Berkeley Group Regulatory News (BKG)

7 Dec 2007 07:01

Berkeley Group Holdings (The) PLC07 December 2007 Statement of Directors' Responsibilities This statement, which should be read in conjunction with the independent reviewof the auditors set out at the end of this condensed set of interim financialstatements (the "interim financial statements"), is made to enable shareholdersto distinguish the respective responsibilities of the Directors and the auditorsin relation to the interim financial statements which the Directors confirm hasbeen presented on a going concern basis. The Directors consider that the Grouphas used appropriate accounting policies, consistently applied and supported byreasonable and appropriate judgements and estimates. A copy of the interim financial statements of the Group is placed on the websiteof The Berkeley Group Holdings: www.berkeleygroup.co.uk. The Directors areresponsible for the maintenance and integrity of the information on the website.Information published on the internet is accessible in many countries withdifferent legal requirements. Legislation in the United Kingdom governing thepreparation and dissemination of the financial statements may differ fromlegislation in other jurisdictions. The Directors confirm that this condensed set of interim financial statementshas been prepared in accordance with IAS 34 as adopted by the European Union,and that the interim management report herein includes a fair review of theinformation required by the Disclosure and Transparency Rules 4.2.7 and 4.2.8. The Directors of The Berkeley Group Holdings plc are listed in The BerkeleyGroup Holdings plc Annual Report for 30 April 2007, with the exception of thefollowing changes in the period: Mr R S J H Lewis resigned as an ExecutiveDirector and Group Chairman on 31 July 2007. Mrs V M Mitchell, an existingNon-executive Director, was appointed Group Chairman on 1 August 2007. Mr J AArmitt was appointed as a Non-executive Director on 1 October 2007. A list ofcurrent Directors is maintained on The Berkeley Group Holdings website. By order of the Board A W Pidgley7 December 2007Managing Director R C Perrins7 December 2007Finance Director Consolidated Income Statement Six months Six months Year ended ended ended 31 October 31 October 30 April 2007 2006 2007 Unaudited Unaudited Audited Notes £'000 £'000 £'000===================================================================================Continuing operationsRevenue 4(a) 441,372 381,153 918,410Cost of sales (299,968) (271,311) (649,549)___________________________________________________________________________________Gross profit 141,404 109,842 268,861Net operating expenses (46,657) (39,438) (91,789)___________________________________________________________________________________Operating profit 4(b) 94,747 70,404 177,072Finance income 5 4,155 5,797 10,121Finance costs 5 (6,793) (794) (5,941)Share of post tax results of joint ventures using the equity method 4(c) (1,463) 6,052 6,798___________________________________________________________________________________Profit before taxation 90,646 81,459 188,050Taxation 6 (27,251) (21,560) (52,505)___________________________________________________________________________________Profit after taxation 63,395 59,899 135,545===================================================================================Earnings per Ordinary Share - Basic 7 52.6p 49.8p 112.6p - Diluted 7 52.5p 49.6p 112.3p=================================================================================== Consolidated Statement of Recognised Income and Expense Six months Six months Year ended ended ended 31 October 31 October 30 April 2007 2006 2007 Unaudited Unaudited Audited £'000 £'000 £'000===================================================================================Profit for the financial period 63,395 59,899 135,545Actuarial (loss) / gain recognised in the pension scheme (259) (673) 961Deferred tax on actuarial (loss) / gain recognised in the pension scheme 78 202 (288)Deferred tax in respect of employee share schemes 3,300 7,730 23,850___________________________________________________________________________________Total recognised income for the period 66,514 67,158 160,068=================================================================================== Consolidated Balance Sheet At At At 31 October 31 October 30 April 2007 2006 2007 Unaudited Unaudited Audited Notes £'000 £'000 £'000===================================================================================AssetsNon-current assetsIntangible assets 18,551 - 19,686Property, plant and equipment 4,356 2,123 2,368Investments accounted for using equity method 1,779 61,546 1,729Deferred tax assets 43,494 25,446 34,594___________________________________________________________________________________ 68,180 89,115 58,377___________________________________________________________________________________ Current assetsInventories 1,099,216 754,788 1,057,994Trade and other receivables 50,529 26,280 27,601Cash and cash equivalents 170,175 322,047 140,330___________________________________________________________________________________ 1,319,920 1,103,115 1,225,925___________________________________________________________________________________ LiabilitiesCurrent liabilitiesBorrowings (57,433) (85) (59,368)Trade and other payables (353,780) (231,496) (341,860)Current tax liabilities (39,881) (31,956) (38,680)___________________________________________________________________________________ (451,094) (263,537) (439,908)___________________________________________________________________________________Net current assets 868,826 839,578 786,017___________________________________________________________________________________Total assets less current liabilities 937,006 928,693 844,394___________________________________________________________________________________Non-current liabilitiesRetirement benefit obligation - (1,773) -Other non-current liabilities (86,112) (19,767) (62,819)___________________________________________________________________________________ (86,112) (21,540) (62,819)___________________________________________________________________________________Net assets 850,894 907,153 781,575=================================================================================== Shareholders' equityShare capital 18,123 24,164 18,123Share premium 264 264 264Capital redemption reserve 12,132 6,091 12,132Other reserve (961,299) (961,299) (961,299)Revaluation reserve 13,814 - 17,725Retained profit 1,768,992 1,805,405 1,694,299Joint ventures' reserves (1,132) 32,528 331___________________________________________________________________________________Total equity 8 850,894 907,153 781,575=================================================================================== Consolidated Cash Flow Statement Six months Six months Year ended ended ended 31 October 31 October 30 April 2007 2006 2007 Unaudited Unaudited Audited Notes £'000 £'000 £'000=================================================================================== Cash flows from operating activitiesCash generated from operations 9 66,830 103,786 199,053Dividends from joint ventures - 6,016 6,016Interest received 4,155 5,797 10,121Interest paid (3,691) (64) (2,716)Tax paid (31,572) (21,422) (51,540)___________________________________________________________________________________Net cash flow from operating activities 35,722 94,113 160,934___________________________________________________________________________________ Cash flows from investing activitiesPurchase of property, plant and equipment (2,557) (747) (1,183)Sale of property, plant and equipment 128 206 345Purchase of shares in joint ventures (70) - (5)Sale of shares in joint ventures - 10 10Movements in loans with joint ventures (1,443) 7,795 6,528Acquisition of subsidiary undertaking - - (97,457)Cash balance in subsidiary acquired - - 34,658Expenses relating to acquisition of subsidiary - - (1,812)___________________________________________________________________________________Net cash flow from investing activities (3,942) 7,264 (58,916)___________________________________________________________________________________ Cash flows from financing activitiesRedemption of shares - - (241,641)(Decrease) / Increase in short-term borrowings (1,935) - 59,283___________________________________________________________________________________Net cash flow from financing activities (1,935) - (182,358)___________________________________________________________________________________ Net increase / (decrease) in cash and cash equivalents 29,845 101,377 (80,340)Cash and cash equivalents at the start of the period 140,330 220,670 220,670___________________________________________________________________________________Cash and cash equivalents at the end of the period 170,175 322,047 140,330=================================================================================== Notes to condensed consolidated half-yearly financial information 1 General information The Company is a limited liability company incorporated and domiciled in theUnited Kingdom. The address of its registered office is Berkeley House, 19Portsmouth Road, Cobham, Surrey, KT11 1JG. This condensed consolidated half-yearly financial information was approved forissue on 7 December 2007. These interim financial results do not comprise statutory accounts within themeaning of Section 240 of the Companies Act 1985. Statutory accounts for theyear ended 30 April 2007 were approved by the Board of Directors on 19 July 2007and delivered to the Registrar of Companies. The report of the auditors on thoseaccounts was unqualified, did not contain an emphasis of matter paragraph anddid not contain any statement under Section 237 of the Companies Act 1985. 2 Basis of preparation This condensed consolidated half-yearly financial information for the six monthsended 31 October 2007 has been prepared in accordance with the Disclosure andTransparency Rules of the Financial Services Authority and with IAS 34 'Interimfinancial reporting' as adopted by the European Union. This half-yearlycondensed consolidated financial report should be read in conjunction with theannual financial statements for the year ended 30 April 2007, which have beenprepared in accordance with International Financial Reporting Standards asadopted by the European Union. 3 Accounting policies The accounting policies adopted are consistent with those of the annualfinancial statements for the year ended 30 April 2007, as described in thoseannual financial statements. The following new standards, amendments to standards or interpretations aremandatory for the first time for the financial year ending 30 April 2008: • IFRS 7 "Financial Instruments: Disclosures" and the Amendments to IAS 1 "Presentation of Financial Statements: Capital Disclosures";• IFRIC9 "Reassessment of Embedded Derivatives";• IFRIC10 "Interim Financial Reporting and Impairment". The adoption of these standards has no impact on the consolidated financialstatements, with the exception of the adoption of IFRS 7 which will require theadoption of certain new disclosures in the consolidated financial statements forthe year ending 30 April 2008. The following new standards, amendments to standards and interpretations havebeen issued, but are not effective for the financial year ending 30 April 2008and have not been early adopted: • IFRS 8 "Operating Segments";• IFRIC11 "IFRS2- Group and Treasury Share Transactions";• IFRIC12 "Service Concession Arrangements";• IAS 23 (Amendment) "Borrowing Costs". These standards are not expected to have a significant impact on theconsolidated financial statements. 4 Segmental reporting Six months Six months Year ended ended ended 31 October 31 October 30 April 2007 2006 2007 Unaudited Unaudited Audited Continuing operations £'000 £'000 £'000===================================================================================(a) Revenue Residential housebuilding 422,084 375,223 867,944 Commercial property and other activities 19,288 5,930 50,466___________________________________________________________________________________ 441,372 381,153 918,410___________________________________________________________________________________ (b) Operating profit Residential housebuilding 89,763 69,191 170,097 Commercial property and other activities 4,984 1,213 6,975___________________________________________________________________________________ 94,747 70,404 177,072___________________________________________________________________________________ (c) Share of post tax results of joint ventures Residential housebuilding (1,463) 6,012 6,751 Commercial property and other activities - 40 47___________________________________________________________________________________ (1,463) 6,052 6,798=================================================================================== All revenue and profit disclosed in the table above relate to continuingactivities of the Group and are derived from activities performed in the UnitedKingdom. Included in Group residential housebuilding revenue and operatingprofit are £13,106,000 and £717,000 in respect of land sales (2006: £3,247,000and £1,631,000). 5 Net finance costs Six months Six months Year ended ended ended 31 October 31 October 30 April 2007 2006 2007 Unaudited Unaudited Audited Continuing operations £'000 £'000 £'000=================================================================================== Finance income 4,155 5,797 10,121___________________________________________________________________________________Finance costsInterest payable on bank loans and overdrafts (1,740) (291) (3,000)Bank facility refinancing costs (1,792) - -Other finance costs (3,261) (503) (2,941)___________________________________________________________________________________ (6,793) (794) (5,941)___________________________________________________________________________________Net finance (costs) / income (2,638) 5,003 4,180=================================================================================== 6 Taxation Six months Six months Year ended ended ended 31 October 31 October 30 April 2007 2006 2007 Unaudited Unaudited Audited Continuing operations £'000 £'000 £'000=================================================================================== Current taxUK corporation tax payable (33,451) (21,909) (63,107)Adjustments in respect of previous periods 678 1,120 4,611___________________________________________________________________________________ (32,773) (20,789) (58,496)Deferred tax 5,522 (771) 5,991___________________________________________________________________________________ (27,251) (21,560) (52,505)=================================================================================== 7 Earnings per Ordinary Share Earnings per Ordinary Share is based on the profit for the financial period of£63,395,000 (2006: £59,899,000) and the weighted average number of OrdinaryShares in issue during the period of 120,598,836 (2006: 120,246,800). Fordiluted earnings per Ordinary Share, the weighted average number of OrdinaryShares in issue is adjusted to assume the conversion of all dilutive potentialOrdinary Shares. The dilutive potential Ordinary Shares relate to shares grantedunder employee share schemes where the exercise price is less than the averagemarket price of the Ordinary Shares during the period. The effect of thedilutive potential Ordinary Shares is 141,371 shares (2006: 463,133), whichgives a diluted weighted average number of Ordinary Shares of 120,740,207 (2006:120,709,933). 8 Statement of Changes in Shareholders' Equity Capital Joint Share Share redemption Other Revaluation Retained ventures' capital premium reserve reserve reserve profit reserves Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000UnauditedAt 1 May 2007 18,123 264 12,132 (961,299) 17,725 1,694,299 331 781,575Profit/(loss) for the financial period - - - - - 64,858 (1,463) 63,395Reserves transfer fromrevaluation reserve - - - - (3,911) 3,911 - -Actuarial loss recognised inthe pension scheme - - - - - (259) - (259)Deferred tax on actuarial lossrecognised in the pensionscheme - - - - - 78 - 78Credit in respect ofemployee share schemes - - - - - 2,805 - 2,805Deferred tax in respect ofemployee share schemes - - - - - 3,300 - 3,300___________________________________________________________________________________________________________________At 31 October 2007 18,123 264 12,132 (961,299) 13,814 1,768,992 (1,132) 850,894=================================================================================================================== UnauditedAt 1 May 2006 24,164 264 6,091 (961,299) - 1,735,475 32,495 837,190Profit for the financial period - - - - - 53,847 6,052 59,899Dividends received fromjoint ventures - - - - - 6,019 (6,019) -Actuarial loss recognised inthe pension scheme - - - - - (673) - (673)Deferred tax on actuarial loss recognised in the pension scheme - - - - - 202 - 202Credit in respect ofemployee share schemes - - - - - 2,805 - 2,805Deferred tax in respect ofemployee share schemes - - - - - 7,730 - 7,730___________________________________________________________________________________________________________________At 31 October 2006 24,164 264 6,091 (961,299) - 1,805,405 32,528 907,153===================================================================================================================AuditedAt 1 May 2006 24,164 264 6,091 (961,299) - 1,735,475 32,495 837,190Profit for the financial year - - - - - 128,747 6,798 135,545Acquisition of subsidiary - - - - 20,297 32,946 (32,946) 20,297Dividends received fromjoint ventures - - - - - 6,016 (6,016) -Reserves transfer fromrevaluation reserve - - - - (2,572) 2,572 - -Redemption of shares (6,041) - 6,041 - - (241,641) - (241,641)Actuarial gain recognised inthe pension scheme - - - - - 961 - 961Deferred tax on actuarial gain recognised in the pension scheme - - - - - (288) - (288)Credit in respect ofemployee share schemes - - - - - 5,661 - 5,661Deferred tax in respect ofemployee share schemes - - - - - 23,850 - 23,850___________________________________________________________________________________________________________________At 30 April 2007 18,123 264 12,132 (961,299) 17,725 1,694,299 331 781,575=================================================================================================================== 9 Notes to the Consolidated Cash Flow Statement Six months Six months Year ended ended ended 31 October 31 October 30 April 2007 2006 2007 Unaudited Unaudited Audited £'000 £'000 £'000===================================================================================Net cash flows from operating activities Continuing operationsProfit for the financial period 63,395 59,899 135,545Adjustments for:- Taxation 27,251 21,560 52,505- Depreciation 491 665 1,278- Amortisation of intangible assets 1,135 - 746- Loss/(profit) on sale of property, plant and equipment (50) 5 (34)- Finance income (4,155) (5,797) (10,121)- Finance costs 6,793 794 5,941- Share of results of joint ventures after tax 1,463 (6,052) (6,798)- Non-cash charge in respect of share awards 2,805 2,805 5,661Changes in working capital:- (Increase)/decrease in inventories (41,222) 9,085 18,385- (Increase)/decrease in receivables (22,928) (2,588) 5,354- Increase in payables 32,122 32,801 216- Decrease in employee benefit obligations (270) (9,391) (9,625)___________________________________________________________________________________Cash generated from continuing operations 66,830 103,786 199,053=================================================================================== Reconciliation of net cash flow to netcashNet increase/(decrease) in cash and cash equivalents 29,845 101,377 (80,340)Cash outflow/(inflow) from decrease/ (increase) in borrowings 1,935 - (59,283)___________________________________________________________________________________Movement in net cash in the period 31,780 101,377 (139,623)Opening net cash 80,962 220,585 220,585___________________________________________________________________________________Closing net cash 112,742 321,962 80,962=================================================================================== At At At 31 October 31 October 30 April 2007 2006 2007 Unaudited Unaudited Audited £'000 £'000 £'000===================================================================================Net cashCash and cash equivalents 170,175 322,047 140,330Borrowings (57,433) (85) (59,368)___________________________________________________________________________________Net cash 112,742 321,962 80,962=================================================================================== 10 Contingent liabilities The Group has guaranteed bank facilities of £2,500,000 (2006: £2,500,000) injoint ventures. The Group has guaranteed road and performance agreements in the ordinary courseof business of £86,369,000 (31 October 2006: £18,765,000; 30 April 2007:£45,563,000). 11 Related party transactions The Group has entered into the following related party transactions: a) Charges made for goods and services supplied to joint ventures During the financial period £6,000 (2006 £1,965,000) was charged to jointventures for goods and services supplied. b) Transactions with Directors During the financial period, each of Mr A W Pidgley and Mr R C Perrins paid£306,000 and £34,000 respectively to Berkeley Homes plc for works carried out attheir homes under the Group's own build scheme. There were no balancesoutstanding at the half year end. c) Investment with Saad Investments Company Limited In May 2007 the establishment of three joint venture companies, Saad BerkeleyRegeneration Limited, Saad Berkeley Developments Limited and Saad BerkeleyInvestments Limited was completed. The joint venture partner is Saad InvestmentsCompany Limited ('Saad') and, as Saad is currently a 29.4% shareholder in TheBerkeley Group Holdings plc, is considered a related party. During the six month period, the Group invested £1,131,000 in the three privatejoint venture companies through a combination of share capital and shareholderloans. Independent review report to The Berkeley Group Holdings plc Introduction We been engaged by the company to review the condensed set of financialstatements in the half-yearly financial report for the six months ended 31October 2007, which comprises the Consolidated Income Statement, theConsolidated Statement of Recognised Income and Expense, the ConsolidatedBalance Sheet, the Consolidated Cash Flow Statement and related notes. We haveread the other information contained in the half-yearly financial report andconsidered whether it contains any apparent misstatements or materialinconsistencies with the information in the condensed set of financialstatements. Directors' responsibilities The half-yearly financial report is the responsibility of, and has been approvedby, the Directors. The Directors are responsible for preparing the half-yearlyfinancial report in accordance with the Disclosure and Transparency Rules of theUnited Kingdom's Financial Services Authority. As disclosed in note 2, the annual financial statements of the group areprepared in accordance with IFRSs as adopted by the European Union. Thecondensed set of financial statements included in this half-yearly financialreport has been prepared in accordance with International Accounting Standard34, "Interim Financial Reporting", as adopted by the European Union. Our responsibility Our responsibility is to express to the company a conclusion on the condensedset of financial statements in the half-yearly financial report based on ourreview. This report, including the conclusion, has been prepared for and onlyfor the company for the purpose of the Disclosure and Transparency Rules of theFinancial Services Authority and for no other purpose. We do not, in producingthis report, accept or assume responsibility for any other purpose or to anyother person to whom this report is shown or into whose hands it may come savewhere expressly agreed by our prior consent in writing. Scope of review We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, 'Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity' issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly, wedo not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believethat the condensed set of financial statements in the half-yearly financialreport for the six months ended 31 October 2007 is not prepared, in all materialrespects, in accordance with International Accounting Standard 34 as adopted bythe European Union and the Disclosure and Transparency Rules of the UnitedKingdom's Financial Services Authority. PricewaterhouseCoopers LLPChartered AccountantsLondon7 December 2007 This information is provided by RNS The company news service from the London Stock Exchange