Note 11 – Earnings per share and adjusted profit on ordinary activities before taxation
a) Earnings per share
| |
Earnings per share 2005 pence |
Profit for the year 2005 £m |
Weighted average number shares 2005 million |
Earnings per share 2004 (restated) pence |
Profit for the year 2004 (restated) £m |
Weighted average number shares 2004 million |
Earnings per share 2003 (restated) pence |
Profit for the year 2003 (restated) £m |
Weighted average number shares 2003 million |
|---|---|---|---|---|---|---|---|---|---|
| Basic, including exceptional items and goodwill amortisation |
29.5 | 908 | 3,082 | 35.0 | 1,074 | 3,070 | 11.4 | 351 | 3,078 |
| Exceptional operating items (note 4(a)) |
8.1 | 251 | – | 9.0 | 277 | – | 11.4 | 350 | – |
| Exceptional non-operating items (note 4(b)) |
(2.7) | (83) | – | (10.4) | (322) | – | 3.2 | 99 | – |
| Exceptional financing charge (note 4(c)) |
– | – | – | – | – | – | 1.0 | 31 | – |
| Exceptional tax credit (note 4(d)) |
(2.5) | (79) | – | (2.9) | (89) | – | (4.1) | (128) | – |
| Exceptional minority interests (note 4(e)) |
– | – | – | – | – | – | 0.9 | 28 | – |
| Goodwill amortisation | 3.5 | 109 | – | 3.2 | 99 | – | 3.3 | 102 | – |
| Adjusted basic, excluding exceptional items and goodwill amortisation |
35.9 | 1,106 | 3,082 | 33.9 | 1,039 | 3,070 | 27.1 | 833 | 3,078 |
| Dilutive impact of employee share options |
(0.2) | – | 14 | (0.1) | – | 7 | (0.1) | – | 10 |
| Dilutive impact of 4.25% Exchangeable Bonds |
n/a | n/a | n/a | n/a | n/a | n/a | (0.3) | 22 | 110 |
| Adjusted diluted, excluding exceptional items and goodwill amortisation |
35.7 | 1,106 | 3,096 | 33.8 | 1,039 | 3,077 | 26.7 | 855 | 3,198 |
| Exceptional operating items (note 4(a)) |
(8.1) | (251) | – | (9.0) | (277) | – | (10.9) | (350) | – |
| Exceptional non-operating items (note 4(b)) |
2.7 | 83 | – | 10.4 | 322 | – | (3.1) | (99) | – |
| Exceptional financing charge (note 4(c)) |
– | – | – | – | – | – | (1.0) | (31) | – |
| Exceptional tax credit (note 4(d)) |
2.5 | 79 | – | 2.9 | 89 | – | 4.0 | 128 | – |
| Exceptional minority interests (note 4(e)) |
– | – | – | – | – | – | (0.9) | (28) | – |
| Goodwill amortisation | (3.5) | (109) | – | (3.2) | (99) | – | (3.2) | (102) | – |
| Diluted, including exceptional items and goodwill amortisation |
29.3 | 908 | 3,096 | 34.9 | 1,074 | 3,077 | 11.6 | 373 | 3,198 |
Earnings per ordinary share, excluding exceptional items and goodwill amortisation, are provided in order to reflect the underlying performance of the Group.
As at 31 March 2005, there were 7,108,201 outstanding share options in respect of the executive share scheme that were anti-dilutive instruments.
In respect of the year ended 31 March 2003, the potential ordinary shares that related to the 4.25% Exchangeable Bonds were dilutive as they decreased earnings from continuing operations. Consequently, the diluted earnings per share were higher than basic earnings per share for this year because of the effect of losses that arose from discontinued operations.
b) Adjusted profit on ordinary activities before taxation
The following table reconciles profit before taxation on ordinary activities to adjusted profit on ordinary activities before taxation. Adjusted profit on ordinary activities before taxation excludes exceptional items and goodwill amortisation and is provided to reflect the underlying pre-tax performance of the Group.
| |
2005 £m |
2004 (restated) £m |
2003 (restated) £m |
|---|---|---|---|
| Profit on ordinary activities before taxation | 1,152 | 1,337 | 627 |
| Exceptional operating items (note 4(a)) | 251 | 277 | 350 |
| Exceptional non-operating items (note 4(b)) | (83) | (322) | 99 |
| Exceptional financing charge (note 4(c)) | – | – | 31 |
| Goodwill amortisation | 109 | 99 | 102 |
| Adjusted profit on ordinary activities before taxation | 1,429 | 1,391 | 1,209 |