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LBT
LILII
LBT - Liberty International Plc - Quarterly report for the period ended 31 March
2007
LIBERTY INTERNATIONAL PLC
(Registration number UK3685527)
ISIN Code: GB0006834344
JSE Code: LBT
Issuer Code: LILI I
PRESS RELEASE
1 May 2007
LIBERTY INTERNATIONAL PLC
QUARTERLY REPORT FOR THE PERIOD ENDED 31 MARCH 2007
Attached is the quarterly report for the period ended 31 March 2007:
Page
Highlights 3
Commentary 4
Summary of Investment and Development Properties 6
Unaudited Financial Information 9
Sir Robert Finch, Chairman of Liberty International, commented:
"Liberty International has had an active and successful first quarter of 2007.
The results for the first quarter show continued growth in like-for-like net
rental income, an increase in underlying profit before tax from GBP28 million to
GBP36 million and a 4 per cent increase for the quarter in net asset value per
share to 1376p. This is the equivalent of 1476p when adjusted for notional
acquisition costs deducted by the valuers in accordance with their rules to
arrive at market values. Our financial position is exceptionally strong with a
36 per cent debt to assets ratio.
These results confirm the merit of our focus on prime retail assets whose
characteristics are steady long-term rental growth in well-established
competitive locations and whose values are less cyclically volatile than many
other property classes. Furthermore, our published net asset value does not
recognise the value of the business as a whole, including for example the long
lead times needed for major new developments and the skill, expertise and
experience found within Liberty International to create and then actively
control and manage such developments".
1 May 2007
Background on Liberty International
Liberty International PLC is the UK`s third largest listed property company and
a constituent of the FTSE-100 Index of the UK`s leading listed companies.
Liberty International owns Capital Shopping Centres ("CSC"), the premier UK
regional shopping centre business, and Capital & Counties, a retail and
commercial property investment and development company concentrating on Central
London, non-shopping centre retail in the UK and California, USA.
This press release includes statements that are forward-looking in nature.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements
of Liberty International PLC to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Any information contained in this press release on
the price at which shares or other securities in Liberty International PLC have
been bought or sold in the past, or on the yield on such shares or other
securities, should not be relied upon as a guide to future performance.
A conference call with analysts and investors will take place at 9.00 a.m. on 1
May 2007.
Enquiries:
Liberty International PLC:
Sir Robert Finch Chairman +44 (0)20 7960 1273
David Fischel Chief Executive +44 (0)20 7960 1207
Aidan Smith Finance Director +44 (0)20 7960 1210
Public relations:
UK: Michael Sandler, Hudson Sandler +44 (0)20 7796 4133
SA: Matthew Gregorowski, +44 (0)20 7457 2020
College Hill Associates
Nicholas Williams, +27 (0)11 447 3030
College Hill Associates
LIBERTY INTERNATIONAL PLC
QUARTERLY REPORT FOR THE PERIOD ENDED 31 MARCH 2007 - HIGHLIGHTS
Quarter Quarter Year
ended ended ended
31 March 31 March 31 December
2007 2006 2006
Net rental income +14% GBP91m GBP80m
GBP341m
Profit before tax
(underlying)* +29% GBP36m GBP28m
GBP122m
Profit before tax GBP293m GBP903m
Profit for the period attributable to
equity shareholders GBP273m GBP1,564m
Gain on revaluation and sale of
investment properties GBP156m GBP587m
Total properties GBP8,116m GBP8,232m
Net debt GBP3,043m GBP3,063m
Net assets (diluted, adjusted) GBP5,190m GBP5,002m
Adjusted earnings per share +56% 9.8p 6.4p 33.9p
Net assets per share +4% 1376p 1327p
(diluted, adjusted**) (for the quarter)
*Profit before tax (underlying) is before property trading, valuation and
exceptional items
**Net assets per share (diluted, adjusted) would increase by 100p per share
to 1476p at 31 March 2007
(31 December 2006 - by 98p to 1425p) if adjusted for notional acquisition
costs amounting to GBP377 million
(31 December 2006 - GBP370 million).
COMMENTARY
Liberty International has had an exceptionally productive first three months
since becoming a UK Real Estate Investment Trust (``REIT``) on 1 January 2007.
With the benefit of increased asset management flexibility provided by REIT
status, we have recorded the following significant corporate transactions in
the first quarter of 2007:
- Formation of a strategic partnership with GIC Real Estate realising GBP426
million.
- Formation of The Great Capital Partnership, a GBP460 million joint venture
with Great Portland Estates.
- GBP128 million acquisition of the Royal Opera House retail units in Covent
Garden.
Details of these transactions are shown in the paragraph "Transactions in the
quarter" below.
The financial information contained within this report has included both the
acquisition of the Royal Opera House retail units and the partnership with GIC
Real Estate together with the related disposal of 40 per cent of the group`s
interest in the MetroCentre, Gateshead. The cash element of the settlement in
respect of the GIC partnership amounting to GBP212 million was received after
the
end of the quarter and therefore is shown as a receivable at 31 March 2007.
The impact of the formation of The Great Capital Partnership, which has also
completed since the quarter end, has not been incorporated into the financial
results for the period due to the conditionality of the contract as at 31 March
2007.
Results for the quarter ended 31 March 2007
The Income Statement for the quarter shows continuing underlying growth, with
an 11.4 per cent like-for-like net rental income growth in the group`s UK
regional shopping centres (5.8 per cent excluding a one-off GBP3 million
surrender premium), a 29 per cent increase in underlying profit before tax from
GBP28 million to GBP36 million, and a 56 per cent increase in underlying
earnings
per share reflecting in addition the benefit of tax savings from conversion to
REIT status.
Occupancy remained at a high level of 98.4 per cent in established UK regional
shopping centres,
97.9 per cent overall including recently completed developments (31 December
2006 - 98.6 per cent and 97.7 per cent respectively). In particular
Manchester Arndale, where the major 550,000
sq. ft. Northern Extension completed in Autumn 2006, is now 94 per cent
committed by rental value.
Gains on revaluation and sale of investment properties amounted to GBP156
million, including GBP16 million from the partial disposal of MetroCentre,
Gateshead, above the book value at 31 December 2006.
Like-for-like gains on revaluation of investment properties are summarised as
follows:
Quarter ended Year ended
31 March 31 December
2007 2006
- UK regional shopping centres + 1.9% + 7.9%
- UK non-shopping centre properties + 1.6% + 13.9%
- USA + 1.5% + 5.8%
Of the revaluation gain on UK regional shopping centres, 75 per cent is
estimated to have arisen as a result of yield shift, and 25 per cent from
underlying rental growth.
Reflecting the rise in long-term interest rates in the period, with for example
the ten year UK interest rate swap rising from 5.11 per cent at 31 December
2006 to 5.35 per cent at 31 March 2007, we recorded a surplus of GBP109 million
on revaluation of the derivative financial instruments used to fix our
long-term debt.
Transactions in the quarter
- Strategic partnership with GIC Real Estate realising GBP426 million.
Our wholly owned subsidiary, Capital Shopping Centres (``CSC``), entered into
an agreement with GIC Real Estate (``GIC RE``) for GIC RE to acquire a 40 per
cent share in CSC`s interest in the MetroCentre, Gateshead for a gross
consideration of GBP426 million. We are delighted to welcome GIC RE, the real
estate investment arm of the Government of Singapore Investment Corporation and
one of the world`s leading global real estate investors, as a strategic
long-term partner in this flagship asset. CSC will continue to manage the
MetroCentre. The transaction, which has completed since the end of the quarter,
releases capital to enable Liberty International to continue to expand its
overall business which currently includes a GBP1 billion development programme.
- Formation of a GBP460 million Central London joint venture with Great Portland
Estates.
Our wholly owned subsidiary, Capital and Counties, announced the formation of
The Great Capital Partnership, a 50:50 joint venture with Great Portland
Estates plc (``GPE``), to own, manage and develop a number of Central London
properties and to broaden both parties` exposure in Central London. The Great
Capital Partnership has a starting value of around GBP460 million, with Capital
&
Counties contributing GBP299 million of investment properties and GPE
contributing GBP162 million and making a balancing payment of GBP68 million in
cash
to Capital & Counties. The transaction has completed since the end of the
quarter. GPE will be responsible for asset management of the partnership
properties. We are delighted to have created this relationship with GPE which
will enable us to increase our involvement in London in partnership with a
first class team.
-GBP128 million acquisition of the Royal Opera House retail units in Covent
Garden.
Capital and Counties acquired in the quarter the retail element of the Royal
Opera House block in London`s Covent Garden for GBP127.5 million increasing the
aggregate value of our interests in Covent Garden, which are wholly owned and
directly managed, to over GBP620 million. This purchase is of strategic
importance to our long-term plans for Covent Garden. The retail units in the
Royal Opera House block are amongst the most prime in Covent Garden and the
acquisition expands our ownership to encompass the northern side of the Market
and James Street which serves as the "front door" to the Covent Garden Market
itself.
Financial position and summary
The net proceeds of the transactions referred to above, combined with the GBP335
million of equity capital raised by way of a share placing in November 2006,
represent a substantial strengthening of the group`s financial position in the
last six months. Liberty International`s financial ratios, which include a debt
to assets ratio of 36 per cent (31 December 2006 - 36 per cent), are robust and
we are well placed to continue with the measured expansion of our business and
to respond to the challenges which lie ahead.
These results confirm the merit of our focus on prime retail assets whose
characteristics are steady long-term rental growth in well-established
competitive locations and whose values are less cyclically volatile than many
other property classes. Furthermore, our published net asset value does not
recognise the value of the business as a whole, including for example the long
lead times needed for major new developments and the skill, expertise and
experience found within Liberty International to create and then actively
control and manage such developments.
1 May 2007
SUMMARY OF INVESTMENT AND DEVELOPMENT PROPERTIES
Fair value
31 December 31 March
2006 2007
GBPm GBPm
UK regional shopping centres
Lakeside, Thurrock 1,289.0 1,322.7
Braehead, Glasgow 742.0 742.8
MetroCentre, Gateshead (60%) 611.5 635.6
The Harlequin, Watford 521.7 529.2
Victoria Centre, Nottingham 438.3 447.7
Chapelfield, Norwich 345.3 345.4
Cribbs Causeway, Bristol 314.5 316.8
The Potteries, Stoke-on-Trent 306.3 306.3
The Glades, Bromley 281.4 284.1
The Chimes, Uxbridge 271.8 283.8
Eldon Square, Newcastle upon Tyne 240.4 242.6
Like-for-like income 5,362.2 5,457.0
Arndale, Manchester 439.6 456.2
St. David`s, Cardiff 104.2 104.7
Xscape, Braehead 36.4 38.0
Like-for-like capital 5,942.4 6,055.9
Redevelopments and developments 192.7 202.2
Disposals (MetroCentre (40%)) 407.7 -
Total UK regional shopping centres 6,542.8 6,258.1
UK non-shopping centre properties
Like-for-like income 700.7 719.3
Like-for-like other 466.7 471.2
Like-for-like capital 1,167.4 1,190.5
Acquisitions - 127.5
Redevelopments 123.3 138.5
Disposals - -
Total UK non-shopping centre
properties 1,290.7 1,456.5
US properties*
Like-for-like income 278.3 281.9
Like-for-like other 69.8 71.9
Like-for-like capital 348.1 353.8
Disposals 5.5 -
Total US properties 353.6 353.8
Total investment properties 8,187.1 8,068.4
Revaluation surplus
GBPm Increase
UK regional shopping centres
Lakeside, Thurrock 31.2 2.4%
Braehead, Glasgow 0.7 0.1%
MetroCentre, Gateshead (60%) 23.6 3.8%
The Harlequin, Watford 7.5 1.4%
Victoria Centre, Nottingham 9.3 2.1%
Chapelfield, Norwich 4.4 1.3%
Cribbs Causeway, Bristol 2.3 0.7%
The Potteries, Stoke-on-Trent (0.2) (0.1)%
The Glades, Bromley 2.1 0.7%
The Chimes, Uxbridge 12.0 4.4%
Eldon Square, Newcastle upon Tyne 3.1 1.3%
Like-for-like income 96.0 1.8%
Arndale, Manchester 16.5 3.8%
St. David`s, Cardiff 0.3 0.3%
Xscape, Braehead 1.5 4.2%
Like-for-like capital 114.3 1.9%
Redevelopments and developments (4.1) (1.9)%
Disposals (MetroCentre (40%)) - -
Total UK regional shopping centres 110.2 1.8%
UK non-shopping centre properties
Like-for-like income 15.8 2.2%
Like-for-like other 2.6 0.6%
Like-for-like capital 18.4 1.6%
Acquisitions (5.4) (4.1)%
Redevelopments 11.2 8.8%
Disposals - -
Total UK non-shopping centre
properties 24.2 1.7%
US properties*
Like-for-like income 3.6 1.2%
Like-for-like other 2.0 2.9%
Like-for-like capital 5.6 1.5%
Disposals 0.2
Total US properties 5.8 1.6%
Total investment properties 140.2 1.8%
Net rental income
31 31
March March
2006 2007
GBPm GBPm
Increase
UK regional shopping centres
Lakeside, Thurrock
Braehead, Glasgow
MetroCentre, Gateshead (60%)
The Harlequin, Watford
Victoria Centre, Nottingham
Chapelfield, Norwich
Cribbs Causeway, Bristol
The Potteries, Stoke-on-Trent
The Glades, Bromley
The Chimes, Uxbridge
Eldon Square, Newcastle upon Tyne
Like-for-like income 54.0 60.1 11.4%
Arndale, Manchester
St. David`s, Cardiff
Xscape, Braehead
Like-for-like capital 57.3 66.2 15.5%
Redevelopments and developments 1.4 1.0
Disposals (MetroCentre (40%)) 4.6 4.6
Total UK regional shopping centres 63.3 71.8 13.4%
UK non-shopping centre properties
Like-for-like income 8.4 8.4 -%
Like-for-like other 0.4 4.9
Like-for-like capital 8.8 13.3
Acquisitions - 0.1
Redevelopments 0.9 1.1
Disposals 2.1 -
Total UK non-shopping centre
properties 11.8 14.5 23.2%
US properties*
Like-for-like income 4.8 4.3 1.3%
Like-for-like other 0.3 0.7
Like-for-like capital 5.1 5.0
Disposals 0.1 -
Total US properties 5.2 5.0
Total investment properties 80.3 91.3 13.7%
*Like-for-like % increases are in local currency
SUMMARY OF INVESTMENT AND DEVELOPMENT PROPERTIES (Continued)
Property analysis by use and type
Revaluation
Fair Value surplus
31 31
December March
2006 2007 % of total
GBPm GBPm properties Increase
Regional shopping
centres and other
retail
UK regional shopping
centres 6,542.8 6,258.1 77.6% 1.8%
UK other retail 776.0 913.5 11.3% 0.1%
US regional shopping
centres 121.6 124.3 1.5% 1.7%
US other retail 132.2 128.5 1.6% 1.5%
Total regional
shopping centres and
other retail 7,572.6 7,424.4 92.0% 1.6%
Office
UK business space 514.7 543.0 6.8% 4.4%
US business space 65.8 66.7 0.8% 1.7%
Total office 580.5 609.7 7.6% 4.1%
Residential
US residential 34.0 34.3 0.4% 0.8%
Total investment
properties 8,187.1 8,068.4 100% 1.8%
Analysis of UK non-shopping centres and US properties by location and type
Revaluation surplus
31 31
December March 31 March
2006 2007 2007
GBPm GBPm GBPm
Increase
UK non-shopping centre
properties
Capco Covent Garden 492.3 624.8 (2.4) (0.4)%
Capco London 330.3 342.0 10.7 3.2%
Capco Opportunities 273.1 295.1 17.7 6.4%
Capco Urban 195.0 194.6 (1.8) (0.9)%
Total UK non-shopping centre
properties 1,290.7 1,456.5 24.2 1.7%
US properties
US retail 253.8 252.8 4.4 1.6%
US business space 65.8 66.7 1.1 1.7%
US residential 34.0 34.3 0.3 0.8%
Total US properties 353.6 353.8 5.8 1.6%
1,644.3 1,810.3 30.0 1.7%
Net rental income
31 March 31 March
2006 2007
GBPm GBPm
UK non-shopping centre properties
Capco Covent Garden 0.8 5.2
Capco London 4.3 4.2
Capco Opportunities 4.8 3.1
Capco Urban 1.9 2.0
Total UK non-shopping centre properties 11.8 14.5
US properties
US retail 4.2 3.7
US business space 1.0 1.0
US residential - 0.3
Total US properties 5.2 5.0
17.0 19.5
SUMMARY OF INVESTMENT AND DEVELOPMENT PROPERTIES (Continued)
UK investment property valuation data
Nominal equivalent yield
Fair Value
31 March
2007
GBPm 31 December 31 March
2006 2007
UK regional shopping centres
Lakeside, Thurrock 1,322.7 4.65% 4.55%
Braehead, Glasgow 742.8 4.81% 4.81%
MetroCentre, Gateshead 635.6 4.75% 4.62%
The Harlequin, Watford 529.2 4.75% 4.70%
Arndale, Manchester 456.2 4.96% 4.86%
Victoria Centre, Nottingham 447.7 4.95% 4.85%
Chapelfield, Norwich 345.4 5.00% 4.95%
Cribbs Causeway, Bristol 316.8 4.74% 4.72%
The Potteries, Stoke-on-Trent 306.3 5.00% 5.00%
The Glades, Bromley 284.1 4.95% 4.95%
The Chimes, Uxbridge 283.8 5.00% 4.90%
Eldon Square, Newcastle upon Tyne 242.6 5.20% 5.10%
St. David`s, Cardiff 104.7 5.00% 5.00%
Xscape, Braehead 38.0 6.04% 5.87%
Like-for-like capital 6,055.9 4.83% 4.78%
Other 202.2
Total UK regional shopping centres 6,258.1 4.83% 4.78%
UK non-shopping centre properties
Capco Covent Garden 497.1 4.56% 4.54%
Capco London 313.6 5.01% 5.04%
Capco Opportunities 216.9 5.80% 5.82%
Capco Urban 162.9 5.15% 5.19%
Like-for-like capital 1,190.5 4.99% 5.00%
Other 266.0
Total UK non-shopping centre
properties 1,456.5 5.11% 5.03%
Passing Net rental
rent income ERV
31 March 31 March 31 March
2007 2007 2007
GBPm GBPm
GBPm
UK regional shopping centres
Lakeside, Thurrock
Braehead, Glasgow
MetroCentre, Gateshead
The Harlequin, Watford
Arndale, Manchester
Victoria Centre, Nottingham
Chapelfield, Norwich
Cribbs Causeway, Bristol
The Potteries, Stoke-on-Trent
The Glades, Bromley
The Chimes, Uxbridge
Eldon Square, Newcastle upon Tyne
St. David`s, Cardiff
Xscape, Braehead
Like-for-like capital 237.9 66.2 299.5
Other 4.8 5.6 5.1
Total UK regional shopping centres 242.7 71.8 304.6
UK non-shopping centre properties
Capco Covent Garden
Capco London
Capco Opportunities
Capco Urban
Like-for-like capital 51.4 13.3 65.8
Other 5.4 1.2 10.6
Total UK non-shopping centre propertie 56.8 14.5 76.4
INCOME STATEMENT (Unaudited)
Three Three
months months Year
ended ended ended
31 March 31 March 31 December
2007 2006 2006
Notes GBPm GBPm
GBPm
UK shopping centres 71.8 63.3 272.0
Other commercial properties 19.5 17.0 68.6
Net rental income 91.3 80.3 340.6
Other income 0.4 0.1 2.0
91.7 80.4 342.6
Administration expenses (7.4) (8.5) (34.2)
Operating profit
(underlying)* 84.3 71.9 308.4
Interest payable 2 (49.7) (44.7) (190.0)
Interest receivable 1.3 0.8 3.9
Net finance costs
(underlying) (48.4) (43.9) (186.1)
Profit before tax
(underlying)* 35.9 28.0 122.3
Tax on profit (underlying) (0.5) (7.0) (7.4)
Profit for the period 35.4 21.0 114.9
(underlying)*
Adjusted earnings per share 7 9.8p 6.4p 33.9p
Profit before tax 35.9 122.3
(underlying)*
Property trading profits - 32.8
Gains on revaluation and
sale of investment
properties 156.3 586.5
Movement in fair value of
derivative financial
instruments 109.2 163.5
Exceptional finance costs (8.3) (2.0)
Profit before tax 293.1 903.1
Tax (20.4) 661.0
Profit for the period
attributable to equity
shareholders 272.7 1,564.1
* before property trading, valuation and exceptional items
CONSOLIDATED BALANCE SHEET (Unaudited)
As at 31 As at 31
March December
2007 2006
Notes GBPm GBPm
Non-current assets
Investment and development property 3 8,068.4 8,187.1
Plant and equipment 0.9 0.9
Investments 7.5 -
Trade and other receivables 5 101.0 81.4
8,177.8 8,269.4
Current assets
Trading properties 4 47.7 45.2
Trade and other receivables 5 311.5 113.8
Cash and cash equivalents 60.5 321.8
419.7 480.8
Total assets 8,597.5 8,750.2
Current liabilities
(230.1) (319.5)
Trade and other payables
Tax liabilities (0.2) (2.1)
(152.8) (43.5)
Borrowings, including finance leases 6
Derivative financial instruments (2.0) (4.6)
(385.1) (369.7)
Non-current liabilities
Borrowings, including finance leases 6 (2,951.1) (3,341.3)
Derivative financial instruments (43.0) (128.9)
Deferred tax provision (62.3) (40.8)
Other provisions (3.7) (4.9)
Other payables (143.8) (132.2)
(3,203.9) (3,648.1)
Total liabilities (3,589.0) (4,017.8)
Net assets 5,008.5 4,732.4
Equity
Called up share capital and reserves 8 5,008.5 4,732.4
Diluted, adjusted net assets per share 7 1376p 1327p
Basic net assets per share 7 1384p 1308p
NOTES
1 Basis of preparation
The Quarterly Report is unaudited and does not constitute statutory accounts
within the meaning of s240 of the Companies Act 1985. The auditor`s opinion on
the statutory accounts for the year ended 2006, which were prepared in
accordance with International Financial Reporting Standards as adopted by the
European Union ("IFRS"), IFRIC interpretations and with those parts of the
Companies Act, 1985 applicable to companies reporting under IFRS, was
unqualified and did not contain a statement made under s237 (2) or s237(3) of
the Companies Act 1985.
The financial information has been prepared using the accounting policies set
out on pages 42 and 43 of the Group`s Annual report for 2006.
2 Finance costs
Three months Three months
ended 31 ended 31
March March Year ended
2007 2006 31 December
2006
GBPm GBPm
GBPm
Gross interest payable - recurring 52.8 47.2 198.6
(3.1) (2.5) (8.6)
Interest capitalised on developments
Interest payable 49.7 44.7 190.0
3 Investment and development property
Other
UK
shopping commercial
centres properties Total
GBPm GBPm
GBPm
At 31 December 2006 6,542.8 1,644.3 8,187.1
Additions 17.6 142.8 160.4
Disposals (412.5) (5.6) (418.1)
Foreign exchange - (1.2) (1.2)
fluctuations
Surplus on valuation 110.2 30.0 140.2
At 31 March 2007 6,258.1 1,810.3 8,068.4
The group`s interests in investment and development properties were valued as
at 31 December 2006 and 31 March 2007 by independent external valuers in
accordance with the Appraisal and Valuation Manual of RICS on the basis of
market value. Market value represents the figure that would appear in a
hypothetical contract of sale between a willing buyer and a willing seller.
4 Trading properties
The estimated replacement cost of trading properties based on market value
amounted to GBP52.6 million (31 December 2006 - GBP49.9 million).
NOTES (Continued)
5 Trade and other receivables
As at 31 As at 31
March 2007 GBPm December 2006 GBPm
Amounts falling due within one year:
Rents receivable 21.1 26.1
10.9 7.0
Derivative financial instruments
Other receivables* 236.6 42.3
Prepayments and accrued income 42.9 38.4
311.5 113.8
Amounts falling due after more than one year:
Derivative financial instruments 32.0 14.0
Other receivables 12.8 12.2
55.2
Prepayments and accrued income 56.2
101.0 81.4
*31 March 2007 includes GBP212.2 million receivable in respect of the part
disposal of MetroCentre, Gateshead.
6 Borrowings, including finance leases
As at 31 As at 31
March December
2007 2006
GBPm GBPm
Amounts falling due within one year 152.8 43.5
Amounts falling due after more than one year 2,951.1 3,341.3
Total borrowings, including finance leases 3,103.9 3,384.8
Cash and cash equivalents (60.5) (321.8)
Net borrowings 3,043.4 3,063.0
See below for details of interest rate hedging
arrangements
Fair value of financial instruments
As at 31 March 2007
Balance Fair value
sheet value GBPm GBPm
Debentures and other fixed rate loans
Sterling
C&C 5.562% debenture 2027 225.8 345.0
CSC 6.875% unsecured bonds 2013 26.6 26.2
CSC 5.75% unsecured bonds 2009 41.4 40.4
US dollars
Fixed rate loans 158.1 159.8
451.9 571.4
Floating rate and other loans 2,542.5 2,542.5
2,994.4 3,113.9
Convertible bonds - fixed rate 109.5 174.4
Total borrowings 3,103.9 3,288.3
As at 31 December 2006
Balance
sheet value Fair value
GBPm GBPm
Debentures and other fixed rate loans
Sterling
C&C 5.562% debenture 2027 225.8 348.8
CSC 6.875% unsecured bonds 2013 26.5 25.4
CSC 5.75% unsecured bonds 2009 41.3 42.0
US dollars
Fixed rate loans 164.0 169.1
457.6 585.3
Floating rate and other loans 2,818.5 2,818.5
3,276.1 3,403.8
Convertible bonds - fixed rate 108.7 195.4
Total borrowings 3,384.8 3,599.2
The adjustment in respect of the above, after credit for tax relief, to the
diluted net assets per share (which does not require adjustment for the fair
value of convertible bonds) would amount to 22p per share (31 December 2006 -
24p). All other financial assets and liabilities included in the balance sheet
are stated at fair values.
NOTES (Continued)
Derivative financial instruments
As at As at
31 March 31 December
2007 2006
GBPm GBPm
Non current assets (note 5) 32.0 14.0
Current assets (note 5) 10.9 7.0
(4.6)
Current liabilities (2.0)
Non-current liabilities (43.0) (128.9)
(2.1) (112.5)
Interest rate swaps
Notional principal Average contracted rate
31 March 31 December 31 March 31 December
2007 2006 2007 2006
GBPm GBPm %
Effective after:
1 year 2,642 3,055 5.31 5.31
5 years 2,818 3,153 5.10 5.16
10 years 2,350 2,075 4.68 4.75
15 years 2,025 1,750 4.57 4.63
20 years 2,025 1,750 4.57 4.63
25 years 1,550 1,275 4.38 4.43
NOTES (Continued)
7 Per share details
(a) Earnings per share
Three Three
months months Year
ended ended ended
31 March 31 March 31 December
2007 2006 2006
GBPm GBPm
GBPm
Earnings used for calculation of
underlying earnings per
share 35.4 21.0 114.9
Property trading profits - 0.4 (0.3)
Earnings used for calculation of
adjusted earnings per share 35.4 21.4 114.6
As at 31 As at 31 As at 31
March March December
2007 2006 2006
Number Number Number
millions millions millions
Weighted average shares in issue 362.8 337.8 340.0
Weighted averages shares held by ESOP (1.1) (2.4) (1.5)
Weighted average shares used for
calculation
of underlying and adjusted earnings per 361.7 335.4 338.5
share
(b) Net assets per share
As at 31 March 2007 As at 31 December 2006
GBPm GBPm
Basic net asset value 5,008.5 4,732.4
Fair value of derivative
financial instruments
(net of tax) (9.8) 80.4
Deferred tax on revaluation
surpluses 34.1 32.1
Deferred tax on capital
allowances 31.3 31.8
Unrecognised surplus on
trading properties
(net of tax) 4.9 4.7
5,069.0 4,881.4
Effect of dilution:
On conversion of bonds 109.5 108.7
On exercise of options 11.6 12.3
Diluted net asset value 5,190.1 5,002.4
As at 31 March 2007 As at 31 December
Number 2006
millions Number
millions
Shares in issue, excluding those
held by
ESOP trust and treated as
cancelled 361.8 361.7
Effect of dilution:
On conversion of bonds 13.9 13.9
On exercise of options 1.4 1.5
Diluted shares in issue 377.1 377.1
(c) Convertible debt
3.95 per cent convertible bonds due 2010 At 31 March 2007 and 31 December 2006
3.95 per cent convertible bonds with a nominal value of GBP111.3 million
were in issue.
The holders of the 3.95 per cent bonds have the option to convert their bonds
into ordinary shares at any time on or up to 23 September 2010 at 800p per
ordinary share. The 3.95 per cent bonds may be redeemed at par at the company`s
option after 14 October 2008.
NOTES (Continued)
8 Summary of changes in equity
Three months ended 31 Year ended 31
March 2007 December 2006
GBPm GBPm
Opening equity shareholders` funds 4,732.4 2,933.1
Issue of shares 1.1 342.4
Cancellation of shares - (1.0)
4,733.5 3,274.5
Underlying profit for the period 35.4 114.9
Trading, valuation and
exceptional items and related tax 237.3 1,449.2
Profit for the period 272.7 1,564.1
Actuarial gains on defined
benefit pension schemes - 0.7
Tax on items taken directly to
equity - (4.9)
2.3 (4.6)
Net exchange translation
differences and other movements
Total recognised income and
expense for the period 275.0 1,555.3
5,008.5 4,829.8
Dividends paid - (97.4)
Closing equity shareholders` funds 5,008.5 4,732.4
Date: 02/05/2007 08:00:01 Produced by the JSE SENS Department.
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