Philip Rogerson Chairman

Transcription

1 1 Philip Rogerson Chairman 2 Chris Girling Finance Director

2 IFRS 3! Mandatory from 1 January 2005! financial information restated for full and half year (copy in handout)! Based on published standards and interpretations issued by IASB to date! Some standards still uncertain e.g. accounting for PPP concessions Summary of restatement 4 H1 UK GAAP IFRS FY UK GAAP IFRS PBT ( m) PBT* ( m) Eps (pence) Eps* (pence) Net assets ( m) (19.1) 19.9 (11.9) (6.4) 54.7 (8.5) * Before exceptional items and goodwill amortisation in respect of UK GAAP goodwill impairment in respect of IFRS

3 Summary of impacts 5! No effect on underlying cash flows trading ability to pay dividends! Increase in PBT due to different treatment of goodwill! Increase in H1 PBT pre exceptionals and goodwill due to different treatment of pension prepayment! Minimal effect on FY PBT preexceptionals and goodwill! Net assets reduced, primarily due to bringing pension deficit on to balance sheet IFRS 1 options adopted 6! IFRS 3 Business Combinations not applied to acquisitions prior to 1 January! Cumulative value of foreign exchange differences in reserves at 1 January deemed to be zero! Cumulative actuarial gains and losses arising on valuations of pension scheme assets and liabilities are recognised in full at 1 January

4 IFRS 1 options adopted 7! IFRS 2 Sharebased payments not applied to share options granted on or before 7 November 2002! IAS 32 and IAS 39 Financial Instruments not adopted for restated information Key standards 8! IAS 19 Employee benefits! IFRS 2 Sharebased payments! IAS 12 Income taxes! IAS 21 Foreign currencies! IAS 10 Events after balance sheet date! IFRS 3 Business combinations! IAS 32 & 39 Financial instruments! IAS 1 Presentation of financial statements

5 IAS 19 Employee benefits 9 Effects on UK GAAP m PBT PBT* Net assets H (65.2) FY (69.3) * Before exceptionals and goodwill impairment IAS 19 Pensions 10! Positive impact on PBT due to reversing the 7.2m cost of writing off a pension prepayment relating to rail maintenance employees transferred to Network Rail! Net assets reduced by c 60m due to bringing pension deficit onto balance sheet ( 85.2m deficit less deferred tax of 25.5m)! Net assets reduced by c 10m due to writingoff other remaining SSAP 24 prepayments! 2005 P&L charge expected to be similar to SSAP 24! IAS19 P&L charge potentially more volatile

6 IFRS 2 Share based payments 11 Effects on UK GAAP m PBT PBT* Net assets (0.3) (0.3) 0.6 * Before exceptionals and goodwill impairment IFRS 2 Share based payment 12! Fair value cost of share based payments to be expensed! Applied to schemes starting after 7 November 2002! Minimal impact on! Small movement in PBT and net assets due to inclusion of all share based payments! Cost of providing share based payments in 2005 expected to be c 0.6m

7 IAS 12 Income taxes 13 Effects on UK GAAP m PBT PBT* Net assets (2.9) * Before exceptionals and goodwill impairment IAS 12 Income taxes 14! One change to calculation of tax! Deferred tax provision now required for unremitted earnings of overseas entities! Expect minimal further impact on net assets in 2005

8 IAS 21 Foreign Currencies 15 Effects on UK GAAP m PBT PBT* Net assets * Before exceptionals and goodwill impairment IAS 21 Foreign Currencies 16! Replaces SSAP 20 under which Carillion opted to translate income and expenses of overseas entities at exchange rates on balance sheet date! Under IAS 21 average exchange rates used to translate income and expenses! No effect on net assets as these are still calculated at exchange rates at balance sheet date! Impact in 2005 depends on exchange rates, but expected to be minimal

9 IAS 10 Events after balance sheet date Effects on UK GAAP 17 m PBT PBT* Net assets 10.1 * Before exceptionals and goodwill impairment IAS 10 Events after balance sheet date 18! IAS 10 similar to SSAP 17 except for accounting treatment of dividends! No longer accrue for dividends that are to be approved beyond balance sheet date! Impact on 2005 onwards inline with dividend

10 IFRS 3 Business Combinations 19 Effects on UK GAAP m PBT PBT* Net assets * Before exceptionals and goodwill impairment IFRS 3 Business Combinations 20! Replaces goodwill amortisation with annual impairment testing! Goodwill written off to reserves under UK GAAP no longer recycled through P&L when businesses to which it relates are sold! Intangible assets will continue to be amortised

11 IFRS 3 Business Combinations 21! Reversing goodwill amortisation in increases PBT by 3.6m ( 3.9m of amortisation less 0.3m impairment) net assets by 3.2m ( 3.6m less tax of 0.4m)! Reversing goodwill previously written off to reserves increases PBT by 68.7m! Going forward, impacts depend on impairment testing and acquisitions that generate intangible assets! PME acquisition generated mostly goodwill IAS 32 & 39 Financial Instruments 22! IAS 32 deals with disclosure and presentation! IAS 39 deals with recognition and measurement! Elected under IFRS 1 not to restate information! Requires fair value of derivative financial instruments to be included on balance sheet! Applies to interest rate swaps on PPP loans reduces net assets by 10m at 1 Jan 2005, net of deferred tax

12 Draft IFRIC on Accounting for Concessions! Draft guidance issued in March 2005! Final interpretation due second half of 2005! Key issue is treatment of PPP investments! From 1 Jan 2005, intend to recognise these assets at amortised cost as permitted by IAS 39 i.e. no change to current treatment! Alternative is to measure these assets at fair value! If final interpretation requires measurement at fair value, there will be a significant increase in the carrying value of these assets. 23 IAS 1 Presentation of financial statements Effects on UK GAAP m Turnover (121.8) Op profit (3.9) PBT (2.0) PBT* (2.2) PAT Net assets * Before exceptionals and goodwill impairment 24

13 IAS 1 Presentation of financial statements 25! JV turnover no longer included in P&L! JV profit after tax included in operating profit! Operating profit and PBT therefore reduce! No change to post tax profit! Presentational changes in balance sheet but no impact on net assets or disclosure! Presentation of JV tax expected to reduce 2005 PBT by c 5m Summary PBT PBT* Net Assets UK GAAP IAS 19 pensions IFRS 2 share schemes (6.4) 3.1 (0.3) (0.3) (69.3) 0.6 IAS 12 deferred tax (2.9) IAS 21 foreign currencies IAS 10 dividends 10.1 IFRS 3 goodwill IAS 1 JV tax (2.0) (2.2) Other (0.3) (0.3) (0.7) Revised under IFRS GAAP EPS UK GAAP basis (8.5)p 19.9p EPS IFRS GAAP basis 27.1p 21.0 * Before exceptional items and goodwill amortisation in respect of UK GAAP goodwill impairment in respect of IFRS

14 Summary of estimated effects on ! IAS 19 Pensions minimal! IFRS 2 Sharebased payments c 0.6m reduction in PBT! IAS 12 Income taxes effect on Net Assets similar to! IAS 10 Events after balance sheet date in line with dividends! IAS 21 Foreign exchange minimal! IFRS 3 Business Combinations depends on acquisitions! IAS 1 Presentation (JV tax) c 5m reduction in PBT! IAS 32 & 39 Financial instruments c 10m reduction in Net Assets at Jan 2005! Draft IFRIC Concession accounting remains uncertain