AB Foods Regulatory News (ABF)

24 Apr 2007 07:02

Associated British Foods PLC24 April 2007 24 April 2007 Associated British Foods plc announces its interim results for the 24 weeks ended 3 March 2007 Investment in Primark and sugar drives growth Highlights • Adjusted operating profit up 7% to £272m* • Group revenue up 12% to £3,220m • Adjusted profit before tax up 5% to £268m ** • Adjusted earnings per share level at 23.3p ** • Interim dividend per share up 4% to 6.5p • Net investment in capital and acquisitions over the last year of £720m • Net debt of £350m • Basic earnings per share down 9% to 19.2p and profit before tax down 15% to £198m, reflecting increases in the charges for the amortisation of intangibles and the net loss on the sale of businesses and fixed assets George Weston, Chief Executive of Associated British Foods, said: "This is a good set of results. The satisfactory growth in revenue andoperating profit in the first half reflects the substantial investment made bythe group in capital and acquisitions last year. The advances made by Primarkand sugar are the beginning of the benefits we expect from this investment andrepresent a significant development for these businesses." * before amortisation of intangibles and profits less losses on the sale of property, plant & equipment ** before amortisation of intangibles, profits less losses on the sale of property, plant & equipment and losses on the sale of businesses All figures stated after amortisation of intangibles, profits or losseson the sale of businesses and property, plant & equipment are shown on the face of the consolidated income statement. For further information please contact: Associated British Foods:Until 1500 onlyGeorge Weston, Chief Executive Geoff Lancaster, Head of External AffairsJohn Bason, Finance Director Mobile: 07860 562 659 Tel: 020 7638 9571 Jonathan Clare/Chris Barrie/Fiona Bradshaw, Citigate Dewe RogersonTel: 020 7638 9571After 1500John Bason, Finance DirectorTel: 020 7399 6500 ASSOCIATED BRITISH FOODS plcINTERIM REPORTFOR THE 24 WEEKS ENDED 3 MARCH 2007 CHAIRMAN'S STATEMENT This half year shows the early benefits of the investment made last year and hasbeen a period of considerable activity which has seen the group perform wellagainst a backdrop of challenging market conditions. In particular the resultsinclude, for the first time, those of Illovo Sugar Limited, in which we acquireda 51% interest in September 2006. The rapid roll-out of new Primark storescontributed some £200m of additional sales. The Kingsmill brand was relaunchedin February. Energy costs eased during the period but the currency translationimpact of the strengthening of sterling, particularly against the US dollar,reduced operating profit year-on-year by £8m. Adjusted operating profit increased by 7% to £272m. Net interest paid rose inthe period reflecting the major investment of the past year. Adjusted profitbefore tax increased by 5% to £268m. Minorities' share of adjusted profits rosesharply due to the sizeable minority interests in Illovo. Adjusted earnings pershare, reflecting this, were level with the previous year. With the acquisition of Illovo, our sugar activities now extend to 24 plantsoperating in nine countries in three continents. This important strategic stepfor the business not only provides a substantial growth opportunity withinsub-Saharan Africa but also supports our intention to develop our EU salescapacity by harnessing the tariff free trading arrangements afforded from 2009/10 to the Least Developed Countries (LDCs). Illovo grows and processes canesugar in four LDC countries. In addition to the contribution from Illovo, ourother sugar businesses all showed progress in the first half. It is now accepted by the sugar industry in Europe that the restructuringprocess in its current form will fall short of the 6m tonnes target forvoluntary renunciation of quota by an estimated 2m tonnes. We are pleased thatthe industry is actively engaging with the European Commission to determine howthe restructuring programme can be modified to speed up the process of restoringthe balance between consumption and production in the EU market. Furthermore,the Commission has demonstrated its desire to manage the supply of sugar in theEU in 2007/8 with its announcement of an advanced quota withdrawal of 2m tonnesfor the beet industry. British Sugar will commission the UK's first bioethanol plant at Wissington inJune 2007 with commercial sales of ethanol starting later in the Summer. Thisplant will have the capacity to deliver 55,000 tonnes or 70m litres per year ofethanol to the UK market for blending with petrol. British Sugar is alsocontinuing to develop plans for a cereal based biofuel facility in the UK. In grocery the major issue was the disappointing results from the UK bakeries.Following the relaunch of the Kingsmill brand in February better trading isexpected in the second half. The North American and Australian grocerybusinesses made good progress. Primark opened 23 new stores in the period adding 0.9 million sq ft of sellingspace, net of the closure of five adjacent smaller stores. By the half year,all but four of the former Littlewoods stores had been converted and weretrading as Primark stores. Primark's sales and profit in the first half were36% and 28% respectively ahead of the previous year mainly due to the additionalretail selling space. The identification of further new sites, in all countrieswhere Primark operates, continues. This is expected to result in significantfurther expansion in the next two years, although not on the scale of the pastyear. The new, much larger, distribution depot in the UK is now fullyoperational and working well. During the period we disposed of our Scandinavian food distributor and ourcommodity food polyols business in the US for total proceeds of £60m. Therewill be a phased closure of the polyols manufacturing plant in Delaware butprovision for the expected loss associated with the disposal and closure hasbeen made in these accounts and is included in the net loss of £39m on the saleof businesses. Cash flow in the period was strong. Net borrowings at the end of the periodamounted to £350m as against £162m a year ago. The cash consideration forIllovo in September 2006 plus its debt totalled £382m, and so the other cashflows over the past year have been positive. The group's financial capacityremains very substantial. Board Changes In my last annual statement I reported in full on the appointment as directorson 2 November 2006 of Lord Jay of Ewelme and Mr Javier Ferran. On 28 Februaryit was announced that Jeff Harris will retire from the board at the conclusionof the board meeting on 18 April. Jeff's contribution both as a director and aschairman of the Audit committee has been outstanding for which we thank him. Peter Smith was appointed to the board on 28 February and will succeed JeffHarris as chairman of the Audit committee. Mr Smith is also currently chairmanof Savills plc and a non-executive director of Templeton Emerging MarketsInvestment Trust plc and NM Rothschild & Sons Limited. I am confident he willmake a valuable contribution to ABF. Dividends The board has decided that the interim dividend will be 6.5p, an increase of 4%on last year. This dividend will be paid on 2 July 2007 to shareholdersregistered at the close of business on 1 June 2007. Outlook The successful outcome of the European Commission's refinement of the terms ofthe sugar regime restructuring, due over the coming months, will be of greatimportance. Following the extensive Primark store opening programme we will nowtake the opportunity to optimise the performance of these new stores. Ourbusinesses are well placed to face the competitive conditions in the markets inwhich they operate. Despite continuing adverse currency translation impacts, weexpect progress in adjusted operating profit and in adjusted earnings in theremainder of the year. Martin Adamson Chairman 24 April 2007 OPERATING REVIEW Group revenue increased by 12% to £3,220m and adjusted operating profit by 7% to£272m. These advances are the result of the substantial investments made by the groupin capital and acquisitions last year. Profit from our sugar businessesincreased by 64% following the acquisition of a 51% interest in Illovo SugarLimited in September 2006, and the benefit of capacity increases and efficiencyimprovements in existing sugar factories. Primark's profit increased by 28%reflecting the current extensive store opening programme. The increase in adjusted operating profit has been achieved despite an estimatedtotal impact of £28m on the profits of Primary Food and Grocery arising fromchanges to the EU sugar regime. Although a disappointing performance by Allied Bakeries led to a reduction ingrocery profit, a major relaunch of Kingsmill has now been implemented.Ingredients made very good progress but the profit increase was held back by theimpact of currency translation. PRIMARY FOOD & AGRICULTURE Primary Food 2007 2006Revenue £m 579 282Operating profit £m 87 53 Agriculture 2007 2006Revenue £m 322 296Operating profit £m 7 8 In Primary Food, the acquisition of Illovo led to a doubling of revenue and a64% increase in profit. Profit in the UK was in line with the same period last year. The businessbenefited from a very efficient campaign, additional quota acquired, lowerenergy costs and earlier exports of sugar. These factors were offset by thefurther impact on profit of sugar regime reform amounting to £24m arising fromthe temporary quota cut and the cost of the restructuring levy which exceededreduced beet costs, although sugar prices were more stable. In Poland profitwas ahead of last year benefiting from an excellent campaign, factoryrationalisation and improved retail prices. Operations in the UK and Poland once again achieved improvements in productionperformance and the Glinojeck factory performed ahead of expectations followingcompletion of its major expansion programme. The sugar crop was 1.16m tonnes inthe UK and 0.21m tonnes in Poland. China performed very well with a record crop of over 0.5m tonnes. This crop,combined with production efficiencies, exceptionally high sugar yields andconsistent prices, drove an increase in profit. Such is the competition fromalternative, higher value crops in China that farmers, in conjunction with localand provincial governments, required higher prices for cane in order to justifytheir continued farming of this crop. These higher prices partly offset theprofit improvement in this business. Illovo's contribution to this result was ahead of our expectations at the timeof acquisition. Illovo's earnings for the full year to 31 March 2007 were over40% ahead of those achieved in its prior year. This is despite production inSouth Africa and Tanzania being significantly lower than planned due to thecombination of extended drought and then unusually high rainfall at the end ofthe growing season. Malawi and Zambia both delivered strong manufacturingperformances. The recent announcement of the planned £100m investment to doublesugar production in Zambia over the next two years is an example of the excitinggrowth opportunities available to this business. Stronger volumes and margins benefited our UK agricultural business andFrontier, the arable joint venture with Cargill, delivered a strong profitincrease from revenue growth and cost synergies. In China, the inability topass on the impact of high raw material costs led to a reduction in the profitfor animal feeds. GROCERY 2007 2006Revenue £m 1,226 1,257Operating profit £m 64 84 Grocery revenue and profit were lower than last year. The reduction in profitwas primarily a result of a poor performance by Allied Bakeries, the currencytranslation impact of the weaker dollar on the results of our US businesses andlower sugar prices in Silver Spoon. ACH continued to perform well in both the US and Mexico. Sales of Mazolaincreased in a US consumer oil category which has stabilised following thedecline last year. In January we announced the rationalisation of our commodityoils business. Oil processing at Jacksonville will cease and we will exit thesupply of certain low margin products. A charge of £2m relating to thisrationalisation was made in the first half with a further £3m to be taken in thesecond half. Capullo in Mexico showed further strong sales growth. In spices,the development of the premium brand, Spice Islands, continued and wascomplemented by the introduction of two new product ranges. The competitive bread market in the UK delayed the recovery of increased wheatprices last Autumn, volumes were lower than expected and profitability sufferedas a result. We have now implemented a major relaunch of the Kingsmill brandwith improved products and new packaging. Recipes have been improved to excludeartificial preservatives and loaves are now larger and have a softer texture.Bread prices have been increased and strong marketing support, includingtelevision advertising, will continue into the second half. International hot beverages continued to deliver good sales growth with marketshare gains in its main strategic markets. Progress in the Twinings brand wasdriven by a strong performance in the UK with further growth in sales ofEveryday, green tea, speciality black teas and infusions. Twinings sales werealso strong in Australia, the US and other international export markets,particularly Italy and Russia. Thailand continued to be the major driver ofOvaltine brand growth which benefited from new products and strong marketingsupport. In October we sold our Scandinavian food distributor and the profit onthis disposal is included in these results. Silver Spoon's profit was impacted by the reduction in selling prices sustainedlast year. Billington's grew strongly and significant new business forFairtrade sugar, which is packed in the UK and supplied by our African business,Illovo, was secured. The integration of Westmill's various ethnic foodbusinesses was completed successfully and good progress is being made with theconsolidation of its logistics and warehousing at a site adjacent to the mainoffice in North London. At Ryvita further investment was made in marketing andin its supply chain. Growth in Ryvita Minis, Goodness bars and the premiumcrispbread range partially offset a decline in standard crispbread. In Australia, bread prices were increased to recover significantly higher wheatcosts following the drought in Australia and higher world prices. Bakeryvolumes grew and major improvements were made in the operation of the Sydneybakery. Our new bakery in Wuhan, China, started trading in January supplyingrolls to the rapidly expanding foodservice market. This bakery will provide aplatform for the development of local retail sales and market opportunitieselsewhere in China. INGREDIENTS 2007 2006Revenue £m 345 322Operating profit £m 33 32 Revenue was ahead by 7% to £345m and profit by 3% to £33m. Both revenue andprofit were adversely affected by currency translation and the underlyingperformance was very good with a profit increase of 9%. The yeast business demonstrated good progress with price increases in manymarkets to recover higher molasses and energy costs. This drove a particularlystrong recovery in North America. In China, production capacity was expanded tokeep pace with the very strong growth in domestic demand. Resources in ourbakery ingredients business were strengthened as it continued to develop well,albeit from a low base. Good organic growth was achieved in yeast and particularly in bakery ingredientsin developing countries where it was driven by the use of our bread ingredienttechnology and the launch of a range of new products to the craft bakerysectors. Enzymes and proteins have seen good sales growth in the period, particularly inthe US and Asia. Enzyme sales were strong, especially to the textile and animalfeed markets, but profit was affected by higher raw material costs. Investmentin capacity expansion is being made at the Finnish enzyme factory to meetincreasing demand. Profit increased in proteins with higher volumes andimproved pricing. Capacity expansion is underway at both of the yeast extractplants and for milk protein isolates. A new protein specialities group,comprising specialist sales and product development expertise, has been createdto build our capability in this high value-added sector. We completed the sale of our commodity food polyols business in the US inFebruary and there will be a phased closure of the old manufacturing plant inDelaware. The loss on disposal of this business, including the write-off ofgoodwill and the costs of the plant closure, is provided for in these accounts.The business supplying antacids, excipients including polyols, and drug deliverysystems to pharmaceutical companies has been retained. RETAIL 2007 2006PrimarkRevenue £m 721 530Operating profit £m 91 71 LittlewoodsRevenue £m - 141Operating profit £m - 16 Primark's results were substantially ahead of last year with a revenue increaseof 36% to £721m and profit ahead 28% to £91m. The increases resulted primarilyfrom the additional retail selling space from an extensive store openingprogramme. As expected, the operating profit margin fell from 13.4% to 12.6%primarily as a result of the higher depreciation charge associated with therecent capital investment. Like-for-like sales were level with last year in the first half despite thepreviously highlighted impact on existing stores of adding 1.5 million sq ft ofnew space. Our estimate for like-for-like sales growth in stores unaffected bynew openings is 6%. Trading in the new stores has been encouraging. Delivering the store opening programme for the first half, on time and tobudget, was a major achievement for the management team. 23 new stores wereopened and five smaller stores were closed to give 161 stores with 4.4 millionsq ft of retail selling space at the half year. All but four of the 41 formerLittlewoods stores were trading by the half year. New store openings:Aberdeen Dublin - Swords LincolnBlackpool Dundee Murcia - SpainBurton-on-Trent Dunfermline OldhamCamberley Eastbourne PlymouthCheltenham Glasgow - Parkhead PooleChesterfield Greenock SwindonCoventry Hanley WolverhamptonDoncaster Inverness Stores closed:Aberdeen (resite) Doncaster (resite) Swindon (resite)Burton-on-Trent (resite) Dundee (resite) Our new store openings included our second store in Spain and we are veryencouraged by early trading in both Spanish stores. We will open a further eight stores in the second half taking the total retailselling space to 4.7 million sq ft by the financial year end. Six of thesestores were acquired outside the Littlewoods transaction which demonstrates thatPrimark's heightened profile makes attractive high street locations easier tosecure, as evidenced by the highly successful opening of the 70,000 sq ft storeon London's Oxford Street on 5 April. George Weston Chief Executive CONSOLIDATED INCOME STATEMENT 24 weeks 24 weeks 52 weeks ended ended ended 3 March 4 March 16 September 2007 2006 2006 £m £m £m Note Revenue 1 3,220 2,887 5,996Operating costs before exceptional items (2,994) (2,651) (5,486)Exceptional items - - (97) 226 236 413Share of profit after tax from joint ventures 3 3 10and associatesProfits less losses on sale of property, plant 12 - 10& equipmentOperating profit 241 239 433 Adjusted operating profit 1 272 255 561Profits less losses on sale of property, plant 12 - 10& equipmentAmortisation of intangibles (43) (16) (41)Exceptional items - - (97) Profits less losses on sale of businesses (39) (5) (4)Provision for loss on termination of an - - (8)operationProfit before interest 202 234 421Financial income 71 73 149Financial expenses (75) (73) (151)Profit before taxation 198 234 419 Adjusted profit before taxation 268 255 559Profits less losses on sale of property, plant 12 - 10& equipmentAmortisation of intangibles (43) (16) (41)Exceptional items - - (97)Profits less losses on sale of businesses (39) (5) (4)Provision for loss on termination of an - - (8)operationTaxation - UK (25) (35) (60) - Overseas (18) (31) (51) 2 (43) (66) (111)Profit for the period 155 168 308 Attributable to:Equity shareholders 152 166 301Minority interests 3 2 7Profit for the period 155 168 308 Basic and diluted earnings per ordinary share 3 19.2 21.0 38.1(pence) CONSOLIDATED BALANCE SHEET At At At 3 March 4 March 16 September 2007 2006 2006 Note £m £m £mNon-current assetsIntangible assets 1,454 1,239 1,542Property, plant & equipment 2,548 2,203 2,479Biological assets 46 - 46Investments in joint ventures 39 39 54Investments in associates 18 18 15Employee benefits assets 193 96 169Deferred tax assets 87 78 82Other receivables 5 - 5Total non-current assets 4,390 3,673 4,392 Current assetsAssets classified as 3 77 53held for saleInventories 895 854 681Biological assets 52 - 51Trade and other receivables 797 758 913Other investments 20 201 53Cash and cash equivalents 364 354 349Total current assets 2,131 2,244 2,100TOTAL ASSETS 6,521 5,917 6,492 Current liabilitiesLiabilities classified as held for - - (11)saleInterest-bearing loans and (80) (166) (531)overdraftsTrade and other payables (1,016) (797) (997)Income tax (71) (99) (85)Provisions (42) (11) (49)Total current liabilities (1,209) (1,073) (1,673) Non-current liabilitiesInterest-bearing loans (654) (551) (176)Provisions (26) (38) (21)Deferred tax liabilities (407) (251) (398)Employee benefits (41) (21) (42)liabilitiesTotal non-current liabilities (1,128) (861) (637)TOTAL LIABILITIES (2,337) (1,934) (2,310)NET ASSETS 4,184 3,983 4,182 EquityIssued capital 47 47 47Other reserves 173 173 173Translation reserve (58) 78 (29)Hedging reserve (5) 1 (6)Retained earnings 3,819 3,656 3,773 3,976 3,955 3,958Minority interests 208 28 224TOTAL EQUITY 6 4,184 3,983 4,182 CONSOLIDATED CASH FLOW STATEMENT 24 weeks 24 weeks 52 weeks ended ended ended 3 March 4 March 16 September 2007 2006 2006 £m £m £mCash flow from operating activitiesProfit before taxation 198 234 419 Add back non-operating itemsProfits less losses on sale of (12) - (10)property, plant & equipmentProfits less losses on sale of 39 5 4businessesProvision for loss on termination of - - 8an operationExceptional items - - 97Financial income (71) (73) (149)Financial expenses 75 73 151 Adjustments forShare of profit from joint ventures (3) (3) (10)and associatesAmortisation 43 16 41Depreciation 109 95 177Pension cost less contributions (14) 3 (1)Increase in inventories (224) (279) (29)Decrease/(increase) in receivables 108 (58) (178)Increase in payables 54 14 78Decrease in provisions (18) (45) (62)Cash generated from operations 284 (18) 536Income taxes paid (48) (69) (117)Net cash from operating activities 236 (87) 419 Cash flows from investing activitiesDividends received from joint - - 1venturesDividends received from associates - - 3Purchase of property, plant & (227) (156) (432)equipmentPurchase of intangibles (7) - (13)Sale of property, plant & equipment 22 83 181Purchase of subsidiary undertakings (1) (100) (496)Sale of subsidiary undertakings 60 - -Interest received 7 22 36Net cash from investing activities (146) (151) (720) Cash flows from financing activitiesDividends paid to minorities (9) (4) (6)Dividends paid to equity shareholders (99) (95) (144)Interest paid (24) (25) (47)Decrease in other current asset investments 32 70 216FinancingDecrease in short-term loans (360) (372) (46)Increase/(decrease) in long-term loans 479 - (365)(Increase)/decrease in own shares held (9) (1) 1Net cash from financing activities 10 (427) (391) Net increase/(decrease) in cash and 100 (665) (692)cash equivalentsCash and cash equivalents at the 198 894 894beginning of the periodEffect of movements in foreign exchange (1) 3 (4)Cash and cash equivalents at the end 297 232 198of the period CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE 24 weeks 24 weeks 52 weeks ended ended ended 3 March 4 March 16 September 2007 2006 2006 £m £m £m Actuarial gains on defined benefit schemes - - 43Deferred tax associated with defined - - (12)benefit schemesEffect of movements in foreign exchange (40) 49 (88)Tax on effect of movements in foreign exchange - (2) -Net gain/(loss) on hedge of net 1 (10) 14investment in foreign subsidiariesMovement in cash flow hedging position 1 (8) (13)Net (loss)/gain recognised directly in equity (38) 29 (56)Profit for the period 155 168 308Total recognised income and expense 117 197 252for the periodAdjustments relating to the adoption - 9 7of IAS 32 and IAS 39 on 18 September 2005 (Equityshareholders) 117 206 259 Attributable to:Equity shareholders 124 194 246Minority interests (7) 3 6 117 197 252 NOTES TO THE INTERIM REPORT 1. Segmental analysis Revenue Adjusted operating profit 24 weeks 24 weeks 52 weeks 24 weeks 24 weeks 52 weeks ended ended ended ended ended ended 3 March 4 March 16 September 3 March 4 March 16 September 2007 2006 2006 2007 2006 2006Business segments £m £m £m £m £m £m Grocery 1,226 1,257 2,578 64 84 182Primary Food 579 282 671 87 53 115Agriculture 322 296 623 7 8 15Ingredients 345 322 683 33 32 79Retail 721 671 1,309 91 87 185Central - - - (13) (11) (22) 3,193 2,828 5,864 269 253 554Businesses disposed:Grocery 7 35 78 - 1 3Agriculture - 3 8 - - 1Ingredients 20 21 46 3 1 3 3,220 2,887 5,996 272 255 561 Geographical segments United Kingdom 1,503 1,484 2,995 114 133 280Europe, Middle East & 614 277 668 62 35 70AfricaThe Americas 544 576 1,164 58 58 121Asia Pacific 532 491 1,037 35 27 83 3,193 2,828 5,864 269 253 554Businesses disposed:United Kingdom - 3 8 - - 1Europe, Middle East & 7 35 78 - 1 3AfricaThe Americas 20 21 46 3 1 3 3,220 2,887 5,996 272 255 561 1. Segmental analysis - 24 weeks ended 3 March 2007 Business segments Primary Elimina- Grocery Food Agriculture Ingredients Retail Central tions Total £m £m £m £m £m £m £m £mRevenue from continuing 1,231 624 323 368 721 - (74) 3,193operationsBusinesses disposed 7 - - 20 - - - 27Internal revenue (5) (45) (1) (23) - - 74 -Revenue from external 1,233 579 322 365 721 - - 3,220customers Adjusted operating profit 64 87 7 33 91 (13) - 269from continuing operationsBusinesses disposed - - - 3 - - - 3Adjusted operating profit 64 87 7 36 91 (13) - 272Amortisation of (6) (24) - (13) - - - (43)intangiblesProfits less losses on 4 - - - 8 - - 12sale of property, plant &equipmentProfits less losses on 6 - - (39) (6) - - (39)sale of businessesProfit before financial 68 63 7 (16) 93 (13) - 202income, financial expensesand taxationFinancial income 71 - 71Financial expenses (75) - (75)Taxation (43) - (43)Profit for the period 68 63 7 (16) 93 (60) - 155 Segment assets (excl. 1,804 1,497 184 949 1,352 14 - 5,800investments in associatesand joint ventures)Investments in associates 9 7 28 13 - - - 57and joint venturesSegment assets 1,813 1,504 212 962 1,352 14 - 5,857Cash and cash equivalents 364 - 364Employee benefits assets 193 - 193Deferred tax assets 87 - 87Other investments 20 - 20Segment liabilities (339) (339) (54) (130) (190) (38) - (1,090)Interest-bearing loans and (734) - (734)overdraftsIncome tax (71) - (71)Deferred tax liabilities (407) - (407)Employee benefits (35) - (35)liabilitiesNet assets 1,474 1,165 158 832 1,162 (607) - 4,184 Capital expenditure 38 48 3 18 94 - - 201Depreciation 36 30 3 13 27 - - 109Amortisation of 6 24 - 13 - - - 43intangibles Geographical segments Europe United Middle East The Asia Elimina- Kingdom & Africa Americas Pacific tions Total £m £m £m £m £m £mRevenue from external customers 1,503 621 564 532 - 3,220Segment assets 2,705 1,398 936 818 - 5,857Capital expenditure 125 39 19 18 - 201Depreciation 66 15 12 16 - 109Amortisation of intangibles 2 27 12 2 - 43 1. Segmental analysis - 24 weeks ended 4 March 2006 Business segments Primary Elimina- Grocery Food Agriculture Ingredients Retail Central tions Total £m £m £m £m £m £m £m £m Revenue from continuing 1,263 330 296 341 671 - (73) 2,828operationsBusinesses disposed 35 - 3 21 - - - 59Internal revenue (6) (48) - (19) - - 73 -Revenue from external 1,292 282 299 343 671 - - 2,887customers Adjusted operating profit 84 53 8 32 87 (11) - 253from continuing operationsBusinesses disposed 1 - - 1 - - - 2Adjusted operating profit 85 53 8 33 87 (11) - 255Amortisation of (5) - - (11) - - - (16)intangiblesProfits less losses on - - - (5) - - - (5)sale of businessesProfit before financial 80 53 8 17 87 (11) - 234income, financial expensesand taxationFinancial income 73 - 73Financial expenses (73) - (73)Taxation (66) - (66)Profit for the period 80 53 8 17 87 (77) - 168 Segment assets (excl. 1,917 926 183 1,009 809 287 - 5,131investments in associatesand joint ventures)Investments in associates 6 6 25 20 - - - 57and joint venturesSegment assets 1,923 932 208 1,029 809 287 - 5,188Cash and cash equivalents 354 - 354Employee benefits assets 96 - 96Deferred tax assets 78 - 78Other investments 201 - 201Segment liabilities (337) (159) (56) (113) (168) (13) - (846)Interest-bearing loans and (717) - (717)overdraftsIncome tax (99) - (99)Deferred tax liabilities (251) - (251)Employee benefits (21) - (21)liabilitiesNet assets 1,586 773 152 916 641 (85) - 3,983 Capital expenditure 38 22 4 18 80 - - 162Depreciation 37 26 3 13 16 - - 95Amortisation of 4 - - 12 - - - 16intangibles Geographical segments Europe United Middle East The Asia Elimina- Kingdom & Africa Americas Pacific tions Total £m £m £m £m £m £mRevenue from external customers 1,487 312 597 491 - 2,887Segment assets 2,560 767 1,107 754 - 5,188Capital expenditure 100 18 11 33 - 162Depreciation 58 7 14 16 - 95Amortisation of intangibles 2 3 9 2 - 16 1. Segmental analysis - 52 weeks ended 16 September 2006 Business segments Primary Elimina- Grocery Food Agriculture Ingredients Retail Central tions Total £m £m £m £m £m £m £m £mRevenue from 2,597 766 623 729 1,309 - (160) 5,864continuing operationsBusinesses disposed 78 - 8 46 - - - 132Internal revenue (19) (95) - (46) - - 160 -Revenue from external 2,656 671 631 729 1,309 - - 5,996customers Adjusted operating 182 115 15 79 185 (22) - 554profit from continuingoperationsBusinesses disposed 3 - 1 3 - - - 7Adjusted operating 185 115 16 82 185 (22) - 561profitExceptional items - (97) - - - - - (97)Amortisation of (12) - - (29) - - - (41)intangiblesProfits less losses on 4 4 (1) - 2 1 - 10sale of property,plant & equipmentProfits less losses on 3 (2) - (6) - 1 - (4)sale of businessesProvision for loss on - - - - (8) - - (8)termination of anoperationProfit before 180 20 15 47 179 (20) - 421financial income,financial expenses andtaxationFinancial income 149 - 149Financial expenses (151) - (151)Taxation (111) - (111)Profit for the period 180 20 15 47 179 (133) - 308 Segment assets (excl 1,782 1,497 158 1,010 1,302 14 - 5,763investments inassociates and jointventures)Investments in 7 6 27 29 - - - 69associates and jointventuresSegment assets 1,789 1,503 185 1,039 1,302 14 - 5,832Cash and cash 356 - 356equivalentsEmployee benefits 169 - 169assetsDeferred tax assets 82 - 82Other investments 53 - 53Segment liabilities (303) (338) (48) (113) (214) (60) - (1,076)Interest-bearing loans (707) - (707)and overdraftsIncome tax (86) - (86)Deferred tax (398) - (398)liabilitiesEmployee benefits (43) - (43)liabilitiesNet assets 1,486 1,165 137 926 1,088 (620) - 4,182 Capital expenditure 84 55 6 48 303 - - 496Depreciation 71 36 7 30 33 - - 177Amortisation of 12 - - 29 - - - 41intangibles Geographical segments Europe United Middle East The Asia Elimina- Kingdom &Africa Americas Pacific tions Total £m £m £m £m £m £mRevenue from external customers 3,003 746 1,210 1,037 - 5,996Segment assets 2,519 1,533 1,023 757 - 5,832Capital expenditure 357 52 30 57 - 496Depreciation 101 18 26 32 - 177Amortisation of intangibles 4 7 18 12 - 41 24 weeks 24 weeks 52 weeks ended ended ended 3 March 4 March 16 September 2007 2006 2006 £m £m £m2. Income tax expenseCurrent tax expenseUK - corporation tax at 30% 15 28 37Overseas - corporation tax 20 26 46 35 54 83Deferred tax expenseUK deferred tax 10 7 21Overseas deferred tax (2) 5 8Over-provided in prior years - - (1)Total income tax expense in income 43 66 111statement Reconciliation of effective tax rateProfit before taxation 198 234 419Less share of profit from joint ventures (3) (3) (10)and associatesProfit before taxation excluding share of 195 231 409profit from joint ventures and associatesNominal tax charge at UK corporation tax 59 69 123rate (30%)Lower tax rates on overseas earnings (17) (10) (23)Expenses not deductible for tax purposes 5 7 12Utilisation of losses (4) - -Adjustments in respect of prior periods - - (1) 43 66 111 3. Earnings per ordinary share Pence Pence Pence Adjusted earnings per share 23.3 23.3 50.9Earnings per share on:Sale of property, plant & equipment 1.5 - 1.3Sale of businesses (4.9) (0.7) (0.5)Provision for loss on termination of - - (1.0)operationExceptional items - - (12.3)Tax effect on above 2.0 - 3.3Amortisation of intangibles (5.4) (2.0) (5.2)Tax credit on intangibles amortisation 1.6 0.4 1.6Minority share of net amortisation charge 1.1 - -Earnings per ordinary share 19.2 21.0 38.1 4. Dividends Pence Pence Pence Per share2005 final - 12.00 12.002006 interim - - 6.252006 final 12.50 - - 12.50 12.00 18.25 £m £m £mTotal2005 final - 95 952006 interim - - 492006 final 99 - - 99 95 144 The 2006 final dividend of 12.5p per share was approved on 9 December 2006 and totalled £99m whenpaid on 12 January 2007. The 2007 interim dividend of 6.5p per share will be paid on 2 July 2007to shareholders on the register on 1 June 2007. At Cash flow Exchange At adjustments 3 March 16 September 2007 2006 £m £m £m £m 5. Analysis of net debtCash at bank and in hand, 198 100 (1) 297cash equivalents andoverdraftsShort-term borrowings (373) 360 - (13)Investments 53 (32) (1) 20Loans over one year (176) (479) 1 (654) (298) (51) (1) (350) Cash and cash equivalents comprise cash balances, call deposits and investmentswith original maturities of three months or less. Bank overdrafts that arerepayable on demand and form an integral part of the group's cash management areincluded as a component of cash and cash equivalents for the purpose of the cashflow statement. 24 weeks 24 weeks 52 weeks ended ended ended 3 March 4 March 16 September 2007 2006 2006 £m £m £m6. Summary of movements in equityOpening equity (excluding IAS 32 and IAS 39) 4,182 3,877 3,877Adjustments relating to adoption of IAS 32 and IAS 39 on - 9 718 September 2005Opening equity (restated) 4,182 3,886 3,884Profit for the period 155 168 308Other recognised income and expense for the period (38) 29 (56)Total recognised income and expense for the period 117 197 252Dividends paid to shareholders (99) (95) (144)Net (increase)/decrease in own shares held (7) (1) 1Minority interests acquired - - 195Dividends paid to minorities (9) (4) (6)Closing equity 4,184 3,983 4,182 Attributable to:Equity shareholders 3,976 3,955 3,958Minority interests 208 28 224 4,184 3,983 4,182 7. Basis of preparation These interim financial statements have been prepared in accordance withaccounting policies set out in the group's statutory accounts for the yearending 16 September 2006. The interim results are unaudited and were approved by the board of directors on24 April 2007 but do not constitute statutory accounts as defined in Section 290of the Companies Act 1985. The comparative figures for the financial year ended16 September 2006 have been abridged from the group's 2006 financial statementsand are not the company's statutory accounts for that financial period. Thoseaccounts have been reported on by the company's auditors and delivered to theRegistrar of Companies. The report of the auditors was unqualified and did notcontain statements under Section 237(2) or (3) of the Companies Act 1985. END This information is provided by RNS The company news service from the London Stock Exchange