H.k.land Regulatory News (HKLD)

23 Feb 2006 09:05

Hongkong Land Hldgs Ld23 February 2006 To: Business Editor 23rd February 2006 For immediate release The following announcement was today issued to the London Stock Exchange. HONGKONG LAND HOLDINGS LIMITED2005 PRELIMINARY ANNOUNCEMENT OF RESULTS Highlights• Hong Kong office market continues to strengthen• Adjusted net assets per share* up 41%• New development sites in Singapore, Macau and Mainland China• 77% of MCL Land acquired• Full year dividend up 14% "With the reversion cycle having turned and the demand for space strong in theHong Kong commercial market, the outlook for both our office and our retailportfolio is good. The lack of residential completions will hold back the resultfor 2006, but our active development pipeline and the positive rental cycle giveconfidence for the years to come." Simon Keswick, Chairman23rd February 2006 Results____________________________________________________________________________________________ Year ended 31st December 2005 2004 Change US$m US$m %____________________________________________________________________________________________Underlying profit attributable to shareholders 188 197 -5Profit attributable to shareholders 2,061 1,688 +22Shareholders' funds 7,215 5,205 +39Adjusted shareholders' funds* 8,592 6,072 +42____________________________________________________________________________________________ USc USc %____________________________________________________________________________________________Underlying earnings per share 8.42 8.86 -5Earnings per share 92.58 75.84 +22Dividends per share 8.00 7.00 +14____________________________________________________________________________________________ US$ US$ %____________________________________________________________________________________________Net asset value per share 3.24 2.34 +38Adjusted net asset value per share* 3.86 2.73 +41____________________________________________________________________________________________ * In preparing the Group's financial statements under International Financial Reporting Standards ('IFRS'), the fair value model for investment properties has been adopted. In accordance with this model, the Group's investment properties have been included at their open market value as determined by independent valuers. As there is no capital gains tax in territories where the Group has significant leasehold investment properties, no tax would be payable if those properties were to be sold at the amounts included in the financial statements. In relation to leasehold investment properties, however, IFRS require deferred tax on any revaluation amount to be calculated using income tax rates. This is in contrast to the treatment for the revaluation element of freehold properties where IFRS require capital gains tax rates to be used. As Management considers that the Group's long leasehold properties have very similar characteristics to freehold property, the adjusted shareholders' funds and adjusted net asset value per share information is presented on the basis that would be applicable if the leasehold properties were freeholds. The adjustments made add back the deferred tax provided in the financial statements that would not have been provided if the properties were freeholds, which in any event would not be payable on a sale of the properties.____________________________________________________________________________________________ The final dividend of USc6.00 per share will be payable on 21st June 2006,subject to approval at the Annual General Meeting to be held on 14th June 2006,to shareholders on the register of members at the close of business on 17thMarch 2006. The ex-dividend date will be on 15th March 2006, and the shareregisters will be closed from 20th to 24th March 2006, inclusive. HONGKONG LAND HOLDINGS LIMITED PRELIMINARY ANNOUNCEMENT OF RESULTSFOR THE YEAR ENDED 31ST DECEMBER 2005 OVERVIEW The strong recovery that characterised the commercial property market in HongKong in 2004 continued throughout 2005. Capital values and rents in both theoffice and retail sectors rose as vacancy fell across the market and demandbecame more broad-based. PERFORMANCE The effect of negative rental reversions on the Group's income came to an endduring the year as reversions turned positive. The overall impact on earningsfor 2005, however, was neutral. With few completions in the residential sector,profits from that segment fell to US$19 million. Consequently, despite reducedfinancing charges, underlying earnings were 5% lower than the prior year atUS$188 million. Capital values continued to increase as rising market rents were only partiallyoffset by higher capitalisation rates. Net profit rose from US$1,688 million ayear earlier to US$2,061 million, reflecting a 34% rise in the value of theGroup's investment property portfolio. The 34% increase in valuation, asassessed by external valuers, to US$9,779 million led to a 41% increase inadjusted net asset value per share to US$3.86. In view of the positive outlook for operating cashflow, the Directors are recommending an increase in the final dividend for 2005 to USc6.00. Together with theinterim dividend of USc2.00, the total dividend proposed for the year istherefore USc8.00. GROUP REVIEW The strong performance of the Hong Kong economy, and in particular of theinternational business sectors operating in the city, generated broad demand forhigh quality, well-located premises. This has led to the full absorption of theconsiderable additions to office space completed in Central in recent years. Officerents rose significantly in this environment. The retail sector also continued to see robust growth, with the enhancements toquality created by the continuing refurbishment of the Group's portfolioattracting good demand from retailers show-casing their brands in Hong Kong'spremier shopping district. In Singapore the Group took advantage of the strongest local market seen inrecent years to pre-commit some 70% of its joint venture development at OneRaffles Quay, well ahead of its physical completion in 2006. In the residential sector, Phase II of the Central Park development in Beijingwas handed over to buyers during the year. The units in Phase III, currentlyunder construction, have been substantially pre-sold. In Hong Kong, few unitsremain to be sold in the Ivy on Belcher's and Stanley Court developments, whilethe joint venture property fund, Grosvenor Land, continues to divest itsinvestment portfolio recording satisfactory returns. NEW DEVELOPMENTS In 2005 three major sites were secured for future development. In July, theBusiness and Finance Centre phase I site in Singapore was won by a consortiumcomprising the same partners currently building One Raffles Quay in the city.The Group's one-third interest in this development positions Hongkong Land wellto benefit from the improving performance of the Singapore market. In Chongqing,in Western China, a joint venture with local developer the Longhu group won theright to develop an excellent site of 450,000 sq. m gross floor area at BambooGrove in the New Northern District of the city. In Macau, a joint venture withShun Tak Holdings Limited was entered into to develop a prime site adjacent tothe MGM casino development, facing the Nam Van Lake and the harbour. This willcomprise high-end residential apartments, a luxury shopping podium and a 5-starhotel. These sites provide the Group's business with a significant and diversifieddevelopment pipeline to complement its prime investment portfolio. MCL LAND On 17th February 2006 the Group completed a voluntary cash offer for MCL Land, aSingapore-listed residential property developer. Following the offer, MCL Landis now a 77%-held subsidiary at a cost of US$307 million. The acquisition givesscale to Hongkong Land's growing residential property business and provides aplatform from which to develop that business further in Southeast Asia. OUTLOOK In conclusion, the Chairman, Simon Keswick said, "With the reversion cyclehaving turned and the demand for space strong in the Hong Kong commercialmarket, the outlook for both our office and our retail portfolio is good. Thelack of residential completions will hold back the result for 2006, but ouractive development pipeline and the positive rental cycle give confidence forthe years to come." CHIEF EXECUTIVE'S REVIEW STRATEGIC FOCUS An extensive programme of refurbishment and redevelopment has rejuvenated ourCentral portfolio in recent years. This will culminate in 2006 with thecompletion of the new tower on the southeast corner of The Landmark complex. Itleaves the core assets of our business in an excellent position to takeadvantage of the strong cycle we are experiencing in Hong Kong, in both theoffice and retail markets. Our leadership in quality of product and level ofservice will ensure our revenue growth benefits fully from the upswing. In support of the core Hong Kong commercial portfolio, we are growing regionallyand developing the residential component of our business. Securing the BusinessFinancial Centre ('BFC') opportunity in Singapore takes the critical mass of ourportfolio in that city to a new level, and builds value for the future. Theacquisition of MCL Land in Singapore and the new sites we have been awarded inChongqing and Macau will provide further momentum to the residential business.Finally, with the disposal of our toll road investment in Indonesia, onlyTradeport remains of our infrastructure portfolio, now reported in the Commercial Property segment of our accounts. COMMERCIAL PROPERTYCentral Portfolio The strong upward momentum in rentals experienced in 2004 in the Hong Kongoffice market continued throughout 2005 amid steady broadening demand. Thisenabled the Group to reduce vacancy from 6% to 4.6% over the year. The cycle ofrising rents and falling vacancy is now benefiting decentralised districts aswell as Central. The rise in rents has moved the reversion pattern for our office portfolio froma negative position as recently as the first half of the year, to a stronglypositive one by the fourth quarter. For the year as a whole, the two periodsbroadly offset each other and only in 2006 will positive reversionssignificantly impact revenue. The new office tower on the Landmark East site ofsome 110,000 sq. ft net will be completed towards the end of 2006 and begingenerating revenue in the following year. Retail activity continued to be buoyant in Hong Kong. The renovation of TheLandmark, and the continuing work on the public environment outside our retailportfolio under our Cityscape scheme, have reinforced Central's position as theleading high-end shopping destination in Hong Kong. In addition to our refurbishment in The Landmark Atrium and creation of The Landmark Mandarin Oriental whichopened in August in Edinburgh Tower, a number of major global fashion brandslaunched stunning flagship stores during the year. Together with theintroduction of Harvey Nichols' first store in Asia, these investments byHongkong Land and its leading retailers have taken Central to a new level. Against this background, the proportion of rental income generated by the retailelement of our Central portfolio has risen to some 31%. Commercial Properties Outside Hong Kong The Singapore office market saw improving demand during the year. Our jointventure development at One Raffles Quay ('ORQ') provides a world-class productat a time when many global financial service firms are seeking to expand intostate-of-the-art premises in the city. In this environment, pre-leasing at ORQwas very active and by the year end the development was some 70% pre-committed.Tenants will be able to take-up occupation in two phases; the South Tower from April, and the North Tower from September 2006. Our existing investment inSingapore, One Raffles Link, remains fully let, as does its retail componentCitylink Mall. In July, the consortium of companies constructing ORQ, in which Hongkong Landhas a one-third share, won the right to develop the neighbouring BFC site. Thesetwo sites will form the core of the New Downtown business district in Singapore.The BFC is a 438,000 sq. m mixed-use site which will be developed in two phases;predominantly for offices but with retail and residential components. In Thailand, our 49%-held retail centre in Bangkok, Gaysorn, is fully let andtrading well. In Indonesia, the Group increased its interest in Jakarta Land to37% and since the year end has bought an additional stake to move to a 50%holding. The refurbishment of the company's existing buildings in Jakarta is inprogress, while plans for its landbank will be developed later in the year. InKuala Lumpur we entered into an agreement to manage a premium retail mall at avenue K, enabling us to become involved in the market in that city without committingcapital at this stage. In Vietnam, our two leading office buildings in Hanoi remain fully let at premium rents. RESIDENTIAL PROPERTY Following a number of residential completions in 2004, only Phase II of CentralPark in Beijing was handed over to buyers in 2005. As a result, profits reportedin this sector were lower than the prior year. Units of Phase III of CentralPark have been substantially pre-sold. These are now under construction, withcompletion scheduled in 2007. Work on Phase IV has begun. This is the last phaseof the project and is scheduled to be handed over to buyers in 2008. Elsewhere in Mainland China, following the formation in March of a joint venturewith local developer, the Longhu group, the company successfully bid for a majorsite in the New Northern District of Chongqing. This large site of almost half amillion sq. m will be developed in phases. In Hong Kong, with sales of Ivy on Belcher's and Stanley Court almost complete,we are now focusing on our Lai Sing Court and Victoria Road developments. Vacantpossession has now been obtained at the former and demolition of the existingbuilding has started. At the latter site, we have now agreed the land premiumwith the Government and will begin work on site shortly. Construction on thesetwo sites is scheduled to complete in 2009 and 2010 respectively. In the Philippines, the sale of apartments at Roxas Triangle in Manila continuedbut at a slow pace, while we raised our holding in residential developer JardineLand to 40%. In September, the Group signed a joint venture agreement to develop a prime,200,000 sq. m mixed-use site in Macau. Over 800 luxury apartments will beconstructed, commanding excellent waterfront views over Nam Van Lake above aninternational-quality retail podium. Adjoining this, facing the harbour, a5-star hotel will complete the development. Our joint venture with Shun TakHoldings Limited commenced construction toward the end of year. Our joint venture residential property fund, Grosvenor Land, continues torealise its investments in Hong Kong and Japan. MCL LAND In December the Group announced a cash offer for Singapore-listed MCL Land. TheOffer, which closed on 17th February 2006, received acceptances of 77% at a costof US$307 million. As indicated when the offer was announced, Hongkong Land'sintention was to acquire a controlling stake in MCL Land and the Group iscontent for the company to remain listed with a minority interest. MCL Land is a leading property group whose main activity is residential development in Singapore and Malaysia, where it has a portfolio of prime residentialproperties at various stages of development for sale. MCL Land has a good brandname, a reputation for quality and a highly regarded and experienced managementteam. The acquisition of a controlling stake in an established developer such asMCL Land allows Hongkong Land to expand its growing residential propertyactivities into Singapore and Malaysia. FINANCE In September, the Group raised S$700 million in a landmark issue of 5 and10-year bonds, the largest ever seen in that currency by a foreign issuer. Thisfinancing was followed by a US$400 million, 7-year, Convertible Bond issued inDecember. These issues have enabled the Group to take advantage of the very lowlevel of longer-term interest rates currently prevailing. OUTLOOK The Group's core commercial portfolio in Hong Kong is now benefiting from thestrong upturn in market rents which began in the last quarter of 2003. Withrelatively little supply over the medium term of either office or retail spacein Central, the outlook for rental income is very positive. Our residential business, augmented by the acquisition of MCL Land, will see fewcompletions in the short-term and not therefore contribute significantly toaccounting profit in the near term. The Group's development pipeline is,however, stronger than it has been for many years. These developments will addto the income stream later in the decade. Nicholas Sallnow-SmithChief Executive23rd February 2006 ________________________________________________________________________________Hongkong Land Holdings LimitedConsolidated Profit and Loss Accountfor the year ended 31st December 2005________________________________________________________________________________ 2005 2004 US$m US$m________________________________________________________________________________Revenue (note 2) 367.6 409.1Cost of sales (95.7) (116.4) ______________ ______________Gross profit 271.9 292.7Other income - 0.9Administrative and other expenses (28.2) (25.6) ______________ ______________ 243.7 268.0Increase in fair value of investment properties 2,367.9 1,701.3Asset impairment reversals and disposals (note 3) 11.1 62.7 ______________ ______________Operating profit (note 4) 2,622.7 2,032.0Net financing charges (39.3) (53.1)Share of results of joint ventures (note 5) 10.0 23.7 ______________ ______________Profit before tax 2,593.4 2,002.6Tax (note 6) (532.6) (314.3) ______________ ______________Profit for the year 2,060.8 1,688.3 ______________ ______________Attributable to:Shareholders of the Company 2,060.5 1,688.0Minority interests 0.3 0.3 ______________ ______________ 2,060.8 1,688.3 ______________ ______________________________________________________________________________________________ USc USc________________________________________________________________________________Earnings per share (note 7) - basis 92.58 75.84 - diluted 92.48 75.84Underlying earnings per share (note 7) 8.42 8.86________________________________________________________________________________ ________________________________________________________________________________Hongkong Land Holdings LimitedConsolidated Balance Sheetat 31st December 2005________________________________________________________________________________ 2005 2004 US$m US$m________________________________________________________________________________Net operating assetsTangible assets (note 8) Investment properties 9,778.7 7,289.0 Others 12.3 11.7 ______________ ______________ 9,791.0 7,300.7Joint ventures 638.8 288.1Other investments 49.5 0.3Deferred tax assets 1.6 2.3Pension assets 10.8 9.7Other non-current assets 9.1 1.9 ______________ ______________Non-current assets 10,500.8 7,603.0 ______________ ______________Properties for sale 87.2 15.8Debtors, prepayments and others 135.8 144.6Bank balances 1,092.8 749.9 ______________ ______________Current assets 1,315.8 910.3 ______________ ______________Creditors and accruals (243.1) (174.3)Current borrowings (note 9) (379.0) (79.5)Current tax liabilities (8.6) (8.8) ______________ ______________Current liabilities (630.7) (262.6) ______________ ______________Net current assets 685.1 647.7Long-term borrowings (note 9) (2,568.6) (2,159.6)Deferred tax liabilities (1,400.6) (885.2) ______________ ______________ 7,216.7 5,205.9 ______________ ______________Total equityShare capital 229.5 229.5Revenue and other reserves 7,063.5 5,053.0Own shares held (77.7) (77.7) ______________ ______________Shareholders'funds 7,215.3 5,204.8Minority interests 1.4 1.1 ______________ ______________ 7,216.7 5,205.9 ______________ ______________________________________________________________________________________________ US$ US$________________________________________________________________________________ Net asset value per share (note 10) 3.24 2.34Adjusted net asset value per share (note 10) 3.86 2.73________________________________________________________________________________ ________________________________________________________________________________Hongkong Land Holdings LimitedConsolidated Statement of Recognised Income and Expensefor the year ended 31st December 2005 ________________________________________________________________________________ 2005 2004 US$m US$m________________________________________________________________________________Net exchange translation differences 11.0 7.2Actuarial gains on defined benefit pension plans 1.4 2.7Gain/(loss) on revaluation of other investments 4.6 (0.2)Gains/(losses) on cash flow hedges 28.7 (16.5)Equity component of convertible bonds 63.4 -Tax on items taken directly to equity (1.6) (0.6) ______________ ______________Net income/(expense) recognised directly in equity 107.5 (7.4)Transfer to profit and loss in respect of cash flow hedges (1.7) 18.7Profit for the year 2,060.8 1,688.3 ______________ ______________Total recognised income and expense for the year 2,166.6 1,699.6 ______________ ______________Attributable to:Shareholders of the Company 2,166.3 1,699.3Minority interests 0.3 0.3 ______________ ______________ 2,166.6 1,699.6 ______________ ______________________________________________________________________________________________ ________________________________________________________________________________Hongkong Land Holdings LimitedConsolidated Cash Flow Statementfor the year ended 31st December 2005________________________________________________________________________________ 2005 2004 US$m US$m________________________________________________________________________________Operating activities ______________ ______________Operating profit 2,622.7 2,032.0Depreciation 0.7 0.9Increase in fair value of investment properties (2,367.9) (1,701.3)Asset impairment reversals and disposals (11.1) (62.7)(Increase)/decrease in properties for sale (16.7) 24.4(Increase)/decrease in debtors, prepayments and others (16.3) 1.6Increase/(decrease) in creditors and accruals 6.7 (12.4)Interest received 34.3 11.7Interest and other financing charges paid (76.4) (57.6)Tax paid (22.6) (18.7)Dividends received 2.8 0.3 ______________ ______________Cash flows from operating activities 156.2 218.2 Investing activities ______________ ______________Major renovations expenditure (14.5) (14.9)Developments capital expenditure (78.5) (56.7)Investments in and loans to joint ventures (335.9) (20.0)Purchase of other investments (47.4) -Disposal of joint ventures and other investments 10.1 93.9 ______________ ______________Cash flows from investing activities (466.2) 2.3 Financing activities ______________ ______________Net proceeds from issue of bonds 411.7 493.8Net proceeds from issue of convertible bonds 395.2 -Drawdown of unsecured bank loans 223.4 11.0Repayment of unsecured bank loans (224.4) (443.4)Dividends paid by the Company (155.5) (132.8) ______________ ______________Cash flows from financing activities 650.4 (71.4)Effect of exchange rate changes 1.8 1.2 ______________ ______________Net increase in cash and cash equivalents 342.2 150.3Cash and cash equivalents at 1st January 747.7 597.4 ______________ ______________Cash and cash equivalents at 31st December 1,089.9 747.7 ______________ ______________________________________________________________________________________________ USc USc________________________________________________________________________________Cash flow per share (note 12) 6.37 9.13________________________________________________________________________________ ________________________________________________________________________________Hongkong Land Holdings LimitedNotes________________________________________________________________________________ 1. ACCOUNTING POLICIES AND BASIS OF PREPARATION The financial information contained in this announcement has been based on the audited results for the year ended 31st December 2005 which have been prepared in conformity with International Financial Reporting Standards, including International Accounting Standards and Interpretations issued by the International Accounting Standards Board. There have been no changes to the accounting policies described in the 2004 financial statements. 2. REVENUE 2005 2004 US$m US$m ________________________________________ By business Commercial property ______________ ______________ Rental income 279.4 278.5 Service and management charges 61.4 60.4 Other 7.0 - ______________ ______________ 347.8 338.9 Residential property ______________ ______________ Rental income 1.3 1.3 Service and management charges 0.4 0.1 Sales of properties 18.1 68.8 ______________ ______________ 19.8 70.2 ______________ ______________ 367.6 409.1 ______________ ______________ By geographical area Hong Kong 349.2 391.4 Southeast Asia 18.4 17.7 ______________ ______________ 367.6 409.1 ______________ ______________ 3. ASSET IMPAIRMENT REVERSALS AND DISPOSALS 2005 2004 Gross Net Gross Net US$m US$m US$m US$m _____________________ _____________________ Asset impairment reversals 11.1 11.1 2.9 2.9 Profit on disposal of joint venture - - 59.8 59.8 ________ ________ ________ ________ 11.1 11.1 62.7 62.7 ________ ________ ________ ________ By business Residential property 1.0 1.0 - - Corporate 10.1 10.1 62.7 62.7 ________ ________ ________ ________ 11.1 11.1 62.7 62.7 ________ ________ ________ ________Gross asset impairment reversals and disposals are shown before net financingcharges and tax. Net asset impairment reversals and disposals are shown afternet financing charges, tax and minority interests. 4. OPERATING PROFI 2005 2004 US$m US$m ________________________ By business Commercial property 255.5 258.1 Residential property 8.7 27.9 Corporate (20.5) (18.0) ___________ _________ 243.7 268.0 Increase in fair value of investment properties 2,367.9 1,701.3 Asset impairment reversals and disposals (note 3) 11.1 62.7 ___________ _________ 2,622.7 2,032.0 ___________ _________ 5. SHARE OF RESULTS OF JOINT VENTURES 2005 2004 US$m US$m ________________________ By business Commercial property 2.7 2.3 Residential property 7.3 24.9 Corporate - (3.5) ___________ _________ 10.0 23.7 ___________ _________ 6. TAX 2005 2004 US$m US$m ________________________ Current tax (21.3) (18.1) Deferred tax ___________ _________ - increase in fair value of investment (507.6) (288.9) properties - other temporary differences (3.7) (7.3) ___________ _________ (511.3) (296.2) ___________ _________ (532.6) (314.3) ___________ _________ Tax on profits is provided at the rates of taxation prevailing in the territories in which the Group operates. 7. EARNINGS PER SHARE Basic earnings per share are calculated on profit attributable to shareholders of US$2,060.5 million (2004: US$1,688.0 million) and on the weighted average number of 2,225.6 million (2004: 2,225.6 million) shares in issue during the year, which excludes 69.6 million shares in the Company held by a wholly-owned subsidiary. Diluted earnings per share are calculated on profit attributable to shareholders of US$2,061.1 million (2004: US$1,688.0 million) and on the weighted average number of 2,228.8 million (2004: 2,225.6 million) shares in issue during the year after adjusting for the effects of the conversion of convertible bonds. Earnings per share are additionally calculated based on underlying profit attributable to shareholders. The difference between underlying profit attributable to shareholders and profit attributable to shareholders is reconciled as follows: 2005 2004 US$m US$m ________________________ Underlying profit attributable to shareholders 187.5 197.2 Revaluation surpluses of investment properties 2,367.9 1,701.3 Deferred tax charges on revaluation surpluses of investment properties (507.6) (288.9) Share of revaluation surpluses of investment properties of joint ventures (net of deferred tax) 0.9 14.5 Asset impairment reversals and disposals 11.1 62.7 Share of asset disposals of joint ventures 0.8 1.3 Minority interests (0.1) (0.1) ___________ _________ Profit attributable to shareholders 2,060.5 1,688.0 Interest expense on convertible bonds (net of tax) 0.6 - ___________ _________ Profit for calculation of diluted earnings per share 2,061.1 1,688.0 ___________ _________ 8. TANGIBLE ASSETS 2005 2004 US$m US$m ________________________ Net book value at 1st January 7,300.7 5,519.1 Exchange rate adjustments 20.4 2.5 Additions 102.7 78.7 Depreciation (0.7) (0.9) Net revaluation surplus 2,367.9 1,701.3 ___________ _________ Net book value at 31st December 9,791.0 7,300.7 ___________ _________ 9. BORROWINGS 2005 2004 US$m US$m ________________________ Current ___________ _________ Bank overdrafts 2.9 2.2 Short-term borrowings 77.4 77.1 Current portion of long-term borrowings 298.7 0.2 ___________ _________ 379.0 79.5 Long-term borrowings ___________ _________ Bank loans 705.1 818.0 7% United States Dollar bonds due 2011 625.0 648.7 3% Hong Kong Dollar notes due 2006 - 192.1 5.5% United States Dollar bonds due 2014 493.1 500.8 3.01% Singapore Dollar notes due 2010 190.4 - 3.65% Singapore Dollar notes due 2015 222.9 - 2.75% United States Dollar convertible bonds due 2012 332.1 - ___________ _________ 2,568.6 2,159.6 ___________ _________ 2,947.6 2,239.1 ___________ _________ 10. NET ASSET VALUE PER SHARE Net asset value per share is calculated on shareholders' funds of US$7,215.3 million (2004: US$5,204.8 million) and on 2,225.6 million (2004: 2,225.6 million) shares issued at year end, which excludes 69.6 million shares in the Company held by a wholly-owned subsidiary. Additional net asset value per share is also calculated based on adjusted shareholders' funds. The difference between adjusted shareholders' funds and shareholders' funds is reconciled as follows: 2005 2004 US$m US$m ________________________ Shareholders' funds 7,215.3 5,204.8 Deferred tax on revaluation surpluses of investment properties 1,371.7 860.9 Share of deferred tax on revaluation surpluses of investment properties of joint ventures 5.2 5.9 ___________ _________ Adjusted shareholders'funds 8,592.2 6,071.6 ___________ _________ 11. DIVIDENDS 2005 2004 US$m US$m ________________________ Final dividend in respect of 2004 of USc5.00 (2003: USc4.00) per share 111.3 89.0 Interim dividend in respect of 2005 of USc2.00 (2004: USc2.00) per share 44.5 44.5 ________________________ 155.8 133.5 ________________________ A final dividend in respect of 2005 of USc6.00 (2004: USc5.00) per share amounting to a total of US$133.5 million (2004: US$111.3 million) is proposed by the Board. The dividend proposed is not accounted for until it has been approved at the Annual General Meeting. The amount will be accounted for as an appropriation of revenue reserves in the year ending 31st December 2006. 12. CASH FLOW PER SHARE Cash flow per share is based on cash flows from operating activities less major renovations expenditure amounting to US$141.7 million (2004: US$203.3 million) and is calculated on the weighted average number of 2,225.6 million (2004: 2,225.6 million) shares in issue during the year, which excludes 69.6 million shares in the Company held by a wholly-owned subsidiary. 13. POST BALANCE SHEET EVENT On 1st December 2005, the Group announced a voluntary conditional cash offer for Singapore-listed residential property developer, MCL Land Limited. The offer which subsequently closed on 17th February 2006, has resulted in the Group holding 77.4% in MCL Land Limited at a total consideration of approximately US$307 million. 14. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES 2005 2004 US$m US$m ________________________ Capital commitments 632.1 493.4 ___________ _________ Guarantees in respect of facilities made available to joint ventures 8.0 19.7 ___________ _________ The final dividend of USc6.00 per share will be payable on 21st June 2006, subject to approval at the Annual General Meeting to be held on 14th June 2006,to shareholders on the register of members at the close of business on 17thMarch 2006. The ex-dividend date will be on 15th March 2006, and the shareregisters will be closed from 20th to 24th March 2006, inclusive. Shareholderswill receive their dividends in United States Dollars, unless they areregistered on the Jersey branch register where they will have the option toelect for Sterling. These shareholders may make new currency elections bynotifying the United Kingdom transfer agent in writing by 2nd June 2006. TheSterling equivalent of dividends declared in United States Dollars will becalculated by reference to a rate prevailing on 7th June 2006. Shareholdersholding their shares through The Central Depository (Pte) Limited ("CDP") inSingapore will receive United States Dollars unless they elect, through CDP, toreceive Singapore Dollars. For further information, please contact: Hongkong Land LimitedN R Sallnow-Smith (852) 2842 8300G M Brown (852) 2842 8138 Jardine Matheson LimitedMatheson & Co LimitedMartin Henderson (44) 207 816 8135 GolinHarrisC T Hew (852) 2501 7963 Weber Shandwick Square MileRichard Hews / Helen Thomas (44) 207 067 0700 Full text of the Preliminary Announcement of Results and the PreliminaryFinancial Statements for the year ended 31st December 2005 can be accessedthrough the Internet at 'www.hkland.com' This information is provided by RNS The company news service from the London Stock Exchange