Section image

Cherries
oil on canvas
22 x 20 in
1981

Penny Machines
oil on canvas
23¾ x 29¾ in
1961

Stack of Books
oil on canvas
30 x 24 in
n.d.

Seven Suckers
oil on canvas
19 x 23 in
1970

Twin Jackpots
oil on canvas
30 x 46 in
1962

Ties
oil on canvas
20 x 26 in
1980

Cake Slices
oil on canvas
20 x 16 in
n.d.

Notes 6 - 10

9. Earnings per share

Basic EPS
The calculation of basic reported and headline EPS is as follows:
  2009 2008 2007
Reported earnings1 (£m) 437.7 439.1 465.9
Headline earnings (£m) (note 31) 550.0 648.3 561.0
Average shares used in Basic EPS calculation (m) 1,218.7 1,143.4 1,176.9
Reported EPS 35.9p 38.4p 39.6p
Headline EPS 45.1p 56.7p 47.7p
Note
1
Reported earnings is equivalent to profit for the year attributable to equity holders of the parent.
Diluted EPS
The calculation of diluted reported and headline EPS is set out below:
  2009 2008 2007
Diluted reported earnings (£m) 437.7 439.9 466.8
Diluted headline earnings (£m) 550.0 649.1 561.9
Average shares used in diluted EPS calculation (m) 1,238.2 1,169.6 1,227.1
Diluted reported EPS 35.3p 37.6p 38.0p
Diluted headline EPS 44.4p 55.5p 45.8p

Diluted EPS has been calculated based on the diluted reported and diluted headline earnings amounts above. On 19 May 2009 the Group issued £450 million 5.75% convertible bonds due May 2014. For the year ended 31 December 2009 these convertible bonds were accretive to earnings and therefore excluded from the calculation of diluted earnings. For the years ended 31 December 2008 and 31 December 2007, the $150 million 5% Grey convertible bonds were dilutive and earnings were consequently increased by £0.8 million and £0.9 million respectively for the purpose of this calculation; these bonds were redeemed on 28 October 2008. For the year ended 31 December 2007, the £450 million 2% convertible bonds were accretive to earnings and therefore excluded from the calculation of dilutive earnings; these bonds were redeemed on their due date of 11 April 2007. In addition, at 31 December 2009, options to purchase 33.2 million ordinary shares (2008: 28.0 million, 2007: 16.4 million) were outstanding, but were excluded from the computation of diluted earnings per share because the exercise prices of these options were greater than the average market price of the Group’s shares and, therefore, their inclusion would have been accretive.

A reconciliation between the shares used in calculating basic and diluted EPS is as follows:
  2009
m
2008
m
2007
m
Average shares used in basic EPS calculation 1,218.7 1,143.4 1,176.9
Dilutive share options outstanding 2.1 2.9 16.6
Other potentially issuable shares 17.4 16.0 24.7
$150 million Grey convertible bonds 7.3 8.9
Shares used in diluted EPS calculation 1,238.2 1,169.6 1,227.1

At 31 December 2009 there were 1,256,491,314 ordinary shares in issue.

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