RNS Number:9035S
Berkeley Group PLC
05 December 2003
PRESS RELEASE 5TH DECEMBER 2003
INTERIM STATEMENT
BERKELEY EARNINGS PER SHARE UP 11.9% WITH
PRE-TAX PROFITS UP 3.5% TO #116.8 MILLION
The Berkeley Group plc ("Berkeley" or "The Group"), the urban regenerator
and residential property developer, announces its interim results for the
six months ended 31st October 2003. Highlights of the results include:
* Pre-tax Profits Up 3.5% to #116.8 million
* Operating Margins Group housebuilding operating margins,
excluding land sales, up to 18.9% from
18.6% at the full year.
* Earnings Per Share Increased by 11.9% to 64.8 pence
(2002: 57.9 pence)
* Net Asset Value Per Share Up 15.0% to 889 pence (2002: 774 pence)
* Interim Dividend Up 20.8% to 5.8 pence
* Net Debt Down #90.1 million to #3.4 million
* ROCE Increased to 20.7% from 20.4%
* Land Holdings Up to 26,002 plots from 25,850 at the
full year
* Forward Order Book Remains solid at #875 million
* Share buy-backs 1.25 million (1%) shares bought back
for #7.8 million with a further 5.3
million (4%) bought back for #40.6
million after the period end
October 2003 October 2002 % Difference
-------------- -------------- --------------
Turnover #575.8m #559.1m +3.0%
--------- ---------
Operating Profit #110.1m #109.7m +0.4%
Joint Ventures #10.6m #9.6m +10.4%
Interest (#3.9m) (#6.5m) -40.0%
--------- ---------
Profit before Tax #116.8m #112.8m +3.5%
--------- ---------
EPS 64.8p 57.9p +11.9%
DPS 5.8p 4.8p +20.8%
NAVPS 889p 774p +15.0%
Commenting on the results, Managing Director, A W Pidgley said:
"In our full year statement I described how Berkeley was in a position to
continue to deliver enhanced performance in the coming year. I am delighted to
report that we have delivered on this intent. In the last six months Berkeley
has achieved record profits, generated #144 million of free cashflow and reduced
its gearing level to below 1%. At the same time, we have maintained our forward
sales position at #875 million, improved operating efficiencies within the Group
and increased our unrivalled land holdings.
The property market in the UK has been uncertain, especially in our core markets
in London and the South East. However these are the conditions we predicted and
for which we planned some time ago.
In the first half Berkeley continued its transition from a traditional home
building company to Britain's premier urban regenerator. I am especially proud
that our scheme at Gunwharf Quays in Portsmouth was chosen out of 180 schemes to
win English Partnership's coveted Partnership in Regeneration Award as well as a
prestigious 2003 BURA (British Urban Regeneration Association) Best Practice
Award for outstanding regeneration. I was also delighted with the announcement
at the beginning of this month that Land Securities has taken full control of
the commercial and leisure elements of Gunwharf Quays, allowing Berkeley to
focus on completing the residential development of Gunwharf Quays and continuing
the regeneration of Portsmouth Harbour.
Our dynamic management approach continued to find innovative ways to give life
to the entrepreneurial spirit at the heart of Berkeley. The deal that saw the
Crosby management team led by Geoff Hutchinson acquire rights in that business
was true to this character, which remains central to our management approach and
I believe is key to our continuing success. This transition continued the
strategy of simplifying Berkeley, giving security of cashflow and incentivising
an experienced management team to deliver. Crosby is on target to deliver over
#500 million of operating cashflow within seven years.
Berkeley has a very clear and consistent strategy balancing between Earnings Per
Share growth, cash generation and a well-bought land bank to give security of
future profits. Berkeley has increasingly focused on protecting asset value and
generating cash flow as opposed to primarily focusing on the profit and loss
account."
Roger Lewis, Group Chairman said "The housing market over the last six months
has been broadly similar in transaction terms to the previous six months, with
sales prices holding up relatively well but with varying trends from location to
location. New launches have performed extremely well in London, Birmingham and
Manchester. There has been over-supply in certain markets and the Group has sold
aggressively where this has occurred. These include large detached houses
throughout the country and completed city centre schemes in Manchester, Bristol
and Cardiff. The Group's house building operating margin was 18.9% compared to
18.6% in the last full year. This shows our unique strength in terms of product
quality and diversity, marketing flair and innovation."
Corporate Governance
Berkeley made a statement at the Annual General Meeting that it would be
considering its overall remuneration structure this Autumn which it has been
undertaking using Halliwell Consulting. The Board is aware of the objectives of
our shareholders to have a clear, transparent and understandable remuneration
policy. This review is likely to be completed in the New Year and the results
will be communicated to our principal shareholders and advisory bodies for
feedback and comment.
Fred Wellings, our Senior Independent Director and Chairman of the Audit
Committee has resigned from the Board after serving for 9 years. The Board would
like to thank Fred for his numerous contributions to Berkeley over the last 9
years which have been greatly valued.
Berkeley has initiated the process to appoint two further Non-Executive
Directors to meet our objective of having a balanced Board in line with the
principles of the Combined Code. Independent consultants have been appointed and
a number of names are already being considered.
The Board has reviewed the composition and Terms of Reference for the
Nominations and Audit Committees. The Nominations Committee will comprise of the
Chairman and Non-Executive Directors and be chaired by the Group Chairman,
unless the Committee is considering the appointment of the Group Chairman or
Group Managing Director. In this case, the Nominations Committee will be chaired
by the Senior Independent Director. The Terms of Reference of the Audit
Committee have been updated to reflect recommended practice following a review
of the Combined Code by the Board.
Following the resignation of Fred Wellings, the Audit Committee will be chaired
by Roger Lewis the Group Chairman with the view that a new appointee will have
the relevant skills to become Chairman of the Audit Committee.
Tony Palmer has been appointed as the Senior Independent Director.
Results
Berkeley is delighted to announce pre-tax profits of #116.8 million for the six
months ended 31st October 2003 - an increase of 3.5% on the #112.8 million for
the same period last year. Earnings Per Share rose 11.9% from 57.9 pence to 64.8
pence. Berkeley is expecting a broadly similar trading profile between the first
and second halves of the year as last year.
Net assets increased by #70.8 million to #1,127.0 million (30th April 2003 -
#1,056.2 million), an increase of 6.7%. Net assets per share stand at 889 pence,
an increase of 15.0%.
Due to the buy-backs in May 2003, net assets are #7.8 million lower at 31st
October 2003 and will be #48.4 million lower at 30th April 2004 as a result of
the buy-backs in May and November. Net assets in total have been reduced by
#90.1 million since Berkeley began buying back shares in December 2002.
Return on Capital Employed was 20.7%, up from 20.4% last time. At 31st October
2003 bank loans and overdrafts were #3.4 million (April 2003 - #143.1 million)
representing a gearing of less than 1% (April 2003 - 13.5%).
Dividends
The Directors are pleased to recommend an interim dividend of 5.8 pence per
share. This is 20.8% higher than 2002's interim dividend - continuing our aim to
move towards a better balance between the interim and final dividend and not to
increase the cover ratios. The cost of this dividend will be #7.1 million and
will be payable on 12th February 2004 to shareholders on the register at 16th
January 2004.
Trading Analysis
Group turnover was #575.8 million (2002 - #559.1 million). This comprises #555.9
million (2002 - #546.8 million) of residential turnover and #19.9 million (2002
- #12.3 million) of commercial turnover.
During the period Berkeley sold 2,015 units at an average selling price of
#271,000. This compares to 1,810 units at an average selling price of #285,000
in the corresponding period in 2002. In the period the Group realised #9.4
million from land sales (2002 - #2.2 million). The Group's policy has always
been to take advantage of suitable land opportunities - Berkeley's performance
is not, however, dependent on realising such opportunities. Group commercial
turnover increased by #7.6 million to #19.9 million with Berkeley taking to
profit 10 commercial opportunities on our mixed-use schemes, including Gunwharf
Quays, disposing of 52,000 sq ft of offices and 88,000 sq ft of retail,
restaurants and hotels.
Joint venture turnover totalled #59.4 million (2002 - #52.1 million). This
comprises of #56.9 million (2002 - #49.5 million) from residential projects and
#2.6 million (2002 - #2.6 million) from commercial opportunities on mixed-use
schemes. The number of units sold was 493 at an average selling price of
#231,000. This compares to last year's figure of 283 units at an average selling
price of #136,400.
The housebuilding operating margin excluding joint ventures and land sales is
18.9% compared to 18.6% in the last full year; consistent with the range between
18.5% and 19.5% (depending on mix) achieved over recent reporting periods. Joint
venture operating margins are 17.8%. In this period #1.2 million has been
included in net operating expenses resulting from fees incurred on the Crosby
transaction. In the comparable period #1.2 million of goodwill amortisation was
included and all goodwill was fully written off last year.
Share Buy Backs
During the period Berkeley purchased 1,250,000 shares at an average cost of 625
pence per share with a further 5,308,318 shares being purchased at an average
cost of 764 pence per share in November 2003. The financial costs of these
buy-backs were #7.8 million and #40.6 million respectively. Since December 2002
Berkeley has bought back 13,344,877 shares at an average price of 675 pence. As
previously stated, buy-backs are not part of Berkeley's core investment strategy
but if the opportunity does arise it will be fully considered, especially if it
improves shareholder value. The shares bought in November were at a 14% discount
to the net asset value per share as at 31st October 2003, and this increased net
asset value per share by 5 pence. In total, the shares have been bought at a
discount of 24% to October's net asset value per share and have increased net
assets per share by approximately 22 pence.
Berkeley Group Strategy
Berkeley's strategy has been consistently applied since the mid 1990s when the
decision was made for the Group to concentrate on added value large scale
mixed-use brownfield developments as opposed to traditional volume
housebuilding.
To deliver this strategy, Berkeley has built up an exceptional and unique
management team with experience gained at the forefront of the regeneration
industry. This experience has enabled us to undertake some of the most exciting
regeneration projects in the country, delivering both the level of quality
expected by our customers and the returns sought by our shareholders.
Our business philosophies are unique, bringing entrepreneurial skills to the
corporate environment. These skills are difficult to replace and require special
focus to ensure they are refreshed and motivated.
Berkeley's sound capital base is demonstrated by our gearing level at 31st
October 2003 of less than 1% (2002 - 9.0%). If joint venture debt is included,
the gearing level would be 7.0% (2002 - 14.3%). Following the half year end
Berkeley has received #85 million from Gunwharf Quays which has resulted in the
Group currently being cash positive and less than 5% geared if joint venture
debt is included.
Current Trading and The Housing Market
During the first six months of the current financial year, Berkeley's
reservations have been in line with the same period in 2002. It is interesting
to note that, despite the comments being made in respect of investors and the
buy to let market, investors have risen from 44% in the same period last year to
over 50%. The Group defines investors as ranging from customers purchasing a
second home through to large institutional investors. The continued strength of
the underlying investment market for Berkeley has been reassuring.
The recent 0.25% rise in interest rates and uncertainty over future rate
movements may affect consumer confidence to some degree. However, high
employment levels, interest rates which remain low and a lack of credible
alternative investment options should continue to underpin consumer confidence
whilst constraints on supply are likely to continue due to planning delays and
the complexity of delivering urban regeneration schemes.
The market, especially in London and the South East continues to provide us a
stable environment in which to operate. Sales price increases are very dependent
on the location, type of development and stage of construction. As we reported
last year, demand for detached houses in the Home Counties and large apartments
in Central London has moderated and Berkeley has modest exposure to these
markets.
On completed schemes in Manchester, Cardiff and Bristol we have sold
aggressively and to achieve this, sales prices achieved have been 5% below our
business plan forecast. This is as a result of over-supply of the market and
other developers cutting prices to achieve volume and cashflow requirements
especially in Manchester. This has been offset by new launches in London, the
South East and Home Counties which have achieved between 3.0% to 8.0% above our
business plan forecast. Build costs continue to remain under pressure given the
skills shortage, though through careful management and intelligent engineering
of the build process, Berkeley has been able to maintain its operating margin.
For the Group to achieve its full year targets, 51% of sales are required on
units under #300,000 and 76% under #500,000. Of the sales required, 85% are
outside London. Although this is cause for optimism, we have no illusion about
the competitiveness of the market and the effect on sales prices which can occur
if our competitors require volume for year-end or cashflow targets. Current
market conditions favour companies with distinctive and high quality products.
Forward Sales
Berkeley's strategy has always been to sell its houses at an early stage in the
development cycle in order to secure an early commitment from customers and thus
enhance the quality of future income and security in the profit and loss
account. This strategy has always stood the Group in good stead, whatever the
market conditions. At 31st October 2003 Berkeley held forward sales of #875.4
million, a drop of #45.4 million from 30th April 2003. Of this total #164.9
million was included in the results for six months to October 2003. Shown as
debtors in the balance sheet, it reflects cash to be collected on units taken to
sales. The balance of #710.5 million will benefit the second six months of the
current year as well as future years.
Land Holdings
Berkeley has broadly replaced the number of units used up during trading in the
six months from May to October. The land market has been extremely competitive
in the period and Berkeley has adopted very strict investment criteria. Berkeley
has continued to review its owned land holdings maximising densities wherever
possible in line with best planning practice. This has the advantage of
improving unit numbers and gross margin without using up further capital
employed in land.
As a result, at 31st October the Group controlled some 26,002 plots compared to
25,850 at 30th April 2003. Of these holdings, 18,884 (April 2003 - 19,459) are
owned and included in the balance sheet. In addition, 5,411 (April 2003 - 3,358)
are contracted and a further 1,707 (April 2003 - 3,033) have terms agreed and
solicitors instructed. At 31st October 2003 the estimated gross margin on those
26,002 remains over #2 billion. Over 95% of our land holdings are on brownfield
or recycled land.
Group Structure
During the period, Berkeley has continued to simplify its structure as it
continues to move away from developing small sites to large urban regeneration
projects. The Group now operates through 9 divisions and 26 operating companies.
Of the 26 operating companies, six are project focused and this is forecast to
increase.
In the period the Crosby management team subscribed for shares in Crosby which
will entitle them to 50.01% of the economic and voting rights of Crosby after
the generation of #450 million of operating cashflow. I am delighted to report
that Crosby is in front of its business plan and has to date generated #39.9
million of operating cashflow.
The Board announced earlier this week that Land Securities has taken full
control of the retail and leisure elements of Gunwharf Quays. Land Securities
will pay The Berkeley Group in aggregate for Gunwharf Quays around #170 million,
of which #64 million was paid by April 2003, #90 million is forecast by the end
of April 2004, of which #85 million was received in November 2003, and the
remainder thereafter. The remainder is paid to The Berkeley Group in tranches,
the timing of which will be related initially to the base rents secured and one
year thereafter, to the level of turnover rents. The final amount payable will
depend on the turnover element of the rents received. The commercial and leisure
phase at Gunwharf Quays is forecast to contribute #9 million of gross margin to
the second half pre-tax profits. This week Berkeley submitted planning
applications for a further 483 residential units on the next phase of Gunwharf
Quays.
Prospects
At Berkeley we have never forgotten the particular challenges inherent in a
cyclical business. The policy of the Board has always been to ensure a sound
capital base and to put in place financial resources well ahead of need,
enabling it to invest in new opportunities. This approach has delivered
consistently impressive profits and has allowed the Group to be selective in its
timing of new land acquisitions.
This position, which is maintained by focused and determined management, creates
the platform for the entrepreneurial characteristics of our business to
flourish, adding value to our shareholders and producing homes that our
customers want. Berkeley is well placed for the future, which we look forward to
with confidence.
For Further Information:
The Berkeley Group Smithfield Financial
Roger Lewis, Chairman John Antcliffe
01932 868555 Rupert Trefgarne
0207 360 4900
Consolidated Profit and Loss Account
------------------------------------
Six months Six months Year
ended ended ended
31 October 2003 31 October 2002 30 April 2003
Unaudited Unaudited Audited
Notes #000 #000 #000
--------------------------------------- ---------- ----------- ---------
Turnover including share of joint 2(a) 635,199 611,252 1,250,165
ventures
Less: share of joint ventures' (59,449) (52,123) (99,325)
turnover
Turnover - continuing operations 575,750 559,129 1,150,840
Cost of sales (419,157) (403,167) (835,770)
Gross profit 156,593 155,962 315,070
Net operating expenses (46,485) (46,246) (99,406)
Operating profit - continuing 110,108 109,716 215,664
operations
Share of operating profit in joint 10,596 9,618 16,542
ventures
Total operating profit including 2(b) 120,704 119,334 232,206
share of joint ventures
Net interest payable 3 (3,890) (6,495) (11,025)
Profit on ordinary activities 116,814 112,839 221,181
before taxation
Taxation 4 (34,804) (35,195) (66,497)
Profit on ordinary activities after 82,010 77,644 154,684
taxation
Dividends (7,089) (6,479) (24,909)
Retained profit for the period 74,921 71,165 129,775
--------------------------------------- ---------- ----------- ---------
Dividends per Ordinary Share 5.8p 4.8p 19.2p
--------------------------------------- ---------- ----------- ---------
Earnings per Ordinary Share
- basic 5 64.8p 57.9p 116.0p
- diluted 5 64.6p 57.7p 115.7p
--------------------------------------- ---------- ----------- ---------
Consolidated Balance Sheet
----------------------------
As at As at As at
31 October 2003 31 October 2002 30 April 2003
Unaudited Unaudited Audited
#000 #000 #000
----------------------------------- --------------- --------------- -------------
Fixed assets
Intangible assets - 1,159 -
Tangible assets 16,016 19,266 18,492
Investments 2,100 2,803 2,145
Joint ventures
- Share of gross assets 232,758 230,393 227,387
- Share of gross liabilities (168,955) (175,952) (170,612)
----------------------------------- --------------- --------------- -------------
63,803 54,441 56,775
----------------------------------- --------------- --------------- -------------
81,919 77,669 77,412
----------------------------------- --------------- --------------- -------------
Current assets
Stocks 1,080,288 1,133,053 1,151,103
Debtors 184,402 149,117 247,436
Investments 62,609 58,672 62,047
Short term deposits and cash at 96,691 106,688 57,103
bank
----------------------------------- --------------- --------------- -------------
1,423,990 1,447,530 1,517,689
----------------------------------- --------------- --------------- -------------
Creditors (amounts falling due
within one year)
Borrowings (120) (163) (153)
Other creditors (274,567) (272,781) (316,573)
----------------------------------- --------------- --------------- -------------
(274,687) (272,944) (316,726)
----------------------------------- --------------- --------------- -------------
Net current assets 1,149,303 1,174,586 1,200,963
----------------------------------- --------------- --------------- -------------
Total assets less current 1,231,222 1,252,255 1,278,375
liabilities
----------------------------------- --------------- --------------- -------------
Creditors (amounts falling due after
more than one year)
Borrowings (100,000) (200,000) (200,000)
Other creditors (4,214) (12,829) (22,219)
----------------------------------- --------------- --------------- -------------
(104,214) (212,829) (222,219)
----------------------------------- --------------- --------------- -------------
Net assets 1,127,008 1,039,426 1,056,156
----------------------------------- --------------- --------------- -------------
Capital and reserves
Share capital 31,881 33,743 32,054
Share premium 425,057 420,427 420,603
Capital redemption reserve 2,010 - 1,697
Retained profit 633,425 558,103 571,248
Joint ventures' reserves 34,135 27,153 30,554
----------------------------------- --------------- --------------- -------------
Equity shareholders' funds 1,126,508 1,039,426 1,056,156
Equity minority interest 500 - -
----------------------------------- --------------- --------------- -------------
1,127,008 1,039,426 1,056,156
----------------------------------- --------------- --------------- -------------
Net assets per Ordinary Share 889p 774p 829p
----------------------------------- --------------- --------------- -------------
Consolidated Cash Flow Statement
----------------------------------
Six months Six months Year
ended ended ended
31 October 2003 31 October 2002 30 April 2003
Unaudited Unaudited Audited
#000 #000 #000
-------------------------------- --------------- --------------- -------------
Cash inflow from operating 193,241 180,269 204,385
activities
Dividends from joint ventures 355 1,079 1,245
Returns on investments and (2,498) (4,677) (7,233)
servicing of finance
Taxation (29,102) (14,604) (46,579)
Capital expenditure and financial 18 4,744 13,744
investment
Equity dividends paid (18,324) (16,875) (23,321)
-------------------------------- --------------- --------------- -------------
Net cash inflow before financing 143,690 149,936 142,241
Financing (104,102) (35,486) (77,376)
-------------------------------- --------------- --------------- -------------
Increase in cash in the period 39,588 114,450 64,865
-------------------------------- --------------- --------------- -------------
Reconciliation of net cash flow
to movement in net debt
Increase in cash in the period 39,588 114,450 64,865
Cash outflow from decrease in 100,033 35,532 35,542
debt
Movement in net debt in the 139,621 149,982 100,407
period
Opening net debt (143,050) (243,457) (243,457)
-------------------------------- --------------- --------------- -------------
Closing net debt (3,429) (93,475) (143,050)
-------------------------------- --------------- --------------- -------------
Six months Six months Year
ended ended ended
31 October 2003 31 October 2002 30 April 2003
Unaudited Unaudited Audited
#000 #000 #000
-------------------------------- --------------- --------------- -------------
Reconciliation of operating
profit to operating cash flows
Operating profit 110,108 109,716 215,664
Goodwill amortised - 1,200 2,359
Depreciation 1,428 1,578 3,147
Profit on sale of tangible fixed (161) (1,238) (1,634)
assets
Stocks - decrease/(increase) 70,815 (14,808) (32,858)
Debtors - decrease 65,152 131,306 32,898
Investments - increase (517) (3,158) (6,533)
Creditors - decrease (53,584) (44,327) (8,658)
-------------------------------- --------------- --------------- -------------
Cash inflow from operating 193,241 180,269 204,385
activities
-------------------------------- --------------- --------------- -------------
Reconciliation of Movements In
Shareholders' Funds
Six months Six months Year
ended ended ended
31 October 2003 31 October 2002 30 April 2003
Unaudited Unaudited Audited
#000 #000 #000
------------------------------ --------------- --------------- -------------
Profit for the period 82,010 77,644 154,684
Dividends (7,089) (6,479) (24,909)
Retained earnings 74,921 71,165 129,775
Share buy-backs (7,863) - (42,039)
New share capital subscribed 4,592 71 255
Contribution to QUEST (1,298) (25) (50)
------------------------------ ----------- ----------- ---------
Net additions to equity 70,352 71,211 87,941
shareholders' funds
------------------------------ ----------- ----------- ---------
Opening equity shareholders' 1,056,156 968,215 968,215
funds
------------------------------ ----------- ----------- ---------
Closing equity shareholders' 1,126,508 1,039,426 1,056,156
funds
------------------------------ ----------- ----------- ---------
Notes to the Interim Report
1. Basis of preparation
The interim accounts have been prepared in accordance with the accounting
policies set out in the audited financial statements for the year ended 30 April
2003.
Six months Six months Year
ended ended ended
31 October 2003 31 October 2002 30 April 2003
Unaudited Unaudited Audited
#000 #000 #000
----------------------------- --------------- --------------- -------------
2. Analysis by Activity
(a) Turnover
Residential housebuilding
Group 555,862 546,841 1,130,062
Joint ventures 56,859 49,497 91,450
----------------------------- --------------- --------------- -------------
612,721 596,338 1,221,512
----------------------------- --------------- --------------- -------------
Commercial property and other
activities
Group 19,888 12,288 20,778
Joint ventures 2,590 2,626 7,875
----------------------------- --------------- --------------- -------------
22,478 14,914 28,653
----------------------------- --------------- --------------- -------------
Total 635,199 611,252 1,250,165
----------------------------- --------------- --------------- -------------
(b) Operating profit
Residential housebuilding
Group 105,454 106,098 212,012
Joint ventures 9,860 8,565 14,205
----------------------------- --------------- --------------- -------------
115,314 114,663 226,217
----------------------------- --------------- --------------- -------------
Commercial property and other
activities
Group 4,654 3,618 3,652
Joint ventures 736 1,053 2,337
----------------------------- --------------- --------------- -------------
5,390 4,671 5,989
----------------------------- --------------- --------------- -------------
Total 120,704 119,334 232,206
----------------------------- --------------- --------------- -------------
Included in Group residential housebuilding turnover and operating margin is
#9,424,000 and #2,264,000 in respect of land sales (2002: #2,225,000 and
#988,000).
Six months Six months Year
ended ended ended
31 October 2003 31 October 2002 30 April 2003
Unaudited Unaudited Audited
#000 #000 #000
------------------------------ ----------- ----------- ---------
3. Net interest payable
Interest receivable 1,898 761 2,395
Interest payable on bank loans (4,055) (5,942) (10,403)
and overdrafts
Interest payable - share of (1,733) (1,314) (3,017)
joint ventures
------------------------------ ----------- ----------- ---------
(3,890) (6,495) (11,025)
------------------------------ ----------- ----------- ---------
4. Taxation
UK corporation tax (34,291) (32,397) (62,021)
Deferred tax 2,118 (328) (352)
Share of joint ventures' tax (2,631) (2,470) (4,124)
------------------------------ ----------- ----------- ---------
(34,804) (35,195) (66,497)
------------------------------ ----------- ----------- ---------
5. Earnings per Ordinary Share
Earnings per Ordinary Share is based on the profit after taxation of
#82,010,000 (2002: #77,644,000) and the weighted average of number of
Ordinary Shares in issue during the period of 126,489,348 (2002:
134,179,832). For diluted earnings per Ordinary Share, the weighted average
number of Ordinary Shares in issue is adjusted to assume the conversion of
all dilutive potential Ordinary Shares. The dilutive potential Ordinary
Shares relate to shares granted under employee share schemes where the
exercise price is less than the average market price of the Ordinary Shares
during the period. The effect of the dilutive potential Ordinary Shares is
506,367 shares (2002: 323,325), this gives a diluted weighted average number
of Ordinary Shares of 126,995,715 (2002: 134,503,157).
6. These interim accounts are unaudited but have been reviewed by the auditors
who review report is set out below. The abridged financial information
relating to the year ended 30 April 2003 is an extract from the latest
financial statements, which have been filed with the Registrar of Companies.
The report of the auditors on these financial statements was unqualified and
did not contain a statement under section 237(2) or (3) of the Companies Act
1985. The financial information summarised above does not constitute
statutory accounts within the meaning of section 240 of the Companies Act
1985.
7. The interim results were approved by the Board on 4th December 2003 and the
interim statement, which is available for inspection at the Company's
Registered Office, will be sent by mail to shareholders in December 2003.
Independent Review Report to The Berkeley Group plc
Introduction
We have been instructed by the company to review the financial information which
comprises the profit and loss account, the balance sheet, the cash flow
statement and the related notes. We have read the other information contained in
the interim report and considered whether it contains any apparent misstatements
or material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The Directors are
responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of management and applying analytical
procedures to the financial information and underlying financial data and, based
thereon, assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities and
transactions. It is substantially less in scope than an audit performed in
accordance with United Kingdom Auditing Standards and therefore provides a lower
level of assurance than an audit. Accordingly we do not express an audit opinion
on the financial information. This report, including the conclusion, has been
prepared for and only for the company for the purpose of the Listing Rules of
the Financial Services Authority and for no other purpose. We do not, in
producing this report, accept or assume responsibility for any other purpose or
to any other person to whom this report is shown or into whose hands it may come
save where expressly agreed by our prior consent in writing.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 October 2003.
PricewaterhouseCoopers LLP
Chartered Accountants
London
5 December 2003
Notes:
(a) The maintenance and integrity of The Berkeley Group plc website is
the responsibility of the directors; the work carried out by the
auditors does not involve consideration of these matters and,
accordingly, the auditors accept no responsibility for any changes that
may have occurred to the interim report since it was initially presented
on the website.
(b) Legislation in the United Kingdom governing the preparation and
dissemination of financial information may differ from legislation in
other jurisdictions.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FSSESLSDSEIE