BPB's programme to achieve transition from UK Generally Accepted Accounting Practice ("UK GAAP") to International Financial Reporting Standards ("IFRS") is progressing to plan and BPB, along with other listed companies in the European Union, will prepare and report its consolidated financial statements for the year to 31 March 2006 under IFRS. BPB's trading update in September 2005 and Interim Report for 2005/06 will also be prepared under IFRS. In advance of these announcements, an overview of the limited impact of IFRS on BPB's 2004/05 financial statements is given below. More detailed analysis and guidance, together with Ernst & Young's unqualified preliminary IFRS audit opinion, are now available in the investor centre on the group's website www.bpb.com.


Overview of IFRS impact
The way in which certain financial information is calculated and presented under IFRS is different to the approach previously adopted under UK GAAP. However, the impact on the group of adopting the new accounting rules is limited, with trading activity and cash generation unaffected and with the main features of BPB's re-statement under IFRS of its consolidated financial statements for the year to 31 March 2005 being as follows:

• Underlying profit before tax and earnings per share are respectively lower by 1.7% and 1.5% at £282.6 million and 38.5p
  
  
• Reported profit before tax is 1.4% higher at £262.3 million
  
  
• Net assets are £39.7 million lower at £905.6 million and net borrowings are unchanged

		Year to 31 March 2005 (Audited)				Six months to 30 September 2004 (Unaudited)
	Note	IFRS	UK GAAP	Change + / -	Change %	IFRS	UK GAAP	Change + / -	Change %
Turnover (£m)		2,316.8	2,316.8	-	-	1,151.1	1,151.1	-	-
Underlying profit before tax (£m) *	(1)	282.6	287.5	-4.9	-1.7	144.0	145.2	-1.2	-0.8
Reported profit before tax (£m)	(2)	262.3	258.7	+3.6	+1.4	145.0	150.3	-5.3	-3.5
Reported profit after tax (£m)	(3)	196.2	184.2	+12.0	+6.5	98.8	98.0	+0.8	+0.8
Underlying EPS (p) *		38.5	39.1	-0.6	-1.5	19.5	19.6	-0.1	-0.5
Net assets (£m)	(4)	905.6	945.3	-39.7	-4.2	839.6	898.1	-58.5	-6.5
Net borrowings (£m)		422.0	422.0	-	-	471.5	471.5	-	-

Explanatory notes to the table of changes in reported financial information:

(1)	Full year underlying profit before tax on an IFRS basis is £4.9 million lower than under UK GAAP following additional charges for share-based awards (£1.8 million), retirement and other employee benefits (£1.6 million) and the reclassification of the tax charge on associate and joint venture profits (£2.2 million) to pre-tax profits. Other adjustments increased profit by £0.7 million.
(2)	Full year reported profit before tax on an IFRS basis is slightly higher, as goodwill is no longer amortised (UK GAAP charge of £16.3 million) but reviewed annually for impairment, and the exceptional Canadian pension refund (UK GAAP credit of £14.6 million) is not recognised in the income statement. For the six months to 30 September 2004 reported profit before tax on an IFRS basis is slightly lower as the impact of excluding the Canadian pension refund exceeds the reversal of goodwill amortisation (UK GAAP charge of £7.8 million).
(3)	Full year reported profit after tax on an IFRS basis includes exceptional deferred tax credits of £3.7 million from the recognition of an additional deferred tax asset in the US (in addition to £13.9 million under UK GAAP), mainly in respect of higher net pension liabilities, and £5.8 million in respect of the Canadian pension refund.
(4)	Net assets as at 31 March 2005 are £39.7 million lower on an IFRS basis, principally due to recognition in the balance sheet of net defined benefit pension deficits of £89.9 million (on a post-tax basis and similar in size to those disclosed in BPB's 2005 Annual Report under FRS17). This reduction in net assets is partly offset by a reversal of the year-end dividend accrual of £53.9 million. The main reason for the greater reduction in net assets on an IFRS basis as at 30 September 2005, compared to the position as at 31 March 2005, is that the half-year dividend accrual reversed under IFRS was £27.8 million lower at £26.1 million.
*	Underlying profit before tax and earnings per share are stated as follows:
	UK GAAP	- before goodwill amortisation and exceptional items (including gains and losses on disposal of property assets and businesses)
	IFRS	- before exceptional items and gains and losses on disposal of property assets and businesses

The EU may not endorse all International Accounting Standards Board pronouncements, new interpretations may be issued on existing standards, and best practice continues to evolve. It is therefore possible that the information given in this announcement and on the group's website might have been revised by the time that it forms the comparative to the group's first full set of financial statements under IFRS in the 2006 Annual Report.


The IFRS impact on the 2005/06 financial statements is unlikely to be the same as that reported for 2004/05. In particular, the transition rules of IFRS 2 mean that an additional charge of circa £2 million for share-based awards is expected in 2005/06. Furthermore, BPB has adopted IAS 32 and IAS 39 from 1 April 2005 and hence the potential earnings volatility from marking to market financial instruments will be reported for the first time in the interim results for the six months to 30 September 2005.


Commenting on the transition to new financial reporting standards, Paul Hollingworth, finance director of BPB, said:


"BPB's adoption of IFRS is progressing smoothly and has had very little impact on the group's full year financial statements for 2004/05, with underlying profit before tax and earnings per share adjusted down by less than 2% and reported profit before tax up by just over 1%. BPB is now fully prepared to meet the financial reporting requirements of IFRS.


We will host a conference call today to brief interested parties on the limited impact of adopting IFRS on the group financial statements for the year to 31 March 2005. No statement will be made on current trading".

• BPB is the world leader in the supply of plasterboard and gypsum plasters, and a major supplier of insulation, ceiling tiles and related products for interiors, serving growing markets for building systems in over 50 countries.
  
  
• A group trading update for the half-year to 30 September 2005 will be published by BPB on 22 September 2005.
  
  
• There will be a conference call for interested parties at 11.00 am today to discuss BPB's adoption of IFRS. The dial-in number is +44 (0) 20 7162 0091 and the password is BPB.

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