Information  X 
Enter a valid email address

Wolv.& Dudley Brews. (WOLV)

  Print      Mail a friend

Tuesday 28 March, 2006

Wolv.& Dudley Brews.

IFRS Statement

Wolverhampton& Dudley Breweries PLC
28 March 2006

                                                                   28 March 2006



                   The Wolverhampton & Dudley Breweries, PLC

         Adoption of International Financial Reporting Standards (IFRS)

The Wolverhampton & Dudley Breweries, PLC ('the Group') today releases restated
consolidated financial information for the year ended 1 October 2005, applying
International Financial Reporting Standards.

The adoption of IFRS will have no impact on the underlying business, cash flows
or debt covenants of the Group.

The key headlines are:
                                                                           Year ended 1 October 2005
                                                                         UK GAAP                IFRS             Change

Revenue (£m)                                                               597.3               556.1             (41.2)
Profit before tax (£m)                                                      47.9                54.2               6.3
Profit after tax (£m)                                                       33.4                39.1               5.7
Basic earnings per share (pence)                                            44.3                51.9               7.6
Net assets as at 1 October 2005 (£m)                                       758.5               652.1            (106.4)


The accounting policy changes that have the most significant impact on the
financial statements of the Group for the year ended 1 October 2005 are:

  • Excise duty excluded from turnover and operating expenses - no impact on
    operating profit.

  • Goodwill amortisation ceases - operating profit increased by £7.1m.

  • Deferred tax liability recognised on property revaluation - net assets
    reduced by £89.9m, tax charge reduced by £1.0m.

  • Post employment obligations - net assets reduced by £65.6m excluding
    deferred tax.

  • Timing of the recognition of dividends - net assets increased by £19.8m.

These changes are further explained in Section 4 'Changes from UK Generally
Accepted Accounting Principles (UK GAAP) to IFRS' and detailed reconciliations
are shown in the appendices to this report.

CONTENTS

1      Background

2      Basis of preparation

3      First time adoption options

4      Changes from UK GAAP to IFRS

5      Accounting policies under IFRS

6      Appendices: Restated IFRS consolidated financial statements


The full text of this announcement will be available on our website
www.wdb.co.uk.



Enquiries: Paul Inglett, Finance Director                    Tel: 01902 329516



1 Background

Following a European Union regulation issued in 2002, all EU listed companies
are required to report their consolidated financial statements under IFRS for
all reporting periods commencing after 1 January 2005. IFRS will apply for the
first time to the Group's consolidated financial statements for the year ending
30 September 2006, including comparative information from the date of
transition, 2 October 2004. The first results to be published under IFRS will be
the interim results for the six months ending 1 April 2006.

The purpose of this report is to explain how the Group's financial performance
for the year ended 1 October 2005 and its financial position as at that date,
prepared under IFRS, differs from that previously reported under UK GAAP.

The format of the IFRS primary financial statements is presented under IAS 1 '
Presentation of Financial Statements'.  There are a number of presentational and
classification differences in these statements (See appendices).

The implementation of IFRS may result in increased volatility in reported
results and net assets.

2 Basis of preparation

The restated results have been prepared on the basis of all IFRS issued by the
International Accounting Standards Board which are relevant to the Group and
expected to be effective for 2006 financial reporting, with the exception of IAS
34 'Interim Financial Reporting' which is not mandatory in the UK. If the
European Commission does not adopt all of these standards in time for the
financial reporting at September 2006, or the issue of further interpretations
by the International Financial Reporting Interpretation Committee (IFRIC) in
advance of the reporting date, this could result in the need to change the basis
of accounting or presentation of certain financial information from that
presented in this document. The financial information in this document is
unaudited.

3 First time adoption options

IFRS requires a Group to comply with each accounting standard effective at the
reporting date for its first full set of IFRS statements. Usually, the standards
are applied retrospectively.

IFRS1 'First-Time Adoption of International Financial Reporting Standards'
outlines the procedures a company or group must follow when adopting IFRS for
the first time. It offers certain exemptions from the full requirements of IFRS
in the year of transition. The Group has elected to apply the following
exemptions:

a)       Business combinations (IFRS 3): those business combinations prior to
the transition date have not been restated on an IFRS basis.

b)       Valuation of properties (IAS 16): the carrying value of property, plant
and equipment revalued in the year ended 2 October 2004 under UK GAAP has been
deemed to be cost at the date of transition. All other property has been fair
valued at the date of transition under IFRS.

c)       Employee benefits (IAS 19): the cumulative net actuarial losses in
relation to employee benefit schemes have been recognised in full at the
transition date as an adjustment to equity.

d)       Financial instruments (IAS 32 and IAS 39): IAS 32 'Financial
Instruments: Disclosure and Presentation' and IAS 39 'Financial Instruments:
Recognition and Measurement' will not be applied to the comparative period. The
comparative period has been prepared on the basis of previous UK GAAP for
financial instruments. The Group will apply IAS 32 and IAS 39 for the year
ending 30 September 2006.

e)       Share based payments (IFRS 2): the Group has applied IFRS 2 'Share
based payments' to equity settled awards that were granted after 7 November 2002
but not vested at 1 January 2005.

4 Changes from UK GAAP to IFRS

a) Revenue

Revenue, previously identified as turnover under UK GAAP, includes only the
gross inflows of economic benefits received and receivable by the Group. Amounts
collected on behalf of third parties such as excise duty are not economic
benefits which flow to the Group. Excise duty is excluded from revenue where it
relates to brewing and packaging of products on which the Group is accountable
to the Government for the duty.

For the year ended 1 October 2005 revenue has been reduced by £41.2m. This has
been reclassified within the income statement and therefore has no impact on
reported profit.

b) Business combinations

Under UK GAAP, goodwill is amortised over its expected useful economic life up
to a presumed maximum of 20 years, whereas under IFRS goodwill is considered to
have an indefinite life and is not amortised. Instead it is tested for
impairment annually or more frequently if circumstances indicate that impairment
may have occurred. Goodwill has been tested for impairment at 2 October 2004 and
1 October 2005 and no impairment adjustment is required.  Goodwill amortisation
of £7.1m charged under UK GAAP since the date of transition has been credited to
the income statement.

Any future negative goodwill will be written off immediately to the income
statement.

c) Intangible assets

In accordance with IAS 38 'Intangible Assets', tangible assets of £0.8m at 2
October 2004 (under UK GAAP) have been reclassified under IFRS to intangible
assets.  This consists of computer software costs, which are amortised over
three years. There is no impact on the income statement as depreciation rates
and amortisation rates remain unchanged.

Intangible assets arising on an acquisition are recognised separately from
goodwill if the fair value of the asset can be identified separately and
measured reliably.

On the acquisition of Jennings Brothers PLC in the year ended 1 October 2005,
£2.8m of the goodwill arising on acquisition has been reclassified to intangible
assets. This represents the fair value of the acquired brand name.

d) Post employment obligations

Pensions

The Group accounted for defined benefit post retirement benefits under UK GAAP
in accordance with Statement of Standard Accounting Practice (SSAP) 24 and also
gave disclosures under Financial Reporting Standard (FRS) 17 in accounting for
its pension obligations.

Pension costs were charged to the profit and loss account over the average
expected service life of current employees. Actuarial surpluses and deficits
were amortised over the expected remaining service lives of current employees.
Any differences between the amount charged to the profit and loss account and
payments made to the scheme were treated as assets and liabilities in the
balance sheet.

Under IFRS, pension accounting costs for defined benefit plans are assessed by
determining the pension obligation using the projected unit credit method.

The income statement bears the service cost as part of operating profit, and
interest on pension scheme liabilities less the expected return on pension
scheme assets as finance costs.

Actuarial gains and losses are recognised in the income statement over the
expected average remaining working lives of the employees only to the extent
that their net cumulative amount exceeds 10% of the greater of the present value
of the obligation and the fair value of the plan assets at the end of the
previous year. Unrecognised actuarial gains and losses are reflected in the
balance sheet.

The present value of pension obligations is measured by reference to market
yields on high corporate bonds which have terms to maturity approximating to the
terms of the related pension liability. Plan assets are measured at fair value.

The Group has recognised all cumulative actuarial gains and losses for all
existing defined benefit pension plans as at 2 October 2004, reducing net assets
by £64.7m (before deferred tax).

Other post employment obligations

The Group operates a scheme which provides post-retirement healthcare benefits
to certain retired employees and their dependent relatives. The present value of
estimated future benefit payments has been included in the balance sheet (2
October 2004: £0.3m, 1 October 2005: £0.3m).

e) Financial instruments

Financial instruments for the year ended 1 October 2005 are recorded in
accordance with current UK GAAP accounting policies.

The Group uses interest rate swaps to fix the interest rate payable on the
floating rate tranches of its secured loan notes. These derivative financial
instruments have qualified for cash flow hedge accounting so that changes in
fair value are recognised in reserves for the effective portion of the hedge. A
liability of £14.3m will be recorded in the opening balance sheet for the year
ending 30 September 2006, reflecting the fair value of the swaps at this
reporting date under IFRS.

f) Share options

Under UK GAAP at 2 October 2004, the profit and loss account was charged in
respect of the intrinsic value of the Long Term Incentive Plan at the date of
grant over the performance period, where performance criteria must be satisfied.
IFRS requires the fair value of all equity based transactions at the date of
grant to be charged to the income statement. The fair value has been determined
by applying the Black-Scholes valuation model and is being charged to the income
statement evenly over the vesting periods (adjustments to the income statement:
6 months to 2 April 2005 £0.1m, year ended 1 October 2005 £0.2m).

g) Deferred tax

IAS 12 'Income taxes' requires deferred tax to be provided on all temporary
differences between the tax base and the carrying value of assets and
liabilities in the financial statements rather than just on timing differences
as under UK GAAP. Specifically, deferred tax is now recognised on the rolled
over gains on property disposals and asset revaluations. As at 2 October 2004,
an additional deferred tax liability of £91.4m has been recorded, reducing net
assets.

In addition, deferred tax assets have been recorded at 2 October 2004 for the
following:

Pension scheme deficit       £19.5m
Share based payments          £1.9m

As at 1 October 2005, a deferred tax liability of £89.9m has been recognised in
respect of property and a further £18.1m in respect of the Burtonwood, Jennings
and English Country Inns acquisitions.

Deferred tax assets have been recorded at 1 October 2005 for the following:

Pension scheme deficit       £19.7m
Share based payments          £2.3m

h) Dividends

Dividends relating to an accounting period are dealt with in that period under
UK GAAP. IFRS does not permit recognition of a dividend until it is approved,
usually after the accounting period to which it relates. The effect of this
change is to increase net assets by £16.9m at 2 October 2004.

i) Financing costs

Financing costs now comprise interest payable on borrowings, interest receivable
on funds invested, interest on pension scheme liabilities net of expected return
on assets, and gains and losses on hedging instruments that are recognised in
the income statement.

j) Leases

Premiums paid on the acquisition of leasehold property were classified as fixed
assets under UK GAAP.

Under IAS 16 'Property, Plant and Equipment'  premiums are considered to be
advance rent and so have been reclassified as other non-current assets (£0.6m as
at 2 October 2004, £1.0m as at 1 October 2005). Depreciation previously charged
has been reclassified as rent.

5 Accounting policies under IFRS

a) Basis of preparation

This financial information has been prepared in accordance with IFRS as endorsed
by the EU or are expected to be effective for the year end. The disclosures
required by IFRS 1 concerning the transition from UK GAAP to IFRS are given in
the appendices to this report.

The financial information has been prepared on the historic cost basis, as
modified for the revaluation of certain properties and financial instruments.
The principle accounting policies adopted are set out below.

b) Basis of consolidation

The consolidated financial statements incorporate the audited financial
statements of The Wolverhampton & Dudley Breweries, PLC and all of its
subsidiary undertakings. The results of new subsidiary undertakings are included
in the Group accounts from the date on which control transfers to the Group or,
in the case of disposals, up to the effective date of disposal. Transactions
between Group companies are eliminated on consolidation.

c) Revenue recognition

Revenue represents the value of goods and services supplied to customers, and
rents receivable from licensed and unlicensed properties. Revenue for drink,
food and accommodation is recognised at the point the goods or services are
provided. Machine income is recognised as earned or received. Rental income is
recognised in respect of the period to which it relates. Revenue is recorded net
of discounts, intra-Group transactions and VAT. Amounts collected on behalf of
third parties such as excise duty are not economic benefits which flow to the
Group. Revenue will exclude excise duty, relating to the brewing and packaging
of products, for which the Group is accountable to the Government.

d) Deferred tax

Deferred tax is provided in full, using the liability method, on all temporary
differences that have originated but not reversed by the balance sheet date
which gave rise to an obligation to pay more or less tax in the future.
Temporary differences are differences between the carrying value of assets and
liabilities and their tax base.

Deferred tax assets are recognised to the extent that is probable that future
taxable profit will be available against which the temporary differences can be
utilised.

Deferred tax is calculated using tax rates that are expected to apply when the
related deferred asset is realised or the deferred taxation liability is
settled.

e) Property, plant and equipment

  • Freehold and leasehold properties are stated at valuation or at cost.
    Plant, furnishings, equipment and other similar items are stated at cost.

  • Freehold buildings are depreciated to residual value on a straight line
    basis over 50 years.

  • Other tangible fixed assets are depreciated to residual value on a
    straight line basis at rates calculated to provide for the cost of the
    assets over their anticipated useful lives. Leasehold properties are
    depreciated over the lower of the lease period and 50 years and other
    tangible assets over periods ranging from three to 15 years.

  • Own labour directly attributable to capital projects is capitalised.

  • Land is not depreciated.

An annual assessment will be performed to ensure that residual values are based
on current prices.

Payments made on entering into or acquiring leaseholds that are accounted for as
operating leases represent prepaid lease payments and classified as non-current
assets. These are amortised on a straight line basis over the lease term.

Valuation of properties

Properties are revalued by qualified valuers on a regular basis at open market
value so that the carrying amount of an asset does not differ materially from
its fair value at the balance sheet date. When a valuation is below current
carrying value, the asset concerned is reviewed for impairment. Impairment
losses are charged to the revaluation reserve to the extent that a previous gain
has been recorded, and thereafter to the income statement. Surpluses on
revaluation are recognised in the revaluation reserve, except where they reverse
previously charged impairment losses, in which case they are recorded in the
income statement.

f) Employee benefits

Pension costs for the Group's defined benefit post retirement benefits plans are
determined by the Projected Unit Credit Method, with actuarial calculations
being carried out at each year end date.

Costs are recognised separately as operating and financing costs in the income
statement.  Operating costs comprise the current service cost, any gains or
losses on settlement or curtailments, and past service costs where benefits have
vested. Finance items comprise the interest on plan liabilities and the expected
return on plan assets.

Actuarial gains or losses comprising differences between actual and expected
return on plan assets, changes in plan liabilities due to experience and changes
in actuarial assumptions are recognised in the income statement over the
expected average remaining working lives of the employees only to the extent
that their net cumulative amount exceeds 10% of the greater of the present value
of the pension obligation and the fair value of the plan assets at the end of
the previous year.

Unrecognised actuarial gains and losses are reflected in the balance sheet.

The liability recognised in the balance sheet for the defined benefit plan is
the present value of scheme liabilities less the fair value of scheme assets.

Pension costs for the Group's defined contribution plan are charged to the
income statement in the period incurred.

g) Share based payments

The fair value of share based remuneration at the date of grant is calculated
using the Black-Scholes model and charged to the income statement on a straight
line basis over the vesting period of the award. The charge to the income
statement takes account of the estimated number of shares that will vest.

h) Intangible assets

Goodwill

Goodwill arising on acquisition is capitalised and represents the excess of the
fair value of the consideration given over the fair value of identifiable net
assets and liabilities acquired.  Goodwill is subject to an annual impairment
review or more frequently if events or changes in circumstances indicate that
the carrying value may be impaired. Any impairment is recognised immediately in
the income statement.

Negative goodwill is recognised in the income statement immediately.

Other intangible assets

Other intangible assets are carried at cost less accumulated amortisation and
any impairment losses.

This includes software costs which are amortised over three years.

Intangible assets arising on acquisition are recognised separately from goodwill
if the fair value of the assets can be identified separately and measured
reliably.

Amortisation is calculated on a straight line basis over the estimated useful
life of the intangible asset.

The carrying values are reviewed for impairment if events or changes in
circumstances indicate that their carrying value may be impaired.

i) Leases

Leases are classified as finance leases if the terms of the lease transfer
substantially all the risks and rewards of ownership to the lessee. All other
leases are classified as operating leases.

The cost of assets held under finance leases is included within tangible fixed
assets and depreciation is charged in accordance with the policy for the class
of asset concerned. The corresponding capital obligations under these leases are
shown as creditors. The finance charge element of rentals is charged to the
income statement and classified within finance costs as incurred.

Rental costs under operating leases are charged to the income statement on a
straight line basis over the term of the lease.

j) Financial instruments

Other Financial assets

Trade loans are classified as held for trading and are recognised initially at
cost. Subsequently trade loans are measured at fair value being amounts advanced
less deemed impairment. Gains or losses are recognised in the income statement
for the period.

Derivative financial instruments

The Group uses derivative financial instruments to hedge its exposure to
fluctuations in interest rates. Derivative financial instruments are recognised
in the balance sheet at fair value. Changes in the fair value of derivatives
that do not qualify for hedge accounting are charged or credited to the income
statement in the period.

The Group seeks to achieve hedge accounting to mitigate the impact on the Group
of changes in interest rates on the floating tranche of loan notes by matching
the impact with a fixed rate swap in the income statement.  This is recognised
as a cash flow hedge.

To qualify for hedge accounting, the hedging relationship must meet several
conditions with respect to documentation, probability of occurrence, hedge
effectiveness and reliability of measurement. At the inception of the
transaction the Group documents the relationship between hedging instruments and
hedged items, as well as the Group's risk management objective and strategy for
undertaking various hedge transactions.  This process includes linking all
derivatives designated as hedges to specific liabilities. The Group also
documents its assessment, both at the hedge inception and on a quarterly basis,
as to whether the derivatives that are used in hedging transactions have been,
and are likely to continue to be, highly effective at offsetting changes in cash
flows.

The effective part of the changes in fair value of cash flow hedges is
recognised in equity, whilst any ineffective part is recognised immediately in
the income statement.

Trade receivables

Trade receivables are measured at initial recognition, do not carry any interest
and are stated at their fair value. They are subsequently measured at amortised
cost using the effective interest rate method.

Trade payables

Trade payables are non-interest bearing and are stated at their nominal value.

Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held on call with
banks, other short term highly liquid investments with original maturities of
three months or less and bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities in the balance sheet. For the purpose of the
Group Cash Flow Statement, cash and cash equivalents are as defined above, net
of outstanding bank overdrafts.

Borrowings and borrowing costs

All loans and borrowings, which include the Group's secured loan notes, are
stated initially at the fair value of the consideration received net of issue
costs.

Borrowings are subsequently stated at amortised cost; any difference between the
proceeds (net of issue costs) and the redemption value is recognised in the
income statement over the period of the borrowings using the effective interest
method.

Borrowing costs are expensed in the period in which they are incurred, except
for issue costs which are amortised over the period of the borrowing.

Investments

Interests in subsidiaries are initially recognised at cost, net of acquisition
fees associated with the investment, less any impairment charge.

Investments that are actively traded in organised financial markets are carried
at fair value determined by reference to Stock Exchange quoted market bid prices
at the close of business on the balance sheet date.

k) Provisions

Provisions are recognised in the balance sheet when the Group has a present
legal or constructive obligation as a result of a past event and it is probable
that an outflow of economic benefits will be required to settle the obligation.

A provision for restructuring is recognised when the Group has approved a
detailed and formal restructuring plan, and the restructuring has either
commenced or has been publicly announced. Future operating losses are not
provided for.

Provisions are measured at the Directors' best estimate of the amount required
to settle the obligation at the balance sheet date.

l) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost
includes direct materials and a proportion of attributable overheads.

m) Segmental reporting

A business segment is a group of assets and operations engaged in providing
products or services that are subject to risks and returns that are different
from those of other business segments. A geographical segment is engaged in
providing products or services within a particular economic environment that are
subject to risks and returns that are different from those of segments operating
in other economic environments.

At 1 October 2005, the Group has four core divisions which are the primary
business segments:

  • Pathfinder Pubs
  • The Union Pub Company
  • WDB Brands
  • Central costs

There is no geographical segmentation as the Group trades in one geographical
segment, being the United Kingdom.

n) Dividends

Dividends proposed by the Board but unpaid at the year end are recognised in the
financial statements when they have been approved by the shareholders. Interim
dividends are recognised when paid.

o) Non- current assets held for sale

Assets are held for sale when the value of an asset will be recovered through a
sale transaction rather than continuing use. This condition is met when the sale
is highly probable and the asset is available for immediate sale in its present
condition. Management must be committed to the sale and the completion should be
expected within one year from the date of classification. Assets held for sale
are valued at the lower of carrying value and fair value less costs to sell and
are no longer depreciated.

The Wolverhampton & Dudley Breweries, PLC

Income statement reconciliation - Year ended 1 October 2005 (unaudited)

                                                                 IAS 19         IFRS 3  IFRS 2
                                 IAS 10  IAS 12          IAS 18 Retire-         Bus-    Share   Total
                                  Final     De-  IAS 16 Revenue    ment IAS 38  iness   based    IFRS
                      UK  IAS 1   Divi- ferred Revalua-    beer   Bene-  Good-  Combin-  Pay-  Adjust-
                    GAAP Reclass  dends    Tax    tion     duty    fits   will  ations  ments    ments      IFRS
                     £m      £m      £m     £m      £m       £m      £m     £m     £m      £m       £m        £m

Revenue           597.3                                   (41.2)                                 (41.2)    556.1

Operating
expenses         (475.4)    4.0                   (0.4)    41.2     2.0    7.0    0.1     0.2     54.1    (421.3)
                -------   -----   -----   ----  ------  -------   -----  -----  -----   -----  -------   -------
Operating
profit            121.9     4.0       -      -    (0.4)       -     2.0    7.0    0.1     0.2     12.9     134.8

Fixed asset
disposals           4.0    (4.0)                                                                  (4.0)        -
Finance income      0.2                                                                                      0.2
Finance costs     (78.2)                                           (2.6)                          (2.6)    (80.8)
                -------  ------   -----  -----  ------  -------  ------  -----  -----   -----  -------   -------
Profit before
tax                47.9       -       -      -    (0.4)       -    (0.6)   7.0    0.1     0.2      6.3      54.2

Tax               (14.5)                   1.0                      0.2                  (1.8)    (0.6)    (15.1)
                -------  ------   -----  -----  ------  -------  ------  -----  -----  ------  -------   -------
Profit after
tax                33.4       -            1.0    (0.4)       -    (0.4)   7.0    0.1    (1.6)     5.7      39.1

Dividends         (29.9)           29.9                                                           29.9         -
                -------  ------  ------  -----  ------  -------  ------  -----  -----  ------  -------   -------
Retained
profit for the
period              3.5       -    29.9    1.0    (0.4)       -    (0.4)   7.0    0.1    (1.6)    35.6      39.1
                -------  ------  ------  -----  ------  -------  ------  -----  -----  ------  -------   -------



The Wolverhampton & Dudley Breweries, PLC

Balance sheet reconciliation - Year ended 1 October 2005 (unaudited)


                                                              IAS 19                         IFRS 2
                                   IAS 10            IAS 16  Retire-   IAS   IAS 38   IFRS 3  Share     Total
                                    Final   IAS 12    Lease     ment    38 Computer Business  based      IFRS
                                UK  Divi- Deferred    Pre-    Bene-  Good-    Soft- Combina-   pay-   adjust-
                              GAAP  dends      Tax   miums     fits   will    ware    tions   ments     ments       IFRS
                               £m      £m       £m      £m       £m     £m      £m       £m      £m        £m         £m
Non-current assets
Goodwill                    105.9                                      7.0             18.1              25.1      131.0
Intangible
assets                          -                                              1.1      2.8               3.9        3.9
Property,
plant and
equipment                 1,553.1                     (1.0)                   (1.1)                      (2.1)   1,551.0
Other
non-current
assets                       21.1                      1.0                                                1.0       22.1
                         --------   -----    -----  ------   ------  -----  ------   ------  ------    ------   --------
                          1,680.1       -        -       -        -    7.0       -     20.9       -      27.9    1,708.0
                         --------   -----    -----  ------   ------  -----  ------   ------  ------    ------   --------

Current assets
Inventories                  13.6                                                                                   13.6
Trade and
other
receivables                  82.7                             (28.7)                                    (28.7)      54.0
Current tax
asset                         5.9                                                                                    5.9
Cash and cash
equivalents                  76.1                                                                                   76.1
                         --------   -----    -----  ------  -------  -----  ------   ------   -----   -------   --------
                            178.3       -        -       -    (28.7)     -       -        -       -     (28.7)     149.6
                         --------   -----    -----  ------  -------  -----  ------   ------   -----   -------   --------

Current liabilities
Borrowings                  (53.8)                                                                                (53.8)
Derivatives                     -                                                                           -          -
Trade and
other payables             (112.4)   19.8                                                       0.2      20.0     (92.4)
Pension
liabilities                  (3.3)                                                      3.3               3.3          -
                         --------  ------    -----  ------  -------  -----  ------   ------   -----   -------   --------
                           (169.5)   19.8        -       -        -      -       -      3.3     0.2      23.3    (146.2)
                         --------  ------    -----  ------  -------  -----  ------   ------   -----   -------   --------

Non-current liabilities
Borrowings                 (894.0)                                                                               (894.0)
Derivatives                  (0.9)                                                                          -      (0.9)
Pension
liabilities                     -                             (36.6)                   (6.0)            (42.6)    (42.6)
Deferred tax                (32.8)           (89.9)            19.7                   (18.1)    2.3     (86.0)   (118.8)
Other
non-current
liabilities                  (0.5)                             (0.3)                                     (0.3)     (0.8)
Provisions                   (2.2)                                                                                 (2.2)
                         --------  ------  -------  ------  -------  -----  ------  -------   -----   -------   --------
                           (930.4)      -    (89.9)      -    (17.2)     -       -    (24.1)    2.3    (128.9) (1,059.3)
                         --------  ------  -------  ------  -------  -----  ------  -------   -----   -------   --------
Net assets                  758.5    19.8    (89.9)      -    (45.9)   7.0       -      0.1     2.5    (106.4)     652.1
                         --------  ------  -------  ------  -------  -----  ------  -------   -----   -------   --------

Capital and reserves
Share capital                22.9                                                                                   22.9
Share premium
account                     185.1                                                                                  185.1
Merger reserve               41.5                                                                                   41.5
Revaluation
reserve                     379.9            (68.7)                                                     (68.7)     311.2
Capital
redeemption
reserve                       6.0                                                                                    6.0
Retained
earnings                    121.1    19.8    (21.2)           (45.9)   7.0              0.1     2.5     (37.7)      83.4
                         --------  ------  -------  ------  -------  -----  ------  -------   -----   -------   --------
Shareholders'
equity                      756.5    19.8    (89.9)      -    (45.9)   7.0       -      0.1     2.5    (106.4)     650.1
Minority
interest in
equity                        2.0                                                                                    2.0
                         --------  ------  -------  ------  -------  -----  ------  -------   -----   -------   --------
Total equity                758.5    19.8    (89.9)      -    (45.9)   7.0       -      0.1     2.5    (106.4)     652.1
                         --------  ------  -------  ------  -------  -----  ------  -------   -----   -------   --------




The Wolverhampton & Dudley Breweries, PLC

Income statement reconciliation - Interims to 2 April 2005 (unaudited)




                     IAS 1    IAS 10   IAS 12      IAS 16  IAS 18     IAS 19   IAS 38   IFRS 2
                   Reclass     Final Deferred Revaluation Revenue Retirement Goodwill    Share    Total IFRS
         UK GAAP           dividends      tax                 Beer  benefits             based   adjustments      IFRS
                                                             duty                     payments   
              £m        £m        £m       £m          £m      £m         £m       £m       £m            £m        £m

Revenue    277.6                                            (20.0)                                     (20.0)    257.6

Operating 
expenses  (226.4)      2.8                           (1.7)   20.0        0.8       3.6     0.1          25.6    (200.8)
          ------    ------    -------   ------     ------   -----     ------    ------  ------        ------    ------
Operating 
profit      51.2       2.8          -        -       (1.7)       -       0.8       3.6     0.1           5.6      56.8

Fixed 
asset        
disposals    2.8      (2.8)                                                                             (2.8)         -
Finance 
income       0.1                                                                                                   0.1
Finance 
costs      (21.5)                                                       (1.3)                           (1.3)    (22.8)
          ------    ------    -------   ------     ------   -----     ------    ------  ------        ------    ------
Profit 
before tax  32.6          -         -        -       (1.7)       -      (0.5)      3.6     0.1           1.5      34.1

Tax        (10.1)                          0.4                           0.2              (0.3)          0.3      (9.8)
          ------    ------    -------   ------     ------   -----     ------    ------  ------        ------    ------
Profit 
after tax   22.5          -         -      0.4       (1.7)       -      (0.3)      3.6    (0.2)          1.8      24.3

Dividends  (10.1)                10.1                                                                   10.1          -
          ------    ------    -------   ------     ------   -----     ------    ------  ------        ------    ------
Retained 
profit      
for the 
period      12.4          -      10.1      0.4       (1.7)       -      (0.3)      3.6    (0.2)         11.9      24.3
          ------    ------    -------   ------     ------   -----     ------    ------  ------        ------    ------



The Wolverhampton & Dudley Breweries, PLC

Balance sheet reconciliation - Interims - As at 2 April 2005 (unaudited)



                       IAS 10    IAS 12   IAS 16   IAS 16  IAS 19    IAS 38   IAS 38  IFRS 3  IFRS 2
             UK GAAP    Final  Deferred    Lease Revalua-  Retire- Goodwill Computer Business Share   Total    
                        divi-       tax premiums    tion     ment           software combin-  based   IFRS
                        dends                            Benefits                     ations  pay-  adjust-
                                                                                              ments   ments     IFRS
                 £m        £m        £m        £m     £m       £m        £m       £m      £m     £m      £m       £m
Non-current 
assets
Goodwill       99.0                                                     3.6             14.4           18.0    117.0
Intangible 
assets            -                                                              0.9                    0.9      0.9
Property, plant 
and 
equipment   1,395.2                          (1.0)   52.0                       (0.9)                  50.1  1,445.3
Other non-
current 
assets         22.4                           1.0                                                       1.0     23.4
             ------    ------    -------   ------   ------   -----   ------  ------   ------  ------  ------  ------
            1,516.6         -        -          -    52.0       -       3.6       -     14.4     -     70.0  1,586.6
             ------    ------    -------   ------   ------   -----   ------  ------   ------  ------  ------  ------

Current assets
Inventories    13.5                                                                                             13.5
Trade and 
other 
receivables    49.8                                                                                             49.8
Financial 
assets          0.9                                                                                              0.9
Cash and 
cash 
equivalents    24.9                                                                                             24.9
             ------    ------    -------   ------   ------   -----   ------  ------   ------  ------  ------  ------
               89.1         -       -          -       -       -          -       -        -     -       -      89.1
             ------    ------    -------   ------   ------   -----   ------  ------   ------  ------  ------  ------
Current 
liabilities
Borrowings    (0.2)                                                                                             (0.2)
Derivatives   (1.8)                                                                                             (1.8)
Trade and 
other 
payables    (123.6)      10.1                                                                  0.1     10.2   (113.4)
Pension 
liabilities   (1.9)                                           0.7                       1.2             1.9        -
             ------    ------    -------   ------   ------   -----   ------  ------   ------  ------  ------  ------
            (127.5)      10.1       -          -       -      0.7         -       -     1.2    0.1     12.1   (115.4)
             ------    ------    -------   ------   ------   -----   ------  ------   ------  ------  ------  ------
Non-current 
liabilities
Borrowings  (740.5)                                                                                           (740.5)
Derivatives   (9.5)                                                                                             (9.5)
Pension 
liabilities      -                                          (66.0)                     (3.0)          (69.0)   (69.0)
Deferred tax (21.1)             (90.7)                       19.8                     (12.6)   3.1    (80.4)  (101.5)
Other non-
current 
liabilities   (1.6)                                          (0.3)                                     (0.3)    (1.9)
Provisions    (1.2)                                                                                             (1.2)
             ------    ------    -------   ------   ------   -----   ------  ------   ------  ------  ------  ------
            (773.9)        -    (90.7)         -      -     (46.5)        -       -   (15.6)   3.1   (149.7)  (923.6)
             ------    ------    -------   ------   ------   -----   ------  ------   ------  ------  ------  ------
Net assets   704.3      10.1    (90.7)         -   52.0     (45.8)      3.6       -       -    3.2    (67.6)   636.7

Share 
capital       22.7                                                                                              22.7
Share 
premium 
account      252.2                                                                                             252.2
Merger 
reserve          -                                                                                                 -
Revaluation 
reserve      321.7              (68.9)             53.2                                               (15.7)   306.0
Capital 
redeemption 
reserve       6.0                                                                                                6.0
Retained 
earnings    101.7      10.1     (21.8)             (1.2)  (45.8)        3.6                    3.2    (51.9)    49.8
             ------    ------    -------   ------   ------   -----   ------  ------   ------  ------  ------  ------
Shareholders' 
equity      704.3      10.1     (90.7)        -    52.0   (45.8)        3.6       -      -     3.2    (67.6)   636.7
             ------    ------    -------   ------   ------   -----   ------  ------   ------  ------  ------  ------



The Wolverhampton & Dudley Breweries, PLC

Balance sheet reconciliation - Transition date - As at 2 October 2004 (unaudited)


                             IAS 10   IAS 12    IAS 16    IAS 16      IAS 19    IAS 38    IFRS 2
                              Final     Def-    Lease Revaluation Retirement Computer     Share    Total IFRS
                              divi-    erred premiums               benefits software     based   adjustments      IFRS
                     UK GAAP  dends      tax                                           payments   
                         £m      £m       £m       £m          £m         £m       £m        £m            £m        £m
Non-current assets
Goodwill              109.1                                                                                       109.1
Intangible assets         -                                                      0.8                     0.8        0.8
Property, plant and 1,182.3                     (0.6)       53.7                (0.8)                   52.3    1,234.6
equipment
Other non-current      21.2                       0.6                                                    0.6       21.8
assets
                   --------  ------   -------  ------     ------      ------   ------   -------       ------    -------
                    1,312.6       -        -        -       53.7           -        -         -         53.7    1,366.3
                   --------  ------   -------  ------     ------      ------   ------   -------       ------    -------

Current assets
Inventories            13.5                                                                                        13.5
Trade and other        45.0                                                                                        45.0
receivables
Cash and cash          16.2                                                                                        16.2
equivalents
                   --------  ------   -------  ------     ------      ------   ------   -------       ------    -------
                       74.7        -        -        -           -          -        -         -             -     74.7
                   --------  ------   -------  ------     ------      ------   ------   -------       ------    -------
Current liabilities
Borrowings             (3.9)                                                                                       (3.9)
Derivatives            (1.8)                                                                                       (1.8)
Trade and other      (131.5)   16.9                                                        (0.2)         16.7    (114.8)
payables
Pension liabilities    (1.5)                                            1.5                              1.5          -
                   --------  ------   -------  ------     ------      ------   ------   -------       ------    -------
                     (138.7)   16.9         -        -           -      1.5         -     (0.2)         18.2     (120.5)
                   --------  ------   -------  ------     ------      ------   ------   -------       ------    -------
Non-current
liabilities
Borrowings           (572.7)                                                                                     (572.7)
Derivatives           (10.4)                                                                                      (10.4)
Pension liabilities        -                                           (66.2)                           (66.2)    (66.2)
Deferred tax          (15.7)           (91.4)                           19.5                1.9         (70.0)    (85.7)
Other non current          -                                            (0.3)                            (0.3)     (0.3)
liabilities
Provisions             (1.5)                                                                                       (1.5)
                   --------  ------   -------  ------     ------      ------   ------   -------       ------    -------
                     (600.3)       -   (91.4)        -           -     (47.0)        -      1.9        (136.5)   (736.8)
                   --------  ------   -------  ------     ------      ------   ------   -------       ------    -------
Net assets            648.3    16.9    (91.4)        -       53.7      (45.5)        -      1.7         (64.6)    583.7
                   --------  ------   -------  ------     ------      ------   ------   -------       ------    -------
Capital and reserves
Share capital          21.5                                                                                        21.5
Share premium         209.9                                                                                       209.9
account
Revaluation reserve   321.9            (69.2)                54.9                                       (14.3)    307.6
Capital redeemption     6.0                                                                                         6.0
reserve
Retained earnings      89.0    16.9    (22.2)                (1.2)     (45.5)               1.7         (50.3)     38.7
                   --------  ------   -------  ------     ------      ------   ------   -------       ------    -------
Shareholders' equity  648.3    16.9    (91.4)        -       53.7      (45.5)        -      1.7         (64.6)    583.7
                   --------  ------   -------  ------     ------      ------   ------   -------       ------    -------







                      This information is provided by RNS
            The company news service from the London Stock Exchange
                                                                                                                                                 

a d v e r t i s e m e n t