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Rexam PLC (REX)

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Thursday 31 August, 2000

Rexam PLC

Interim Results - Part 1

Rexam PLC
31 August 2000

PART 1

Unaudited interim results for the six months to 30 June 2000

Rexam PLC, the global consumer packaging group, announces its interim results
following a strong start to the year.

                                        2000         1999       Increase
Sales - ongoing operations             £1,006m      £883m          +14%
Operating profit* - ongoing                                
operations                              £104m        £95m          +9%
Profit before tax*                      £93m         £89m          +4%
Earnings per share*                     15.0p        14.4p         +4%
Dividend per share                       6.4p         6.1p         +5%

* Based on operations before goodwill amortisation and exceptional items

Highlights

- Rexam's transformation into a focused consumer packaging group nears
completion
- £1.3bn acquisition of American National Can completed in July
- Divestment of Printing, Bulk Packaging and other businesses for £105m
- Strong trading in first half brings good sales and profit progress for
ongoing operations

Commenting on the results Jeremy Lancaster, Chairman of Rexam, said:

'Our strategy since 1996 has been to focus on consumer packaging.  Following
the acquisition of ANC and the planned non-core disposals, the transformation
of Rexam will be near completion. The whole of our business will be
concentrated on the consumer packaging sector and approximately 75% of the
Group's sales will come from beverage customers.  The task now is to build on
this position as one of the world's leaders in beverage packaging and use this
platform to grow the business into a truly global force in consumer
packaging.'

31 August 2000

Enquiries

Rexam PLC      Tel: 020 7227 4100
Rolf Borjesson, Chief Executive
Michael Hartnall, Finance Director
Per Erlandsson, Director of Communications

Financial Dynamics       Tel: 020 7269 7249
Richard Mountain/ David Yates

CHAIRMAN'S STATEMENT

The first six months of this new millennium have seen sales from ongoing
operations advance strongly from £883m to £1,006m and operating profit before
goodwill amortisation and exceptional items from £95m to £104m.  Profit before
tax, before goodwill amortisation and exceptional items, improved from £89m to
£93m, and earnings per share increased from 14.4p to 15.0p.

During this half year, we have pursued our strategy to refocus Rexam around
consumer packaging.  We completed the disposal of the Printing Sector and Bulk
Packaging division and announced the sale of our United States metallising
business and the pharmaceutical cartons business in Puerto Rico, both were
completed in July.  In early April we made a £1.3 billion cash tender offer
for all of the issued shares in American National Can Group, Inc (ANC), the
world's number two beverage can maker.  The successful completion of the offer
at the end of July makes Rexam one of the world's top five consumer packaging
companies and the world's number one beverage can maker.

General trading

Demand for Rexam consumer packaging and other products has been strong across
all our Sectors in the first six months of the year.  Operating profit for
ongoing operations has moved ahead by 9%, benefiting from increased volumes.
I am also pleased to report that our continued focus on maximising operating
efficiencies has resulted in further cost reductions throughout the Group.
However, we have had to meet a number of challenges during the period.
Trading conditions in the UK have been particularly difficult due to the
strength of sterling and we have also had to contend with a rise in raw
material costs in a number of our businesses.

Looking first at our consumer packaging businesses, the Rexam Beverage
Packaging Sector, which sells mainly to European customers, has enjoyed a
strong start, carrying on from last year and producing another solid showing,
despite having to manage sharp rises in energy costs and adverse currency
conditions.

Rexam's Beauty Packaging Sector also traded well during the period, reporting
an increase in profits.  Sales from the dispensing division were particularly
strong as were sales from Der Kwei, based in South East Asia.

Sales growth has been good in the Rexam Healthcare Packaging Sector, but an
increase in the price of raw materials and the strength of sterling have
affected performance.  Both these factors have also had a significant impact
on profit in the Rexam Speciality Food Packaging Sector, the majority of whose
business is UK based.

Coated Films and Papers has reported good first half year figures, primarily
due to last year's restructuring of the Sector, the broad cost cutting
programme and the improvement in the Asian market.  The Building and
Engineering Sector posted another excellent six months.

Disposals

As announced at the time of the offer for ANC, we plan to sell the non-
packaging Sectors.  These disposals are well under way.

Dividends

The Board has approved an interim dividend of 6.4p per ordinary share, an
increase of 5% on last year's 6.1p.  The interim dividend will be paid on 6
November 2000 to holders of ordinary shares registered on 13 October 2000.

The future

Trading in the second half has continued in line with our expectations, and
raw material costs seem to have peaked. The integration of ANC is progressing
according to plan, and we will be consolidating this business from August.  We
anticipate that the planned disposals will be completed by the end of the
first quarter of next year.  Overall, the major changes to the Group's
portfolio of businesses are expected to enhance future profitability.

Our strategy since 1996 has been to focus on consumer packaging.  Following
the acquisition of ANC and the planned non-core disposals, the transformation
of Rexam will be near completion. The whole of our business will be
concentrated on the consumer packaging sector and approximately 75% of the
Group's sales will come from beverage customers.  The task now is to build on
this position as one of the world's leaders in beverage packaging and use this
platform to grow the business into a truly global force in consumer packaging.

Rexam today is a new and well-structured company.

Jeremy Lancaster
Chairman
31 August 2000

OPERATING AND FINANCIAL REVIEW

Strategy

During the past four years Rexam's strategy has been to focus the Group's
resources on the consumer packaging market.  As a result of two major
acquisitions, PLM in February 1999 and American National Can Group, Inc
('ANC') in July 2000, Rexam is now the fourth largest consumer packaging
company in the world and the largest producer of beverage cans.  Full details
of the transaction were circulated to shareholders on 27 April 2000 and
approved by them at an Extraordinary General Meeting on 17 May 2000.
Subsequently the proposed purchase of ANC was referred to the EU Commission to
consider Rexam's competitive position in the European beverage can market.  In
July we received clearance from the EU Commission to proceed with this
acquisition having given undertakings that three plants, out of a total of
sixteen in Europe, would be sold during the next twelve months.  Following
these disposals, Rexam will have in excess of 40% of the European beverage can
market.  This report does not address the acquisition of ANC as the
transaction was completed after the period covered by this review.

To concentrate the Group on consumer packaging and to raise funds for the
recent acquisitions, the Board has embarked upon a programme of substantial
disposals.  During the past twelve months the Windows, Printing and Bulk
Packaging divisions together with other smaller businesses have been sold.
This will cause some earnings dilution in the short term.  We are currently
progressing the disposal of the Coated Films and Papers and the Building and
Engineering sectors and hope to have sold these businesses by the end of first
quarter in 2001.

Trading performance

The trading performance from the existing businesses during the first six
months of 2000 has been satisfactory with strong sales growth and operating
profits, before goodwill and exceptional items, from ongoing operations up 9%.

                                         6 months   6 months              
                                               to         to      Increase
                                          30.6.00    30.6.99             %
                                               £m         £m
                                                                          
Sales                                                                     
Ongoing operations                          1,006        883            14
Discontinued and                                                          
other disposals                               110        281
                                            1,116      1,164              
Operating profit*                                                         
Ongoing operations                            104         95             9
Discontinued and                                                          
other disposals                                 4         13
                                              108        108              
Interest                                     (15)       (19)              
Profit before tax*                             93         89             4
                                                                          
Earnings per share*                         15.0p      14.4p             4
* Before goodwill amortisation and                                        
exceptional items

During this period demand for Rexam's products has been strong across all
Sectors with underlying volume growth on a like for like basis up 6%.  This
increased volume has been the major contributor to improved profitability.  In
addition, all businesses continue to focus on cost reduction and efficiency
programmes, which contributed £10m to operating profits.

Overall Group performance has been influenced by a number of factors.  During
the past twelve months there have been significant increases in raw material
prices particularly for plastic resins, papers and energy.  Our business
managers have been working hard to pass on these costs to customers but timing
delays have meant that it has not been possible to recover fully these amounts
during the first six months.  There should be some benefit during the
remainder of the year as selling price increases become effective.
Additionally, in some instances we agreed with our customers to absorb raw
material cost increases in exchange for greater volume.

Exchange rates

The principal exchange rates used in preparing the consolidated profit and
loss account, balance sheet and cash flow statement are set out in Note 7 to
the Interim Accounts.

The weakness of the Euro and the strength of sterling have made trading
conditions in the United Kingdom difficult with significant import penetration
and highly competitive export markets in Europe.  However, currently only
about 18% of sales from continuing operations are in the United Kingdom.

Sales

                                                  6 months      6 months
                                                        to            to
                                                   30.6.00       30.6.99
                                                        £m            £m
                                                                        
Sales as reported                                    1,116         1,164
Discontinued and other disposals                     (110)         (281)
Ongoing operations                                   1,006           883
Impact of 1999 acquisitions                              -            58
Currency  fluctuations                                   -          (17)
Ongoing operations on a pro forma                                       
basis                                                1,006           924

Performance was strong during the period with pro forma sales up 9%.  All
Sectors reported strong demand for products and underlying volume gains were
6% compared with the same period last year.

Operating profit


                                                    6 months      6 months
                                                          to            to
                                                     30.6.00       30.6.99
                                                          £m            £m
                                                                          
Operating profit as reported                             108           108
Discontinued and other disposals                         (4)          (13)
Ongoing operations                                       104            95
Impact of 1999 acquisitions                                -             2
Currency fluctuations                                      -           (2)
Ongoing operations on a pro forma                                         
basis                                                    104            95


                                                               Profit
                                                             movement
                                                              in 2000
                                                                   £m
                                                                     
Prices/costs                                                     (31)
Efficiency savings                                                 10
                                                                 (21)
Additional volume                                                  30
                                                                    9

Underlying growth from the ongoing operations was 9% although the performance
of each Sector was by no means consistent.   Much of the variability has been
due to geographic factors.  Businesses based in the United States have
benefited from strong demand driven by a robust economy.  Europe too has seen
generally good growth and our Asian operations have enjoyed the recovery in
the local economies after the downturn in 1998 and 1999.  However trading
conditions in the less significant United Kingdom have been challenging.  The
combination of high raw material costs and strength of sterling has made it
difficult to recover costs in the marketplace.  As discussed below, the
Speciality Food Packaging Sector, which primarily operates in the United
Kingdom, has found trading conditions particularly harsh.

As can be seen from the table above, the strong volume has produced an
additional operating profit of £30m but the benefit has been eroded by raw
material costs.

Return on sales and return on net assets

Despite Group return on sales for the ongoing operations reducing to 10.3%
from 10.8%, return on net assets for the ongoing operations has improved to
22.1% from 21.1% last year as a result of better utilisation of assets from
the increased volume of sales.

                                                 6           6       Year
                                            months      months         to
                                        to 30.6.00  to 30.6.99   31.12.99
                                                 %           %          %
                                                                         
ROS*                                          10.3        10.8       10.9
RONA*                                         22.1        21.1       21.6

* Ongoing operations before goodwill amortisation and exceptional items

Performance of business sectors

Summary                                   6 months    6 months       Year
                                                to          to         to
                                           30.6.00     30.6.99   31.12.99
                                                                         
Sales                                      £1,116m     £1,164m    £2,389m
Operating profit                             £108m       £108m      £236m
Return on sales                               9.7%        9.3%       9.9%


Ongoing operations                        6 months    6 months       Year
                                                to          to         to
                                           30.6.00     30.6.99   31.12.99
                                                                         
Sales                                      £1,006m       £883m    £1,885m
Operating profit                             £104m        £95m      £205m
Return on sales                              10.3%       10.8%      10.9%

The performance of the individual Sectors is discussed in more detail below
and is based on operations before goodwill amortisation and exceptional items.

Beauty Packaging

                                          6 months  6 months          Year
                                                to        to            to
                                           30.6.00   30.6.99      31.12.99
                                                                          
Sales                                        £115m     £104m         £214m
Operating profit                              £16m      £15m          £32m
Return on sales                              13.9%     14.4%         15.0%

The Beauty Packaging Sector continued to enjoy strong demand for its products
with profit growth of 7%.  Sales from Der Kwei, which is based in South East
Asia, were particularly strong as were those from the Pumps division.

Healthcare Packaging

                                       6 months    6 months          Year
                                     to 30.6.00  to 30.6.99   to 31.12.99
                                                                         
Sales                                     £141m        £127m        £261m
Operating profit                           £12m         £14m         £26m
Return on sales                            8.5%        11.0%        10.0%

In spite of a good increase in sales in the Healthcare Packaging Sector
profits were down.  A number of customer contracts have agreed fixed dates for
raw material price increase adjustments and therefore there has been some
delay in recovering these costs.  In addition, the businesses based in the
United Kingdom have found it necessary to reduce prices in order to compete in
continental Europe due to the strength of sterling.

Beverage Packaging

                                      6 months      6 months         Year
                                             to           to           to
                                        30.6.00      30.6.99     31.12.99
                                                                         
Sales                                     £340m        £300m        £663m
Operating profit                           £33m         £28m         £64m
Return on sales                            9.7%         9.3%         9.7%

The Beverage Packaging Sector, which is essentially the PLM group, purchased
in February last year, has again excelled.  The comparative figures for 1999
in the above table are for five and eleven months of post acquisition trading
only.  However, the profit at June is broadly comparable as the pre-
acquisition profit matches the £2m impact arising from foreign exchange
translation.  Demand, particularly in the Beverage Can division, has been
strong and underlying unit volumes are up on last year.  The performance has
been achieved despite significant increases in energy costs, which has
impacted the Glass division, a heavy user of gas and oil.

Speciality Food Packaging

                                          6 months  6 months         Year
                                                to        to           to
                                           30.6.00   30.6.99     31.12.99
                                                                         
Sales                                         £89m      £81m        £177m
Operating profit                               £3m       £7m         £15m
Return on sales                               3.4%      8.6%         8.5%

Substantial increases in raw material prices, as much as 50% for some resin
categories, and the strength of sterling combined to make this a tough period
for the Speciality Food Packaging Sector.  Competitors in the UK market are
reporting a similar story.  In the United Kingdom, which accounts for around
75% of the Sector's business, it has been difficult to increase prices owing
to import penetration.  A number of customer contracts allow for raw material
cost increases to be passed on but inevitably there are some time delays.  The
first quarter was particularly difficult but there was some improvement in the
second.  We aim to recover most of the cost increases during the remainder of
the year as raw material costs stabilise.

Coated Films and Papers

                                           6 months 6 months           Year
                                                 to        to            to
                                            30.6.00   30.6.99      31.12.99
                                                                           
Sales                                         £222m     £185m         £391m
Operating profit                               £22m      £16m          £36m
Return on sales                                9.9%      8.6%          9.2%

After a difficult trading period in 1999, the Coated Films and Papers Sector
has recovered strongly showing a significant improvement in performance.
Demand for our products was high, particularly in the electronics sector which
was badly affected by the Asian crisis last year.  All divisions within the
Sector saw good growth in sales and profits. As previously announced, this
Sector is due to be sold.

Building and Engineering

                                               6         6             Year
                                          months    months               to
                                              to        to         31.12.99
                                         30.6.00   30.6.99
                                                                           
Sales                                       £99m      £86m            £179m
Operating profit                            £18m      £15m             £32m
Return on sales                            18.2%     17.4%            17.9%

The Building and Engineering Sector reported another outstanding performance
led by a strong demand for MiTek's products both in the United States and in
other markets around the world.  TBS Engineering has also seen an improvement
in sales and profits associated with the recovery of Asian markets. As
previously announced, this Sector is due to be sold.

Exceptional items

The following net exceptional loss is reported as part of Group profit in the
six months to 30.6.00:

                                                                        £m
                                                                          
Disposal of businesses                                                    
Net profit before goodwill                                              22
Attributable goodwill written off                                     (91)
Net loss on disposal of businesses                                    (69)
Profit on fixed assets                                                   3
Taxation charge on exceptional items                                   (1)
                                                                      (67)

There were no trading exceptional items during the period.  The loss on the
disposal of businesses derives largely from the write off of goodwill
previously set off directly against reserves of £84m.  This amount has been
adjusted through the reserves and therefore has no impact upon the Group's
equity.

Interest

The interest charged for the period was £15m compared with £19m last year.
This reduction is largely due to the proceeds from the sale of businesses.

Taxation

A charge at the rate of 31%, unchanged from 1999, has been made for taxation
on profits before goodwill amortisation and exceptional items.  This is the
rate we expect to apply for the whole of 2000 subject to assessing the impact
of ANC and the timing of planned disposals.

Earnings per share

Basic earnings per share before goodwill amortisation and exceptional items
improved by 4% to 15.0 pence per share.  Due primarily to the loss on the sale
of the Printing Sector, the Group's basic earnings per share, including
goodwill amortisation and exceptional items, was a negative 3.3 pence per
share.

Dividend per share

The Board has approved an increase in the interim dividend to 6.4 pence per
ordinary share up 5% from 6.1 pence per ordinary share paid in 1999.  This
dividend will be paid on 6 November 2000.

Acquisitions

The purchase of ANC was not completed until July 2000.  Other acquisition
activity during the period was not significant.  Costs were incurred in
respect of ANC, primarily fees associated with debt funding for the
acquisition.  The outflow of funds in respect of acquisitions was:

                                                            £m
                                                              
Costs and fees in connection with ANC                       16
Acquisitions made by MiTek                                   7
                                                            23

Disposals

Disposal proceeds, including borrowings disposed and net of transaction costs,
amounted to £105m, relating primarily to the sale of the Printing and Bulk
Packaging businesses.  Since the end of June 2000 we have completed the sales
of the United States metallising and the Puerto Rican pharmaceutical cartons
businesses.

Cash flow and borrowings

                                          6 months   6 months         Year
                                                to         to           to
                                           30.6.00    30.6.99     31.12.99
                                                £m         £m           £m
Cash flow from operations after normal                                    
taxation,                                      125        125          263
interest and non equity dividends
Change in working capital                     (86)       (74)         (10)
Capital expenditure and financial             (67)       (69)        (143)
investment
Free cash flow                                (28)       (18)          110
Ordinary dividends - normal                   (34)       (32)         (56)
Ordinary dividends - deferred                    -       (54)         (54)
Business cash flow                            (62)      (104)            -
Acquisitions                                  (23)      (523)        (549)
Disposals                                      105        226          368
Taxation with respect to 1984                    -       (14)         (14)
demerger*
Cash flow                                       20      (415)        (195)
Currency fluctuations                         (38)       (10)           38
Share capital changes                            1          -          (3)
Debt restructuring of Russian                   26          -            -
operations
Net borrowings at the beginning of the       (606)      (446)        (446)
period
Net borrowing at the end of the period       (597)      (871)        (606)

* Rexam reached an agreement with the Internal Revenue Service in the United
States regarding the Foreign Investment in Real Property Tax Act of 1980 to
pay £14m in respect of the demerger of Bowater Inc in 1984.

Cash flow was in line with expectations with free cash flow being an outflow
of £28m.  As usual during the first half of the year there is substantial
increase in working capital due to seasonal demand for our products,
particularly in the Beverage Packaging Sector.  We anticipate that there will
be a compensating inflow of funds during the remainder of the year as we
approach the winter season when activity is lower.

Borrowings only reduced marginally from the beginning of the year due to the
working capital outflow and the movement on exchange rates offset by disposal
proceeds.  It is our practice to substantially hedge the overseas assets with
foreign borrowings, consequently the movement in the United States dollar
compared to sterling has increased reported borrowings by £38m.

Russian beverage can joint venture

In August 2000 Rexam reached an agreement with the banks that have financed
the Russian beverage can plant in which Rexam had an equity stake of 52%.  Due
to the very difficult business conditions in Russia, the joint venture was
effectively insolvent.  Rexam has purchased the banks' $80m loans at a
discount and all minority equity stakes have been eliminated such that Rexam
presently owns 100% of this business.  Rexam is discussing with some of the
original equity investors the possibility of them taking a small equity stake
in the newly refinanced Russian business.  The change in financial structure
results in a reduction of the Group's consolidated debt by £26m with a
corresponding adjustment to capitalised goodwill reflecting the change in fair
value of the debt acquired.

Capital expenditure

Gross capital expenditure was £68m and disposal proceeds were £6m.  Demand for
capital was relatively low and was almost equal to depreciation.  We
anticipate that capital expenditure for the full year will be around £160m on
the existing portfolio excluding the impact of ANC in the second half.

                                         6 months  6 months           Year
                                               to        to             to
                                          30.6.00   30.6.99       31.12.99
                                                                          
Capital expenditure (gross)                  £68m      £71m          £155m
Depreciation                                 £69m      £66m          £145m
Ratio                                        0.99      1.08           1.07

Balance sheet, gearing and interest cover

                                            As at     As at          As at
                                          30.6.00   30.6.99       31.12.99
                                               £m        £m             £m
                                                                          
Intangible fixed assets                       276       310            302
Other net assets                            1,050     1,147            990
                                            1,326     1,457          1,292
                                                                          
Equity, including minority interests          729       586            686
Net borrowings                                597       871            606
                                            1,326     1,457          1,292
                                                                          
Gearing (%)                                    82       149             88
                                                                          
Interest cover (times)                        7.2       5.7            5.9

Gearing was 82% at the end of June 2000.  The balance sheet profile and
financing ratios will change significantly in the second half when the ANC
acquisition is incorporated.


Rolf Borjesson
Chief Executive

Michael Hartnall
Finance Director

31 August 2000

CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the six months to 30.6.00 - Unaudited


                              Operations                                    
                                  before                                    
                                goodwill      Goodwill  Exceptional         
                            amortisation  amortisation        items    Total
                                     and            £m                      
                             exceptional                         £m       £m
                                   items
                                      £m
                                                                            
Turnover (Note 2)                                                           
Continuing operations              1,056             -            -    1,056
Discontinued operations               60             -            -       60
                                   1,116             -            -    1,116
Turnover of associates -             (8)             -            -      (8)
continuing operations
                                   1,108             -            -    1,108
Operating expenses                                                -         
Continuing operations              (941)           (5)            -    (946)
Discontinued operations             (59)             -            -     (59)
                                 (1,000)           (5)            -  (1,005)
Operating profit (Note                                            -         
2)
Continuing operations                107           (5)            -      102
Discontinued operations                1             -            -        1
                                     108           (5)            -      103
Profit on fixed assets -               -             -            3        3
continuing operations
Disposal of businesses                 -             -         (69)     (69)
(Note 3)
Profit on ordinary                   108           (5)         (66)       37
activities before
interest
Interest                            (15)             -            -     (15)
Profit on ordinary                    93           (5)         (66)       22
activities before
taxation
Taxation on ordinary                (29)             -          (1)     (30)
activities (Note 4)
Loss on ordinary                      64           (5)         (67)      (8)
activities after
taxation
Equity minority                                                          (2)
interests
Loss for the financial                                                  (10)
period
Preference dividend on                                                   (3)
non equity shares
Loss attributable to                                                    (13)
ordinary shareholders
Ordinary dividend on                                                    (25)
equity shares (Note 6)
Retained loss for the                                                   (38)
period
                                                                            
Earnings per ordinary                                                       
share (Note 5)
Basic (pence)                       15.0                               (3.3)
Diluted (pence)                     14.8                               (3.3)
                                                                            
Dividend per ordinary                                                    6.4
share (pence) (Note 6)

CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the six months to 30.6.99 - Unaudited


                             Operations                                     
                                 before                                     
                               goodwill      Goodwill  Exceptional          
                           amortisation  amortisation        items     Total
                                    and                                     
                            exceptional                                     
                                  items                                     
                                                                            
                                                                          £m
                                                   £m           £m
                                     £m
                                                                            
Turnover (Note 2)                                                           
Continuing operations               943             -           -        943
Discontinued operations             221             -           -        221
                                  1,164             -           -      1,164
Turnover of associates                                                      
Continuing operations               (8)             -           -        (8)
Discontinued operations             (1)             -           -        (1)
                                    (9)             -           -        (9)
                                  1,155             -           -      1,155
Operating expenses                                                          
Continuing operations             (837)           (7)        (13)      (857)
Discontinued operations           (210)             -           -      (210)
                                (1,047)           (7)        (13)    (1,067)
Operating profit (Note 2)                                                   
Continuing operations                98           (7)        (13)         78
Discontinued operations              10             -           -         10
                                    108           (7)        (13)         88
Disposal of businesses                -             -          39         39
(Note 3)
Profit on ordinary                  108           (7)          26        127
activities before
interest
Interest                           (19)             -           -       (19)
Profit on ordinary                   89           (7)          26        108
activities before
taxation
Taxation on ordinary               (28)             -         (1)       (29)
activities (Note 4)
Profit on ordinary                   61           (7)          25         79
activities after taxation
Equity minority interests                                                (1)
Profit for the financial                                                  78
period
Preference dividend on                                                   (3)
non equity shares
Profit attributable to                                                    75
ordinary shareholders
Ordinary dividend on                                                    (24)
equity shares (Note 6)
Retained profit for the                                                   51
period
                                                                            
Earnings per ordinary                                                       
share (Note 5)
Basic (pence)                      14.4                                 19.0
Diluted (pence)                    14.2                                 18.5
                                                                            
Dividend per ordinary                                                    6.1
share (pence) (Note 6)


CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year to 31.12.99 - Audited


                              Operations                                    
                                  before                                    
                                goodwill      Goodwill  Exceptional         
                            amortisation  amortisation        items    Total
                                     and                                    
                             exceptional                                    
                                   items                                  £m
                                      £m            £m           £m
                                                                            
Turnover (Note 2)                                                           
Continuing operations              2,007             -            -    2,007
Discontinued operations              382             -            -      382
                                   2,389             -            -    2,389
Turnover of associates                                                      
Continuing operations               (17)             -            -     (17)
Discontinued operations              (1)             -            -      (1)
                                    (18)             -            -     (18)
                                   2,371             -            -    2,371
Operating expenses                                                          
Continuing operations            (1,780)          (16)         (29)  (1,825)
Discontinued operations            (355)             -            -    (355)
                                 (2,135)          (16)         (29)  (2,180)
Operating profit  (Note 2)
Continuing operations                210          (16)         (29)      165
Discontinued operations               26             -            -       26
                                     236          (16)         (29)      191
Profit on fixed assets -               -             -            5        5
continuing operations
Disposal of businesses                 -             -           31       31
(Note 3)
Profit on ordinary                   236          (16)            7      227
activities before
interest
Interest                            (40)             -            -     (40)
Profit on ordinary                   196          (16)            7      187
activities before
taxation
Taxation on ordinary                (61)             -            8     (53)
activities (Note 4)
Profit on ordinary                   135          (16)           15      134
activities after taxation
Equity minority interests                                                (2)
Profit for the financial                                                 132
year
Preference dividend on                                                   (6)
non equity shares
Profit attributable to                                                   126
ordinary shareholders
Ordinary dividend on                                                    (58)
equity shares (Note 6)
Retained profit for the                                                   68
year
                                                                            
Earnings per ordinary                                                       
share (Note 5)
Basic (pence)                       32.2                                31.9
Diluted (pence)                     31.3                                31.1
                                                                            
Dividend per ordinary                                                   14.8
share (pence) (Note 6)

CONSOLIDATED BALANCE SHEET


                                        Unaudited   Unaudited       Audited
                                            as at       as at         as at
                                          30.6.00     30.6.99              
                                                                   31.12.99
                                               £m          £m            £m
                                                                           
Fixed assets                                                               
Intangible assets                             276         310           302
Tangible assets                               799         937           842
Investments                                    16          10             9
                                            1,091       1,257         1,153
Current assets                                                             
Properties surplus to requirements              2           2             2
Stocks                                        283         299           281
Debtors receivable within one year            427         475           373
Pensions receivable after more than           122         110           116
one year
Other debtors receivable after more             8           9            10
than one year
Marketable securities                           5           5             5
Money market deposits                          27          27            35
Cash at bank and in hand                       52          81            65
                                              926       1,008           887
Creditors: amounts falling due within                                      
one year
Borrowings                                  (451)       (220)         (349)
Other creditors                             (455)       (493)         (499)
Net current assets                             20         295            39
                                                                           
Total assets less current liabilities       1,111       1,552         1,192
                                                                           
Creditors: amounts falling due after                                       
more than one year
Borrowings                                  (230)       (764)         (362)
Other creditors                               (9)         (5)           (8)
                                                                           
Provisions for liabilities and charges      (143)       (197)         (136)
                                              729         586           686
                                                                           
Capital and reserves                                                       
Ordinary equity share capital                 254         254           254
Non equity share capital                       93          97            93
Called up share capital                       347         351           347
Equity reserves                                                            
Share premium account                         396         394           395
Capital redemption reserve                    259         255           259
Profit and loss reserve                     (316)       (456)         (356)
Other reserves                                 22          22            22
                                              708         566           667
Equity minority interests                      21          20            19
                                              729         586           686

CONSOLIDATED CASH FLOW STATEMENT


                                        Unaudited  Unaudited        Audited
                                         6 months   6 months           year
                                               to         to             to
                                          30.6.00    30.6.99       31.12.99
                                               £m         £m             £m
                                                                           
Cash flow from operating activities            88         87            331
                                                                           
Returns on investments and servicing                                       
of finance
Net interest paid                            (19)       (19)           (36)
Syndication fees paid on acquisition         (15)          -              -
financing for ANC
Dividends paid to non equity                  (3)        (3)            (7)
shareholders and minority interests
                                             (37)       (22)           (43)
                                                                           
Taxation paid                                                              
Normal taxation                              (27)       (14)           (35)
FIRPTA settlement                               -       (14)           (14)
                                             (27)       (28)           (49)
                                                                           
Capital expenditure and financial                                          
investment
Purchase of tangible fixed assets            (68)       (71)          (155)
Purchase of other fixed asset                 (7)          -              -
investments
Sale of tangible fixed assets and               6          2             10
surplus properties
Sale of other fixed asset investments           2          -              2
                                             (67)       (69)          (143)
Acquisitions and disposals                                                 
Purchase of subsidiary undertakings           (8)      (312)          (329)
and businesses
Sale of subsidiary undertakings and            85        222            318
businesses
Investment in associated undertakings           -          -            (2)
Purchase of minority interests                  -          -            (1)
                                               77       (90)           (14)
                                                                           
Equity dividends  paid to ordinary           (34)       (86)          (110)
shareholders
                                                                           
Cash flow before management of liquid           -      (208)           (28)
resources and financing
                                                                           
Management of liquid resources                                             
Marketable securities                           -          5              5
Money market deposits                           9         20             13
                                                9         25             18
                                                                           
Financing                                                                  
Issue of ordinary equity share capital          1          -              1
Redemption of non-equity B shares               -          -            (4)
Net (decrease)/increase in loans             (18)        199             36
                                             (17)        199             33
                                                                           
(Decrease)/increase in cash                   (8)         16             23

RECONCILIATION OF OPERATING PROFIT TO CASH FLOW FROM OPERATING ACTIVITIES


                                          Unaudited  Unaudited     Audited
                                           6 months   6 months        year
                                                 to         to          to
                                            30.6.00    30.6.99    31.12.99
                                                                          
                                                 £m         £m          £m
                                                                          
Operating profit from continuing                102         78         165
operations
Depreciation                                     66         56         128
Impairments and amounts written off               -          7           7
tangible fixed assets
Goodwill amortisation                             5          7          16
Movement in provisions                            4          1           1
Non cash element of retirement                  (7)        (6)        (17)
benefits
Movement in working capital                    (81)       (67)        (12)
Other movements                                 (1)          -           2
Cash flow from continuing operating              88         76         290
activities
Cash flow from discontinued operating             -         11          41
activities
Cash flow from operating activities              88         87         331






RECONCILIATION OF CASH FLOW TO MOVEMENT IN NET BORROWINGS

                                          Unaudited  Unaudited     Audited
                                           6 months   6 months        year
                                                 to         to          to
                                            30.6.00    30.6.99    31.12.99
                                                 £m         £m          £m
                                                                          
Net borrowings at the beginning of the        (606)      (446)       (446)
period
Currency fluctuations                          (38)       (10)          38
(Decrease)/increase in cash                     (8)         16          23
Decrease in liquid resources                    (9)       (25)        (18)
Decrease/(increase) in loans                     18      (199)        (36)
Net borrowings acquired/disposed                 20      (207)       (167)
Debt restructuring of Russian                    26          -           -
operations
Net borrowings at the end of the              (597)      (871)       (606)
period
                                                                          
                                                  %          %           %
                                                                          
Gearing                                          82        149          88
                                                                          

STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

                                          Unaudited   Unaudited      Audited
                                           6 months    6 months         year
                                                 to          to           to
                                            30.6.00     30.6.99     31.12.99
                                                 £m          £m           £m
                                                                            
(Loss)/profit for the financial period         (10)          78          132
Currency fluctuations                           (6)         (3)            6
Total recognised gains and losses for          (16)          75          138
the financial period




RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

                                          Unaudited   Unaudited      Audited
                                           6 months    6 months         year
                                                 to          to           to
                                            30.6.00     30.6.99     31.12.99
                                                 £m          £m           £m
                                                                            
Balance at the beginning of the period          667         489          489
as originally reported
Prior period adjustment (Note 1e)                 -        (14)         (14)
Balance at the beginning of the period          667         475          475
as restated
                                                                            
(Loss)/profit for the financial period         (10)          78          132
Dividends                                      (28)        (27)         (64)
Retained (loss)/profit for the period          (38)          51           68
                                                                            
Currency fluctuations                           (6)         (3)            6
Issue of ordinary share capital under             1           -            1
share option schemes
Redemption of non equity B shares                 -           -          (4)
Goodwill written off on business                 84          43          121
disposals
Balance at the end of the period                708         566          667


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