British Land Regulatory News (BLND)

Consolidated Income Statement

for the year ended 31 March 2013

2013

2012

Underlying

Capital

Underlying

Capital

pre-tax*

and other

Total

pre-tax*

and other

Total

Note

£m

£m

£m

£m

£m

£m

Gross rental and related income

3

329

-

329

332

-

332

Net rental and related income

3

281

-

281

286

-

286

Fees and other income

4

15

-

15

16

-

16

Joint ventures and funds (see also below)

130

(63)

67

113

69

182

Administrative expenses

(72)

-

(72)

(69)

-

(69)

Net valuation movement (includes result on disposals)

5

-

88

88

-

143

143

Financing costs

- financing income

6

21

2

23

24

2

26

- financing charges

6

(101)

(41)

(142)

(101)

(4)

(105)

(80)

(39)

(119)

(77)

(2)

(79)

Profit (loss) on ordinary activities before taxation

274

(14)

260

269

210

479

Taxation

- current tax income (expense)

7

8

8

(2)

(2)

- deferred tax income

7

16

16

3

3

24

24

1

1

Profit for the year after taxation attributable to shareholders of the Company

284

480

Earnings per share:

-

basic

2

31.7

p

54.1

p

-

diluted

2

31.5

p

53.8

p

Share of results of joint ventures and funds

Underlying profit before taxation

130

-

130

113

-

113

Net valuation movement (includes result on disposals)

-

(62)

(62)

-

72

72

Non-recurring items

-

(4)

(4)

-

(3)

(3)

Current tax income (expense)

-

2

2

-

(1)

(1)

Deferred tax income

-

1

1

-

1

1

Share of results of joint ventures and funds

9

130

(63)

67

113

69

182

All results derive from continuing operations.

*As defined in note 2

Consolidated Statement of Comprehensive Income

for the year ended 31 March 2013

2013

2012

£m

£m

Profit for the year after taxation

284

480

Other comprehensive income:

Items that will not be reclassified subsequently to profit or loss:

Net actuarial loss on pension scheme

(2)

(3)

(2)

(3)

Items that may be reclassified subsequently to profit or loss:

Losses on cash flow hedges

- Group

(16)

(65)

- Joint ventures and funds

(6)

(50)

(22)

(115)

Transferred to the income statement (cash flow hedges)

- foreign currency derivatives

(5)

-

- interest rate derivatives

26

18

21

18

Exchange differences on translation of foreign operations

- hedging and translation

(4)

9

- other

6

(8)

2

1

Other comprehensive loss for the year

(1)

(99)

Total comprehensive income for the year attributable to shareholders of the Company

283

381

Consolidated Balance Sheet

as at 31 March 2013

2013

2012*

Note

£m

£m

ASSETS

Non-current assets

Investment and development properties

8

5,488

5,346

Owner-occupied property

8

42

41

5,530

5,387

Other non-current assets

Investments in joint ventures and funds

9

2,336

2,191

Other investments

10

76

28

Interest rate derivative assets

15

92

73

8,034

7,679

Current assets

Trading properties

8

40

47

Debtors

11

60

95

Liquid investments

15

-

200

Cash and short-term deposits

15

135

137

235

479

Total assets

8,269

8,158

LIABILITIES

Current liabilities

Short-term borrowings and overdrafts

15

(44)

(49)

Creditors

12

(259)

(261)

Corporation tax

(17)

(23)

(320)

(333)

Non-current liabilities

Debentures and loans

15

(2,134)

(2,572)

Other non-current liabilities

13

(26)

(25)

Deferred tax liabilities

14

(16)

(32)

Interest rate derivative liabilities

15

(86)

(92)

(2,262)

(2,721)

Total liabilities

(2,582)

(3,054)

Net assets

5,687

5,104

Equity

Share capital

18

249

225

Share premium

1,242

1,237

Merger reserve

213

-

Other reserves

(163)

(164)

Retained earnings

4,146

3,806

Total equity attributable to shareholders of the Company

5,687

5,104

EPRA NAV per share**

2

596

p

595

p

* Comparatives have been re-presented, see note 1.

** As defined in note 2.

Consolidated Statement of Cash Flows

for the year ended 31 March 2013

2013

2012

Note

£m

£m

Rental income received from tenants

266

271

Fees and other income received

19

21

Operating expenses paid to suppliers and employees

(88)

(81)

Cash generated from operations

197

211

Interest paid

(113)

(89)

Interest received

31

17

UK corporation tax received

1

3

Distributions and other receivables from joint ventures and funds

74

64

Net cash inflow from operating activities

190

206

Cash flows from investing activities

Development and other capital expenditure

(230)

(106)

Purchase of investment properties

(442)

(382)

Sale of investment properties

699

59

Purchase of investments

-

(22)

Sale of investments

2

-

Deferred consideration received

18

12

Investment in and loans to joint ventures and funds

(318)

(110)

Capital distributions received from joint ventures and funds

72

-

Indirect taxes (paid) received in respect of investing activities

(3)

2

Net cash outflow from investing activities

(202)

(547)

Cash flows from financing activities

Issue of ordinary shares

493

-

Dividends paid

16

(203)

(212)

Closeout of interest rate derivatives

4

-

Movement in other financial liabilities

2

(4)

Disposal of liquid investments

15

210

-

Decrease in bank and other borrowings

(889)

(406)

Drawdowns on bank and other borrowings

-

1,040

Proceeds on convertible bond issue

393

-

Net cash inflow from financing activities

10

418

Net (decrease) increase in cash and cash equivalents

(2)

77

Cash and cash equivalents at 1 April

137

60

Cash and cash equivalents at 31 March

135

137

Cash and cash equivalents consists of:

Cash and short-term deposits

15

135

137

Consolidated Statement of Changes in Equity

 for the year ended 31 March 2013

Hedging and

Share

Share

translation

Revaluation

Merger

Retained

capital

*

premium

reserve

*

reserve

*

reserve

*

earnings

Total

£m

£m

£m

**

£m

£m

£m

Balance at 1 April 2012

225

1,237

(72)

(92)

-

3,806

5,104

Profit for the year after taxation

-

-

-

-

-

284

284

Losses on cash flow hedges

-

-

(16)

-

-

-

(16)

Joint ventures and funds revaluations

-

-

-

(6)

-

-

(6)

Reclassification of losses on cash flow hedges

- foreign currency derivatives

-

-

(5)

-

-

-

(5)

- interest rate derivatives

-

-

26

-

-

-

26

Exchange differences on translation of foreign operations

-

-

(4)

6

-

-

2

Net actuarial loss on pension schemes

-

-

-

-

-

(2)

(2)

Other comprehensive income (loss)

-

-

1

-

-

(2)

(1)

Total comprehensive income for the year

-

-

1

-

-

282

283

Share issues

24

5

-

-

464

-

493

Adjustment for share and share option awards

-

-

-

-

-

9

9

Dividends payable in year (26.3p per share)

-

-

-

-

-

(234)

(234)

Transfer

-

-

-

-

(251)

251

-

Adjustment for scrip dividend element

-

-

-

-

-

32

32

Balance at 31 March 2013

249

1,242

(71)

(92)

213

4,146

5,687

Balance at 1 April 2011

224

1,237

(34)

(34)

-

3,537

4,930

Profit for the year after taxation

-

-

-

-

-

480

480

Losses on cash flow hedges

-

-

(65)

-

-

-

(65)

Joint ventures and funds revaluations

-

-

-

(50)

-

-

(50)

Reclassification of losses on cash flow hedges

- interest rate derivatives

-

-

18

-

-

-

18

Exchange differences on translation of foreign operations

-

-

9

(8)

-

-

1

Net actuarial loss on pension schemes

-

-

-

-

-

(3)

(3)

Other comprehensive loss

-

-

(38)

(58)

-

(3)

(99)

Total comprehensive (loss) income for the year

-

-

(38)

(58)

-

477

381

Share issues

1

-

-

-

-

-

1

Adjustment for share and share option awards

-

-

-

-

-

5

5

Dividends payable in year (26.0p per share)

-

-

-

-

-

(231)

(231)

Adjustment for scrip dividend element

-

-

-

-

-

18

18

Balance at 31 March 2012

225

1,237

(72)

(92)

-

3,806

5,104

* refer to note 18.

** The balance at 1 April 2012 includes £11m relating to foreign exchange and (£83m) relating to hedging.

Notes to the accounts

 for the year ended 31 March 2013

1. Basis of preparation

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 March 2013 or 2012, but is derived from those accounts. Statutory accounts for 2012 have been delivered to the Registrar of Companies and those for 2013 will be delivered following the Company's annual general meeting. The auditor has reported on those accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis and did not contain statements under s498(2) or (3) of Companies Act 2006 or equivalent preceding legislation.

The financial statements for the year ended 31 March 2013 have been prepared on the historical cost basis, except for the revaluation of properties, investments and derivatives. The financial statements have also been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and therefore comply with Article 4 of the EU IAS Regulation.

While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of IFRSs, this announcement does not itself contain sufficient information to comply with IFRSs. The Company expects to publish full financial statements that comply with IFRSs in June 2013.

The accounting policies used are consistent with those contained in the Group's last annual report and accounts for the year ended 31 March 2012. Standards and interpretations issued but not effective for the current accounting period were: IFRS 9 - Financial Instruments; IFRS 10 - Consolidated Financial Statements; IFRS 11 - Joint Arrangements; IFRS 12 - Disclosure of Interests in Other Entities; IFRS 13 - Fair Value Measurement; IAS 1 (amended) - Presentation of Items of Other Comprehensive Income; IAS 12 (amended) - Deferred Tax: recovery of assets; IAS 19 (revised) - Employee Benefits; IAS 27 (revised) - Separate Financial Statements; IAS 28 (revised) - Investments in Associates and Joint Ventures and IAS 32 (amended) - Financial Instruments: Presentation.

The balance sheet has been re-presented to show interest rate derivative assets, interest rate derivative liabilities and corporation tax creditor on the face of the balance sheet, in accordance with IAS 1. Comparatives on the balance sheet and in the notes to the accounts have been re-presented accordingly. The tax withheld on dividends, previously disclosed within corporation tax creditors, has been re-presented in other taxation and social security.

The Directors do not expect that the adoption of the standards listed above will have a material impact on the financial statements of the Group in future periods except as follows: IFRS 9 will impact both the measurement and disclosures of financial instruments; IFRS 12 will impact the disclosure of interests the Group has in other entities; IFRS 13 will impact the disclosure of fair value measurements and IAS 19 (revised) will impact the measurement of the various components representing movements in the defined benefit pension obligation.

The financial statements have been prepared on the going concern basis as stated in the directors' responsibility statement.

2. Performance measures

2013

2012

Earnings per share (diluted)

Earnings

Penceper share

Earnings

Penceper share

£m

£m

Underlying pre-tax profit - income statement

274

269

Tax charge relating to underlying profit

(1)

(4)

Underlying earnings

273

30.3

p

265

29.7

p

Mark-to-market on / profit on disposal of liquid investments (held for trading assets)

9

(3)

Mark-to-market on convertible bond

(7)

-

Non-recurring items*

(7)

-

EPRA earnings

268

29.7

p

262

29.4

p

Profit for the year after taxation

284

31.5

p

480

53.8

p

*Non-recurring items for the year ended 31 March 2013 relate to £7m of issue costs for the convertible bond.

The European Public Real Estate Association (EPRA) issued Best Practices Recommendations most recently in September 2011 and additional guidance in January 2013, which gives guidelines for performance measures. Comparatives have been re-presented in line with the additional guidance. The EPRA earnings measure excludes investment property revaluations and gains or losses on disposals, intangible asset movements and their related taxation. A summary of the EPRA Performance Measures is provided in table B within the Supplementary Disclosures.

Underlying earnings consists of the EPRA earnings measure, with additional company adjustments. Adjustments include mark-to-market adjustments on, or profits on disposal of, held for trading assets, mark-to-market adjustments on the convertible bond and issue costs of the convertible bond.

The weighted average number of shares in issue for the year was: basic: 895m (2012: 887m); diluted for the effect of share options: 901m (2012: 892m). Basic undiluted earnings per share for the year, calculated using profit for the year after taxation of £284m (2012: £480m), was 31.7p (2012: 54.1p). Earnings per share shown in the table above are diluted.