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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Dtz Hldgs | LSE:DTZ | London | Ordinary Share | GB0002606118 | ORD 5P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 6.96 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number:3303N DTZ Holdings PLC 09 July 2003 9 July 2003 DTZ HOLDINGS PLC ('DTZ'/'Group') Preliminary results for the year ending 30 April 2003 Highlights * Turnover remained steady at #153.7 million (2002: #152.6 million) * Profits before tax and exceptional items of #9.1 million (2002: #12.7 million); profitability affected by weaker market conditions in Continental Europe, particularly Germany. * Resilient performance in the UK with strong contributions from investment, professional and consultancy businesses. * Disposal of Curzon Global Partners, generating an exceptional pre-tax profit of #5 million. * Cost management programme to ensure Group is well placed to benefit from market upturns as they occur. * Post year-end acquisition of the remaining shares in DTZ Asset Management France. Acquisition to be immediately earnings enhancing. * Wide range of new instructions for private and public organisations worldwide. * Good cashflow during year resulting in strong year-end cash position. * Total dividend for the year maintained at 6.25 pence per share in light of the Board's confidence in the Group's long term strategy and robust financial position. Commenting on the results, Tim Melville-Ross, DTZ's Chairman, said: "We have positioned the Group so that it is better protected in difficult markets, and well placed to benefit from any upturn as it occurs by continuing to focus on our chosen strategy, maintaining a strong balance sheet and containing costs. This will enable us to meet the needs of our clients and deliver enhanced shareholder returns over time." For further information, please contact: Tim Melville-Ross/Mark Struckett/Tim Maynard DTZ Holdings plc Tel: 020 7408 1161 Stephanie Highett/Dido Laurimore Financial Dynamics Tel: 020 7831 3113 Chairman's Statement - Year to 30 April 2003 The year to 30 April 2003 has been challenging, with continuing weak economic growth impacting on property markets worldwide. We have performed well in the United Kingdom but, in various countries overseas, our performance continued to be adversely affected by market weakness, particularly in Germany, to which I refer below. However, we continue to strengthen our competitive position in many areas, extend the range of services we offer to our clients worldwide and maintain our robust financial position. Financial Review Turnover was broadly unchanged at #153.7 million (#152.6 million). Profits before tax, minority interests and exceptionals increased in the second half over the first half by 87% to #5.9 million, but for the year as a whole fell by 29% to #9.1 million. Basic earnings per share on this basis fell by 39% to 8.60 pence affected also by a higher tax charge. Exceptional income of #5.0 million arose following the sale of our interest in Curzon Global Partners. Exceptional costs totalled #5.7 million, of which #4.0 million was for restructuring in Germany. Our cash position is strong. Cash balances exceeded our borrowings at the year end. In spite of some difficult leasing markets, profitability in the UK was not significantly reduced from last year. Our investment and professional businesses have performed well, as has our agency business in many parts of the country. Our levels of leasing business in some important markets in the UK have fallen by much less than the markets themselves. Our transactional capabilities are important to us and this performance underlines their quality. Outside the UK, our financial performance was affected by weaker market conditions, especially in Germany. Throughout the year we have carried out a programme of cost management, so that we are better protected in difficult markets and well placed to benefit from market upturns as they occur. In the light of our confidence in our long term strategy and the Group's robust financial position, the Board is recommending a maintained final dividend of 4.00 pence, making an unchanged total dividend for the year of 6.25 pence. Strategic Context We will continue to offer our clients an evolving range of quality property advisory and related services where they need them, provided of course that it makes commercial sense for us to do so. We are well placed to do this given our integrated approach to the delivery of client service, built on the sound base of high quality people. We have seen clear evidence that our ability to offer our services throughout Europe is benefiting our clients and therefore the Group. Our UK business benefits directly from our ability to offer services elsewhere. We are seeing a fundamental change in many of our markets to a European rather than national dimension. This is likely to be sustained over the long term and we need to position ourselves accordingly. The current disparity between our UK and some continental subsidiaries is partly a reflection of the resilience of the UK economy and the weakness of some continental economies, and partly a reflection of the currently greater strength, breadth and maturity of our UK business. These are characteristics that, over time, will accrue to our European businesses as well. Beyond Europe, our partnerships with our Asian colleagues, where we have minority equity holdings, and with our American associates, The Staubach Company, give us the opportunity to offer our clients services on a global basis. As well as geographical spread, we wish to be sure that our clients' requirements for more diverse and sophisticated property services and advice are met profitably. To that end, and in addition to developing our traditional " mainstream" transactional and professional services; - our corporate finance capability has been building strongly through the year; - DTZ Pieda Consulting has grown turnover and profit, and has been moving forward with its programme of opening centres of excellence outside the UK and; - our asset management transaction in France, completed after the year end, will give us the opportunity to develop this particular capability throughout Europe. Germany During the year, we have vigorously addressed the problems that the Group has faced in Germany. The German economy has been especially hard hit over the last three years and the impact of this on our business there has been compounded by local management issues. There has now been a change in leadership, changes in local management, radical cost cutting measures including some office closures, and the introduction of a much clearer forward strategy for our subsidiary there. We are confident that the actions we have taken will ensure that our German subsidiary is well placed to contribute positively to the future development of the Group, although the pace at which this occurs will clearly be influenced by the rate of progress in the recovery of the German economy. People In difficult market conditions, our people have to work ever harder to satisfy the needs of our clients and to generate acceptable returns to our shareholders, and I am extremely grateful for everything they have done. Strong leadership is even more important at such times, and I am very pleased with the significant changes that have been made to our senior management team in the recent past that will ensure the effective delivery of the strategy I have outlined above. In addition, David Watt will be stepping down from the Board at the AGM but will continue to act as Chairman of DTZ International based in Hong Kong and, as announced separately today, Killian O'Higgins, Managing Director of DTZ International, is joining the Board with immediate effect. I would like to thank David for his contribution to the Board, and to wish Killian well in his new role. Markets and Outlook The economic outlook continues to be uncertain. Growth in the United Kingdom is expected to be broadly unchanged in 2003 compared with 2002 but growth in the United States in 2003 is likely to be slower than in 2002 and the growth outlook for the Eurozone is also weak. We have therefore positioned the Group so that it is better protected in difficult markets, and well placed to benefit from any upturn as it occurs, by continuing to focus on our chosen strategy, maintaining a strong balance sheet and containing costs. This will enable us to meet the needs of our clients and deliver enhanced shareholder returns over time. Tim Melville-Ross Chairman 9 July 2003 Chief Executive's Operational Review INTRODUCTION This was a demanding year for the Group in which some good performances, particularly in the UK, helped offset the impact of deteriorating conditions in many of our markets. However, our results were particularly adversely affected by the losses which we incurred in Germany, which meant that the Group's profit before tax and exceptionals fell by 29% to #9.1 million (#12.7 million in 2001/ 02), while earnings per share were further affected by the impact on the tax charge of the resultant overseas tax losses which could not be offset in the year to 30 April 2003. As outlined below, we have taken significant action in Germany and elsewhere to ensure the Group is re-positioned to allow for a further period of subdued market conditions. MARKETS The depressed nature of global economies, compounded by the specific effects of Iraq and SARS, continued to feed its way through to occupational demand, primarily for office space. Financial centres across Europe saw substantial falls in demand for office space, with a subsequent impact on rental values, while the depressed conditions in high-tech areas continued. In general, the problem has been one of a rapid fall in demand rather than excessive construction of new buildings, with the majority of space placed on the market often being tenants' surplus accommodation. Looking forward, I expect subdued conditions in the office marketplace to continue until confidence returns to the business and financial sectors. The retail and distribution markets have held up much better. Generally, consumer expenditure has been the mainstay of economies over the last year or two which has been reflected in the property markets. In contrast to the office occupational markets, the investment market has been strong, buoyed by its performance and perception compared to other asset classes and the availability of low cost finance. The composition of the investment market has continued to alter with a dominance of private debt which inevitably affected pricing and the types of investment stock in demand. While the private sector has seen pressures, public sector expenditure has generally risen, leading to a comparable increase in demand for services, particularly in consultancy areas. PROPERTY ADVISORY BUSINESS United Kingdom Turnover in our main UK property advisory business (DTZ Debenham Tie Leung) was robust at #102.2 million (#100.9 million). This contained several trends within the business. Firstly, the balance between London and the South East (62%) and the other regions (38%) has moved slightly in favour of the regions, reflecting their stronger performance particularly in Scotland and the Midlands. Secondly, our professional business (69%) grew slightly relative to the transactional business (31%), reflecting the weaker office letting markets. Nonetheless, our office leasing agency business coped relatively well with some very difficult conditions in some areas of the market, winning an industry award for best UK Office Agency Team. By illustration, while overall transaction levels in the Central London marketplace halved, this was not reflected in our agency turnover which only reduced by around a third. The resultant gain in market share should continue with instructions such as our appointment as sole letting agents at 30 St Mary Axe on behalf of Swiss Re and as joint letting agents on the whole of The Portman Estate, covering 650 buildings and 110 acres. Outside Central London, we sought to build our M25 office team towards the end of 2002. This resulted in some significant business wins in the first quarter of 2003 with instructions on around 1 million sq ft of space, including 0.5 million sq ft at Stockley Park. Our teams also performed well in the generally stronger markets in the regions. Notable new office agency instructions include Glasgow Harbour and the re-development of the Grand Hotel in Birmingham. In the retail sector, we have one of the strongest shopping centre teams in the UK which values, manages and leases around 30% of the market. We are retained leasing agents on 75 existing shopping centres. During the year, we won instructions such as The Ridings in Wakefield and the Chequers Shopping Centre in Maidstone. Our UK logistics team undertook several very high profile deals which included one of the UK's largest single distribution building pre-lets of 800,000 sq ft to B&Q at Doncaster. In addition, we advised Pearson on the consolidation of its operations into a 450,000 sq ft facility at Rugby - an instruction facilitated by our US partners, The Staubach Company. The investment team had increasing success through the year and, during the first quarter of 2003, transacted around #1 billion worth of deals, well above the average for recent years. The team has performed particularly strongly in shopping centres, again reflecting around a 30% market share, advising on transactions such as the acquisition of an 11 shopping centre portfolio on behalf of CIT for #325 million. In the City of London, we won the instruction to dispose of the Aviva worldwide headquarters at 1 Undershaft, EC3 while progress has continued since the year end with deals such as the sale of Alban Gate, EC2 for #240 million. Our strong professional skills base in the UK continues to develop, and was acknowledged by an industry award for the best UK Professional team. Our 160 strong UK valuation team has doubled its turnover since 1999/2000 by broadening its expertise and working closely with other parts of the Group, including DTZ Pieda Consulting. Jobs handled during the year included work for Marks & Spencer and Safeway, both also involving many other parts of the business, while the team won major new instructions from Hammerson. The property management team has also been successful, particularly with the management of lease obligations for major occupiers, winning the outsourcing of HSBC's surplus properties, the overall appointment to RAC, and the asset management of the Magnet Group's UK stores. Residential is a growing part of our UK business with turnover this year up 7% to #7.8 million. Our new home sales business has grown particularly significantly, with current instructions on about 7,500 homes across the country in 11 offices. The Residential valuation team also had an effective year, valuing around #1.3 billion of property. The year end has seen a number of management changes with the Managing Director, Peter Stoughton-Harris, moving to European Valuations in order to help develop this growing area. Jeremy Payne, previously the MD of our Midlands and South West region, has taken over Peter's UK role. Overall, this was a satisfactory year for the UK property advisory business, with turnover and profits broadly stable, despite testing conditions in some leasing markets. While I have analysed the business by skill lines above, a major feature is the cross-skill teamwork which is increasingly enabling us to win major instructions and projects through applying an innovative and comprehensive approach. International Weaker overall economic conditions were reflected in a sharp fall in leasing activity across Europe although, as in the UK, investment held up quite well. Countries such as France, the Netherlands and Belgium which have a more diversified practice base tended to perform better than others. We therefore intend to continue our strategy of building a broader balance of business activities across the Continent. Overall, our international activities saw a small fall in turnover to #34.7 million (#35.2 million), although these figures exclude the significant turnover from those businesses where we do not have majority control. The overall operating loss for the year was #7.1 million (#4.7 million in 2001/02). This includes both the substantial German losses explained below and goodwill amortisation of #1.5 million, while it ignores our share of profits from overseas associates and joint ventures of #1.3 million. Thus, the overall trading contribution of our international interests outside Germany was a #0.6 million profit, which demonstrates the impact of our problems in Germany. The German economy failed to recover, turning into recession after the autumn elections. Our business there is predominantly transactional which directly reflects market conditions; this, combined with some failures in local management control, caused a trading loss of #4.9 million. We have taken firm action including the replacement of the Managing Director, hiring a new financial controller, closing two offices in Dusseldorf and Stuttgart and reducing staff by around 60. We also took an exceptional charge of #4.0 million during the year to allow for these actions. Looking forward, the team is now concentrated in Frankfurt, Berlin, Munich and Hamburg with a staff of about 75 to serve the needs of both domestic and international clients. Elsewhere in Continental Europe, leasing activities were also significantly reduced although we still saw some substantial transactions. For example, we let the 126,000 sq ft offices at 17 Boulevard Hausmann, Paris, to Groupe Danone on behalf of Credit Agricole's insurance fund, 86,000 sq ft of a major new development in Prague on behalf of Doughty Hanson and PDP, while in the retail sector, we were appointed to lease the 381,000 sq ft shopping centre within the Mahon Point peninsular scheme in Cork. As in the UK, the investment market was active. Notably, we advised the German investor fund, DEKA, on its first acquisition in Italy with the purchase of four office buildings in Milan for Euro133 million and on its first acquisition in the Czech Republic. Professional services have grown their turnover by around 14%. This has arisen both from areas of property management such as the new instructions on 'La Gran Manzana' shopping centre in Northern Spain and from valuation instructions, such as our work for the US Department of State in Eastern Europe. Our French Asset Management subsidiary had a very successful year. Since the year end, we have restructured the minority interests in this business through a transaction approved by shareholders at an EGM on 30 June 2003. This provides the foundation to expand the operation into other continental European countries over the coming years. We expect this business to be a source of profit growth in its own right while also helping to widen our income base on the Continent and providing cross-selling opportunities with the rest of the Group. In Asia, transactional business in our associate businesses in Hong Kong and Singapore suffered from the economic downturn and recovery was postponed by the SARS epidemic. Since the year end, however, travel restrictions have been lifted in both cities and business appears to be recovering, with, for example, a noticeable uplift in interest in residential and hotel investments. Throughout this, professional services in both countries remained in reasonable demand and the mainland China business continued to grow where the business now comprises some 830 people in 8 offices. We are establishing a clear expertise in office towers in North Asia and have been instructed on 800,000 sq ft in the New World Tower in Shanghai, 930,000 sq ft in the Golden Business Centre in Shenzhen and 500,000 sq ft in 21FC in Hong Kong. The investment market has also been active; we advised on the purchase of the Kincheng Bank Building for around HK$300 million and the retail and theatre section of Kiu Fai Mansion for HK$160 million. This activity is being echoed in South East Asia with instructions such as the 200 room Meritus Negara Hotel in Singapore and a 700,000 sq ft shopping mall at Putrajaya, Malaysia. Elsewhere, we continue to build our relationship with The Staubach Company in the Americas and I am pleased that the business handled by our global joint venture company, DTZ Staubach Tie Leung, held up well. CONSULTING The business continued to make pleasing progress, growing turnover by 16.1% to #16.1 million, of which #15.8 million was in the UK. The business continues to win good instructions both in its own right and increasingly as part of a group-wide team on projects like the Safeway valuation. Examples of DTZ Pieda Consulting's work include: * Advising the London Borough of Islington in relation to the proposed relocation of Arsenal Football Club. * Leading a consortium chosen to formulate a masterplan for the redevelopment of a 100 acre site in Hereford City centre for Advantage West Midlands and Herefordshire Council. * Option appraisal for the extension to the Eden Project in Cornwall. We have established centres of excellence in Frankfurt and Paris to meet Continental demand for such services and the initial response is encouraging. The MD of Pieda Consulting, Tim Hodgson, moved at the year end to become Chief Operating Officer of the UK. An announcement will be made shortly on his successor as the MD of DTZ Pieda Consulting. CURZON GLOBAL PARTNERS At our half year results, we announced the disposal of our wholly owned subsidiary, Curzon Global UK Limited, which has a 50% share in Curzon Global Partners, to AEW Capital Management, our on-going partners in this fund management venture. This transaction generated an exceptional pre-tax profit of #5.0 million in the year. The total net cash inflow was in excess of #5 million, of which #3.6 million was received before the year end and the remainder in June. The profitable sale of our investment in this venture means that we will look to expand our direct activities in asset management and corporate finance as well as building our retained UK investment management team. CORPORATE FINANCE We invested in the development of our Corporate Finance team during the course of the year which, as anticipated, has led to a small net loss. We completed our senior team by October with the recruitment of Simon Berrill as Managing Director. Some 77% of the turnover was billed in the second half. We are encouraged by the growing deal flow emerging from Corporate Finance. Alongside our investment department, it advised Morley Fund Management on setting up a new factory outlet fund with McArthurGlen on assets with a capital value of around #173 million and Warner Estate Holdings on the formation of the #223 million Agora Shopping Centre Fund owned in a joint venture with Bank of Scotland Corporate Banking. There is a good future pipeline and we expect this team to move into profit in the current financial year. STRATEGY Over the past few years, we have reflected the changes in our markets by developing the Group from a leading UK business into a leading European property services company that has global reach through its Asian and American associates. This has, since 1998, involved integrating the European equity holding of our partners and this process is now largely complete. The financial performance of our Continental business exceeded our expectations until the severe market downturn in 2001/02. We are now mainly focusing on the organic development of the continental business. Core market skills in each country are being evolved and complemented by growing pan-European capabilities that provide a range of business lines with consistent service delivery and a better spread of income sources. This should position us well for any upturn. OUTLOOK Looking forward, in the UK, the southern office leasing markets will remain difficult and we may see these conditions spread geographically. However, our range of services and income sources provides relative protection against substantial downturns while our leading market position means that we tend to gain market share in tough conditions. The Continental European markets will continue to be difficult and we have been taking action to control costs while focusing on key integration issues. Despite the difficult conditions, I am pleased with the progress that Killian O'Higgins and his team have made in this respect and am confident that the improvements made in Germany will lead to better financial performance by our international business. Finally, I would like to thank the people in the business who have worked hard to enable us to rise to the challenge of some difficult market conditions and circumstances. Their skill and dedication and the relationship with our clients means that we can face the future with confidence. Mark Struckett Group Chief Executive 9 July 2003 Consolidated profit and loss account Year ended 30 April 2003 Before Exceptional Exceptional Items Items (Note 2) Year to Year to 2003 2003 30 April 2003 30 April 2002 Notes #'000 #'000 #'000 #'000 Turnover 1 153,717 - 153,717 152,587 Staff costs (93,706) (3,168) (96,874) (93,190) Other operating costs (51,446) (2,557) (54,003) (48,369) (145,152) (5,725) (150,877) (141,559) Operating profit 8,565 (5,725) 2,840 11,028 Share of losses in joint ventures (824) - (824) (845) Share of profits in associated 1,527 - 1,527 2,537 undertakings Total operating profit 9,268 (5,725) 3,543 12,720 Income from other fixed asset 37 - 37 40 investments Profit on disposal of fixed asset - 5,017 5,017 - investment Net interest (payable)/receivable (238) - (238) (49) Profit on ordinary activities 9,067 (708) 8,359 12,711 before taxation Tax on profit on ordinary 3 (4,488) (312) (4,800) (5,081) activities Profit on ordinary activities 4,579 (1,020) 3,559 7,630 after taxation Equity minority interests (282) - (282) (713) Profit for the financial year 4,297 (1,020) 3,277 6,917 Equity dividends paid and 4 (3,151) (3,088) proposed Profit retained, transferred to 126 3,829 reserves Basic earnings per ordinary share 5 8.60p 6.56p 14.0p Diluted earnings per ordinary 5 8.59p 6.55p 13.9p share Dividends per share (net) Interim paid 2.25p 2.25p Final proposed 4.00p 4.00p All amounts derive from continuing operations Analysis of earnings before interest, tax, depreciation and amortisation (EBITDA) (pre exceptional items) for the year ended 30 April 2003 Year to Year to 30 April 30 April 2003 2002 #'000 #'000 Profit on ordinary activities before taxation and exceptional items 9,067 12,711 Add interest payable (less receivable) 238 49 Add depreciation 3,268 3,475 Add goodwill amortisation 1,771 992 EBITDA 14,344 17,227 Consolidated balance sheet 30 April 2003 2003 2002 #'000 #'000 Fixed assets Intangible assets 17,329 15,756 Tangible assets 8,291 9,473 Investments 7,345 7,688 32,965 32,917 Current assets Work in progress 5,209 5,411 Debtors 56,044 59,169 Cash at bank and in hand 7,377 2,717 68,630 67,297 Creditors Amounts falling due within one year (46,384) (43,901) Net current assets 22,246 23,396 Total assets less current liabilities 55,211 56,313 Creditors Amounts falling due after more than one year (2,210) (2,712) Provisions for liabilities and charges (3,803) (6,368) Equity minority interests (2,722) (1,861) Net assets 46,476 45,372 Equity shareholders' funds 46,476 45,372 Reconciliation of movement in shareholders' funds 2003 2002 Year ended 30 April 2003 #'000 #'000 Profit attributable to the shareholders of the company 3,277 6,917 Dividends (3,151) (3,088) 126 3,829 Other recognised gains and losses relating to the year: Translation differences on foreign currency net investments 970 58 Other movements New share capital issued 8 574 Net addition to shareholders' funds 1,104 4,461 Opening shareholders' funds 45,372 40,911 Closing shareholders' funds 46,476 45,372 Consolidated cash flow statement Year ended 30 April 2003 2003 2002 # '000 # '000 Net cash inflow from operating activities 17,520 14,294 Dividends received from associated undertakings 437 2,221 Returns on investments and servicing of finance (201) (9) Taxation paid (6,136) (8,788) Capital expenditure and financial investment (1,808) (2,424) Acquisitions and disposals (1,520) (4,781) Equity dividends paid (3,131) (3,088) Net cash inflow/(outflow) before financing 5,161 (2,575) Net cash outflow from financing (501) (208) Increase/(decrease) in cash 4,660 (2,783) Statement of total recognised gains and losses Year ended 30 April 2003 Profit for the financial year 3,277 6,917 Translation differences on foreign currency net investments 970 58 Total recognised gains and losses relating to the year 4,247 6,975 Prior period adjustment - adoption of FRS19 - 626 Total recognised gains and losses since the last annual report 4,247 7,601 Notes to the Preliminary Results 1 Segmental analysis Year ended 30 April 2003 United Kingdom International Total # '000 # '000 # '000 Turnover Agency and investment commission 31,975 16,868 48,843 Professional and property management fees 71,257 17,548 88,805 Consulting 15,777 292 16,069 119,009 34,708 153,717 Operating profit - pre exceptional items 15,661 (7,096) 8,565 Operating loss - exceptional items (747) (4,978) (5,725) Operating profit 14,914 (12,074) 2,840 Share of losses in joint ventures (747) (77) (824) Share of profits in associated undertakings 126 1,401 1,527 Total operating profit 14,293 (10,750) 3,543 Income from other fixed asset investments 37 - 37 Profit on disposal of fixed asset investment - 5,017 - 5,017 exceptional items Profit before interest 19,347 (10,750) 8,597 Net interest payable (238) Profit on ordinary activities before taxation 8,359 Year ended 30 April 2002 Turnover Agency and investment commission 34,956 19,579 54,535 Professional and property management fees 68,810 15,404 84,214 Consulting 13,579 259 13,838 117,345 35,242 152,587 Operating profit 15,713 (4,685) 11,028 Share of losses in joint ventures (788) (57) (845) Share of profits in associated undertakings 85 2,452 2,537 Total operating profit 15,010 (2,290) 12,720 Income from other fixed asset investments 40 - 40 Profit before interest 15,050 (2,290) 12,760 Net interest receivable (49) Profit on ordinary activities before taxation 12,711 2. The exceptional costs incurred during the year of #5,725,000 were made up of redundancy and related costs of #3,168,000 and other costs of #2,557,000. Within these costs, #4,049,000 related to Germany, whilst the balance of #1,676,000 principally related to redundancy and related costs in the UK and Continental Europe. In Germany, the costs arose following a fundamental review of its operations which included the closure of 2 offices, a reduction in the workforce by 35% and the provision of #1,689,000 against estimates of income and costs that had been accrued at 30 April 2003. The profit on the sale from the other fixed asset investments related to the sale of the Group's wholly owned subsidiary Curzon Global UK Limited, which had a 50% interest in the Curzon Global Partners joint venture, to AEW Capital Management L.P. The tax effect on the exceptional items has been shown within the Consolidated Profit and Loss Account 3. The tax charge includes tax of #288,000 (2002 : #266,000) on profits/losses in overseas subsidiaries, and #17,000 (2002 : #728,000) for the Group's share of tax on profits/losses from associated undertakings. 4. The interim dividend paid in February 2003 of 2.25p (net) per ordinary share absorbed #1,137,000 (2002 : #1,097,000). The proposed final dividend of 4.00p net (2002 : 4.00p) per ordinary share, if approved at the Annual General Meeting, will bring the total dividend for the year to 6.25p (net) (2002 : 6.25p) and will absorb #3,151,000 (2002 : #3,088,000). The dividend will be paid on 15 September 2003 to those shareholders on the register at close of business on 15 August 2003. 5. The basic earnings per ordinary share have been calculated using the weighted average number of shares in issue of 49,974,367 and ranking for dividend for the year to 30 April 2003 (2002 : 49,565,000), and the profit for the year of #3,277,000 (2002 : #6,917,000). The diluted earnings per ordinary share are based on a weighted average of 50,044,422 shares in issue (2002 : 49,830,353). This total includes shares in issue but not ranking for dividend plus options granted but not exercised as at year end. 6. Principal acquisitions in the year, none of whose results were material to the profit and loss account, were as follows: * On 15 May 2002, the Group, through its 50.8% subsidiary DTZ Iberica Asesores Immobiliarios Internacionales SA, acquired 50.1% of the ordinary share capital of Cavada King SA (subsequently renamed DTZ Cavada King SA) for a consideration of #632,000, of which #270,000 was paid in June 2003. Net assets acquired amounted to #37,000 and goodwill of #595,000 arose, which is being amortised over 5 years. * On 28 June 2002, the Group acquired the remaining 25% of the ordinary share capital of DTZ Australia (NSW) Pty Ltd for a consideration of #57,000. Net liabilities of #287,000 were acquired, giving rise to goodwill of #344,000 which is being amortised over 20 years. * On 1 July 2002, the Group acquired the new homes business of Robert Powell & Co for an initial consideration of #221,000, with a further payment of #100,000 in cash paid on 1st July 2003. Further payments up to a maximum of #1,300,000 may be made over the next two years. However, based on present projections, it is not anticipated that any further consideration will be payable. No assets were acquired, therefore, #321,000 of goodwill arose. This is being amortised over 10 years. * During the year the Group made the following acquisitions of additional shares in its existing subsidiary DTZ Jean Thouard SA ("DTZ JT") from local management. On 15 August 2002, the Group acquired a further 1.76% of the ordinary share capital of DTZ JT for a cash consideration of #109,000. Goodwill of #29,000 arose and is being amortised over 20 years. On 1 January 2003, the group acquired a further 1.75% of the ordinary share capital of DTZ JT for a cash consideration of #107,000. Goodwill of #21,000 arose and is being amortised over 20 years. These acquisitions increased the Group's interest in DTZ JT to 98.07%. * On 5 November 2002, the Group acquired a further 20% of the ordinary share capital of EuroAsia Properties Limited from the former joint venture partner. Consideration of #8,000 was paid. Net liabilities of #53,000 were acquired, giving rise to goodwill of #61,000 which is being amortised over 3 years. The acquisition increased the Group's interest to 70% * Also on 5 November 2002, EuroAsia Properties Limited acquired 60% of the entire issued share capital of DTZ Japan KK from Sino Beijing Venture Limited. Consideration of #23,000 was paid. Net liabilities of #651,000 were acquired giving rise to goodwill of #628,000 which is being amortised over two years. * On 26 February 2003, the Group acquired a further 16% of the ordinary share capital of DTZ Austria GmbH from the minority interest shareholder. * Consideration of #97,000 was paid. Net liabilities of #133,000 were acquired giving rise to goodwill of #230,000 which is being amortised over 4 years. This acquisition increased the Group's interest to 76%. Since 30 April 2003 the Group has completed the following acquisition: * On 7 July 2003, the Group acquired the remaining shares it did not own in DTZ Asset Management (France) SA ("AMF"), a transaction approved by shareholders at an Extraordinary General Meeting on 30th June 2003. The consideration comprises an initial cash payment of #5.3 million and a deferred cash consideration which, based on the future profits of AMF, is expected to amount to approximately #1.6 million. At the same time, a new company, to be known as DTZ Asset Management (Europe) SA, is to be set up (in which DTZ will hold 80% and the sellers of the shares in AMF will hold 20%) to expand the Group's real estate asset management operations in France and other continental European countries. 7. These accounts do not constitute the Company's statutory accounts for the year ended 30 April 2003 or 2002 but are derived from those accounts. Statutory accounts for 2002 have been delivered to the Registrar of Companies and those for 2003 will be delivered following the Company's Annual General Meeting. The auditors have reported on these accounts; the reports were unqualified and did not contain a statement under S237(2) or (3) of the Companies Act 1985. 8. The financial information set out in the announcement was approved by the Board of Directors on 9 July 2003. This information is provided by RNS The company news service from the London Stock Exchange END FR EADXPEEDDEAE
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