Results to 25-03-2000-PART 1
Tate & Lyle PLC
8 June 2000
PART 1
ANNOUNCEMENT OF PRELIMINARY RESULTS
For the 78 weeks ended 25 March 2000
-----------------------------------------------------------------
2000 2000 1999
PRELIMINARY RESULTS TO MARCH 78 52 52
weeks weeks weeks
-----------------------------------------------------------------
Sales £6,183m £4,090m £4,359m
Profit before tax,
reorganisation costs and £318m £225m £173m
exceptional items
Profit before tax and £300m £209m £171m
exceptional items
Profit before taxation £287m £191m £184m
EPS (diluted) before 45.2p 29.9p 28.4p
exceptional items
EPS (diluted) 40.2p 24.2p 30.4p
Dividends per ordinary share 26.9p 21.4p 17.2p
---------------------------------------------------------------
Results for 52 weeks to March 2000
----------------------------------
- Underlying profit before tax up 30%
- Starch - strong performance in US, improvement in Europe
- Extremely adverse conditions in US sugar market
- Disposal proceeds exceed £100 million
- Debt reduced - balance sheet strengthened
- Significant strategic developments since year end
'Looking forward it would be unwise to assume any immediate improvement
in market conditions, particularly as they relate to US sugar. However,
there is much we can do to help ourselves, through our own efficiency
and cost-reduction measures. Irrespective of the trading environment we
will continue to examine alternatives and act aggressively to enhance
shareholder value. That is our prime objective.'
Sir David Lees
Chairman
Copies of the Annual Report for the period ended 25 March 2000 will
be available to shareholders shortly, and will be obtainable from:
John R Hunter, Company Secretary, Tate & Lyle PLC,
Sugar Quay, Lower Thames Street, London EC3R 6DQ
PAGE ONE OF THIRTEEN
Chairman's Statement
From the Chairman, Sir David Lees
Change of Financial Year
I explained in my Chairman's statement in November 1998 that there were
advantages in changing our financial year-end from September to March
and we have made the change. This means these Results
are for the 78-week period to 25 March 2000 compared with the
52-week period to 25 September 1998. In order to assist shareholders,
unaudited results for the year ended 25 March 2000, together with
comparative unaudited figures for the year ended 27 March 1999 are also
included.
Results
Profit before tax for the 78-week period to 25 March 2000 was £287
million after charging reorganisation costs of £18 million and
exceptional items of £13 million.
Profit before tax, reorganisation costs and exceptional items for
the year to 25 March 2000 was £225 million compared with £173
million for the year to 27 March 1999. This comparison reflects a
strong performance in the 26 weeks to 25 September 1999 compared
with considerably weaker results in the equivalent 26 weeks in the
previous year. The results are discussed in greater detail in the
Chief Executive's Review.
Diluted earnings per share before exceptional items for the year to
25 March 2000 increased to 29.9p per share from 28.4p per share in
the comparable period.
Operating cash flow for the 78-week period was £544 million and net
borrowings were £805 million on 25 March 2000 compared with £955 million
on 26 September 1998. This reduction in debt reflects considerable
concentration on cash management together with a number of successes
in the divestment of our non-core businesses and assets where the
proceeds realised amounted to £113 million.
Dividend
The total dividend proposed for the 78-week period is 26.9p and is
covered 1.7 times by earnings before exceptional items. This total
dividend includes a proposed final dividend of 9.1p covering the results
for the transitional 26-week period to 25 March 2000 and approximates to
50% of the total dividend for a normal year. This final dividend will
be due and payable on 2 August 2000 to shareholders on the register
on 7 July 2000.
The Board
Mary Jo Jacobi was appointed to the Board as a non-executive director
on 1 October 1999. Mary Jo is currently Managing Director and Global
Head of Marketing and Corporate Relations at Lehman Brothers.
PAGE TWO OF THIRTEEN
Review of Initial Targets
In my first statement in November 1998, I identified a number of initial
targets for Tate & Lyle including, in particular, an improvement in
profitability and in the Group's return on invested capital.
Profitability has improved since the poor results achieved in the 1998
base period, although over-capacity in the US sugar market has constrained
the improvement to levels below what we had planned. Return on invested
capital overall has made some progress, notwithstanding the lack of any
return from 25% of our assets.
The target of at least maintaining the dividend in real terms has been
met. Balance sheet gearing has been reduced and interest cover has
improved.
Strategy
The Board of Tate & Lyle is totally committed to a strategy that will
achieve a substantial improvement in profitability and return on
capital and therefore in shareholder value. To that end, we will:
- Continue to develop higher margin, higher value added and higher
growth carbohydrate-based products, building on the Group's
technology strengths in our worldwide starch business;
- Ensure that all retained assets produce acceptable returns;
- Divest businesses which do not contribute to value creation, and/or
are no longer core to the Group's strategy;
- Conclude as rapidly as practicable our review of the strategic
alternatives available to us in our US sugar operations;
- Continue to improve efficiency and reduce costs through our Business
Improvement Projects which include employee development and training
programmes.
Since the year-end two important transactions have been announced both of
which, in their different ways, exemplify our strategy. The divestment of
Bundaberg, which will realise £162 million, illustrates well our strategic
intent to retain only those assets that produce acceptable returns.
The acquisition of the minority shareholdings in Amylum and Staley,
for a total consideration of £274 million, will result in the creation
of one wholly-owned world-wide starch business able to focus on the
combined technological strengths of the two companies. The
acquisition provides considerable opportunity for servicing our global
customers more effectively and for cost efficiencies through the
application of world best practice.
Outlook
Looking forward it would be unwise to assume any immediate improvement
in market conditions, particularly as they relate to US sugar. However,
there is much we can do to help ourselves, through our own efficiency
and cost-reduction measures. Irrespective of the trading environment
we will continue to examine alternatives and act aggressively to
enhance shareholder value. That is our prime objective.
Sir David Lees
Chairman
7 June 2000
PAGE THREE OF THIRTEEN
Chief Executive's Review
From Larry Pillard, Chief Executive
Change of Year End
In the review that follows, in order to provide meaningful comparisons,
I will focus on the unaudited results for the 52 weeks to 25 March 2000,
and the comparable period to 27 March 1999.
Group Performance
The year has seen an improvement, principally arising from strong
results in the six months to September 1999. Profits before tax,
reorganisation costs and exceptional items in the year rose by 30% from
£173 million to £225 million. The second half was disappointing,
with underlying profits slightly below those in the corresponding
six-month period, mainly because of continuing adverse market
conditions in the US sugar market.
Faced with these difficult market conditions, we have recognised
the urgent need to take action to improve returns. In US Sugar,
a fundamental review of strategic options is well under way, and
a new management team is in place. I expect to be able to report
to you on the actions we are taking as a result of this review
at the next results in November.
Elsewhere in the Group, we have been active in focusing on key
activities and reorganising for efficiency.
Focus on Key Activities
We have continued to concentrate on adding value to carbohydrates.
In parallel with the release of these preliminary results we also
announce agreements to sell Bundaberg and to buy the minority
stakes in Amylum and Staley.
The acquisition of the minorities in Amylum and Staley marks a
significant strategic change for the Group, enabling us to focus on
the development of the combined businesses of Amylum and Staley as
leading value-added processors of carbohydrates. Both Amylum and
Staley are world-class businesses, with compatible skills,
technologies and markets. We will now be able to achieve full
transfer of these skills and technologies and create an integrated
approach to product development and marketing. This approach offers
powerful prospects for better servicing the needs of our customers
around the world and increasing the contribution of value-added
products within Tate & Lyle. The full integration of Amylum into
the Tate & Lyle Group will give rise to widespread savings and
efficiencies and product development opportunities. The elimination
of duplication between Amylum and the rest of the Tate & Lyle
Group in areas including IT, sales and marketing, purchasing, supply chain,
finance and administration, operations and engineering, and human resources,
will greatly reduce costs.
Under recently reconfirmed marketing arrangements which require all
raw sugar production to be sold through a single organisation, the
Bundaberg businesses are not likely, within a realistic timetable, to
be able to earn the enhanced returns available from vertical integration
with other Group businesses which were envisaged at the time of the
initial investment. We have therefore taken the opportunity to sell
these businesses. Taken together these two transactions underline
our determination to realise value for Group shareholders and to
focus on value-added growth markets.
We have also sold several businesses and assets that were either
not earning acceptable returns for shareholders or, in the case
of our Argentine corn wet milling business Industrias de Maiz,
where better returns could be earned from disposal than were
likely to be earned in the future. Proceeds from disposals in
the year totalled £102 million and included also a US animal
feed joint venture, two sites in London and several smaller
businesses. Further disposals, including the sale of the US
Grains animal feed business, were agreed after the year-end,
and more are planned. Goodwill associated with businesses being
considered for disposal has been written off in this year.
In summary, the impact in the profit and loss account of these
items is a net exceptional charge of £18 million after writing
off £67 million goodwill previously charged to reserves.
Shareholders' funds have therefore benefited by £49 million.
Reorganising for Efficiency
Considerable progress has been made in reorganising the Group to
reduce its cost base and increase efficiency.
This year we launched the UK Business Improvement Project to
combine and simplify activities, increasing efficiency and
reducing costs. This builds on the excellent benefits being
achieved in North America from a similar project. In
North America, we achieved payback on a cash cost of £20 million
in under two years. We are currently achieving savings in excess
of £25 million per annum and further benefits will continue
to accrue. Expenditure on the UK project is expected to total
£15 million, of which £6 million has already been incurred,
with cash payback expected in less than two years.
Other reorganisations begun during the year included:
- a project to improve workforce skills at Tate & Lyle Sugars
in the UK;
- rationalisation at Amylum, including the closure of a small
French starch plant;
- a reconfiguration of production at Tate & Lyle North American
Sugar's Brooklyn and Baltimore refineries;
- the outsourcing of information technology activities in the UK,
which will take effect during summer 2000.
Reorganisation costs for the Group as a whole were £16 million in
the year as against £2 million in the comparable period.
Performance of Main Businesses
Improved margins in high fructose corn syrup (HFCS) in the 1999
calendar year and increased profits from value-added products led
to higher profits at Staley in the year to March 2000. The HFCS
market continued to grow at around 4% per annum fuelled by increased
demand from the soft drinks industry. No significant additional
HFCS capacity was brought on line during the year. Sales increases
in both HFCS and starch led to better capacity utilisation
and, together with continued cost control, to lower costs. Speciality
starch products for both industrial and food ingredient applications
showed good growth. Staley's excellent safety record was maintained.
The annual HFCS pricing in respect of the calendar year 2000 has
now been completed. Pricing is broadly in line with calendar 1999
levels but with higher net corn costs HFCS margins are expected to be
lower in the current financial year. However, Staley will continue to
benefit from its expanding value-added food ingredient portfolio and
also from cost reduction initiatives, and this will mitigate the effects
of the lower HFCS margins.
Tate & Lyle Citric Acid increased its capacity in the UK and in Brazil and
doubled capacity in the US. Worldwide demand for citric acid is growing at
around 5% annually, driven by growth in beverage demand. Tate & Lyle Citric
Acid is now serving world markets through its plants situated on three
continents. A coordinated approach to production scheduling and
flexibility in sourcing sales has led to much reduced inventory levels.
Cost reduction continues to benefit the citric business and margins should
improve as a result. Further low-cost capacity expansion is planned to
maintain our position as the number one global citric acid producer in this
growing, but competitive, industry.
The North American sugar businesses had mixed results. In Canada, results
improved, with increased sales and lower manufacturing costs. In the US,
market conditions deteriorated significantly towards the year-end and
losses were incurred. An oversupply of beet and cane sugar, following
unusually large crops, drove down selling prices to their lowest level
since 1979. The Brooklyn Refinery remains operational despite the
continuation of a strike which began last summer. Cost reductions are being
realised from integrating production between the Baltimore and Brooklyn
refineries. Sugar syrup is now being transported by barge from Baltimore
for finishing at Brooklyn, enabling the Baltimore refinery to move to
efficient seven-day-a-week operation.
We are not expecting any significant improvement in US sugar
market conditions in the financial year to March 2001, and a
fundamental change to the market will be required to restore
profitability to acceptable levels.
Amylum's performance improved from last year's low levels, due
to cost reductions and the final commissioning of the Nesle plant
last year. Better market conditions led to higher sales volumes and
a gradual increase in selling prices. The oversupply of potato starch
has disappeared and this market is now in balance, benefiting prices in
the starch market. Production levels at the Nesle plant are improving
and benefits are being realised from reconfiguration and our ground-breaking
use of wheat as a raw material instead of maize. A small starch plant
in France (Amylum Aquitaine) was closed during the year as part of
the continuing rationalisation plan. Asian imports depressed prices
in the monosodium glutamate market. Amylum's joint ventures
in Central and Eastern Europe performed strongly, growing volumes and
benefiting from cost reductions. Amylum is expected to make further
progress in the year to March 2001, although increased energy costs
are likely to restrain improvements in performance.
Our European sugar business performed well, providing strong cash flow,
although profits fell slightly. The market in the UK continues to be
competitive, particularly in the retail sector, and the strong
pound attracted imports, putting UK prices under pressure and reducing
export margins. The strength of the pound is likely to reduce margins
further in the new financial year despite operating cost reductions.
The packaging of our value-added UK branded retail sugars was redesigned.
New products launched, included 5kg and 10kg Granulated, Finer
Fondant Icing, Rough Cubes, Marzipan made with Lyle's Golden Syrup
flavour and Organic Sugar. Further new products will be launched
during the current year helping to maintain the profile of the
Tate & Lyle brand in the UK. In Portugal profits were slightly
down as increased beet sugar supply affected the market,
but the Group's cane refining business retained its market share.
PAGE FOUR OF THIRTEEN
Performance of Other Businesses
The Group's animal feed businesses in North America and Europe were
re-focused into a single business devoted to liquid feeds and the
storage of related products. As a result several animal feed businesses
have been sold or are currently being offered for sale.
The performance of Tate & Lyle Bundaberg in Australia was affected
by the low world raw sugar price, mitigated by tight control on costs.
The businesses in Zambia and Zimbabwe performed well in local currency
terms but failed to make progress in sterling terms as a result of
currency depreciation. The political situation in Zimbabwe is of concern,
but is not yet affecting our business.
In sugar trading we made an investment in port storage to strengthen
our access to supplies from the southern central area of Brazil.
This is the key point of origin for world supplies of raw sugar with a high
sugar content. We also opened new markets for white sugar sales.
Performance in existing markets was satisfactory.
Sucralose
Further approvals granted in the period included the important
Japanese market where initial sales have been encouraging.
Johnson & Johnson, our US partner is increasing sales in the
US market, where a new plant is nearing completion. We continue
to discuss options for best serving markets with our partner.
Economic Value Added
We have further extended the application of Economic Value Added (EVA)
techniques throughout the Group. EVA is the residual profit after
deducting the full cost of capital employed from after-tax operating
profit. EVA improved by £18 million as a result both of the increase
in underlying profit and a reduction of over £39 million in our
EVA capital base.
In addition to being a simple measure of true economic performance,
EVA is a key tool to assist employees at all levels in making the
best value-adding decisions. We continue our extensive EVA training
initiatives and over 300 employees now have incentives linked to the
achievement of annual improvement in EVA performance. We believe
strongly that extending the use of EVA performance improvements
in bonus schemes will best align employees' interests with those
of the shareholders.
Employees
The year has seen major changes in the way the Group operates.
The Group's employees have responded to the challenges this
presents with initiative and determination, and we thank those
employees and their families for their support.
The Future
As we enter a new year, the focus of the Group will continue to
be on the development of higher value-added products, principally
within the starch business. There are excellent prospects for growth
in this segment and we are taking advantage of new technologies
and other developments, such as in fermentation. We have
industry-leading businesses and R&D teams in this area. We will
also continue to drive down costs in our aim to become the lowest cost
producer in bulk commodity products such as HFCS and in the value-added
segment. The starch business should provide attractive and growing
returns for shareholders looking forward.
The strong cash flow of the European sugar business has for many
years funded much of the growth of the Group and it continues to do so.
In pursuit of shareholder value we are vigorously addressing the US
sugar and other strategic issues and we will report to you in
November on progress and action taken.
Larry Pillard
Chief Executive
7 June 2000
PAGE FIVE OF THIRTEEN
TATE & LYLE
GROUP PROFIT AND LOSS ACCOUNT
Results for the 78 weeks ended 25 March 2000
Audited Audited Unaudited *Unaudited
2000 1998 2000 1999
78 weeks 52 weeks 52 weeks 52 weeks
ended ended ended ended
25 March 26 Sept 25 March 27 March
£million £million £million £million
---------------------------------------------------------------------------
Sales 6,183 4,467 4,090 4,359
Less share of sales of joint ventures (537) (350) (352) (373)
and associates
----- ----- ----- -----
Group sales 5,646 4,117 3,738 3,986
===== ===== ===== =====
Operating profit before
reorganisation costs and exceptional 370 218 253 222
items
Reorganisation costs (18) - (16) (2)
----- ----- ----- -----
Operating profit before exceptional 352 218 237 220
items
Exceptional items - (15) - (5)
----- ----- ----- -----
Group operating profit 352 203 237 215
Share of profits of joint ventures 68 31 47 37
and associates ----- ----- ----- -----
Total operating profit: group and
share of joint ventures and 420 234 284 252
associates
Exceptional write downs on planned (50) - (50) -
sales of businesses
Exceptional profit on sale of businesses 25 - 25 -
Exceptional profit on sale of fixed 12 13 7 18
assets ----- ----- ----- -----
Profit before interest 407 247 266 270
Net interest payable (102) (68) (65) (73)
Share of joint ventures' and (18) (14) (10) (13)
associates' interest ----- ----- ----- -----
Profit before taxation 287 165 191 184
UK taxation (7) (5) (8) (1)
Overseas taxation (82) (39) (55) (48)
----- ----- ----- -----
Profit after taxation 198 121 128 135
Minority interests (14) 3 (17) 4
----- ----- ----- -----
Profit for the period 184 124 111 139
Dividends paid and proposed (124) (78) (99) (79)
----- ----- ----- -----
Retained earnings 60 46 12 60
===== ===== ===== =====
*Restated: a £5 million gain on the disposal of fixed assets, previously
included in operating profit in the March and September 1999 Interim
Reports, is now treated as exceptional.
Earnings per share - basic 40.3p 27.4p 24.3p 30.4p
- diluted 40.2p 27.1p 24.2p 30.4p
Dividends per ordinary share 26.9p 17.0p 21.4p 17.2p
Pre Exceptional:
Profit before taxation (£m) 300 167 209 171
Diluted earnings per share (pence) 45.2 27.2 29.9 28.4
PAGE SIX OF THIRTEEN
TATE & LYLE
GROUP BALANCE SHEET
Summarised balance sheet as at 25 March 2000
Audited Audited Unaudited
25 March 26 Sept 27 March
2000 1998 1999
£million £million £million
---------------------------------------------------------------------------
Fixed assets
Intangible assets 1 - -
Tangible assets 1,678 1,707 1,720
Investments 175 185 172
----- ----- -----
1,854 1,892 1,892
----- ----- -----
Current assets
Stock 479 388 486
Debtors 535 590 578
Investments and cash at bank 261 243 178
and in hand
----- ----- -----
1,275 1,221 1,242
Creditors - due within one year
Borrowings (434) (411) (299)
Other (530) (567) (550)
----- ----- -----
Net current assets 311 243 393
Total assets less current 2,165 2,135 2,285
liabilities
Creditors - due after one year
Borrowings (632) (787) (865)
Other (12) (11) (11)
Provisions for liabilities and (257) (250) (238)
charges
----- ----- -----
Total net assets 1,264 1,087 1,171
===== ===== =====
Capital and reserves
Called up share capital 117 117 117
Share premium account and other 445 443 442
reserves
Profit and loss account 539 371 462
----- ----- -----
Shareholders' funds 1,101 931 1,021
Minority interests 163 156 150
----- ----- -----
1,264 1,087 1,171
===== ===== =====
--------------------------------------------------------------------------
Year end exchange rates
US Dollar £1 = $ 1.59 1.70 1.66
Belgian Franc £1 = BFr 66.0 58.7 58.1
Euro £1 = 1.64 n/a 1.51
PAGE SEVEN OF THIRTEEN
TATE & LYLE
STATEMENT OF CASH FLOWS
For the 78 weeks ended March 2000
--------------------------------------------------------------------------
Audited Audited Unaudited Unaudited
2000 1998 2000 1999
78 weeks 52 weeks 52 weeks 52 weeks
ended ended ended ended
25 March 26 Sept 25 March 27 March
£million £million £million £million
--------------------------------------------------------------------------
Net cash inflow from operating 544 395 450 427
activities
Dividends from joint ventures and 15 13 12 13
associates
Returns on investment and servicing of
finance
Net interest paid (101) (69) (62) (79)
Dividends paid to minority interests (7) (4) (6) (3)
in subsidiary undertakings
----- ----- ----- -----
(108) (73) (68) (82)
Taxation paid (80) (56) (44) (66)
Capital expenditure and financial
investment
Purchase of tangible fixed assets (179) (199) (126) (158)
Sale of tangible fixed assets 34 19 23 24
Purchase of fixed asset investments* (11) (2) (11) (1)
Sale of fixed asset investments 2 25 2 24
----- ----- ----- -----
(154) (157) (112) (111)
Acquisitions and disposals
Purchase of businesses and (19) (108) (2) (124)
subsidiaries (net of cash acquired)
Sale of businesses** 9 28 9 28
Purchase of interests in joint - (45) - (7)
ventures and associates
Refinancing of existing joint ventures* (16) - (8) (8)
Sale of interests in joint ventures 68 - 68 -
and associates
Capital repayments by joint ventures 34 - 1 33
----- ----- ----- -----
76 (125) 68 (78)
Equity dividends paid (135) (77) (135) (25)
Net cash inflow/(outflow) before
financing and management of liquid 158 (80) 171 78
resources ===== ===== ===== =====
* In addition to £16 million direct equity refinancing of joint ventures, £4
million increase in loans to joint ventures represented refinancing in the
78 weeks to March 2000.
** In addition, £1 million of deposits were transferred out of the Group as
part of the disposal of subsidiaries in 2000.
PAGE EIGHT OF THIRTEEN
TATE & LYLE
NOTES TO STATEMENT OF CASH FLOWS
For the 78 weeks ended 25 March 2000
2000 1998 2000 1999
78 52 52 52
CASH FLOW/NET DEBT weeks weeks weeks weeks
RECONCILIATION ended ended ended ended
25 26 25 27
March Sept March March
£million £million £million £million
--------------------------------------------------------------------------
Net cash outflow before
financing and management of 158 (80) 171 78
liquid resources
Raised on issue of share capital 4 6 2 4
Contributed by minority - 1 - -
interests
Changes in debt not involving
cash flow:
- Assumed on acquisition of - (3) - 1
subsidiaries
- Increase on disposal of (1) - (1) -
subsidiaries
- Exchange movements (9) 32 10 (37)
- Amortisation of bond (2) (1) (1) (1)
discount
- New finance leases - (1) - (1)
----- ----- ----- -----
Reduction/(increase) in net 150 (46) 181 44
borrowings
Net borrowings at start of (955) (909) (986) (1,030)
period
----- ----- ----- -----
Net borrowings at end of (805) (955) (805) (986)
period ===== ===== ===== =====
NET CASH INFLOW FROM OPERATING ACTIVITIES
--------------------------------------------------------------------------
Operating profit 352 203 237 215
Depreciation of tangible fixed 206 135 136 143
assets
Change in working capital (13) 56 79 67
Provisions against fixed asset (1) 1 (2) 2
investments ----- ----- ----- -----
544 395 450 427
===== ===== ===== =====
BALANCE SHEET RECONCILIATION 26 Sept 25 March
1998 Cash flow Exchange 2000
--------------------------------------------------------------------------
Cash at bank and in hand 58 (6) (1) 51
Overdrafts* (36) 6 3 (27)
----- ----- ----- -----
Net cash 22 - 2 24
===== ===== ===== =====
* Included in borrowings due within one year on the balance sheet.
PAGE NINE OF THIRTEEN
TATE & LYLE
STATEMENT OF RECOGNISED GAINS AND
LOSSES AND RECONCILIATION OF MOVEMENTS
IN SHAREHOLDERS' FUNDS AND STATEMENT OF RECOGNISED GAINS AND LOSSES
For the 78 weeks ended 25 March 2000
STATEMENT OF RECOGNISED GAINS AND LOSSES
2000 1998 2000 1999
78 52 52 52
weeks weeks weeks weeks
ended ended ended ended
25 26 25 27
March Sept March March
£million £million £million £million
--------------------------------------------------------------------------
Profit for the period 184 124 111 139
Currency difference on
foreign currency net 41 (95) (1) 12
investments ----- ----- ----- -----
Total recognised gains for 225 29 110 151
period ===== ===== ===== =====
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
--------------------------------------------------------------------------
Total recognised gains and
losses for the period 225 29 110 151
Dividends (124) (78) (99) (79)
Issue of shares 4 6 2 4
Adjustments to goodwill
arising on acquisitions prior (2) (30) - (29)
to September 1998
Goodwill transferred to profit
and loss account 67 11 67 11
----- ----- ----- -----
Net increase/(reduction) in 170 (62) 80 58
shareholders' funds
Opening shareholders' funds 931 993 1,021 963
----- ----- ----- -----
Closing shareholders' funds 1,101 931 1,101 1,021
===== ===== ===== =====
BASIS OF PREPARATION
This preliminary announcement is prepared using accounting policies
consistent with those set out in the Annual Report for the period
ended 26 September 1998, except that Financial Reporting Standards
10, 11, 12, 15 and 16 have been adopted for the first time. These
cover Goodwill, Impairment, Provisions, Tangible Fixed Assets and
Current Tax respectively.
PAGE TEN OF THIRTEEN
Note: Because of file size restrictions in the Stock Exchange RNS system,
some supplementary tables follow in a separate announcement.
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