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REG - Persimmon Plc - Final Results - Part 1 Released: 02/03/2010
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RNS Number : 9007H
Persimmon PLC
02 March 2010
Tuesday 2 March 2010
FINAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2009
Highlights
· 8,976 legal completions for the year (2008: 10,202) at an
average selling price* of £160,513 (2008: £172,994)
· Sales revenue for the year of £1.42bn (2008: £1.76bn)
· Pre-tax profit of £77.8m following exceptional release of
£74.8m of net realisable value provisions (2008: £780.0m loss, after
£904.8m exceptional charge)
· Underlying pre-tax profits** of £7.0m (2008: £126.6m), with a
profit of £23.7m being generated in the second half
· Underlying operating margin** in the second half improving to
c. 6% from 1.6% in the first half. Full year margin of 4.0% (2008: 11.3%)
· Net borrowings*** at the year end reduced to £267.5m (2008:
£600.7m), comfortably within c. £1bn facilities
· Basic earnings per share 24.7p (2008: 208.3p loss per share)
· Net assets per share increased by 4.3% to 540.2p (2008: 518.0p)
· Strong forward sales of c. £900m, up 29% on 2008 of £698m
· 90 new sites scheduled to open in the first half of 2010
· Healthy landbank of 60,454 plots (2008: 69,279) owned and under
control, representing over six years' supply
· c. 5,500 plots acquired or terms agreed - includes c. 1,900
pulled through from strategic land portfolio
* Calculated from nominal value of turnover - before fair value charge on
shared equity sales
** Stated before goodwill impairment and exceptional items
*** Stated before finance lease obligations and financing transaction costs
John White, Group Chairman, said: "Our cash generation and cost control have
placed the business in a strong position both operationally and financially
for a recovering market. Prices have held firm since the beginning of the
year and we remain focused on improving our operating margins and to
profitably grow the business."
For further information, please contact:
John White, Group Chairman Edward Orlebar
Mike Farley, Group Chief Executive Charlotte McMullen
Mike Killoran, Group Finance Director Marylène Guernier
Persimmon plc M:Communications
Tel: +44 (0) 20 7920 2323 Tel: +44 (0) 20 7920 2333
Analysts wishing to remotely listen to the presentation at 9am may dial +44
(0) 203 037 9100.
A webcast of today's analyst presentation will be available on
www.corporate.persimmonhomes.com [1] this afternoon.
CHAIRMAN'S STATEMENT
Persimmon has performed well throughout a period of difficult trading
conditions. Over the last twelve months we have concentrated heavily on
cash generation and cost control. This focus and the action we took during
2008 to restructure our business in light of the medium term outlook, has
ensured that we remain strong and competitive. The business is well
positioned both operationally and financially for a recovering market.
Results
Sales revenues for the year ended 31 December 2009 were £1.42 billion
(2008: £1.76 billion). Pre-tax profit for the full year before
exceptional items and goodwill charge was £7.0 million. This result
reflects an improved performance during the second half of the year which
produced a pre-tax profit (before exceptional items and goodwill charge) of
£23.7 million (H1 2009: £16.7 million loss).
Following a review of the net realisable value of our assets £74.8 million
of provisions previously created have been released as an exceptional
credit. This reflects a combination of both an improvement in revenues and
a reduction in development costs. This results in a pre-tax profit for the
full year, after exceptional items and goodwill charge, of £77.8 million
(2008: £780.0 million loss). Basic earnings per share were 24.7p (2008:
208.3p loss per share). Net assets per share increased to 540.2p.
Operating profit for the year (before exceptional items and goodwill charge)
was £57.2 million representing c. 4% of turnover. We achieved an
improvement in this operating margin to c. 6% during the second half of the
year, reflecting our changing focus to margin improvement as cash generation
improved.
Legal completions for the year were 8,976 (2008: 10,202) at an average
selling price of £160,513 stated before the fair value charge on shared
equity sales (2008: £172,994). Operating expenses were 14% lower than
2008 at £78.7 million and 36% lower than 2007, the year prior to
restructuring the business.
Once again, during the year we generated good levels of free cash flow of
£356.8 million (2008: £239.2 million). This resulted in net borrowings
at the year end of £267.5 million (2008: £600.7 million). This debt
level is well within the amended facilities we arranged in March 2009 of c.
£1 billion. Whilst achieving this reduction in debt we continued to open
90 new sites during the year. We also committed to selective land
opportunities and at the year end maintained healthy land holdings of 60,454
plots, owned and under control. This provides a long landbank of over six
years' supply at current build rates.
A thorough review of these land holdings was carried out at the end of 2009
and we are confident that the book value of these assets is
appropriate. As stated above, we have released back to profit £74.8
million of the provision created in 2008. Further releases will depend
upon movements in selling prices and costs of development. We do not
however expect to make further provisions in this respect unless there is a
significant deterioration in house selling prices in the future.
Total net financing costs for the period, including imputed charges were
£50.2 million (2008: £71.7 million).
As previously announced the Board does not intend to pay a dividend for
2009, in line with our current strategy of conserving cash in the business
and strengthening our balance sheet. The Board will continue to monitor
the performance of the business and the outlook for the housing market to
assess when dividend payments should be recommenced.
Outlook
Sales throughout the autumn of 2009 remained steady, providing a good
forward sales position coming into the New Year. At 1 January 2010 we
carried forward £637.8 million of sales revenue on 4,280 homes. Sales
have continued to be at good levels and we currently have c. £900 million
of total sales including legal completions achieved since 1 January 2010 (2
March 2009: £698 million).
Prices have held firm since the beginning of the year, and we are focusing
on margin growth. We continue to market our homes with the benefit of part
exchange and shared equity including the Government's HomeBuy Direct
support. Our part exchange stock holding at the year end was at a
historically low level of £9.3 million (2008: £54.5 million), giving us
plenty of scope to use this key marketing tool when required to assist
potential Persimmon home buyers. In addition, the continued use of HomeBuy
Direct is assisting many first time buyers to buy our homes.
It is too early to make precise forecasts about the housing market,
particularly in an election year, and we will remain cautious in our
investment decisions. We will continue to look to reduce debt levels again
this year, although we remain ready to take advantage of any suitable
opportunities as they arise.
Board
In 2009 Jeff Fairburn was appointed as an executive Director of the
Board. Jeff has worked at Persimmon since 1989. During this time he has
held many positions within the Group. In 2006 he was appointed North
Division Chief Executive, a position he still retains. He now has various
Group operational responsibilities including procurement and associated
functions. Jeff's vast operational experience in the housing industry is
of great benefit to the Board.
At the forthcoming Annual General Meeting on 22 April 2010, Hamish Leslie
Melville will retire from the Board. Hamish has been a non-executive
Director of Persimmon since 1995. During this time he has served the Board
with distinction and has contributed greatly to the success of Persimmon
over the last fifteen years. On behalf of the Board I thank him for his
support and endeavours during this important period for the Group.
I am delighted to welcome to the Board of Persimmon, Jonathan Davie,
Chairman and Partner of First Avenue Partners and non-executive Chairman of
IG Group Plc. Jonathan joined the Board on 1 January 2010. His wealth of
experience will undoubtedly bring added strength to our Board for the
future.
Finally I thank all our Directors, Senior Management and employees at all
levels who have continued to work so hard and loyally for the Group once
again this year.
CHIEF EXECUTIVE'S PERFORMANCE REVIEW 2009
During 2009 Persimmon successfully generated significant cash flow, and saw
a substantial increase in the rate of sale. We have controlled our on-site
work in progress, as well as reducing our overhead costs. These results
are in line with the priorities that we set for the business for the year.
The Market
The housing market showed signs of stabilising in the first half of the
year. We entered the year with a low forward sales position of £458.1m
due to the poor market conditions that prevailed through the second half of
2008, but we were able to build our reservations in the first quarter and as
consumer confidence grew our sales cancellation rate for the first half of
the year fell to c. 16% (as compared to c. 34% for the second half of 2008).
The increased availability of mortgages throughout the year has had a major
impact on the stabilisation of the market. Monthly mortgage approvals have
increased from an historic low of c. 27,000 in November 2008 to c. 59,000 in
December 2009. However, this still remains substantially lower than the
historic average of c. 92,000 approvals each month.
During the first half of 2009 we continued to experience underlying price
weakness. However, the rate of decline slowed as we proceeded through the
first six months: the price reduction nationally was c. 3% in the first
quarter and 1% in the second quarter. Through the summer months we saw a
change in the overall market with the housing market performing noticeably
better in the south in comparison to the north, a trend which continued
throughout the second half of the year.
A major contributory factor for the price decline in the first half was down
valuations by mortgage valuers and whilst this situation has improved, we
continue to experience some problems in this area. This remains one of the
major reasons for our cancellation levels.
The sales momentum we experienced in the spring continued through the
normally quieter summer months and into the autumn. This enabled the
business to expand its order book during 2009 and provided a strong opening
order book of £638 million for 2010.
As we experienced a gradual improvement in the housing market we opened new
sites and reactivated existing sites we had halted in April 2008. In the
first half of the year we opened 40 new sites and a further 50 in the second
half. Some of these sites were assisted by advance payments of grant
funding for affordable homes, a welcome intervention by the Government to
assist the housing market. Nevertheless, we remain cautious with our
expenditure on new sites and are maintaining strong controls on the amount
we spend on these new opportunities, as well as on existing schemes.
As part of our ongoing strategy we have negotiated the replanning of a
number of new sites with Local Authorities to contain a higher proportion of
traditional two storey housing that is more desirable to our buyers. These
sites are due for commencement in the first half of 2010. Persimmon is
able to build these traditional homes more economically and it is easier for
us to control levels of work in progress. Another advantage is that we can
react swiftly to demand and complete the construction of these homes in less
time when compared to apartment blocks or terraces of town houses.
Although the mortgage market continued to improve during the year, it
remained hampered by the restricted availability of higher loan to value
mortgages, particularly for first time buyers who are key to the
market. The mortgage market has been focused on providing competitively
priced mortgages at 75% loan to value of the property. Many buyers without
a large deposit find it difficult to access these funds.
We are particularly pleased to have access to the Government's HomeBuy
Direct Scheme. Our initial allocation of 2,668 homes proved very popular
with buyers, and we had taken over 1,350 reservations on this scheme by the
year end. We recently received a further allocation of £50 million
through the Government's Kickstart 1 and 2 schemes. This funding is
progressively available until 2012 to assist our buyers, support our
business and reinvigorate our supply chain.
Our approach to the review of the net realisable value of our land assets
has provided protection against continued market weakness. We have been
able to write-back a total of £74.8 million of unutilised provision, of
which £46.9 million relates to the second half of the year. We will
continue to review the basis on which the provision is held by the Group,
but believe that our stance is justified against the background of current
market uncertainty.
In the first half of 2009 we completed 4,006 homes (H1 2008: 5,501 homes)
and our debt had reduced to £494.2 million (June 2008: £905.5 million)
from £600.7 million at the 2008 year end. In the second half of 2009
sales continued through the autumn at a steady rate, again with low
cancellations. The improved market in the second half saw our volumes grow
to 4,970, a 24% increase on the first half.
This resulted in total completions for the year of 8,976 homes (2008:
10,202) and due to good cash management our debt reduced to £267.5 million,
well ahead of our original expectations. Underlying price growth of
2-3% across the country in the second half with greater growth in the south
has assisted the improvement in our margins.
Divisional Structure
Within our divisional structure we maintain our three core businesses of
Persimmon, Charles Church and Westbury Partnerships. A number of our
businesses are now operating on a dual brand basis where the management
teams are responsible for both the Persimmon and Charles Church brands. We
have achieved significant benefits from this restructuring. The selection
of the appropriate brand for our sites ensures there are no conflicts, which
maintains each brand's individuality. On large sites we have achieved
operating efficiencies with our teams being able to manage both brands
without any duplication, from buying land and materials to the handover of
the finished homes. We will continue to dual brand wherever possible in
the future.
North Division
The North Division completed 2,144 Persimmon homes (2008:
2,753). Undoubtedly the market in this Division was the most challenging,
particularly in Scotland and the North West. It has taken time to recover
and for prices to stabilise. We have already seen some recovery in the
market with this Division completing 1,192 homes in the second half, a 25%
increase from the first half's performance. Despite the difficult market
our operation in Scotland has performed well, achieving a 12% increase in
volumes in the second half and completed 674 homes for the year. In
Yorkshire our scheme at The Forum, York legally completed 83 apartments in
2009. These completions were achieved by a combination of first time
buyers utilising the HomeBuy Direct Scheme and a similar number of
individual investors.
Average selling prices for the full year for private sale homes in this
Division declined to £151,462 (2008: £172,160) predominantly due to a
change in housing mix with more apartments completed in the first
half. The average selling price increased by 6% to £155,195 in the second
half of the year as we returned to selling more traditional houses. There
were some signs of underlying price growth in the last quarter of 2009,
particularly on newly opened sites.
Central Division
This Division recorded the highest level of Persimmon completions in the
Group for the year, at 2,714, a reduction of just 1% on the previous year
(2008: 2,748). Our continued strategy of long term relationships with our
Housing Association partners secured a 5% increase in volumes for the
Eastern Region's operating businesses within this Division.
We have seen a good take-up of our HomeBuy Direct and Shared Equity schemes
with 675 units, equating to 25% of our sales being assisted in this
manner. Although demand in our Birmingham Region remains constrained, our
ability to offer homes at an average selling price of £136,504 has
supported sales in this Region to increase volumes by 7% to 1,062 homes.
In our East Midlands operating business we have recently completed over
three kilometres of by-pass, which serves 1,525 plots at our Stanground,
Peterborough site. This investment of c. £20 million will lead to legal
completions for all our brands during 2010 on the project. This important
site has been brought through our strategic land portfolio.
The average selling price of homes for private sale in the Division was
£167,894 (2008: £189,449) offering buyers good affordability, particularly
for those operations in the south of the Division. Prices declined in real
terms by 4% in the first half of the year. However, we have seen a 3%
underlying increase in the second half and there is greater emphasis on
price growth for our operating businesses closer to the stronger London
market.
South Division
The Division has completed 2,004 Persimmon homes (2008: 2,436) of which 341
were Partnership homes. We saw a noticeable strengthening in this
Division's market emanating from the South East in the early part of
2009. Prices stabilised in the latter part of the second quarter and have
shown a modest rise throughout the remainder of the year. We have seen a
21% increase in volumes to 1,096 completions in the second half. Again we
utilised HomeBuy Direct combined with our own Shared Equity scheme in Wales,
where currently HomeBuy Direct is not available.
The average selling price of homes for private sale for the year was
£178,830 (2008: £195,147), an 8% reduction. However, we saw the average
sales price increase to £183,834 in the second half, due to a combination
of planning changes towards more traditional housing and some underlying
price growth in this Division.
As part of our long term plan for organic growth we reorganised our two
operating businesses in Wales to form new East and West Wales
businesses. These will dual brand with Charles Church, which has been well
received by prospective purchasers in the Wales region since its launch in
2006.
We have had a number of strategic land successes particularly in the South
West operating business with sites at Newton Abbot and Sidmouth receiving
planning consent, giving a good platform for this business to grow with good
returns in the future.
Charles Church
Charles Church has performed well despite the challenging market. It has
achieved stable volumes of 1,903 homes (2008: 1,924) which equates to 21% of
the Group's completions.
The strengthening market has enabled Charles Church to complete a number of
apartment schemes, selling 221 plots at Fellowes Plain, Norwich and 128
apartments at Century Wharf, Cardiff. These premium apartment schemes have
predominantly sold to owner occupiers.
Although the Charles Church private sale average selling price has reduced
to £204,436 (2008: £244,094) this is largely due to the higher proportion
of apartment sales. Buyers of these higher than average selling price
homes are less affected by mortgage loan to value ratios as they tend to
have large deposits and this has helped to sustain Charles Church's volumes.
Space4
The improvement to the housing market and the availability of further
Government funding has benefited the Space4 business. Production in the
first half was low with 801 housing units completed, but has substantially
improved in the second half to such an extent that extended working hours
were required for a period to keep pace with demand. Total production for
the year was 2,089 units (2008: 1,238).
The need for increased energy efficiency for private housing and the changes
we have made to the Space4 Eco housing range has led to an improvement in
orders for the business. The Space4 system enables our business to build
houses in a shorter period and tightly controls our cost base. We are able
to react quickly to sales demand which in turn maintains our work in
progress at an acceptable level. There is now an increased demand for the
Space4 product from the Persimmon Group, not only for affordable homes but
also for private residential housing and as a result nearly 85% of its
production is being used within the Group.
Additional capacity is available and we will seek new external business in
periods where our own demand is lower. We have already secured a sale for
a 120 unit care home scheme which meets this requirement.
Space4 is now supplying 18 of the Group's operating businesses and has a
forward order book of 2,400 units. We anticipate that Space4 will provide
significant support to the expansion of Group volumes as the market
recovers.
Westbury Partnerships
Westbury Partnerships, our specialist affordable housing provider, has
continued developing its close working relationship with a number of housing
associations delivering high quality, energy efficient sustainable homes.
In 2009 Westbury Partnerships completed 211 units which is part of the total
of 1,622 Partnership homes provided by the Group. Our Partnership home
completions equate to 18% of the Group's turnover by total volume.
Westbury Partnerships has recently completed its first developments built to
the Code for Sustainable Homes Level 4 at Portishead and Bristol. These
schemes have utilised our Space4 system to provide the highly insulated
fabric of the buildings.
The Partnerships operating business has recently commenced its first scheme
for 34 homes in Redditch partly funded by the Homes & Communities Agency
(HCA) Kickstart 1 programme. This funding is in addition to grant funding
received under the National Affordable Housing Programme.
The combination of the use of Space4 and our own HCA compliant house types
has continued to deliver good efficiencies for this operating business in
the affordable housing market.
Landbank
The Group's landbank currently consists of 60,454 plots owned or under
control, a planned reduction from the 69,279 a year ago. Based on current
output this equates to 6.7 years' supply. Due to the Group's strong
balance sheet and low debt we have now agreed to purchase a further 3,000
plots mainly in the south of England. These are attractive sites in good
locations and will be earnings enhancing in the future.
We remain cautious in the land market due to uncertainty in the general
economy. We continue to focus on our strategic land portfolio, which
consists of c. 19,000 acres of land owned or held under option. We have
achieved good success in adding to the number of strategic sites including
Carmarthen and Taunton. In addition, we won a recent approval at Appeal
for a 900 plot site at Bessacarr, Doncaster. Our strategy will be to
continue to allow our landbank to reduce, whilst taking advantage of good
opportunities as they arise.
Corporate Responsibility
Health and safety is an important priority and we continue to invest in
training and improving our operational procedures. This investment has
significantly improved our reportable incident rate which reduced to 47 in
2009, a 40% reduction on the prior year (2008: 78).
As part of our commitment to efficient building operations, we have improved
our operational waste management. The amount of waste from each home we
build has reduced over the past five years by over 50%. Last year we
recycled 75% of our waste which has not only improved our environmental
performance, but also our financial performance by reducing our landfill
costs.
We continue to monitor the quality of both the homes we build and the
service that we provide to our customers. This has been particularly
important during the difficult housing market in 2009. We undertake
regular customer satisfaction surveys and I am pleased to report that during
2009, 91% of our customers said that they would recommend Persimmon to a
friend (2008: 89%), which is a reflection of the quality of our homes and
the customer service from our employees.
Current Trading Outlook
Market indicators continue to give a more positive outlook on the housing
sector. Sales since the beginning of the year are up c. 7% compared to the
same period last year. As we are currently operating from c. 12% fewer
sites then our sales rate per site per week is over 20% ahead of the prior
year. Visitors to sites have been steadily increasing and we have seen a
rise in web site traffic as a result of our recent marketing campaigns.
We are currently operating from 370 developments compared to 420 last
year. However, we are preparing to commence work on 90 new sites in the
first half of 2010, subject to market conditions. Cancellation rates
appear to have stabilised at c. 16%, which is below the long term average
rate of 20% and indicates stronger consumer confidence. Due to the issues
regarding loan to value ratios for mortgage lending, we expect continued
demand for the use of HomeBuy Direct and our own Shared Equity products. A
further increase in mortgage availability and improved loan to value ratios
will strengthen the housing market and the Group's performance. We
continue to monitor the supply of mortgage credit with keen interest.
We currently have forward sales of £897.9 million from 5,873 units, and of
these sales c. 51% are contracted. This is a strong order book and
combined with further site openings it will enhance our sales for the
year. We are now focused on improving our operating margins from the c. 6%
achieved for the second half of 2009.
Summary
The actions we have taken during 2009 and the results we have announced for
the year have placed the business in a strong position to react to
developments in the wider economy in 2010. Our significant banking
facilities and headroom will also enable us to increase investment when the
market strengthens. With the scheduled opening of new sites we will be
able to react to further improvements in the housing market and will
continue to buy land if we see good opportunities. However, we remain
cautious and continue with our disciplined approach to maintaining further
debt reduction and margin improvement. Space4 positions the business well
to meet the requirements of higher energy standards for our properties but
also allows for rapid acceleration to volumes if demand increases.
Our ability to react in these key business areas when combined with our
strong balance sheet and forward sales of c. £900 million will allow the
Group to increase profitability in the future.
Finally, I would like to thank our staff for their efforts in achieving such
a creditable result in this difficult year. Their focus on, and delivery
of, the substantial debt reduction for the business, together with the
improvement in profitability through the second half underlines the strength
and abilities of the management teams throughout the Group.
PERSIMMON PLC
Consolidated statement of comprehensive income for the year ended 31 December 2009
2009 2008
Continuing operations
Note Before exceptional items £m Exceptional items Total £m Before exceptional items £m Exceptional items (Note 2) £m Total £m
(Note 2) £m
Revenue 1,420.6 - 1,420.6 1,755.1 - 1,755.1
Cost of sales (1,297.0) 74.8 (1,222.2) (1,489.8) (688.2) (2,178.0)
Gross profit / (loss) 123.6 74.8 198.4 265.3 (688.2) (422.9)
Other operating income 8.8 - 8.8 21.4 - 21.4
Operating expenses (78.7) - (78.7) (91.0) (222.9) (313.9)
Share of results of jointly controlled entities (0.5) - (0.5) 0.8 - 0.8
Profit / (loss) from operations before impairment of intangible assets 57.2 74.8 132.0 198.3 (710.1) (511.8)
Impairment of intangible assets (4.0) - (4.0) (1.8) (201.0) (202.8)
Profit / (loss) from operations 53.2 74.8 128.0 196.5 (911.1) (714.6)
Finance income 4.8 - 4.8 4.1 6.3 10.4
Finance costs (55.0) - (55.0) (75.8) - (75.8)
Profit / (loss) before tax 3.0 74.8 77.8 124.8 (904.8) (780.0)
Tax (charge) / credit 3 (0.7) (3.0) (3.7) (20.7) 175.7 155.0
Profit / (loss) after tax (all attributable to equity holders of the parent) 2.3 71.8 74.1 104.1 (729.1) (625.0)
Other comprehensive expense
Effective portion of changes in fair value of cash flow hedges (0.8) - (0.8) (0.8) - (0.8)
Net actuarial losses on defined benefit pension schemes 9 (29.0) - (29.0) (43.8) - (43.8)
Tax credit / (charge) on other comprehensive expense 3 19.3 - 19.3 (11.3) - (11.3)
Other comprehensive expense for the year, net of tax (10.5) - (10.5) (55.9) - (55.9)
Total recognised income / (expense) for the year (8.2) 71.8 63.6 48.2 (729.1) (680.9)
Earnings per share i
Basic 5 24.7p (208.3p)
Diluted 5 24.5p (208.3p)
Non-GAAP measures Underlying earnings per share ii
Basic 5 2.1p 35.3p
Diluted 5 2.1p 35.2p
iEarnings per share is calculated in accordance with IAS 33 'Earnings Per Share'
iiUnderlying earnings per share excludes exceptional items and goodwill impairment
PERSIMMON PLC
Consolidated balance sheet
As at 31 December 2009
2008
Note 2009 Restated
£m £m
ASSETS
Non-current assets
Intangible assets 260.4 264.7
Property, plant and equipment 32.0 45.1
Investments 3.3 3.9
Available for sale financial assets 68.0 26.2
Trade and other receivables 3.6 5.2
Forward currency swaps 8 20.8 96.0
Deferred tax assets 27.9 6.5
416.0 447.6
Current assets
Inventories 6 2,187.8 2,614.5
Trade and other receivables 50.2 70.2
Forward currency swaps 8 - 20.8
Cash and cash equivalents 8 138.0 0.8
Assets held for sale 3.6 -
2,379.6 2,706.3
Total assets 2,795.6 3,153.9
LIABILITIES
Non-current liabilities
Interest bearing loans and borrowings 8 (283.0) (571.2)
Trade and other payables (77.2) (132.0)
Deferred tax liabilities (24.1) (26.5)
Retirement benefit obligation 9 (114.4) (95.3)
(498.7) (825.0)
Current liabilities
Interest bearing loans and borrowings 8 (117.0) (147.6)
Trade and other payables (464.5) (551.9)
Forward currency swaps 8 (9.5) -
Current tax liabilities (82.7) (74.2)
(673.7) (773.7)
Total liabilities (1,172.4) (1,598.7)
Net assets 1,623.2 1,555.2
EQUITY
Ordinary share capital issued 30.3 30.3
Share premium 233.6 233.6
Hedge reserve (0.4) 0.1
Other non-distributable reserve 281.4 281.4
Retained earnings 1,078.3 1,009.8
Total equity 1,623.2 1,555.2
PERSIMMON PLC
Consolidated statement of changes in shareholders' equity as at 31 December
2009
Share Share Hedge Other non Retained Total
capital premium reserve distributable earnings
reserve
£m £m £m £m £m £m
Year ended 31
December 2008:
Balance at 1 30.3 233.6 0.7 281.4 1,799.4 2,345.4
January 2008
Loss for the - - - - (625.0) (625.0)
year
Other - - (0.6) - (55.3) (55.9)
comprehensive
expense
Transactions
with owners:
Exercise of - - - - 3.2 3.2
share options
/ share awards
Own shares - - - - (2.4) (2.4)
purchased
Share based - - - - 3.7 3.7
payments and
taxation
thereon
Dividends - - - - (113.1) (113.1)
approved and
paid
Other reserve - - - - (0.7) (0.7)
movement
Balance at 31 30.3 233.6 0.1 281.4 1,009.8 1,555.2
December 2008
Year ended 31
December 2009:
Balance at 1 30.3 233.6 0.1 281.4 1,009.8 1,555.2
January 2009
Profit for the - - - - 74.1 74.1
year
Other - - (0.5) - (10.0) (10.5)
comprehensive
expense
Transactions
with owners:
Exercise of - - - - 0.2 0.2
share options
/ share awards
Own shares - - - - (0.2) (0.2)
purchased
Share based - - - - 3.6 3.6
payments
Other reserve - - - - 0.8 0.8
movement
Balance at 31 30.3 233.6 (0.4) 281.4 1,078.3 1,623.2
December 2009
The other non distributable reserve arose prior to transition to IFRSs, and
relates to the issue of ordinary shares to acquire the shares of Beazer
Group Plc in 2001.
PERSIMMON PLC
Consolidated cash flow statement for the year ended 31 December 2009
2008
Note 2009 Restated
£m £m
Cash flows from operating activities:
Profit / (loss) for the year 74.1 (625.0)
Adjustments for:
Tax charge / (credit) recognised in profit or loss 3 3.7 (155.0)
Finance income (4.8) (4.1)
Finance costs 55.0 75.8
Depreciation charge 6.3 8.7
Amortisation of intangible assets 0.3 0.3
Impairment of intangible assets - utilisation of strategic land holdings 4.0 1.8
Share of results of jointly controlled entities 0.5 (0.8)
Profit on disposal of property, plant and equipment (0.6) (0.7)
Share-based payment charge 3.6 4.4
Exceptional non-cash 2 (74.8) 892.7
items
Other non-cash items 3.5 (3.1)
70.8 195.0
Movements in working capital:
Decrease in inventories 501.5 185.5
Increase in trade and other receivables (16.9) (5.8)
Decrease in trade and other payables (164.5) (173.6)
Cash generated from operations 390.9 201.1
Interest paid (45.9) (67.6)
Interest received 7.8 4.1
Tax received 0.3 106.2
Net cash generated from operating activities 353.1 243.8
Cash flows from investing activities:
Received in respect of jointly controlled entities 0.1 0.1
Purchase of property, plant and equipment (1.2) (6.9)
Proceeds from sale of property, plant and equipment 4.8 2.2
Net cash generated from / (used in) investing activities 3.7 (4.6)
Cash flows from financing activities:
Repayment of borrowings (173.1) (160.3)
Drawdown of loan facilities - 65.0
Financing transaction costs (21.4) (1.9)
Finance lease principal payments (1.2) (1.4)
Own shares purchased (0.2) (2.4)
Exercise of share options - 0.8
Dividends paid to Group shareholders - (113.1)
Net cash used in financing activities (195.9) (213.3)
Increase in net cash and cash equivalents 7 160.9 25.9
Net cash and cash equivalents at (22.9) (48.8)
beginning of the year
Net cash and cash equivalents at end of the year 8 138.0 (22.9)
Notes
1. Basis of preparation
The results for the year have been prepared on a basis consistent with
the accounting policies set out in the Persimmon plc Annual Report for
the year ended 31 December 2008, except as noted below.
The preparation of the financial statements in conformity with the
Group's accounting policies requires the Directors to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
the disclosure of contingent assets and liabilities at the balance sheet
date, and the reported amounts of revenue and expenses during the
reported period. Whilst these estimates and assumptions are based on the
Directors' best knowledge of the amount, events or actions, actual
results may differ from those estimates.
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 December 2009 or 2008, but is
derived from those accounts. Statutory accounts for 2008 have been
delivered to the Registrar of Companies and those for 2009 will be
delivered following the Company's Annual General Meeting. The auditors,
KPMG Audit Plc, have reported on those accounts; their reports were
unqualified, did not draw attention to any matters by way of emphasis
without qualifying their report and did not contain statements under
Section 498(2) or (3) of the Companies Act 2006 in respect of the
accounts for 2009 nor a statement under Section 237 (2) or (3) of the
Companies Act 1985 in respect of the accounts for 2008.
Whilst the financial information included in this preliminary
announcement has been computed in accordance with IFRS as adopted by the
European Union, this announcement does not itself contain sufficient
information to comply with IFRS. The Company expects to publish full
financial statements in March 2010.
The Group's business activities, together with the factors likely to
affect its future development, performance and position are set out in
the Group Chief Executive's and Group Finance Director's reviews in the
Annual Report. The financial position of the Group, its cash flows,
liquidity position and borrowing facilities are described in the Group
Finance Director's review and in the financial statements and notes. The
Directors believe that the Group is well placed to manage its business
risks successfully. After making enquiries, the Directors have a
reasonable expectation that the Group has adequate resources to continue
to operate for the foreseeable future, despite the current uncertain
economic environment. Accordingly, they continue to adopt the going
concern basis of accounting in preparing the annual financial statements.
Change of accounting presentation
The audited consolidated financial statements of the Group were
consistently prepared on the basis that expenditure relating to forward
land, including options and fees, was held within other receivables until
the option was exercised and the land acquired following the securing of
planning permission at which time the amount was transferred to
inventories.
As part of our ongoing procedures to improve the quality of our financial
reporting, we have reviewed our existing presentation in the light of
current best practice and that adopted by members of our peer group. On
the basis of this review we have concluded that it would be more helpful
to users of our financial statements, to present the expenditure relating
to forward land, including options and fees, within inventories upon
inception. This presentation has been adopted for the six months ended 31
December 2009 and all comparative data in this report has been
represented accordingly.
The effect of this change in presentation is to increase the value of
land and decrease the amount of trade and other receivables at 31
December 2009 by £63.8m (31 December 2008: £68.0m).
Adoption of new and revised Standards
The following new standards and amendments to standards are mandatory for
the first time for the financial year beginning 1 January 2009:
· IAS 1 (Revised), 'Presentation of Financial Statements'. The
most significant change within IAS 1 (Revised) is the requirement to
produce a statement of comprehensive income setting out all items of
income and expense relating to non owner changes in equity. There is a
choice between presenting comprehensive income in one statement or in two
statements comprising an income statement and a separate statement of
comprehensive income. The Group has elected to present comprehensive
income in one statement. In addition, the revised Standard requires the
statement of changes in shareholders' equity to be presented as a primary
statement. Finally, the revised Standard has required the presentation of
a third statement of financial position at 1 January 2008 in the Annual
Report, because the Group has reclassified
- More to follow, for following part double click [ID:nRSB9007Hb]
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