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Arriva PLC (~264)

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Wednesday 08 March, 2000

Arriva PLC

Final Results - Year Ended 31 December 1999

Arriva PLC
8 March 2000


                                  ARRIVA plc
                                       
            PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 1999
 
 
*    PROFIT BEFORE TAXATION £198.7 MILLION

*    EXCLUDING THE LEASING BUSINESS DISPOSAL:

     -    PROFIT BEFORE TAXATION £95.2 MILLION
          
     -    EARNINGS PER SHARE 33.9 PENCE


*    SIGNIFICANT CONTRIBUTION FROM EXPANDED OPERATIONS IN MAINLAND EUROPE

*    MTL ACQUISITION COMPLETED

*    OPERATING CASHFLOW FROM CONTINUING BUSINESSES OF £206 MILLION

*    DIVIDEND INCREASED BY 5%

Commenting on the results, ARRIVA's Chief Executive Bob Davies said:

'We are delivering on the strategy that I outlined some twelve months ago.
ARRIVA has changed fundamentally in the past year with the sale of our leasing
business, the expansion of our passenger services operations in the UK and
mainland Europe and the strengthening of the management team.

'The Group is well positioned for future growth and development.'

Enquiries:

ARRIVA plc                                   On the day:    0207 457 2345
Bob Davies, chief executive                  Thereafter:    0191 520 4000
Steve Lonsdale, group finance director
Julian Evans, director of corporate communications

Gavin Anderson & Company
Marc Popiolek/Neil Garnett/Fiona Grant Duff  Tel:           0207 457 2345

CHAIRMAN'S STATEMENT

I am pleased to report that the Group has made substantial progress in
delivering our strategy for development and growth.

*  Our leasing business (AAS) was sold for £520 million
*  Our expanded passenger services operations in mainland Europe made a
   significant contribution
*  UK operations were restructured to improve efficiency and accountability
*  The management team was strengthened
*  Finally, in February this year, we completed the acquisition of MTL
   Services plc (MTL) adding a major metropolitan bus business to our     
   portfolio

Profit before taxation for the year to 31 December 1999 was £198.7 million
(1998: £94.5 million). Excluding the profit of £103.5 million arising from the
sale of AAS, profit before taxation was £95.2 million. Earnings per share was
68.9 pence compared with 33.5 pence in 1998. Excluding the sale of AAS,
earnings per share was 33.9 pence.

Turnover for the Group was £1,534 million (1998: £1,556 million). Operating
profit, before exceptional items, from the continuing operations increased by
6 per cent to £97 million (1998: £91.3 million). The taxation charge for the
year was £43.9 million (1998: £18.9 million) including £24.9 million arising
on the disposal of AAS.

Operating cashflow from our continuing operations was £206 million, reflecting
the inherently strong cash generation of our businesses.   There was a
significant fall in gearing to 36 per cent at the year end, and with
shareholders' funds of £482 million the Group has significant financial
capacity.

The Board is recommending a final dividend of 11.1 pence per share, which,
together with the interim dividend of 3.8 pence per share paid in September
1999, makes a total dividend of 14.9 pence per share (1998: 14.2 pence). The
final dividend will be paid on 2 May 2000 to shareholders on the Register at
close of business on 7 April 2000.

In March 1999, following a strategic review conducted by our Chief Executive,
Bob Davies, we announced that we would focus our management and financial
resources to enable the Group to capitalise on opportunities in passenger
transportation in the UK and mainland Europe.

At that time, we stated that we were seeking to realise the value of our
leasing business. This was achieved when General Motors Acceptance Corporation
acquired the business on 30 July 1999. The sale, for over £520 million,
significantly in excess of market expectations, provided substantial financial
resources for expansion.

Adding to our major investment in The Netherlands at the end of 1998, we
further strengthened our position in mainland Europe during the year with the
acquisition of Bus Danmark, operating in Denmark and southern Sweden, and two
acquisitions in Spain. ARRIVA's overseas operations contributed over 30 per
cent of our total passenger services turnover during the year and made a
significant contribution to our profits.

On 17 February this year, we acquired MTL, the largest unlisted bus company in
the UK and the operator of two rail franchises, for a consideration of £34.7
million. In addition we assumed MTL's net debt which, at 8 January 2000,
totalled approximately £50 million.

Turnover and operating profit for the Merseyside bus business, in the year
ended 31 March 1999, were £68.6 million and £11.8 million respectively. MTL
brings to the Group a large, profitable bus business in a major metropolitan
area, which complements our operations in the North-West. We expect the
acquisition to be earnings enhancing this year before goodwill amortisation
and exceptional costs.

The Northern Spirit rail franchise is a significantly loss making business.
Accordingly, we have reached agreement with the Shadow Strategic Rail
Authority (SSRA) and the relevant Passenger Transport Executives to operate
MTL's two rail franchises, Merseyrail Electrics and Northern Spirit on their
present terms only until 18 February 2001. Over the next few months the SSRA
is expecting to re-shape the franchises serving the North-West and the Trans
Pennine Routes. As the incumbent operator we will be well placed to bid for
any new arrangements.

Passenger transport has remained high on the political agenda in the UK and
throughout mainland Europe. This environment continues to offer excellent
opportunities for future growth in our businesses.

Board of Directors

Len Clayton left the Board of ARRIVA plc on 30 July to continue as Managing
Director of AAS. He joined the Group in 1997 and the Board in December 1998.
Mr Clayton was instrumental in the implementation of our strategy to
reposition the contract hire business. I take this opportunity to record our
appreciation to him and his team for their contribution to the business.

The Transport Industry is a major employer. ARRIVA currently has over 30,000
employees providing services for millions of customers. In an environment
where service is vitally important it is our employees who will determine the
success of our businesses. The Human Resources function has a significant role
in ensuring that we realise their full potential and to that end, in February
2000, Mark Saxton joined the Board following his appointment to the new
position of Human Resources Director with ARRIVA plc. I am delighted that Mr
Saxton has joined us. Since 1988 he held a series of senior appointments with
Cadbury Schweppes within the Beverages Division, latterly as Vice President
Human Resources, International. He brings high quality European experience
that will be invaluable as we capitalise on opportunities in the UK and
mainland Europe.

I would like to record the Board's appreciation to all the staff of ARRIVA
whose contribution is fundamental to the success of the Group and to our
customers who can be assured that we will continue to focus on the delivery of
quality service and value for money.

1999 was a year of considerable achievement. We have a clear strategy, a
strong balance sheet, cash generative businesses, and a strengthened
management team. The Board is confident that the progress made in 1999
provides a sound base for the profitable development of the Group.

Gareth Cooper, Chairman


OPERATING REVIEW

ARRIVA is one of the leading providers of public transport in Europe with over
30,000 employees operating in the UK, Denmark, The Netherlands, Spain and
Sweden.   In addition, the Group has a significant involvement in motor
retailing with 38 dealership locations and a vehicle rental fleet of some
8,500 vehicles.

Passenger Services - UK

As one of the UK's major bus operators we serve customers in the North-East,
North-West and South-East of England, Yorkshire, the Midlands, Scotland and
Wales.  For the full year, patronage grew by 0.5 per cent. We are also the
largest bus operator in the regulated London market.

Operating profit of £61 million was achieved on a turnover of £452.9 million
compared with £61.2 million profit on £444.2 million turnover in 1998. The
operating margin was 13.5 per cent (1998: 13.8 per cent).

Included in the operating profit are restructuring costs of £1.3 million,
reflecting steps taken to achieve improvements in efficiency and the
elimination of overheads at a number of our operations. Our businesses in
Northumberland, Durham, Cleveland and North Yorkshire have been consolidated
into a single management unit.  A similar reorganisation of the operations in
Kent, Surrey and Sussex was implemented.

As expected, financial performance in London was weaker in 1999 reflecting the
current stage of the five-year tendering cycle. In addition, the development
of the Croydon Tramlink caused severe traffic congestion in the south of
London impacting on our service delivery and financial performance. Margins
should improve in the future as lower margin contracts are re-tendered.

We introduced nearly 500 new buses during the year. Over the last three years
we have invested some £150 million in new vehicles and at the year-end the
average age of our non-London fleet had reduced to 7.5 years.  Many of the new
vehicles support quality partnerships with local authorities and provide
significant opportunities to improve service reliability and enhance the
overall image of bus travel.  Nearly 20 schemes were started during 1999,
bringing the total number to 32 by the end of the year.

Initiatives to grow bus patronage include the expansion of route branding and
user-friendly ticketing arrangements. Emphasis is being maintained on
improving public perception of bus travel and expanding our business. Major
projects include Phase 2 of the East Leeds guided busway and the development
of a new quality corridor in Watford where we introduced low-floor LPG buses
in the autumn.

Shopping and leisure developments provide opportunities for growth and we are
now the major provider of bus services to a number, including Dartford's
Bluewater Centre, the Millennium Shopping Complex at Braehead on Clydeside,
Manchester's Trafford Centre and the White Rose Centre in Leeds.

Looking forward, wage pressures, particularly in the South-East of England,
and high fuel prices, will have some impact on profitability. However, the
management team will continue to be focused on rationalising and enhancing
operations, and managing our resources effectively in a cost conscious
environment. Investment in recent years provides the opportunity to attract,
by being innovative, the maximum number of passengers travelling with ARRIVA.

Passenger Services - Mainland Europe

The year saw a major expansion in our European operations positioning us as
one of the leading private providers of public transport. Turnover increased
to £198.4 million from £41.9 million in 1998. In mainland Europe we now employ
some 6,000 people and operate over 2,500 vehicles, representing considerable
growth following our first acquisition, in Denmark, during 1997.

Growth in our European operations resulted in an operating profit of £11.6
million compared with £2.6 million in 1998.  The exceptional charge of £4.5
million in the accounts represents restructuring programmes in Denmark, The
Netherlands and Spain, which we expect to complete this year.

Our first full year of trading in The Netherlands, our largest overseas
operation, is included in the results. Holland's market is highly regulated
with the provinces and municipalities awarding negotiated contracts. It is
expected that 35 per cent of the national market will be open to competitive
tender by 2003.  ARRIVA Nederland is the only significant private operator in
Holland, with some 20 per cent of the country's bus services, and is well
placed to take advantage of a more open market. In addition to an extensive
bus fleet we also operate mini buses, taxis and ambulances, providing demand
response services. In June 1999, the Ministry of Transportation awarded a
grant to ARRIVA Nederland and Motorola to run a smart card trial in Groningen
from October this year.

We achieved our first entry into the rail transport market during the year
with a joint venture, NoordNed, in The Netherlands.  The joint venture, with
Dutch Rail, was awarded two contracts in the north of the country. Since June
1999 NoordNed has been running integrated bus and rail services in Friesland
and later this year it will be running train services in the province of
Groningen.

At the end of March we completed the acquisition of Bus Danmark which was
integrated with our existing business, Unibus,  and renamed ARRIVA Danmark.
The company operates in Copenhagen, Jutland, Zealand and southern Sweden.
ARRIVA Danmark has some 20 per cent of the total Danish bus market, including
45 per cent of Greater Copenhagen. We also participate in a joint venture,
which will operate the Copenhagen Metro, currently under construction, with
services due to commence in 2002.

In July we made our first acquisition in Spain, the Ideal Auto Group, and in
September acquired Transportes Finisterre.  Restructured and consolidated as
ARRIVA Noroeste with a fleet of 250 buses, its primary business is the
operation of regular inter-urban bus services on long-term concessions in the
region of Galicia.  We believe the Spanish bus market, the fifth largest in
Europe and worth some £2 billion, offers substantial opportunities; the market
is highly fragmented and is experiencing healthy growth in passenger numbers.
We have already successfully negotiated the extension of our long-term
concessions, some of which now extend until 2018.

Motor Retailing

The difficulties experienced by the UK's motor retailing sector during 1999
have been well documented and expectations of 'price realignment' with
mainland Europe are having a major impact on customer sentiment. However, the
majority of the profit achieved by ARRIVA Motor Retailing continues to be
derived from the sale of used cars and aftersales.

Following the successful disposal of AAS, which, as expected, had an impact on
Motor Retailing profits in the second half, we integrated the remaining
captive finance businesses, Broadwood Finance and ARRIVA Finance Lease, with
our dealership businesses under a single management structure.

The market changed dramatically during the year. In the first half, new car
sales increased by 7 per cent and then declined by 8 per cent in the final six
months. The experience in the used car market was similar with a 17 per cent
rise in the first half being followed by a fall of 5 per cent.

ARRIVA Motor Retailing achieved an operating profit of £15.6 million, compared
with £18.3 million in 1998.  Turnover was £608.2 million (1998: £695.2
million).  The decline in turnover primarily reflected a fall in demand from
rental companies. The contribution from Broadwood Finance and ARRIVA Finance
Lease was unchanged at £6.0 million.

Operating from 38 locations our national motor franchise network offers
consumers a wide range of vehicles through our association with BMW, Cadillac,
Ford, Honda, Jaguar, Land Rover, Kawasaki, Lexus, Nissan, Peugeot, Renault,
Rover, Toyota and Vauxhall.

Consistent with our emphasis on retail customers and on developing
relationships with manufacturers we have addressed the development needs in
our dealership network. Significant projects included a flagship Lexus and
Toyota dealership at Bristol, a new development for Land Rover in Perth and a
major upgrade for Vauxhall in Leicester. A number of other refurbishments and
redevelopments were completed including Ford in Nottingham and Kawasaki at
Bristol.

Our web site,  www.arriva.co.uk, now includes new and used car promotions run
by ARRIVA.  It also provides a locator for our dealerships; links to their web
sites and an e-mail facility to gain further information.

Vehicle Rental

ARRIVA's Vehicle Rental business, which targets the corporate and public
sectors, operates a fleet of some 8,500 vehicles from over 50 locations across
the country.

During the first half of the year the business was reorganised under a new
management team.

Operating profit was £7.5 million compared with £6.9 million in 1998.
Turnover was £78.4 million, compared with £58.9 million in the previous year,
reflecting a full year's impact of the acquisitions made in 1998.

In addition to a comprehensive network of outlets customers are able to view
the range of vehicles and our hire terms on the ARRIVA web site, and make
bookings on-line.

Bus and Coach Distribution

ARRIVA Bus and Coach distributes both new and good quality used buses and
coaches for operations throughout the UK. The business has the exclusive
rights to import DAF bus and coach chassis and products, and is also the UK
and Eire distributor for Van Hool coach.

During 1999 ARRIVA Bus and Coach achieved an operating profit of £4.9 million
on a turnover of £34.2 million (1998: £5.6 million and £29.2 million
respectively) as the capital employed was reduced by £16 million.

Summary

We are delivering on the strategy that I outlined some twelve months ago.
ARRIVA has changed fundamentally in the past year with the sale of our leasing
business, the expansion of our passenger services operations in the UK and
mainland Europe and the strengthening of the management team. The Group is
well positioned for future growth and development.

Bob Davies, Chief Executive


GROUP PROFIT AND LOSS ACCOUNT                                                 
For the year ended 31 December 1999     
                                      
                                     Notes     1999    1999     1998      1998
                                                 £m      £m       £m        £m
TURNOVER                                                                      
Continuing operations                       1,290.4          1,269.4          
Acquisitions                                   81.7                -     
                                              -----            -----
                                            1,372.1          1,269.4          
Discontinued operations                       162.2            286.9          
                                              -----            -----
                                         1          1,534.3            1,556.3
Cost of sales                                      (1,282.6)         (1,310.4)
                                                   --------              -----
GROSS PROFIT                                          251.7              245.9
                                                                              
Net operating expenses                                                        
before exceptional items                    (129.3)          (109.3)
Exceptional items charged                                                     
to net operating expenses                3    (4.5)                -
                                             ------            -----
Total net operating expenses                        (133.8)            (109.3)
                                                       ----            -------
OPERATING PROFIT                                                              
Continuing operations                          91.6             91.3          
Acquisitions                                    0.9                -          
                                               ----            -----
                                               92.5             91.3          
Discontinued operations                        25.4             45.3          
                                              -----            -----
                                         1            117.9              136.6
EXCEPTIONAL ITEMS                                                             
Surplus on sale of                                                            
discontinued operations                       129.7                -
Goodwill previously written                                                   
off to reserves in                                                  
discontinued operations                       (26.2)               -
                                             ------            -----
Profit on sale of                                                             
discontinued operations                       103.5                -
Profit on the disposal of                                                     
properties in continuing                                            
operations                                      7.3              1.5
                                              -----             ----
                                                      110.8                1.5
                                                      -----              -----
PROFIT ON ORDINARY ACTIVITIES                                                 
BEFORE INTEREST                                       228.7              138.1
Interest payable and                                                          
similar charges                          2           (30.0)             (43.6)
                                                      -----              -----
PROFIT ON ORDINARY ACTIVITIES                                                 
BEFORE TAXATION                                      198.7               94.5
Tax on profit on ordinary                                                     
activities                               4           (43.9)             (18.9)
                                                      -----              -----
PROFIT ON ORDINARY ACTIVITIES                         154.8               75.6
AFTER TAXATION
Minority interests                                        -              (0.5)
                                                      -----              -----
PROFIT FOR THE FINANCIAL YEAR                         154.8               75.1
Dividends paid and proposed              5           (33.5)             (31.9)
                                                      -----              -----
TRANSFER TO RESERVES                                  121.3               43.2
                                                       ====               ====
BASIC EARNINGS PER SHARE                               68.9 p           33.5 p
                                                                              
DILUTED EARNINGS PER SHARE                             68.8 p           33.3 p
                                                                              
BASIC EARNINGS PER SHARE                                                      
BEFORE PROFIT ON SALE OF
DISCONTINUED OPERATIONS                                33.9 p           33.5 p


GROUP BALANCE SHEET                                                        
As at 31 December 1999                                                     
                                                        1999        1998   
                                                          £m          £m   
FIXED ASSETS                                                               
Goodwill                                                54.9        31.7   
Tangible assets                                        585.5       970.4   
Investments                                              4.0         4.0   
                                                       -----       -----   
                                                       644.4     1,006.1   
                                                       -----       -----   
CURRENT ASSETS                                                             
Stocks                                                  62.7        81.4   
Debtors                                                130.9       133.0   
Instalment credit agreements                            48.9        52.0   
Finance lease receivables                               17.4        16.9   
Cash at bank and in hand                                89.0        14.8   
                                                       -----       -----   
                                                       348.9       298.1   
                                                       -----       -----   
CREDITORS                                                                  
Amounts falling due within                                                 
one year                                               266.7       365.2
                                                       -----       -----   
NET CURRENT ASSETS /                                                       
(LIABILITIES)                                           82.2      (67.1)
                                                       -----       -----   
                                                                           
TOTAL ASSETS LESS CURRENT                                                  
LIABILITIES                                            726.6       939.0
                                                                           
CREDITORS                                                                  
Amounts falling due after                                                  
more than one year                                     236.9       592.9
                                                                           
PROVISIONS FOR LIABILITIES                               7.6        13.1   
AND CHARGES
                                                       -----      ------   
                                                       482.1       333.0   
                                                        ====        ====   
REPRESENTED BY:                                                            
CAPITAL AND RESERVES                                                       
Called up equity share capital                          11.2        11.2   
Capital redemption reserve fund                          0.1         0.1   
Share premium account                                    4.2         2.9   
Special reserve                                         59.1        59.1   
Revaluation reserve                                      8.1         5.7   
Profit and loss account                                399.4       254.0   
                                                       -----      ------   
EQUITY SHAREHOLDERS' FUNDS                             482.1       333.0   
                                                        ====        ====   
Net Borrowings                                         173.1       659.1   
                                                                           
Gearing                                                  36%        198%   
                                                                           
Net assets per ordinary                                                  
share                                                  214.4 p     148.4 p



GROUP CASH FLOW STATEMENT                                                  
For the year ended 31 December 1999                                        

                                          Notes   1999   1999   1998   1998
                                                    £m     £m     £m     £m
                                                                           
Net cash inflow from operating                                             
activities                                    7         307.0         354.2
                                                                           
Returns on investments and                                                 
servicing of finance
Interest and finance                                                       
charges paid                                    (27.2)        (49.2)
Dividends received                                 0.3           0.3       
                                                 -----        ------       
                                                       (26.9)        (48.9)
                                                                           
Taxation                                                                   
Corporation and advance                                                    
corporation tax paid                                   (19.1)        (17.0)
                                                                           
Capital expenditure and                                                    
financial investment
Sale of investments                                 -           0.2    
Inception of instalment credit                                             
and finance lease agreements                    (40.0)        (47.6)
Disposal of contract hire                                                  
and short-term rental vehicles                    99.8         128.3
Disposal of other fixed assets                    26.3          13.5       
Purchase of contract hire and                                              
short-term rental vehicles                      (196.2)       (313.6)
Purchase of other                                                          
fixed assets                                    (88.0)        (73.9)
                                                  ----          ----       
                                                       (198.1)       (293.1)
                                                         
Acquisitions and disposal                                                  
Acquisitions of businesses                      (39.0)        (74.8)       
(Overdraft) / cash received                                                
on acquisitions                                  (0.5)          13.9
Disposal of business                                                       
(net of costs)                                   512.1             -
Net overdraft of business sold                     1.7                     
                                                                   -
                                                 -----          ----       
                                                        474.3        (60.9)
                                                                           
Equity dividends paid                                  (32.3)        (30.3)
                                                        -----         -----
Cash flow before use of                                                    
liquid resources and financing                          504.9        (96.0)
                                                                           
Financing                                                                  
Issue of ordinary share capital                    1.3           0.7       
Debt due within a year:                                                    
short-term loans                                                           
and finance house loans                         (55.1)           4.8
Debt due after a year:                                                     
syndicated loans,                                                          
loan capital and finance                                            
house loans                                     (367.6)        116.9
Finance lease obligations                        (7.6)         (9.6)       
                                                  ---- (429.0) -----  112.8
                                                       ------         -----
Increase in cash for the year                 8          75.9          16.8
                                                         ====          ====


RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
For the year ended 31 December 1999                                        
                                                           1999        1998
                                                             £m          £m
                                                                           
Profit for the financial year                             154.8        75.1
                                                                           
Dividends                                                (33.5)      (31.9)
                                                          -----      ------
                                                          121.3        43.2
                                                                           
New share capital subscribed                                               
(net of expenses)                                           1.3         0.7
                                                                           
Goodwill on acquisitions                                                   
eliminated                                                    -       (1.8)
                                                                           
Goodwill previously written                                                
off to reserves in discontinued                                            
operations                                                 26.2           -
                                                                           
Currency translation differences                                           
on foreign currency net investments                         0.3           -
                                                         ------        ----
Net addition to shareholders' funds                       149.1        42.1
                                                                           
Opening shareholders' funds                               333.0       290.9
                                                          -----       -----
Closing shareholders' funds                               482.1       333.0
                                                           ====        ====


STATEMENT OF TOTAL RECOGNISED GAINS & LOSSES                               
For the year ended 31 December 1999                                        
                                                           1999        1998
                                                             £m          £m
                                                                           
Profit for the financial year                             154.8        75.1
                                                                           
Currency translation differences on                                        
foreign currency net investments                            0.3           -
                                                          -----       -----
Total gains and losses                                    155.1        75.1
relating to the year
                                                           ====        ====
                                                                           
NOTE OF HISTORICAL COST PROFITS AND LOSSES                                 
For the year ended 31 December 1999                                        
                                                           1999        1998
                                                             £m          £m
                                                                           
Reported profit on ordinary                                                
activities before taxation                                198.7        94.5
                                                                           
Difference between historical cost                                         
and revalued amount on properties
sold during the year                                      (2.5)           -
                                                                           
Difference between historical cost                                         
depreciation charge and the actual
depreciation charge of the year                                            
calculated on the revalued amount                           0.1           -
                                                           ----       -----
Historical cost profit on ordinary                                         
activities before taxation                                196.3        94.5
                                                           ====        ====
                                                                           
Historical cost profit for the year                                        
retained after taxation, minority
interests and dividends                                   118.9        43.2
                                                           ====        ====


NOTES                                                                      
                                                                           
1. Segmental results                Year ended 31         Year ended 31
                                    December 1999         December 1998
                                     ------------           ---------
                                                                      
                                  Turnover  Operating Turnover    Operating
                                               profit                profit
                                        £m         £m       £m           £m
Passenger Services                                                         
UK                                   452.9       61.0    444.2         61.2
Overseas                             198.4       11.6     41.9          2.6
                                      ----        ---     ----         ----
Total                                651.3       72.6    486.1         63.8
                                     -----       ----    -----         ----
                                                                           
Motor Retailing                                                            
Dealerships                          598.7        9.6    686.4         12.3
Motor Finance                          9.5        6.0      8.8          6.0
                                      ----       ----    -----        -----
Total                                608.2       15.6    695.2         18.3
                                     -----       ----    -----        -----
                                                                           
Daily Rental                          78.4        7.5     58.9          6.9
Bus & Coach Distribution              34.2        4.9     29.2          5.6
Head Office                                     (3.6)                 (3.3)
                                    ------     ------    -----      -------
Total continuing                                                           
operations                         1,372.1       97.0  1,269.4         91.3
                                                                           
Discontinued operations -                                                  
     Contract Hire                   162.2       25.4    286.9         45.3
                                                                           
Exceptional costs                                                          
(see note 3)                                    (4.5)                      
                                                                          -
                                     -----     ------    -----       ------
Total turnover and                                                         
operating profit                   1,534.3      117.9  1,556.3        136.6
                                    ======              ======             
Profit on the disposal                                                     
of properties                                                              
in continuing operations                          7.3                   1.5
                                                                           
Interest payable and                                                       
similar charges                                                            
(see note 2)                                   (30.0)                (43.6)
                                               ------                ------
                                                 95.2                  94.5
                                                                           
Profit on sale of                                                          
discontinued operations                         103.5                     -
                                               ------                ------
Profit on ordinary                                                         
activities before taxation                      198.7                  94.5
                                                 ====                   ===
                                                                           
                                                                              
2. Interest payable and similar charges                    1999         1998

                                                             £m           £m
Cost of funding for                                                         
finance and rental facilities:
                                                                            
  Motor Finance                                             4.0          4.0
                                                                            
  Daily Rental                                              4.5          4.5
                                                                            
  Bus & Coach Distribution                                  2.4          3.6
                                                                            
Other continuing operations                                 7.2         11.3
                                                                            
Discontinued operations                                                     
- Contract Hire                                            11.9         20.2
                                                            ---         ----
                                                           30.0         43.6
                                                            ===          ===
3. Exceptional costs                                                        
                                                                            
Exceptional costs relate to the restructuring of continuing, recently
acquired, overseas operations.
                                                                              
                                                                              
4. Tax on profit on ordinary activities                    1999         1998
                                                             £m           £m
Tax on profit on ordinary activities comprises the following:
                                                                            
Corporation tax at 30.25%                                                   
(1998: 31%)                                                19.8         15.0
                                                                            
Tax on profit  on sale                                                      
of discontinued operations                                 24.9            -
                                                                            
Deferred taxation                                         (0.8)          3.8
                                                                            
Tax on franked investment                                     -          0.1
income
                                                          -----        -----
                                                           43.9         18.9
                                                           ====         ====
                                                                            
                                                                            
5. Dividends paid and proposed                             1999         1998
                                                             £m           £m
                                                                            
                                                                            
Interim dividend paid of 3.8p                               8.5          8.1
per share (1998: 3.6p)
                                                                            
Final dividend proposed of 11.1p                           25.0         23.8
per share (1998: 10.6p)
                                                          -----        -----
                                                           33.5         31.9
                                                          =====        =====


6.   Reconciliation of net debt

                                                             1999      1998
                                                               £m        £m
                                                                           
At 1 January                                              (659.1)   (540.3)
Increase in cash                                             75.9      16.8
Decrease / (increase) in                                                   
loans due within 1 year                                      55.1     (4.8)
Decrease / (increase) in                                                   
loans due after 1 year                                      367.6   (116.9)
Decrease in finance leases                                    7.6       9.6
Loans acquired                                             (10.6)    (19.2)
Finance leases acquired                                    (20.0)     (4.3)
Exchange movements                                           10.4        -
                                                            -----      ----
At 31 December                                            (173.1)   (659.1)
                                                              ===      ====
                                                                           
                                                                           
7.  Reconciliation of operating profit to net cash inflow from operating  
activities
                                                                           
                                                             1999      1998
                                                               £m        £m
                                                                           
Operating profit                                            117.9     136.6
Depreciation                                                145.6     183.6
Decrease in stocks, excluding                                              
acquisitions and disposal                                    20.1       0.9
(Increase) / decrease in debtors,                                          
excluding acquisitions and disposal                         (7.9)       5.8
Repayments of capital from                                                 
instalment credit
agreements and finance lease receivables                     42.6      38.3
Decrease in creditors, excluding                                           
acquisitions and disposal                                  (12.6)    (12.3)
Dividend received                                           (0.3)     (0.3)
Amortisation of goodwill                                      1.6       1.6
                                                              ---     -----
Net cash inflow from                                        307.0     354.2
operating activities                                          ===       ===
                                                                           
Net cash inflow from discontinued operating activities amounts to £100.8m
(1998: £176.4m).
                                                                           
8.  Analysis of net debt
                                                                           
                                                                           
                                            Acquisitions                   
                                  1           (excluding                   31
                            January    Cash       cash &  Exchange   December
                               1999    flow  overdrafts) movements       1999
                                 £m      £m           £m        £m        £m
                                                                           
Net cash and                                                               
overdrafts                     10.3    75.9            -         -     86.2
Loans due within                                                           
1 year                       (90.5)    55.1        (9.8)       7.0   (38.2)
Loans due after                                                            
1 year                      (555.7)   367.6        (0.8)         -   (188.9)
Finance leases               (23.2)     7.6       (20.0)       3.4   (32.2)
                               ----    ----        -----     -----    -----
                            (659.1)   506.2       (30.6)      10.4   (173.1)
                                ===     ===          ===       ===      ===
                                                                           


9.  Financial information

The unaudited financial information set out above does not constitute the
Group's statutory accounts for the year ended 31 December 1999.

The condensed financial information for the year ended 31 December 1998 is
extracted from the latest statutory accounts which have been delivered to the
Registrar of Companies. The report of the auditors on those accounts was
unqualified and did not contain a statement under section 237(2) and (3) of
the Companies Act 1985.

a d v e r t i s e m e n t