Rank Group Plc · LSE:RNK
Rank — The Rank Group — Investor Presentation (July 2005)
23 slides from Rank's investor presentation, July 2005
Slide 1: The Rank Group Plc IFRS Briefing
The Rank Group Plc IFRS Briefing July 2005
Slide 2: Cautionary statement
Cautionary statement International Financial Reporting Standards (‘IFRS’) are being applied in the European Union for the first time. There are a number of new and revised Standards included in the body of Standards that comprise IFRS. There is not yet a significant body of established practice upon
Slide 3: IFRS Headlines
IFRS Headlines 2004 Adjusted profit* £m UK GAAP 151.0 IFRS 156.0 2004 net assets £m UK GAAP 414.7 IFRS 400.0 2004 Adjusted EPS UK GAAP 18.0p IFRS 18.8p * Adjusted Group profit - pre-exceptional profit before tax excluding DMS less foreign exchange movements on inter company taken to profit & loss ac
Slide 4: Outlook
Outlook • IFRS adoption will not materially impact – 2005 adjusted profit – how the business operates, cashflow generation Additional 2005 considerations: • IAS 39 & 39 adopted 1 January 2005 - Amortisation of equity component of convertible bond (2005 onwards) − IAS 32 & 39 adoption will increase P
Slide 5: Operating profit divisional reconciliation
Operating profit* divisional reconciliation UK IFRS DMS GAAP Adjs Adjs IFRS Year ended 31 December 2004 £m £m £m £m Gaming 112.0 5.0 - 117.0 Hard Rock 27.8 0.1 - 27.9 Deluxe Film 57.4 2.4 - 59.8 Deluxe Media Services 8.9 - (8.9) - Resorts USA 4.2 (0.1) - 4.1 Central costs (13.2) 0.3 - (12.9) Associa
Slide 6: 2004 Income Statement
2004 Income Statement UK IFRS DMS IFRS GAAP Adjs Adjs £m £m £m £m Revenue 1,953.3 - (385.1) 1,568.2 Operating profit - pre-exceptional 197.6 7.2 (8.9) 195.9 Exceptional operating losses (58.1) (10.5) 27.1 (41.5) Operating profit 139.5 (3.3) 18.2 154.4 Non-operating items (185.5) 4.1 181.4 - Net fina
Slide 7: 2004 Adjusted Profit Reconciliation
2004 Adjusted Profit Reconciliation £m £m UK loss before tax (83.3) - DMS operating profit (pre-exceptional) (8.9) - DMS interest (0.4) - Exceptional items 243.6 234.3 Adjusted UK GAAP profit 151.0 IFRS profit before tax 125.9 - Exceptional items 41.5 - Gains on inter-company balances (11.4) 30.1 Ad
Slide 8: Pre-exceptional operating profit reconciliation
Pre-exceptional operating Pre-exceptional profit reconciliation £m £m 2004 Operating profit* - UK GAAP 197.6 DMS UK GAAP profit removed (8.9) 188.7 IFRS adjustments (excluding DMS): Goodwill amortisation 5.8 Goodwill no longer amortised Acquired intangible amortisation (0.1) 2004 acquisitions Operat
Slide 9: Post exceptional operating profit reconciliation
Post exceptional operating profit reconciliation 2004 Operating profit - UK GAAP £m £m Pre-exceptional 197.6 Exceptional items (58.1) DMS (£27.1m), Hard Rock (£31m) UK GAAP operating profit 139.5 DMS reclassification: Reclassified as held for sale Pre-exceptional operating profit (8.9) Exceptional i
Slide 10: Operating profit divisional reconciliation
Operating profit* divisional reconciliation UK IFRS DMS IFRS GAAP Adjs Adjs Year ended 31 December 2004 £m £m £m £m Gaming 112.0 5.0 - 117.0 Hard Rock 27.8 0.1 - 27.9 Deluxe Film 57.4 2.4 - 59.8 Deluxe Media Services 8.9 - (8.9) - Resorts USA 4.2 (0.1) - 4.1 Central costs (13.2) 0.3 - (12.9) Associa
Slide 11: Operating profit reconciliation - Gaming
Operating profit* reconciliation - Gaming £m £m Operating profit*- UK GAAP 112.0 IFRS adjustments: Goodwill amortisation 2.8 Goodwill no longer amortised Operating leases 0.5 Reclassified as finance leases Employee benefit costs (0.6) Share based payments, holiday pay Mecca CGU 2.0 Depreciation savi
Slide 12: Operating profit reconciliation - Hard Rock
Operating profit* reconciliation - Hard Rock £m £m Operating profit* - UK GAAP 27.8 IFRS adjustments: Operating lease costs 0.4 Reclassified as finance leases Employee benefit costs (0.3) Share based payments, holiday pay IFRS adjustments 0.1 Operating profit*- IFRS 27.9 * - before exceptional items
Slide 13: Operating profit reconciliation - Deluxe Film
Operating profit reconciliation - Deluxe Film £m £m Operating profit - UK GAAP 57.4 IFRS adjustments: Goodwill amortisation 3.0 Goodwill no longer amortised Acquired intangibles amortisation (0.1) Excess consideration on intangibles Employee benefit costs (0.9) Share based payments, holiday pay Othe
Slide 14: Financing costs reconciliation
Financing costs reconciliation £m £m 2004 Net financing costs - UK GAAP 37.3 DMS interest 0.4 Presentation 37.7 IFRS adjustment: Leases 2.7 Finance cost of reclassified leases Associates (0.5) Presentation Foreign exchange on I/co loans (11.4) No impact on net assets (9.2) 2004 Net financing costs -
Slide 15: Net assets and net debt
Net assets and net debt As at 31 December 2004 UK IFRS GAAP Adjs IFRS* £m £m £m Net assets 414.7 (14.7) 400.0 Net debt 606.7 29.6 636.3 * IFRS net assets at 1 January 2005 will be amended to reflect adoption of IAS 32 & 39
Slide 16: Net assets reconciliation
Net assets reconciliation £m £m 2004 net assets - UK GAAP 414.7 IFRS adjustments: Opening net asset adjustment (24.4) 2004 adjustments: Income statement adjustments 104.4 As per restated income statement Foreign exchange on I/co loans (11.4) Taken to income statement under IFRS Tax (15.3) Dividends
Slide 17: Net debt reconciliation
Net debt reconciliation £m £m 2004 Net Debt - UK GAAP 606.7 IFRS adjustments: Finance Leases 31.0 Land and building leases split into component parts before lease classification test performed DMS net debt (1.4) transferred to held for sale IFRS adjustments 29.6 2004 Net debt - IFRS 636.3 As at 31 D
Slide 18: Summary
Summary • IFRS adoption will not materially impact – 2005 adjusted profit – how the business operates Additional 2005 considerations: • IAS 39 adopted 1 January 2005 - Amortisation of equity component of convertible bond (2005 onwards) − IAS 32/39 adoption will increase P&L volatility • Full year of
Slide 19: Appendix: Mecca CGU adjustment
Appendix: Mecca CGU adjustment UK GAAP • Impairment tests performed for the business as a whole • The future cash flows from Mecca support the carrying value IFRS • Impairment tests performed at individual club level • A number of clubs impaired. Net assets reduced by £43.7m • No uplift for clubs wh
Slide 20: Appendix: Foreign exchange on inter-company loans
Appendix: Foreign exchange on inter -company loans inter-company UK GAAP • Foreign exchange movements on inter-company loans taken to reserves • These movements net off against foreign exchange on translation of foreign subsidiaries’ inter-company loans on consolidation IFRS • Foreign exchange movem
Slide 21: Appendix: Lease accounting
Appendix: Lease accounting UK GAAP • Land and building leases accounted for as a single, combined lease • Majority of the leases were classified as operating leases IFRS • Land and building leases split into their component parts • Some separate building leases now classed as finance leases • Leased
Slide 22: Appendix: Business acquisitions
Appendix: Business acquisitions UK GAAP • Excess consideration classified as goodwill • Amortised over the shorter of 20 years and useful economic life IFRS • Separately identifiable intangible assets recognised and amortised over their useful economic life • Goodwill not amortised but reviewed annu
Slide 23: Appendix: Tax
Appendix: Tax UK GAAP • Deferred tax provided on timing differences IFRS • Wider in scope than UK GAAP • Requires deferred tax to be provided on all temporary differences • Awaiting HMRC clarification on treatment on some adjustments • Decreases deferred tax asset by £20.1m • Group’s effective tax r