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INTERIM ANNOUNCEMENT HALF YEAR ENDED MARCH 31, 1992 GRANDMET INCREASES PROFITS DESPITE DIFFICULT ENVIRONMENT

 INTERIM ANNOUNCEMENT HALF YEAR ENDED MARCH 31, 1992
 GRANDMET INCREASES PROFITS DESPITE DIFFICULT ENVIRONMENT
 HIGHLIGHTS
 Sales from continuing businesses L3.7b $6.5b +11.8 pct.
 Operating income from
 continuing businesses L437m $760m +11.5 pct.
 Profit before tax L402m $699m +6.9 pct.
 Income before extraordinary items L272m $473m +6.3 pct.
 Earnings per share
 Including property/exceptionals 13.4p $.23 +3.9 pct.
 (per ADR(a), $.93)
 Excluding property/exceptionals 13.3p $.23 +5.6 pct.
 (per ADR(a), $.93)
 Interim dividend per
 ordinary share 4.6p $.08 +9.5 pct.
 Interim dividend per ADR(a), gross $.43
 Interim dividend per ADR(a), net $.36
 Interest cover 7.4 times
 Dividend cover 2.9 times
 (a) Each American Depositary Receipt (ADR) is equivalent to four ordinary shares.
 Overall Summary
 -- Operating income growth from continuing businesses was over 11 pct. in sterling and 6 pct. in local currencies. IDV and Burger King again produced strong growth, and the North American food operations performed well in fiercely competitive US consumer markets. European food results reflect major investments in long term product development. Pearle and UK Retailing continued to reflect the difficult retail market conditions.
 -- Interest cover improved from 4.5 times to 7.4 times and debt to total capitalization fell to 41 pct. from 47 pct. at March 31, 1991.
 -- Earnings per share, excluding property and exceptional items, grew by 5.6 pct. The interim dividend is increased by 9.5 pct. to 4.6p ($.08) per ordinary share. This is equivalent to a 9.5 pct. increase in the gross dividend of 24.5p ($.43) per ADR and a net dividend of 20.9p ($.36).
 -- Extraordinary profits of L139 ($242) million arose from the sale of the Express businesses in the United Kingdom and Ireland.
 Chairman's Comments
 Sir Allen Sheppard, Chairman and Group Chief Executive, commenting on progress and outlook for the rest of the year said:
 "As I stated at our Annual General Meeting, the recession has proved to be both deeper and more prolonged than most people had thought was likely. However, overall the company has performed well despite the difficult market conditions.
 I indicated at that time that the first half results should be in line with last year. In the event, I am pleased to report that profit before tax was up 6.9 pct. at L402 ($699) million. I would also like to highlight two other numbers: first, the 11.5 pct. growth in operating income from our continuing businesses, and second, the 5.6 pct. growth in earnings per share excluding property and exceptional items. For the interim dividend, the board has declared a 9.5 pct. increase.
 Looking at the full year, trading conditions in our major markets continue to be testing. I remain confident that 1992 will be another year of progress for the company, but the rate of our advance will depend on the rate at which the world economy recovers from recession."
 The detailed interim statement follows.
 GRAND METROPOLITAN PLC DETAILED INTERIM STATEMENT
 Profit and Loss Account
 The profit and loss account of the company for the half year ended March 31, 1992, is attached as Appendix 1. The average dollar exchange rate used to translate dollars into sterling during the half year was $1.77 - L1, compared with $1.93 - L1 for the corresponding period last year. Favorable currency translation increased operating income by L21 ($37) million and profit before tax by L12 (L21) million.
 Half year ended Half year ended
 March 31, 1992 March 31, 1991
 Operating Operating
 Sales Income Sales Income
 Lm $m Lm $m Lm $m Lm $m
 Continuing businesses
 Food 1,559 2,713 141 245 1,448 2,519 137 238
 Drinks 1,408 2,450 235 409 1,174 2,043 199 346
 Retailing 748 1,301 61 106 700 1,218 56 98
 -- 3,715 6,464 437 760 3,322 5,780 392 682
 Discontinued
 businesses 415 722 16 28 1,112 1,935 75 131
 -- 4,130 7,186 453 788 4,434 7,715 467 813
 Discontinued businesses comprise Express Dairy, Eden Vale, Express Ireland, Burger King Distribution Services and, in the prior period only, Brewing, tenanted pubs, UK Drinks Wholesaling, The Dominic Group and Service Restaurants.
 Geographical Analysis
 Operating
 Sales Income
 Pct. Pct.
 United Kingdom 20 22
 Rest of Europe 19 20
 United States 52 51
 Rest of World 9 7
 Continuing businesses 100 100
 Food
 The operating income of the North American Food businesses increased by 11 pct. In dollar terms the growth was 2 pct., to $213 million. The US consumer market was difficult and competitive. Bakery Products continued to benefit from recent product launches, holding volumes and increasing profits. Green Giant's market shares were improved, but at the cost of reduced profits. Haagen-Dazs was also affected by competitive activity. Alpo profits improved significantly with a number of new product launches sustaining its market share.
 The operating income of the European Food businesses, including Express's remaining cheese and food service operations, fell from L29 ($50) million to L21 ($37) million, a 28 pct. decrease on the comparable period. This result reflects substantial expansion costs in Europe to build the Hagen-Dazs, Pillsbury and Brossard brands.
 Drinks
 Operating income at IDV grew by 18 pct. to L235 ($409) million. After excluding the L9 ($16) million favorable impact of exchange translation the operating income growth was 14 pct., including an important contribution from recent acquisitions.
 This very creditable result was achieved despite the effects of the recession on the world drinks market. Strong profit increases were achieved in the North American and Southern European regions, with market share improving in the particularly difficult US market. Considerable attention has been given to production and distribution cost reduction programs and to cost control, and this is benefiting margins throughout the world. The Cinzano acquisition is proving very successful and brings not only the brand but also control of distribution networks in Italy and Germany as well as in Latin America.
 Retailing
 Operating income at Burger King increased by 13 pct. to $85 million. Its sterling operating income was L48 million compared with L39 million in the same period last year. An increase in comparable store sales and improved margins contributed to this strong profit growth.
 Pearle reported a loss of $23 million compared with a $10 million loss in the first half of 1991. Results continued to be affected significantly by the US recession but recent months have shown improvement.
 The operating income of the Chef & Brewer managed pub business and GrandMet Estates was up L4 ($7) million in spite of poor economic conditions. Chef & Brewer's profits benefited from cost reductions and from the addition of 330 Courage managed pubs in March 1991.
 Associates
 The company's share of Inntrepreneur Estates Limited's loss for the six months was L7 ($12) million, which is in line with original expectations. Profits in respect of the other associates increased from L10 ($17) million to L16 ($28) million, with contributions from the expansion of Hagen-Dazs in Japan and the acquisition of an interest in Jose Cuervo in Mexico.
 Property Profits and Exceptional Items
 Property profits were L3 ($5) million compared with L7 ($12) million in the comparable period last year. There were no exceptional items in the period.
 Interest
 Interest cover for the period was 7.4 times compared with 4.5 times in the same period last year.
 The interest charge decreased from L108 ($188) million to L63 ($110) million primarily as a result of the brewing and pubs transaction in March 1991.
 Taxation
 The effective rate of taxation was 31.6 pct., which is slightly higher than the rate for the year ended Sept. 30, 1991.
 Extraordinary Items
 There was an extraordinary credit after tax of L139 ($242) million in the half year ended March 31, 1992. This arises from the disposals of the Express businesses in the United Kingdom and Ireland.
 Dividend
 The interim dividend for the year ending Sept. 30, 1992 of 4.6p per ordinary share will be paid on Oct. 5, 1992 to shareholders on the register on August 7, 1992. This dividend compares with the 1991 interim of 4.2p per ordinary share (adjusted for the two for one ordinary share split) - an increase of 9.5 pct.. This is covered 2.9 times.
 Note to ADR Holders
 Payment of the interim 1992 dividend to ADR holders will be made shortly after Oct. 5, 1992 to holders of record on August 7, 1992.
 Dividend
 Note to ADR Holders (cont.)
 Qualifying US and Canadian resident ADR holders are entitled to a refund of the 25/75ths UK tax credit attaching to the dividend, less a 15 pct. UK withholding tax charge on the sum of the dividend and the tax credit. The effect for qualifying US and Canadian resident ADR holders is a gross dividend of 24.5p ($.43) and a net dividend of 20.9p ($.36) per ADR. The actual rate of exchange used in determining the dollar payment to ADR holders will be the exchange rate on Oct. 5, 1992. The 15 pct. withholding tax of 3.6p ($.07) per ADR may be treated as a foreign income tax credit that is eligible for credit against the ADR holder's federal income taxes.
 Using $1.74 for illustrative purposes, the gross interim dividend for 1992 is $.43 ($.36 net) versus $.39 ($.33 net) for the same period last year.
 Balance Sheet
 An abbreviated balance sheet of the company at March 31, 1992 is attached as Appendix 2.
 Shareholders' equity, before deducting minority interests, was L3,816 ($6,640) million compared with L3,266 (L5,683) million at March 31, 1991 and L3,454 ($6,010) million at Sept. 30, 1991.
 Net borrowings of L2,654 ($4,617) million were L234 ($407) million lower than March 31, 1991 and similar to Sept. 30, 1991. The impact of currency movements was not material.
 Debt to total capitalization was 41 pct. compared with 47 pct. at March 31, 1991 and 43 pct. at Sept. 30, 1991.
 Preliminary Statement
 The preliminary statement for the year ending Sept. 30, 1992 is due to be released on Dec. 3, 1992.
 Notes
 For the convenience of the reader, certain sterling amounts have been translated into US dollars using Grand Metropolitan's Balance Sheet rate on March 31, 1992 of L1.00 - $1.74.
 Trading Profit in UK terms has been called Operating Income for purposes of this release.
 The financial data (unaudited) has been prepared in accordance with UK accounting principles.
 Inquiries to: Mary Carroll, US Public Affairs, (212) 554-9225
 Holly Clemente, US Investor Relations, (212) 554-9233
 APPENDIX 1
 GRAND METROPOLITAN GROUP
 PROFIT AND LOSS ACCOUNT (UNAUDITED)
 Half year Half year Year
 ended ended ended
 31st March 31st March 30th September
 1992 1991 1991
 Lm Lm Lm
 Turnover
 Continuing businesses 3,715 3,322 6,914
 Discontinued businesses 415 1,112 1,834
 -- 4,130 4,434 8,748
 Trading profit
 Continuing businesses 437 392 957
 Discontinued businesses 16 75 106
 -- 453 467 1,063
 Share of profits/(losses)
 of associates
 Inntrepreneur Estates Ltd (7) -- (11)
 Other 16 10 21
 -- 462 477 1,073
 Property profits 3 7 18
 Net exceptional items - - 30
 Interest (63) (108) (171)
 Profit before taxation 402 376 950
 Taxation (127) (117) (298)
 Profit after taxation 275 259 652
 Minority interests (3) (3) (7)
 Profit before
 extraordinary items 272 256 645
 Extraordinary items 139 (319) (427)
 Profit for the year 411 (63) 218
 Ordinary dividends (92) (80) (218)
 Transferred to reserves 319 (143) -
 Interest cover 7.4 times 4.5 times 6.6 times
 Earnings per share 13.4p 12.9p 32.4p
 Dividend per share 4.6p 4.2p 11.35p
 Average L/$ exchange rate 1.77 1.93 1.80
 Average number of shares 2,025m 1,985m 1,990m
 APPENDIX 2
 GRAND METROPOLITAN GROUP
 BALANCE SHEET (UNAUDITED)
 31st 31st 30th
 March March September
 1992 1991 1991
 Lm Lm Lm
 Fixed assets
 Intangible assets 2,537 2,476 2,464
 Tangible assets 2,682 2,667 2,764
 Investments 807 859 851
 -- 6,026 6,002 6,079
 Working capital
 Stocks 1,250 1,265 1,286
 Debtors 1,781 1,627 1,561
 Creditors
 and provisions (2,587) (2,740) (2,873)
 Capital employed 6,470 6,154 6,053
 Net borrowings (2,654) (2,888) (2,599)
 -- 3,816 3,266 3,454
 Shareholders' funds
 Called up share capital 522 509 515
 Reserves 3,258 2,728 2,907
 Minority interests 36 29 32
 -- 3,816 3,266 3,454
 Gearing 70 pct. 88 pct. 75 pct.
 Closing L/$
 exchange rate 1.74 1.74 1.75
 APPENDIX 3
 GRAND METROPOLITAN GROUP
 NOTES (UNAUDITED)
 1. The figures on Appendices 1 and 2 for the year ended 30th September 1991 have been extracted from the statutory accounts which have been filed with the registrar of companies and restated as set out in notes 2 and 3 below. The auditors' report on those accounts was unqualified and did not contain any statement under section 237 of the Companies Act 1985.
 2. In accordance with the consensus pronouncement issued by the Urgent Issues Task Force of the Accounting Standards Board, the profit or loss on the disposal of a previously acquired business now reflects the attributable amount of purchased goodwill relating to that business.
 The results for the six months ended 31st March 1992, together with the comparative half year and full year profit and loss accounts, have been reduced by the following charges for goodwill on disposals:
 6 months 6 months Year
 31.3.92 31.3.91 30.9.91
 Lm Lm Lm
 Trading profit 23(a) 1 8
 Exceptional items - - 5
 Profit before tax 23 1 13
 Extraordinary items 63 185 201
 (a) This charge relates to the disposal of the investment in Remy Cointreau. After charging this goodwill the disposal gave rise to a net gain of L3 million.
 This change has no overall impact on the balance sheets.
 3. On 15th April 1992 each 50p ordinary share of the company


was sub-divided into two new ordinary shares of 25p each. The figures for earnings per share and dividends per share have been adjusted to take account of this change.
 -0- 5/14/92
 /CONTACT: Mary Carroll, US Public Affairs, 212-554-9225, or Holly Clemente, US Investor Relations, 212-554-9233, both for Grand Metropolitan/ CO: Grand Metropolitan PLC ST: Minnesota IN: FOD SU: ERN


DS -- MN006 -- 0127 05/14/92 10:39 EDT
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