Interim Results
BURMAH CASTROL PLC
8 September 1999
BURMAH CASTROL PLC: 1999 INTERIM RESULTS
'A powerful start to the year'
Highlights
* Operating profit* up 9 per cent, with Castrol Consumer
performing particularly strongly.
* Earnings per share* up 13 per cent.
* Interim dividend of 15.4 pence per share: up 10 per cent.
1H 1999* Change on 1H 1998*
as reported at constant
currencies
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Operating profit £135m +9% +7%
Profit before tax £126m +5% +3%
Profit after tax and minorities £70m +6% +4%
Earnings per share 34.8p +13% +11%
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* Before discontinued businesses and exceptional items.
Chief Executive, Tim Stevenson, comments:
'We have made a powerful start to the year, despite challenging
conditions in certain key markets. We have also been actively
pursuing our strategy of investment in our principal businesses
and the divestment of non-core activities, and have made a good
start with the implementation of our business efficiency
programmes. The outlook is encouraging, with trading conditions
improving.'
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Enquiries:
James Alexander 0171 499 9533 on 8 September
Corporate Affairs Director and 01793 452006 thereafter
Rachel Hirst, Hogarth 0171 357 9477
A full copy of the Interim Results announcement is available on
the Burmah Castrol Web-site: www.burmah-castrol.com.
Summary
Burmah Castrol achieved excellent growth in the first half of
1999, despite challenging conditions in certain key markets.
Before discontinued businesses and exceptional items, operating
profit rose nine per cent, to £135 million, and earnings per share
increased 13 per cent to 34.8 pence, this higher increase
reflecting the initial effects of the return of approximately £280
million of capital to shareholders in May 1999. For the first
time in three years, currency translation had a marginally
positive effect on results; turnover and operating profit from
continuing businesses benefited by some £20 million and £2 million
respectively.
The outlook is encouraging as market conditions are improving.
The effect of the return of capital will be to enhance earnings
per share by some six per cent in 1999.
Burmah Castrol is also actively pursuing its programme to improve
shareholder value through investment in its principal businesses
and the divestment of non-core businesses. So far this year
Burmah Castrol has made seven acquisitions, set up new operations
in China and Eastern Europe, and increased its holdings in Foseco
India and Sericol India. Brand investment has been maintained at
a high level. The Irish Fuels operation, and Timber Treatment and
Aluminium divisions, have been sold. Further opportunities for
complementary acquisitions, geographic expansion and the sale of
peripheral businesses are under review.
Business Results
* Castrol Consumer made an excellent start, with profits
reaching £85 million, up 24 per cent on the first half of
1998. Volumes were up three per cent reflecting further
market share gains; margins improved to 15 per cent as a
result of lower raw material costs and tight expense control.
Europe continues to face challenging conditions, but achieved
improved profits and margins. North America recorded strong
results: volumes and margins improved, the company holds the
leading brand position in the 'Do-it-yourself' market, and is
now successfully targeting specific opportunities in the 'Do-
it-for-me' quick-lube sector. Asia Pacific is performing
much better with good results from Australia, Thailand,
Malaysia and Japan, whilst India continues to make good
progress.
Following the reorganisation of Castrol in 1998, there have
been some business and expense reallocations amongst the
different Castrol business streams. These have reduced
Industrial's and Commercial's reported half year profits by
some £1.5 million in each case, and increased principally
Consumer accordingly.
* Castrol Industrial's profit decline was due to difficult
market conditions in Europe, which offset satisfactory
results from North America, improving performances in East
Asia and encouraging progress in India. 'Chemical Management
Services' contracts continue to be won in all regions and
will underpin future profit and margin growth.
* Castrol Marine increased profits, with improved results being
achieved in Asia Pacific. Europe also performed well.
Castrol Commercial achieved growth in Europe and Asia
Pacific, including India; North America's volumes should
benefit from a successful rebranding exercise, to convert the
Dryden name to Castrol.
* Foseco Foundry's profits fell as a result of the decline in
the jobbing foundry and steel casting markets in Europe and,
to a lesser extent, in North America. Margins were however
maintained at a high level, Asia Pacific is showing strong
growth and restructuring in Europe and India will bring
benefits.
* Construction made a strong start, with profits up
significantly and margins improving to almost 12 per cent.
There were continuing good results from the Middle East,
conditions are improving in Asia Pacific and the UK has been
returned to profitability following major restructuring.
* Printing did well to maintain profits, as the continuing
strength of sterling impacted UK export growth and its
European and US operations faced less robust markets.
Margins remain excellent, at over 15 per cent.
* Releasants achieved good growth, notably in the USA and Asia
Pacific, and margins improved to over 11 per cent. Steel
declined as steel production in Europe and the USA fell
sharply. In Specialities, Mining achieved much improved
results despite weak global markets and Investment Casting
improved profit significantly, but Ceramic Welding recorded a
loss as its markets deteriorated sharply.
Other Businesses
The remaining two Fuels networks' profits declined slightly, as
did Energy Investments' due to lower gas prices in Pakistan. The
intention remains to dispose of these businesses when satisfactory
prices can be obtained.
Financial Position
As a result of the return of capital to shareholders, net gearing
rose to 85 per cent (74 per cent on a net borrowing only basis),
but interest cover was a strong 14 times at the half year and is
expected to be around 10 times at the full year on a proforma
basis. There was a net cash outflow, before management of liquid
resources and financing, of £44 million, principally as a result
of a series of strategic acquisitions amounting to £42 million in
total in the first half of the year.
Exceptional Items
A net exceptional loss of some £2 million arose following the sale
of the Irish Fuels, Timber Treatment and Aluminium businesses.
Exceptional costs of some £15 million have been incurred to date
in respect of business efficiency programmes. Following a recent
Brazilian Supreme Court judgement, a provision of £14 million has
been made for turnover-based taxes and associated charges relating
mainly to prior years.
Value Creation
Burmah Castrol announced, in March, its intention to improve
further the value creation potential of each principal business.
The aim is to maintain margins in those businesses that already
achieve high returns, improve margins where these are currently
inadequate, significantly reduce indirect costs and accelerate
market share growth.
In Europe, Castrol Consumer has commenced a series of projects, to
further differentiate itself from the competition and grow share
while, at the same time, substantially reducing the cost base. Pan-
European marketing initiatives are being developed, including
partnerships with key customers where early successes include
Conoco and Carrefour; others are close to completion. Plans are
also in place to achieve substantial reductions in capital
employed as well as cost savings, through purchasing, supply chain
and back office restructuring.
Also in Europe, the Foundry, Steel, Releasants and Construction
businesses have been engaged in similar programmes, involving new
marketing and product development projects allied to supply chain
rationalisation. In India, extensive restructuring and
rationalisation of the Foundry and Steel businesses are well
underway. In addition, following a major review of the Steel
business, it has been decided that there is much that can be done
to create value through further, major restructuring and that it
is currently in shareholders' interests to retain this business.
Since March, additional restructuring opportunities in Burmah
Castrol's other businesses and regions have been identified and
they are developing their own plans. Further information will be
provided as the programmes progress. At this stage, the
cumulative benefits expected are now estimated to be of the order
of £30 million in 2000, £45 million in 2001 rising to some £60
million per annum in 2002 and higher thereafter. Exceptional
costs of the order of £35 million in 1999, £30 million in 2000 and
£85 million across the following two years are expected to be
incurred. The total net cash cost of the programme is likely to
be just over £100 million, of which some £35 million will be
incurred in 1999. The difference between the total exceptional
costs and the net cash costs expected reflects reductions in net
working capital and asset write downs. Restructuring on this
scale will regrettably result in significant job losses. This year
there will be some 450 job losses; over the next few years,
numbers employed could fall by over a further 1000 people. Every
effort will be made to reduce the impact through voluntary
redundancy and natural wastage.
Dividends
An interim cash dividend of 15.4 pence per share is to be paid, a
10 per cent increase on the 1998 interim dividend of 14 pence per
share. The company intends to maintain its progressive dividend
policy.
Year 2000
Burmah Castrol has had a dedicated team, which reports regularly
to the Board, working to ensure that planning covers all business
continuity issues, including working with customers and suppliers.
Burmah Castrol is currently in the final stages of contingency
planning and is confident that all units will achieve 'Year 2000
readiness'. During 1999 some £5 million of costs will be incurred
in this respect.
Year End Trading Statement
Burmah Castrol has decided that an annual trading statement should
be published on a regular basis, two months ahead of its full year
announcement. The first such statement will therefore be issued
in December this year.
Outlook
The Chief Executive, Tim Stevenson, comments:
'We have made a powerful start to the year. The outlook for the
second half is favourable. Consumer is continuing to grow share
and should maintain satisfactory margins despite rising input
costs. Construction and Releasants are achieving a good rate of
growth. Industrial is starting to perform more strongly, and
Marine and Commercial are making steady progress. Foundry is
seeing some improvement in its markets but, in Printing, the key
graphics segment remains subdued.
There is much work still to be done. We are confident we will
bring through to shareholders the full value of our strong global
businesses.'
GROUP PROFIT & LOSS ACCOUNT
Half year to 30 June 1999
Continuing Discontinued Exceptional Total
Notes operations operations items(note 3)
£ million £ million £ million £ million
-----------------------------------------------------------------
Turnover 1,423.7 22.8 1,446.5
-----------------------------------------------------------------
Operating profit 134.3 1.4 (28.9) 106.8
Share of
operating profit
in associates 1.0 1.0
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Total operating
profit 135.3 1.4 (28.9) 107.8
Profit on sale
of businesses 3.4 3.4
Provision for loss
on sale of businesses (5.3) (5.3)
(Loss)/profit on sale
of fixed assets (1.3) (1.3)
-----------------------------------------------------------------
Profit before
interest 135.3 1.4 (32.1) 104.6
4 Interest (9.8) (9.8)
-----------------------------------------------------------------
Profit before
taxation 125.5 1.4 (32.1) 94.8
5 Taxation (44.9) (0.1) 4.3 (40.7)
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Profit after
taxation 80.6 1.3 (27.8) 54.1
Minority interests (11.1) (11.1)
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Profit attributable
to shareholders 69.5 1.3 (27.8) 43.0
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6 Earnings per
ordinary share 34.8p 0.6p (13.9)p 21.5p
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6 Diluted earnings
per ordinary share 34.7p 0.6p (13.9)p 21.4p
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Interest cover
(times) 14 11
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Taxation as a
percentage of
profit before
taxation -----35.5%----- 42.9%
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GROUP PROFIT & LOSS ACCOUNT
Half year to 30 June 1998
Continuing Discontinued Exceptional Total
Notes operations operations items(note 3)
£ million £ million £ million £ million
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Turnover 1,384.8 33.4 1,418.2
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Operating profit 122.9 2.5 (10.4) 115.0
Share of
operating profit
in associates 1.0 1.5 2.5
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Total operating
profit 123.9 4.0 (10.4) 117.5
Profit on sale
of businesses 40.2 40.2
Provision for loss
on sale of businesses
(Loss)/profit on sale
of fixed assets 0.2 0.2
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Profit before
interest 123.9 4.0 30.0 157.9
4 Interest (4.3) (0.1) (4.4)
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Profit before
taxation 119.6 3.9 30.0 153.5
5 Taxation (44.8) (0.3) (2.0) (47.1)
-----------------------------------------------------------------
Profit after
taxation 74.8 3.6 28.0 106.4
Minority interests (9.5) (9.5)
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Profit attributable
to shareholders 65.3 3.6 28.0 96.9
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6 Earnings per
ordinary share 30.7p 1.7p 13.2p 45.6p
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6 Diluted earnings
per ordinary share 30.4p 1.7p 13.2p 45.3p
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Interest cover
(times) 29 36
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Taxation as a
percentage of
profit before
taxation -----36.5%----- 30.7%
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GROUP PROFIT & LOSS ACCOUNT
Year to 31 December 1998
Continuing Discontinued Exceptional Total
Notes operations operations items(note 3)
£ million £ million £ million £ million
-----------------------------------------------------------------
Turnover 2,774.5 62.6 2,837.1
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Operating profit 250.2 5.4 (55.1) 200.5
Share of
operating profit
in associates 1.6 1.6 3.2
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Total operating
profit 251.8 7.0 (55.1) 203.7
Profit on sale
of businesses 42.7 42.7
Provision for loss
on sale of businesses (1.3) (1.3)
(Loss)/profit on sale
of fixed assets (0.6) (0.6)
-----------------------------------------------------------------
Profit before
interest 251.8 7.0 (14.3) 244.5
4 Interest (9.3) (0.2) (9.5)
-----------------------------------------------------------------
Profit before
taxation 242.5 6.8 (14.3) 235.0
5 Taxation (89.0) (0.7) 2.9 (86.8)
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Profit after
taxation 153.5 6.1 (11.4) 148.2
Minority interests (19.6) (19.6)
-----------------------------------------------------------------
Profit attributable
to shareholders 133.9 6.1 (11.4) 128.6
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6 Earnings per
ordinary share 63.2p 2.9p (5.4)p 60.7p
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6 Diluted earnings
per ordinary share 62.9p 2.9p (5.4)p 60.4p
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Interest cover
(times) 27 26
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Taxation as a
percentage of
profit before
taxation -----36.0%----- 36.9%
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SUMMARY GROUP BALANCE SHEET
30.6.99 30.6.98 31.12.98
Notes £ million £ million £ million
Fixed assets 876 814 865
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Current assets
Stocks 281 276 266
Debtors 698 632 642
Investments 131 180 159
Cash at bank and in hand 87 89 96
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1,197 1,177 1,163
Creditors - amounts falling
due within one year (779) (741) (781)
-------------------------------------------------------------
Net current assets 418 436 382
-------------------------------------------------------------
Total assets less current
liabilities 1,294 1,250 1,247
Creditors - amounts falling due
after more than one year (537) (240) (261)
Provisions for liabilities
and charges (147) (136) (135)
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Net assets 610 874 851
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Capital and reserves
7 Called up share capital 75 213 213
Reserves 465 600 575
-------------------------------------------------------------
Shareholders' funds 540 813 788
Minority interests 70 61 63
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610 874 851
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% % %
Net gearing:
Net borrowings 74 7 9
Obligations recognised
per FRS 5 11 9 10
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85 16 19
-------------------------------------------------------------
£ million £ million £ million
Gearing calculated on:
8 Net borrowings 403 56 72
Obligations recognised
per FRS 5 58 71 77
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461 127 149
SUMMARY GROUP CASH FLOW STATEMENT
Half year to Half year to Year to
30.6.99 30.6.98 31.12.98
Notes £ million £ million £ million
9 Net cash inflow from
operating activities 125 89 273
Dividends received
from associates 1 1 1
Returns on investment
and servicing of finance (11) (12) (28)
Taxation (45) (57) (102)
Capital expenditure (40) (49) (99)
Purchase of investments (16) (13) (45)
Payments for acquisitions (42) (9) (16)
Cash received from disposals 13 80 82
Equity dividends paid (29) (56) (86)
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Cash (outflow)/inflow
before management of liquid
resources and financing (44) (26) (20)
Management of liquid
resources 15 (6) 26
Return of capital (278)
Financing 280 (2) (32)
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(Decrease) in cash in
the period (27) (34) (26)
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Reconciliation of net cash
flow to movement in net debt
8 Net debt at 1 January (149) (117) (117)
(Decrease) in cash in the period (27) (34) (26)
(Increase)/decrease in debt (280) 6 18
(Decrease)/increase in liquid
resources (15) 6 (26)
Other movements in net debt 10 12 2
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8 Net debt at end of the period (461) (127) (149)
----------------------------------------------------------------
Memorandum : cash flow from
ordinary operations
Net cash flow before management
of liquid resources
and financing (44) (26) (20)
Add back/(deduct):
Payments for acquisitions 42 9 16
Cash received from disposals (13) (80) (82)
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Cash outflow from ordinary
operations (15) (97) (86)
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SEGMENTAL ANALYSIS
Operating profit before
Turnover exceptional items
------------------------------------------------------------------------
Half Half Year to Half Half Year to
year to year to year to year to
30.6.99 30.6.98 31.12.98 30.6.99 30.6.98 31.12.98
£ million £ million £ million £ million £ million £ million
BY MANAGEMENT AREA
Consumer
(note (i)) 555.5 533.6 1,077.7 85.3 68.8 144.9
Commercial 88.4 79.5 160.3 3.5 5.2 11.5
Marine 66.5 67.7 138.5 7.9 7.5 12.8
Industrial 229.5 221.1 439.9 12.4 15.1 30.0
Central costs (5.9) (5.3) (11.8)
----------------------------------------------------------------------------
Castrol 939.9 901.9 1,816.4 103.2 91.3 187.4
----------------------------------------------------------------------------
Foundry 116.9 124.3 238.1 13.3 14.0 27.3
Construction 52.1 52.3 105.8 6.1 3.9 9.5
Printing Inks 61.9 59.4 118.4 9.7 9.7 18.1
Releasants 29.7 25.9 52.7 3.5 2.6 5.1
Steel 31.2 35.6 67.7 1.4 2.0 3.9
Other businesses 73.8 71.5 143.2 4.8 5.8 12.5
Central costs (2.4) (2.3) (4.7)
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Chemicals 365.6 369.0 725.9 36.4 35.7 71.7
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Fuels 114.9 110.0 225.6 0.9 1.1 2.0
Energy
Investments 3.3 3.9 6.6 2.0 2.7 4.0
Central
Management (7.2) (6.9) (13.3)
----------------------------------------------------------------------------
Continuing 1,423.7 1,384.8 2,774.5 135.3 123.9 251.8
Discontinued 22.8 33.4 62.6 1.4 4.0 7.0
----------------------------------------------------------------------------
1,446.5 1,418.2 2,837.1 136.7 127.9 258.8
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BY GEOGRAPHICAL AREA
United
Kingdom
(note (ii)) 129.9 136.8 271.1 (31.6) (31.1) (66.4)
Europe (excluding
UK) (note (i)) 374.4 359.4 748.5 49.9 49.1 101.7
Africa 33.8 36.3 68.7 3.9 4.0 8.3
The Americas 450.3 444.8 855.0 59.7 56.6 111.9
Asia 256.8 237.2 486.9 45.0 35.4 76.1
Australasia 178.5 170.3 344.3 8.4 9.9 20.2
----------------------------------------------------------------------------
Continuing 1,423.7 1,384.8 2,774.5 135.3 123.9 251.8
Discontinued 22.8 33.4 62.6 1.4 4.0 7.0
----------------------------------------------------------------------------
1,446.5 1,418.2 2,837.1 136.7 127.9 258.8
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(i) Consumer includes share of operating profit in associated
undertakings of £1 million (1998: June £1 million;
December £1.6 million). These amounts are included in Europe
in the geographical analysis.
(ii) UK operating profit is after deducting central management,
marketing and research expenditure.
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Half year to Half year to Year to
30.6.99 30.6.98 31.12.98
£ million £ million £ million
--------------------------------------------------------------
Profit for the period
attributable to
shareholders 43 97 128
Currency translation
differences (3) (20) (7)
--------------------------------------------------------------
Total recognised gains
and losses for the period 40 77 121
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NOTES
1 Accounting policies
Except as noted below, the interim financial information has
been prepared on the basis of the accounting policies set out
in the group's statutory accounts for the year ended 31
December 1998. The adoption of FRS 12 (Provisions,
Contingent Liabilities and Contingent Assets) has not
necessitated any material change to the accounts.
Certain advertising costs are apportioned on a time basis,
based on projected annual estimates.
2 Exchange rates
The main exchange rates used in these accounts are:
Half year to Half year to Year to
30.6.99 30.6.98 31.12.98
--------------------------------------------------------------
U.S. Dollar - average 1.61 1.65 1.66
- closing 1.58 1.67 1.66
Deutsche Mark - average 2.91 2.99 2.92
- closing 2.99 3.01 2.77
Indian Rupee - average 69.05 66.28 68.36
- closing 68.35 70.70 70.70
Australian Dollar - average 2.54 2.53 2.63
- closing 2.38 2.69 2.71
NOTES
3 Exceptional items
(a) Operating exceptional items
Half year to Half year to Year to
30.6.99 30.6.98 31.12.98
£ million £ million £ million
Business
restructuring (note (i)) (14.6) (3.1) (22.8)
Provision for Brazilian
taxes (note (ii)) (14.3)
Write down of assets in
Indonesia (7.3) (7.8)
Write down of European
Information System (24.5)
------------------------------------
(28.9) (10.4) (55.1)
------------------------------------
To clarify the effect on the results of the group, the
following costs are disclosed as exceptional items in the
profit and loss account to the extent that the group has
committed to the expenditure.
(i) As identified in the 1998 accounts, costs are being incurred
in restructuring our principal businesses and supply chain
operations.
(ii) Following a recent Brazilian Supreme Court judgement,
provision has been made for turnover-based taxes and
associated charges mainly relating to prior years.
(b) Non-operating exceptional items
Half year to Half year to Year to
30.6.99 30.6.98 31.12.98
£ million £ million £ million
(Loss)/profit on
disposal of operations:
Peripheral Chemicals
businesses (note (i)) (0.5) 13.4 16.2
Ireland Fuels 3.9
LNG Transportation 26.8 26.5
----------------------------------------------------------------
3.4 40.2 42.7
Provision for loss on disposal
of businesses (note (ii)) (5.3) (1.3)
(Loss)/profit on disposal
of fixed assets (note (iii)) (1.3) 0.2 (0.6)
----------------------------------------------------------------
(3.2) 40.4 40.8
----------------------------------------------------------------
(i) The loss on disposal of peripheral Chemicals businesses in the first
half of 1999 arises from the sale of the Timber Treatments business,
including acquisition goodwill written back of £3 million. The
profit on disposal in the first half and full year 1998 is
principally the profit on disposal of Metal Carboxylates and
Industrial Adhesives, net of acquisition goodwill written back of
£9.2 million.
(ii) Provision has been made for the loss on disposal of the Aluminium
business, including acquisition goodwill written back of £8 million,
which was sold on 6 August 1999.
(iii)Disposal of properties resulted in a net loss of £0.3 million. A £1
million loss on fixed asset investments arose in the Burmah Castrol
plc Employee Share Trust as a consequence of the return of capital.
NOTES
4 Interest
Half year to Half year to Year to
30.6.99 30.6.98 31.12.98
£ million £ million £ million
Interest payable and
similar charges (15.9) (12.3) (24.7)
Interest receivable and
similar income 6.1 7.9 15.2
----------------------------------------------------------------
(9.8) (4.4) (9.5)
----------------------------------------------------------------
5 Taxation
The taxation charge is calculated by applying the directors'
best estimate of the annual tax rate to the profit for the
period. The amount of the tax charge, excluding exceptional
items, relating to overseas taxation is approximately £43
million (1998: June £40 million; December £77 million).
Taxation attributable to exceptional items is reported within
that column in the Summary Group Profit & Loss Account. The
amount of overseas taxation in exceptional items is a credit
of £6.5 million (1998: June charge of £1 million; December
credit of £4.5 million). The total amount of taxation
attributable to associated undertakings is £0.3 million
(1998: June £0.4 million; December £0.8 million).
6 Earnings per share
Half year to Half year to Year to
30.6.99 30.6.98 31.12.98
million million million
Basic weighted average number
of shares in issue 199.7 211.3 211.0
Potential dilutive shares 0.8 1.5 1.0
--------------------------------------------------------------
Diluted weighted average
number of shares in issue 200.5 212.8 212.0
--------------------------------------------------------------
Earnings per share for June 1998 and December 1998 are
calculated after deduction of preference dividend of £0.5
million.
7 Return of capital
At an extraordinary general meeting of the Company held on 26
March 1999 a special resolution was passed to approve the
return of capital scheme. The reduction of capital was
confirmed by the Court of Session on 7 May 1999. Capital
shares with a par value of £138.8 million were repaid at a
cost of £280.8 million, including expenses of £1.1 million.
8 Analysis of net debt
Half year to Half year to Year to
30.6.99 30.6.98 31.12.98
£ million £ million £ million
Cash at bank and in hand 87 89 96
Current asset investments 131 180 159
Short-term borrowings (137) (154) (134)
Long-term borrowings (483) (168) (191)
Finance leases (1) (3) (2)
--------------------------------------------------------------
Net borrowings (403) (56) (72)
Obligations recognised
per FRS 5 (58) (71) (77)
--------------------------------------------------------------
Net debt (461) (127) (149)
--------------------------------------------------------------
Long-term borrowings include Euro 400 million 4 7/8 per cent
Bonds due 2009, issued on 12 March 1999. In accordance with
the group's policies on currency and interest rate risk
management, Euro 300 million of the Eurobond issue has been
swapped into Sterling, of which Euro 225 million is at
floating rates of interest and Euro 75 million is at fixed
rates. The remaining Euro 100 million of the Eurobond issue
has been retained in Euros, but swapped into floating rate
debt.
9 Reconciliation of operating profit to operating cash flow
Half year to Half year to Year to
30.6.99 30.6.98 31.12.98
£ million £ million £ million
Operating profit 136 125 256
Exceptional items (29) (10) (55)
Depreciation charges 46 42 91
Changes in external
working capital (34) (40) (29)
Changes in other
debtors/creditors (20) (34) (7)
Non-cash items included
in operating profit 26 6 17
--------------------------------------------------------------
Net cash inflow from
operating activities 125 89 273
--------------------------------------------------------------
10 Interim 1999 dividend
The interim dividend of 15.4 pence per share will be paid on
14 January 2000 to shareholders on the register at the close
of business on the record date, which is 8 October 1999. The
corresponding ex-dividend date is 4 October 1999. The cost
of the interim dividend will be £27 million. The Company
offers a dividend re-investment plan to shareholders.
Details are available on request from the Company's
Registrar, Lloyds TSB Registrars, 54 Pershore Road South,
Birmingham, B22 1AD (Telephone: 0121 433 8000 - please
quote company reference 1138).
11 Events after the balance sheet date
Subsequent to the end of the accounting period, the Aluminium
business has been sold. A loss on disposal of £5.3 million
has been provided for and reported as a non-operating
exceptional item in the interim results and the operating
results of the business have been included within
discontinued operations.
On 19 July 1999, the group completed the acquisition of two
Construction Chemicals businesses in France and Spain for a
consideration of £15 million.
12 Status of interim results
This interim report was approved by the directors on 7
September 1999, and will be mailed to shareholders on 17
September. It should be read in conjunction with the 1998
annual report, which contains the most recent audited
financial statements.
Results of the two half years have not been audited, but have
been reviewed by the auditors.
The financial information contained in this interim financial
statement does not constitute statutory accounts as defined
in section 240 of the Companies Act 1985. The financial
information for the preceding full year is based on the
statutory accounts for the financial year ended 31 December
1998. Those accounts, upon which the auditors issued an
unqualified opinion, have been delivered to the Registrar of
Companies.