Notes to the Accounts
10. Earnings per share
In order to show results from operating activities on a comparable basis two adjusted earnings per equity share are presented. First, an adjusted earnings per share is presented which excludes profits or losses on the sale of fixed assets and investments, businesses and associates (see notes 4 and 5) which in 2000 relate primarily to the sale of Lazard and the sale of 20% of Recoletos. Also excluded are Year 2000 compliance costs, integration costs in respect of the acquisitions of Simon & Schuster, Dorling Kindersley and National Computer Systems (NCS) (see note 2), the accelerated amortisation of a financing arrangement fee following the early redemption of a borrowing facility, the premium paid in respect of a forward currency option in connection with the acquisition of NCS (see note 7) and goodwill amortisation. Due to a significant level of expenditure on internet enterprises, a second adjusted earnings per equity share is presented in which the results of these are also excluded from earnings.
| 2000 | 1999 restated |
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| £m | earnings per share (p) |
£m | earnings per share (p) |
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| Profit for the financial | 179 | 24.6 | 294 | 43.0 |
| Adjustments: | ||||
| Loss/(profit) on sale of fixed assets and investments: continuing operations (see note 4) | 4 | 0.5 | (349) | (51.0) |
| (Profit)/loss on sale of businesses and associates: | ||||
| continuing operations (see note 5) | (30) | (4.0) | 44 | 6.4 |
| (Profit) on sale of businesses and associates: | ||||
| discontinued operations (see note 5) | (231) | (31.7) | – | – |
| Loss/(profit) on sale of businesses and associates by an associate: continuing operations | 3 | 0.4 | (1) | (0.1) |
| Internet enterprises (see note 2) | 196 | 26.9 | 39 | 5.7 |
| Interest on internet enterprises | 9 | 1.2 | – | – |
| Goodwill amortisation (see notes 12/15) | 239 | 32.9 | 131 | 19.2 |
| Integration costs (see note 2) | 40 | 5.5 | 95 | 13.9 |
| Other net finance costs (see note 7) | 24 | 3.3 | – | – |
| Year 2000 compliance costs | – | – | 5 | 0.7 |
| Taxation on above items | (18) | (2.5) | 67 | 9.8 |
| Minority interest share of above items | (18) | (2.5) | – | – |
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| Adjusted earnings before internet enterprises | 397 | 54.6 | 325 | 47.6 |
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| Internet enterprises | (196) | (26.9) | (39) | (5.7) |
| Interest on internet enterprises | (9) | (1.2) | – | – |
| Taxation on internet enterprises | 37 | 5.0 | 10 | 1.4 |
| Minority interest share of internet enterprises | 3 | 0.4 | – | – |
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| Adjusted earnings after internet enterprises | 232 | 31.9 | 296 | 43.3 |
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| Profit for the financial | 179 | 24.3 | 294 | 42.5 |
| Taxation on the conversion of ordinary shares | (2) | (0.3) | (1) | (0.1) |
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| Diluted earnings | 177 | 24.0 | 293 | 42.4 |
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| Weighted average number of equity shares (millions) – for earnings and adjusted earnings | 727.7 | 683.4 | ||
| Effect of dilutive share options | 8.4 | 7.8 | ||
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| Weighted average number of equity shares (millions) – for diluted earnings | 736.1 | 691.2 | ||
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note • The weighted average number of shares in 1999 has been restated to reflect the rights issue of equity shares during 2000.
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