Analysis of Consolidated Profit and Loss Statement for the Year Ended 31st December 1995
The constituent elements
of the Group's profit for the year, disclosed in the profit and
loss statement on page 96 of the annual report, are summarised below. The Group's results
are further analysed by continuing, acquired and divested businesses
so as to identify separately the impact of acquired and divested
businesses on the results for the year. The Group's four main
businesses of Marketing and Distribution, Telecommunications,
Property and Banking are unchanged from the prior year.
The Group's businesses generally
recorded strong performances in 1995, although both years are
affected by significant exceptional items.
Turnover
- increased by 38.0 per cent, in particular because of the growth
of Hagemeyer and Tech Pacific.
Profit before taxation
- from consolidated activities increased by 35.9 per cent mainly
due to increased profitability of the telecommunications and marketing
and distribution businesses, particularly Pacific Link and Hagemeyer.
The contribution from associated companies increased because of
the full year profit contribution of HCL in 1995. Exceptional
profits in 1995 were attributable to gains on dilution and disposal
of shareholdings in subsidiaries. Provisions have been established
for reorganisation and closure expenses, for investments and for
the closedown of the analogue telecommunication networks in Hong
Kong. An analysis of exceptional items is set out on page 69 of the
Annual Report.
Taxation
- after adjusting for the effect of exceptional items, the Group's
overall effective tax rate has declined to 18.2 per cent from
23.1 per cent in 1994. The lower rate reflects the write back
of a provision for tax no longer required, which was made against
First Pacific Davies' 1994 profits, and the utilisation of tax
losses arising from the merger, in late 1994, of Pacific Link
and Pacific TeleLink.
Outside interests
- the increase in outside interests' participation in profit after
taxation is partly due to Hagemeyer, which arises from increased
profits for the full year and the increased share of profits attributable
to outside interests since 4th October following the dilution
of the Group's interest in Hagemeyer, and partly because of improved
profitability of Pacific Link and First Pacific Bank.
More detailed explanation of the contribution by each subsidiary as to turnover and profit for the year, together with analyses of other performance measures, are set out on the following pages.
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