| Thu 19 May 2005, 8:56 | | SABMiller - Preliminary (unaudited) results for th |
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JSEALPHA CODE : SAB
ISSUER CODE SOSAB
ISIN CODE GB0004835483
PRELIMINARY ANNOUNCEMENT
Ref: 11/2005
Outstanding Volume and Earnings Growth
London and Johannesburg, 19 May 2005. SABMiller plc today announces its
preliminary (unaudited) results for the year to 31 March 2005. Highlights are:
2005 2004
US$m US$m % change
Turnover 14,543 12,645 15
EBITA* 2,409 1,893 27
Profit before tax 2,194 1,391 58
Adjusted profit before tax* 2,242 1,705 31
Adjusted earnings 1,251 925 35
Adjusted earnings per share*
- US cents 103.2 77.6 33
- UK pence (up 22%) 55.9 45.8
- SA cents (up 17%) 641.8 547.6
Adjusted diluted earnings per 99.8 75.2 33
share* (US cents)
Basic earnings per share (US 94.1 54.1 74
cents)
Dividends per share (US cents) 38.0 30.0 27
Net cash inflow from operating 2,792 2,292 22
activities
* EBITA and adjusted profit before tax comprise profit before
interest and tax (US$2,361 million) and profit before tax
(US$2,194 million) respectively before goodwill amortisation
(US$366 million), and before exceptional items (net credit
US$318 million - see note 4). The calculation of adjusted
earnings is given in note 6. All references to EBITA refer to
pre-exceptional EBITA.
Total lager volumes increase 8% to 148 million hls, organic growth of 4%
Miller domestic volume returns to growth - turnaround on track
Excellent volume and EBITA performance in South Africa
Continued strong performances from both Europe and Africa & Asia
Group EBITA margin 16.6%, up from 15.0%
Strong cash flows reduce gearing to 26.4%
2005 Pre- Reported Organic,
exceptional growth % constant
EBITA US$m currency
growth %
North America 497 17 17
Central America 91 21 26
Europe 483 26 15
Africa and Asia 384 25 21
Beer South Africa 708 36 20
Other Beverage 250 34 18
Interests
Hotels and Gaming 81 51 33
Central (85) - -
Administration
Group 2,409 27 18
Statement from Meyer Kahn, Chairman
"This has been the third successive year of remarkable volume, margin and
earnings growth from SABMiller and confirms our superior long-term growth
profile.
Our South African operations were particularly strong, benefiting from robust
economic conditions, further improvements in operating performance and a firm
local currency. Miller has shown domestic volume growth for the first time in
six years and the businesses in Europe and Africa & Asia continued their
excellent momentum.
Following the improvement in adjusted diluted earnings per share, the board has
recommended an increase in the final dividend, giving a total of 38.0 US cents
for the year, an increase of 27% over the prior year."
Enquiries
SABMiller plc
Tel: +44 20 76590100
Sue Clark
Director of Corporate Affairs
Mob: +44 7850 285471
Gary Leibowitz
Vice President, Investor Relations
Mob: +44 7717 428540
Nigel Fairbrass
Head of Media Relations
Mob: +44 7799 894265
Philip Gawith
The Maitland Consultancy Ltd
Tel: +44 20 7979 5151
A live webcast of the management presentation to analysts will begin at 9.30am
(BST) on 19 May 2005.
This announcement, a copy of the slide presentation and video interviews with
management are available on the SABMiller plc website at www.sabmiller.com.
Video interviews with management can also be found at www.cantos.com.
High resolution images are available for the media to view and download free of
charge from www.vismedia.co.uk.
Copies of the press release and the detailed Preliminary Announcement are
available from the Company Secretary at the Registered Office, or from 2 Jan
Smuts Avenue, Johannesburg, South Africa.
Registered office: Dukes Court, Duke Street, Woking, Surrey, GU21 5BH.
Telephone: +44 1483 264000
Telefax: +44 1483 264103
Incorporated in England and Wales (Registration Number 3528416)
CHIEF EXECUTIVE'S REVIEW
Business review
The twelve month period to 31 March 2005 was a third successive year of
outstanding performance. Our strong local brands and portfolio of businesses,
which is well balanced between established and developing markets, enabled us to
leverage both value and volume growth.
Organic lager volumes grew by 4%, twice the historical global industry average
growth rate, and EBITA was up 27% (18% on an organic, constant currency basis)
with double-digit growth from every one of our businesses. The group EBITA
margin increased by 160 basis points over the year to 16.6%, while at the same
time we grew market shares in each of our major territories.
This strong performance was the result of our programmes to enhance the equity
of our brands, to drive positive mix improvements, to continuously improve our
sales and distribution execution, and to focus relentlessly upon operational
excellence. Our efforts were assisted by benign economic conditions and
favourable currency movements.
While all our businesses did well, the South African beer and soft drink
businesses were particularly strong with EBITA up 20% and 18% respectively on an
organic, constant currency basis. We are pleased with the progress at Miller
where the turnaround programme remains on track.
We continued to pursue our strategy to build our global business, reinforcing
our in-country positions through the purchase of minority shareholdings in Birra
Peroni and Amalgamated Beverage Industries Ltd (ABI) and the acquisition of SC
Aurora SA in Romania. Our Chinese associate, China Resources Snow Breweries Ltd
(CR Snow), made a number of acquisitions increasing access to markets.
Overall, these results demonstrate the fundamental operational strength of the
group. Total group beverage volumes grew by 5% on an organic basis, and on a
reported basis at 187.2 million hectolitres (hls) were 8% above last year.
Within this total, lager volumes were 148.3 million hls.
Turnover, including share of associates, increased by 8% on an organic, constant
currency basis, and on a reported basis at US$14,543 million was 15% ahead of
last year. Reported EBITA of US$2,409 million was 27% ahead of prior year and
reported profit before tax increased by 58% to US$2,194 million.
Net cash inflow from operations of US$2,792 million was 22% ahead of prior year,
reflecting the overall strength of the trading performance. The group's gearing
decreased at the year-end to 26.4% from last year's 43.3%, reflecting the
trading performance, proceeds from the sale of certain investments and the
conversion of the 4.25% US$600 million convertible bond, partly offset by cash
spent on acquisitions.
Adjusted earnings were up by 35%, to US$1,251 million, 103.2 US cents on a per
share basis, with adjusted diluted earnings per share of 99.8 US cents up 33% on
the prior year. Reported basic earnings per share of 94.1 US cents increased
74% on the prior year.
The board has proposed a final dividend of 26.0 US cents per share, making a
total of 38.0 US cents per share for the year, an increase of 27% over prior
year. The dividend is covered 2.6 times by adjusted earnings per share on a
diluted basis.
North America
Further progress has been made in North America, and for the first time in many
years Miller achieved growth in both retail sales and domestic shipments, with
Miller Lite, the largest brand in the portfolio, recording strong volume growth.
Profitability has improved, with the EBITA margin for the business reaching
10.2%, and overall market share has been gained. Increased investment is taking
place in both marketing and sales and distribution to strengthen further the
capabilities of the organisation. These investments, and an increasingly
competitive industry environment, are likely to result in further profit
improvement being of a modest nature in the coming year.
Central America
Economic and trading conditions in Central America were difficult, but our
business performed well and delivered EBITA of US$91 million, an increase of 21%
over prior year. However, volumes of beer and carbonated soft drinks (CSDs) fell
by 1% and 7% respectively in markets that were negatively impacted by high fuel
costs and, in El Salvador, price-based CSD competition and increased excise tax
on beer.
Europe
Our Europe operations delivered another excellent year of earnings growth, with
EBITA up 26%, 15% organically in constant currency. This performance is
particularly impressive following five successive years of double-digit EBITA
increases, organically in constant currency. Organic lager volumes grew by 5%,
benefiting from generally favourable economic conditions, continued increases in
per capita consumption and our improved operational execution. Poland, Russia
and Romania performed particularly well, offsetting declines elsewhere in the
portfolio.
Organic volumes in Poland grew by 12%, securing market leadership for Kompania
Piwowarska and contributing to increased EBITA. In Russia, total volumes
increased by 30%, with sales of Miller Genuine Draft growing by 43%. Volumes
decreased in the Czech Republic, being impacted by a cooler summer, however
Plzensky Prazdroj gained market share. In Italy, the domestic beer market was
affected by a weak consumer environment and declined by an estimated 6%. Despite
a decline in volumes the Peroni brand retained its market leadership.
Africa and Asia
Our African businesses delivered another year of strong earnings growth with
EBITA up 25%, 21% organically in constant currency. Favourable economic
conditions and exchange rate movements, volume growth, revenue management
initiatives and productivity enhancements all contributed to this improvement.
Tanzania enjoyed an exceptional year, Mozambique excelled, Angola continued its
strong growth in CSDs, and Botswana performed well. The Castel group, with which
we have an alliance, continued its strong performance.
Our Chinese associate, CR Snow, further consolidated its leading position during
the year, with a number of acquisitions giving access to new markets in the
Yangtze River delta as well as bolstering our position in Anhui. Lager volume
growth for the year was 25%, within which underlying organic growth of 10% was
achieved. Our national brand, Snow, grew by 27% and comprised 33% of total
volumes Overall, market share gains were recorded in the key markets of
Heilongjiang and Jilin.
South Africa
Beer South Africa achieved strong growth in volumes, with an increase of 4% on a
comparable basis. EBITA grew by 36%, 20% in constant currency, and EBITA margin
increased to 28.1%, benefiting from this volume growth, pricing and mix
improvements and ongoing operational productivity. The business capitalised
upon the consumer shift towards premium brands, through developments in
packaging, promotions and merchandising with a particular drive behind our
international premium brands, Miller Genuine Draft and Pilsner Urquell.
Other Beverage Interests (OBI) grew pre-exceptional EBITA by 34%, 18% in
constant currency, driven by increased CSD volumes at ABI, price management and
overhead productivity. ABI achieved 8% volume growth in the CSD category,
through continued flavour and pack innovations, and share gains in national
accounts.
Tsogo Sun has benefited from a strong gaming market, and has reported improved
trading performances in both its hotel and gaming operations.
Outlook
There is underlying momentum in most of our major markets, and we expect further
steady organic volume growth for the group, supported by significant ongoing
marketplace investments.
Following a number of years of exceptional rates of profit growth delivered by
the group, earnings per share for the coming year are expected to continue to
grow at a more moderate rate from this higher base.
Operational review
North America
2005 2004 %
change
Financial summary US$m US$m
Turnover 4,892 4,778 2
EBITA* 497 424 17
EBITA margin (%)* 10.2 8.9
Sales volumes (hls 000s)
- Lager - excluding contract 47,380 47,258 -
brewing
- Lager - contract brewing 10,583 10,593 -
- Carbonated soft drinks 75 70 8
(CSDs)
Lager - domestic sales to 44,380 43,997 1
retailers (STRs)
* Before exceptional credits of US$7 million being exceptional profit on the
sale of Tumwater brewery of US$4 million, Tumwater brewery closure costs
reversal of US$1 million and integration and restructuring cost reversal of US$2
million (2004: exceptional charges of US$14 million being integration and
restructuring costs of US$13 million, Tumwater brewery closure costs reversal of
US$4 million and asset impairment of US$5 million).
For the first time since 1998, Miller Brewing Company posted growth in retail
sales and domestic shipments. This was achieved in a challenging competitive and
economic environment. Substantial increases in fuel costs have had a marked
impact on consumers' disposable income and spending patterns, whilst US beer
industry sales were also impacted by more favourable sales trends for the
competing wine and spirit categories. These two factors, coupled with variable
weather conditions, make this performance all the more pleasing. Domestic market
share grew to 18.5% on a financial year basis.
Domestic beer sales to wholesalers increased by 0.7% during the year whilst
wholesaler inventories at year end were one day lower than the prior year.
Wholesaler sales to retailers (STRs) increased by 0.9% over the prior year. In
the second half, STRs were unchanged versus the prior year on a comparable
selling day basis.
Miller Lite has achieved strong growth during the year despite challenging
comparatives in the second half of the prior year, and was the fastest growing
beer brand in US supermarkets for our financial year just ended, as determined
by Nielsen. The decline in Miller Genuine Draft has slowed somewhat compared
with the previous year, however Miller remain dissatisfied with the brand's
performance and further investment will be made behind this brand in the coming
financial year.
Increased focus is being applied to the Miller High Life and Milwaukee's Best
brand franchises by both the company and its distributors, and the decline in
these brands has slowed. During the year, Olde English and Mickey's returned to
volume growth.
In the worthmore segment Pilsner Urquell has continued to grow whilst Peroni
Nastro Azzurro was launched during the fourth quarter. The early signs for this
brand are promising. Brutal Fruit was trial launched in three areas of the
country late in the financial year whilst shipments of both SKYY Blue and SKYY
Sport were discontinued during the year.
Internationally volumes experienced varying performance across the territories.
During the year Miller's licensing arrangements with its UK partner were
renegotiated. Contract brewing volumes were in line with the prior year.
7
Total turnover for the year increased by 2.4%, and within this, US domestic
turnover excluding contract brewing grew by 3.2%. The level of promotions
increased in the fourth quarter as a result of the intensified competition in
the market place and this pricing activity is expected to continue into the
coming financial year. Strong gains in both operating efficiency and overall
waste reductions have been made in Miller's breweries. However, during the
fourth quarter the first impacts of the significant increases in world commodity
prices, particularly aluminium and energy costs, were felt.
Total marketing expenditure was higher than in the prior year, driven by
increased spending in the second half. The mix of marketing expenditure
continued to shift away from overhead and fixed costs towards consumer-facing
media placements and local market activation programmes. Increased resources
were also deployed in the sales and marketing departments, and in improving the
talent level, training and development programmes as well as depth of cover in
all functions of the company. Miller are in the early stages of implementing
world class manufacturing standards in some of its breweries. Progress against
cost leadership goals has been in line with expectations and the resulting
productivity gains have been reinvested in the core strategic focus areas of the
business. These include an expanded sales organisation, with the recruitment of
nearly 200 specialised sales force team members, funding of local market
initiatives in all areas, the expansion of the on-premise taste challenge with
millions of consumer intercepts being achieved, improved brand marketing
capability and an increase in marketing expenditure on Miller's key brands.
EBITA for the year grew 17% to US$497 million despite the challenging
competitive and economic environment. Following this strong performance,
Miller's target of achieving a double-digit EBITA margin by the end of its three
year turnaround programme was met earlier than expected, at 10.2% for the year.
Capital expenditure was ahead of the prior year and is expected to grow in the
short and medium term as increased investments are made behind key focus areas.
The extremely competitive environment coupled with a difficult economic
landscape and higher world commodity prices make the next financial year a
difficult year to forecast. Industry fundamentals, primarily volume and pricing,
are expected to be more challenging, and since February the pricing environment
has become increasingly difficult. However, further growth in Miller Lite sales
volumes, albeit at a slower rate, is expected to be achieved, together with an
improvement in the balance of the portfolio. The company intends to continue to
invest strongly behind its brands, its people and its processes in order to
ensure that it remains a strong and viable competitor over the long term.
8
Central America
2005 2004 %
change
Financial summary US$m US$m
Turnover 521 531 (2)
EBITA* 91 76 21
EBITA margin (%)* 17.5 14.2
Sales volumes (hls 000s)
- Lager 1,828 1,839 (1)
- Carbonated soft drinks 5,622 6,031 (7)
(CSDs)
- Other beverages 2,749 2,643 4
* Before exceptional costs of US$Nil million (2004: reorganisation costs of US$6
million).
The results for the year display the progress made in many areas of the business
notwithstanding tough trading conditions, particularly in El Salvador.
Disposable incomes in both countries continue to be negatively impacted by high
fuel costs, and consequent increases in electricity and public transport costs.
Economic growth in El Salvador has slowed significantly due to the effects of
delayed expenditure caused by the uncertainty in the outcome of the presidential
elections and postponement in the approval of the central budget. This situation
has been exacerbated by the introduction in January 2005 of a number of fiscal
reforms, including an increase in excess of 50% in the excise tax on beer,
against modest increases for competing alcohol products. The excise regime has
also changed, moving away from ad valorem to a unit of alcohol basis. This
ostensibly allows for more transparency, but the rate imposed on beer penalises
the category by comparison to spirits.
Further progress was made throughout the year in strengthening our brand
portfolio and improving execution through customer focused channel marketing.
Following our successful launch of a local premium beer, Bahia, in El Salvador
in the previous financial year, the brand was launched in Honduras during the
year and continues to grow share ahead of expectation. Both countries
successfully grew share of worthmore brands enhancing beer margins. However,
overall beer volumes were marginally lower across the business, with good growth
in Honduras being offset by a decline in El Salvador, where domestic volumes in
the last quarter fell following the excise tax increase, and export volumes were
reduced in light of their inherent low profitability.
Aggregate CSD volumes fell by 7%, reflecting the price-based nature of
competition in El Salvador. Whilst our CSD market share is relatively stable in
Honduras, market share has been lost in El Salvador. However, through effective
channel marketing and improved in-trade execution, we have been able to increase
prices in certain segments in both markets to improve the profitability of the
CSD business. Whilst we have introduced lower-priced offerings in selected
market segments to compete on a price basis, we continue to support our sector
leadership by focusing mainly on brand attributes rather than price. The growth
in other beverage volumes reflects the increased sales of bottled water.
Turnover for the period declined by 2%, as improved pricing for both beer and
CSDs partly offset the impact of the volume decline. Improved revenue management
through brand segmentation and portfolio management has yielded benefits, and
continues to deliver improved margins across the business. These improved
margins, strong control of operating costs, and the lower cost base in the
business following restructuring, has led to a higher EBITA (26% up in constant
currency) and an improved EBITA margin. The full year benefits of previous
reorganisations have also assisted this improvement.
Trading conditions are expected to remain tough, and this will lead to increased
market investment. However, the business is now appropriately structured with a
cost base that will allow us to compete aggressively. Accordingly, we are in a
position to strongly defend the competitive entries into our beer markets, and
have the ability to aggressively seek CSD market share, albeit that this may be
at the expense of short term margin.
9
Europe
2005 2004 %
change
Financial summary US$m US$m
Turnover 2,909 2,420 20
EBITA* 483 383 26
EBITA margin (%)* 16.6 15.8
Sales volumes (hls 000s)
- Lager 33,669 30,925 9
- Lager organic 32,420 30,925 5
- Other beverages - 97 -
* Before exceptional items of US$51 million being Naples brewery closure costs
of US$35 million and restructuring costs in the Canary Islands of US$16 million
(2004: water plant closure costs of US$6 million).
Total lager beer volumes rose 9% (5% on an organic basis), adversely influenced
in the first half by much poorer summer weather than in the previous year.
Strong volume growth in Poland, Russia and Romania more than offset declines
elsewhere. Supporting this good growth was increased marketing investment, up 9%
in real terms over the prior year, and expansion of focused on-premise
merchandising. The business again produced excellent profit growth, with EBITA
up 26% (15% in organic constant currency terms). EBITA margin growth of 80
basis points was derived from improved sales mix, as worthmore segment volumes
rose 11% organically, and increased productivity.
The Polish beer market grew by some 2%, led by growth in the lower mainstream
segment. Kompania Piwowarska's organic volume growth of 12%, driven by
increased on-trade investment and key account channel focus (including enhanced
cold display), secured market leadership, with share at 37%. Tyskie remains
Poland's leading beer brand, and Zubr is now the second largest brand following
its re-launch in July 2003, with market share of 8% at the end of the year. Re-
launched premium brand Lech, complemented by Redds, improved mix in the fourth
quarter, halting the negative mix trend witnessed for much of the year. New
product innovation has been particularly successful in Poland, and products
launched since 2000 now contribute over 30% of total revenue. Real pricing
declines continued for the industry, but our manufacturing and distribution
productivity yielded cost savings, and sales per employee reached 4,000
hectolitres.
In the Czech Republic, domestic industry volumes declined by 2.5% for the year,
with the first half's 5% decline reflecting 22% fewer summer sunshine hours
compared to the prior year. Plzensky Prazdroj's volumes were down 2.1% for the
year, resulting in a small market share gain as our on-premise investment and
key account management initiatives continued to succeed in the market. Pilsner
Urquell volumes rose slightly both domestically and globally, driving positive
sales mix benefits. Pricing grew ahead of inflation, whilst package and channel
mix were stable. These factors, together with cost savings from centralised
regional procurement, helped our Czech operations to once again deliver improved
earnings.
In Russia, Transmark's volume increase for the year outpaced both overall single
digit industry growth and also premium segment growth, although our rate of
growth slowed in the second half as we cycled high prior year comparables. Our
successful focus on building complementary Russian and international brand
equities within a leading premium portfolio has been amplified by strong
merchandising execution by our specialist distributors and retailers. Miller
Genuine Draft volumes grew by 43%, generating positive brand mix benefits. Our
distributors' network now covers most major Russian cities, with particular
strength in the Moscow region where we have a revenue share of approximately
15%. Pricing growth continued in line with food and beverage inflation. Whilst
marketing expenditure rose significantly, substantial cost benefits have been
obtained through local malt and bottle procurement. Recently restrictions have
been imposed on media use by brewers and on beer consumption, although it is too
early to quantify what impact these may have on the industry.
10
In Romania, our organic volume growth of 18% (industry up 6%) and our
acquisition of SC Aurora SA in June 2004 have increased our market share to 22%.
Ursus, the country's leading brand franchise, has been repositioned, attracting
more consumers to Ursus Premium (from Ursus Pils), a local premium beer with
equity rivalling the international brands in the country. Ursus franchise
volumes grew by 35% and generated positive mix impact, whilst Timisoreana Lux
grew 82% in the mainstream segment with rapidly growing geographic distribution.
At year end, we launched two new brands: Peroni Nastro Azzurro in the
international premium segment and Ciucas, a lower-mainstream PET brand designed
to complement our existing portfolio, leveraging our strong distribution network
in this market segment. Profitability has increased significantly, and our
production capacity is being expanded to accommodate our continuing growth.
In Italy, the domestic beer market declined by an estimated 6% in a weak
consumer environment and following the prior year's exceptionally good summer.
Birra Peroni's organic volumes declined 8%, reflecting an unchanged organic
share performance and the termination of a licensed international brand. The
Peroni brand retained its market leading share of 12% and Nastro Azzurro held
its 4% share. A comprehensive turnaround programme is now underway,
encompassing stronger brand marketing, development of an effective sales
function and direct point of sale merchandising control, restructuring of
distribution arrangements, aggressive cost containment and deliberate
performance management. Facilities restructuring programmes are on track
following the closure of the Naples plant, whilst manufacturing upgrades are
ongoing at other facilities, including those enabling production of Miller
Genuine Draft for the pan-European market at the Padua brewery. Margins have
reduced mainly as a result of negative sales mix associated with consumption
shifts towards the off-premise channel and towards lower-priced market segments.
The closure of the Naples plant and associated restructuring initiatives led to
an exceptional charge of US$35 million during the year. In February, we
increased our shareholding in Birra Peroni to 99.8% at a cost of US$205 million.
In March, beer excise was increased by 24%, the impact of which will be felt by
the industry in the forthcoming year.
The Peroni Nastro Azzurro brand was recently re-launched in the UK, with a brand
marketing budget of GBP5 million. Initial consumer reception is encouraging and
the new brand has achieved high early awareness among target consumers.
The Hungarian domestic industry declined some 10% following the ongoing
importation of cheap German cans. Dreher's volume declined in line with this,
and profits have decreased as a consequence.
The Slovakian industry continued to decline, but at the reduced rate of 7% and
our volumes contracted by 3%. In the Canaries, our volumes were level, in line
with the industry. Significant restructuring has been announced in the
Canaries, including a 20% workforce reduction, which will generate significant
cost savings from 2007. An exceptional charge of US$16 million has been taken.
11
Africa and Asia
2005 2004 %
change
Financial summary US$m US$m
Turnover 1,937 1,555 25
EBITA* 384 306 25
EBITA margin (%)* 19.8 19.7
Sales volumes (hls 000s)**
- Lager 39,505 32,521 21
- Lager organic # 35,685 32,392 10
- Carbonated soft drinks 4,667 3,879 20
(CSDs)
- Other beverages 11,538 10,137 14
* Before exceptional items being profit on the disposal of the group's interest
in Harbin Brewery Group Limited (Harbin) of US$103 million (2004: share of
associate's profit on disposal of a CSD business and brands in Morocco of US$6
million and share of associate's profit on disposal of a brand in Angola of US$1
million).
** Castel volumes of 12,771 hls 000s (2004: 12,049 hls 000s) lager, 8,260 hls
000s (2004: 9,221 hls 000s) CSDs, and 2,985 hls 000s (2004: 3,326 hls 000s)
other beverages are not included.
# During 2004, the management responsibility for sales to Angola was transferred
from Beer South Africa to the Africa division. On a pro forma comparable basis,
the organic growth in lager volume in Africa and Asia would have been 9%
compared to the prior year.
Africa
Our African businesses continued the solid momentum described at the half-year
with full year growth in reported lager volumes of 9%. Volume gains combined
with improved productivity and selective price increases led to strong EBITA
growth for the year under review. EBITA margin also increased aided by
favourable country mix, with good growth in our higher margin territories.
Within the portfolio, Tanzania enjoyed an exceptional year with lager volume
growth of 9%, driven by improved market penetration within the context of an
improving economy and favourable agricultural conditions. Mozambique also
excelled with volume growth of 13% reflecting greater product availability in
rural areas and improving economic fundamentals. Angola continued its strong
growth in CSDs with volumes improving 15% year-on-year as increased capacity and
additional packs were introduced during the year. Botswana recovered from a slow
start to the year following the 8% devaluation of the local pula, to post 1.3%
total volume growth, within which the CSD portfolio performed best.
Castle brand volumes grew 15% across Africa, with strong performances in
Tanzania and Zambia where the brand attracts a price premium. Castle Milk Stout
grew in Ghana, also at a premium price position, and the brand was introduced in
Cameroon by our strategic alliance partner, Castel, with encouraging initial
results. Miller Genuine Draft was launched in selected African countries in the
last quarter of the year.
Lager volumes in Castel grew 6% year-on-year, with solid performances in Angola,
Democratic Republic of Congo and Algeria. Castel's CSD volumes reflect a non-
organic drop following the sale of their Moroccan and Angolan CSD interests in
the latter part of the prior year. EBITA has shown strong growth over the prior
year, reflecting improved productivity and a favourable product mix.
12
Asia
Our Chinese associate, CR Snow, expanded further during the year, with seven
breweries acquired giving access to new markets in the Yangtze River delta as
well as bolstering our position in Anhui. Lager volume growth for the year was
25%, within which underlying organic growth of 10% was achieved. Our national
brand, Snow, grew by 27% and comprised 33% of total volumes. Overall, our
national market share grew by over one full percentage point to 11.5%.
Double-digit organic EBITA growth was delivered in China driven by our volume
performance as well as modest net pricing and mix improvement which offset
higher raw material and energy costs. Continuing moderate price inflation
trends are encouraging. Additionally, while we are increasing investment in
focused brand marketing and distribution initiatives, we are beginning to reap
brand portfolio and operational synergies from our recent acquisitions. Reported
EBITA was, however, also influenced by the negative impact of the new
acquisitions, particularly in the case of the breweries in southern Jiangsu
province, which were acquired in October 2004, ahead of the lower-volume winter
months.
Our Shaw Wallace investment in India recorded double-digit sales volume growth,
ahead of the industry. The business continued to rehabilitate individual brewing
units and added one million hls of new capacity while closing down two smaller
breweries during the year. The business is focusing on industry reforms, and is
making significant investments in upgrading returnable containers.
South Africa
South Africa Beverages
Following the acquisition in December 2004 of all of the shares in ABI which the
group did not own, a programme of work has begun to establish and leverage the
benefits from the combination of our beverage businesses in South Africa. Future
financial announcements will include segmental results and commentaries for
South Africa Beverages. For the year under review, economic conditions remained
positive for our South African operations. Lower inflation and interest rates,
taken together with lower taxation and benefits from improved social grants, led
to an increase in disposable income.
Beer South Africa
2005 2004 %
change
Financial summary US$m US$m
Turnover 2,522 1,964 28
EBITA 708 522 36
EBITA margin (%) 28.1 26.6
Sales volumes (hls 000s)
- Lager 25,912 25,261 3
Reported lager volumes achieved strong growth, ending the year 3% above last
year. As noted at the half year, during 2004 the management responsibility for
exports to Angola was transferred to the Africa division, and on a pro forma
comparable basis the increase in volume was 4%. A programme of renovation of our
mainstream brands including packaging changes and focussed consumer
communication contributed to this volume growth. This has been achieved through
innovation, maximising opportunities presented by the marketing mix, price
management in trade and improved availability following a 19% increase in
customers receiving a delivery service.
13
The general consumer shift to more premium offerings continues to gain momentum,
with growth of 50% achieved in the premium segment by Beer South Africa.
Developments in packaging, promotions and merchandising combined with a highly
differentiated route to market and focussed consumer engagement helped to
maximise this growth. The deliberate drive behind our international brands,
Miller Genuine Draft and Pilsner Urquell, within the South African premium
portfolio has delivered results and contributed to this growth. In addition,
Beer South Africa now holds a market leadership position in the fruit alcoholic
drinks category following 36% growth during the year under review.
Turnover increased by 13% in local currency, reflecting higher volumes, price
increases and significant growth in premium brands. This translates to a 10%
increase in domestic turnover per hl over last year.
Good control of operational costs and improved efficiencies assisted by the
strong performance of the rand which resulted in reductions in raw material
costs, helped boost the EBITA margin to 28.1% up from 26.6% a year ago. EBITA
was significantly up at US$708 million, an improvement of 36% on last year, and
a constant currency increase of 20%.
Strong sales growth and changes to both pack and brand mix have resulted in the
need to increase both packaging and brewing capacity as well as flexibility
capability. Plans are well advanced to bring the first tranche of capacity on
line before the 2005 summer peak. While capacity upgrades are restricted to
certain breweries, a general enhancement of our packaging capability is planned
for all breweries.
Good progress has been made by the liquor industry on the formulation of a Black
Economic Empowerment (BEE) Charter for the industry. Internal targets to
finalise the Charter by later in the year are, however, being hampered by
Government's delay in publishing the full BEE codes of good practice.
Progress in licensing the previously unlicensed shebeen trade has continued to
be below expectations, given delays in provincial licensing legislation. In the
Eastern Cape, however, increased temporary licensing has resulted in a doubling
of licensed customers during the year. We have continued to engage with the
relevant licensing authorities and assist shebeeners to increase the pace of
licensing across the country and are investing in training to enhance the
business skills of taverners.
The company has again received a number of awards in South Africa. This year,
the company was awarded both the Marketing and Manufacturing organisation of the
year by the respective industry bodies and was first, for a second successive
year, in the Finance Week survey of the best companies to work for.
14
Other Beverage Interests
2005 2004 %
change
Financial summary US$m US$m
Turnover 1,473 1,171 26
- ABI 1,151 912 26
EBITA* 250 186 34
- ABI 213 158 35
EBITA margin (%)* 17.0 15.9
- ABI 18.5 17.3
Sales volumes (hls 000s)
- Soft drinks 14,301 13,227 8
- ABI 14,066 12,999 8
* Before exceptional items of US$Nil million (2004: profit on disposal of
trademarks of US$13 million).
Amalgamated Beverage Industries (ABI)
ABI has benefited from the favourable economic conditions referred to earlier,
and a growing black middle class has increased national household spending,
supporting increasing demand for ABI's products. Volume was buoyant, and the 8%
growth was driven by effective national account promotional spend, the effects
of the two-tiered pricing strategy, and moderate price increases. The final
quarter showed strong growth, aided by the timing of Easter in March. The
benefits of the two Easters during the year aided growth in volume by
approximately 0.5%. This excellent performance resulted in share gains in the
CSD category, especially in the national accounts following repositioning of
some brands and more effective promotional spending. Continued flavour and pack
innovation further drove sales, as did focus on driving winter consumption. CSD
volumes were up 8% for the year and overall, CSDs contributed 94.6% of total ABI
volume. CSD volume increases were driven by the growth in non-returnable
bottles, in particular the 2 litre pack.
Turnover increased 26% (11% in constant currency) on the back of volume growth
and selective price increases. EBITA increased by 35% for the year (19% in
constant currency), driven by higher turnover, productivity improvements and
procurement cost reductions, and delivered an improved EBITA margin of 18.5%.
Appletiser
Sales in South Africa recorded strong growth, with new packaging receiving an
enthusiastic response, and progress was made in several international markets.
Good EBITA growth reflected the benefits of higher volumes and operational
efficiencies, partially offset by increased marketing expenditures.
Distell
Distell's domestic sales volumes increased, with further gains in the spirits
category contributing to an improved sales mix. International volumes also grew,
focused on a core portfolio of brands in selected markets. Customer service
levels and operational efficiency has improved across the business, and work
with key suppliers has yielded benefits. The improved sales mix, disciplined
cost management and the containment of overhead costs have all contributed to
improved earnings.
15
Hotels and Gaming
2005 2004 %
change
Financial summary US$m US$m
Turnover 289 226 28
EBITA* 81 53 51
EBITA margin (%)* 28.0 23.7
Revpar - US$ ** $51.45 $42.71 20
* Before exceptional credit of US$7 million being share of associate's profit on
the disposal of fixed assets of US$11 million and share of associate's
restructuring costs of US$4 million (2004: US$Nil million).
** Revenue per available room.
Since 31 March 2003, SABMiller has been a 49% shareholder in the Tsogo Sun group
following a restructuring of our interests in that group. The business reported
strong trading results and our share of EBITA for the period was US$81 million,
an increase of 51% over the prior year (33% on an organic, constant currency
basis).
The gaming market has continued to grow strongly, up 14% in the key Gauteng
Province, reflecting buoyant consumer spending. In addition the Suncoast casino
in Kwa-Zulu-Natal has performed well. Hotel occupancies were marginally above
the prior year and the growth in Revpar in local currency of 6% reflects the
growth in occupancy and price increases in line with inflation. US dollar
Revpar reflects the impact of the stronger rand. Overall, the Tsogo Sun group
is well placed to take advantage of continuing positive economic conditions.
16
Financial review
Segmental analysis
Our operating results are set out in the segmental analysis of operations, and
the disclosures accord with the manner in which the group is managed. SABMiller
believes that the reported profit measures - before exceptional items and
amortisation of goodwill - provide additional and more meaningful information on
trends to shareholders and allow for greater comparability between segments.
Segmental performance is reported after the specific apportionment of
attributable head office service costs.
Accounting for volumes
In the determination and disclosure of reported sales volumes, the group
aggregates the volumes of all consolidated subsidiaries and its equity accounted
associates, other than associates where the group exercises significant
influence but primary responsibility for day to day management rests with others
(such as Castel and Distell). In these latter cases, the financial results of
operations are equity accounted in terms of UK GAAP but volumes are excluded.
Contract brewing volumes are excluded from total volumes, however turnover from
contract brewing is included within group turnover. Reported volumes exclude
intra-group sales volumes.
Organic, constant currency comparisons
The group has made some disclosures of its results on an organic, constant
currency basis, to analyse the effects of acquisitions net of disposals and
changes in exchange rates on the group's results. Organic results exclude the
first twelve months' results of acquisitions and the last twelve months' results
of disposals. Constant currency results have been determined by translating the
local currency denominated results for the year ended 31 March 2005 at the
exchange rates for the comparable period in the prior year.
International Financial Reporting Standards (IFRS)
The group is well advanced in its preparation for the adoption of IFRS, which
the group will adopt for its 2006 financial reporting. We plan to issue 2005
financial information, restated for IFRS, ahead of this summer's annual general
meeting. It is estimated that the adoption of IFRS will have limited negative
impact on adjusted earnings per share, reflecting increased costs primarily
relating to employee share options and certain pension and post-retirement
benefits.
Central administration expenses
The central administration expenses recorded in the year reflect the full-year
running costs of the group's enhanced head office departments, which are now
more appropriately proportioned to the size of the group and the spread of
businesses. The increase over the prior year includes the currency impact from
UK-based cost centres.
Acquisitions
The acquisition of a 94.93% interest in SC Aurora SA in Romania was completed on
10 June 2004, with the holding increased to 99.58% subsequently.
The acquisition of the remaining 26.5% minority interests in ABI was completed
in December 2004.
The acquisition of a further 39.8% interest in Birra Peroni SpA (Peroni) was
completed in February 2005, bringing the total holding to 99.8%.
All of the acquisitions were funded in cash from existing resources and
facilities.
17
Exceptional items including sale of investments
The group recorded net exceptional costs within operating profit of US$48
million, being US$35 million of brewery closure costs in Italy; US$16 million of
restructuring costs in the Canary Islands; US$4 million share of associate's
restructuring costs in Hotels and Gaming; US$4 million profit on disposal of the
Tumwater brewery in Miller; US$2 million credit on the reversal of surplus
integration and restructuring provisions in Miller; and US$1 million credit on
the reversal of surplus Tumwater brewery closure costs in Miller.
Exceptional profits of US$366 million were recorded after operating profit and
comprised US$103 million profit on the disposal of the group's 29.6% stake in
Harbin Brewery Group Limited (Harbin), US$252 million profit on the disposal of
the group's 21% investment in Edgars Consolidated Stores Ltd (Edcon) and US$11
million share of associates' profit on the disposal of fixed assets in Hotels
and Gaming.
This compares to prior year net exceptional costs within operating profit of
US$26 million, comprising Miller restructuring costs of US$13 million; a
reversal of US$4 million of the Tumwater brewery closure costs at Miller; and a
US$5 million impairment charge in relation to FMB assets at Miller; US$6 million
of reorganisation costs in Central America; and US$6 million costs associated
with the closure of the water bottling plant in the Canary Islands. Exceptional
profits of US$67 million were recorded after operating profit and comprised
surplus on the pension fund of a disposed operation of US$47 million; profit on
the disposal of trademarks in Appletiser of US$13 million; and the group's share
of the profit on disposal of Castel's Moroccan CSD business of US$6 million and
a brand in Angola of US$1 million.
Treasury
Gross borrowings have decreased to US$3,339 million from US$3,707 million at 31
March 2004. Net debt has decreased to US$2,196 million from US$3,025 million
reflecting the increase in cash generated from operating activities, the
proceeds from the disposal of investments and the conversion of the 4.25% US$600
million convertible bond, partially offset by cash expended on acquisitions and
the purchase of minorities in ABI and Peroni.
The average loan maturity in respect of the US$ fixed rate debt portfolio is
some six years. The average borrowing rate for the total debt portfolio at
March 2005 was 5.5% (2004: 4.8%). The group's gearing decreased at the year-end
to 26.4% from last year's 43.3%.
In April 2004 SABMiller plc and SABMiller Finance BV signed a five-year US$1,000
million revolving credit bank facility agreement. This replaced the US$720
million facility in existence at 31 March 2004.
Interest
Net interest costs decreased to US$167 million, an 11% decrease on the prior
year's US$188 million. This decrease is primarily due to the conversion of the
bond noted above and lower levels of net debt throughout the year. Interest
cover, based on pre-exceptional profit before interest and tax, has improved to
12.2 times.
Profit before tax
Profit before tax of US$2,194 million was up 58% on prior year, reflecting
performance improvements in all our businesses, a number of exceptional credits
(as described above), the reduction in interest and the impact of favourable
exchange rates.
Taxation
The effective tax rate, before goodwill amortisation, exceptional items and
before a charge for South African secondary tax on companies (STC) on non-
recurring dividends following a restructuring of the group's holdings in South
Africa, is 34.8%, which is broadly in line with the prior year. Including the
non-recurring STC charge, the effective tax rate is 36.5%.
18
Pensions
The group has exposures associated with defined benefit pension schemes and post
retirement benefits: the Miller defined benefit pension plans and post
retirement benefit plans, the ABI Pension Fund, and the South African post
retirement medical aid schemes being the most significant. The updated
valuations as at the year end, required for FRS17 disclosure purposes only,
indicate a deficit on the schemes in aggregate, in excess of amounts provided in
the balance sheet, of some US$201 million, after taking account of the related
deferred taxation. This compares to the prior year deficit of US$140 million.
The group has no other significant exposures to pension and post retirement
liabilities as measured in accordance with FRS17.
Goodwill
Intangible assets increased by US$309 million, due primarily to the inclusion of
goodwill of US$172 million arising on the acquisition of a further 39.8%
interest in Peroni and US$419 million on the acquisition of the minorities in
ABI, partially offset by the amortisation for the year. Goodwill in ABI is
considered to have an indefinite life (consistent with prior years), all other
goodwill being amortised over 20 years. The attributable amortisation charge for
the year under review rose to US$344 million from last year's US$333 million.
Cash flow
Net cash inflow from operating activities before working capital movement
(EBITDA) rose to US$2,740 million from last year's US$2,185 million. The ratio
of EBITDA to group turnover increased in the year to 21.2% (2004: 19.2%).
Currency: rand
During the financial year, the SA rand showed strength against the US dollar and
the currency ended the financial year at R6.26 to the US dollar. As a result,
the weighted average rand/dollar rate improved by 13% to R6.22 compared with
R7.06 in the prior year.
Dividend
The board has proposed a final dividend of 26.0 US cents making a total of 38.0
US cents per share for the year. Shareholders will be asked to ratify this
proposal at the annual general meeting, scheduled for 28 July 2005. In the event
that ratification takes place, the dividend will be payable on 5 August 2005 to
shareholders registered on the London and Johannesburg Registers on 8 July 2005.
The ex-dividend trading dates, as stipulated by the London Stock Exchange will
be 6 July 2005 on the London Stock Exchange and 4 July 2005 on the JSE
Securities Exchange South Africa as stipulated by STRATE. As the group reports
in US dollars, dividends are declared in US dollars. They are payable in
sterling to shareholders on the UK section of the register and in South African
rand to shareholders on the RSA section of the register. The rates of exchange
applicable on 13 May 2005, being the last practical date before the declaration
date, will be used for conversion ($/GBP = 1.8556 and R/$ = 6.3100), resulting
in an equivalent final dividend of 14.0116 UK pence per share for UK
shareholders and 164.0600 SA cents per share for RSA shareholders. The
equivalent total dividend for the year for UK shareholders is 20.4985 UK pence
(2004: 17.2350 UK pence) and for RSA shareholders is 237.4868 SA cents (2004:
202.6501 SA cents).
To comply with the requirements of STRATE in South Africa, from the close of
business on 1 July 2005 until the close of business on 8 July 2005, no transfers
between the UK and South African Registers will be permitted and no shares may
be dematerialised or rematerialised.
Annual report and accounts
The group's unaudited summarised financial statements and certain significant
explanatory notes follow. The annual report will be mailed to shareholders in
early July 2005 and the annual general meeting of the company will be held at
11:00hrs on 28 July 2005.
19
SABMiller plc
CONSOLIDATED PROFIT AND LOSS ACCOUNTS
for the years ended 31 March
2005 2004
Unaudited Audited
Notes US$m US$m
Turnover (including share of 2 14,543 12,645
associates' turnover)
Less: share of associates' turnover (1,642) (1,279)
Group turnover 2 12,901 11,366
Net operating costs 3 (11,152) (10,043)
Group operating profit 2 1,749 1,323
Share of operating profit of 2 246 189
associates
Profit on disposal of investments 4 355 -
Share of associate's profit on 4 11 -
disposal of fixed assets
Profit on disposal of trademarks 4 - 13
Surplus on pension fund of disposed 4 - 47
operation
Share of associate's profit on 4 - 7
disposal of a CSD business and brands
in Morocco and a brand in Angola
Profit on ordinary activities before 2,361 1,579
interest and taxation
Net interest payable (167) (188)
Group (143) (152)
Associates (24) (36)
Profit on ordinary activities before 2,194 1,391
taxation
Taxation on profit on ordinary 5 (850) (579)
activities
Profit on ordinary activities after 1,344 812
taxation
Equity minority interests (203) (167)
Profit for the financial year 1,141 645
Dividends (473) (358)
Retained profit for the financial 668 287
year
Basic earnings per share (US cents) 6 94.1 54.1
Headline earnings per share (US 6 97.5 76.7
cents)
Adjusted basic earnings per share (US 6 103.2 77.6
cents)
Diluted earnings per share (US cents) 6 91.1 53.0
Adjusted diluted earnings per share 6 99.8 75.2
(US cents)
Dividends per share (US cents) 38.0 30.0
During the year and the previous year, the group made a number of acquisitions
and increased its shareholdings in several subsidiaries. As disclosed in note
11, these acquisitions were material to individual business segments, however,
they were not material to the group as a whole. All operations are continuing.
There is no material difference between the results disclosed above and those
disclosable on an unmodified historical cost basis.
20
SABMiller plc
CONSOLIDATED BALANCE SHEETS
at 31 March
2005 2004
Unaudited Audited
Notes US$m US$m
Fixed assets
Intangible assets 7 6,822 6,513
Tangible assets 4,162 3,758
Investments 1,303 1,212
Investments in associates 1,116 928
Other fixed asset investments 187 284
12,287 11,483
Current assets
Stock 634 599
Debtors 1,164 1,035
Investments 10 689 31
Cash at bank and in hand 10 454 651
2,941 2,316
Creditors - amounts falling due within (3,550) (2,783)
one year
Interest bearing debt 10 (813) (613)
Other (2,737) (2,170)
Net current liabilities (609) (467)
Total assets less current liabilities 11,678 11,016
Creditors - amounts falling due after (2,579) (3,166)
one year
Interest bearing debt * 10 (2,526) (3,094)
Other (53) (72)
Provisions for liabilities and charges 8 (796) (866)
Net assets 8,303 6,984
Shareholders' funds 7,665 6,165
Equity minority interests 638 819
Capital employed 8,303 6,984
* 2004 included US$594 million 4.25% guaranteed convertible bonds.
21
SABMiller plc
CONSOLIDATED CASH FLOW STATEMENTS
for the years ended 31 March
2005 2004
Unaudited Audited
Notes US$m US$m
Net cash inflow from operating 9 2,792 2,292
activities
Dividends received from associates 47 25
Returns on investments and servicing
of finance
Interest received 94 53
Interest paid (228) (216)
Interest element of finance lease (2) (3)
rental payments
Dividends received from other 10 9
investments
Dividends paid to minority interests (172) (154)
Net cash outflow from returns on (298) (311)
investments and servicing of finance
Taxation paid (625) (456)
Capital expenditure and financial
investments
Purchase of tangible fixed assets (768) (576)
Sale of tangible fixed assets 30 27
Purchase of investments (19) (217)
Sale of investments 475 6
Net cash outflow for capital (282) (760)
expenditure and financial investments
Acquisitions and disposals
Purchase of subsidiary undertakings 11 (24) (338)
Net cash / (overdraft) acquired with 1 (160)
subsidiary undertakings
Purchase of shares from minorities 11 (793) (20)
Purchase of shares in associates (13) (58)
Net funding (to) / from associates (68) 1
Proceeds of pension fund surplus from 4 - 47
previously disposed operation
Proceeds from disposal of trademarks 4 - 13
Net cash outflow for acquisitions and (897) (515)
disposals
Equity dividends paid to shareholders (412) (309)
Management of liquid resources
Sale / (purchase) of short-term 3 (16)
liquid instruments
Cash placed in short-term deposits (661) -
Net cash outflow from management of 10 (658) (16)
liquid resources
Financing
Issue of shares 38 10
Issue of shares to minorities 1 4
Net purchase of own shares for share (21) (10)
trusts
New loans raised 540 3,385
Repayment of loans (658) (3,377)
Net cash (outflow) / inflow from (100) 12
financing
Decrease in cash in the year 10 (433) (38)
22
SABMiller plc
CONSOLIDATED STATEMENTS OF TOTAL RECOGNISED GAINS AND LOSSES
for the years ended 31 March
2005 2004
Unaudited Audited
US$m US$m
Profit for the financial year 1,141 645
Currency translation differences on 206 300
foreign currency net investments
Total recognised gains and losses for the 1,347 945
year
CONSOLIDATED RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the years ended 31 March
2005 2004
Unaudited Audited
US$m US$m
Profit for the financial year 1,141 645
Other recognised gains and losses relating 206 300
to the year (net)
Dividends declared by SABMiller plc (473) (358)
Payment for purchase of own shares for (21) (10)
share trusts
Credit entry re the charge in respect of 12 6
share option schemes
Increase in share capital and premium on 597 -
conversion of 4.25% guaranteed convertible
bonds
Net proceeds on ordinary shares issued for 38 10
cash
Net increase in shareholders' funds 1,500 593
Shareholders' funds at start of year 6,165 5,572
Shareholders' funds at end of year 7,665 6,165
The amount of cumulative goodwill in respect of purchased subsidiary and
associated undertakings which has been set off against shareholders' funds prior
to 31 March 1998 was US$209 million at 31 March 2005 (2004: US$187 million).
23
SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS
1. Basis of preparation
The consolidated financial statements present the financial record for the years
ended 31 March 2005 and 31 March 2004.
The subsidiary and associated undertakings in the group operate in the local
currency of the country in which they are based. From a functional perspective,
the group regards these operations as being US dollar-based as the transactions
of these entities are, insofar as is possible, evaluated in US dollars. In
management accounting terms all companies report in US dollars.
The directors of the company regard the US dollar as the functional currency of
the group, being the most representative currency of its operations. Therefore
the consolidated financial statements are presented in US dollars.
In accordance with s240 of the Companies Act, 1985, as amended, the above
statements do not set out the full group financial statements of SABMiller plc
and its subsidiary undertakings. Group financial statements for 2005 will be
delivered to the Registrar of Companies in due course. The board of directors
approved this financial information on 18 May 2005. The financial information
for the year ended 31 March 2004 does not comprise statutory accounts but has
been extracted from the statutory accounts for that year, which have been
delivered to the Registrar of Companies. The auditors' report was unqualified
and did not contain a statement made under s237(2) or (3) of the Compa
