
Revenue represents the fair value of work done on contracts
performed during the year on behalf of customers or the value of goods and
services delivered to customers.
These fair values are based upon estimates of the final expected
outcome of contracts and the proportion of work which has been completed.
Contract results
In the nature of the Group's business, the results for the year
include adjustments to the outcome of contracts, including jointly controlled
operations, completed in prior years arising from claims from customers or
third parties and claims on customers or third parties for variations to the
original contract.
Prudent provision against claims from customers or third parties
are made in the year in which the Group becomes aware that a claim may arise.
Income from claims on customers or third parties is not recognised until the
outcome is reasonably certain.
Where it is reasonably foreseen that a loss will arise on a
contract, full provision for this loss is made in the year in which the Group
becomes aware that a loss may arise.
Jointly controlled operations
From time to time the Group undertakes contracts jointly with other
parties. These fall under the category of jointly controlled operations as
defined by IAS 31. The Group accounts for its own share of sales, profits,
assets, liabilities and cash flows measured according to the terms of the
agreements covering the jointly controlled operations.
Depreciation
Depreciation is not provided on freehold land.
Depreciation is provided to write off the cost less the estimated
residual value of property, plant and equipment by reference to their
estimated useful lives using the straight line method. The rates of
depreciation used are:
Buildings - 2%
Long life plant and equipment - 8.33%
Short life plant and equipment - 12.5%
Motor vehicles - 25%
Computers - 33.33%
The cost of leased properties is depreciated by equal instalments
over the period of the lease or 50 years, whichever is the shorter.
Capital work in progress
Capital work in progress represents expenditure on property, plant
and equipment in the course of construction. Transfers are made to other
property, plant and equipment categories when the assets are available for
use.
Inventories
Inventories are valued at the lower of cost and estimated net
realisable value with due allowance being made for obsolete or slow moving
items.
Leases
Amounts payable under operating leases are charged to contract work
in progress or net operating costs on a straight line basis over the lease
term.
Property, plant and equipment acquired under finance leases are
capitalised in the balance sheet at fair value and depreciated in accordance
with the Group's accounting policy. The capital element of the leasing
commitment is included as obligations under finance leases. The rentals
payable are apportioned between interest, which is charged to the income
statement, and capital, which reduces the outstanding obligation.
Taxation
Provision is made for current tax on taxable profits for the year.
Full provision is made for deferred tax on temporary differences in
line with IAS 12 (Income Taxes).
Retirement benefit costs
The Group operates a number of defined benefit pension
arrangements, and also makes payments into defined contribution schemes for
employees.
The liability in respect of defined benefit schemes is the present
value of the defined benefit obligations at the balance sheet date, calculated
using the projected unit credit method, less the fair value of the schemes'
assets.
In accordance with IFRS 1, the Group has recognised the pension
liability in full as at 1 January 2004.
The Group has applied the requirements of IAS 19 (revised) for the
year ended 31 December 2004 recognising the current service cost and interest
on scheme liabilities in the income statement, and actuarial gains and losses
in equity. This policy is subject to the endorsement of IAS 19 (revised) by
the EU.
Payments to defined contribution schemes are accounted for on an
accruals basis.
Share-based Payment
Charges for employee services received in exchange for share-based
payment have been made for all options granted after 7 November 2002 in
accordance with IFRS 2.
Options granted under the Group's employee share schemes are equity
settled. The fair value of such options has been calculated using a stochastic
model, based upon publicly available market data, and is charged to the income
statement over the performance period.
Goodwill and intangible assets
Goodwill arising on consolidation, representing the difference
between the fair value of the purchase consideration and the fair value of the
net assets of the subsidiary undertaking at the date of acquisition, is
capitalised as an intangible asset.
In accordance with IFRS 3, goodwill has been frozen at its net book
value as at 1 January 2004 and will not be amortised. Instead, it will be
subject to an annual impairment review, with any impairment losses being
recognised immediately in the income statement. Goodwill arising prior to 1
January 1998 was taken directly to reserves in the year in which it arose.
Such goodwill has not been reinstated on the balance sheet.
The fair value of net assets in excess of the fair value of
purchase consideration it is credited to the income statement.
Intangible assets, other than goodwill, which are purchased, such
as licences, patents and trademarks are capitalised and charged to the income
statement over their useful economic lives.
Foreign currencies
Balance sheet items in foreign currencies are translated into
sterling at closing rates of exchange at the balance sheet date. Income
statements and cash flows of overseas subsidiary undertakings are translated
into sterling at average rates of exchange for the year.
Exchange differences arising from the retranslation of opening net
assets and income statements at closing rates of exchange are dealt with as
movements in equity. All other exchange differences are charged to the income
statement.
The Group has taken advantage of the option made available in IFRS
1 to set cumulative translation differences taken to the translation reserve
to zero at the date of transition to IFRS.
Financial instruments
The Group uses currency swaps and interest rate swaps to manage
financial risk. Interest charges and financial liabilities are stated after
taking account of these swaps.
The Group has also entered into hedges to mitigate exposures to
both foreign currency and interest rates. Hedging instruments are held at fair
value in the balance sheet.
Hedges are accounted for in accordance with IAS 39 as follows:
Fair value hedges: changes in fair value of the hedged item and
hedging instrument are taken to the income statement.
Cash flow hedges and net investment hedges: the effective portion
of changes in the fair value of the hedging instrument is taken to equity,
with the ineffective portion of changes in fair value being taken to the
income statement.
Dividends
Dividends are recorded in the Group's financial statements in the
period in which they are declared or paid.
Appendix 2
Consolidated Income Statement
Six months to Year to
30 June 31 December
2004 2004
(restated) (restated)
£000 £000
Revenue 294,124 595,856
Operating costs (280,892) (561,961)
------------- -------------
Operating profit 13,232 33,895
Interest receivable 122 340
Finance costs (2,156) (4,487)
------------- -------------
Profit before tax 11,198 29,748
Tax (4,718) (11,874)
------------- -------------
Profit for the period 6,480 17,874
======== ========
Attributable to:
Equity holders of the parent 5,590 15,743
Minority interests 890 2,131
------------- -------------
6,480 17,874
======== ========
Basic earnings per share 8.6p 24.2p
Diluted earnings per share 8.6p 24.1p
Consolidated Statement of Recognised Income and Expense
Six months to Year to
30 June 31 December
2004 2004
(restated) (restated)
£000 £000
Exchange differences on translation of (3,173) (5,676)
foreign operations
Actuarial losses on defined benefit (1,833) (2,668)
pensions
Tax on items taken directly to or 554 856
transferred from equity
------------ -------------
Net expense recognised directly in equity (4,452) (7,488)
Profit for the period 6,480 17,874
------------ ------------
Total recognised income and expense 2,028 10,386
======= =======
Attributable to:
Equity holders of the parent 1,138 8,255
Minority interests 890 2,131
------------ ------------
2,028 10,386
======= =======
Consolidated Balance Sheet
30 June 31 December
2004 2004
(restated) (restated)
£000 £000
ASSETS
Non-current assets
Intangible assets 52,161 51,761
Property, plant and equipment 79,298 80,937
Deferred tax assets 2,862 3,146
---------- ----------
134,321 135,844
---------- ----------
Current assets
Inventories 21,850 24,319
Trade and other receivables 161,321 143,926
Cash and cash equivalents 10,436 16,416
---------- ----------
193,607 184,661
---------- ----------
Total assets 327,928 320,505
---------- ----------
LIABILITIES
Current liabilities
Loans and borrowings (31,223) (9,787)
Current tax liabilities (5,690) (5,538)
Trade and other payables (129,984) (120,701)
------------ ------------
(166,897) (136,026)
------------ ------------
Non-current liabilities
Loans and borrowings (51,043) (65,286)
Employee benefits (15,782) (17,211)
Deferred tax liabilities (6,644) (8,138)
Other liabilities (2,329) (2,875)
------------ ------------
(75,798) (93,510)
------------ ------------
Total liabilities (242,695) (229,536)
------------ ------------
Net assets 85,233 90,969
======= =======
EQUITY
Issued share capital 6,535 6,536
Share premium account 36,014 36,027
Capital redemption reserve 7,629 7,629
Translation reserve (3,191) (5,666)
Retained earnings 33,486 40,832
---------- ----------
Equity attributable to equity holders of 80,473 85,358
the parent
Minority interests 4,760 5,611
---------- ----------
Total equity 85,233 90,969
====== ======
Consolidated Cash Flow Statement
Six months to Year to 31 December
30 June 2004
2004 (restated)
(restated)
£000 £000
Cash flows from operating activities
Cash generated from operations 6,325 33,577
Interest paid (2,264) (4,368)
Income taxes paid (1,358) (7,339)
---------- ---------
Net cash from operating activities 2,703 21,870
---------- ---------
Cash flows from investing activities
Proceeds from sale of property, plant & 333 2,063
equipment
Interest received 122 339
Acquisition of subsidiary, net of cash (2,835) (3,422)
acquired
Acquisition of property, plant & (5,847) (13,887)
equipment
Acquisition of intangible fixed assets - (15)
---------- ------------
Net cash from investing activities (8,227) (14,922)
---------- ------------
Cash flows from financing activities
Proceeds from the issue of share capital 15 15
New borrowings 16,815 55,982
Repayment of borrowings (7,970) (52,498)
Payment of finance lease liabilities (84) (373)
Dividends paid (6,225) (9,345)
---------- -----------
Net cash from financing activities 2,551 (6,219)
---------- -----------
Net (decrease)/increase in cash and cash (2,973) 729
equivalents
Cash and cash equivalents at beginning of 10,812 10,812
period
Effect of exchange rate fluctuations (807) (432)
---------- -----------
Cash and cash equivalents at end of 7,032 11,109
period
====== ======
Appendix 3
Reconciliation of Profit
12 months to 31 December 2004
Previously IAS19 IFRS3 IFRS2 IAS12 Effect of Restated
reported transition under IFRS
under UK Employee Business Share based Taxation to IFRS
GAAP benefits combinations payment
£000 £000 £000 £000 £000 £000 £000
Revenue 595,856 595,856
Operating costs (565,071) 136 2,877 97 3,110 (561,961)
------------ ------------ ------------ ------------ ------------ ---------- ------------
Operating profit 30,785 136 2,877 97 3,110 33,895
Interest 340 340
receivable
Finance costs (4,487) (4,487)
------------ ------------ ------------ ------------ ------------ ------------ ------------
Profit before 26,638 136 2,877 97 3,110 29,748
tax
Tax (11,130) (34) (709) (29) 28 (744) (11,874)
------------ ------------ ------------ ------------ ------------ ------------ ------------
Profit for the 15,508 102 2,168 68 28 2,366 17,874
period
======= ======= ======= ======= ======= ======= =======
Attributable to:
Equity holders
of the parent
13,377 102 2,168 68 28 2,366 15,743
Minority 2,131 2,131
interests
------------ ------------ ------------ ------------ ------------ ------------ ------------
15,508 102 2,168 68 28 2,366 17,874
======= ======= ======= ======= ======= ======= =======
Basic earnings 20.5p 24.2p
per share
Diluted earnings
per share 20.5p 24.1p
Reconciliation of Profit
6 months to 30 June 2004
Previously IAS19 IFRS3 IFRS2 Share IAS12 Effect of Restated
reported Business based transition under IFRS
under UK Employee combinations payment Taxation to IFRS
GAAP benefits
£000 £000 £000 £000 £000 £000 £000
Revenue 294,124 294,124
Operating costs (282,299) 54 1,411 (58) 1,407 (280,892)
------------ ------------ ------------ ------------ ------------ ------------ ------------
Operating profit 11,825 54 1,411 (58) 1,407 13,232
Interest 122 122
receivable
Finance costs (2,156) (2,156)
------------ ------------ ------------ ------------ ------------ ------------ ------------
Profit before 9,791 54 1,411 (58) 1,407 11,198
tax
Tax (4,378) (17) (356) 17 16 (340) (4,718)
------------ ------------ ------------ ------------ ------------ ------------ ------------
Profit for the 5,413 37 1,055 (41) 16 1,067 6,480
period
======= ======= ======= ======= ======= ======= =======
Attributable to:
Equity holders
of the parent
4,523 37 1,055 (41) 16 1,067 5,590
Minority 890 890
interests
------------ ------------ ------------ ------------ ------------ ------------ ------------
5,413 37 1,055 (41) 16 1,067 6,480
======= ======= ======= ======= ======= ======= =======
Basic earnings 7.0p 8.6p
per share
Diluted earnings
per share 6.9p 8.6p
Reconciliation of Equity
As at 31 December 2004
Previously IAS19 IAS39 IFRS3 IAS21 IAS10 IAS12 Effect of Restated
reported Foreign transition under IFRS
under UK Employee Financial Business exchange Dividend Taxation to IFRS
GAAP benefits instruments combinations adjustment
£000 £000 £000 £000 £000 £000 £000 £000 £000
ASSETS
Non-current
assets
Goodwill 57,679 3,012 (10,642) 1,501 (6,129) 51,550
Other intangible 211 211
assets
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Intangible 57,890 3,012 (10,642) 1,501 (6,129) 51,761
assets
Property, plant
and equipment 80,937 80,937
Deferred tax 3,146 3,146 3,146
assets
--------- --------- --------- --------- --------- --------- --------- --------- ---------
138,827 3,146 3,012 (10,642) 1,501 (2,983) 135,844
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Current assets
Inventories 24,319 24,319
Trade and other
receivables 144,518 (592) (592) 143,926
Cash and cash
equivalents 16,416 16,416
--------- --------- --------- --------- --------- --------- --------- --------- ---------
185,253 (592) (592) 184,661
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Total assets 324,080 2,554 3,012 (10,642) 1,501 (3,575) 320,505
--------- --------- --------- --------- --------- --------- --------- --------- ---------
LIABILITIES
Current
liabilities
Loans and (9,787) (9,787)
borrowings
Current tax (5,538) (5,538)
liabilities
Trade and other (125,523) 51 4,771 4,822 (120,701)
payables
----------- --------- --------- --------- --------- --------- --------- --------- -----------
(140,848) 51 4,771 4,822 (136,026)
----------- --------- --------- --------- --------- --------- --------- --------- -----------
Non-current
liabilities
Loans and (66,588) 1,302 1,302 (65,286)
borrowings
Employee (7,687) (9,524) (9,524) (17,211)
benefits
Deferred tax (5,957) (709) (1,472) (2,181) (8,138)
liabilities
Other (1,573) (1,302) (1,302) (2,875)
liabilities
---------- --------- --------- --------- --------- --------- --------- --------- ---------
(81,805) (9,524) (709) (1,472) (11,705) (93,510)
------------ --------- --------- --------- --------- --------- --------- --------- ---------
Total (222,653) (9,473) (709) 4,771 (1,472) (6,883) (229,536)
liabilities
------------ --------- --------- --------- --------- --------- --------- --------- ---------
NET ASSETS 101,427 (6,919) 2,303 (10,642) 4,771 29 (10,458) 90,969
====== ====== ====== ====== ====== ====== ====== ====== ======
EQUITY
Issued share 6,536 6,536
capital
Share premium 36,027 36,027
account
Capital
redemption 7,629 7,629
reserve
Translation (16) (5,651) 1 (5,666) (5,666)
reserve
Retained 45,624 (6,903) 2,303 (4,991) 4,771 28 (4,792) 40,832
earnings
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Equity
attributable to
equity holders 95,816 (6,919) 2,303 4,771 29 (10,458) 85,358
of the parent
(10,642)
Minority 5,611 5,611
interests
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Total equity 101,427 (6,919) 2,303 (10,642) 4,771 29 (10,458) 90,969
====== ====== ====== ====== ====== ====== ====== ====== ======
Reconciliation of Equity
As at 30 June 2004
Previously IAS19 IFRS3 IAS21 IAS10 IAS12 Effect of Restated
reported Foreign transition under IFRS
under UK Employee Business exchange Dividend Taxation to IFRS
GAAP benefits combinations adjustment
£000 £000 £000 £000 £000 £000 £000 £000
ASSETS
Non-current
assets
Goodwill 57,868 1,546 (8,913) 1,427 (5,940) 51,928
Other intangible 233 233
assets
--------- --------- --------- ------- --------- --------- --------- ---------
Intangible 58,101 1,546 (8,913) 1,427 (5,940) 52,161
assets
Property, plant
and equipment
79,298 79,298
Deferred tax 2,862 2,862 2,862
assets
--------- --------- --------- ------- --------- --------- --------- ---------
137,399 2,862 1,546 (8,913) 1,427 (3,078) 134,321
--------- --------- --------- ------- --------- --------- --------- ---------
Current assets
Inventories 21,850 21,850
Trade and other
receivables
161,940 (619) (619) 161,321
Cash and cash
equivalents
10,436 10,436
----------- --------- --------- ------- --------- --------- --------- -----------
194,226 (619) (619) 193,607
----------- --------- --------- ------- --------- --------- --------- -----------
Total assets 331,625 2,243 1,546 (8,913) 1,427 (3,697) 327,928
----------- --------- --------- ------- --------- --------- --------- -----------
LIABILITIES
Current
liabilities
Loans and (31,223) (31,223)
borrowings
Current tax (5,690) (5,690)
liabilities
Trade and other (132,348) 11 2,353 2,364 (129,984)
payables
------------ --------- --------- ------- --------- --------- --------- ------------
(169,261) 11 2,353 2,364 (166,897)
------------ --------- --------- ------- --------- --------- --------- ------------
Non-current
liabilities
Loans and (51,043) (51,043)
borrowings
Employee (7,150) (8,632) (8,632) (15,782)
benefits
Deferred tax (4,877) (356) (1,411) (1,767) (6,644)
liabilities
Other (2,329) (2,329)
liabilities
------------ --------- --------- ------- --------- --------- --------- ---------
(65,399) (8,632) (356) (1,411) (10,399) (75,798)
------------ --------- --------- ------- --------- --------- --------- ---------
Total (234,660) (8,621) (356) 2,353 (1,411) (8,035) (242,695)
liabilities
------------ --------- --------- ------- --------- --------- --------- ------------
Net assets 96,965 (6,378) 1,190 (8,913) 2,353 16 (11,732) 85,233
====== ====== ====== ====== ====== ====== ====== ======
EQUITY
Issued share 6,535 6,535
capital
Share premium 36,014 36,014
account
Capital
redemption 7,629 7,629
reserve
Translation 28 (3,219) (3,191) (3,191)
reserve
Retained 42,027 (6,406) 1,190 (5,694) 2,353 16 (8,541) 33,486
earnings
--------- --------- ------- ------- -------- ----------- ----------- ----------
Equity
attributable to
equity holders 92,205 (6,378) 1,190 (8,913 2,353 16 (11,732) 80,473
of the parent
Minority 4,760 4,760
interests
Total equity 96,965 (6,378) 1,190 (8,913) 2,353 16 (11,732) 85,233
====== ====== ====== ====== ====== ====== ====== ======
Reconciliation of Equity
As at 1 January 2004
Previously IAS19 IFRS 3 IAS21 IAS10 IAS 12 Effect of Restated
reported Employee Business Foreign Dividend Taxation transition under IFRS
under UK benefits combinations exchange adjustment to IFRS
GAAP
£000 £000 £000 £000 £000 £000 £000 £000
ASSETS
Non-current
assets
Goodwill 56,759 135 (7,685) 1,495 (6,055) 50,704
Other 287 287
intangible
assets
--------- --------- --------- --------- ---------- -------- --------- ---------
Intangible 57,046 135 (7,685) 1,495 (6,055) 50,991
assets
Property, plant
and equipment 82,169 82,169
Deferred tax 2,324 2,324 2,324
assets
---------- -------- -------- ---------- ---------- -------- ---------- -----------
139,215 2,324 135 (7,685) 1,495 (3,731) 135,484
---------- -------- -------- ---------- ---------- -------- ---------- -----------
Current assets
Inventories 16,885 16,885
Trade and other
receivables
137,855 (646) (646) 137,209
Cash and cash
equivalents
21,511 21,511
---------- --------- --------- ---------- ---------- ---------- ---------- -----------
176,251 (646) (646) 175,605
---------- --------- --------- ---------- ---------- ---------- ---------- -----------
Total assets 315,466 1,678 135 (7,685) 1,495 (4,377) 311,089
---------- --------- --------- ---------- ---------- ---------- ---------- -----------
LIABILITIES
Current
liabilities
Loans and (26,679) (26,679)
borrowings
Current tax (2,509) (2,509)
liabilities
Trade and other (117,859) 4,522 4,522 (113,337)
payables
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(147,047) 4,522 4,522 (142,525)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Non-current
liabilities
Loans and (55,496) (55,496)
borrowings
Employee (7,486) (6,860) (6,860) (14,346)
benefits
Deferred tax (4,872) (1,495) (1,495) (6,367)
liabilities
Other (2,942) (2,942)
liabilities
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(70,796) (6,860) (1,495) (8,355) (79,151)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Total (217,843) (6,860) 4,522 (1,495) (3,833) (221,676)
liabilities
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Net Assets 97,623 (5,182) 135 (7,685) 4,522 (8,210) 89,413
======= ======= ======= ======= ======= ======= ======= =======
EQUITY
Issued share 6,507 6,507
capital
Share capital 680 680
to be issued
Share premium 35,374 35,374
account
Capital
redemption
reserve 7,629 7,629
Retained 41,849 (5,182) 135 (7,685) 4,522 (8,210) 33,639
earnings
---------- ---------- ------- --------- --------- ---------- ---------- ---------
Equity
attributable to
equity holders 92,039 (5,182) 135 (7,685) 4,522 (8,210) 83,829
of the parent
Minority 5,584 5,584
interests
---------- ---------- ------- ---------- --------- ---------- ---------- ---------
Total equity 97,623 (5,182) 135 (7,685) 4,522 (8,210) 89,413
====== ====== ==== ====== ===== ====== ====== =====
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