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its own management board. All divisions are engaged in residential-led, mixed use
developments in the United Kingdom and therefore, having regard to the aggregation criteria in IFRS 8, the Group has one
reportable operating segment.
3 OPERATING PROFIT
Operating profit from continuing activities is stated after charging:
2015 2014
£m £m
Staff costs (Note 4) 57.3 51.1
Depreciation (Note 10) 1.2 0.9
Operating lease rentals:
Land and buildings 3.0 3.0
Other operating lease rentals 1.2 1.2
Auditors' remuneration: £000 £000
Audit of these consolidated financial statements 43 41
Audit of financial statements of subsidiaries pursuant to legislation 125 128
Non-audit fees:
Review of half year results 30 21
Other services relating to taxation - 27
In addition to the above, PwC provided advice to the Trustees of the Group's Defined Benefit pension scheme, the cost of
this advice of £0.1m was paid for by the Group, as agreed between the Trustees and the Group as employer for the scheme.
PwC also provides audit services to the Crest Nicholson Group Pension and Life Assurance Scheme. The fees associated with
these of services £15,775 (2014: £15,275) are met by the assets of the scheme.
4 STAFF NUMBERS AND COSTS
2015 2014
(a) Average monthly number of persons employed by the Group Number Number
Development 792 711
The Directors consider all employees of the Group to be employed within the same category of Development.
2015 2014
(b) Staff costs (including Directors and key management) £m £m
Wages and salaries 44.5 40.0
Social security costs 5.4 5.2
Other pension costs 2.4 1.9
Share-based payments (Note 21) 5.0 4.0
57.3 51.1
(c) Key management remuneration
Key management comprises the Executive Management Team, which includes the Executive Directors of the Board and
Non-Executive Directors as they are considered to have the authority and responsibility for planning, directing and
controlling the activities of the Group. Key management remuneration, including Directors, comprised:
2015 2014
£m £m
Salaries and short-term employee benefits 3.9 3.7
Other pension costs 0.1 0.1
Share-based payments 2.2 1.7
6.2 5.5
(d) Directors' remuneration
Directors' remuneration comprised:
2015 2014
£m £m
Salaries and short-term employee benefits 1.9 2.0
Other pension costs 0.1 0.1
Share-based payments 1.2 1.0
3.2 3.1
Further information relating to Directors' remuneration, incentive plans, share options and pension entitlement appears in
the Directors' remuneration report.
5 FINANCE INCOME AND EXPENSE
2015 2014
Finance income £m £m
Interest income 1.1 0.6
Imputed interest on other financial assets (Note 12) 3.9 3.3
5.0 3.9
2015 2014
Finance expense £m £m
Interest on bank loans and overdrafts 8.9 8.1
Revolving credit facility issues costs pre refinancing amortisation - 2.5
Revolving credit facility issue costs post refinancing amortisation 0.7 0.3
Imputed interest on deferred land payables 3.6 3.3
Net interest on defined benefit pension plan obligations (Note 21) 1.3 1.1
14.5 15.3
Net financing expense 9.5 11.4
6 INCOME TAX EXPENSE
2015 2014
£m £m
Current tax
UK Corporation tax on profits for the year 12.2 -
Total current tax 12.2 -
Deferred tax
Origination and reversal of temporary differences in the current year 17.6 21.3
Prior year adjustment 0.1 -
Deferred tax arising on previously unrecognised temporary differences - (3.4)
Total deferred tax (Note 17) 17.7 17.9
Total tax in income statement 29.9 17.9
The total tax charge for the year is lower (2014: lower) than the standard rate of UK corporation tax of 20.42% (2014:
21.83%). The differences are explained below:
2015 2014
£m £m
Profit before tax 154.0 116.7
Tax on profit at 20.42% (2014: 21.83%) 31.4 25.5
Effects of:
Expenses not deductible for tax purposes 0.1 0.1
Enhanced tax deductions (2.4) (2.2)
Income not taxable - (2.1)
Deferred tax change in rate 0.7 -
Prior year adjustment 0.1 -
Deferred tax arising on previously unrecognised temporary differences - (3.4)
Total tax in income statement 29.9 17.9
7 DIVIDENDS
Amounts recognised as distributions to equity shareholders in the year:
2015 2014
Dividends recognised as distributions to equity shareholders in the year: £m £m
Prior year final dividend per share of 10.2p (2014: 6.5p) 25.6 16.3
Current year interim dividend per share of 6.4p (2014: 4.1p) 16.1 10.3
41.7 26.6
2015 2014
Dividends declared as distributions to equity shareholders in the period: £m £m
Final dividend for the year ended 31st October 2015 of 13.3 pence per share (2014: 10.2 pence per share) 33.4 25.6
The proposed final dividend is subject to approval by shareholders at the Annual General Meeting on 17th March 2016, and in
accordance with IAS 10 'Events after the Reporting Period', has not been included as a liability in these financial
statements.
8 EARNINGS PER ORDINARY SHARE
Basic earnings per share is calculated by dividing profit attributable to equity shareholders by the weighted average
number of ordinary shares in issue during the year.
For diluted earnings per share, the weighted average number of shares is increased by the average number of potential
ordinary shares held under option during the period. This reflects the number of ordinary shares which would be purchased
using the difference in value between the market value of shares and the share option exercise price. The market value of
shares has been calculated using the average ordinary share price during the year. Only share options which have met their
cumulative performance criteria have been included in the dilution calculation.
The earnings and weighted average number of shares used in the calculations are set out below.
Earnings Weighted average number of Ordinary shares Per share amount
£m Number Pence
Year ended 31st October 2015
Basic earnings per share 124.1 251,530,176 49.3
Dilutive effect of share options - 4,985,822
Diluted earnings per share 124.1 256,515,998 48.4
Year ended 31st October 2014
Basic earnings per share 98.8 251,428,643 39.3
Dilutive effect of share options - 4,097,336
Diluted earnings per share 98.8 255,525,979 38.7
9 INTANGIBLE ASSETS
Goodwill 2015 2014
£m £m
Cost at beginning and end of the year 47.7 47.7
Impairment at beginning and end of the year (18.7) (18.7)
At beginning and end of the year 29.0 29.0
Goodwill arose on the acquisition of Castle Bidco Limited on 24th March 2009. Goodwill is allocated to acquired strategic
land holdings (cash-generating units) within the Group. The recoverable amount is equal to the higher of value in use and
fair value less costs of disposal. The Directors have therefore assessed value in use, being the present value of the
forecast cash flows from the expected development and sale of properties on the strategic land. The forecast looks at the
likelihood and scale of permitted development, forecast build costs and forecast selling prices, using a discount rate of
9.05% (2014: 9.05%), covering a period of 22 years from 2009 (being the minimum period that management expects to benefit
from the acquired strategic land holdings) and based on current market conditions. The recoverable value of the
cash-generating units is substantially in excess of the carrying value of goodwill. Sensitivity analysis has been
undertaken by changing discount rates, profit margins and other variables applicable to the cash-generating units. None of
the sensitivities, either individually or combined, resulted in the fair value of the goodwill being reduced to below its
current book value amount.
10 PROPERTY, PLANT AND EQUIPMENT
2015 2014
£m £m
Cost
At beginning of the year 9.2 8.4
Additions 1.6 1.2
Disposals (0.4) (0.4)
At end of the year 10.4 9.2
Accumulated depreciation
At beginning of the year 7.0 6.5
Charged in the year 1.2 0.9
Disposals (0.4) (0.4)
At end of the year 7.8 7.0
Carrying value
At end of the year 2.6 2.2
Property, plant and equipment consists of computer equipment, £1.8m (2014: £1.3m) and office fittings and furniture £0.8m
(2014: £0.9m).
11 INVESTMENTS
Interests in joint ventures
Below are the joint ventures that the Directors consider are material to the Group. All material joint ventures place of business is in Great Britain, are 50% owned and are accounted for using the equity method.
2015 2014
£m £m
Entity
Crest Nicholson Bioregional Quintain LLP 0.2 0.2
Kitewood (Cossall) Limited 0.3 -
Bonner Road LLP - -
Crest/Galliford Try (Epsom) LLP - -
0.5 0.2
· Crest Nicholson Bioregional Quintain LLP was set up to develop a site in Brighton. The site was completed in 2010.
· In April 2015 the Group acquired a 50% interest in the ordinary share capital of Kitewood (Cossall) Limited, which was set up to develop a site in London. The company purchased the land and works have commenced for the construction of 123 apartments, currently forecast for completion in 2017. The Group provides funding to the company to facilitate construction, and also receives a project management fee.
· Bonner Road LLP; in August 2015 the Group entered into a partnership agreement with Your LifeSpace Ltd to procure and develop a site in London. The LLP will apply for planning during 2016 on the site for residential purposes, with construction currently forecast to commence in 2017. The development will be jointly funded by both partners equally, accruing interest on loaned sums, and will share profits equally. The Group will receive a project management fee.
· Crest/Galliford Try (Epsom) LLP was set up to develop three sites in Epsom. The LLP purchased the land and is responsible for developing the infrastructure on the sites. The risks and rewards of development will accrue to the development partners, Crest Nicholson and Galliford Try. All works are currently forecast to be completed in 2016.
Summarised financial information for joint ventures
The tables below provides financial information for joint ventures that are material to the Group. The information disclosed reflects the amounts presented in the financial statements of the relevant joint ventures and not Crest Nicholson Holdings plc's share of those amounts.
Crest Nicholson Bioregional Quintain LLP Kitewood (Cossall) Limited Bonner Road LLP Crest/Galliford Try (Epsom) LLP TOTAL
Summarised statement of financial position 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
£m £m £m £m £m £m £m £m £m £m
Current assets
Cash and cash equivalents 0.3 0.1 - - - - - 0.1 0.3 0.2
Other current assets - 0.1 12.3 - 52.0 - 0.7 13.9 65.0 14.0
Non-current assets 0.1 0.2 - - - - - - 0.1 0.2
Current liabilities
Financial liabilities - - - - - - (13.7) - (13.7) -
Other current liabilities (0.1) (0.1) (0.6) - (0.2) - (2.1) (29.1) (3.0) (29.2)
Non-current liabilities -
Financial liabilities - - (11.1) - (52.0) - - - (63.1) -
Net assets/(liabilities) 0.3 0.3 0.6 - (0.2) - (15.1) (15.1) (14.4) (14.8)
Crest Nicholson Bioregional Quintain LLP Kitewood (Cossall) Limited Bonner Road LLP Crest/Galliford Try (Epsom) LLP TOTAL
2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
£m £m £m £m £m £m £m £m £m £m
Reconciliation to carrying amounts:
Opening net assets/(liabilities) at 31st October 2014 0.3 3.7 - - - - (15.1) (15.1) (14.8) (11.4)
Profit/(loss) for the year - - 0.6 - (0.2) - - - 0.4 -
Dividends paid - (3.4) - - - - - - - (3.4)
Closing net assets/(liabilities) at 31st October 2015 0.3 0.3 0.6 - (0.2) - (15.1) (15.1) (14.4) (14.8)
Group's share and proportion of control in joint venture 50% 50% 50% 50% 50% 50% 50% 50%
Group's share in joint venture 0.2 0.2 0.3 - (0.1) - (7.6) (7.6) (7.2) (7.4)
Fully provided in Group accounts - - - - - - 7.6 7.6 7.6 7.6
Recognised against receivable from joint venture - - - - 0.1 - - - 0.1 -
Group's share in joint venture 0.2 0.2 0.3 - - - - - 0.5 0.2
Amount due from Crest Nicholson Group - - - - - - - - - -
Amount due to Crest Nicholson Group - - 8.0 - 25.9 - - - 33.9 -
Summarised income statement
Revenue - 0.8 3.2 - - - 4.6 - 7.8 0.8
Expenditure - (0.8) (2.1) - - - (4.6) 1.1 (6.7) 0.3
Operating profit before financing costs - - 1.1 - - - - 1.1 1.1 1.1
Interest expense - - (0.3) - (0.2) - - (1.1) (0.5) (1.1)
Income tax expense - - (0.2) - - - - - (0.2) -
Profit/(loss) for the period - - 0.6 - (0.2) - - - 0.4 -
Group's share and proportion of control in joint venture 50% 50% 50% 50% 50% 50% 50% 50%
Group's share in joint venture - - 0.3 - (0.1) - - - 0.2 -
Commitments and contingent liabilities in respect of joint ventures 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
£m £m £m £m £m £m £m £m £m £m
Commitments - joint ventures - - - - - - - - - -
Commitment to provide funding - - 5.4 - 4.0 - - - 9.4 -
Contingent liabilities - joint ventures - - - - - - - - - -
Subsidiary undertakings
The subsidiary undertakings that are significant to the Group and traded during the year are set out below. The Group's
interest is in respect of ordinary issued share capital that is wholly owned and all the subsidiary undertakings are
incorporated in Great Britain and included in the consolidated financial statements.
Subsidiary Nature of business
Castle Bidco Limited Holding Company
Crest Nicholson plc Holding Company
Crest Nicholson Operations Limited Residential and commercial property development
A full list of the Group's undertakings is set out in Note 26.
12 OTHER FINANCIAL ASSETS
2015 2014
£m £m
At beginning of the year 28.4 31.9
Additions - 0.2
Disposals (8.1) (7.0)
Imputed interest 3.9 3.3
At end of the year 24.2 28.4
Of which:
Non-current assets 23.0 28.4
Current assets 1.2 -
24.2 28.4
Other financial assets carried at fair value are categorised as level 3 (inputs not based on observable market data) within
the hierarchical classification of IFRS 13 Revised.
Other financial assets comprise shared equity loans secured by way of a second charge on the property. The loans can be
repaid at any time within the loan agreement, the amount of which is dependent on the market value of the asset at the date
of repayment. The assets are recorded at fair value, being the estimated amount receivable by the Group, discounted to
present day values.
The fair value of future anticipated cash receipts takes into account Directors' views of an appropriate discount rate
(incorporating purchaser default rate), future house price movements and the expected timing of receipts. These assumptions
are given below and are reviewed at each year end.
Assumptions 2015 2014
Discount rate, incorporating default rate 10.5% 10.5%
House price inflation for the next three years 3.0% 3.0%
Timing of receipt 10 to 15 years 10 to 13 years
Sensitivity - effect on value of other financial assets (less)/more 2015 2015
Increase assumptions by 1 % / year Decrease assumptions by 1 % / year
£m £m
Discount rate, incorporating default rate (0.9) 0.9
House price inflation for the next three years 0.5 (0.5)
Timing of receipt (1.3) 1.2
The difference between the anticipated future receipt and the initial fair value is charged over the estimated deferred
term to financing, with the financial asset increasing to its full expected cash settlement value on the anticipated
receipt date. The imputed interest credited to financing for the year ended 31st October 2015 was £3.9m (2014: £3.3m).
At initial recognition, the fair values of the assets are calculated using a discount rate, appropriate to the class of
assets, which reflects market conditions at the date of entering into the transaction. The Directors consider at the end of
each reporting period whether the initial market discount rate still reflects up to date market conditions. If a revision
is required, the fair values of the assets are remeasured at the present value of the revised future cash flows using this
revised discount rate. The difference between these values and the carrying values of the assets is recorded against the
carrying value of the assets and recognised directly in the statement of comprehensive income.
13 INVENTORIES
2015 2014
£m £m
Work-in-progress: land, building and development 863.8 779.6
Completed buildings including show homes 40.7 34.5
904.5 814.1
Included within inventories is a fair value provision of £66.9m (2014: £90.7m) which arose on the acquisition of Castle
Bidco Limited in 2009 and will unwind to cost of sales in future years as the units against which the original fair value
provision was recognised are sold. Inventories of £390.0m (2014: £384.0m) is estimated to be recovered in more than 12
months. Inventories of £565.4m (2014: £437.1m) were recognised as expensed in the year.
14 TRADE AND OTHER RECEIVABLES
2015 2014
£m £m
Non-current
Trade receivables 0.4 -
Due from joint ventures 33.9 -
34.3 -
Current
Trade receivables 25.2 24.0
Recoverable on contracts 13.6 12.5
Other receivables 7.9 8.7
Prepayments and accrued income 2.3 2.9
49.0 48.1
Current trade receivables of £11.2m have been collected since year end (2014: £5.7m). The remaining balance is due
according to contractual terms. Receivables are stated after provision for doubtful debts of £nil (2014: £nil).
15 INTEREST-BEARING LOANS AND BORROWINGS
2015 2014
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