Tomson Group Limited — Earnings Release 2005

Sep 8, 2005

Listed Company Information

Listed Company Information
TOMSON GROUP<00258> - Results Announcement Tomson Group Limited announced on 08/09/2005: (stock code: 00258 ) Year end date: 31/12/2005 Currency: HKD Auditors' Report: N/A Interim report reviewed by: Audit Committee (Unaudited ) (Unaudited ) Last Current Corresponding Period Period from 01/01/2005 from 01/01/2004 to 30/06/2005 to 30/06/2004 Note ('000 ) ('000 ) Turnover : 309,259 101,882 Profit/(Loss) from Operations : 123,107 37,917 Finance cost : (9,904) (2,153) Share of Profit/(Loss) of Associates : 872 323 Share of Profit/(Loss) of Jointly Controlled Entities : 11,835 6,034 Profit/(Loss) after Tax & MI : 230,480 35,444 % Change over Last Period : +550.27 % EPS/(LPS)-Basic (in dollars) 2 : 0.2048 0.0318 -Diluted (in dollars) 2 : 0.1829 N/A Extraordinary (ETD) Gain/(Loss) : N/A N/A Profit/(Loss) after ETD Items : 230,480 35,444 Interim Dividend : Nil Nil per Share (Specify if with other : N/A N/A options) B/C Dates for Interim Dividend : N/A Payable Date : N/A 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. Application of New Accounting Standards In the period of six months ended 30th June, 2005, the Group has applied, for the first time, a number of new Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards ("HKAS(s)") and Interpretations (hereinafter collectively referred to as "new HKFRSs") issued by the Hong Kong Institute of Certified Public Accountants that are effective for accounting periods beginning on or after 1st January, 2005. The application of the new HKFRSs has resulted in a change in the presentation of the income statement and the change has been applied retrospectively. Summary of the effects of the changes: An analysis of increase in profit for the six months ended 30th June, 2004 in this Results Announcement Form as compared with that for the same period presented in the Results Announcement Form submitted in 2004 by line items is presented below according to their nature: Six months ended 30th June, 2004 HK$'000 Increase in fair values of investment properties (Note (a)) 16,866 ------- Increase in profit from operations 16,866 Increase in effective interest expense on the liability component of convertible bonds (Note (b)) (758) Increase in share of results of jointly controlled entities (Note (c)) 361 Increase in taxation (2,891) ------- Increase in profit after taxation and MI 13,578 ====== (a) Investment properties The Group has elected to use the fair value model to account for its investment properties for the current period which requires gains or losses arising from changes in the fair value of investment properties to be recognized directly in the income statement for the period in which they arise. However, in the last corresponding period, investment properties were measured at open market values, with revaluation surplus or deficits credited or charged to investment properties revaluation reserve unless the balance on this reserve was insufficient to cover a revaluation decrease, in which case the excess of the revaluation decrease over the balance on the investment properties revaluation reserve was charged to the income statement. Where a decrease had previously been charged to the income statement and revaluation subsequently arose, that increase was credited to the income statement to the extent of the decrease previously charged. The Group has applied the relevant transitional provisions in HKAS 40 and elected to apply such HKAS retrospectively, hence, there was an increase in fair value of investment properties recognized in the income statement for the period ended 30th June, 2004. (b) Finance cost HKAS 32 requires the Company to separate the zero coupon convertible bonds due 2009 (the "Bonds") issued by the Company into liability and equity components on its initial recognition and to account for these components separately. The liability component is classified as a liability carried at amortised cost using the effective interest method while the equity component is grouped under the reserves of the Company. The transaction costs in relation to issuance of convertible bonds are allocated to the liability and equity components in proportion to the allocation of proceeds. In the last corresponding period, the convertible bonds were classified as liabilities on the balance sheet. As HKAS 32 requires retrospective application, the finance costs for the last corresponding period in this Results Announcement Form has been restated as there was an increase in effective interest expense on the liability component of the Bonds. (c) Share of results of jointly controlled entities The share of results of jointly controlled entities for the current period and the last corresponding period in this Results Announcement Form was presented after charging/crediting the share of taxation of the jointly controlled entities while the share of results of jointly controlled entities for the six months ended 30th June, 2004 presented in the Results Announcement Form submitted previously for that period was calculated before crediting the share of taxation of jointly controlled entities. 2. Earnings per Share The calculation of the basic and diluted earnings per share attributable to the ordinary shareholders of the Company is based on the following data:- Six months ended 30th June (Restated) 2005 2004 HK$'000 HK$'000 Earnings Profit for the period attributable to shareholders of the Company for the purposes of basic earnings per share 230,480 35,444 =============== Adjustment of finance costs on convertible bonds due 2009 9,904 ------- Profit for the period attributable to shareholders of the Company for the purposes of diluted earnings per share 240,384 ======= Number of shares Weighted average number/number of ordinary shares for the purposes of basic earnings per share 1,125,200,480 1,113,249,112 ================ Effect of dilutive potential ordinary shares - Convertible bonds due 2009 189,097,858 -------------- Weighted average number of ordinary shares for the purposes of diluted earnings per share 1,314,298,338 ============= For the six months ended 30th June, 2004, the effect of dilutive potential ordinary shares in respect of convertible bonds due 2009 was anti- dilutive. Accordingly, no diluted earnings per share was shown. 3. Discount on Acquisition Released to Income In March 2005, the Group acquired a 20% interest in the issued share capital of Bonton Co. Ltd. ("Bonton"), a then 80% indirectly owned subsidiary of the Company which holds a subsidiary engaged in property development, at a consideration of approximately HK$140,395,000. While the fair value of the Company's share of the identifiable assets and liabilities of Bonton at the date of acquisition, in aggregate, amounted to approximately HK$265,179,000. The excess of the fair value over the cost of acquisition amounted to HK$124,784,000 and represented the discount on acquisition credited to the consolidated income statement for the period under review.