- Financial Statements
Notes to the Consolidated Financial Statements
for the year to 31 December 2007
4. Business and geographical segments
Business segments
For management purposes, the Group is currently organised into five operating divisions - Housing United Kingdom, Housing North America, Housing Spain and Gibraltar, Construction and Corporate. These divisions are the basis on which the Group reports its primary segment information.
Segment information about these businesses is presented below.
| Housing United Kingdom | Housing North America | Housing Spain and Gibraltar | Construction | Corporate | Consolidated | |
| 2007 | £m | £m | £m | £m | £m | £m |
| Revenue: | ||||||
| External sales | 3,053.8 | 986.8 | 64.4 | 609.3 | – | 4,714.3 |
| Inter-segment sales | – | – | – | 34.5 | – | 34.5 |
| Eliminations | – | – | – | (34.5) | – | (34.5) |
| Total revenue | 3,053.8 | 986.8 | 64.4 | 609.3 | – | 4,714.3 |
| Result: | ||||||
| Operating profit/(loss) before joint ventures, brand amortisation and exceptional items | 409.1 | 53.3 | 2.2 | 3.4 | (15.4) | 452.6 |
| Share of results of joint ventures | 9.1 | 14.2 | – | 0.1 | – | 23.4 |
| Profit/(loss) on ordinary activities before finance costs, exceptional items and amortisation of brands | 418.2 | 67.5 | 2.2 | 3.5 | (15.4) | 476.0 |
| Brand amortisation | (3.7) | – | – | – | – | (3.7) |
| Exceptional items | (47.9) | (321.3) | (6.3) | – | (4.2) | (379.7) |
| Profit/(loss) on ordinary activities before finance costs | 366.6 | (253.8) | (4.1) | 3.5 | (19.6) | 92.6 |
| Finance costs (net) | (112.1) | |||||
| Taxation | (177.2) | |||||
| Loss for the year | (196.7) |
Inter-segment Construction and Housing revenue relates to contracts conducted on an arm's-length basis.
| Housing United Kingdom | Housing North America | Housing Spain and Gibraltar | Construction | Corporate | Consolidated | |
| 2007 | £m | £m | £m | £m | £m | £m |
| Asset and liabilities: | ||||||
| Segment assets | 5,350.1 | 976.7 | 182.1 | 96.6 | 39.5 | 6,645.0 |
| Joint ventures | 39.6 | 20 | 0.2 | 0.1 | – | 59.9 |
| Segment liabilities | (1,548.7) | (316.4) | (66.7) | (232.0) | (70.6) | (2,234.4) |
| Net operating assets/(liabilities)* | 3,841.0 | 680.3 | 115.6 | (135.3) | (31.1) | 4,470.5 |
| Goodwill | 699.8 | |||||
| Current taxation (net) | (137.6) | |||||
| Deferred taxation (net) | 87.9 | |||||
| Net debt | (1,415.4) | |||||
| Net assets | 3,705.2 |
* The Group is unable to allocate the defined benefit pension scheme assets and liabilities of the Taylor Woodrow Group Pension and Life Assurance Fund on an actuarial basis by entity. However, for the purposes of the segmental analysis above the Group has allocated the deficit on the basis of members in the plan. This allocation is performed solely for the purposes of providing a more meaningful segmental analysis and is not an appropriate apportionment in accordance with IAS 19 Retirement benefits. The assets and liabilities of the George Wimpey Staff Pension Scheme have been allocated in their entirety to UK Housing.
| Housing United Kingdom | Housing North America | Housing Spain and Gibraltar | Construction | Corporate | Consolidated | |
| 2007 | £m | £m | £m | £m | £m | £m |
| Other information: | ||||||
| Property, plant and equipment additions | 6.2 | 5.8 | 0.3 | 1.3 | – | 13.6 |
| Amortisation of intangibles* | 15.7 | 20.0 | – | – | – | 35.7 |
| Depreciation – plant and equipment | 3.3 | 3.6 | 0.1 | 1.3 | – | 8.3 |
| Other non-cash expenses: | ||||||
| Provisions provided | 48.7 | 28.7 | 0.6 | – | – | 78.0 |
* The amortisation of intangibles includes impairment losses of £10.0m on the Laing Homes brand (Housing United Kingdom) and £20.0m on the Morrison Homes brand (Housing North America) following their curr`ent retirements.
| Housing United Kingdom* | Housing North America* | Housing Spain and Gibraltar* | Construction* | Corporate* | Consolidated | |
| 2006 | £m | £m | £m | £m | £m | £m |
| Revenue: | ||||||
| External sales | 1,759.2 | 1,170.2 | 92.1 | 550.6 | – | 3,572.1 |
| Inter-segment sales | 4.1 | – | – | 60.8 | – | 64.9 |
| Eliminations | (4.1) | – | – | (60.8) | – | (64.9) |
| Total revenue | 1,759.2 | 1,170.2 | 92.1 | 550.6 | – | 3,572.1 |
* Restated see note 1.
| Housing United Kingdom* | Housing North America* | Housing Spain and Gibraltar* | Construction* | Corporate* | Consolidated | |
| 2006 | £m | £m | £m | £m | £m | £m |
| Result: | ||||||
| Operating profit/(loss) before joint ventures | 215.4 | 209.1 | 26.8 | 9.6 | (13.2) | 447.7 |
| Share of results of joint ventures | 8.6 | 13.5 | – | – | – | 22.1 |
| Profit/(loss) on ordinary activities before finance costs | 224.0 | 222.6 | 26.8 | 9.6 | (13.2) | 469.8 |
| Finance costs, net | (64.2) | |||||
| Taxation | (115.0) | |||||
| Profit for the year | 290.6 |
* Restated see note 1.
| Housing United Kingdom* | Housing North America* | Housing Spain and Gibraltar* | Construction* | Corporate* | Consolidated | |
| 2006 | £m | £m | £m | £m | £m | £m |
| Assets and liabilities: | ||||||
| Segment assets | 2,160.0 | 865.0 | 173.7 | 106.1 | 18.1 | 3,322.9 |
| Joint ventures | 33.5 | 19.4 | – | 3.3 | – | 56.2 |
| Segment liabilities | (609.5) | (318.9) | (82.2) | (249.1) | (25.9) | (1,285.6) |
| Net operating assets/(liabilities) (†) | 1,584.0 | 565.5 | 91.5 | (139.7) | (7.8) | (2,093.5) |
| Goodwill | 363.1 | |||||
| Current taxation (net) | (54.4) | |||||
| Deferred taxation (net) | 94.6 | |||||
| Net debt | (391.3) | |||||
| Net assets | 2,105.5 |
* Restated see note 1.
† The Group is unable to allocate the defined benefit pension scheme assets and liabilities of the Taylor Woodrow Group Pension and Life Assurance Fund on an actuarial basis by entity. However, for the purposes of the segmental analysis above, the Group has allocated the deficit on the basis of members in the plan. This allocation is performed solely for the purposes of providing a more meaningful segmental analysis and is not an appropriate apportionment in accordance with IAS 19 Retirement benefits.
| Housing United Kingdom* | Housing North America* | Housing Spain and Gibraltar* | Construction* | Corporate* | Consolidated | |
| 2006 | £m | £m | £m | £m | £m | £m |
| Other information: | ||||||
| Property, plant and equipment additions | 2.5 | 1.7 | 0.3 | 2.2 | – | 6.7 |
| Depreciation – plant and equipment | 1.1 | 1.1 | 0.1 | 5.4 | – | 7.7 |
| Other non-cash expenses: | ||||||
| Provisions provided | 11.2 | 10.2 | 0.3 | – | – | 21.7 |
* Restated see note 1.
Geographical segments
The Group's operations are located primarily in the United Kingdom and North America. The Group's Housing divisions are already segmented geographically above.
The Construction division is primarily located in the United Kingdom.
The following table provides an analysis of the Group's sales by geographical market, irrespective of the origin of the goods/services:
| Sales revenue by geographical market |
||
| 2007 £m |
2006 £m |
|
| United Kingdom | 3,614.7 | 2,243.6 |
| North America | 986.8 | 1,170.1 |
| Rest of the world | 112.8 | 158.4 |
| 4,714.3 | 3,572.1 | |
The following is an analysis of the carrying amount of segment assets, and additions to property and plant, analysed by the geographical area in which the assets are located:
| Carrying amount of segment assets |
Additions to property and plant |
|||
| 2007 £m |
2006 £m |
2007 £m |
2006 £m |
|
| United Kingdom | 6,205.9 | 2,854.9 | 6.9 | 2.6 |
| North America | 1,231.8 | 1,012.3 | 5.8 | 1.7 |
| Rest of the world | 231.5 | 226.6 | 0.9 | 2.4 |
| 7,669.2 | 4,093.8 | 13.6 | 6.7 | |