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Wolv.& Dudley Brews. (WOLV)

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Friday 23 May, 2003

Wolv.& Dudley Brews.

Interim Results

Wolverhampton& Dudley Breweries PLC
23 May 2003

23 May 2003



• Record interim earnings per share* of 28.4p, up 15.0%
• Interim dividend raised to 10.9p per share, up 10.1%
• Operating margin* improved from 19.3% to 20.0%
• Return on capital increased from 10.9% to 11.1%
• Profit before taxation* £30.1 million (2002: £31.3 million)
• Operating cashflow increased by 5.4% to £55.0m.
• £4 million share buybacks completed during first half
• Pathfinder Pubs total like-for-like sales up 3.1% (33 weeks to 17 May: up 3.2%)
• The Union Pub Company like-for-like sales up 2.0% (33 weeks to 17 May: up 2.1%)
• W&DB Brands return on capital increased from 16.3% to 20.1%

*before goodwill amortisation and exceptional items
Unless otherwise stated all figures are quoted before goodwill amortisation and
exceptional items throughout this announcement.

Ralph Findlay, Chief Executive, comments

'Our trading performance has been resilient in a competitive and difficult
market.  We stated in December 2002 that we aimed to increase margins despite
more challenging trading conditions, and we have done so. We have achieved this
through a combination of investment in our pubs and our beer brands, churning
the pub estate, and increasing productivity. Although consumer confidence
remains relatively fragile, we believe that the clarity of our strategy gives us
the right business mix and the right approach for current markets. '


The Wolverhampton & Dudley Breweries, PLC              Hudson Sandler

Ralph Findlay, Chief Executive                         Keith Hann/Andrew Hayes/

Paul Inglett, Finance Director                         Wendy Baker

Tel:     020 7796 4133 on Friday, 23 May only          Tel:     020 7796 4133

01902 329517 thereafter

To see interviews with Ralph Findlay and Paul Inglett, available in video, audio
and text, go to High quality images for the media to access and
download free of charge are available from Visual Media Online at

                              CHAIRMAN'S STATEMENT

These results have been achieved against a background of intense competition and
pricing pressure in our sector.  The focus of our estate on high quality,
freehold community pubs with a strong value based offer, and the flexibility
afforded by operating three distinct pub and brand businesses, have both
contributed to our strong performance.

The details of our trading results and the development of the business are
described in the Chief Executive's Review and the Financial Review.

Earnings and dividend

Earnings per share (before goodwill amortisation and exceptional items)
increased by 15.0% to 28.4 pence per share.  This increase has been driven by
higher operating margins, the return of £126 million to shareholders during the
financial year ended 28 September 2002 and the impact of buying back nearly
735,000 shares at a cost of £4.0 million during the half-year just ended.

Having regard to the increase in earnings per share and the positive outlook for
the Group, the Board has declared an interim dividend of 10.9 pence per share
(2002: 9.9 pence), payable on 27 June 2003 to shareholders on the register on 6
June 2003.  This is an increase of 10.1%, continuing the progressive dividend
policy that we have pursued consistently over many years.

The Board

Alistair Darby, 36, Managing Director of W&DB Brands since June 2002, was
appointed to the Board as an executive director on 27 January 2003.  Alistair
originally joined the Group in 1991 and worked for us until 1995, rejoining in
1997 from United Distillers.


Recent trading has been satisfactory.  Like-for-like sales across all of our
managed houses within Pathfinder Pubs increased by 3.2% in the 33 weeks to 17
May 2003.  Like-for-like sales in The Union Pub Company were 2.1% ahead of last
year for the same period.  A good trading performance during March and April was
helped by fine weather.  Notwithstanding the uncertain economic climate, the
Board is confident in the prospects for the full year.

This strong interim performance has been achieved against the backdrop of the
challenging operating environment. Looking forward, we continue to focus on
developing the business to extract maximum value from our assets in order to
increase cash generation.  We will use that cash to enhance shareholder value,
either by buying back shares when suitable opportunities present themselves, by
continuing to invest in our businesses, or by making selective acquisitions that
complement and strengthen our existing activities provided that they can achieve
a satisfactory return on capital.

                                                                  David Thompson

                            CHIEF EXECUTIVE'S REVIEW

We have achieved improvements in all of our key performance indicators compared
to last year: operating margins improved by 0.7% to 20.0%, return on capital by
0.2% to 11.1% and earnings per share by 15.0% to 28.4 pence per share.

This performance is a continuation of the good progress made over the last two
years in refocusing the business and building on our core strengths as a
community pub operator and brewer of leading beer brands. We have added a
greater impetus towards organic development and growth in each of our three

As a consequence, our trading performance has been resilient in a competitive
and difficult market.  We stated in December 2002 that we aimed to increase
margins despite more challenging trading conditions and we have done so. We have
achieved this through a combination of investment in our pubs and our beer
brands, churning the pub estate and increasing productivity.

Pathfinder Pubs

Pathfinder Pubs at 29 March 2003 comprised 479 managed pubs, including 28
Pitcher and Piano bars.  The majority of our estate comprises good freehold
community pubs.

The average turnover per week across Pathfinder Pubs is now £10,000.
Like-for-like turnover was 3.1% ahead of last year including all pubs in the
estate and 0.4% below last year on an un-invested basis, which excludes those
pubs where more than £20,000 has been invested since October 2001.  Overall,
like-for-like turnover from food increased by 6.4% and now represents 27% of
total turnover from managed pubs (2002: 25%).

Operating margins increased from 18.8% to 19.3% and return on capital increased
from 11.2% to 11.4%, assisted by the transfer of 104 pubs to tenancy in
September 2002 and careful control of pricing, promotions and costs.  The
management of these components of gross margin has been assisted by the fact
that we have now completed a £6 million investment in Electronic Point of Sale
equipment (EPOS) across the entire estate.  In addition to its obvious till and
audit functions, our EPOS system is used primarily to enhance our understanding
of consumer behaviour.

We are continuing to see significant performance enhancement through the
refurbishment and development of managed pubs in both the 'Bostin' Local' or 
'Service That Suits Me' formats.

We now have 73 'Bostin' Locals', which on average have seen turnover double on
conversion and have achieved an average cash return on incremental capital
comfortably above our minimum target of 20%.  From within our existing estate,
we aim to develop around 35 pubs per year over the next few years.

We have 16 'Service That Suits Me' pubs offering a premium pub food menu and
choice of service style.  The returns on investment made are similar to those
achieved in 'Bostin Local' refurbishments and we aim to develop around 10 such
pubs per annum from our existing estate.

Organic growth continues, and we have plans in place to develop new 'Bostin'
Local' and 'Service That Suits Me' pubs on greenfield sites and are currently
acquiring six such sites in Cambridgeshire, County Durham, Leicestershire,
Northamptonshire, Oxfordshire, and South Wales.

The Government recently announced a 7.1% increase in the national minimum wage
to apply from October 2003 and a further increase of 7.8% to apply from October
2004.  These increases are significantly ahead of inflation and are inevitably
going to result in the further transfer of managed pubs to lease.

The Union Pub Company

Our tenanted pub division comprised 1,139 pubs on 29 March 2003, including 104
smaller managed pubs transferred in September 2002.

Like-for-like sales were 2.0% ahead of last year.  Operating margin was 39.3%
compared with 40.4% in 2002, reflecting the lower margins of managed houses
transferred in the period up until the pubs were leased or tenanted and
increased revenue repairs relating to the 21-year lease programme.  The
underlying operating margin, excluding managed houses transferred during the
period, increased by 2.0% to 42.4%.  Return on capital increased from 12.9% to

The lease programme has developed quickly; we now have 227 21-year leases where
terms have been agreed with tenants and we are on track to achieve our target of
moving approximately half of our tenanted estate to 21-year leases. The benefits
of doing this are that good operators are attracted to the security of the
longer lease and the potential for capital reward.

We believe that our plain English agreements, the independence of our rent
setting process and the attractive discounts available provide us with an edge
over competitors when it comes to attracting the best tenants.  It is the
quality of our tenants that underpins the stable cash flows from this freehold

W&DB Brands

Turnover was £60.0 million compared to £65.2 million last year, as a result of
the significant restructuring of the business, including brewery rationalisation
and a reduction in capital employed, which was completed last year.  This is
reflected in divisional net assets of £89.7 million compared to £109.0 million
as at 30 March 2002.

Although capital employed has been reduced, operating profit increased from £8.9
million to £9.0 million, with operating margin increasing to 15.0% from 13.7%
last year and return on capital from 16.3% to 20.1%.

The beer market declined by approximately 3% last year.  Having completed the
transformation of W&DB Brands to raise margin and return on capital, we now aim
for our brands to outperform the market in future by investing more in marketing
for both the Banks's and Pedigree brands.

We aim to build upon the success we are achieving with Marston's Pedigree
following the 'Uncompromising' marketing campaign launched in November 2002.
Pedigree volumes are now 1.5% ahead of last year and the brand is in growth in
the on-trade.  New product development this year includes the recent launch of
Old Empire, a stronger pale ale intended to complement our existing beer brand

The competitive environment in the beer market is going through significant
upheaval.  We believe that we will benefit by concentrating on doing a few
simple things well and by continuing our more local approach to business.

The future

As the Chairman reports, current trading is satisfactory.  Although consumer
confidence remains relatively fragile, we believe that the clarity of our
strategy gives us the right business mix and the right approach for current

We have made good progress in improving margins in this first half year in a
period of rising costs. These pressures are certain to continue, whether as a
result of higher employment costs due to increases in the minimum wage, pension
costs, or the impact of new legislation. These factors are beyond our direct

However, the quality of our assets and our brands, our local expertise and our
emphasis on providing what our customers want, all contribute to the fundamental
stability of our business and our capacity to generate cash.

                                                                   Ralph Findlay
                                                                 Chief Executive

                           FINANCIAL REVIEW

Trading overview

                              Turnover            Operating profit     Margin           Return on Capital
                              2003     2002        2003      2002      2003      2002       2003     2002

Segmental Analysis              £m       £m          £m        £m         %         %          %        %
Pathfinder Pubs               121.2    134.8       23.4      25.4      19.3      18.8        11.4     11.2
The Union Pub Co.              58.0     50.0       22.8      20.2      39.3      40.4        13.1     12.9
W&DB Brands                    60.0     65.2        9.0       8.9      15.0      13.7        20.1     16.3
Central costs                     -                (7.3)     (6.3)     (3.1)     (2.5)         -         -
Group                         239.2    250.0       47.9      48.2      20.0      19.3        11.1     10.9

Turnover declined by 4.3% to £239.2 million and operating profit by 0.6% to
£47.9 million as a result of the disposal of 73 pubs in the last financial year
and a further 12 pubs in this financial year and the loss of retail turnover
from 104 smaller managed pubs which transferred to tenancy in September 2002.

Underlying operating margins (excluding the impact of the managed to tenanted
transfers) have increased in all divisions of the business, with the Group's
operating margin (before goodwill and exceptional items) increasing from 19.3%
to 20.0%. These margin enhancements have been achieved despite a £1 million
increase in central costs due to higher pension contributions and insurance

Return on capital also improved in all divisions, with the annualised Group
pre-tax return on capital increasing from 10.9% to 11.1%. This demonstrates the
benefit of the actions we have taken to dispose of underperforming assets,
transfer smaller managed pubs to tenancy and reduce the capital employed in W&DB
Brands, in addition to continuing operational improvements yielding increased
margins and reduced costs.

Increasing cash returns to shareholders

We have again delivered strong earnings per share growth - up 15.0% to 28.4
pence per share. This earnings growth and the underlying strong and stable cash
flow have enabled us to increase dividends by 10.1% to 10.9 pence per share. Our
intention remains to increase dividends broadly in line with our earnings
growth, whilst maintaining appropriate dividend cover.

In addition, we bought back a further 735,000 shares at a cost of £4.0 million
in the market during the first half year.

Strong cash flow

In this first half-year, we generated £27 million of free cash flow (after
interest and tax) - funds available for investment and to reward shareholders.
This includes a £2.8m increase in cash flow from operating activities to £55

Disposals of £11.2 million includes the proceeds from the sale of 12 pubs and
unlicensed property.

Net debt at the half year end was £493.0 million - almost unchanged since last
year - despite having returned £76 million to shareholders in the intervening
period (including ordinary dividends).

Capital expenditure

Capital expenditure of £18.9 million was similar to the first half of last year,
with £11.8 million invested in Pathfinder Pubs, £4.9 million in The Union Pub
Company, £1.4 million in W&DB Brands and £0.8 million in central systems.  Of
this £18.9 million, £8.7 million related to maintenance capital, the remainder
being investment capital on major refurbishments and new sites.

We expect our full year investment to be around £40.0 million, compared with
£46.3 million last year.


Interest cover on a rolling 12 month basis was maintained at around 3.0 times,
whilst the interim dividend is 2.6 times covered. Gearing was 108% at 29 March
2003, compared with 110% at our year end in September 2002.

The Group's policy for interest rate management continues to be to reduce the
risk of exposure to changes in interest rates through the use of hedging
instruments. We currently have £185 million of interest rate swaps in place
which expire between now and 2008, at rates between 5.41% and 7.03% plus margin.

In addition, the Group has debentures with a nominal value of £220 million.
Therefore, at the half year end over 80% of the Group's debt was either fixed or
hedged. The average interest cost of the Group's borrowings in the first half
was 7.4%.

At the half year there were £77 million of unutilised banking facilities, which
gives us sufficient headroom within both our facilities and banking covenants to
take advantage of appropriate opportunities.

Property portfolio

The value of our freehold and long leasehold properties continues to provide
strong underpinning to our balance sheet.  Total tangible fixed assets of £888.4
million covered our net debt of £493.0 million by 1.8 times.


The underlying rate of taxation (before goodwill amortisation and exceptional
items) in the first half of the year increased from 29.7% in 2002 to 31.2% in
2003.  This rate is expected to continue for the second half.

Exceptional items

Net exceptional costs after taxation amounted to £0.4 million. These largely
relate to the disposal of a number of high street leasehold managed pubs.

Accounting standards

The interim accounts have been prepared in accordance with the accounting
standards applied in the September 2002 accounts.

                                                                    Paul Inglett
                                                                Finance Director

Group profit and loss account (unaudited)
for the 26 weeks ended 29 March 2003

                                ---26 weeks to 29.3.03---               ---26 weeks to 30.3.02---              52 weeks
                                      Before  Exceptional      Total          Before                                 to
                                exceptionals        items               exceptionals Exceptional               28.09.02
                                                                                           items    Total         Total
                                       £m              £m         £m               £m         £m        £m           £m

  Turnover - continuing            239.2              -       239.2            250.0         -      250.0        505.6

  Trading expenses                (191.3)             -      (191.3)          (201.8)      (2.3)   (204.1)      (400.9)

  Operating profit before
  goodwill amortisation             47.9              -        47.9             48.2       (2.3)     45.9        104.7

  Goodwill amortisation             (3.4)           (0.1)      (3.5)            (3.5)      (4.4)     (7.9)       (13.3)

  Total operating profit -
  continuing operations             44.5            (0.1)      44.4             44.7       (6.7)     38.0         91.4

  Fixed asset disposals               -             (0.4)      (0.4)              -         3.8       3.8          2.4

  Profit on ordinary
  activities before interest        44.5            (0.5)      44.0             44.7       (2.9)     41.8         93.8

  Interest                         (17.8)             -       (17.8)           (16.9)        -      (16.9)       (35.1)

  Profit on ordinary
  activities before taxation        26.7            (0.5)      26.2             27.8       (2.9)     24.9         58.7

  Profit on ordinary
  activities before taxation        26.7                                        27.8

  Add back goodwill                  3.4                                         3.5

  Profit on ordinary
  activities before taxation
  and goodwill amortisation         30.1                                        31.3

  Taxation                          (9.4)            0.1       (9.3)            (9.3)       2.9      (6.4)       (17.0)

  Profit on ordinary
  activities after taxation         17.3            (0.4)      16.9             18.5         -       18.5         41.7

  Dividends paid and proposed                                  (7.9)                                (83.3)       (97.4)

  Retained profit/(loss) for                                    9.0                                 (64.8)       (55.7)
  the period

  Basic earnings per share                                     23.2p                                 20.8p        50.2p

  Basic earnings per share before the effect of goodwill
  amortisation and exceptional items                           28.4p                                 24.7p        62.6p

  Diluted earnings per share                                   22.9p                                 20.6p        49.6p

  Diluted earnings per share before the effect of goodwill
  amortisation and exceptional items                           28.0p                                 24.4p        61.9p

Group cash flow statement (unaudited)
for the 26 weeks ended 29 March 2003

                                                 26 weeks to 29.3.03      26 weeks to 30.3.02    52 weeks to 28.9.02
                                                      £m          £m          £m          £m         £m           £m
Cash flow from operating activities                            55.0                    52.2                   135.7

Returns on investments and servicing of finance
Interest received                                   0.3                     0.6                    1.4
Interest paid                                     (19.8)                  (17.0)                 (34.0)
Arrangement costs of new bank facilities             -                    (2.2)                   (2.2)

Net cash outflow from returns on investments and
servicing of finance                                          (19.5)                  (18.6)                  (34.8)
Taxation                                                       (8.5)                   (5.8)                  (16.8)

Capital expenditure and financial investment
Purchase of tangible fixed assets                 (18.9)                  (18.4)                 (46.3)
Sale of tangible fixed assets                      11.2                    25.2                   42.2
Decrease in trade and other loans                   2.5                    10.9                   16.8

Net cash (outflow)/inflow for capital expenditure and
financial investment                                           (5.2)                   17.7                    12.7
Equity dividends paid                                         (14.1)                  (91.8)                  (99.7)

Cash inflow/(outflow) before use of liquid resources
and financing                                                   7.7                   (46.3)                   (2.9)


Issue of ordinary share capital                     0.3                     4.3                    5.6
Purchase of ordinary share capital                 (4.0)                     -                   (49.5)
Debt due within one year                          (20.3)                 (120.1)                (140.2)
Capital element of finance lease payments          (0.2)                   (0.3)                  (0.6)
Debt due beyond one year - bank loan                7.0                   128.0                  158.1
Net cash (outflow)/inflow from financing                      (17.2)                   11.9                   (26.6)
Decrease in cash in the period                                 (9.5)                  (34.4)                  (29.5)
Reconciliation of net cash flow to movement in net debt
Decrease in cash in the period                     (9.5)                  (34.4)                 (29.5)
Cash outflow/(inflow) from decrease/(increase)     13.5                    (7.6)                 (17.3)
in debt
Change in debt resulting from cash flows                        4.0                   (42.0)                  (46.8)
Non-cash movements                                             (0.1)                   (0.1)                   (0.1)
Movement in net debt in the period                              3.9                   (42.1)                  (46.9)
Net debt at 29 September 2002                                (496.9)                 (450.0)                 (450.0)
Net debt at 29 March 2003                                    (493.0)                 (492.1)                 (496.9)

Group balance sheet (unaudited)
as at 29 March 2003

                                                                                 29.3.03       30.3.02      28.9.02
                                                                                      £m            £m           £m
Fixed assets
Intangible assets                                                                  113.7         118.0        117.2
Tangible assets                                                                    888.4         899.3        892.3
Investments                                                                         30.0          38.3         32.5
                                                                                 1,032.1       1,055.6      1,042.0
Current assets
Stocks                                                                              13.6          13.7         13.0
Debtors                                                                             36.2          36.7         34.5
Cash at bank and in hand                                                             5.1           9.7         14.6
                                                                                    54.9          60.1         62.1
Creditors - amounts falling due within one year                                   (165.2)       (140.4)      (171.5)
Net current liabilities                                                           (110.3)        (80.3)      (109.4)
Total assets less current liabilities                                              921.8         975.3        932.6
Creditors - amounts falling due after more than one year                          (451.2)       (475.7)      (467.6)
Deferred taxation provision                                                        (15.4)        (15.7)       (15.1)
Net assets                                                                         455.2         483.9        449.9

Capital and reserves
Equity share capital                                                                21.6          23.9         21.8
Non-equity share capital                                                             0.1           0.1          0.1
Called up share capital                                                             21.7          24.0         21.9
Share premium account                                                              204.9         203.2        204.5
Revaluation reserve                                                                154.9         159.6        155.9
Capital redemption reserve                                                           5.5           3.2          5.3
Capital reserve                                                                       -            0.4           -
Profit and loss account                                                             68.2          93.5         62.3
Shareholders' funds including non-equity interests of £0.1m (2002: £0.1m)          455.2         483.9        449.9
Capital employed                                                                   455.2         483.9        449.9


  1     Basis of preparation of accounts

        The interim accounts have been prepared in accordance with the 
        accounting policies as stated in the accounts for the year ended 
        28 September 2002.

        The financial information for the year ended 28 September 2002 is 
        extracted from the audited financial statements for that year, which 
        have been delivered to the Registrar of Companies. The auditors' report 
        was unqualified and did not contain a statement

        under Section 237 (2) or (3) of the Companies Act 1985. The auditors 
        have neither audited nor reviewed the interim accounts.

  2     Segmental analysis

                                ---------------29.3.03----------------               ----------------30.3.02------------
                                               Operating          Net                            Operating          Net
                                Turnover           profit       assets               Turnover        profit       assets
                                      £m               £m           £m                     £m            £m           £m

        Pathfinder Pubs            121.2             23.4        411.7                  134.8          25.4       454.4
        The Union Pub Company       58.0             22.8        347.5                   50.0          20.2       313.0
        W&DB Brands                 60.0              9.0         89.7                   65.2           8.9       109.0
        Central costs                  -             (7.3)        16.0                      -          (6.3)       11.7

                                   239.2             47.9        864.9                  250.0          48.2       888.1

        Goodwill and                   -             (3.5)       113.7                      -         (10.2)      118.0
        Debt, tax, dividends and ESOP  -                -       (523.4)                     -             -      (522.2)

                                   239.2             44.4        455.2                  250.0          38.0       483.9

                              ---------------29.3.03----------------              ----------------30.3.02------------   
                                Operating                                        Operating
                             profit after                                        profit after
                             goodwill and    Goodwill and     Goodwill           goodwill and  Goodwill and    Goodwill
                             exceptionals    exceptionals        asset           exceptionals  exceptionals       asset
                                      £m               £m           £m                     £m            £m          £m

        Pathfinder Pubs             22.3              1.1         35.2                   23.9           1.5        36.5
        The Union Pub Company       21.9              0.9         24.8                   17.0           3.2        25.8 
        W&DB Brands                  8.5              0.5          9.0                    4.5           4.4        10.7
        Central costs               (8.3)             1.0         44.7                   (7.4)          1.1        45.0
                                    44.4              3.5        113.7                   38.0          10.2       118.0

  3     Reconciliation of operating profit to net cash inflow from operating 

                                                                                 29.3.03        30.3.02        28.9.02
                                                                                     £m             £m             £m

        Total operating profit                                                     44.4           38.0           91.4
        Goodwill amortisation                                                       3.4            3.5            7.2
        Income from fixed asset investments                                        (0.2)          (0.2)          (0.7)
        Depreciation charge                                                        15.2           15.2           28.9
        Loss/(profit) on sale of fixed assets                                         -            0.1              -
        Pension cost provision                                                      0.2            0.1            0.3
        (Increase)/decrease in stocks                                              (0.6)           0.3            1.0
        (Increase)/decrease in debtors                                             (2.1)          (1.5)            -
        (Decrease)/increase in creditors                                           (5.4)          (8.1)           1.1
        Exceptional costs with no cash impact                                       0.1            4.8            6.5
        Net cash inflow from operating activities                                  55.0           52.2          135.7

  4     Taxation
        The taxation charge for the 26 weeks ended 29 March 2003 is calculated 
        by applying an estimate of the effective tax rate for the year ending 
        27 September 2003.

                                                29.03.03                             30.3.02                    28.9.02
                                                      £m                                  £m                         £m
        Current tax                                  9.0                                 5.8                       16.4
        Deferred tax                                 0.3                                 0.6                        0.6
                                                     9.3                                 6.4                       17.0

 5    Interim dividends
      An interim dividend of £7.9m, being 10.9p per ordinary share and 3.0p per 
      preference share, has been proposed and will be paid on 27 June 2003 to 
      those shareholders on the registers at the close of business on 
      6 June 2003.

 6    Earnings per share
                               ------------------29.3.03--------------           ----------------30.3.02----------------
                                                Weighted                                         Weighted
                                                 average          Per                             average            Per
                                               number of        share                           number of          share
                               Earnings           shares       amount            Earnings          shares         amount
                                     £m                m            p                  £m               m              p

      Basic earnings per share     16.9             73.0         23.2                18.5            89.1           20.8

      Diluted earnings per share   16.9             73.8         22.9                18.5            90.0           20.6

      Supplementary earnings per 
      share figures:

      Basic earnings per share 
      before goodwill amortisation 
      and exceptional items        20.7             73.0         28.4                22.0            89.1           24.7

      Diluted earnings per share 
      before goodwill amortisation 
      and exceptional items        20.7             73.8         28.0                22.0            90.0           24.4

      Basic earnings per share is calculated by dividing the profit after tax by 
      the weighted average number of shares in issue during the period excluding 
      those held in the Employee Share Ownership Plan.

      Diluted earnings per share is calculated by adjusting the basic earnings 
      per share to assume the notional exercise of the weighted average number 
      of ordinary share options outstanding during the period.  The effect of 
      dilutive options is to increase the weighted average number of shares by 
      0.8m (2002: 0.9m)

      Supplemental earnings per share figures are presented to exclude the 
      effects of exceptional items and goodwill amortisation.

7     The Interim report was approved by the Board on 23 May 2003.

8     Copies of this report have been sent to shareholders and are available to 
      the public on request from: The Company Secretary,

      The Wolverhampton & Dudley Breweries, PLC, PO Box 26, Park Brewery, 
      Wolverhampton, WV1 4NY.

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