Financial Statements
Notes to the Group financial statements
For the year ended 31 March 2006
14. Basic and diluted earnings per share
The calculation of basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders of the Company by the weighted average number of Ordinary shares in issue during the year (excluding own shares held in Treasury and in the ESOP Trust, which are treated as cancelled).
The calculation of diluted earnings per share reflects the potential dilutive effect of employee share incentive schemes. The earnings figures used in the calculations are unchanged for diluted earnings per share.
During the year the Group demerged its remaining interest in Burberry. This was followe by a share consolidation which reduced the number of shares in issue to 849m. As a result of the share consolidation the earnings per share numbers shown below are comparable in 2005 and 2006.
| Basic earnings per share: | 2006 pence |
2005 pence |
| Continuing operations | 51.2 | 47.2 |
| Discontinued operations | 9.0 | 12.4 |
| Continuing and discontinued operations | 60.2 | 59.6 |
| Add back of exceptional and other adjustment items, net of tax | 2.1 | 1.6 |
| Adjustment between effective and actual rates of taxation* | – | 0.8 |
| Benchmark earnings per share | 62.3 | 62.0 |
| Diluted earnings per share: | ||
| Continuing operations | 50.4 | 46.7 |
| Discontinued operations | 8.8 | 12.1 |
| Continuing and discontinued operations | 59.2 | 58.8 |
| Benchmark diluted earnings per share | 61.3 | 61.2 |
| Earnings: | 2006 £m |
2005 £m |
| Continuing operations | 484 | 472 |
| Discontinued operations | 85 | 124 |
| Continuing and discontinued operations | 569 | 596 |
| Add back of exceptional and other adjustment items, net of tax | 21 | 16 |
| Adjustment between effective and actual rates of taxation* | – | 8 |
| Benchmark earnings | 590 | 620 |
| 2006 £m |
2005 £m |
|
| Weighted average number of Ordinary shares in issue during the year | 946.7 | 1,000.1 |
| Dilutive effect of share incentive awards | 15.0 | 12.6 |
| Diluted weighted average number of Ordinary shares in issue during the year | 961.7 | 1,012.7 |
| * The tax charge used in the calculation of the effective tax rate is based on Benchmark PBT. | ||
