Results to 16/09/00 - Part 2

Associated British Foods PLC 8 November 2000 Part 2 NOTES TO THE PRELIMINARY ANNOUNCEMENT For the For the year ended year ended 16 September 18 September 2000 1999 £m £m 1.Analysis of turnover and profits Turnover Geographical analysis (by origin and destination): European Union, mainly United Kingdom and Ireland 3,037 2,962 Australia and New Zealand 608 548 North America 627 665 Elsewhere 134 124 -------- -------- Group turnover 4,406 4,299 ======== ======== Business sector: Manufacturing 3,977 3,935 Retail 429 364 -------- -------- Group turnover 4,406 4,299 ======== ======== Profits Geographical analysis (by origin): European Union, mainly United Kingdom and Ireland 280 284 Australia and New Zealand 27 17 North America 27 26 Elsewhere 6 (1) -------- -------- Total operating profit before exceptional items and amortisation of goodwill 340 326 Exceptional items - European Union (72) (84) - North America (45) - - Elsewhere (13) - Amortisation of goodwill - European Union (1) - - North America (5) (5) -------- -------- Total operating profit 204 237 ======== ======== Business sector: Manufacturing 289 283 Retail 51 43 -------- -------- Total operating profit before exceptional items 340 326 Exceptional items - manufacturing (130) (84) Amortisation of goodwill - manufacturing (6) (5) -------- -------- Total operating profit 204 237 Other net income 43 63 -------- -------- Profit on ordinary activities before taxation 247 300 ======== ======== The exceptional operating charge in the current year reflects the results of a review of the group's operations which has affected the carrying values and useful lives of certain assets (£86 million) and has given rise to the need to provide for an estimate of the associated cash costs (£12 million), including redundancy, where closure plans have been announced. A further fixed asset impairment charge (£32 million) has been made in respect of UK manufacturing assets, based on their estimated value in use, using a weighted average cost of capital of 12.5%. Exceptional items in the prior year relate to an FRS 11 impairment charge in respect of fixed assets within the group's UK manufacturing operations, based on their estimated value in use, using a weighted average cost of capital of 12.5%. For the For the year ended year ended 16 September 18 September 2000 1999 £m £m 2.Tax on profit on ordinary activities United Kingdom 80 89 Overseas - income and corporation tax 29 23 - deferred tax - 2 Joint ventures and associates 2 1 -------- -------- 111 115 ======== ======== 3.Dividends First interim dividend of 4.25p per share (1999 - 4.25p) 34 34 Second interim dividend of 7.00p per share (1999 - 6.50p) 55 51 -------- -------- 89 85 Special interim dividend of nil per share (1999 - 50.00p) - 448 -------- -------- 89 533 ======== ======== 4.Cash flow from operating activities Operating profit 197 233 Amortisation of goodwill 6 5 Impairment of fixed assets 32 84 Depreciation 206 142 (Increase)/decrease in working capital - stocks (28) (17) - debtors (25) 1 - creditors 44 (25) Provisions 13 (3) -------- -------- 445 420 ======== ======== The depreciation of £206 million includes £86 million related to the exceptional charge following a review of the group's manufacturing operations 5.Analysis of changes in net funds Increase/(decrease) in cash before management of liquid funds and financing 116 (562) Purchase of equity investments 7 1 Sale of equity investments (9) (6) Changes in market value (2) 9 Arising on acquisition of subsidiary undertakings - (8) Effect of currency changes (2) (2) -------- -------- Movement in net funds in the year 110 (568) Net funds at beginning of year 871 1,439 -------- -------- Net funds at end of year 981 871 ======== ======== 6.Analysis of net funds Current asset investments 1,133 1,030 Cash at bank and in hand 65 51 Short term borrowings (57) (53) Loans falling due after one year (160) (157) -------- -------- 981 871 ======== ======== 7. Other information The financial information set out above does not constitute the group's statutory financial statements for the years ended 16 September 2000 and 18 September 1999, but is derived from them. The 1999 financial statements have been filed with the Registrar of Companies whereas those for 2000 will be delivered following the company's annual general meeting. The auditor's opinions on these financial statements were unqualified and did not include a statement under section 237 (2) or (3) of the Companies Act 1985. ACCOUNTING POLICIES Basis of preparation These financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets, and in accordance with applicable accounting standards and the Companies Act 1985. Basis of consolidation The group accounts comprise a consolidation of the accounts of the Company and its subsidiary undertakings, together with the group's share of the results and net assets of its joint ventures and associates. The financial statements of the company and its subsidiary undertakings are made up for the 52 weeks ended 16 September 2000, except that, to avoid delay in the preparation of the consolidated financial statements, those of the Australian and New Zealand group and China and Poland are made up to 31 July 2000, and those of the North American subsidiary undertakings are made up to 31 August 2000. Acquisitions The consolidated profit and loss account includes the results of new subsidiary undertakings, joint ventures and associates attributable to the period since change of control. Disposals The results of subsidiary undertakings, joint ventures and associates sold are included up to the dates of change of control. The profit or loss on the disposal of an acquired business takes into account the amount of any related goodwill previously written off directly to reserves, or the net amount of goodwill remaining unamortised, as appropriate. Intangible fixed assets Intangible fixed assets consist of goodwill arising on acquisitions since 13 September 1998, being the excess of the fair value of the purchase consideration of new subsidiary undertakings, joint ventures and associates over the fair value of net assets acquired. Goodwill is capitalised in accordance with FRS 10 and amortised over its useful economic life, not exceeding 20 years. Goodwill previously written off against reserves has not been reinstated. Tangible fixed assets Fixed assets are carried at their original cost less accumulated depreciation. Foreign currencies Assets and liabilities denominated in foreign currencies are converted into sterling at rates of exchange ruling at the balance sheet date or at the contracted rate as appropriate. The assets and liabilities of overseas operations are converted into sterling at the rates of exchange ruling at the balance sheet date. The results of overseas operations have been translated at the average rate prevailing during the year. Exchange differences arising on consolidation are taken directly to reserves. Other exchange differences are dealt with as part of operating profits. Pensions The group has established separately funded pension schemes for the benefit of permanent staff, which vary with employment conditions in the countries concerned. Net pension costs are charged to income over the expected average remaining service lives of employees. Any differences between the charge for pensions and total contributions are included within pension provisions or debtors as appropriate. Research and development Expenditure in respect of research and development is written off against profits in the period in which it is incurred. Fixed asset investments Joint ventures and associates are accounted for in the financial statements of the group under the equity method of accounting. Other fixed asset investments in the group's accounts, and all fixed asset investments in the accounts of the company, are stated at cost less amounts written off in respect of any permanent diminution in value. Depreciation Depreciation is provided on the original cost of assets and is calculated on a straight line basis at rates sufficient to reduce them to their estimated residual value. No depreciation is provided on freehold land or payments on account. Leaseholds are written off over the period of the lease. The anticipated life of other assets is generally deemed to be not longer than: Freehold buildings 66 years Plant, machinery, fixtures and fittings - sugar factories 20 years - other operations 12 years Vehicles 8 years Leases All material leases entered into by the group are operating leases, whereby substantially all of the risks and rewards of ownership of an asset remain with the lessor. Rental payments are charged against profits on a straight line basis over the life of the lease. Stocks Stocks are valued at the lower of cost or net realisable value, after making due provision against obsolete and slow-moving items. In the case of manufactured goods the term 'cost' includes ingredients, production wages and production overheads. Current asset investments Current asset investments are stated at the lower of cost or market value. Financial instruments Forward foreign exchange contracts and currency options are used to hedge forecast transactional cash flows and accordingly, any gains or losses on these contracts are recognised in the profit and loss account when the underlying transaction is settled. Derivative commodity contracts are used to hedge committed purchases or sales of commodities and accordingly, any gains or losses on these contracts are recognised in the profit and loss account in the same accounting period as the underlying purchase or sale. Gains or losses arising on hedging instruments which are cancelled due to the termination of the underlying exposure are taken to the profit and loss account immediately. Deferred tax Deferred tax represents corporation tax in respect of accelerated taxation allowances on capital expenditure and other timing differences, to the extent that a liability is anticipated in the foreseeable future.

Companies

Associated British Foods (ABF)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today