Pike Robert, Neal Bill. Corporate finance and investment: decisions and strategy

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Chapter 19 Does capital structure really matter? 535

Since Proposition I argues that equals the return required by shareholders in an

equivalent ungeared company, and so long as the book and market values of debt

capital coincide, thus ensuring that then this expression may be written as:

as in the text. In other words, the return required by shareholders is a linear function

of the company’s debt/equity ratio.

 k

 1k

 k

i  k

APPENDIX II

MM’S PROPOSITION III: THE CUT-OFF RATE FOR NEW INVESTMENT

MM’s third proposition asserts that ‘the cut-off rate for investment will in all cases be

and will be unaffected by the type of security used to finance the investment’.

To show this, consider a firm whose initial value, is:

(A)

It contemplates an investment project, with outlay involving a perpetual return

of R per invested. After the investment is accepted, the new value of the firm, is:

Assuming the project is debt financed, the post-project acceptance value of the shares is:

(B)

Substituting Equation (A) into Equation (B) yields:

and since

the change in equals

This exceeds zero only if Hence, a firm acting in the best interests of its share-

holders should only undertake investments whose returns at least equal the weighted aver-

age cost of capital, which itself is invariant to gearing according to Proposition I.

R 7 k

 V

2 

 I

 1V

 V

 V



 V

 I

 1V

 V

2  V

 1V

 I2



 RI

 V



,£

£I,

 V

 V



CFAI_C19.QXD 10/26/05 5:22 PM Page 535

536 Part V Strategic financial decisions

The MM analysis including corporate earnings taxation still leaves something of a

‘puzzle’. The expression for the value of a geared company indicates that the tax shield

is equal to the corporate tax rate (T) times the book value of corporate debt (B), i.e. TB.

With the present UK rate of Corporation Tax of 30 per cent, for every of corporate

debt the value of the company would be increased by If such tax benefits can

stem from corporate gearing, why do we find widely dispersed gearing ratios even in

the same industry? And why are some of these so much lower than the MM theory

(even allowing for the costs of financial distress) might suggest? According to Miller

(1977), the answers to such questions lie in the interaction of the corporate taxation

system with the personal taxation system, an issue omitted from the MM analysis.

Miller’s agenda was to re-establish the irrelevance of gearing for company value,

thus explaining why US firms did not appear to exploit apparently highly valuable tax

shields. Miller argued that if individuals and corporations can borrow at the same rate,

and if individuals invest in corporate debt as well as equity, there are no advantages

to corporate borrowing because corporations that borrow are simply doing what per-

sonal investors can do for themselves. Any temporary premium in the market valua-

tion of a geared company will be quickly unwound by the usual arbitrage process.

However, this presupposes that individuals also can obtain tax relief on their personal

borrowing (as applies in the USA, but not generally in the UK). Intuitively, we may

expect to find some benefit to corporate borrowing in the UK because tax breaks on

personal borrowing are not available.

Greatly simplifying, the Miller position can be expressed by the simple expression:

where is the tax rate at which corporations enjoy relief on debt interest and is the

tax rate at which individuals enjoy relief on debt interest.

If then there is no tax advantage of corporate debt and hence no tax shield

to exploit.

Only if and differ is there a tax shield. Note that for the tax shield is

positive, and for the tax shield appears to be negative, as might apply for

shareholders subject to very high rates of tax.

Miller introduced a further mechanism to support the irrelevance of gearing for

company value. He argued that if there is a (temporary) tax advantage relating to debt

financing, this will lead firms to increase their demand for debt (i.e. increase the sup-

ply of debt instruments), thus exerting upward pressure on interest rates until the

advantage of issuing further debt disappears. If the effective tax rate on equity income

were zero, and personal investors paid tax on debt interest income, companies would

have to compensate investors for switching from untaxed equity to taxed debt invest-

ments by a higher interest rate. This would stop when the net-of-tax cost of debt to

companies equalled the cost of equity. Miller concludes that movement to capital mar-

ket equilibrium would eliminate any tax advantage of debt, so that

Ashton and Acker (2003) have undertaken an assessment of the average tax advan-

tage of debt in a UK context, and conclude that it is ‘likely to be no more than 13% of

the value of debt’

 V

6 T

7 T

 T

Post-tax cost of debt  pre-tax cost 31  1T

 T

£0.30.

£1

APPENDIX III

ALLOWING FOR PERSONAL TAXATION: MILLER’S REVISION

CFAI_C19.QXD 10/26/05 5:22 PM Page 536

Chapter 19 Does capital structure really matter? 537

%Debt % Equity WACC

– 100 – 20% ?

25 75 8% 24% ?

50 50 8% 32% ?

75 25 8% 56% ?

Question with coloured numbers have solutions in Appendix B on page 715.

1 With the following information about Rushden plc, determine its cost of equity according to the MM no-tax model.

2 Diamonds plc estimates its costs of debt and equity for different capital structures as follows:

 20%;

 8%;

 V

 20%

Geared Ungeared

Expected earnings

Debt finance (nominal) –

Interest rate 5% –

Market value of equity

Market value of company

£950£1,100

£950£900

£200

£100£100

ordinary shares (fully paid) 2,500,000

Share premium account 1,000,000

Retained profit 1,400,000

8% preference shares 1,200,000

10% debentures (secured) 2,600,000

8,700,000

£1

QUESTIONS

Required

(i) What theory of capital structure is portrayed? (Complete the WACC column.)

(ii) Restate the table allowing for taxation of corporate profits (hence, tax relief on debt) at 30 per cent.

Assume Diamonds plc always has sufficient taxable capacity to exploit the tax shield.

Identify the relevant theory of capital structure.

3 Demonstrate how the process of home-made gearing-cum-arbitrage would operate in an MM world so as to

equalise the values of the following two firms. The companies are identical in every respect except their cap-

ital structures.

Assume that the market value of geared debt is equal to the nominal value, and the investor holds 10 per

cent of Geared’s equity.

4 Kipling plc is a food manufacturer which has the following long-term capital structure:

The directors of the company wish to raise further long-term finance by the issue of either preference shares or

debentures. One director, who supports the issue of debentures, believes that, although a debenture issue will

increase the company’s gearing, it will reduce the overall cost of capital.

Required

(a) Discuss the arguments for and against the view that the company’s overall cost of capital can be reduced in

this way. The views of Modigliani and Miller should be discussed in answering this part of the question.

Overleaf

CFAI_C19.QXD 10/26/05 5:22 PM Page 537

538 Part V Strategic financial decisions

(b) Discuss the major factors which the directors should consider when deciding between preference shares

and debentures as a means of raising further long-term finance.

that Kipling plc will be able to raise.

(ACC Certified Diploma)

5 (a) Berlan plc has annual earnings before interest and tax of million. These earnings are expected to

remain constant. The market price of the company’s ordinary shares is 86 pence per share cum div and of

debentures per debenture ex-interest. An interim dividend of six pence per share has been

declared. Corporate tax is at the rate of 35 per cent and all available earnings are distributed as dividends.

Berlan’s long-term capital structure is shown below:

£105.50

£15

£000

Ordinary shares (25 pence par value) 12,500

Reserves 24,300

36,800

16% debenture 31 December 1994 ( par value) 23,697

60,497

£100

Required

Calculate the cost of capital of Berlan plc according to the traditional theory of capital structure. Assume

that it is now 31 December 1991.

(b) Canalot plc is an all equity company with an equilibrium market value of million and a cost of cap-

ital of 18 per cent per year. The company proposes to repurchase million of equity and to replace it with

13 per cent irredeemable loan stock.

Canalot’s earnings before interest and tax are expected to be constant for the foreseeable future.

Corporate tax is at the rate of 35 per cent. All profits are paid out as dividends.

Required

Using the assumptions of Modigliani and Miller, explain and demonstrate how this change in capital

structure will affect Canalot’s:

(i) market value

(ii) cost of equity

(iii) cost of capital

ful they might be in the determination of the appropriate capital structure for a company.

(ACCA)

6 The ordinary shares of Stanley Plc are quoted on the London Stock Exchange. The directors, who are also major

shareholders, have been evaluating some new investment opportunities. If they go ahead with these, new capital

of million will be required. The directors expect the new projects to earn 15 per cent per annum before tax.

Financial information about the company for 1996 is as follows:

EBIT (existing operations) million

Number of shares in issue (par value ) 50 million

The company is at present all-equity financed. It has the choice of raising the million new capital by an

issue of equity or debt. Equity would be issued by a new issue at a 15 per cent discount to current market

price. Debt will be raised by an issue at par of 12 per cent unsecured loan stock.

If the finance is raised via equity, the company’s P:E ratio is likely to rise from its current level of 9 to 9.5.

However, if debt is introduced into the capital structure, the company’s financial advisors have warned the

two directors that the market is likely to lower the P:E ratio of the company to 8.5.

The company’s marginal tax rate is 33 per cent.

Issue costs should be ignored.

(a) Determine the expected share price, total value of equity and value of the firm under the two financing

options and comment briefly on which financing option appears the most advantageous.

£38

£1

£79.50

£38

£5

£32.5

CFAI_C19.QXD 10/26/05 5:22 PM Page 538

Chapter 19 Does capital structure really matter? 539

(b) Assume the company’s average cost of equity as an ungeared firm is 14 per cent and it expects to contin-

ue to pay tax at 33 per cent. The estimated cost of bankruptcy or financial distress is estimated at mil-

lion. According to Modigliani and Miller, what would be the value of equity and the firm if the company

finances the expansion by (i) equity or (ii) debt?

ket with no taxes, capital structure can have no effect on the value of the firm.

7 You are given the following information about Electronics plc. It has a payout ratio of 0.6, a return on equity

of 20 per cent, an equity beta of 1.33 and is expected to pay a dividend next year of There are 1 million

shares outstanding and it is fairly valued. It also has nominal debt of million issued at 10 per cent and

maturing in 5 years. Yields on similar debt have since dropped to 8 per cent. The risk free rate is 6 per cent

and the expected market return is 13.5 per cent.

(a) Find Electronics’ cost of capital and cost of equity.

(b) The company decides to retire half its debt at current prices. Find the company’s cost of capital and equi-

ty and explain your results.

of firms currently trading in the new business area. The information is given below.

£20

£2.00.

£5

Company Beta Debt/Equity Market capitalisation

A 1.5 1:2 million

B 1.8 1:1 million

C 1.2 No debt million

£50

£30

£20

What discount rate should the company use for the new business?

8 Claxby is an undiversified company operating in light engineering. It is all-equity financed with a Beta of 0.6.

Total risk is 40 (standard deviation of annual return). Management want to diversify by acquiring Sloothby

Ltd, which operates in an industrial sector where the average equity Beta is 1.2 and the average gearing (debt

to total capital) ratio is 1:3. The standard deviation of the return on equity (on a book value basis) for Sloothby

is 25%. The acquisition would increase Claxby’s asset base by 40 per cent. The overall return on the market

portfolio is expected to be 18 per cent and the current return on risk-free assets is 11 per cent. The standard

deviation of the return on the market portfolio is 10%. The rate of Corporation Tax is 33 per cent.

(a) What is the asset Beta for Sloothby?

(b) Analyse both Sloothby’s and Claxby’s total risk into their respective specific and market risk components.

(d) Using the new Beta, calculate the required return on the expanded firm’s equity.

Under what conditions could this be taken as the cut-off rate for new investment projects?

(e) In the light of the figures in this example, discuss whether the acquisition of Sloothby may be expected to

operate in the best interests of Claxby’s shareholders.

9 The managing director of Wemere, a medium-sized private company, wishes to improve the company’s invest-

ment decision-making process by using discounted cash flow techniques. He is disappointed to learn that esti-

mates of a company’s cost of equity usually require information on share prices which, for a private company,

are not available. His deputy suggests that the cost of equity can be estimated by using data for Folten plc, a

similar sized company in the same industry whose shares are listed on the AIM, and he has produced two sug-

gested discount rates for use in Wemere’s future investment appraisal. Both of these estimates are in excess of

17 per cent p.a. which the managing director believes to be very high, especially as the company has just agreed

a fixed rate bank loan at 13 per cent p.a. to finance a small expansion of existing operations. He has checked

the calculations, which are numerically correct, but wonders if there are any errors of principle.

Estimate 1: Capital Asset Pricing Model

Data have been purchased from a leading business school

Equity Beta of Folten: 1.4

Market return: 18%

Treasury Bill yield: 12%

The cost of capital is This rate must be adjusted to include inflation at

the current level of 6 per cent. The recommended discount rate is 32.4 per cent.

Continued

18%  118%  12%21.4  26.4%.

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540 Part V Strategic financial decisions

Year Average share price Dividend per share

(pence) (pence)

1985 193 9.23

1986 109 10.06

1987 96 10.97

1988 116 11.95

1989 130 13.03

Estimate 2: Dividend Growth Model

Folten plc

Wemere Folten

£000 £000

Fixed assets 7,200 7,600

Current assets 7,600 7,800

Less: Current liabilities (3,900) (3,700)

10,900 11,700

Financed by:

Ordinary shares (25 pence) 2,000 1,800

Reserves 6,500 5,500

Term loans 2,400 4,400

10,900 11,700

Notes

1 The current ex div share price of Folten plc is 138 pence.

2 Wemere’s board of directors has recently rejected a takeover bid of million.

3 Corporate tax is paid at the rate of 35 per cent.

Required

(a) Explain any errors of principle that have been made in the two estimates of the cost of capital and pro-

duce revised estimates using both of the methods.

State clearly any assumptions that you make.

(b) Discuss which of your revised estimates Wemere should use as the discount rate for capital investment

appraisal.

£10.6

The cost of capital is: where is the expected dividend, P is the market price and g is the growth

rate of dividends

When inflation is included, the discount rate is 17.01 per cent.

Other financial information on the two companies is presented below:

1 14.20p>1138p  92  11.01%2.

>1P  g2,

Reread the exposition in Chapter 11 of how we obtained tailored discount rates for the three Whitbread plc divi-

sions. How close do you think our surrogates were?

For another divisionalised company of your choice (try to find a two- or three-division company):

1 Consult the Risk Measurement Service for an up-to-date estimate of the equity Beta, and use the CAPM to

assess the shareholders’ required rate of return.

2 Estimate discount rates for each division. You will need to select surrogate companies, record their Betas, and

obtain an indication of their own asset Betas by ungearing their equity Betas.

3 Determine whether the weighted average Beta for the company corresponds to its ungeared Beta. You will

probably have to use weights based on earnings or sales as very few companies report book values (let alone

market values!) of their segments.

Practical assignment

CFAI_C19.QXD 10/26/05 5:22 PM Page 540

Acquisitions and restructuring

Learning objectives

A major aim of this chapter is to emphasise the strategic aspects of takeovers. Having read it,

you should understand the following:

■ Why firms select acquisitions rather than other strategic options.

■ How acquisitions can be financed.

■ How acquisitions should be integrated.

■ How the degree of success of a takeover can be evaluated.

■ How corporate restructuring can enhance shareholder value.

An ARM and a Leg

ARM Holdings, the UK designer of microchip technol-

ogy, was once a member of the FTSE-100 Index until

it shocked the market in 2002 with a profits warning

that slashed 50% off its share price in one day. By

2004, its fortunes had recovered, propelled by boom-

ing sales of digital cameras and Apple iPods, and by

June 2004, its balance sheet sported $301 million of

cash, looking for a home.

In August 2004, it bid $913 million (£502 million)

a little under half of its market value of $1.9 billion,

on US firm Artisan Components, another player in

microchip technology. This represented a 42% premi-

um on Artisan’s pre-bid closing price and a multiple

of over 50 times Artisan earnings of $17 million. ARM

proposed to pay up to $225 million in cash for

Artisan, the remainder being in ARM shares, the

amount depending on how many Artisan sharehold-

ers desired an exit.

The appeal of the deal was prospective revenue

synergies. ARM designed chip technology to allow

complex software applications to be run on consumer

devices such as mobile phones, earning royalties from

users such as Texas Instruments and Intel, while

Artisan designed physical chip components such as

memory. ARM and Artisan had worked together for

some time, their sales forces being complementary,

and many of their customers were shared. ARM was

not a stranger to growth by acquisition, having previ-

ously acquired 8 companies, but none had involved

outlays above $15 million.

Market reaction was swift and severe. Amidst wide-

spread doubts about the speed and size of revenue

synergies, and the absence of cost synergies, ARM

shares fell by 18%, reducing the value of the deal to

below $800 million, while Artisan shares rose 16%.

Announcing plans for a ‘hearts and minds cam-

paign’ to convince sceptical shareholders as to the

rationale for the acquisition, ARM’s Chief Executive,

Mr Warren East, said, ‘I’m not surprised that the

investment community are a bit surprised. I’m sorry if

investors are a little bit spooked by this, but we will

be talking to them.’

The Lex column was more forthright, saying, ‘One

man’s garbage is another man’s art Overpaying

on the acquisition trail is hardly the answer to

increasingly lacklustre future growth prospects.’

Source:

Based on articles in the

Financial Times,

24 August 2004.

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542 Part V Strategic financial decisions

20.1 INTRODUCTION

Acquisitions of other companies are investment decisions and should be evaluated

on essentially the same criteria as say, the purchase of new items of machinery.

However, there are two important differences between takeovers and many ‘stan-

dard’ investments.

First, because takeovers are frequently resisted by the target’s managers, bidders

often have little or no access to intelligence about their targets beyond published finan-

cial and market data, and any inside information they may glean. (When the bid

process is under way, the defending board is obliged to provide key information to

enable the bidder to conduct ‘due diligence’ examinations. This is essentially a search

for ‘skeletons in the cupboard’.)

In 1997, Vereinsbank of Germany, in an effort to avoid being taken over by the much

larger Deutsche Bank, reportedly cobbled together over a single weekend a merger

agreement with Hypobank, a smaller rival. The penalty for undue haste in addressing

the financial, legal and human issues involved was the discovery a year later, by the

auditors of the new entity (HypoVereinsBank), of huge losses in Hypobank’s proper-

ty portfolio, necessitating loan loss provisions of DM 3.5 billion (information from the

Economist, 2000).

Second, many takeovers are undertaken for longer-term strategic motives, and the

benefits are often difficult to quantify. It is common to hear the chairmen of acquiring

companies talk about an acquisition opening up a ‘strategic window’; what they often

do not add is that the window is usually not only shut, but has thick curtains drawn

across it! To a large extent, a takeover is a shot in the dark, partly explaining why so

many firms that launch giant takeovers come to grief.

But there are other reasons. Targets are often too large in relation to bidders, so that

excessive borrowings or unexpected integration problems throttle the parent. The

demise of Marconi (formerly General Electric), whose share price fell by 97 per cent

during 2000–1, was largely the result of headlong expansion into telecoms equipment

manufacturing just before the sector entered recession. Its debt financing proved an

albatross which, despite a debt-for-equity swap, it is still trying to cast off.

There are important lessons to be learned from risk analysis and portfolio theory.

When acquisitions have highly uncertain outcomes, the larger they are, the more cat-

astrophic the impact of any adverse outcomes. As a result, it may be rational and less

risky to confine takeover activity to small, uncontested bids. Alternatively, a spread

of large acquisitions might confer significant portfolio diversification benefits, so

long as the components have low cash flow correlation. However, the greater the

scale of takeover activity, the greater the resulting financing burden placed on the

parent, and the greater the impact of diverting managerial capacity into solving inte-

gration problems.

The acquisition decision is thus a complex one. It involves significant uncertainties

(except in purely asset-stripping takeovers), it often requires substantial funding and it

may pose awkward problems of integration. Yet, as some takeover ‘kings’ have shown,

spectacular payoffs can be achieved. These are some of the themes of this chapter –

how to evaluate a takeover, how to finance it and how to integrate it. But first, we

examine the phenomenon of takeover surges.

20.2 TAKEOVER WAVES

Although the terms ‘takeover’ and ‘merger’ are used as synonyms, there is a techni-

cal difference. A takeover is the acquisition by one company of the share capital of

another in exchange for cash, ordinary shares, loan stock or some mixture of these.

This results in the identity of the acquired company being absorbed into that of the

CFAI_C20.QXD 10/28/05 5:25 PM Page 542

Chapter 20 Acquisitions and restructuring 543

Table 20.1

The scale and financing

of takeover activity of

UK firms by UK firms

Number Outlay Cash Ordinary Fixed

Year acquired (£m) (%) shares (%) interest (%)

1970 793 1,122 22 53 25

1971 884 911 31 48 21

1972 1,210 2,532 19 58 23

1973 1,205 1,304 53 36 11

1974 504 508 68 22 9

1975 315 291 59 32 9

1976 353 448 72 27 2

1977 481 824 62 37 1

1978 567 1,140 57 41 2

1979 534 1,656 56 31 13

1980 469 1,475 52 45 3

1981 452 1,144 68 30 3

1982 463 2,206 58 32 10

1983 477 2,343 44 54 2

1984 568 5,474 54 34 13

1985 474 7,090 40 52 7

1986 842 15,370 26 57 17

1987 1,528 16,539 35 60 5

1988 1,499 22,839 70 22 8

1989 1,337 27,250 82 13 5

1990 779 8,329 77 18 5

1991 506 10,434 70 29 1

1992 432 5,941 63 36 1

1993 526 7,063 81 16 3

1994 674 8,269 64 34 2

1995 505 32,600 78 20 1

1996 584 30,457 63 36 1

1997 506 26,829 41 58 1

1998 635 29,525 41 58 1

1999 493 26,163 62 37 1

2000 587 106,916 37 62 1

2001 492 28,994 n/a n/a n/a

2002 430 25,236 70 27 3

2003 558 18,679 86 9 5

2004 694 31,244 63 33 4

Source:

National Statistics, 2005 (First Release, www.statistics.gov.uk).

acquirer (although, of course, the expanded company may continue to use the acquired

company’s brand names and trademarks). A merger is a pooling of the interests of

two companies into a new enterprise, requiring the agreement of both sets of share-

holders. The combination of Daimler–Benz and Chrysler in 1998 was presented (ini-

tially, at least) as a merger of friendly partners. In 2001, an unusual three-way merger

of leading steel firms Usinor of France, Arbed of Luxembourg and Aceralia of Spain

was forged. By definition, mergers involve the friendly (initially, at least) restructur-

ing of assets into a new organisation, whereas many takeovers are hotly resisted. In

practice, the vast majority of business amalgamations are takeovers rather than merg-

ers. Table 20.1 shows the upsurge in UK takeover activity of all kinds since 1970.

Takeover activity often seems to occur in waves, the strongest to date being that of the

mid-1980s (number of firms) and the late 1990s (value of acquired firms).

CFAI_C20.QXD 10/28/05 5:25 PM Page 543

544 Part V Strategic financial decisions

The reader will observe that the latest wave peaked in 2000, distinguished by

amount of expenditure rather than by number of deals, i.e. these mergers were signif-

icantly larger on average. One factor was the strong upward movement in the UK

stock market, but the lurch towards the mega-merger was an international phenome-

non. Notice, also, the new peak in 2004 of numbers of firms acquired, and a strong

recovery in value of acquisitions, suggesting the onset of a new mid-2000s wave.

Table 20.2 shows, for the past decade, how the acquisitions by UK firms (‘acquirors’)

of other UK companies (‘acquirees’) were split into purchases of other independent

firms, and acquisitions of subsidiaries of other firms, or ‘trade sales’. It can be seen that

the trend for bigger mergers is focused in the market for independent firms, where bid-

ding is more public, resistance by incumbent directors is often encountered, competi-

tion is more likely and a premium above the market price must be offered to encourage

present owners to sell.

According to the late Peter Doyle, the eminent marketing academic (1994), the

motives for the mega-mergers of recent years differ from those of the 1980s. In the ear-

lier wave, companies like Hanson and BTR were looking to exploit financial economies

by restructuring badly-run companies and giving managers incentives to deliver strong

cash flows to create value. By contrast, more recent mergers are more likely to be driv-

en by strategic factors. Prominent among these are the increased globalisation of mar-

kets, with greater exposure to more aggressive international competition.

According to Doyle, this process was fuelled by deregulation and privatisation in

many countries, which have freed companies in the telecommunications and airline

industries, in particular, to seek out global strategic alliances. In addition, technologi-

cal change raised the investment expenditures required to research and market new

products, so that size of firm confered a major advantage in industries like pharmaceu-

ticals. Moreover, distance was no longer a barrier, given the improvements in trans-

portation and information technology; hence the wave of banking mergers in North

America and Europe in the late 1990s, and the flurry of mergers in the US telecommu-

nications industry in 2005.

The importance of cross-border acquisitions involving UK firms can be seen in

Table 20.3, which shows data on acquisitions of UK firms by foreign entities, and

Table 20.2

Acquisition according

to status of acquiree

Total Independent Inter-company sales

acquisitions firms of subsidiaries

Year Number Value Value Value

(£m) Number (£m) Number (£m)

1992 432 3,941 232 4,108 200 1,833

1993 526 7,063 337 2,986 189 4,078

1994 674 8,269 465 5,743 209 2,526

1995 505 32,600 299 25,647 206 6,953

1996 584 30,742 336 23,348 248 7,394

1997 506 26,829 384 22,453 122 4,376

1998 635 29,525 485 24,086 150 5,439

1999 493 26,163 400 22,211 93 3,952

2000 587 106,916 466 100,513 121 6,403

2001 492 28,994 319 21,029 173 7,965

2002 430 25,236 323 16,998 107 8,238

2003 558 18,679 392 10,954 166 7,725

2004 694 31,244 535 22,633 159 8,611

Source:

National Statistics, 2005 (First Release, www.statistics.gov.uk).

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