Tullett Prebon plc Annual Report 2010
The results for 2010 compared with those for 2009 are shown in the table below:
2010 £m 2009 £m
Revenue Operating proﬁt Finance expense Adjusted Proﬁt before tax1 Tax Associates Minority interests Adjusted Earnings2 Weighted average number of shares Adjusted Earnings per share
908.5 152.4 (12.7) 139.7 (40.8) 1.5 (0.6) 99.8 214.9m 46.4p
947.7 170.8 (13.8) 157.0 (53.0) 1.8 (0.6) 105.2 213.9m 49.2p
Note 1. Adjusted PBT reconciles to reported PBT as follows: Adjusted Proﬁt before tax Non cash ﬁnance income/(expense) Reported Proﬁt before tax
139.7 1.6 141.3
157.0 (0.5) 156.5
Finance expense The net ﬁnance expense comprises the interest payable on the ﬁxed rate bonds, the interest payable on the ﬂoating rate bank debt, the interest income on cash deposits, and the amortisation of debt issue costs which are paid upfront and charged to the income statement over the term of the debt to which they relate. The reduction in ﬁnance expense in 2010 compared to 2009 reﬂected the full year beneﬁt of the lower interest rates on the bonds which took effect in July and August 2009, and lower interest on the bank debt due to lower interest rates and the lower average amount outstanding, partly offset by the lower interest receivable on cash balances. Non cash ﬁnance income/(expense) items are excluded from adjusted proﬁt before tax and adjusted earnings. In 2010 and 2009 these items comprised only the expected return and interest on pension scheme assets and liabilities. In 2010 these pension related items netted to a credit of £1.6m; in 2009 these items netted to a charge of £0.5m.
Tax The effective rate of tax on adjusted proﬁt before tax was 29.2% (2009: 33.8%). The reduction in the effective rate compared with 2009 results primarily from the increase in the proportion of taxable proﬁts generated in the UK and Asia relative to the US. Tax charges and credits arising on non cash ﬁnance income/ (expense) items, prior year tax items and tax charges and credits on capital related items are excluded from the calculation of the effective tax rate on adjusted proﬁt before tax, as they do not relate to current trading. Prior year tax items primarily reﬂect the release of tax provisions made in previous years as tax matters are settled. The tax credit on capital related items reﬂects the tax beneﬁt arising in the US from the write down of goodwill under US GAAP in the local accounts. The statutory effective rate of tax, including these items was 23.8% (2009: 30.0%). Adjusted Basic EPS Adjusted Basic EPS is calculated using adjusted earnings shown in the table above and the undiluted weighted average number of shares in issue of 214.9m (2009: 213.9m).
Note 2. Adjusted Earnings reconciles to reported Earnings as follows: Adjusted Earnings Non cash ﬁnance income/(expense) Deferred tax on non cash ﬁnance (expense)/income Prior year tax items Tax on capital related items Reported Earnings
99.8 1.6 (0.5) 1.6 6.0 108.5
105.2 (0.5) 0.2 5.9 – 110.8