Final Results - Part 2

DIAGEO PLC 16 September 1999 PART 2 DIAGEO CONSOLIDATED PROFIT AND LOSS ACCOUNT Year ended 30 June 1999 Before goodwill Goodwill and and ex- exceptional ceptional items items Total £ £ £ million million million Turnover 11,795 - 11,795 Operating costs (9,892) (386) (10,278) ______ ___ ______ Operating profit 1,903 (386) 1,517 Share of associate 188 (8) 180 profits _____ ___ _____ Trading profit 2,091 (394) 1,697 Disposal of fixed assets - (10) (10) Sale of businesses - 104 104 Merger expenses - - - Interest payable (net) (324) - (324) _____ ___ _____ Profit before taxation 1,767 (300) 1,467 Taxation (463) 23 (440) Profit after taxation 1,304 (277) 1,027 Minority interests Equity (49) - (49) Non-equity (36) - (36) _____ ___ ___ Profit for the period 1,219 (277) 942 Dividends (674) - (674) ___ ___ ___ Transferred to reserves 545 (277) 268 === === === Earnings per share Basic 34.5p (7.8)p 26.7p Diluted 34.3p (7.8)p 26.5p Number of shares 3,533m (basic) DIAGEO CONSOLIDATED PROFIT AND LOSS ACCOUNT 18 months ended Year ended 30 June 1998 30 June unaudited) 1998 Before excep- Excep- tional tional items items Total Total £ £ £ £ million million million million Turnover 12,029 - 12,029 17,698 Operating costs (10,087) (572) (10,659) (15,530) ______ ___ ______ ______ Operating profit 1,942 (572) 1,370 2,168 Share of 210 (15) 195 272 associate profits _____ ___ _____ _____ Trading profit 2,152 (587) 1,565 2,440 Disposal of - 5 5 (2) fixed assets Sale of - 558 558 501 businesses Merger expenses - (85) (85) (85) Interest (302) (58) (360) (486) payable(net) _____ ___ _____ _____ Profit before 1,850 (167) 1,683 2,368 taxation Taxation (504) (217) (721) (909) _____ ___ ___ _____ Profit after 1,346 (384) 962 1,459 taxation Minority interests Equity (47) - (47) (67) Non-equity (36) - (36) (54) _____ ___ ___ _____ Profit for the 1,263 (384) 879 1,338 period Dividends (835) - (835) (1,060) ___ ___ ___ _____ Transferred to 428 (384) 44 278 reserves === === === ===== Earnings per share Basic 33.0p (10.0)p 23.0p 34.5p Diluted 32.7p (9.9)p 22.8p 34.2p Number of shares 3,823m 3,880m (basic) DIAGEO CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Year ended Year 30 June 18 months ended 30 1998 ended 30 June 1999 (audited) June 1998 £ £ £ million million million Profit for the period 837 775 1,174 - group - associates 105 104 164 ___ ___ ___ 942 879 1,338 Exchange adjustments 78 (150) (161) Tax relief on exchange 15 10 10 in reserves _____ ___ _____ Total recognised 1,035 739 1,187 gains and losses ===== === ===== DIAGEO CONSOLIDATED BALANCE SHEET 30 June 1999 30 June 1999 £ £ £ £ million million million million Fixed assets Intangible assets 5,188 4,727 Tangible assets 3,178 3,006 Investments 1,354 1,244 _____ _____ 9,720 8,977 Current assets Stocks 2,202 2,236 Debtors 3,259 3,054 Investments - 484 Cash at bank and 1,097 2,503 in hand _____ _____ 6,558 8,277 _____ _____ Creditors - due within one year Borrowings (3,905) (4,724) Other creditors (3,532) (3,524) _____ _____ (7,437) (8,248) Net current (879) 29 (liabilities) /assets _____ _____ Total assets 8,841 9,006 less current liabilities Creditors - due after one year Borrowings (3,395) (2,894) Other creditors (100) (243) _____ _____ (3,495) (3,137) Provisions for (753) (705) liabilities and charges _____ _____ 4,593 5,164 ===== ===== Shareholders funds Equity share 992 1,034 capital Non-equity share - 105 capital ___ _____ Called up share 992 1,139 capital Reserves 3,034 3,490 attributable to equity shareholders _____ _____ 4,026 4,629 ===== ===== Minority interests Equity 179 169 Non-equity 388 366 ___ ___ 567 535 ___ ___ 4,593 5,164 ===== ===== DIAGEO CONSOLIDATED CASH FLOW STATEMENT Year ended 30 June 18 months Year ended 1998 ended 30 June (unaudited) 30 June 1999 1998 £ £ £ million million million Net cash inflow from 1,966 1,866 3,069 operating activities Dividends received from 58 120 162 associates Interest paid (net) (432) (258) (435) Dividends paid to equity (34) (24) (41) minority interests Taxation (566) (603) (834) Purchase of tangible (534) (473) (634) fixed assets Purchase/sale of own (175) 4 - shares Sale of fixed assets 90 103 128 ___ ___ ___ Free cash flow 373 735 1,415 Purchase of subsidiaries (380) (58) (66) Sale of subsidiaries and 331 1,186 1,231 businesses Sale of associates 170 240 240 Equity dividends paid (668) (671) (1,088) ___ _____ _____ Cash flow before liquid (174) 1,432 1,732 resources and financing Management of liquid 2,195 (600) (709) resources Issue of share capital 50 109 155 Repurchase of shares (1,211) (2,775) (2,970) (Decrease)/increase (716) 2,097 2,094 in loans Other financing inflow - - 75 Increase in cash 144 263 377 in the period ___ ___ ___ === === === MOVEMENTS IN NET BORROWINGS Year ended 18 months Year ended 30 June ended 30 June 1998 30 June 1999 (unaudited) 1998 £ million £ million £ million Increase in cash in 144 263 377 the period Cash flow from change 716 (2,097) (2,094) in loans Change in liquid (2,195) 600 709 resources _____ _____ _____ Change in net (1,335) (1,234) (1,008) borrowings from cash flows Exchange adjustments (208) 106 166 Non-cash items (5) 390 383 ____ ___ ___ Increase in net borrowings (1,548) (738) (459) Net borrowings at (4,508) (3,770) (4,049) beginning of the period _____ _____ _____ Net borrowings at end of the (6,056) (4,508) (4,508) period ===== ===== ===== NOTES 1 Segmental analysis Year ended Year ended 30 June 1998 30 June 1999 (unaudited) Operating Operating Turnover profit Turnover profit £ £ £ £ million million million million Class of business: Spirits and Wine 4,929 967 5,327 1,070 Packaged Food 3,757 478 3,654 447 Beer 2,234 273 2,176 247 Quick Service 875 185 869 179 Restaurants Discontinued - - 3 (1) operations ______ _____ ______ _____ 11,795 1,903 12,029 1,942 ====== ===== ====== ===== Geographical area by destination: Europe 4,230 594 4,265 533 North America 5,656 936 5,619 938 Asia Pacific 777 131 915 174 Latin America 593 140 696 190 Rest of World 539 102 534 107 ______ _____ ______ _____ 11,795 1,903 12,029 1,942 ====== ===== ====== ===== 30 June 30 June 1999 1999 £ million £ million Net assets: Spirits and Wine 4,432 4,560 Packaged Food 3,391 2,927 Beer 882 935 Quick Service 1,226 1,120 Restaurants _____ _____ 9,931 9,542 Investments in 1,113 1,092 associates Tax, dividends and other (395) (962) corporate items Net borrowings (6,056) (4,508) _____ _____ 4,593 5,164 ===== ===== Europe 4,003 3,943 North America 5,266 4,887 Asia Pacific 248 243 Latin America 189 204 Rest of World 225 265 _____ _____ 9,931 9,542 ===== ===== The above analyses of operating profit are before goodwill amortisation and exceptional items. The geographical analysis is based on the location of the third party customers. The weighted average exchange rate used in translation of US dollar profit and loss accounts was £1 = $1.64 (1998 - £1 = $1.64). The exchange rate used to translate US dollar assets and liabilities at the balance sheet date was £1 = $1.58 (1998 - £1 = $1.67). 2..Goodwill and exceptional items 18 months ended Year ended 30 June 30 June 1999 1998 £ £ £ £ million million million million Charged to: Operating Goodwill (4) - costs amortisation Merger (262) (302) integration Haagen-Dazs (40) - plant closure Foodservice (37) - integration Sharesave (43) - scheme Agreement with - (250) LVMH Employee - (20) incentive scheme ____ ____ (386) (572) Associates Share of (8) (15) reorganisation costs Disposal Loss on sales (10) (2) of fixed assets Sale of Interests in 113 (54) businesses associates Dewar's and - 668 Bombay brands Other Spirits 29 (23) and Wine brands Packaged (38) (39) Food brands Other - (51) ___ __ 104 501 Merger Transaction - (85) expenses costs Charged to Interest - (58) interest rate policy change ___ ___ (300) (231) === === 3 Taxation The total taxation charge for the year ended 30 June 1999 of £440 million comprises UK taxation of £14 million, overseas taxation of £354 million and tax on associates of £72 million. 4 Note of consolidated historical cost profits and losses There is no material difference between the reported profit shown in the consolidated profit and loss account and the profit restated on an historical cost basis. 5 Movements in consolidated shareholders' funds 18 months Year ended ended 30 June 30 June 1999 1998 £ million £ million Profit for the period 942 1,338 Dividends (674) (1,060) ___ _____ 268 278 Exchange adjustments 78 (161) Tax relief on exchange in 15 10 reserves New share capital issued 52 608 Provision for share issues 8 - Repurchase of shares (1,211) (2,970) Adjustment in respect of - 12 share dividend Goodwill written off on - (29) acquisitions Goodwill on disposals of 187 226 businesses ___ _____ Net movement in shareholders' (603) (2,026) funds Shareholders' funds 4,629 6,655 at beginning of the period _____ _____ Shareholders' funds at end 4,026 4,629 of the period ===== ===== 6 Net borrowings 30 June 30 June 1999 1998 £ £ million million Debt due within one year (3,905) (4,724) and overdrafts Debt due after one year (3,395) (2,894) Net obligations under finance (38) (41) leases _____ _____ (7,338) (7,659) Less: Cash at bank and in hand 1,097 2,503 Current asset investments - 484 Interest rate 185 164 and foreign currency swaps _____ _____ Net borrowings (6,056) (4,508) ===== ===== 7 Net cash inflow from operating activities Year Year ended 18 months ended 30 June ended 30 June 1998 30 June 1999 (unaudited) 1998 £ million £ million £ million Operating profit 1,517 1,370 2,168 Exceptional operating 382 572 572 costs _____ _____ _____ Operating profit before 1,899 1,942 2,740 exceptional items Integration and (301) (250) (307) restructuring payments Agreement with LVMH - (250) (250) Merger transaction costs - (85) (85) Depreciation and 339 323 484 amortisation charge Decrease in working 47 187 501 capital Other items (18) (1) (14) _____ _____ _____ Net cash inflow from 1,966 1,866 3,069 operating activities ===== ===== ===== 8 Repurchase of shares In July 1998, 3 million B shares were redeemed at a cost of £15 million.On August 1998, the company converted the remaining B shares into 12 million ordinary shares at a price of 725 pence per share. The company purchased, and subsequently cancelled, 10.5 million ordinary shares in October 1998 at an average price of 555 pence per share for an aggregate consideration of £59 million, and 161.5 million ordinary shares in March 1999 at an average price of 699 pence per share for an aggregate consideration of £1,137 million. 9 Compliance with new accounting standards The financial statements comply with the following Financial Reporting Standards issued by the Accounting Standards Board. FRS 10 - Goodwill and Intangible Assets and FRS 11 - Impairment of Fixed Assets and Goodwill. FRS 10 requires that purchased goodwill and intangible assets should be capitalised as assets on the balance sheet. Where goodwill and intangible assets are regarded as having limited useful economic lives, they should be amortised over those lives. In other cases, they should not be amortised but an annual impairment test, under the rules set out in FRS 11, is required to demonstrate that the current market value of the goodwill or intangible is not below its carrying value. The standard does not require reinstatement of goodwill previously eliminated against reserves and Diageo has not reinstated such goodwill. Diageo's brands are regarded as having indefinite useful economic lives and are being reviewed for impairment at the end of each reporting period. Intangible assets capitalised in the year were goodwill of £281 million and other intangibles of £28 million; amortisation was £4 million for goodwill and £2 million for other intangibles. FRS 12 - Provisions, Contingent Liabilities and Contingent Assets. This standard requires that a provision should only be recognised when there is a legal or constructive obligation arising from past events, that it is probable that there will be an outflow of benefits and that the amount can be reliably estimated. A constructive obligation arises where other parties have a valid expectation that an action will be carried out because of past practice or sufficiently detailed public statements. In addition, obligations should not be recognised unless they exist independently of the entity's future actions. FRS 12 also mandates that, where material, provisions should be discounted to net present value and should not be net of any anticipated recoveries or expected gains on asset sales. FRS 13 - Derivatives and Other Financial Instruments: Disclosures. This standard requires narrative and numerical disclosure of all financial instruments held or issued, in order to provide information about their impact on the entity's risk profile. FRS 14 - Earnings per Share. This requires entities to present both basic and diluted earnings per share with equal prominence on the face of the profit and loss account and also introduces certain changes to the method by which earnings per share is calculated. Compliance with the above new standards has not given rise to any restatement of figures reported for prior periods. 10 Statutory accounts the financial statements of Diageo plc for the year ended 30 June 1999 and this preliminary statement were approved by a duly appointed and authorised committee of the board of directors on 15 September 1999. This statement does not comprise the statutory accounts of the group but is derived from those accounts. The statutory accounts of Diageo plc for the 18 months ended 30 June 1998 have been filed with the registrar of companies. KPMG Audit Plc and PricewaterhouseCoopers, the previous joint auditors, have reported on those accounts, and KPMG Audit Plc has reported on the statutory accounts for the year ended 30 June 1999. Both the audit reports were unqualified and did not contain any statement under section 237 of the Companies Act 1985.

Companies

Diageo (DGE)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today