Notes to the summary financial statement

1 Basis of preparation

The summary financial statement has been prepared on a going concern basis in accordance with International Financial Reporting Standards (IFRS) adopted by the European Union.

The Group’s accounting policies are set out in the Directors’ report and accounts 2008. In order to better reflect the operating performance of the Group, certain pension related income and costs have been reclassified within the income statement in the current year as permitted by IAS 19. The net amount of the interest cost for the unwind of the pension obligations and the expected return on scheme assets has been reclassified out of net operating expenses to investment income. 2007 comparative amounts have been re-presented to reflect this change.

2 Segment analysis – continuing operations
	Building, building management and services 2008 £m	Civil and specialist engineering and services 2008 £m	Rail engineering and services 2008 £m	Investments 2008 £m	Corporate costs 2008 £m	Total 2008 £m
Performance by activity:
Results
Revenue including share of joint ventures and associates	4,635	3,243	1,055	553	–	9,486
Share of revenue of joint ventures and associates	(137)	(656)	(39)	(393)	–	(1,225)
Group revenue	4,498	2,587	1,016	160	–	8,261
Group operating profit	84	85	39	(19)	(34)	155
Share of results of joint ventures and associates	4	19	2	50	–	75
Profit from operations before exceptional items and amortisation	88	104	41	31	(34)	230
Exceptional items	(1)	(5)	–	(5)	59	48
Amortisation of intangible assets	(14)	(3)	(1)	(9)	–	(27)
Profit from operations	73	96	40	17	25	251

			Europe 2008 £m	North America 2008 £m	Other^* 2008 £m	Total 2008 £m
Performance by geographic origin:
Group revenue			5,981	2,216	64	8,261
Profit from operations before exceptional items and amortisation			147	59	24	230
Exceptional items			51	(3)	–	48
Amortisation of intangible assets			(10)	(17)	–	(27)
Profit from operations			188	39	24	251

	Building, building management and services 2007^# £m	Civil and specialist engineering and services 2007^# £m	Rail engineering and services 2007^# £m	Investments 2007^# £m	Corporate costs 2007^# £m	Total 2007^# £m
Performance by activity:
Results
Revenue including share of joint ventures and associates	3,640	2,668	785	394	1	7,488
Share of revenue of joint ventures and associates	(113)	(556)	(10)	(343)	–	(1,022)
Group revenue	3,527	2,112	775	51	1	6,466
Group operating profit	70	59	39	(25)	(30)	113
Share of results of joint ventures and associates	–	23	1	41	–	65
Profit from operations before exceptional items and amortisation	70	82	40	16	(30)	178
Exceptional items	(26)	(9)	2	–	–	(33)
Amortisation of intangible assets	(6)	(3)	–	–	–	(9)
Profit from operations	38	70	42	16	(30)	136


			Europe 2007^# £m	North America 2007^# £m	Other^* 2007^# £m	Total 2007^# £m
Performance by geographic origin:
Group revenue			4,958	1,471	37	6,466
Profit from operations before exceptional items and amortisation			132	18	28	178
Exceptional items			(27)	(6)	–	(33)
Amortisation of intangible assets			(4)	(5)	–	(9)
Profit from operations			101	7	28	136
* Other principally comprises the Group’s operations in Dubai and Hong Kong.
^# Re-presented (Note 1).

3 Exceptional items and amortisation of intangible assets
					2008 £m	2007 £m
Credited to/(charged against) profit before taxation
Reduction in pension past service liabilities					60	–
Metronet – net contract losses					–	(27)
Post-acquisition integration, reorganisation and other costs					(6)	(6)
Adjustment to Birse Group goodwill					(3)	–
Tax adjustments on share of joint ventures and associates					(3)	–
Premium on buy-back of preference shares					–	(2)
					48	(35)
(Charged against)/credited to taxation
Tax on items above					(15)	11
Tax credit on recognition of Birse Group losses					3	–
Industrial buildings allowances					(3)	–
Recognition of US deferred tax assets					–	51
Credited to profit from continuing operations					33	27
Credited to/(charged against) profit from discontinued operations
Profit on sale of operations					–	57
Metronet – impairment of investment					–	(87)
– tax thereon					–	10
Exceptional items credited to profit for the year					33	7
Amortisation of intangible assets					(27)	(9)
Tax thereon					7	3
Credited to profit for the year					13	1

4 Earnings per ordinary share
			Earnings Basic 2008 £m	EPS Basic 2008 pence	Earnings Basic 2007 £m	EPS Basic 2007 pence
Continuing operations			196	42.9	169	39.3
Discontinued operations			–	–	(18)	(4.2)
			196	42.9	151	35.1
Exceptional items			(33)	(7.2)	(7)	(1.6)
Amortisation of intangible assets			20	4.2	6	1.5
Adjusted earnings/earnings per ordinary share			183	39.9	150	35.0
The weighted average number of ordinary shares used to calculate basic earnings per share was 457.6m (2007: 430.0m). Adjusted earnings per ordinary share, before exceptional items and amortisation of intangible assets, and including the pre-exceptional results of discontinued operations in 2007, has been disclosed to give a clearer understanding of the Group’s underlying trading performance.

5 Post balance sheet events
On 23 February 2009 the Group acquired Dooley Construction Limited Partnership, a leading North Carolina USA firm in the interiors construction market, for a cash consideration of $40m.