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GRAND METROPOLITAN INTERIM ANNOUNCEMENT HALF YEAR ENDED MARCH 31, 1993; PROFIT BEFORE EXCEPTIONALS UP 5 PERCENT

                            HIGHLIGHTS
    OPERATING PROFIT
    From continuing operations            L484m      $731m     15.2 pct.
    PROFIT BEFORE TAX
    Excluding exceptionals                L416m      $628m      5.6 pct.
    EARNINGS PER SHARE
    Excluding exceptionals                13.4p       $.20      3.1 pct.
          (per ADR(a), $.81)
    INTERIM DIVIDEND PER SHARE             4.85p      $.07      5.4 pct.
     Dividend per ADR(a), Gross             --        $.37        --
     Dividend per ADR(a), Net                 --        $.31        --
    INTEREST COVER                          --         6.5 times  --
    (a)  Each American Depositary Receipt (ADR) is equivalent to four ordinary shares.
    Chairman's Comments
    Sir Allen Sheppard, chairman and group chief executive, commenting on the results and outlook for the rest of the year said:
    "Since my comments at February's annual meeting, the world economy has performed much as we anticipated, with gradual recovery emerging in the US, some early signs of improvement in the UK but a worsening economic climate in many Continental European markets.
    Within this environment, GrandMet maintained its strategy of building and developing powerful brands in key international markets and structuring the business for long term growth.  As part of this strategy, we continued our disposal of non-branded businesses.  We also expanded our global reach on several fronts:  IDV, our Drinks division, continued its European expansion with investments in Spain, Italy and Hungary; Burger King expanded in Mexico, Europe and the Middle East; Hagen-Dazs is now in 12 European countries, as well as Japan, Taiwan and Korea.  To support our brands, we maintained our groupwide marketing spend at the same local currency level as last year.
    Several of the major businesses delivered strong performances: IDV, which performed at best industry levels, benefited again from its broad geographical spread and portfolio of well-known brands; Burger King increased profitability from improved margins and successful new unit development; and our North American Food business, with the exception of Green Giant, achieved organic growth.  Over-supply in the US vegetable industry continued to affect Green Giant, although corrective actions are already in place.  Our European food businesses were affected by soft market conditions.  Chef & Brewer increased profits despite a sluggish economy.  Pearle benefited from aggressive cost reductions and significantly reduced losses as a result.  IEL's results improved despite a  difficult market.
    Profit before exceptional items and tax increased by 5.6 percent. The board has declared an interim dividend of 4.85p, an increase of 5.4 percent. Looking ahead, we expect the US and the UK to continue to improve gradually. However, we believe the Continental European markets will increasingly be affected by recession throughout 1993.  Although the pace of economic recovery in our key markets remains difficult to predict, our portfolio of premium brands and the spread of our businesses position us well for future growth."
    Interim Statement
    The detailed interim statement follows.  For the convenience of the reader, certain sterling amounts have been translated into US dollars using Grand Metropolitan's (NYSE: GRM) Balance Sheet rate on March 31, 1993 of L1.00=$1.51.
    The financial data has been prepared in accordance with UK accounting principles.
             GRAND METROPOLITAN DETAILED INTERIM STATEMENT
    Profit and Loss Account
    The profit and loss account of the group for the half year ended March 31, 1993 is  attached as Appendix 1.
    Segment Analysis
                      Half year ended                Half year ended
                          3/31/93                         3/31/92
                     Sales      Operating         Sales      Operating
                                  Profit                       Profit
                   Lm     $m    Lm      $m       Lm     $m    Lm    $m
    Continuing
     operations
    Food         1,609   2,430  127     192    1,412   2,132  124   187
    Drinks       1,675   2,529  268     405    1,408   2,126  235   355
    Retailing      779   1,176   89     134      748   1,129   61    92
    --           4,063   6,135  484     731    3,568   5,387  420   634
    Discontinued
     operations     26      39    1       1      562     849   28    42
    --           4,089   6,174  485     732    4,130   6,236  448   676
    The average dollar exchange rate during the half year was $1.52=L1,
compared with $1.77=L1 for the corresponding period last year.   The positive impact of this and other currency translation movements on the half year operating profit was L50 million and on profit before tax was L29 million.
    Discontinued operations comprise Express Foods and, in the prior period only, all of the Express dairy businesses and Burger King Distribution Services.
    Geographical Analysis
                            Sales by Market        Operating Profit
                          Lm      $m     Pct.     Lm      $m     Pct.
    United Kingdom       597     901      15      79     119      16
    Rest of Europe       861   1,300      21      96     145      20
    United States      2,162   3,265      53     259     391      54
    Rest of World        443     669      11      50      76      10
    Continuing
     operations        4,063   6,135     100     484     731     100
    Food
    The operating profit of North American Food increased by 5 percent to L126 ($190) million.  In dollar terms, with the exception of Green Giant, the North American Food business achieved organic growth in operating profit, and held or improved market shares in most categories. Green Giant maintained market shares, but dollar operating profits halved as vegetable prices, as expected, continued to be affected by the record 1992 industry harvest. Including the Green Giant results, North American Food dollar profits were down 10 percent.
    In European Food, several businesses were impacted by adverse economic conditions resulting in a reduced profit for the period. Hagen- Dazs achieved strong volume growth as it substantially concluded its heavy investment phase with the commissioning of a new manufacturing plant in France and entry into major European centers.
    Drinks
    Following a strong performance in the comparable period last year, operating profit at IDV grew by a further 14 percent to L268 ($405) million.  After excluding the favorable impact of exchange translation, organic growth was 4 percent.  In North America, improved industry trends and focused marketing led to increased sales and a reduction in trade stocks. In Europe, the growth in operating profits was restrained by poor economic conditions.
    IDV's geographical spread and distribution network were enhanced in the period with the acquisition of Buton in Italy, as well as investments in Spain, Hungary, Korea and Uganda.
    Retailing
    Operating profit at Burger King was up 31 percent to L63 ($95) million. In local currency, profits were up 13 percent.  This reflected cost savings from the creation of a total US system purchasing agency in 1992, as well as continued margin improvements and new unit expansion.
    Pearle made significant progress with a loss of L2 ($3) million compared with a L13 ($20) million loss in the first half of 1992. The US eye-care market continues to be slow, but the cost reduction initiatives in 1992 have had a favorable impact.
    The operating profits of the Chef & Brewer managed pub business and GrandMet Estates were up 8 percent at L28 ($42) million, mainly as a result of a continuing tight control of costs.
    Associates
    The group's share of Inntrepreneur Estates Ltd's loss for the six months was L6 ($9) million - a small improvement on the same period last year.  Profits in respect of the other associates decreased from L16 ($24) million to L12 ($18) million, reflecting the disposal of the investment in Remy Cointreau in April 1992.
    Exceptional Items
    There were no material exceptional items in the first half of this year.
    Interest
    Interest cover for the period was 6.5 times compared with 7.3 times in the same period last year.
    Underlying interest decreased, principally as a result of cash flow from disposals.  However, currency movements had an adverse impact of L23 ($35) million and the interest charge increased from L63 ($95) million to L75 ($113) million.
    Taxation
    The effective rate of taxation was 32.4 percent.
    Dividend
    The interim dividend for the year ending Sept. 30, 1993 of 4.85p per share will be paid on Oct. 4, 1993 to shareholders on the register on Aug. 6, 1993.  This dividend compares with the 1992 interim of 4.6p per share, and represents an increase of 5.4 percent.
    Note to ADR Holders
    Payment of the interim 1993 dividend to ADR holders will be made shortly after Oct. 4, 1993 to holders of record on Aug. 6, 1993.
    Qualifying US and Canadian resident ADR holders are entitled to a refund of the 20/80ths UK tax credit attaching to the dividend, less a 15 percent UK withholding tax charge on the sum of the dividend and the tax credit.  The effect for qualifying US and Canadian resident ADR holders is a gross interim dividend of 24.3p ($.37) and a net dividend of 20.6p ($.31) per ADR.  The actual rate of exchange used in determining the dollar payment to ADR holders will be the exchange rate on Oct. 4, 1993.  The 15 percent withholding tax of 3.7p ($.06) per ADR may be treated as a foreign income tax credit that is eligible for credit against the ADR holder's federal income taxes.
    Balance Sheet
    Net borrowings of L3,164 ($4,778) million were L723 ($1,092) million higher than at Sept. 30, 1992, of which currency movements due to the translation of non-sterling denominated debt accounted for L676 ($1,021) million.  Debt to total capitalization was 45 percent compared with 41 percent at March 31,1992 and 39 percent at Sept. 30, 1992.
    Operating cash flow improved to L439 ($663) million compared with L323 ($488) million for the same period last year.
    An abbreviated balance sheet of the group at March 31,1993 is attached as Appendix 2.  A cash flow statement  for the half year ended on that date is attached as Appendix 3.
    Preliminary Statement
    The preliminary statement for the year ending Sept. 30, 1993 is due to be released on Dec. 2, 1993.
    APPENDIX 1
                             GRAND METROPOLITAN
                          PROFIT AND LOSS ACCOUNT
                      (In millions of Pounds Sterling)
                                   Half Year Ended      Year Ended
                                3/31/93      3/31/92      9/30/92
    Turnover
      Continuing operations      4,049        3,568        7,045
      Acquisitions                  14          --           --
    --                           4,063          --           --
      Discontinued operations       26          562          868
      Total turnover             4,089        4,130        7,913
    Operating profit
      Continuing operations        483          420          902
      Acquisitions                   1          --           --
    --                             484          --           --
      Discontinued operations        1           28           47
      Total operating profit       485          448          949
    Share of profits/(losses)
     of associates                  (6)          (7)         (14)
      Inntrepreneur Estates Ltd     12           16           30
      Other                        491          457          965
    Interest                       (75)         (63)         (94)
    Profit before exceptionals
      and taxation                 416          394          871
    Disposal of fixed assets         1            3           13
    Sale or termination of
     businesses                     --          155           41
    Profit before taxation         417          552          925
    Taxation                      (135)        (138)        (295)
    Profit after taxation          282          414          630
    Minority interests              (4)          (3)          (6)
    Profit for the period          278          411          624
    Ordinary dividends             (96)         (92)        (246)
    Transferred to reserves        182          319          378
    Interest cover                 6.5 times    7.3 times   10.3 times
    Earnings per share
      Excluding exceptionals      13.4p        13.0p        28.8p
      Including exceptionals      13.5p        20.3p        30.6p
    Dividend per share            4.85p         4.6p        12.3p
    Average L/$ exchange rate     1.52         1.77         1.81
    Average number of shares     2,060m       2,025m       2,036m
    APPENDIX 2
                             GRAND METROPOLITAN
                               BALANCE SHEET
                      (in millions of pounds sterling)
                                   3/31/93     3/31/92      9/30/92
    Fixed assets
      Intangible assets             2,908       2,537        2,492
      Tangible assets               2,773       2,682        2,638
      Investments                     817         807          713
    --                              6,498       6,026        5,843
    Working capital
      Stocks                        1,330       1,250        1,381
      Debtors                       1,845       1,781        1,830
      Creditors and provisions     (2,671)     (2,587)      (2,826)
    Capital employed                7,002       6,470        6,228
    Net borrowings                 (3,164)     (2,654)      (2,441)
    --                              3,838       3,816        3,787
    Shareholders' funds
      Called up share capital         528         522          526
      Reserves                      3,277       3,258        3,233
    --                              3,805       3,780        3,759
    Minority interests                 33          36           28
    --                              3,838       3,816        3,787
    Debt to total
     capitalization (percent)          45          41           39
    Closing L/$ exchange rate        1.51        1.74         1.78
    APPENDIX 3
                             GRAND METROPOLITAN
                            CASH FLOW STATEMENT
                      (in millions of pounds sterling)
                                      Half Year Ended    Year Ended
                                    3/31/93    3/31/92     9/30/92
    Operating activities
      Operating profit                485        448         949
      Depreciation                    109        101         206
      Other items                     (12)       (22)        (40)
      Working capital                (143)      (204)       (245)
    Cash from operating
     activities                       439        323         870
    Servicing of finance and
     taxation
      Interest paid                   (68)       (93)       (131)
      Dividends paid                  (92)       (81)       (218)
      Taxation paid                  (133)      (116)       (217)
    Cash inflow before investing      146         33         304
    Investing activities
      Capital expenditure             (92)      (156)       (345)
      Sale of fixed assets             12         37          77
      Acquisitions                   (200)      (227)       (310)
      Disposals                       146        383         564
      Provisions                      (63)       (92)       (164)
    Net cash flow before
     financing                        (51)       (22)        126
    Financing
      Shares issued                    17         44          85
      Debt re acquisitions/disposals  (13)       (53)        (43)
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Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Date:May 13, 1993
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