REG - LSL Property ServPLC - PRELIMINARY ANNOUNCEMENT <Origin Href="QuoteRef">LSL.L</Origin> - Part 3
12/03/2015 07:01
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IFRS
when fair value is required or permitted. The resulting calculations under
IFRS 13 affected the principles that the Group uses to assess the fair value,
but the assessment of fair value under IFRS 13 has not materially changed the
fair values recognised or disclosed. IFRS 13 mainly impacts the disclosures of
the Group. It requires specific disclosures about fair value measurements and
disclosures of fair values, some of which replace existing disclosure
requirements in other standards.
IAS 1 Presentation of Items of Other Comprehensive Income - Amendments to IAS
1
The amendments to IAS 1 became effective 1st July 2012 and were first applied
by the Group on 1st January 2013. The amendments introduce a grouping of items
presented in other comprehensive income (OCI). Items that will be reclassified
('recycled') to profit or loss at a future point in time (e.g. net loss or
gain on available-for-sale financial assets) have to be presented separately
from items that will not be reclassified (e.g. revaluation reserve). The
amendment affected presentation only and had no impact on the Group's
financial position or performance.
Recoverable Amount Disclosures for Non-Financial Assets - Amendments to IAS 36
Impairment of Assets
These amendments remove the unintended consequences of IFRS 13 on the
disclosures required under IAS 36. In addition, these amendments require
disclosure of the recoverable amounts for the assets or CGUs for which
impairment loss has been recognised or reversed during the period. These
amendments are effective retrospectively for annual periods beginning on or
after 1st January 2014 with earlier application permitted, provided IFRS 13 is
also applied. The Group has early adopted these amendments to IAS 36 in the
current period since the amended/additional disclosures provide useful
information as intended by the IASB. Accordingly, these amendments have been
considered while making disclosures for impairment of non-financial assets.
These amendments would continue to be considered for future disclosures.
2. Segment analysis of revenue and operating profit
For management purposes, the Group is organised into business units based on
their products and services and has two reportable operating segments as
follows:
· The Estate Agency and Related Services provides services related to the
sale and letting of housing. It operates a network of high street branches.
As part of this process, the division also provides marketing and conveyancing
services. In addition, it provides repossession asset management services to
a range of lenders. It also sells mortgages for a number of lenders and sells
life assurance and critical illness policies, etc for a number of insurance
companies via the Estate Agency branch and Linear Mortgage Network. It also
operates a financial services segment as a separate mortgage and insurance
distribution company providing products and services to financial
intermediaries. The results of this financial services segment, which does not
meet the quantitative criteria for separate reporting under IFRS have been
aggregated with those of Estate Agency and Related Services.
· The Surveying and Valuation Services segment provides a valuations and
professional survey service of residential properties to various lending
corporations and individual customers.
Each segment has various products and services and the revenue from these
products and services are disclosed in the Business Review section of the
Strategic Report of the Annual Report and Accounts 2014.
The Management Team monitors the operating results of its business units
separately for the purpose of making decisions about resource allocation and
performance assessment. Segment performance is evaluated based on operating
profit or loss which in certain respects, as explained in the table below, is
measured differently from operating profit or loss in the Group Financial
Statements. Head office costs, Group financing (including finance costs and
finance incomes) and income taxes are managed on a Group basis and are not
allocated to operating segments.
Operating segments
The following table presents revenue and profit information regarding the
Group's operating segments for the financial year ended 31st December 2014 and
financial year ended 31st December 2013 respectively.
Year ended 31st December 2014
Estate Agency and Related Services Surveying Unallocated Total
and Valuation Services
£'000 £'000 £'000 £'000
Income statement information
Segmental revenue 225,274 62,224 - 287,498
Segmental result:
- before exceptional costs, contingent consideration, amortisation and share-based payments 33,892 13,331 (5,214) 42,009
- after exceptional costs, contingent 52,310 (12,611) (5,819) 33,880
consideration, amortisation and share-based payments
Finance income 14
Finance costs (2,181)
Exceptional finance credits 230
31,943
Profit before tax
Taxation (6,785)
Profit for the year 25,158
Year ended 31st December 2013
Estate Agency andRelated Services£'000 Surveying and ValuationServices£'000 Unallocated£'000 Total£'000
Segmental revenue 198,170 60,433 - 258,603
Segmental result:
- before exceptional costs, contingent consideration, amortisation and share-based payments 29,116 13,096 (5,110) 37,102
- after exceptional costs, contingent
consideration, amortisation and share-based payments 25,966 204 (6,123) 20,047
Finance income 7
Finance costs (3,580)
Exceptional finance costs 606
Profit before tax 17,080
Taxation (3,066)
Profit for the year 14,014
3. Earnings per share (EPS)
Basic EPS amounts are calculated by dividing net profit for the year
attributable to ordinary equity holders of the parent by the weighted average
number of Ordinary Shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the net profit attributable to
ordinary equity holders of the parent by the weighted average number of
Ordinary Shares outstanding during the year plus the weighted average number
of Ordinary Shares that would be issued on the conversion of all the dilutive
potential Ordinary Shares into Ordinary Shares.
Profit after tax £'000 Weighted average number of shares 2014Per share amountPence Profit after tax£'000 Weighted average number of shares 2013Per share amountPence
Basic EPS 25,103 102,479,989 24.5 14,001 102,955,662 13.6
Effect of dilutive share options - 925,536 - - 410,999 -
Diluted EPS 25,103 103,405,525 24.3 14,001 103,366,661 13.5
There have been no other transactions involving Ordinary Shares or potential
Ordinary Shares between the reporting date and the date of completion of these
Financial Statements.
The Directors consider that the adjusted earnings shown below give a better
and more consistent indication of the Group's underlying performance:
2014£'000 2013£'000
Group operating profit before contingent consideration in acquisitions linked to employment, exceptional costs, share-based payments and amortisation (excluding non-controlling interest): 41,954 37,089
Net finance costs (excluding exceptional costs) (2,167) (3,147)
Normalised taxation (8,554) (7,892)
Adjusted profit after tax1 before exceptional costs, share-based payments and amortisation 31,233 26,050
Adjusted basic and diluted EPS
Adjusted profit after tax1£'000 Weighted average number of shares 2014Per share amount Adjusted profit after tax1£'000 Weighted average number of shares 2013Per share amount
Pence
Pence
Adjusted Basic EPS 31,233 102,479,989 30.5 26,050 102,955,662 25.3
Effect of dilutive share options - 925,536 - - 410,999 -
Adjusted Diluted EPS 31,233 103,405,525 30.2 26,050 103,366,661 25.2
1 This represents adjusted profit after tax attributable to equity holders of
the parent. Effective tax rate considered to calculate normalised taxation in
2014 is 21.5% (2013: 23.25%).
4. Exceptional items and contingent consideration
2014 2013
£'000 £'000
Exceptional costs:
Branch closure and restructuring costs including redundancy costs 1,092 924
Acquisition related costs 373 200
Provision for professional indemnity claims/notifications 24,570 12,000
26,035 13,124
Contingent consideration on acquisitions (405) 2,793
Exceptional gains:
Gain on disposal of freehold properties (35) (134)
Gain on disposal of Zoopla shares (19,806) -
(19,841) (134)
Exceptional finance credits:
Movement in fair value of interest rate swap (230) (606)
5,559 15,177
5. Dividends paid and proposed
2014 2013
£'000 £'000
Declared and paid during the year:
Equity dividends on ordinary shares:
2012 Final: 6.4p - 6,584
2013 Interim: 3.3p - 3,401
2013 Final: 7.2p 7,406 -
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