|
For the year ended 31 March 2006, the group is required to prepare its audited annual consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) Interpretations, as adopted by the European
Union (EU) and those parts of the UK Companies Act 1985 applicable to companies reporting under IFRS.
Previously
the group prepared its audited annual financial statements under
UK generally accepted accounting principles (UK GAAP). The 2005
comparative financial statements have therefore been restated as
part of the first-time adoption requirements of IFRS. As allowed
by the US Securities and Exchange Commission (SEC) rules in relation
to first-time adoption of IFRS, only one year of comparative financial
statements are presented in this Annual report. The accounting
policies set out in this report have been applied consistently
to the 2006 and 2005 financial years, with the exception of those
policies relating to financial instruments under IAS 32, ‘Financial
Instruments: Disclosure and Presentation’ (IAS 32) and IAS
39, ‘Financial Instruments: Recognition and Measurement’
(IAS 39), which have been applied with effect from 1 April 2005.
The
selected financial data on these pages is shown in accordance with
IFRS for 2006 and 2005 and UK GAAP for 2005 to 2002. The UK GAAP
data should be read in conjunction with the IFRS transition adjustments
note to gain an understanding of the nature of the adjustments made
to UK GAAP financial information to comply with IFRS. IFRS differs
in certain respects from accounting principles generally accepted
in the United States. The material differences between IFRS and
US GAAP relevant to the group are explained in the notes
to consolidated financial statements.
Summary of group income statement - IFRS
Year ended 31 March |
|
|
2006
£m |
|
|
2005
£m |
|
|
|
Revenue |
|
|
19,514 |
|
|
18,429 |
|
Other operating income |
|
|
227 |
|
|
551 |
|
Operating costs |
|
|
(17,246 |
) |
|
(15,988 |
) |
|
|
Operating profit |
|
|
|
|
|
|
|
Before specific itemsa |
|
|
2,633 |
|
|
2,693 |
|
Specific itemsa |
|
|
(138 |
) |
|
299 |
|
| |
|
|
2,495 |
|
|
2,992 |
|
| Net finance expense |
|
|
|
|
|
|
|
Finance expense |
|
|
(2,740 |
) |
|
(2,773 |
) |
Finance income |
|
|
2,268 |
|
|
2,174 |
|
| |
|
|
(472 |
) |
|
(599 |
) |
Share of post tax profits (losses) of joint ventures and associates |
|
|
|
|
|
|
|
Before specific itemsa |
|
|
16 |
|
|
(14 |
) |
Specific itemsa |
|
|
– |
|
|
(25 |
) |
| |
|
|
16 |
|
|
(39 |
) |
Profit on disposal of joint venture |
|
|
|
|
|
|
|
Before specific items |
|
|
– |
|
|
– |
|
Specific items |
|
|
1 |
|
|
– |
|
| |
|
|
1 |
|
|
– |
|
Profit before tax |
|
|
|
|
|
|
|
Before specific itemsa |
|
|
2,177 |
|
|
2,080 |
|
Specific itemsa |
|
|
(137 |
) |
|
274 |
|
| |
|
|
2,040 |
|
|
2,354 |
|
Taxation |
|
|
|
|
|
|
|
Before specific itemsa |
|
|
(533 |
) |
|
(541 |
) |
Specific itemsa |
|
|
41 |
|
|
16 |
|
| |
|
|
(492 |
) |
|
(525 |
) |
|
|
Profit for the year |
|
|
|
|
|
|
|
Before specific itemsa |
|
|
1,644 |
|
|
1,539 |
|
Specific itemsa |
|
|
(96 |
) |
|
290 |
|
| |
|
|
1,548 |
|
|
1,829 |
|
|
|
Year ended 31 March |
|
|
2006 |
|
|
2005 |
|
|
|
Average number of shares used in basic earnings per share (millions) |
|
|
8,422 |
|
|
8,524 |
|
Average number of shares used in diluted earnings per share (millions) |
|
|
8,537 |
|
|
8,581 |
|
Basic earnings per share |
|
|
18.4 |
p |
|
21.5 |
p |
Diluted earnings per share |
|
|
18.1 |
p |
|
21.3 |
p |
Dividends per sharec |
|
|
11.9 |
p |
|
10.4 |
p |
Dividends per share, centsbc |
|
|
20.7 |
c |
|
19.5 |
c |
|
|
Basic earnings per share before specific itemsa |
|
|
19.5 |
p |
|
18.1 |
p |
Diluted earnings per share before specific itemsa |
|
|
19.2 |
p |
|
17.9 |
p |
|
|
| a |
Earnings
and profit numbers are stated throughout the commentary
before specific items – see the financial
review for definitions. The directors believe these
measures provide a more meaningful analysis of the trading
results of the group and are consistent with the way the
financial performance is measured by management.
|
| b |
Based on actual dividends paid and/or year end exchange rate on proposed dividends |
| c |
Dividends per share represents the dividend proposed in respect of the relevant financial year. Under IFRS, dividends are recognised as a deduction from shareholders’ equity when they are paid. |
Summary of group income statement – UK GAAP
Year ended 31 March |
|
|
2005
£m |
|
|
2004
£m |
|
|
2003
£m |
|
|
2002
£m |
|
|
|
Total turnover: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing activities |
|
|
19,031 |
|
|
18,914 |
|
|
20,182 |
|
|
21,815 |
|
Discontinued activities |
|
|
– |
|
|
– |
|
|
– |
|
|
2,827 |
|
| |
|
|
19,031 |
|
|
18,914 |
|
|
20,182 |
|
|
24,642 |
|
Group’s share of associates’ and joint ventures’ turnover |
|
|
(408 |
) |
|
(395 |
) |
|
(1,455 |
) |
|
(4,764 |
) |
Trading between group and principal joint venture |
|
|
– |
|
|
– |
|
|
– |
|
|
681 |
|
|
|
Group turnover: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing activities |
|
|
18,623 |
|
|
18,519 |
|
|
18,727 |
|
|
18,447 |
|
Discontinued activities |
|
|
– |
|
|
– |
|
|
– |
|
|
2,112 |
|
| |
|
|
18,623 |
|
|
18,519 |
|
|
18,727 |
|
|
20,559 |
|
Other operating income |
|
|
171 |
|
|
177 |
|
|
215 |
|
|
362 |
|
Operating costsab |
|
|
(16,005 |
) |
|
(15,826 |
) |
|
(16,366 |
) |
|
(21,387 |
) |
|
|
Group operating profit (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Before goodwill amortisation and exceptional items |
|
|
2,864 |
|
|
2,889 |
|
|
2,794 |
|
|
2,593 |
|
Goodwill amortisation and exceptional items |
|
|
(75 |
) |
|
(19 |
) |
|
(218 |
) |
|
(3,059 |
) |
| |
|
|
2,789 |
|
|
2,870 |
|
|
2,576 |
|
|
(466 |
) |
Group’s share of operating (loss) profit of associates and joint venturesc |
|
|
(25 |
) |
|
(34 |
) |
|
329 |
|
|
(1,381 |
) |
|
|
Total operating profit (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing activities |
|
|
2,764 |
|
|
2,836 |
|
|
2,905 |
|
|
(1,476 |
) |
Discontinued activities |
|
|
– |
|
|
– |
|
|
– |
|
|
(371 |
) |
| |
|
|
2,764 |
|
|
2,836 |
|
|
2,905 |
|
|
(1,847 |
) |
Profit on sale of fixed asset investments and group undertakings |
|
|
358 |
|
|
36 |
|
|
1,696 |
|
|
4,389 |
|
Profit on sale of property fixed assets |
|
|
22 |
|
|
14 |
|
|
11 |
|
|
1,089 |
|
Amounts written off investments |
|
|
– |
|
|
– |
|
|
– |
|
|
(535 |
) |
Net interest payabled |
|
|
(801 |
) |
|
(941 |
) |
|
(1,439 |
) |
|
(1,622 |
) |
|
|
Profit on ordinary activities before taxation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Before goodwill amortisation and exceptional items |
|
|
2,085 |
|
|
2,013 |
|
|
1,840 |
|
|
1,126 |
|
Goodwill amortisation and exceptional items |
|
|
258 |
|
|
(68 |
) |
|
1,333 |
|
|
348 |
|
| |
|
|
2,343 |
|
|
1,945 |
|
|
3,173 |
|
|
1,474 |
|
Tax on profit on ordinary activitiese |
|
|
(523 |
) |
|
(539 |
) |
|
(459 |
) |
|
(443 |
) |
|
|
Profit on ordinary activities after taxation |
|
|
1,820 |
|
|
1,406 |
|
|
2,714 |
|
|
1,031 |
|
Minority interests |
|
|
1 |
|
|
8 |
|
|
(12 |
) |
|
(23 |
) |
|
|
Profit for the year |
|
|
1,821 |
|
|
1,414 |
|
|
2,702 |
|
|
1,008 |
|
|
|
Average number of shares used in basic earnings per share (millions) |
|
|
8,524 |
|
|
8,621 |
|
|
8,616 |
|
|
8,307 |
|
Basic earnings per share |
|
|
21.4 |
p |
|
16.4 |
p |
|
31.4 |
p |
|
12.1 |
p |
Diluted earnings per share |
|
|
21.2 |
p |
|
16.3 |
p |
|
31.2 |
p |
|
12.0 |
p |
Basic earnings (loss) per share from continuing activities |
|
|
21.4 |
p |
|
16.4 |
p |
|
31.4 |
p |
|
(34.6 |
)p |
Diluted earnings (loss) per share from continuing activities |
|
|
21.2 |
p |
|
16.3 |
p |
|
31.2 |
p |
|
(34.6 |
)p |
Dividends per share |
|
|
10.4 |
p |
|
8.5 |
p |
|
6.5 |
p |
|
2.0 |
p |
Dividends per share, centsf |
|
|
19.5 |
c |
|
15.3 |
c |
|
10.3 |
c |
|
3.1 |
c |
|
|
Basic earnings per share before goodwill amortisation and exceptional items |
|
|
18.1 |
p |
|
16.9 |
p |
|
14.4 |
p |
|
6.2 |
p |
Diluted earnings per share before goodwill amortisation and exceptional items |
|
|
18.0 |
p |
|
16.8 |
p |
|
14.3 |
p |
|
6.2 |
p |
Basic earnings per share before goodwill amortisation and exceptional items on continuing activities |
|
|
18.1 |
p |
|
16.9 |
p |
|
14.4 |
p |
|
9.0 |
p |
|
|
a |
Includes net exceptional costs |
|
|
59 |
|
|
7 |
|
|
198 |
|
|
2,707 |
|
b |
Includes early leaver costs |
|
|
166 |
|
|
202 |
|
|
276 |
|
|
252 |
|
c |
Includes exceptional costs (release) |
|
|
25 |
|
|
26 |
|
|
(150 |
) |
|
1,294 |
|
d |
Includes exceptional costs |
|
|
– |
|
|
55 |
|
|
293 |
|
|
162 |
|
e |
Includes exceptional tax credit |
|
|
(16 |
) |
|
(29 |
) |
|
(139 |
) |
|
(143 |
) |
f |
Based on actual dividends paid and/or year end exchange rate on proposed dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of group cash flow statement – IFRS
Year ended 31 March |
|
|
2006
£m |
|
|
2005
£m |
|
|
|
Net cash inflow from operating activities |
|
|
5,387 |
|
|
5,574 |
|
Net cash inflow (outflow) from investing activities |
|
|
365 |
|
|
(1,740 |
) |
Net cash used in financing activities |
|
|
(5,278 |
) |
|
(3,529 |
) |
|
|
Net increase in cash and cash equivalents |
|
|
474 |
|
|
305 |
|
Cash and cash equivalents at the start of the year |
|
|
1,310 |
|
|
1,005 |
|
|
|
|
Cash and cash equivalents at the end of the year |
|
|
1,784 |
|
|
1,310 |
|
|
