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Recommendations: 2
Hi Fools,
Well here they are. This is today's big event as how the market reacts will have a big say on which two of Scottish & Newcastle, Autonomy and Rolls Royce join the FTSE100. It will be a close call, margins are under pressure and although the headline data looks OK, there are some big exceptionals.
Scottish & Newcastle PLC
5 December 2000
INTERIM RESULTS FOR THE TWENTY SIX WEEKS TO 29 OCTOBER 2000
EARNINGS MOMENTUM DURING STRATEGIC TRANSFORMATION
- TURNOVER £2177m.....up 28%
- OPERATING PROFIT * £311m......up 23%
- PROFIT BEFORE TAX* £241m.......up 8%
- EARNINGS PER SHARE* 27.9p.........up 2%
The Board has declared a 4% increase in the interim dividend to 9.50p per
share (1999 - 9.13p) in respect of the year ending 29 April 2001. This
dividend will be paid on 9 February 2001 to ordinary shareholders on the
register at close of business on 19 January 2001.
* Before amortisation of goodwill and exceptional items.
Enquiries to:
Brian Stewart, Chairman
Derek Wilkinson, Group Finance Director
Richard Gibb, Director of Corporate Affairs
Tel: 0207-409-2112
5 December 2000
Scottish & Newcastle today announced results for the 26 weeks to 29 October
2000.
Commenting on the results, Chairman Brian Stewart said:-
'The last six months has seen significant strategic progress in reshaping the
Group to focus on the development of our beer business, in the UK and
internationally, and the growth sectors in licensed retail. During this period
of substantial change the Group has maintained earnings momentum in spite of
market conditions being less than buoyant.
During the six month period we have increased sales by 28%, operating profit
by 23% and earnings per share by 2%. A strong set of results.
Strategic Transformation
* In July we completed the formation of our partnership with Danone's
Kronenbourg beer business. Results for this business are well up to our
expectations. We have made significant progress towards achieving the
synergy benefits identified at the time of the acquisition and the process
of management integration is well advanced. We are confident that we now
have a platform for growth in Europe.
* In August we announced the acquisition of a 49% stake in Centralcer de
Cervejas, the Portuguese brewer. Clearance has now been received from the
competition authorities and we anticipate completion on 6 December.
* In September we announced the disposal of the major part of our Pontin's
holiday business
* On 21 November we announced that agreement had been reached for the
disposal of our Center Parcs leisure business. Subject to clearance from
the competition authorities, we expect completion by the end of the
calendar year.
* We are reviewing the structure of our Retail business to increase the
focus on growth sectors. We anticipate announcing further details in
January 2001.
Once completed the initiatives referred to above will transform the Group. As
one of the most profitable brewers in Europe, we will have a platform for
growth that will enable us to grow both organically and through acquisitions.
Our Retail Division, in future, will be focused on the key growth sectors.
We are confident that the restructured Group will deliver increasing returns
for our shareholders.
Our key financial objective remains the achievement of upper quartile total
shareholder returns relative to a peer group of major competitors.
Current Trading
The trading trends that we experienced in the first half of our financial year
have continued into the second half. In Retail the improving sales trends that
we saw in Quarter 2 have been maintained, although we inevitably saw some
impact from the severe weather conditions in November. In UK Beer, growth
continues in the off trade but the performance of the on trade market
continues to be below our expectations. Our International beer business is
trading strongly with results being in line with expectations.'
REVIEW OF TRADING
BEER
2000 1999 % Change
Turnover (£m) 1334.3 1031.3 +29.4
Operating Profit (£m) 143.5 102.7 +39.7
Our total beer business has increased its contribution to the Group by nearly
40%. This includes a very satisfactory initial contribution from the recently
acquired Kronenbourg business.
UK Beer
2000 1999 % Change
Turnover (£m) 1000.9 997.1 +0.4
Operating Profit (£m) 102.7 98.5 +4.3
(Results exclude the turnover and operating profit of the former S&N
International Division.)
* Further market share gains
* Key brands deliver value growth
In market conditions that were more difficult than expected, Scottish Courage
did well to grow profits by 4% and make further market share gains. This
performance was again driven by the growth of our key brands and by further
reductions in our cost base.
In a market where volumes declined by an exceptional 3.6% the strength of our
brand portfolio and further improvements in customer service levels saw our
volumes fall by only 1.1% with resulting market share gains. Volume sales of
our key brands increased by over 4%, including a 23% increase in the very
successful Kronenbourg 1664 brand. This volume growth in premium brands
converted into a growth of over 6% in their sales value, underlining the
success of our value strategy.
In support of the value strategy, net spend on brand advertising was increased
by 13% with a particular focus on Foster's, Kronenbourg and John Smith's.
Initiatives to reduce our cost base continued to be pursued. In the current
financial year we anticipate generating incremental cost savings of £9m in
production and distribution.
Reductions in our cost base and the increasing proportion of premium brands in
our sales mix more than offset the impact of volume decline, leaving net
margins up by 0.4% to 10.3%.
We do not believe that the market conditions prevailing in the last six months
are representative of future trends. Consequently we would expect higher rates
of earnings growth in the longer term.
International Beer
2000 1999
Turnover (£m) 333.4 34.2
Operating Profit (£m) 40.8 4.2
(Results include the turnover and operating profit of the former S&N
International Division for 26 weeks.)
* Volume and market share growth
* Value strategy delivers results
Our International beer business, including the Kronenbourg beer business
acquired in July, made an operating profit of £40.8m. This profit was well up
to our expectations and reflected the seasonal nature of trading in Europe
with more of a bias to the summer months.
Over the six months to October 2000 the beer market in France grew by 1.6%.
Volumes of Kronenbourg brands grew significantly faster, rising by 3.6% with
resulting market share gains. The strategy of focusing on value delivery was
well illustrated by the success of the Kronenbourg 1664 brand. This brand,
which commands a significant selling price premium over main stream brands,
grew in volume terms by 13.9%. The increasing premium brand content of our
sales mix added 1.5% to our gross margin.
In Alken Maes we will concentrate brand marketing on the key Maes Pils,
Grimbergen and newly acquired Brugs brands. We anticipate that these brands
will deliver both volume and value growth. The cost reduction projects
implemented over the last twelve months have contributed strongly to profit
growth.
In the USA Newcastle Brown Ale continued to increase its penetration of the
market for imported beers with an 8% increase in volumes.
Good progress has been made with the re-negotiation of existing purchasing
contracts to exploit the economies of scale now available across our wider
European business. We remain confident that the synergy benefits of £25m
identified at the time of the Kronenbourg transaction will be delivered.
RETAIL
Managed Estate
2000 1999 % Change
Turnover (£m) 629.4 448.8 +40.2
Operating Profit (£m) 124.0 106.2 +16.8
* Chef & Brewer success continues
* Premier Lodge brand gaining momentum
Growth in turnover and operating profit benefited from a first time
contribution from the Greenalls' estate acquired in December 1999 offset by
some disposals.
In recent times the pub retailing market has seen substantial change driven by
both the significant investments made by all major pub retailers over the last
few years and changing consumer behaviour. As with other operators, these
factors are producing an increasingly divergent performance between different
sectors of our estate.
Our highly successful Chef & Brewer brand grew like with like sales by 7% and
achieved returns on investment in excess of 20%. The number of units trading
increased by 50% and we anticipate opening a further 17 outlets by the end of
April 2001, increasing the total number of Chef & Brewers to 102.
The number of lodges trading increased by 9 to 107. Room stock grew by 16% to
5750 and revpar was up by 9%. The lodge market continues to offer substantial
growth opportunities with our Premier Lodge brand now increasingly gaining
momentum. We anticipate opening a further 9 units by April 2001, which will
increase our room stock by 1000 bedrooms.
However, a substantial proportion of our estate is still experiencing
significant like with like decline in sales. This decline, coupled with cost
pressures associated with minimum wage, working time directive and rising
property costs, is resulting in pressure on unit profitability. Although
performance in Quarter 2 showed some signs of recovery we do not believe that
this decline in profit can be addressed by management change or by investment.
We are carrying out a unit by unit review of our total Retail estate. This
review, the details of which we will announce in January after appropriate
internal communication, will result in the disposal of all units that fail to
meet defined growth criteria.
Our future estate will be predominantly focused on:-
* Chef & Brewer and family dining
* Premier Lodge
* High quality traditional pubs
* Branded pubs and bars
As a consequence of the restructuring that we plan, we anticipate that our
managed estate will require a reduced level of investment and generate an
increasing level of return on assets.
Pub Enterprises
2000 1999 % Change
Turnover (£m) 14.7 17.8 -17.4
Operating Profit (£m) 8.3 11.9 -30.3
The number of tied outlets trading declined by over 40% as we sold units on a
free of tie basis to a financial institution. This disposal route provides a
very effective mechanism for releasing cash for reinvestment while retaining
outlets for our beer brands. It also produces income from managing the outlets
on behalf of the institution.
LEISURE
2000 1999 % Change
Turnover (£m) 198.7 206.7 -3.9
Operating Profit (£m) 35.1 31.8 +10.4
The results for our Leisure Division include a full six months contribution
from Center Parcs, but only five months from the Pontin's Family Favourite
Centres that were sold in September. The achievement of an 10.4% growth in
operating profit, at a time when the disposal of both businesses was being
progressed and a major fire had resulted in the closure of one of our Dutch
villages, is a credit to the management teams who continued to maintain focus
and commitment during a period of great uncertainty.
EXCEPTIONAL ITEMS
On 21 November we announced the disposal of the Center Parcs business for £
670m, less certain adjustments to be made at completion. In anticipation of
the disposal, the net assets of the Leisure Division have been written down by
£245m to the estimated disposal value.
The disposal of Pontin's has resulted in a loss of £72m. This loss includes £
39.6m of goodwill written off to reserves at the time of the acquisition.
Further information on exceptional items is given in Note 3.
CASH FLOW AND INVESTMENT
Driven by the growth in operating profit before depreciation (EBITDA), cash
flow from operating activities has grown strongly from £293m to £367m.
The cost of financing debt and equity has increased as a result of recent
acquisitions. Cash flow for taxation is also substantially up on last year
which benefited from prior year repayments.
Net cash invested in our three trading divisions at £128m is £50m below last
year's level. Net spend in the Retail Division is down by £63m. Over 60% of
the development expenditure incurred in Retail has been directed to pub
restaurants and lodges, sectors which continue to exhibit significant growth
and in which we have demonstrated success.
In UK Beer we have invested £42m, mainly in support of projects to increase
productivity in the areas of packaging and distribution.
In line with our contractual commitment to the purchaser, we continued to
support the recent refurbishment of our Center Parc villages. The expenditure
incurred of £27m was reflected in the disposal price agreed.
Free cash flow at £26m was ahead of last year.
Mainly as a result of our investment in Kronenbourg, gearing increased
marginally to 82%. The proceeds from the disposal of Center Parcs and a
further tranche of pub disposals will result in a reduction in debt levels in
the second half of our financial year.
The interim report will be posted to all shareholders on 6 December 2000 and
will be available at the Registered office of the Company at 33 Ellersly Road,
Edinburgh.
GROUP PROFIT AND LOSS ACCOUNT
26 Weeks to 29 October 2000 26 Weeks to 31 October 1999
52 Weeks
to 30
April
2000
Before Before Total
Adjustments Adjustments Total Adjustments Total (Audited)
£m £m £m £m £m £m
Turnover: Group and
share of joint 2177.1 2177.1 1704.6 1704.6 3581.9
ventures
Share of joint (4.6) - (4.6) (5.0) (5.0) (10.0)
ventures
-------- -------- -------- -------- -------- ----
Group turnover 2172.5 - 2172.5 1699.6 1699.6 3571.9
-------- -------- -------- -------- -------- ----
Continuing 1840.5 - 1840.5 1653.9 1653.9 3505.0
operations
Acquisitions 298.4 - 298.4 - - -
-------- -------- -------- -------- -------- ----
2138.9 - 2138.9 1653.9 1653.9 3505.0
Discontinued 33.6 - 33.6 45.7 45.7 66.9
-------- -------- -------- -------- -------- ----
Group Operating
Profit 306.4 (260.5) 45.9 247.7 228.9 379.4
Continuing 266.2 (256.5) 9.7 245.1 226.3 383.5
operations
Acquisitions 36.6 (4.0) 32.6 - - -
-------- -------- -------- -------- -------- ----
302.8 (260.5) 42.3 245.1 226.3 383.5
Discontinued 3.6 - 3.6 2.6 2.6 (4.1)
-------- -------- -------- -------- -------- ----
Share of operating
profit in joint 4.5 - 4.5 4.9 4.9 9.9
ventures
-------- -------- -------- -------- -------- ----
Operating Profit of
the
Group and joint
ventures 310.9 (260.5) 50.4 252.6 233.8 389.3
Profit/(Loss) on
disposal
of fixed assets - (4.2) (4.2) - 2.3 (35.5)
Loss on the disposal
of a business - (72.0) (72.0) - - -
-------- -------- -------- -------- -------- ----
Profit/(loss) on
ordinary activities
before interest 310.9 (336.7) (25.8) 252.6 236.1 353.8
Interest payable:
Group (66.9) - (66.9) (27.0) (27.0) (85.2)
Joint Ventures (2.9) - (2.9) (3.3) (3.3) (6.6)
-------- -------- -------- -------- -------- ----
Profit/(loss) on
ordinary activities
before taxation 241.1 (336.7) (95.6) 222.3 205.8 262.0
Taxation on profit
on
ordinary activities (60.8) 7.8 (53.0) (52.5) (48.6) (80.7)
-------- -------- -------- -------- -------- ----
Profit/(loss) on
ordinary activities
after taxation 180.3 (328.9) (148.6) 169.8 157.2 181.3
26 Weeks to 29 October 2000 26 Weeks to 29 October 2000
52 Weeks
to 30
April
2000
Before Before Total
Adjustments Adjustments Total Adjustments Total (Audited)
£m £m £m £m £m £m
Minority interests
on
non- equity shares (3.1) - (3.1) - - -
Preference
dividends on
non-equity shares - - - (0.3) (0.3) (0.4)
-------- -------- -------- -------- -------- -----
Profit/(loss)
attributable to
ordinary
shareholders 177.2 (328.9) (151.7) 169.5 156.9 180.9
Ordinary dividends
on
equity shares
Interim (61.3) - (61.3) (56.6) (56.6) (56.6)
Final - - - - - (115.5)
-------- -------- -------- -------- -------- -----
Profit/(loss) 115.9 (328.9) (213.0) 112.9 100.3 8.8
retained
-------- -------- -------- -------- -------- -----
Earnings per share
Basic (23.9) 25.4 29.2
Diluted (23.9) 25.3 29.2
Diluted excluding
amortisation of
goodwill
and exceptional 27.9 27.3 50.4
items
Dividends per share
(p)
Interim 9.50 9.13 9.13
Final 17.94
* Adjustments relate to the amortisation of goodwill and exceptional
items.
GROUP BALANCE SHEET AT 29 OCTOBER 2000
29 October 31 November 30 April
2000 1999 2000
(Audited)
£m £m £m £m £m £m
Fixed Assets
Intangible Fixed Assets 362.5 13.0 111.3
Tangible Assets 4099.9 3335.2 4180.0
Investments in joint
ventures:
Share of gross assets 126.7 132.3 133.3
Share of gross liabilities (81.6) (90.5) (89.7)
-------- -------- --------
45.1 41.8 43.6
Other investments 255.0 187.0 186.9
-------- -------- -------
4762.5 3577.0 4521.8
-------- -------- -------
Current Assets
Stocks 196.9 147.1 134.4
Debtors 872.0 446.8 492.1
Cash and short-term deposits 132.8 78.0 99.6
-------- -------- -------
1201.7 671.9 726.1
-------- -------- -------
Creditors: amounts falling
due within one year 1772.6 1303.3 1667.2
-------- -------- -------
Net Current Liabilities (570.9) (631.4) (941.1)
-------- -------- -------
Total assets less current
liabilities 4191.6 2945.6 3580.7
-------- -------- -------
Less:
Creditors:
Amounts due after more than
one year 1742.7 491.8 1237.2
Provisions for liabilities
and
charges 14.6 4.3 22.7
-------- -------- -------
2434.3 2449.5 2320.8
-------- -------- -------
Capital and Reserves
Shareholders funds 2288.3 2449.5 2320.8
Minority interests - non 146.0 - -
equity
-------- -------- -------
2434.3 2449.5 2320.8
-------- -------- -------
Net Borrowings (£) 2007.5 886.8 1844.0
Gearing (%) 82.5 36.2 79.5
GROUP CASH FLOW 26 WEEKS TO 29 OCTOBER 2000
26 Weeks to 26 Weeks to 52 Weeks to
29 October 2000 31 October 1999 30 April 2000
(Audited)
£m £m £m £m £m £m
Net cash inflow from operating
activities 367.3 293.1 612.9
Returns on investments and
servicing of finance
Interest received 0.8 1.0 4.1
Interest paid (65.4) (27.3) (82.1)
Preference dividends paid - (0.3) (0.4)
-------- -------- --------
Net cash outflow for returns
on investments and servicing
of finance (64.6) (26.6) (78.4)
Taxation (33.3) 17.0 (43.2)
Capital expenditure and
financial
investment
Purchase of tangible fixed (192.6) (204.5) (401.7)
assets
Purchase of investments (29.7) (29.1) (64.1)
Sale of tangible fixed assets 52.8 18.0 255.5
Realisation of investments 41.7 38.0 72.6
-------- -------- --------
Net cash outflow for capital
expenditure and financial
investment (127.8) (177.6) (137.7)
Acquisitions and disposals
Purchase of business 2.7 (13.7) (1178.3)
Net cash acquired with (172.3) 4.0 3.2
business
Disposal of business 19.4 - -
-------- -------- --------
Net cash outflow for
acquisitions
and disposals (150.2) (9.7) (1175.1)
Equity dividends paid (115.5) (103.9) (160.5)
-------- -------- ------
Net cash outflow before use of
liquid resources and financing (124.1) (7.7) (982.0)
Management of liquid resources
Movement in short-term
deposits
with banks 5.2 1.2 (6.1)
Financing
Issue of ordinary share 2.6 1.5 3.3
capital
Redemption of preference - - (13.6)
shares
Proceeds of loan capital 613.2 118.6 1848.6
Repayment of loan capital (315.3) (79.5) (860.7)
-------- -------- --------
Net cash inflow from financing 300.5 40.6 977.6
-------- -------- ------
Increase in cash in the period 181.6 34.1 (10.5)
-------- -------- ------
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
26 Weeks 26 Weeks 26 Weeks to
to to
29 31 30 April
October October 2000
2000 1999 (Audited)
£m £m £m
Profit/(loss) attributable to ordinary (151.7) 156.9 180.9
shareholders
Exchange adjustments (6.3) (1.0) (32.5)
--------- --------- ---------
Total recognised gains and losses since (158.0) 155.9 148.4
previous year end
--------- --------- ---------
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
26 Weeks 26 Weeks 26 Weeks to
to to
29 31 30 April
October October 2000
2000 1999 (Audited)
£m £m £m
Profit/(loss) attributable to ordinary (151.7) 156.9 180.9
shareholders
Ordinary dividends (61.3) (56.6) (172.1)
Other recognised gains and losses relating to (6.3) (1.0) (32.5)
the year
New share capital issued 121.8 1.6 1.7
Redemption of preference shares - - (13.6)
Warrants issued 25.4 - -
Contribution to employee share trust - (0.1) (0.1)
Goodwill on disposals 39.6 - 7.8
--------- --------- ---------
Net movements in shareholders' funds (32.5) 100.8 (27.9)
Shareholders' funds at 30 April 2000 2320.8 2348.7 2348.7
--------- --------- ---------
Shareholders' funds at 29 October 2000 2288.3 2449.5 2320.8
--------- --------- ---------
NOTES TO THE INTERIM REPORT
1. Basis of Preparation of Accounts
The interim accounts, which are abridged and unaudited, have been
prepared on the basis of the accounting policies expected to apply for
the financial year 2000/01. These are unchanged from the accounting
policies set out in the 1999/00 Group accounts.
The taxation charge is calculated by applying the Directors' best
estimate of the annual effective tax rate to the profit for the period
after adjusting for exceptional items.
The interim accounts were approved by the Board on 5 December 2000.
The figures for the year ended 30 April 2000 are derived from the
published statutory accounts. A copy of the full accounts for that
year, on which the auditors have issued an unqualified audit report,
has been delivered to the Registrar of Companies.
NOTES TO THE INTERIM REPORT
2. Segmental Analysis
2000 1999
Joint Joint
Group Ventures Total Group Ventures Total
£m £m £m £m £m £m
Turnover
Beer
UK Beer 1000.9 - 1000.9 997.1 - 997.1
International Beer 333.4 - 333.4 34.2 - 34.2
-------- -------- -------- -------- --------
Total Beer 1334.3 - 1334.3 1031.3 - 1031.3
-------- -------- -------- -------- -------- --------
Retail
Managed 624.8 4.6 629.4 443.8 5.0 448.8
Pub Enterprises 14.7 - 14.7 17.8 - 17.8
-------- -------- -------- -------- -------- --------
Total Retail 639.5 4.6 644.1 461.6 5.0 466.6
-------- -------- -------- -------- -------- --------
Leisure
Center Parcs 165.1 - 165.1 161.0 - 161.0
Pontin's 33.6 - 33.6 45.7 - 45.7
-------- -------- -------- -------- -------- --------
Total Leisure 198.7 - 198.7 206.7 - 206.7
Total 2172.5 4.6 2177.1 1699.6 5.0 1704.6
-------- -------- -------- -------- -------- --------
NOTES TO THE INTERIM REPORT
2000 1999
Joint Joint
Group Ventures Total Group Ventures Total
£m £m £m £m £m £m
Operating profit before
amortisation of goodwill
and exceptional items
Beer
UK Beer 102.7 - 102.7 98.5 - 98.5
International Beer 40.8 - 40.8 4.2 - 4.2
-------- -------- -------- -------- -------- --------
Total Beer 143.5 - 143.5 102.7 102.7
-------- -------- -------- -------- -------- --------
Retail
Managed 119.5 4.5 124.0 101.3 4.9 106.2
Pub Enterprises 8.3 - 8.3 11.9 - 11.9
-------- -------- -------- -------- -------- --------
Total Retail 127.8 4.5 132.3 113.2 4.9 118.1
-------- -------- -------- -------- -------- --------
Leisure
Center Parcs 31.5 - 31.5 29.2 - 29.2
Pontin's 3.6 - 3.6 2.6 - 2.6
-------- -------- -------- -------- -------- --------
Total Leisure 35.1 - 35.1 31.8 - 31.8
-------- -------- -------- -------- -------- --------
Total 306.4 4.5 310.9 247.7 4.9 252.6
-------- -------- -------- -------- -------- --------
International Beer includes the results of the Beer Business acquired from
Danone on 18 July 2000 and the former Scottish & Newcastle International
Division.
The Pontin's business was sold in the six months to 29 October 2000.
Transfer prices for the supply of beer from UK Beer to the Managed estate were
rebased at the beginning of the current financial year. The comparatives for
last year have been restated to reflect the new prices and this has
transferred profit of £6.5M from UK Beer to Managed (full year - £15.1M).
Beer Group turnover is after eliminating inter segment sales of £111.6m (1999
- £83.7m).
NOTES TO THE INTERIM REPORT
3. Exceptional Items
2000 1999
Redundancy Asset
and other Write
cash
costs Downs Total
£m £m £m £m
UK Beer (8.5) (0.2) (8.7) (18.8)
Center Parcs - (245.0) (245.0) -
-------- -------- -------- -------
Operating profit exceptional charge (253.7) (18.8)
Profit/(Loss) on disposal of fixed (4.2) 2.3
assets
Loss on disposal of Pontin's (72.0) -
-------- --------
(329.9) (16.5)
-------- --------
During the six months UK Beer announced a series of restructuring initiatives.
In anticipation of the disposal of Center Parcs, assets were written down by £
245.0m
Tax relief on the exceptional charge against operating profit was £2.6m (1999-
£3.9M).
Tax relief on the profit/(loss) on disposal of fixed assets was nil.
The loss on disposal of the Pontin's business includes £39.6m of goodwill
previously written off through reserves. Tax relief on the loss was £5.2m.
4. Net cash inflow from operating activities:
26 Weeks to 26 Weeks to
29 October 2000 31 October 1999
£m £m
Group operating profit 45.9 228.9
Exceptional charges against operating profit 253.7 18.8
Depreciation - normal 96.4 75.7
Amortisation of goodwill 6.8 -
Provisions against investments 0.4 0.7
Increase in stocks (1.4) (16.7)
(Increase)/decrease in debtors 43.1 (26.7)
Increase/(decrease) in creditors (61.0) 21.0
-------- --------
Net cash inflow from ordinary
operating activities 383.9 301.7
-------- --------
Reorganisation costs (16.6) (8.6)
-------- --------
Net cash inflow from operating activities 367.3 293.1
-------- --------
NOTES TO THE INTERIM REPORT
5. Analysis of net debt
At Loans At
30 April Cash Acquired with 29 October
2000 Flow Business Exchange 2000
£m £m £m £m £m
Cash 88.9 41.6 - (0.4) 130.1
Bank overdrafts (246.6) 140.0 - (7.4) (114.0)
-------- -------- -------- -------- --------
Net Cash (157.7) 181.6 - (7.8) 16.1
Short term deposits 10.7 (5.2) - (2.8) 2.7
Loan capital (1697.0) (297.9) (68.3) 36.9 (2026.3)
-------- -------- -------- -------- --------
Net Debt (1844.0) (121.5) (68.3) 26.3 (2007.5)
-------- -------- -------- -------- --------
6. Reconciliation of net cash flow to movements in net debt
26 Weeks to 26 Weeks to
29 October 2000 31 October 1999
£m £m
Increase in cash 181.6 34.1
Cash inflow from change in loan capital (297.9) (39.1)
Cash inflow from change in liquid resources (5.2) (1.2)
-------- --------
Change in net debt resulting from cash flows (121.5) (6.2)
Loans acquired with businesses (68.3) -
Exchange 26.3 4.8
-------- --------
Increase in debt (163.5) (1.4)
Net debt at 30 April 2000 (1844.0) (885.4)
-------- --------
Net debt at 29 October 2000 (2007.5) (886.8)
-------- --------
NOTES TO THE INTERIM ACCOUNTS
7. Acquisitions
In July the Group acquired Danone's Beer Business. The provisional
fair value of the business and the related
goodwill are set out below:
Accounting
Policy Revaluation Fair Value
Book Value Alignment Adjustments to the Group
£m £m £m £m
Intangible fixed assets 250.0 - (250.0) -
Tangible fixed assets 165.8 - (7.4) 158.4
Investments 90.7 (1.4) - 89.3
Stocks 67.4 - - 67.4
Debtors 448.4 - (9.4) 439.0
Cash 5.2 - - 5.2
Overdraft (177.5) - - (177.5)
Other borrowings (68.3) - - (68.3)
Other creditors (499.7) - (13.6) (513.3)
Deferred taxation 32.2 - 6.3 38.5
-------- -------- --------- --------
Net Assets 314.2 (1.4) (274.1) 38.7
Goodwill 279.3
-------- -------- -------- --------
Consideration £m
- cash 28.1
- equity 121.6
- warrants for equity shares 25.4
- minority preference shares 142.9
--------
318.0
--------
The figures in the table above are provisional while a full assessment of the
assets (including brands) and liabilities is undertaken.
8. Post Balance Sheet Event
Since the half year end the Group has contracted to sell the Center
Parcs business to companies formed by DB Capital Partners and Pierre &
Vacances SA for a consideration of £670M. Completion, which is
anticipated by the end of December 2000, is subject to the approval of
the relevant competition authorities. The gross consideration payable
in cash at completion will be subject to three adjustments:-
+ A reduction to take account of the liability assumed by the
purchaser for holiday deposits paid in advance (circa £30m).
+ The level of capital expenditure up to, and the working capital at,
completion.
+ £55m will be deferred until the re-opening of the fire damaged
Eemhof village.
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