CTF Services Limited — Earnings Release 2005

Oct 5, 2005

Listed Company Information

Listed Company Information
NWS HOLDINGS<00659> - Results Announcement NWS Holdings Limited announced on 05/10/2005: (stock code: 00659 ) Year end date: 30/06/2005 Currency: HKD Auditors' Report: Unqualified (Audited ) (Audited ) Last Current Corresponding Period Period from 01/07/2004 from 01/07/2003 to 30/06/2005 to 30/06/2004 Note ('Million ) ('Million ) Turnover : 10,286.1 12,552.9 Profit/(Loss) from Operations : 1,965.3 547.8 Finance cost : (205.5) (280.8) Share of Profit/(Loss) of Associates : 423.3 493.0 Share of Profit/(Loss) of Jointly Controlled Entities : 1,019.1 1,127.5 Profit/(Loss) after Tax & MI : 2,918.0 1,538.2 % Change over Last Period : +90 % EPS/(LPS)-Basic (in dollars) : 1.62 0.86 -Diluted (in dollars) : 1.61 0.86 Extraordinary (ETD) Gain/(Loss) : 0 0 Profit/(Loss) after ETD Items : 2,918.0 1,538.2 Final Dividend : $0.62 $0.25 per Share (Specify if with other : in scrip form N/A options) with cash option B/C Dates for Final Dividend : 24/11/2005 to 29/11/2005 bdi. Payable Date : 20/01/2006 B/C Dates for (-) General Meeting : N/A Other Distribution for : N/A Current Period B/C Dates for Other Distribution : N/A Remarks: 1. Basis of preparation and accounting policies The accounts have been prepared in accordance with accounting principles generally accepted in Hong Kong and comply with accounting standards issued by the Hong Kong Institute of Certified Public Accountants (" HKICPA"), including applicable Hong Kong Statements of Standard Accounting Practice and certain Hong Kong Financial Reporting Standards ("HKFRS") and Hong Kong Accounting Standards ("HKAS") (collectively the "HKFRSs") as described further below. The accounts are prepared under the historical cost convention, except that investment properties and other investments are carried at fair value. The HKICPA has issued a number of new and revised HKFRSs, which are effective for accounting periods commencing on or after 1 January 2005. In preparing these accounts, the Group early adopted the following HKFRS and HKASs: HKFRS 3 Business combinations HKAS 36 Impairment of assets HKAS 38 Intangible assets Following the adoption of HKFRS 3, HKAS 36 and HKAS 38, goodwill on acquisitions of subsidiary companies, associated companies and jointly controlled entities is no longer amortized but tested for impairment annually. Any impairment loss recognized during the year is charged to the consolidated profit and loss account. Accumulated amortization as at 1 July 2004 has been eliminated with a corresponding decrease in the cost of goodwill. Goodwill previously eliminated against reserves, totalling HK$1,971.4 million as at 1 July 2004 and included in revenue reserve, is not reinstated on the balance sheet or included in the calculation of the profit or loss on disposal of subsidiary companies, associated companies or jointly controlled entities. The Group ceased amortization of negative goodwill from 1 July 2004. The balance of the negative goodwill, after eliminating its corresponding accumulated amortization, has been derecognized and credited to the equity as at 1 July 2004. From 1 July 2004, any excess of the fair value of the Group's share of the net identifiable assets of the acquired subsidiary companies, associated companies or jointly controlled entities over the cost of an acquisition is recognized immediately in the consolidated profit and loss account. These changes in the accounting policies in goodwill and negative goodwill have been made in accordance with the transitional provisions in the respective standards and have been applied prospectively. In particular, negative goodwill arising on acquisitions has been derecognized from 1 July 2004 and this results in the following: HK$'m Increase in opening reserves 976.5 Decrease in negative goodwill 861.4 Increase in jointly controlled entities 32.0 Increase in associated companies 83.1 ======= In addition, these changes in accounting policies have resulted in the followings: HK$'m Decrease in amortization of goodwill 63.3 Decrease in amortization of negative goodwill (114.8) Negative goodwill credited to profit and loss account 2.7 Increase in profit on disposal of assets 1,711.9 -------- Increase in profit for the year ended 30 June 2005 1,663.1 ======== The Group has not early adopted other new and revised HKFRSs in the accounts for the year ended 30 June 2005. The Group has already commenced an assessment of the impact of these new and revised HKFRSs but is not yet in a position to analyze and quantify the impact of these new and revised HKFRSs on its results of operations and financial position. 2. Operating profit Operating profit of the Group is arrived at after crediting and charging the following: 2005 2004 HK$'m HK$'m Crediting Gross rental income from investment properties 40.9 40.5 Less: Outgoings (10.1) (10.6) --------- --------- 30.8 29.9 ========= ========== Other income Profit on disposal of subsidiary companies 749.3 395.6 Profit on disposal of a jointly controlled entity 1,092.3 13.1 Profit on disposal of an investment 190.7 - Profit on disposal of trading securities - 13.7 Amortization of net negative goodwill - 70.8 Interest income 33.5 9.3 Management fee 31.4 48.8 Machinery hire income 20.2 13.0 --------- --------- 2,117.4 564.3 Charging Cost of inventories sold 905.6 780.7 Depreciation 200.6 441.7 Operating lease rental expense Land and buildings 54.1 87.4 Other equipment 1.0 55.9 Other charges Loss on disposal of a subsidiary company - 3.3 Loss on disposal of a jointly controlled entity 2.1 - Loss on disposal of fixed assets - 26.7 Assets impairment loss 57.8 375.4 --------- --------- 59.9 405.4 ========= ======== 3. Earnings per share The calculation of basic and diluted earnings per share is based on the profit of HK$2,918.0 million (2004: HK$1,538.2 million). The calculation of basic earnings per share is based on the weighted average of 1,803.7 million (2004: 1,784.5 million) shares in issue during the year. The calculation of the diluted earnings per share for the year ended 30 June 2005 is based on 1,813.1 million (2004: 1,799.0 million) shares which were the weighted average number of 1,803.7 million (2004: 1,784.5 million) shares in issue during the year plus the weighted average of 9.4 million shares deemed to be issued at HK$3.725 (2004: 14.4 million at HK$ 3.725 and 0.1 million at HK$6.93), if all outstanding share options had been exercised. The convertible bonds do not have a dilutive effect.