Financial Statements

Notes to the Consolidated Financial Statementsfor the year to 31 December 2008

31. Discontinued operations and disposals

Discontinued operations

On 9 September 2008, Taylor Wimpey plc disposed of Taylor Woodrow Construction (TWC) the results of which have been presented as discontinued. The business was sold for £74.0m in cash resulting in a profit on disposal of £55.6m. On disposal, the continuing Group repaid £89.5m of intercompany balances owing to TWC. The cash costs of disposal were £3.4m, and £4.2m of cash was disposed of with the business.

During the period, TWC contributed a £4.3m outflow (2007: £28.4m inflow) to the Group's net operating cash flows, a £0.6m inflow (2007: £10.6m outflow) in respect of investing activities and nil (2007: nil) in respect of financing activities.

The analysis of the result from TWC is as follows:

2008
£m
2007
£m
Revenue 453.4 571.5
Expenses (451.3) (558.1)
Profit on ordinary activities before finance costs and taxation 2.1 13.4
Net interest receivable 0.1 0.7
Profit on ordinary activities before taxation 2.2 14.1
Taxation (4.7) (3.8)
(Loss)/profit after tax of discontinued operation (2.5) 10.3
Gain on disposal of discontinued operation 55.6
Tax on gain on sale
Profit from discontinued operation 53.1 10.3

An analysis of the assets and liabilities of TWC at the date of sale of 9 September 2008, excluding the intercompany receivable balance of £89.5m settled on disposal, and the comparative figures at 31 December 2007 is set out below:

September
2008
£m
31 December 2007
£m
Property, plant and equipment 9.4 9.1
Investment in joint ventures 0.1 0.1
Trade and other receivables 62.7 59.3
Cash 4.2 7.0
Trade and other payables (157.2) (153.7)
Deferred taxation asset/(liability) 0.4 (0.1)
Net liabilities of discontinued operation (80.4) (78.3)

Prior to its disposal, TWC, which had been a participating employer in the TWGP&LAF defined benefit pension scheme, transferred all of its past and future obligations under the scheme to another Group company, Taylor Woodrow Developments Limited ('TWD Ltd'), part of the continuing operations of the Group. TWD Ltd is included in the Housing United Kingdom business segment. As a result of this transfer, the net assets of TWC at 31 December 2007 shown in the table above exclude a pension liability of £67.8m which was included in the operating liabilities of the Construction business segment in the 2007 published financial statements and which is now shown within the operating liabilities of the Housing United Kingdom business segment in these financial statements (see note 4). The table above also excludes the 2007 deferred tax asset of £19.2m on the pension liability.

Other disposals

During 2008, the Group also disposed of a mining operation in Ghana for £11m in cash.

Subsequent to the year end, on 21 April 2009, the Group disposed of its remaining construction operations in Ghana to existing local management for £1 in cash.