ABBY.L Regulatory News (ABBY)

7 Dec 2007 08:59

Abbey PLC07 December 2007 This replaces the Interim Results announcement released today at 07:00 underRNS No 4053J. Paste the following link into your web browser to download the PDF document containing the full Interim Statement including financial tables. http://www.rns-pdf.londonstockexchange.com/rns/4053j_-2007-12-7.pdf Abbey plc ("Abbey" or the "Company") Interim Statement for the six months ended 31 October 2007 The Board of Abbey plc reports a profit before taxation of €18.20m whichcompares with a profit of €22.57m for the corresponding period last year.Profits at the operating level were €17.24m as compared to €21.68m at the halfway stage last year. Our housebuilding division completed 408 sales (UK 278; Ireland 130) with aturnover of €97.15m generating an operating profit of €15.41m. Marketconditions in England were satisfactory over the reporting period, however,market conditions have become steadily more difficult in recent weeks. Irishsales benefited from the better conditions prevailing early in 2007. Looking forward the housing division is on course for a reasonable result withcompletions likely overall to run ahead of last year. Financially ourperformance will turn on trading from a few particularly high margin projects.The underlying conditions have been steadily deteriorating and 2008/2009 maywell be a very poor trading period. In Prague our site in Slivenec is now wellunder way with sales and building in line with our targets. M & J Engineers, our UK plant hire business, generated operating profits of€1.6m on a turnover of €11.27m. Recent trading continues to be good at thisdivision and we are hopeful of a strong contribution for the year. Rental income for the period amounted to €226,000. The Group has adopted International Financial Reporting Standards in thepreparation of these interim condensed consolidated statements. Shareholdersshould carefully note the exchange rates used for this statement. The profit andloss statement uses the average exchange rate for the period of 100 cents: STG68.29p. The balance sheet uses the rate prevailing on 31 October of 100 cents:STG 69.65p. The Board is pleased to declare a dividend of 12 cents per share which togetherwith the 24 cents approved by the Annual General Meeting in October will make atotal of 36 cents for the financial year. This dividend will be paid on 30thApril 2008 to shareholders on the register at 4th April 2008. During the recent weeks and months there has been a material change to thebusiness environment in which the Group operates. In particular easy creditavailability which benefited our customers and the company has given way to muchtighter credit conditions. Mortgage markets in particular have been affected.It is not yet clear whether the changes are temporary or of a more permanentnature. By the summer hopefully a clearer picture will emerge. Future dividendpolicy will need to be considered with reference amongst other matters to thechanging business environment. The Board cannot rule out a material change toour dividend policy when next considered in the summer. Overall the Group is trading profitably and enjoys a strong financial positionfrom which to address the challenges ahead. A copy of this statement will be circulated to shareholders on Friday 4thJanuary 2008. Copies are available to members of the public at the company'sregistered office, 25/28 North Wall Quay, Dublin 1. On behalf of the Board Charles H Gallagher - Chairman 7th December 2007 ABBEY plc _____________________________________________________________________ Interim Condensed Consolidated Statement of Changes in Equity (unaudited)for the period ended 31 October 2006 Interim Condensed Consolidated Statement of Changes in Equity (unaudited)for the period ended 31 October 2007 ABBEY plc _____________________________________________________________________ Notes to the interim condensed consolidated financial statements (unaudited) for the period ended 31 October 2007 1. Corporate Information The interim condensed consolidated financial statements of Abbey plc for the sixmonth period ended 31 October 2007 were authorised for issue in accordance witha resolution of the directors on December 6, 2007. Abbey plc is a limitedcompany incorporated and domiciled in Ireland. The company's shares are listedon the IEX and AIM stock exchanges. The principal activities of the group aredescribed in Note 4. 2. Basis of Preparation of Financial Statements The interim condensed consolidated financial statements for the six months ended31 October 2007 have been prepared in accordance with IAS 34 'Interim FinancialReporting'. The interim condensed financial statements do not contain all theinformation and disclosures required in the annual financial statements andshould be read in conjunction with the group's annual financial statements. 3. Accounting Policies Up to and including the financial year ended 30 April 2007, the group preparedits consolidated financial statements in accordance with Irish GAAP. Theconsolidated financial statements for the year ending 30 April 2008 will be thefirst the group is required to prepare in accordance with InternationalFinancial Reporting Standards ('IFRS'). Accordingly, the group will prepare consolidated financial statements thatcomply with IFRS applicable for periods beginning on or after 1 May 2007. Inpreparing these consolidated financial statements, the group has started from anopening consolidated balance sheet as at 1 May 2006, the date of transition toIFRS, and made those changes in accounting policies required by IFRS 1 'FirstTime Adoption of International Financial Reporting Standards'. The adjustmentsmade by the group in restating its Irish GAAP consolidated balance sheet as at 1May 2006, its previously published Irish GAAP consolidated financial statementsfor the year ended 30 April 2007 and Irish GAAP unaudited interim financialinformation for the six months ended 31 October 2006 are set out in Note 8. The accounting policies adopted in the preparation of the condensed consolidatedinterim financial report are consistent with those adopted in the last annualfinancial statements with the exception of those set out as follows: (a) Property, plant and equipment Plant and equipment is stated at cost, less accumulated depreciation andaccumulated impairment in value. Land and buildings are measured at fair value less depreciation on buildings andimpairment charged subsequent to the date of the revaluation. Depreciation iscalculated on a straight line basis over the useful life of the assets. The assets' residual values, carrying values and useful lives are reviewed on anannual basis and adjusted if appropriate at each balance sheet date. Any gain or loss arising on the disposal or retirement of the asset (calculatedas the difference between the net disposal proceeds and the carrying amount ofthe asset) is included in the income statement in the year the asset is disposedof or retired. The asset's residual values, useful lives and method of depreciation arereviewed, and adjusted if appropriate, at each financial year end. ABBEY plc _____________________________________________________________________ Notes to the interim condensed consolidated financial statements (unaudited) for the period ended 31 October 2007 (b) Investment properties Investment properties are measured initially at cost, including transactioncosts. Subsequent to initial recognition, investment properties are stated atfair value, which reflects market conditions at the balance sheet date. Gainsor losses arising from changes in fair value of investment properties areincluded in the income statement in the period in which they arise. Any gains or losses on the retirement or disposal of an investment property arerecognised in the income statement in the year of retirement or disposal. (c) Foreign currency translation The consolidated financial statements are presented in euros, which is theCompany's functional and presentation currency. Each entity in the groupdetermines its own functional currency and items included in the financialstatements of each entity are measured using that functional currency.Transactions in foreign currencies are initially recorded at the functionalcurrency rate ruling at the date of the transaction. Monetary assets andliabilities denominated in foreign currencies are retranslated at the functionalcurrency rate of exchange ruling at the balance sheet date with all differencestaken to the income statement. Non monetary items that are measured in terms ofhistorical cost in a foreign currency are translated using the exchange rates asat the dates of the initial transactions. Non monetary items measured at fairvalue in a foreign currency are translated using the exchange rates at the datewhen the fair value was determined. Group companies regulated and trading in the United Kingdom and the CzechRepublic have different functional currencies from the euro. As at thereporting date the assets and liabilities of these subsidiaries are translatedinto the presentation currency of Abbey plc (the euro) at the rate of exchangeruling at the balance sheet date and their income statements are translated atthe weighted average exchange rates for the period. The exchange differencesarising on the translation are taken directly to a separate component of equity. (d) Provisions Provisions are recognised when the group has a present obligation (legal orconstructive) as a result of a past event, it is probable that an outflow ofresources embodying economic benefits will be required to settle the obligationand a reliable estimate can be made of the obligation. Provisions aremeasured at the expected expenditure required to settle the obligation and arediscounted to present value where the effect is material. (e) Significant accounting judgements, estimates and assumptions Management apply the Group's accounting policies when making significantaccounting estimates and judgements. Inventory Valuation The Group measures inventories at the lower of cost and net realisable value.Inventories include development, work in progress and completed units for sale.Inventories are released to cost of sales on legal completion of property salesto match the cost of the properties with the corresponding revenues. Employee benefits The cost of the defined benefit pension plan is determined using actuarialvaluations. The actuarial valuation involves making assumptions about discountrates, future salary increases, expected rates of return, mortality rates andfuture pension increases. Due to the long term nature of this plan, suchestimates are subject to significant uncertainty. ABBEY plc _____________________________________________________________________ Notes to the interim condensed consolidated financial statements (unaudited)for the period ended 31 October 2007 (f) Taxes Current income tax Current income tax assets and liabilities for the period are measured at theamount expected to be recovered from or paid to the taxation authorities. Thetax rates and tax laws used to compute the amount are those that are enacted orsubstantively enacted by the balance sheet date. Deferred income tax Deferred income tax is provided using the liability method on temporarydifferences at the balance sheet date between the tax bases of the assets andliabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are recognised for all taxable temporarydifferences, except in business combinations, where the timing of the reversalof the temporary differences can be controlled and it is probable that thetemporary differences will not reverse in the foreseeable future. (g) Financial Instruments Trade and other receivables Trade receivables are stated at their fair value, being their nominal valuesreduced by allowance for irrecoverable amounts. Cash and cash equivalents Cash and cash equivalents comprise cash balances in hand and at the bank,including bank deposits. Trade and other payables Trade payables are stated at their fair value. Trade payables on extended termsare recorded at their fair value at the period end date, with any discount tofair value amortised over the period of the credit term and charged to financecosts. Financial Instruments The Group operates in three currencies and adverse changes in foreign exchangerates relative to the euro and any adverse economic interest rate changes willimpact on the Group's financial performance. The group's activities areprimarily conducted in the currency of the country of operation. Non-derivative financial instruments comprise investments in equity, trade andother receivables, cash and cash equivalents, loans and borrowings, and tradeand other payables. Non-derivatives financial instruments are recognised atfair value. The Group does not hold any derivative financial instruments to hedge againstits foreign currency and interest rate risk exposures. ABBEY plc _____________________________________________________________________ Notes to the interim condensed consolidated financial statements (unaudited) for the period ended 31 October 2007 4. Segmental information Turnover, cost of sales and operating profit are derived from continuingactivities. The Group operates in three markets being Ireland, the UnitedKingdom and the Czech Republic. The principal activities of the group arebuilding and property development, plant hire and property rental. Thesedivisions are the basis on which the group reports its segment information. ABBEY plc _____________________________________________________________________ Notes to the interim condensed consolidated financial statements (unaudited) for the period ended 31 October 2007 4. Segmental information (continued) 5. Dividends paid and proposed Unaudited Unaudited 31/10/2007 31/10/2006 •'000 •'000 Dividends on ordinary shares declared and paid during the six month period: Dividend for 2007: 24 cents per share (2006: 24 cents) 6,953 6,953 Dividends on ordinary shares proposed (not recognised as a liability at 31 October) Dividend for 2007: 12 cents per share (2007: 12 cents) 3,476 3,476 6. Earnings per share Earnings per share has been calculated by reference to the weighted averagenumber of shares in issue of 28,969,523 at 31 October 2007 (29,248,122 at 31October 2006 and 29,109,967 at 30 April 2007). ABBEY plc _____________________________________________________________________ Notes to the interim condensed consolidated financial statements (unaudited)for the period ended 31 October 2007 7. Pensions The surplus on the pension scheme included in the interim condensed consolidatedbalance sheet is the amount calculated at the prior year end. No revaluation ofassets and liabilities of the scheme has been carried out in the period, andaccordingly there is no gain or loss shown in the statement of total recognisedgains and losses in respect of the interim period. Actuarial gains and lossesfor the full year and the surplus/deficit at the end of the year will bepresented in the annual financial statements for the year ending 30 April 2008. 8. Reconciliation From Irish GAAP to IFRS The previously reported balance sheet for the period ended 30 April 2006 underIrish GAAP is reconciled to the restated balances under International FinancialReporting Standards ("IFRS") as follows. The reconciling items noted below arerecorded as prior year adjustments to the opening reserves of the comparativeperiod ended 31 October 2006. Interim condensed consolidated balance sheetas at 30 April 2006 ABBEY plc _____________________________________________________________________ Notes to the interim condensed consolidated financial statements (unaudited) for the period ended 31 October 2007 8. Reconciliation From Irish GAAP to IFRS (continued) Note (1) In accordance with IAS 1 'Presentation of Financial Statements' the investment properties held by the group amounting to €2,392,000 are presented separately on the balance sheet. Note (2) In accordance with IAS 12 'Taxation', a deferred taxation liability is recognised as a result of the fair value measurement of trading and investment properties. Note (3) In accordance with IAS 19 'Employee Benefits', the surplus on the group's defined benefit pension scheme of €2,621,000, gross of the related deferred taxation liability, is presented under the 'Non-current assets' balance sheet heading. The deferred tax liability of €736,000 pertaining to the defined benefit pension scheme surplus is presented as part of the deferred tax liability balance under the 'Non-current liabilities' balance sheet heading. Note (4) In accordance with IAS 1 'Presentation of Financial Statements' the group liability for corporate tax amounting to €4,792,000 is presented separately on the balance sheet. Note (5) In accordance with IAS 1 'Presentation of Financial Statements' certain investments are reclassified to non current assets. Note (6) In accordance with IAS 37 'Provisions and Contingencies' maintenance provisions amounting to €2,273,000, previously recorded in creditors and accruals under Irish GAAP, are reclassified to Current liability provisions of €1,726,000 and Non-current liability provisions of €547,000 presented separately on the balance sheet. Note (7) In accordance with IAS 19 'Employee Benefits', a liability is recognised in respect of compensated absences accrued by employees at the reporting date. No accrual for this liability was previously recorded under Irish GAAP. Note (8) In accordance with the exemption allowable under IFRS 1 'First-time adoption of International Financial Reporting Standards', the cumulative translation difference amounting to €957,000 at the transition date is transferred to retained earnings. ABBEY plc _____________________________________________________________________ Notes to the interim condensed consolidated financial statements (unaudited) for the period ended 31 October 2007 8. Reconciliation From Irish GAAP to IFRS (continued) Note (1) In accordance with IAS 16 'Property Plant & Equipment' the group has recognised an additional depreciation charge of €74,000 on trading properties for the period ended 31 October 2006. Note (2) An expense amounting to €66,000 is recognised in respect of accrued compensated absences at the reporting date. This expense is offset by the reversal of the adjusted compensated absences accrual of €128,000 at the date of transition to IFRS in the income statement for the period ended 31 October 2006. No accrual for this liability was previously recorded under Irish GAAP. ABBEY plc _____________________________________________________________________ Notes to the interim condensed consolidated financial statements (unaudited) for the period ended 31 October 2007 8. Reconciliation From Irish GAAP to IFRS (continued) Interim condensed consolidated balance sheetas at 31 October 2006 ABBEY plc _____________________________________________________________________ Notes to the interim condensed consolidated financial statements (unaudited) for the period ended 31 October 2007 8. Reconciliation From Irish GAAP to IFRS (continued) Note (1) In accordance with IAS 1 'Presentation of Financial Statements' the investment properties held by the group amounting to €2,392,000 are presented separately on the balance sheet. Note (2) In accordance with IAS 12 'Taxation', a deferred taxation liability is recognised as a result of the fair value measurement of trading and investment properties. Note (3) In accordance with IAS 19 'Employee Benefits', the surplus on the group's defined benefit pension scheme of €2,696,000, gross of the related deferred taxation liability, is presented under the 'Non-current assets' balance sheet heading. The deferred tax liability of €761,000 pertaining to the defined benefit pension scheme surplus is presented as part of the deferred tax liability balance under the 'Non-current liabilities' balance sheet heading. Note (4) In accordance with IAS 1 'Presentation of Financial Statements' the group liability for corporate tax amounting to €5,586,000 is presented separately on the balance sheet. Note (5) In accordance with IAS 16 'Property Plant & Equipment' the group has recognised an additional depreciation charge of €74,000 on trading properties for the period ended 31 October 2006. Note (6) In accordance with IAS 1 'Presentation of Financial Statements' certain investments are reclassified to non current assets. Note (7) In accordance with IAS 37 'Provisions and Contingencies' maintenance provisions amounting to €2,327,000, previously recorded in creditors and accruals under Irish GAAP, are reclassified to Current liability provisions of €1,780,000 and Non-current liability provisions of €547,000 presented separately on the balance sheet. Note (8) In accordance with IAS 19 'Employee Benefits', a liability is recognised in respect of compensated absences accrued by employees at the reporting date. No accrual for this liability was previously recorded under Irish GAAP. Note (9) In accordance with the exemption allowable under IFRS 1 'First-time adoption of International Financial Reporting Standards', the cumulative translation difference amounting to €957,000 at the transition date is transferred to retained earnings. ABBEY plc _____________________________________________________________________ Notes to the interim condensed consolidated financial statements (unaudited)for the period ended 31 October 2007 8. Reconciliation From Irish GAAP to IFRS (continued) Note (1) In accordance with IAS 1 'Presentation of financial statements' finance income and finance costs are presented separately on the face of the income statement. Note (2) In accordance with IAS 16 'Property Plant & Equipment' the group has recognised an additional depreciation charge of €148,000 on trading properties for the year ended 30 April 2007. Note (3) An expense amounting to €133,000 is recognised in respect of compensated absences accrued employee holidays at the reporting date. This expense is offset by the reversal of the adjusted compensated absences accrual of €128,000 at the date of transition to IFRS in the income statement for the year ended 30 April 2007. No accrual for this liability was previously recorded under Irish GAAP. ABBEY plc _____________________________________________________________________ Notes to the interim condensed consolidated financial statements (unaudited) for the period ended 31 October 2007 8. Reconciliation From Irish GAAP to IFRS (continued) Interim condensed consolidated balance sheetas at 30 April 2007 ABBEY plc _____________________________________________________________________ Notes to the interim condensed consolidated financial statements (unaudited) for the period ended 31 October 2007 8. Reconciliation From Irish GAAP to IFRS (continued) Note (1) In accordance with IAS 1 'Presentation of Financial Statements' the investment properties held by the group amounting to €2,392,000 are presented separately on the balance sheet. Note (2) In accordance with IAS 12 'Taxation', a deferred taxation liability is recognised as a result of the fair value measurement of trading and investment properties Note (3) In accordance with IAS 19 'Employee Benefits', the surplus on the group's defined benefit pension scheme of €2,433,000, gross of the related deferred taxation liability, is presented under the 'Non-current assets' balance sheet heading. The deferred tax liability of €730,000 pertaining to the defined benefit pension scheme surplus is presented as part of the deferred tax liability balance under the 'Non-current liabilities' balance sheet heading. Note (4) In accordance with IAS 1 'Presentation of Financial Statements' the group liability for corporate tax amounting to €4,532,000 is presented separately on the balance sheet. Note (5) In accordance with IAS 16 'Property Plant & Equipment' the group has recognised an additional depreciation charge of €148,000 on trading properties for the period ended 31 October 2006. Note (6) In accordance with IAS 1 'Presentation of Financial Statements' certain investments are reclassified to non current assets. Note (7) In accordance with IAS 19 'Employee Benefits', a liability is recognised in respect of compensated absences accrued by employees at the reporting date. No accrual for this liability was previously recorded under Irish GAAP. Note (8) In accordance with IAS 37 'Provisions and Contingencies' maintenance provisions amounting to €2,702,000, previously recorded in creditors and accruals under Irish GAAP, are reclassified to Current liability provisions of €2,562,000 and Non-current liability provisions of €147,000 presented separately on the balance sheet. Note (9) In accordance with the exemption allowable under IFRS 1 'First-time adoption of International Financial Reporting Standards', the cumulative translation difference amounting to €946,000 at the transition date is transferred to retained earnings. This information is provided by RNS The company news service from the London Stock Exchange