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Directors' Report |
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The Directors submit their Report and audited Financial Statements for the year ended 31 December 2005 which they approved on 13 March 2006.
RESULT AND DIVIDENDS FOR CONTINUING OPERATIONS
The profit before taxation for the year was £35.8 million (2004 – £25.0 million). After taxation and discontinued operations the profit for the year was £21.3 million (2004 – £15.2 million).
The Directors recommend a final dividend of 2.45 pence per Ordinary Share to be paid on 1 June 2006 to shareholders whose names appear on the register at the close of business on 24 March 2006.
With the interim dividend of 1.2 pence per share paid on 3 October 2005 the total recommended dividend for the year is 3.65 pence per share (2004 – 3.3 pence per share).
REVIEW OF BUSINESS DEVELOPMENTS
A commentary on events during the year and on the development of the business is given in the Chairman’s Statement, and in the Operating & Financial Review.
The principal risks and uncertainties facing the Company are set out in the Operating & Financial Review on pages 36 to 39.
GROUP ACTIVITIES
John Laing is a focussed developer, investor and operator in PFI/PPP projects in the growing UK and overseas markets.
A list of principal subsidiaries, joint ventures and associated undertaking can be found in note 35 to the accounts.
DIRECTORS
The Directors who served throughout the year were:
W W Forrester
A E Friend
A J H Ewer
D Potts
R Weston
T G Boatman
T Matthews
M G Medlicott
P M C Meridith
There were no changes in the membership of the Board between 31 December 2005 and 13 March 2006.
The Directors retiring by rotation in accordance with the Articles of Association are A E Friend and P M C Meredith who, being eligible, offer themselves for re-election.
The Directors being re-elected have appointment terms providing for the following notice periods from the Company: |
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| Name |
Notice period |
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| A E Friend |
12 months |
| P M C Meredith |
3 months |
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Biographical details of the Directors offering themselves for re-election are shown on page 47 and in the circular sent to shareholders.
DIRECTORS' INTERESTS
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SHARES
The number of shares of the Company in which each Director of the Company holds an interest is shown in accordance with the requirements of the Companies Act 1985. |
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At 31 December 2005 |
At 1 January 2005 |
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Ordinary
Shares
25 pence each |
6.4%
Convertible
Cumulative
Preference
Shares
£1 each |
Ordinary
Shares
25 pence each |
6.4%
Convertible
Cumulative
Preference
Shares
£1 each |
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W W Forrester
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179,374 |
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50,000 |
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A E Friend
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46,976 |
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6,786 |
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A J H Ewer
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97,489 |
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46,711 |
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D Potts
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10,526 |
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500 |
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R Weston
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12,920 |
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1,540 |
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T G Boatman
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5,127 |
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500 |
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T Matthews
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3,254 |
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1,000 |
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M G Medlicott
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5,000 |
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500 |
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| P M C Meredith |
10,000 |
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500 |
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On 16 January 2006 W W Forrester acquired a further 93,568 Ordinary Shares of 25p each following the exercise of share options granted to him on 16 January 2003. In addition, the conditional awards made to executive Directors in 2003 under the John Laing Long-Term Incentive Plan 2001 (‘LTIP’) have vested in full resulting in the transfer of shares to them on 17 February 2006 as follows: |
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Ordinary Shares
of 25 peance each |
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| A E Friend |
107,345 |
| A J H Ewer |
107,345 |
| D Potts |
21,715 |
| R Weston |
22,702 |
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Full details of these transactions and the outstanding share options and awards under the LTIP are set out in the Directors’ Remuneration Report on pages 64 to 66.
SUBSTANTIAL SHAREHOLDINGS
As at 13 March 2006, the Directors had received the following notifications of substantial interests in the shares of the Company: |
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Ordinary Shares
of 25 peance each |
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| Legal & General Investment Management |
35,351,318 |
15.13 |
| MLIM |
23,209,107 |
9.94 |
| Schroder Investment Management |
22,335,212 |
9.56 |
| Majedie Asset Management |
18,584,884 |
7.96 |
| Aegon Asset Management |
18,049,234 |
7.73 |
| Morley Fund Management |
11,764,902 |
5.04 |
| SG Asset Management |
10,434,586 |
4.47 |
| Fidelity Investments |
10,317,559 |
4.42* |
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* On 22 March 2006 Fidelity Investments notified the Company that its interest in the Company's issued Ordinary Share capital had fallen to 2.83%.
EMPLOYEES
The Group seeks to ensure employee commitment to its objectives in a number of ways. Strategic changes are communicated directly to all staff and resultant queries handled by the business head or executive Director as appropriate. Regular team briefings at local level provide employees with information about the performance of and initiatives in, their part of the business. A wide range of information is also communicated across the Group’s Intranet, including the electronic publication of the Group’s financial results and all press releases.
The framework within which decisions about people are made is set out in the Group’s personnel policy which is published in the staff handbook. It is part of that policy to employ and train disabled people whenever their skills and qualifications allow and when suitable vacancies arise. If existing employees become disabled, every effort is made to find them appropriate work and training is provided if necessary.
PAYMENT POLICY
The Group’s policy is to settle terms of payment with suppliers when agreeing the terms of each transaction, ensure that suppliers are made aware of the terms of payment and abide by those terms of payment. Trade creditors at 31 December 2005 were equivalent to 106 days (2004 – 89 days), based on the average daily amount invoiced by suppliers during the year. The Company does not carry on a trade.
AUDITORS
The external auditors Deloitte & Touche LLP, are willing to continue in office and, in accordance with Section 385 of the Companies Act 1985, a resolution for their reappointment as auditors of the Company is to be proposed at the forthcoming AGM.
On behalf of the Board
R K Miller
Group Company Secretary
13 March 2006
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