Kerry Regulatory News (KYGA)

4 Sep 2007 07:01

Kerry Group PLC04 September 2007 Press Announcement Tuesday 4 September 2007 Interim Report Half Year Ended 30 June 2007 Kerry, the global ingredients, flavours, and consumer foods group, reportsinterim results for the half year ended 30 June 2007 and appointment of ChiefExecutive Designate. Financial Highlights • Sales revenue of €2,332m• Like-for-like revenue growth of 5.6%• Trading margin increased from 7.2% to 7.4%• Trading profit growth of 6.2% to €172m• Adjusted earnings per share* up 7.1% to 58.8 cent• Interim dividend per share up 10.9% to 6.1 cent *before intangible amortisation and non-trading items Commenting on the results Kerry Group Chief Executive Hugh Friel said; " Duringthe first half of 2007, Kerry delivered solid organic growth across all Groupbusinesses and territories. Group food ingredients and consumer foodsbusinesses generated 5.6% organic revenue growth and 20 basis points marginimprovement. We have successfully managed continued input cost inflationthrough cost recovery and business efficiency programmes and expect a goodoutturn for the full year." For further information please contact: Frank HayesDirector of Corporate Affairs Tel no + 353 66 7182304 Fax no +353 66 7182972Kerry Web Site www.kerrygroup.com/ Chairman's Statement For the half year ended 30 June 2007 The Group performed strongly in the first half of 2007. Good organic growth andmargin improvement was achieved in Kerry's food ingredients and consumer foodsbusinesses. Building on the progress made in the second half of 2006, the Groupcontinued to successfully manage the inflationary input cost environment throughcost recovery and business efficiency programmes. Having divested non-core lowmargin activities prior to year-end 2006, all Group operating divisions andbusiness regions achieved good profitable growth in the period under review.Successful technology development and new product roll outs contributedsignificantly to the achievement of strong top-line growth. Results In the first six months of 2007 total Group revenue amounted to €2,332m. Thisreflects like-for-like growth of 5.6% relative to the first half of 2006 whenaccount is taken of acquisitions, business disposals and exchange rate effectsdue mainly to the weaker US dollar. Group trading profit increased by 6.2% to €172.4m despite significant input costincreases, adverse currency rates and the impact of business disposals. Tradingmargins in the period advanced by 20 basis points to 7.4%. Group profit aftertaxation, finance charges and non trading items increased by 5% to €105.8m. Adjusted earnings per share increased by 7.1% to 58.8 cent. The interimdividend of 6.1 cent per share reflects an increase of 10.9% over the 2006interim dividend. Business Reviews Food Ingredients The Group's food ingredients, flavours and bio-science businesses all performedrobustly in the first six months of 2007. Total sales revenue increased by 4.1%to €1,611m reflecting like-for-like growth of 5.9% when adjusted for currencytranslation, acquisitions and business disposals impact. Trading profits iningredients markets grew by 5.8% to €130m. The trading margin improved by 10basis points to 8.1%. Against a background of energy driven input costinflation, this performance was achieved through cost recovery programmes andthe on-going successful development of Kerry's 'go-to-market' strategy. Goodresults have been achieved through this programme dedicated to the provision ofindustry leading customer service through innovative product solutions andapplications developed across the Group's broad based science and technologyplatforms. In American ingredients markets sales revenue in the period reported at €644mrepresents 6% like-for-like growth. Good progress was achieved in all marketsegments of the U.S. market. The speciality dairy and lipids sector hasrecovered from the challenging sectoral market conditions of 2005/2006.Building on Kerry's leading cheese and dairy flavour technologies, good volumegrowth was achieved in frozen complete sauces. Trans-fat replacement alsoprovided good growth opportunities. The demand for enhanced nutritionalofferings continues to drive development in the ready-to-eat cereal andnutrition sector. Kerry achieved strong volume growth in the granola bar sector which isexhibiting double digit growth year-on-year. While progress continued throughsweet inclusions in the bakery market, volumes were slightly lower in theice-cream sector due to the impact of dairy raw material prices on sectoralgrowth. Kerry's savoury technologies performed well in the U.S. and Canadianmarkets in particular through meat seasonings in the red meat market and coatingsystems for poultry and seafood applications. Kerry continues to achieve excellent progress in the foodservice sector acrossAmerican markets through sweet and savoury applications. Beverage syrups andsweet inclusions again recorded good growth through coffee house and restaurantchains and successfully extended market development into Latin American andCentral American markets. New product lines were successfully launched duringthe period in the Jet Smoothie, Jet Blended Beverage Base and Oregon Chaiproduct ranges. Strong volume growth was achieved through meat seasonings and savouryapplication in South American markets. Kerry Bio-Science again grew satisfactorily in American markets in the firsthalf of 2007 with strong growth in culinary, cell nutrition and excipientmarkets, and also continued development of dairy, meat and beverage ingredientapplications. The increased trend towards all-natural labelled products andingredients continues to provide good growth opportunities for Kerry Bio-Sciencetechnologies. In addition the progressive development of key customer accountsin Latin American markets is leading to strong double digit growth in thesub-region. Despite unprecedented raw material cost inflation, SheffieldTM PharmaExcipients achieved strong first half growth through innovative anhydrousproduct launches and the commencement of a global sales and marketing agreement.In the pharma cell nutrition segment growth was in line with overall sectoralgrowth rates. Innovation through novel processes for protein hydrolysis hasproduced good results and patents have been submitted. Mastertaste flavours, benefiting from growing demand for salt reduction andcalorie reduction, recorded strong development through its taste modulationtechnologies in savoury and beverage applications in American markets.Manheimer Fragrances achieved excellent results in the first half of 2007, withsignificant new product launches through new and existing accounts in the homeenvironmental and personal care sectors. In European markets, sales revenue increased by 4% to €656m, reflectinglike-for-like revenue growth of 3.6%. While cost recovery in European marketslagged other regions, nevertheless significant progress was achieved and thefocus on cost saving programmes continues. Culinary applications again providedgood growth for Kerry's sauces, purees, bouillons and broths. In the UK marketsales increases in the chilled savoury sector proved satisfactory but thedifficulties in the frozen sector continued to impact volume and margin growth.Supply chain efficiencies assisted business development in Germany and Italy butmarket conditions in the French savoury sector proved challenging. Satisfactorymarket development was achieved in Eastern European markets. The foodservicesector throughout European markets continued to provide good growthopportunities for Kerry's food and beverage ingredients. In line with global dairy market developments, conditions in European markets inthe first half of 2007 improved significantly relative to the difficult marketsituation in 2006. The increasing demand for dairy products and dairyingredients globally coupled with a reduction/elimination of inventories has ledto much improved returns to milk producers and a recovery in dairy processormargins. Kerry Dairy Ingredients has also continued to benefit from on-goingdevelopment of milk proteins in the nutritional and functional food and beveragesectors. Kerry recorded a good first half performance in the European fruit and sweetingredients sector. Product innovation and supply chain efficienciescontributed to satisfactory improvement in fruit applications into the yoghurtand fruit smoothie sectors. Fruit and sweet ingredients also benefited fromincreased demand in Europe for enhanced nutritional offerings in the breakfastcereal and confectionery sectors. In Europe, Kerry Bio-Science achieved good growth in beverage, bakery, dairy andconfectionery markets. Additional capacity arising from the major investmentprogramme at the Menstrie yeast production facility in Scotland facilitated goodgrowth in the European beverage sector and in the U.S. cell nutrition sector.Excellent progress was achieved in the European bakery market as functionalsolutions offered through the Kerry Bio-Science portfolio, including enzymes,fermented ingredients and emulsifiers, are increasingly adopted in preference tocompetitor offerings. Functional ingredients also outperformed market growthrates in the confectionery sector as manufacturers strive to enhance producttexture and consumer appeal. Similarly in the dairy sector, due to theincreased focus on health and wellness, the Kerry Bio-Science range of SherexTM,MyvatexTM and DurafreshTM products achieved excellent results as manufacturersfocus on production of added value products with enhanced taste, texture, shelflife and convenience attributes. Mastertaste flavours made solid progress in Europe. Strong growth was achievedin UK chilled savoury markets in particular through core supplier accounts inthe culinary sector. Strong gains were also achieved through major brandedproduct launches in the Italian confectionery market. Mastertaste naturalproducts division also continued to successfully advance its market positioningin the European beverage sector. In Asia Pacific markets Group ingredients businesses continue to achieveexcellent results in food and beverage applications. Sales revenue increased by14.3% (like-for-like 14.6%) to €199m. Kerry's branded flavoured beverageofferings achieved steady growth throughout the region's fast growing consumerand foodservice markets. Progress in development of speciality nutritionalproducts for 'growing diets', in particular for the Chinese market, againachieved double digit market growth rates. The rate of growth in regionalsavoury markets slowed - most notably in Australia. Kerry Bio-Science also grew steadily in Asia Pacific markets, particularly inJapan, China and India, through its range of beverage, meat, dairy, bakery andconfectionery technologies. The Esterol emulsifier facility in Malaysiacontinues to make excellent progress despite increased input cost pressures.Considerable growth was also achieved through SheffieldTM Pharma Excipients dueto the expansion of regional pharmaceutical manufacturing coupled withmanufacturing shifts by major branded pharmaceutical companies into the region. Kerry's Pinnacle bakery business unit achieved strong growth in Australiaboosted by the successful introduction of speciality lifestyle bakery offeringsfor in-store, franchise bakery and foodservice outlets. Consumer Foods Kerry's consumer foods businesses performed strongly in a competitive UK andIrish market environment in the first half of 2007. Divisional revenueincreased to €882m which reflects like-for-like growth of 4.5% relative to thesame period of 2006. Trading profits increased by 6.6% to €56m assisted by thesuccess of new product launches and investment in the division's brands -leading to a 30 basis points improvement in the operating margin to 6.3%.Significant progress was also made in maximising production and supply chainefficiencies in the face of a challenging input cost environment. All Kerry Foods' brands continued to achieve satisfactory development and leadcategory growth. In Ireland Denny and Ballyfree again achieved excellentprogress in premium sliced meats categories benefiting from successful newproduct development and marketing support. Denny sausage and bacon productranges also performed satisfactorily. Freshways maintained double digit growthin the period through its range of premium convenience 'food to go' offerings.The Freshways sandwich range achieved strong market development at retail leveland a range of Heat n'Eat baguettes and ciabattas was successfully launched inconvenience and foodservice channels. Dawn health juice offerings and smoothiesachieved wider market penetration and Kerry Spring recorded solid growth inflavoured and non-flavoured segments of the Irish market. Kerry Foods continued to outperform market growth rates in the UK and Irishcheese and spreads business through its branded and private label offerings.Charleville cheese and the fast growing Low Low cheese offering continued togrow market share in the Republic of Ireland market whilst rebranding of theColeraine brand in Northern Ireland achieved a strong market response.Cheestrings again achieved satisfactory growth in the UK cheese snacks sectorwhilst Ficello achieved strong double digit growth in France. Strong gains werealso achieved in the foodservice and retail cheese slices markets. Howevermargins in the cheese category were impacted by the spike in raw materialpricing. In the UK market Kerry Food's leading savoury sector brands all advanced marketpositioning. Richmond and Wall's continued to grow market shares in the chilledsausage sector as the frozen segment contracts. In the meat snacking sectorMattessons Fridge Raiders continues to drive category growth at encouraginglevels. The fresh ready meals market grew steadily during the first six months of 2007.Kerry Foods grew sales in line with market growth rates across all marketsegments. Its 'healthily balanced' innovative lines introduced in H2 2006achieved good results as consumers seek the assurance of high quality,nutritional fresh ingredients. In the frozen ready meals segment, while overall sales volume continued todecline year-on-year, the market has restored stability and Rye Valley Foods hasconsolidated its strong market positioning due to its lowest cost producerstatus. Finance The Group delivered free cash flow of €75m (H1 2006: €20m) in the first halfhaving spent €39m on fixed assets, €64m on seasonally affected working capital,€35m on finance costs and €12m on tax. In the first half of 2007, the Group used its share buy-back programmeauthorisation to purchase 10.8m shares at a total cost of €232m. Allowing fordividend and share buy-back cashflows of €230m, net debt at the end of the halfyear increased to €1,357m compared to €1,338m at the end of the first half of2006. Net debt to EBITDA at 2.8 times was similar to the prior half year level.Finance costs were €38m, compared to €35m in the same period of 2006(reflecting an increase in interest rates) with EBITDA to net interest covered6.0 times (H1 2006 : 7.0 times). Dividend The Board has declared an interim dividend of 6.1 cent per share, an increase of10.9% on the 2006 interim dividend of 5.5 cent per share. The interim dividendwill be paid on 23 November 2007 to shareholders registered on the record date19 October 2007. Board and Management Changes The Board announces that Mr Hugh Friel, who became Chief Executive of the Groupin January 2002, will retire as Chief Executive and Director of the Group on 31December 2007. The Group is pleased to announce that Mr Stan McCarthy has been appointed ChiefExecutive Designate to succeed Mr Friel on his retirement. Mr Stan McCarthy (age 49), who has been an Executive Director of the Group since1999, is currently President and CEO Kerry Ingredients Americas. Mr McCarthyjoined Kerry's Graduate Recruitment Programme in Ireland in 1976 and worked inFinance until his appointment as Financial Controller in the USA onestablishment of Kerry's Representative Office in Chicago in 1984. Followingthe Group's acquisition of Beatreme in 1988 he was appointed Vice President ofMaterials Management and Purchasing. In 1991 he was appointed Vice President ofSales and Marketing and was named President of Kerry North America in 1996. Prior to his appointment as Chief Executive of the Group in 2002, Mr Hugh Friel(age 63) served as Joint Deputy Managing Director of the Company since theformation of Kerry Group in 1986. He has been with the Kerry organisation sinceits foundation in 1972, overseeing its growth as Director of Finance. Current Trading and Outlook Building on the first half outcome, the Group expects a good performancethroughout all businesses and geographic markets for the full year -notwithstanding the challenging input cost environment and currency headwinds.Driven by positive trends towards new product development favouring Kerry'sbroad base of food and beverage ingredients technologies and applications, andKerry Foods' capability to meet consumer demand for quality, convenient healthyfoods, the Group expects to achieve continued solid organic growth. Kerry willcontinue to seek acquisition opportunities which will enhance shareholder value. Results for the half year ended 30 June 2007 Kerry Group plcConsolidated Income Statementfor the half year ended 30 June 2007 Half year ended Half year ended Year ended 30 June 2007 30 June 2006 31 Dec. 2006 Unaudited Unaudited Audited Notes •'000 •'000 •'000 Revenue 1 2,331,652 2,265,336 4,645,920 ___________ ___________ ___________ Trading profit 172,389 162,249 383,688 Intangible asset amortisation (6,133) (5,433) (12,093)Non-trading items 2 4,067 3,223 (73,425) ___________ ___________ ___________Operating profit 170,323 160,039 298,170 Finance costs (37,827) (34,772) (76,930) ___________ ___________ ___________Profit before taxation 132,496 125,267 221,240 Income taxes (26,693) (24,534) (43,491) ___________ ___________ ___________ Profit after taxation and attributable to equity 105,803 100,733 177,749shareholders ___________ ___________ ___________ Earnings per ordinary share (cent) - basic 3 57.6 53.8 95.6 - fully diluted 3 57.4 53.6 95.2 Kerry Group plcConsolidated Balance Sheetas at 30 June 2007 30 June 2007 30 June 2006 31 Dec. 2006 Unaudited Unaudited Audited •'000 •'000 •'000Non-current assetsProperty, plant and equipment 996,901 1,061,266 1,010,343Intangible assets 1,679,040 1,679,400 1,684,756Financial asset investments 15,872 14,131 19,866Other non-current assets 54,418 4,168 10,856 ___________ ___________ ____________ 2,746,231 2,758,965 2,725,821 ___________ ___________ ____________Current assetsInventories 569,459 573,469 495,313Trade and other receivables 663,017 623,276 597,073Cash and cash equivalents 123,366 101,235 188,844Financial assets 1,646 7,378 4,485Assets classified as held for sale 2,696 - 2,696 ___________ ___________ ____________ 1,360,184 1,305,358 1,288,411 ___________ ___________ ____________Total assets 4,106,415 4,064,323 4,014,232 ___________ ___________ ____________Current liabilitiesTrade and other payables 921,021 886,117 836,550Financial liabilities 49,525 205,185 27,261Tax liabilities 61,380 50,501 51,909Deferred income 2,224 4,226 2,726 ___________ ___________ ____________ 1,034,150 1,146,029 918,446 ___________ ___________ ____________Non-current liabilitiesFinancial liabilities 1,445,089 1,233,889 1,356,296Retirement benefits obligation 148,048 178,561 180,269Other non-current liabilities 91,046 103,767 87,368Deferred tax liabilities 147,380 126,721 131,252Deferred income 16,812 19,147 17,434 ___________ ___________ ____________ 1,848,375 1,662,085 1,772,619 ___________ ___________ ____________ Total liabilities 2,882,525 2,808,114 2,691,065 ___________ ___________ ____________Net assets 1,223,890 1,256,209 1,323,167 ___________ ___________ ____________Capital and reservesShare capital 21,790 23,419 23,445Share premium account 387,603 381,022 383,341Other reserves 11,348 (31,826) (32,089)Retained earnings - cancelled shares (280,292) - - - retained income 1,083,441 883,594 948,470 ___________ ___________ ____________Shareholders' equity 1,223,890 1,256,209 1,323,167 ___________ ___________ ____________ Kerry Group plcConsolidated Statement of Recognised Income and Expensefor the half year ended 30 June 2007 Half year ended Half year ended Year ended 30 June 2007 30 June 2006 31 Dec. 2006 Unaudited Unaudited Audited •'000 •'000 •'000 Fair value movements on available-for-sale investments (3,994) 1,689 7,424Fair value movements on cash flow hedges (4,206) 7,248 (2,608)Exchange difference on translation of foreign operations 2,283 (15,258) (13,389)Actuarial gains on defined benefit pension schemes 65,024 64,640 61,924Deferred tax on items taken directly to reserves (12,712) (12,987) (12,251) ___________ ___________ ____________Net income recognised directly in equity 46,395 45,332 41,100 TransfersCash flow hedges to profit or loss from equity (2,143) (564) 160Profit for the period after taxation 105,803 100,733 177,749 ___________ ___________ ____________Total recognised income and expense for the period attributable to equity shareholders 150,055 145,501 219,009 ___________ ___________ ____________ Kerry Group plcConsolidated Reconciliation of Changes in Shareholders' Equityfor the half year ended 30 June 2007 Half year ended Half year ended Year ended 30 June 2007 30 June 2006 31 Dec. 2006 Unaudited Unaudited Audited Notes •'000 •'000 •'000 At beginning of period 1,323,167 1,177,684 1,177,684Total recognised income and expense for the period 150,055 145,501 219,009Dividends paid 4 (23,144) (20,597) (30,757)Purchase of shares 3 (231,850) (48,442) (48,442)Long term incentive plan expense 1,350 - 1,265Shares issued during the period 4,312 2,063 4,408 ___________ ___________ ____________ At end of period 1,223,890 1,256,209 1,323,167 ___________ ___________ ____________ Kerry Group plcConsolidated Cash Flow Statementfor the half year ended 30 June 2007 Half year ended Half year ended Year ended 30 June 2007 30 June 2006 31 Dec. 2006 Unaudited Unaudited Audited •'000 •'000 •'000Operating activitiesTrading profit 172,389 162,249 383,688Adjustments for:Depreciation (net) 52,597 53,450 102,923Change in working capital (65,460) (98,909) (45,893)Exchange translation adjustment 669 (615) (484) ___________ ___________ ____________Cash generated from operations 160,195 116,175 440,234 Income taxes paid (11,729) (13,466) (35,056)Finance costs paid (net) (34,912) (35,015) (76,581) ___________ ___________ ____________Net cash from operating activities 113,554 67,694 328,597 ___________ ___________ ____________Investing activitiesPurchase of non-current assets (41,886) (56,450) (103,066)Proceeds from the sale of non-current assets 2,995 7,937 13,886Capital grants received 229 974 1,687Net expenditure on acquisitions and disposals of businesses (10,471) (86,435) (95,712)Payment of deferred payables (2,457) (1,253) (2,781)Expenditure on non-trading items (583) (3,457) (30,903)Consideration adjustment on previous acquisitions (70) - (63) ___________ ___________ ____________Net cash used in investing activities (52,243) (138,684) (216,952) ___________ ___________ ____________Financing activitiesDividends paid (23,144) (20,597) (30,757)Purchase of shares (207,341) (4,314) (48,442)Issue of share capital 4,312 2,063 4,408Net movement on bank borrowings 113,207 89,967 (4,958)Decrease in bank overdrafts (13,237) (55,336) (1,694) ___________ ___________ ____________Net cash (used in) / from financing activities (126,203) 11,783 (81,443) ___________ ___________ ____________Net (decrease) / increase in cash and cash equivalents (64,892) (59,207) 30,202Cash and cash equivalents at beginning of period 188,844 163,903 163,903Exchange translation adjustment on cash and cash equivalents (586) (3,461) (5,261) ___________ ___________ ____________Cash and cash equivalents at end of period 123,366 101,235 188,844 ___________ ___________ ____________ Reconciliation of Net Cash Flow to Movement in Net Debtfor the half year ended 30 June 2007 Net (decrease) / increase in cash and cash equivalents (64,892) (59,207) 30,202Cash (inflow) / outflow from debt financing (99,970) (34,631) 6,652 ___________ ___________ ____________Changes in net debt resulting from cash flows (164,862) (93,838) 36,854Fair value movement on interest rate swaps (2,729) - (5,998)Exchange translation adjustment on net debt 5,006 31,642 50,146 ___________ ___________ ____________Movement in net debt in the period (162,585) (62,196) 81,002Net debt at beginning of period (1,194,356) (1,275,358) (1,275,358) ___________ ___________ ____________Net debt at end of period (1,356,941) (1,337,554) (1,194,356) ___________ ___________ ____________ Kerry Group plcNotes to the Interim Reportfor the half year ended 30 June 2007 1. Analysis of results Half year ended Half year ended Year ended 30 June 2007 30 June 2006 31 Dec. 2006 Unaudited Unaudited Audited Segment Segment Segment Segment Segment Segment Revenue Result Revenue Result Revenue Result •'000 •'000 •'000 •'000 •'000 •'000By business segment:Ingredients 1,610,908 130,404 1,547,769 123,206 3,134,288 293,131Consumer foods 882,242 55,537 874,768 52,075 1,818,733 117,528Unallocated and Group eliminations (161,498) (13,552) (157,201) (13,032) (307,101) (26,971) _________ ________ _________ ________ _________ ________ 2,331,652 172,389 2,265,336 162,249 4,645,920 383,688 _________ _________ _________ Intangible asset amortisation (6,133) (5,433) (12,093)Non-trading items 4,067 3,223 (73,425) ________ ________ ________ Operating profit 170,323 160,039 298,170 ________ ________ ________ Segment Segment Segment Revenue Revenue Revenue •'000 •'000 •'000By destination:Europe 1,488,288 1,455,739 3,007,511Americas 644,386 635,480 1,275,879Asia Pacific 198,978 174,117 362,530 _________ _________ _________ 2,331,652 2,265,336 4,645,920 _________ _________ _________ 2. Non-trading items Non-trading income in 2007 relates mainly to profit on sale of properties, plantand equipment offset partly by restructuring costs related to the continuationof the restructuring programme of manufacturing plants in Europe, Americas andAsia Pacific, which was announced in 2006. 3. Earnings per ordinary share Half year ended Half year ended Year ended 30 June 2007 30 June 2006 31 Dec. 2006 Unaudited Unaudited Audited EPS EPS EPS Notes cent •'000 cent •'000 cent •'000Basic earnings per shareProfit after taxation and attributable to equity shareholders 57.6 105,803 53.8 100,733 95.6 177,749Intangible asset amortisation 3.4 6,133 2.9 5,433 6.5 12,093Non-trading items (net of related tax) 2 (2.2) (4,033) (1.8) (3,342) 31.8 59,163 _____ _______ _____ ________ _____ ________Adjusted earnings* 58.8 107,903 54.9 102,824 133.9 249,005 _____ _______ _____ ________ _____ ________ Diluted earnings per shareProfit after taxation and attributable to equity shareholders 57.4 105,803 53.6 100,733 95.2 177,749Adjusted earnings* 58.5 107,903 54.7 102,824 133.4 249,005 * In addition to the basic and diluted earnings per share, an adjusted earningsper share is also provided as it is considered more reflective of the Group'sunderlying trading performance. Adjusted earnings is profit after taxationbefore intangible asset amortisation and non-trading items (net of related tax). Number Number Number of Shares of Shares of Shares 30 June 30 June 31 Dec. 2007 2006 2006 000's 000's 000's Unaudited Unaudited Audited Basic weighted average number of shares 183,648 187,271 185,949Impact of executive share options outstanding 713 760 715 _________ _________ ________Diluted weighted average number of shares 184,361 188,031 186,664 _________ _________ _________Actual number of shares in issue 174,321 184,560 184,762 _________ _________ _________ In the first half of 2007 the Company continued its share buy back programme,purchasing 10,841,400 A ordinary shares at a total cost of €232 million. All purchases conducted under the programme were in accordance with theCompany's general authority to repurchase securities as approved at the 2007 and2006 Annual General Meeting of the Company and in accordance with the ListingRules of the Irish Stock Exchange and the Listing Rules of the UK ListingAuthority. 4. Dividends Half year ended Half year ended Year ended 30 June 2007 30 June 2006 31 Dec. 2006 Unaudited Unaudited Audited •'000 •'000 •'000 Amounts recognised as distributions to equity shareholders in the period: Final 2006 dividend of 12.50 cent per A ordinary share paid 25 May 2007 (Final 2005 dividend: 11.00 cent per A ordinary share paid 26May 2006) 23,144 20,597 20,597 Interim 2007 dividend of 6.10 cent per A ordinary share payable 23 November 2007 (Interim 2006 dividend: 5.50 cent per A ordinaryshare paid 24 November 2006) - - 10,160 ______________ _____________ ___________ 23,144 20,597 30,757 ______________ _____________ ___________ Since the end of the period, the Board has declared an interim dividend of 6.10cent per share. The payment date for the interim dividend will be 23 November2007 to shareholders registered on the record date 19 October 2007. Theseconsolidated interim financial statements do not reflect this dividend payable. 5. Retirement benefits The Group's net defined benefit pension schemes' deficit which has beenrecognised in the Consolidated Balance Sheet, was as follows: 30 June 2007 30 June 2006 31 Dec. 2006 Unaudited Unaudited Audited •'000 •'000 •'000 Net deficit in plans before deferred tax at end of period (101,933) (178,561) (180,269)Net related deferred tax asset 42,764 57,386 58,122 ______________ _____________ ___________ Net deficit in plans after deferred tax at end of period (59,169) (121,175) (122,147) ______________ _____________ ___________ 6. Events after the balance sheet date Other than the approval of the interim dividend (see note 4 above) there havebeen no significant events, outside the ordinary course of business, affectingthe Group since 30 June 2007. 7. Accounting policies and general information These unaudited consolidated interim financial statements for the half yearended 30 June 2007 have been prepared in accordance with the accounting policiesdetailed in the 2006 Annual Report. These financial statements are not full financial statements and except whereindicated are unaudited. Full consolidated financial statements to 31 December2006 which received an unqualified audit report, have been filed with theRegistrar of Companies. This information is provided by RNS The company news service from the London Stock Exchange