Fitzwilton Fin.(U.K)

Interim Results

Fitzwilton Finance (U.K.) PLC
12 December 2002


Letter to RNS

11th December 2002

            £80,000,000 9.75% Senior Secured Guaranteed Bonds due 2006 

We enclose herewith a copy of the Unaudited Interim Financial Statements of the 
Company in respect of the half year ended 30th June, 2002 together with a copy 
of the certificate of the Directors, both of which are being mailed today to 
registered holders of the above Bonds and will be available as from 13th 
December, for collection by bearer Bondholders. 

For and on behalf of 
FITZWILTON FINANCE (UK) PLC 
Mark Quinn 
 


            £80,000,000 9.75% Senior Secured Guaranteed Bonds due 2006 
 
We, the Board of Directors of Fitzwilton Finance (U.K.) PLC ('the Company'), 
hereby certify that the following figures have been derived from the unaudited 
consolidated interim financial statements for the half year ended 30 June 2002. 
                          
                                                           £ 
          Consolidated Turnover                            Nil 
          Consolidated Net Earnings                  £ (468,076) 
          Consolidated Operating Income              £1,022,156 
          Total Interest                             £1,490,232 

Approved by the Board of Directors on 9th December 2002 
and signed on its behalf by: 

Directors 
 
 

                           FITZWILTON FINANCE (UK) PLC 
                              Interim Statement 
                                30 June 2002 



Fitzwilton Finance (UK) Plc

INDEPENDENT REVIEW REPORT TO FITZWILTON FINANCE (UK) PLC 


Introduction 

We have been instructed by the company to review the financial information set
out on pages 3 to 9 and we have read the other information contained in the
interim report and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information. 

Directors' responsibilities 

The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The Listing Rules
of the Financial Services Authority require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes, and
the reasons for them are disclosed. 

Review work performed 

We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board. A review consists principally of making
enquiries of group management and applying analytical procedures to the 
financial information and underlying financial data and based thereon, assessing 
whether the accounting policies and presentation have been consistently applied 
unless otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with Auditing
Standards and therefore provides a lower level of assurance than an audit.
Accordingly we do not express an audit opinion on the financial information.

Review conclusion 

On the basis of our review we are not aware of any material modifications that 
should be made to the financial information as presented for the six months 
ended 30 June 2002.

Ernst & Young LLP 
Belfast
10 December 2002


MANAGEMENT COMMENTARY 

The directors present their interim report for the six months ended 30 June
2002. The report, which should be read in conjunction with the accounts for the
year ended 31 December 2001, was approved by the board of directors on 9
December 2002. The report has not been audited, but it has been reviewed by the
auditors, and their report is set out on page 1.

The group's principal activity during the period under review was the retailing
of food products in Northern Ireland through its associated undertaking, Safeway
Stores (Ireland) Limited ('Safeway Stores'). Safeway Stores was a 50/50 joint
venture between Safeway Stores Plc and Fitzwilton Finance (UK) Plc. 


Review of operations 

In the six months ended 30th June 2002, Safeway Stores continued to trade from
12 stores in the Safeway trading format and sales continued to grow very
strongly with a like-for-like increase of 12%. Safeway Stores achieved an
operating profit of £3,408,000 (2001: operating profit of £132,000) before
taking account of exceptional costs in the amount of £1,116,000 (2001:
exceptional costs of £326,000). After charging bank interest of £2,960,000
(2001: bank interest of £4,002,000), Safeway Stores incurred a pre-tax loss of
£668,000 (2001: pre-tax loss of £4,196,000) during the 6 months under review. 

Taking account of the share of results of Safeway Stores, the group incurred
a pre-tax loss of £1,485,000 (2001: pre-tax loss of £2,489,000). 

At the end of June 2002, the group had net debt of £76,712,000 (2001: net
debt of £77,676,000).   

Post Balance Event 

In July 2002, the group disposed of its interest in Safeway Stores for a cash 
consideration of £13,750,000. Further details regarding this disposal are set 
out in note 8 in the Notes to the Accounts. 

On behalf of the board 

D Roxburgh 
Director 
9 December 2002 




GROUP PROFIT AND LOSS ACCOUNT
for the six months ended 30 June 2002

                                                                                                                      
                                                                             Unaudited         Unaudited        Audited 
                                                                            Six months        Six months           Year 
                                                                              ended 30          ended 30       ended 31 
                                                                             June 2002         June 2001       Dec 2001
                                                                                           (As restated)                
                                                                  Note           £'000             £'000          £'000 
             
TURNOVER                                                                        
Group and share of associate company turnover                                   50,435            44,932         95,997 
Less: share of associate company turnover                                      (50,435)          (44,932)       (95,997)
                                                                                     -                 -              -
Cost of sales                                                                        -                 -              -

Gross profit                                                                         -                 -              - 
Administration expenses                                                           (932)             (473)        (2,002)
                                                                                  (932)             (473)        (2,002)

Other operating income                                                           1,730             1,712          4,087 
                                                              

GROUP OPERATING PROFIT                                                             798             1,239          2,085 
Share of operating profit/(loss) in associate company                            1,704                66           (136)
                   
TOTAL OPERATING PROFIT: GROUP AND SHARE OF ASSOCIATE COMPANY                     2,502             1,305          1,949 
Share of associate company exceptional costs on disposal of operations            (558)             (163)          (983)

Loss on disposal of fixed assets                                                     -                 -             (1)
Property related costs                                                            (264)                -              - 
          
Net group exceptional items                                                       (264)                -             (1)
                                                                                                             
PROFIT ON ORDINARY ACTIVITIES BEFORE INTEREST                                    1,680             1,142            965 
    
Share of associate company bank interest payable                                (1,480)           (2,001)        (3,872)
Interest receivable                                                              2,398             2,432          8,560
Interest payable and similar charges                                            (4,083)           (4,062)        (8,176)
  
Net group interest (charge)/credit                                              (1,685)           (1,630)           384 

LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION                                     (1,485)           (2,489)        (2,523)
Taxation credit/(charge) on loss on ordinary activities                  3           -              (163)          (378)

RETAINED LOSS FOR THE FINANCIAL YEAR                                            (1,485)           (2,652)        (2,901)

GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 

Profit for the financial period excluding share of losses 
 of associate company                                                            (1,151)             (391)         1,865
Share of associate company loss for the period                                    (334)           (2,261)        (4,766)

TOTAL RECOGNISED GAINS AND LOSSES RELATING TO THE YEAR                          (1,485)           (2,652)        (2,901)
Prior year adjustment                                                                -                 -         (1,955)

TOTAL GAINS AND LOSSES RECOGNISED SINCE LAST ANNUAL REPORT                      (1,485)           (2,652)        (4,856)


GROUP BALANCE SHEET 
at 30 June 2002

                                                                             Unaudited         Unaudited        Audited 
                                                                                    30                30             31 
                                                                             June 2002         June 2001       Dec 2001
                                                                                           (As restated)                
                                                                  Note           £'000             £'000          £'000
ASSETS 
FIXED ASSETS 
Tangible assets                                                                 9,744            10,240          10,244 

Investments: 
Investment in associate company                                     4               -                 -               -
Unsecured loans due from associate                                  4           5,000             4,000           4,500 
                                                                                5,000             4,000           4,500 

CURRENT ASSETS 
Debtors :amounts falling due after one year                                       142               142             142
        :amounts falling due within one year                                  119,267           114,255         117,679
Cash at bank and in hand                                                        2,399             2,726           2,962
                                                                              121,808           117,123         120,783
                                                                              136,552           131,363         135,527
LIABILITIES 
CAPITAL AND RESERVES                                                
Called up share capital                                             5         100,000           100,000         100,000 
Merger reserve                                                      5         (57,192)          (57,192)        (57,192)
Profit and loss account                                             5         (60,132)          (58,235)        (58,647)

SHAREHOLDERS' FUNDS 
(equity interests)                                                  5         (17,324)          (15,427)        (15,839)

PROVISIONS FOR LIABILITIES AND CHARGES                                         23,737            20,735          23,403

CREDITORS: amounts falling due within one year                                 46,057            41,438          43,772

CREDITORS: amounts falling due after more than one year                        84,082            84,617          84,191

                                                                              130,139           126,055         127,963 

                                                                              136,552           131,363         135,527 
D Roxburgh 
L O'Hagan                           Directors 
 
9 December 2002 


GROUP STATEMENT OF CASHFLOWS 
for the six months ended 30 June 2002
                                                  Unaudited Six months     Unaudited Six months     Audited Year ended  
                                                    ended 30 June 2002       ended 30 June 2001        31 Dec 2001      
                                                           £'000                     £'000                    £'000     
          
NET CASH INFLOW FROM OPERATING ACTIVITIES                 1,252                      1,234                   1,608      
          
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE                                                                         
Interest received                                            45                         54                   4,318      
Interest paid                                               (19)                       (61)                 (7,885)     
                                                             26                         (7)                 (3,567)     
                  
TAXATION 
Corporation tax                                               -                          -                        -     
              
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT                                                                            
Payments to acquire fixed assets                              -                          -                       (5) 
Receipts from sale of fixed assets                            -                      2,000                    2,000     
    
                                                              -                      2,000                    1,995
NET CASH INFLOW BEFORE USE OF MANAGEMENT OF LIQUID 
RESOURCES AND FINANCING                                   1,278                      3,227                       36     
                                  
FINANCING                                                                     
New group loans                                            (599)                    (1,152)                    (237)    
           
INCREASE/(DECREASE) IN CASH                                 679                      2,075                     (201)    
                                                              
 
NOTES TO THE ACCOUNTS 
at 30 June 2002


1. BASIS OF PREPARATION 

   The interim financial information has been prepared on the basis of the 
   accounting policies set out in the group's statutory financial statements for 
   the year ended 31 December 2001. 

   As explained in the accounting policies set out in the group's statutory 
   financial statements for the year ended 31 December 2001, investment 
   properties are revalued annually. Accordingly, no valuation of the investment 
   properties has been carried out at 30 June 2002 and 30 June 2001; the 
   investment properties have been included in the balance sheets at 30 June 
   2002 and 30 June 2001 using the valuations obtained at 31 December 2001 and 
   31 December 2000 respectively. 

2. TURNOVER 

   Turnover represents the share of the associate company's external sales of 
   goods and services during the year, which fall within the group's ordinary 
   activities and are stated net of value added tax. 

3. TAXATION 

   The taxation credit/(charge) comprises:
   
                                          Six months      Six months      Year
                                           ended 30        ended 30      ended
                                          June 2002        June 2001       31
                                                        (As restated)  Dec 2001
                                              £'000            £'000      £'000

Group                                             -                -       (603)
Share of associate credit                         -                -        427
Share of associate's deferred tax                 -             (163)      (202)
                                                  -             (163)      (378)
                                                  -            (163)       (378)
 
4.     INVESTMENTS
   
                                         Six months       Six months      Year
                                          ended 30         ended 30     ended 31
                                         June 2002         June 2001    Dec 2001
                                                        (As restated) 
                                             £'000            £'000      £'000

Investment in share capital of              10,000           10,000     10,000
 associate company                         
Share of losses                            (10,000)*        (10,000)*  (10,000)*
Loans to associate company                   5,000            4,000      4,500

                                             5,000            4,000      4,500
 
* Share of losses has been restricted to the £10 million investment and the 
balance has been included in provisions for liabilities and charges amounting 
to £23,737,000 (31 December 2001 - £23,403,000, 30 June 2001 - £20,735,000)
hence the share of Safeway Ireland losses accumulated to 30 June 2002 amounted 
to £33,737,000. 

5. CAPITAL AND RESERVES 
                                                              Profit
                                        Share      Merger     and loss
                                        capital    reserve    account     Total
                                         £'000      £'000      £'000      £'000 

At 31 December 2001                    100,000    (57,192)    (58,647)  (15,839)
Retained loss for the period                 -          -      (1,485)   (1,485)

At 30 June 2002                        100,000    (57,192)    (60,132)  (17,324)



6. CONTINGENT LIABILITIES AND GUARANTEES 

Group 

On 11 October 1996 the group entered into a security instrument with Prudential 
Trustee Company Limited granting a first fixed charge over all the group's 
freehold and long leasehold store properties and to guarantee the punctual
payment of the principal and interest on £80,000,000 9.75% senior secured 
guaranteed bonds due 2006 issued by the company. The group is unconditionally 
jointly and severally liable to the Prudential Trustee Company Limited, as 
security trustee for the bondholders in the event of default by the company.
 
Following the disposal of certain businesses, the group has given warranties in 
line with normal business practice. In the light of information known to date 
the directors consider that unprovided liabilities are unlikely to crystallise 
in the foreseeable future.
 
On 4 July 2002, following the sale of the associate, the company became liable 
to pay Safeway Stores Plc £1,799,000 in respect of indemnities it had given in 
respect of the disposal of certain businesses. No provision for any liability 
has been made in the financial statements.
 
7. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING 
ACTIVITIES
 
                                         Six months     Six months        Year 
                                           ended 30       ended 30    ended 31 
                                          June 2002      June 2001    Dec 2001 
                                              £'000          £'000       £'000 

Operating profit                               798          1,239        2,085 
(Increase)/Decrease in debtors                (556)           233         (321)
 
Increase/(Decrease) in creditors             1,010           (238)        (156)
 
Net cash inflow from operating activities    1,252          1,234        1,608


8. POST BALANCE SHEET EVENT 

On 4 July 2002, the Group disposed of its interest in Safeway Stores (Ireland) 
Limited for cash proceeds of £13.7m. Safeway Stores (Ireland) Limited incurred a 
pre-tax loss of £668,000 in the six months to 30 June 2002. The disposal
resulted in a loss of £4.8m which will be reflected through the Group Profit and 
Loss Account in the period to 31 December 2002, and is calculated as follows: 


                                                                           £
 
Proceeds from sale of shares                                             13.7 

Goodwill previously written off and now reinstated                      (42.2)
in accordance with FRS10
Release of provision for share of joint venture losses                   23.7 

Net loss on disposal                                                     (4.8) 

The disposal is estimated to give rise to a £37.4m increase in the Group's net
assets. 

9. PUBLICATION OF  ACCOUNTS 

The financial information contained in this interim statement does not 
constitute statutory accounts as defined in section 240 of the Companies Act 
1985. The financial information for the full preceding year is based on the
statutory financial statements for the financial year ended 31 December 2001. 
Those financial statements, upon which the auditors issued an unqualified 
opinion, have been delivered to the Registrar of Companies. 

                      This information is provided by RNS
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