25th May 2006 07:02
Britvic plc25 May 2006 Britvic plc Interim Results (Unaudited) (For the 28 weeks ended 16 April 2006) 28 weeks to 28 weeks to % change 16 April 2006 17 April 2005* £m £m Total Branded Revenue 323.5 341.5 (5.3)Carbonates Revenue 159.8 175.6 (9.0)Stills Revenue 153.7 155.2 (1.0) EBITDA** 43.4 47.9 (9.4) Operating Profit 18.6 22.7 (18.1) Free cashflow*** (42.3) (69.8) 39.4 Profit after tax 6.5 9.6 (32.3) Basic earnings per share 3.0p 4.3p (30.2)Dividend per share 3.0p------------------ ------------- ----------- ---------- Note: all numbers (other then revenue and dividend per share) are disclosedbefore exceptional items and all numbers (other than dividend per share) excludethe Private Label Water business - where the last contract expired in November2005. Total revenue including Private Label Water is down 5.7% at £323.6magainst £343.1m in 2005. * Proforma adjustments have been made to 2005 results to present them on acomparable basis (as if the capital and corporate structure in place postflotation had been in place throughout 2005). On a non- proforma basis 2005 H1operating profit is £24.1m and profit after tax pre exceptionals is £16.8m. ** EBITDA is defined as operating profit before depreciation and amortisation ***Free cash flow is defined as net cash flow excluding dividends • Total branded revenue in the seasonally less important first half is down 5.3% to £323.5m and EBITDA down 9.4% to £43.4m reflecting: o an unexpected decline since Christmas in the full sugar carbonate market driven by an acceleration of the consumer trend towards health and wellbeing o the market volume growth in stills being driven by categories such as Pure Juice and Water which Britvic has only recently entered o revenue further affected by structural changes in the Take Home customer base o pricing and promotional issues with a small number of customers have had a marked impact on stills revenue in the last few weeks of the period; these have now been satisfactorily resolved. • Market share maintained in many of Britvic's key categories including total carbonates, adult and juice drinks. • Interim dividend of 3.0p per share underpinned by strong and improving free cash flow. • Innovation launches announced at the time of flotation, including three new water brands, successfully delivered on time. • As previously announced, a further £4m of overhead savings identified in addition to the £6m anticipated at the time of the flotation. Paul Moody, Chief Executive commented: "It has been a difficult first half with an unexpected sharp decline in thecarbonates market since Christmas, affecting both sales and profitability. Oursecond quarter revenue was also impacted by structural changes in the Take Homecustomer base, and our stills revenue was further affected by some short termtrading issues. These issues have since been satisfactorily resolved. Our totalsales performance has improved in the first four weeks of the second half withstills revenue showing encouraging growth although carbonates revenue remainsdown on the prior year. We have not seen the level of recovery in the carbonates market that weanticipated at the time of updating the market in April. This has led to somedownward pressure on pricing which we anticipate continuing for the balance ofthe year. Consequently, management now believes that it will deliver earningsfor the full year modestly below the current range of market expectations butthe continued market volatility suggests that a range of outcomes is possible. We remain confident in the prospects for longer term growth of the business dueto our strength in the important stills market, our track record of outstandinginnovation, the continued marketing support for our core brands and the strongcash flow generated by the business." For further information please contact: Investors:John Gibney/ Jo Guano +44 (0)1245 504 330 Media:Mike Smith/ Conor McClafferty +44 (0)207 404 5959(Brunswick) A presentation for analysts and investors will be held at 9.30am on 25 May 2006at the Auditorium at Deutsche Bank, Winchester House, 1 Great Winchester Street,EC2N 2BD. A live webcast of the presentation including Q&A will be available onthe Britvic plc website www.britvic.com There will also be a conference call today at 2.30pm (9.30am Eastern Time)primarily for US investors and analysts where there will be an opportunity toask questions. A recording of the call will be available for seven days. Toaccess this call please dial the access number below and use the pin numbergiven. Access number +44 (0)20 8609 0205Pin number 217348#Redial number +44 (0)20 8609 0289Conference reference 144612 Notes to editors---------------- Britvic is one of the two leading soft drinks businesses in Great Britain. TheCompany is the largest supplier of still soft drinks, the faster growingcategory in the soft drinks market, and the number two supplier of carbonates. Britvic plc's broad portfolio of leading brands includes established names withhigh brand recognition such as Robinsons and Tango and highly successfulinnovations such as J2O and Fruit Shoot. Included within the portfolio are thePepsi and 7UP brands, which Britvic produces, markets, sells and distributesunder its exclusive appointment from PepsiCo which runs until December 2023.This brand and product portfolio enables Britvic to target and satisfy a widerange of consumer demands in all major soft drinks categories, via all availableroutes to market. Cautionary note regarding forward-looking statements---------------------------------------------------- This announcement includes statements that are forward-looking in nature.Forward-looking statements involve known and unknown risks, uncertainties andother factors which may cause the actual results, performance or achievements ofthe Company to be materially different from any future results, performance orachievements expressed or implied by such forward-looking statements. Except asrequired by the Listing Rules and applicable law, Britvic undertakes noobligation to update or change any forward-looking statements to reflect eventsoccurring after the date such statements are published. Chief Executive Review---------------------- Britvic today announces a decline in half year sales and profits with totalbranded revenue down 5.3 per cent to £323.5m and operating profits down 18.1 percent to £18.6m. Profits after tax and before exceptional items fell 32.3 percent to £6.5m and basic earnings per share are down 30.2 per cent to 3.0p. Freecash flow has improved by 39.4 per cent and a dividend of 3.0p will be paid toshareholders on the register on 9th June. First Half Trading------------------ In the first few months of 2006 the total soft drinks market changedsignificantly as a consequence of a marked acceleration of the consumer trendtowards health and well-being. Against a market background of total carbonatesvolume declining around 9 per cent in the first three months of 2006, Britvic'sbrands have performed satisfactorily, maintaining market share in key categoriesincluding total carbonates, adult and juice drinks. Within this performance, non-added sugar variants have proved to be more robustshowing some small growth against a regular carbonates market in double digitdecline. In the first half therefore Britvic's carbonates volumes were down 7.2per cent and Average Realised Price per litre (ARP) was down 1.9 per centresulting in revenue down 9.0 per cent. The difficult trading environment in carbonates affecting the whole market isresulting in intensified price pressure. There is increasing volatility in thefrequency and depth of promotional activity and this is also reducing volumes.The pricing outlook for the remainder of the year therefore remains uncertain. Conversely, the total stills market showed strong growth tracking almost 7 percent ahead of the 2005 volume trends. However Britvic's brands volumes in thiscategory were only marginally up on last year as a consequence of much of thestills market growth being driven by products such as water, pure juice anddairy where the Company does not have a developed presence. Britvic has howeverlaunched a number of water products this year and the Company is focussing itsfuture new product development on many of these growth segments. Stills revenuehas additionally been impacted by price and promotional issues with twocustomers. Although this has had a marked impact on revenue performance in thelast few weeks, the issues have now been satisfactorily resolved. A further challenge in the first half of 2006 has come from structural changesin the Take Home customer base. Changes in ownership have led to the sale ofstores and the implementation of different sales and promotional strategies,resulting in a reduction in the size of some significant accounts. Against this backdrop Britvic is focusing on the elements that can be directlyinfluenced and has further reduced costs and improved the cash position. Solidprogress has also been made on innovation and new product development. Managing the cost base and improving the cash position------------------------------------------------------ The overhead reduction programme is on course to deliver a further £4 million ofsavings in 2006, in addition to the £6m anticipated at the time of flotation.The annualised targets will therefore increase for 2007 and 2008 to respectively£15m and £18m. These extra savings are as a result of the BusinessTransformation programme, enabling costs to be reduced in a number of overheadareas. In addition, a further £2m of savings from the Product Value Optimisationprogramme in 2006 and a further £2m next year is expected as products arere-engineered to further mitigate input price rises. These significant costsavings, and the phasing of £3m of spend that was more front loaded last year,have helped protect the decline at operating profit margin to less than 100basis points over the period. The guidance at the time of flotation was that the Company would be free cashflow neutral at the end of 2006. Strong management action has led to animprovement in the full year forecast position now being around £20-25m cashpositive. This has been achieved partly through reducing capital expenditurelevels in line with current market conditions - a reduction of over £10m to£40-45m. In addition, improvements in working capital have been made as a resultof the increased visibility given by the new systems enabling reductions instock levels and improvements in supplier terms. Whilst focus in the first half has been on reducing discretionary spend anddriving efficiency we have maintained the advertising and promotional spend tosupport the brands within the portfolio. This spend, represents an investment ofover 7 per cent of revenue. As identified at the time of the flotation, spend inthe second half is allocated towards the growth segments of the market andbehind a mixture of core brands and new launch activity. Innovation / New Product Development------------------------------------ A number of new brands and brand extensions have been launched in the first halfof the year; all aimed at the growth segments of the market. All innovationlaunches planned at the time of float have been delivered on time. Three newbrands, Drench, Pennine Spring and Fruit Shoot H2O have been successfullydelivered on time and are performing in line with management expectations. Inpure juice drinks, "not from concentrate" Britvic Squeezed Orange and PressedApple juices were launched into the On Premise market in May. Carbonates non-added sugar variants continue to grow. Pepsi brand support hashence been focused behind the low-calorie, sugar free variant Pepsi Max, thelaunch of Pepsi Max Cino in January, and 7UP Free. We have also developed twonew flavours under the Tango Clear brand. Innovation will be guided by the consumer trend towards health and wellbeing,developing Britvic's significant presence in emerging and faster growingcategories including non-added sugar carbonates, adult, functional, sportsdrinks and water. Britvic has a strong track record of successful innovation andthe Business Transformation Programme has enabled a reduction in the time takenfrom concept to launch by one third enabling new products to be brought tomarket more quickly. Core Brands----------- Two of the major strands of the core brand activity in the second half revolvearound important sporting events. Pepsi is the official sponsor of Team Englandfor the World Cup starting in June. The promotional campaign is aimed at drivingBritvic's position in 'better for you" carbonates by taking Pepsi Max to theWorld Cup through TV advertising, on-line PR support and consumer facingpromotions. Robinsons' association with Wimbledon is well established; howeverthis year Britvic will have the biggest campaign ever with coverage across theRobinsons portfolio. The other major piece of core brand activity planned forthe second half is the "Summer of Juice" campaign aimed at driving thedistribution and depth of the core Britvic juice range. Britvic has a small International business whose key focus is on establishingdifferentiated Britvic brands in Continental Europe. In the first half the focushas been on establishing Robinsons in the Swedish and Danish markets through afully supported promotional campaign and on continuing the double digit growthof the Fruit Shoot brand in Holland. Current trading--------------- Revenue performance has improved marginally in the first four weeks of thesecond half, with total revenue down 4 per cent on last year, in the large partimpacted by the decline in the carbonates market volumes and the customer issueswhich were resolved part way through the period. The carbonates market continues to be challenging with the company showing a 14per cent decline in this period compared with a market decline post Easter of 4per cent. Removing the customer structural changes, carbonates revenues wouldbroadly be in line with the market. Stills revenue has shown encouraging growthof 9 per cent, driven by J2O, Fruit Shoot and Robinsons. The water launches weremade part way through the period and have consequently had a limited impact. Dividends--------- The Company's core strengths and its strong underlying cash flow underpin theBoard's decision to pay an interim dividend of 3.0p per share. Given theimportance of summer to the business and the seasonality of Britvic'sprofitability the Board broadly anticipates paying a third of the annualdividend at this half year stage. This will be paid on the 7 July 2006 toshareholders on the register on the 9 June 2006. On an ongoing basis the Boardintends to adopt a progressive dividend policy. The Board will take intoconsideration the Company's cash flow as well as earnings in deciding the rateof dividend growth and absolute level. BRITVIC PLC INTERIM FINANCIAL STATEMENTSFOR THE 28 WEEKS TO 16 APRIL 2006 Company number: 5604923 BRITVIC PLC INDEPENDENT REVIEW REPORT TO BRITVIC PLC---------------------------------------- Introduction------------ We have been instructed by the company to review the financial information forthe period ended 16 April 2006 which comprises the Consolidated IncomeStatement, Consolidated Balance Sheet, Consolidated Cash Flow Statement,Consolidated Statement of Changes in Equity, and the related notes 1 to 10. Wehave read the other information contained in the interim report and consideredwhether it contains any apparent misstatements or material inconsistencies withthe financial information. This report is made solely to the company in accordance with guidance containedin Bulletin 1999/4 'Review of interim financial information' issued by theAuditing Practices Board. To the fullest extent permitted by law, we do notaccept or assume responsibility to anyone other than the company, for our work,for this report, or for the conclusions we have formed. Directors' responsibilities--------------------------- The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority. As disclosed in note 1, the next annual financial statements of the group willbe prepared in accordance with those IFRSs adopted for use by the EuropeanUnion. This interim report has been prepared in accordance with the requirementsof IFRS 1, "First Time Adoption of International Financial Reporting Standards"relevant to interim reports. The accounting policies are consistent with those that the directors intend touse in the next financial statements. There is, however, a possibility that thedirectors may determine that some changes to these policies are necessary whenpreparing the full annual financial statements for the first time in accordancewith those IFRSs adopted for use by the European Union. This is because, asdisclosed in note 1, the directors have anticipated that certain standards,which have yet to be formally adopted for use in the EU will be so adopted intime to be applicable to the next annual financial statements. The maintenance and integrity of the Britvic plc web site is the responsibilityof the directors; the work carried out by the auditors does not involveconsideration of these matters and, accordingly, the auditors accept noresponsibility for any changes that may have occurred to the financialinformation since it was initially presented on the web site. Review work performed--------------------- We conducted our review in accordance with guidance contained in Bulletin 1999/4'Review of interim financial information' issued by the Auditing Practices Boardfor use in the United Kingdom. A review consists principally of making enquiriesof group management and applying analytical procedures to the financialinformation and underlying financial data, and based thereon, assessing whetherthe accounting policies have been applied. A review excludes audit proceduressuch as tests of controls and verification of assets, liabilities andtransactions. It is substantially less in scope than an audit performed inaccordance with International Standards on Auditing (UK and Ireland) andtherefore provides a lower level of assurance than an audit. Accordingly we donot express an audit opinion on the financial information. Review conclusion----------------- On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the period ended 16April 2006. Ernst & Young LLPNottingham24 May 2006 BRITVIC PLC CONSOLIDATED INCOME STATEMENTFor the 28 weeks ended 16 April 2006 --------------- --------------- --------------- (Unaudited) (Unaudited) (Audited) 28 Weeks 28 Weeks 52 Weeks Ended October 2005 Note Ended 16 April 2006 Ended 17 April 2005 --------------- --------------- --------------- Before Exceptional Total Before Exceptional Total Before Exceptional Total Exceptional items Exceptional items Exceptional items items items items £m £m £m £m £m £m £m £m £m-------------- --- ------- ------ ------ ------ ------ ------ ------ ------ ------Revenue 323.6 - 323.6 343.1 - 343.1 698.2 - 698.2Cost of Sales (127.4) - (127.4) (130.1) - (130.1) (269.5) - (269.5)-------------- --- ------- ------ ------ ------ ------ ------ ------ ------ ------Gross Profit 196.2 - 196.2 213.0 - 213.0 428.7 - 428.7Selling andDistributionCosts (118.0) - (118.0) (121.2) - (121.2) (232.3) - (232.3)AdministrationExpenses 6 (59.6) (14.6) (74.2) (67.7) (3.1) (70.8) (120.1) (5.8) (125.9)------------- --- ------- ------ ------ ------ ------ ------ ------ ------ ------OperatingProfit 18.6 (14.6) 4.0 24.1 (3.1) 21.0 76.3 (5.8) 70.5------------- --- ------- ------ ------ ------ ------ ------ ------ ------ ------Finance Income - - - 0.2 - 0.2 0.3 - 0.3Finance Costs (9.2) (0.1) (9.3) (0.4) - (0.4) (6.5) (0.1) (6.6)------------- --- ------- ------ ------ ------ ------ ------ ------ ------ ------Profit /(loss) beforeTax 9.4 (14.7) (5.3) 23.9 (3.1) 20.8 70.1 (5.9) 64.2Taxation 8 (2.9) 2.7 (0.2) (7.1) - (7.1) (20.9) 0.1 (20.8)------------- --- ------- ------ ------ ------ ------ ------ ------ ------ ------Profit/(loss)for the period 6.5 (12.0) (5.5) 16.8 (3.1) 13.7 49.2 (5.8) 43.4============= === ======= ====== ====== ====== ====== ====== ====== ====== ====== Earnings PerOrdinary Share 9- basic forprofit/(loss)for the period 3.0p (5.6p) (2.6p) 7.8p (1.4p) 6.4p 22.9p (2.7p) 20.2p ------- ------ ------ ------ ------ ------ ------ ------ ------ diluted forprofit/(loss)for the period 3.0p (5.5p) (2.5p) 7.8p (1.4p) 6.4p 22.9p (2.7p) 20.2p ------- ------ ------ ------ ------ ------ ------ ------ ----- Dividend per share paid in the period - Pence pershare 45.9p 270.4p 1,922.9p ------ ------ -------Dividend per share (proposed after the balancesheet date) - Pence per share 3.0p ------ BRITVIC PLCCONSOLIDATED BALANCE SHEET (Unaudited) (Unaudited) (Audited) 16 April 17 April 02 Oct Note 2006 2005 2005 -------- -------- -------- £m £m £m---------------------------- ----- -------- -------- --------AssetsNon-current assetsProperty, plant & equipment 232.4 234.3 231.5Intangible assets 95.1 99.8 96.7Lease premiums 2.4 2.4 2.4Deferred tax asset - 0.4 2.7---------------------------- ----- -------- -------- -------- 329.9 336.9 333.3---------------------------- ----- -------- -------- --------Current AssetsInventories 37.3 38.5 37.9Trade and other receivables 115.7 157.2 101.8Forward currency contracts 0.2 - -Cash and short-term deposits 1.2 2.9 19.4Income tax receivable 5.7 5.8 ----------------------------- ----- -------- -------- -------- 160.1 204.4 159.1 -------- -------- --------Total Assets 490.0 541.3 492.4---------------------------- ----- ======== ======== ========Equity and LiabilitiesIssued capital 5 (43.2) (12.3) (12.3)Share premium - (25.4) (25.4)Own share reserve 0.5 - -Share scheme reserve (5.7) (0.6) (0.8)Other reserves - (7.2) (7.1)Retained earnings 116.6 (150.3) 23.4---------------------------- ----- -------- -------- --------Total Equity 10 68.2 (195.8) (22.2)---------------------------- ----- -------- -------- -------- Non-current liabilitiesInterest-bearing loans andborrowings 7 (354.2) - (219.3)Deferred tax liability (7.1) - -Pension liability (48.9) (82.2) (84.6)---------------------------- ----- -------- -------- -------- (410.2) (82.2) (303.9)---------------------------- ----- -------- -------- --------Current liabilitiesTrade and other payables (138.3) (179.5) (142.4)Interest-bearing loans andborrowings 7 (9.5) (81.0) (13.9)Forward currency contracts (0.2) - -Non-interest bearing loans andborrowings - (2.8) (2.8)Income tax payable - - (7.2)---------------------------- ----- -------- -------- -------- (148.0) (263.3) (166.3)---------------------------- ----- -------- -------- --------Total Liabilities (558.2) (345.5) (470.2)---------------------------- ----- ======== ======== ========Total Equity and Liabilities (490.0) (541.3) (492.4)---------------------------- ----- ======== ======== ======== BRITVIC PLC CONSOLIDATED CASH FLOW STATEMENT (Unaudited) (Unaudited) (Audited) 28 Weeks 28 Weeks 52 Weeks Ended Ended Ended 16 April 17 April October 2006 2005 2005 -------- -------- --------- £m £m £m------------------------------------ -------- -------- ---------Cash flows from operating activitiesProfit from continuing operationsbefore tax and finance costs 4.0 21.0 70.5Depreciation 20.5 21.0 40.8Amortisation of intangible assets 2.5 2.5 3.0Share based payments treated asincrease in equity 7.8 0.3 0.5Net pension charge less contributions (29.4) (28.8) (27.0)Decrease/(Increase) in Stock 0.6 (5.7) (5.2)(Increase) in Debtors (11.9) (62.6) (7.3)(Decrease)/Increase in Creditors (6.0) 29.7 (3.7)Loss on disposal of property,plant and equipment 1.8 1.7 3.2Income tax paid (3.7) (16.6) (18.8) -------- --------- ---------Net cash flows from operatingactivities (13.8) (37.5) 56.0------------------------------------ -------- -------- ---------Cash flows from investing activitiesProceeds from sale of property,plant and equipment 0.2 - 0.1Purchase of property plant and equipment (27.6) (30.1) (51.8)Interest Received 0.0 - 0.3Acquisition of Subsidiary net of cash acquired - (4.1) (4.3)------------------------------------ -------- -------- ---------Net cash flows from investingactivities (27.4) (34.2) (55.7)------------------------------------ -------- -------- ---------Cash flows from financing activitiesFinance Costs (0.1) - (0.8)Interest Paid (5.8) (0.2) (4.3)Interest bearing loans received 364.4 81.0 233.2Interest bearing loans repaid (233.9) - -Repayment of borrowings (2.8) - -Purchase of own shares (0.5) - -Increase to share capital 0.2 - -Dividend paid to equity holders of the parent (98.5) (33.2) (112.1)Dividend paid to minority interests - - (123.9) -------- --------- ---------Net cash flows from financingactivities 23.0 47.6 (7.9)------------------------------------ -------- -------- ---------Net decrease in cash and cashequivalents (18.2) (24.1) (7.6)Cash and cash equivalents atbeginning of period 19.4 27.0 27.0------------------------------------ -------- -------- ---------Cash and cash equivalents atend of period 1.2 2.9 19.4------------------------------------ ======== ========= ========= BRITVIC PLC CONSOLIDATED STATEMENT OF RECOGNISED INCOME & EXPENSE (Unaudited) (Unaudited) (Audited) 28 Weeks 28 Weeks 52 Weeks Ended 16 Ended 17 Ended April 2006 April 2005 October 2005 -------- -------- -------- £m £m £m-------------------------------------- -------- -------- --------Actuarial adjustments on pensionliabilities 6.7 (2.0) (3.4)Current tax on actuarial adjustmentson pension liabilities 9.0 9.0 9.0Deferred tax on revalued buildings - - (0.1)Deferred tax on share options grantedto employees 1.1 - 0.4Current tax on share optionsexercised 0.6 - -Deferred taxation on pensionliabilities (11.0) (8.4) (8.0)Cost of share-based payments 7.3 0.3 0.5Cash flow hedge gains taken to equity 1.0 - --------------------------------------- -------- -------- --------Net income recognised directly inequity 14.7 (1.1) (1.6)(Loss) / Profit for the period (5.5) 13.7 43.4-------------------------------------- -------- -------- --------Total recognised income for theperiod 9.2 12.6 41.8Adoption of IAS 32/39 (1.0) - --------------------------------------- -------- -------- --------Total recognised income 8.2 12.6 41.8====================================== ======== ======== ======== BRITVIC PLC NOTES TO THE FINANCIAL INFORMATIONFor the period ended 16 April 2006 1. Basis of preparation----------------------- For all periods up to and including the year ended 2 October 2005, BritanniaSoft Drinks Ltd prepared its financial statements in accordance with UKgenerally accepted accounting practice (UK GAAP). As a consequence of theacquisition of Britannia Soft Drinks Ltd by Britvic plc and of that company'slisting on the London Stock Exchange, from 3 October 2005 the Group is requiredto prepare consolidated financial statements in accordance with InternationalFinancial Reporting Standards (IFRS) as endorsed by the European Commission. The financial information has been prepared on the basis of standards that willbe applied by the year end under IFRS, including all International AccountingStandards (IAS), Standing Interpretations Committee (SIC) and InternationalFinancial Reporting Interpretations Committee (IFRIC) interpretations issued bythe International Accounting Standards Board (IASB) and published by 16 April2006. These include IFRS endorsed by the EU and those awaiting formalendorsement, as applicable to the 2006 financial statements. These interim financial statements are unaudited and do not constitute statutoryaccounts of the Group within the meaning of Section 240 of the Companies Act1985. The Annual Report and Financial Statements for Britannia Soft Drinks Ltdfor the year ended 2 October 2005, under UK GAAP, which contain an unqualifiedaudit report, have been filed with the Registrar of Companies. 2. Transition to International Financial Reporting Standards------------------------------------------------------------ IFRS 1, First-time Adoption of International Financial Reporting Standards, hasbeen applied in preparing these interim financial statements. The Group hastaken the following exemptions available under IFRS 1: a) Not to restate the comparative information disclosed in the 2006financial statements (being the financial statements for the 28 weeks to 17April 2005 and the 52 weeks ended 2 October 2005) in accordance with IAS 32'Financial Instruments: Disclosure and Presentation' and IAS 39 'FinancialInstruments: Recognition and Measurement'. b) Not to restate business combinations occurring before 4 October 2004. c) To recognise all actuarial gains and losses on pensions and otherpost-retirement benefits directly in shareholders' equity at 4 October 2004. d) To retain UK GAAP carrying values of property plant and equipment,including revaluations, as deemed cost at transition. e) Not to apply IFRS 2 'Share-based Payments' to grants of equityinstruments on or before 7 November 2002 that had vested prior to 1 January2005. Explanatory notes setting out Britvic plc's accounting policies under IFRS, themajor differences between UK GAAP and IFRS for Britvic plc and reconciliationsof UK GAAP to IFRS for the income statement for the year ended 2 October 2005and Balance sheets as at 4 October 2004 and 2 October 2005 are included withinthe Global Offer Price Range Prospectus issued in November 2005, available fromthe website, www.britvic.com. The reconciliations for the 2005 interim periodincluded in this report are set out below. Reconciliation UK to IFRS for Half Year '05--------------------------------------------- ---------------- 28 weeks to 17 April 2005 ---------------- Profit for the period under UK GAAP 9.2IFRS adjustments:Goodwill amortisation 5.3Share based payments (0.3)Holiday pay accrual (0.6)Deferred taxation 0.1 ----------------Profit for the period under IFRS 13.7 ---------------- ---------------- 28 weeks to 17 April 2005 ----------------Shareholders' equity under UK GAAP 194.8IFRS adjustments:Goodwill amortisation 5.3Pension costs (1.1)Holiday pay accrual (0.6)Deferred taxation 0.1Land leases reclassified as operating leases (2.7) ----------------Shareholders' equity under IFRS 195.8 ---------------- 3. Change of Accounting Policy : Implementation of IAS 32 and IAS 39-------------------------------------------------------------------- As permitted by IFRS1 'First time adoption of International Financial ReportingStandards' the Group elected not to present comparative information inaccordance with IAS 32 'Financial Instruments: Disclosure and Presentation' andIAS 39 'Financial Instruments: Recognition and Measurement'. Therefore in therestated information for the year ended 2 October 2005 and the half year 2005,financial assets and liabilities are accounted for under UK GAAP. Under UK GAAP, derivative financial instruments used for hedging purposes wererecognised by applying the deferral method, whereby gains and losses fromderivatives were deferred and recognised in earnings or as adjustments tocarrying amounts as the underlying hedged transactions matured or occurred. From 3 October 2005 for IFRS all financial assets and financial liabilities haveto be recognised initially at fair value. In subsequent periods the measurementof these financial instruments depends on their classification. At 3 October 2005 the Group had forward exchange contracts and interest rateswaps outstanding in relation to anticipated future cash flows. Hedges of cashflows have been valued at the forward rates ruling at 3 October 2005. Theeffects of adopting IAS 39 are shown as a restatement of the opening balance ofreserves as at 3 October 2005. The effects of the change in accounting policy onthe 2 October 2005 balance sheet would be as follows: £mDecrease in reserves (1.0)Increase in current liabilities 1.2Increase in current assets (0.2) 4. Segmental Reporting---------------------- The directors consider that the Group has only one reportable geographicsegment, being the UK, and one business segment being the manufacture and saleof soft drinks. The directors consider that the risks and returns of the Group'sproducts are similar in nature. 5. Issue of Share Capital------------------------- The Company was incorporated on 27 October 2005 with an authorised share capitalof £655,000,000 divided into 6,550,000,000,000 ordinary shares of £0.0001 each. 5,829,810 ordinary shares were allotted to Six Continents Investments Limited,2,914,904 ordinary shares were allotted to Whitbread Group PLC, 2,914,904ordinary shares were allotted to Allied Domecq Overseas (Canada) Limited and613,664 ordinary shares were allotted to Wotsits Brands Limited, all issued atpar value of £0.0001 for cash. As a result, issued share capital onincorporation comprised 12,273,282 ordinary shares totalling £1,227. Since the date of incorporation, the following changes in share capital haveoccurred: On 18 November 2005 the Company acquired the entire share capital of BritanniaSoft Drinks Limited pursuant to a share exchange agreement dated 18 November2005, in consideration of the issue to the shareholders of Britannia Soft DrinksLimited of 4,295,636,424,718 ordinary shares of £0.0001 each. On 18 November 2005 the entire share capital was consolidated in a ratio of 1for every 20,000 shares. This resulted in a revised share capital of 214,782,435ordinary shares with a nominal value of £2 each. On 24 November 2005, the company's share capital was reduced by a court-approvedreduction of capital. The share capital of £429,564,870 divided into 214,782,435ordinary shares of £2 each was reduced to 214,782,435 ordinary shares of £0.20each, thus creating distributable reserves of £386,608,383 in the company. There have been further smaller share issues relating to incentive schemes foremployees. As a result, issued share capital as at 16 April 2006 comprised215,911,792 ordinary shares of £0.20 each, totalling £43,182,358. 6. Exceptional items before interest and taxation------------------------------------------------- Exceptional items are those items of financial performance that Britvic PLCbelieves should be separately disclosed by virtue of size and nature to assistthe understanding of the financial performance achieved. Year ended Period ended Period ended 2 October 16 April 2006 17 April 2005 2005 ---------- ---------- ---------- £m £m £m----------------------------- ---------- ---------- ----------Listing costs (5.4) (3.1) (5.8)Incentive schemes directlyassociated with the flotation (6.6) - -Restructuring costs (2.6) - ------------------------------ ---------- ---------- ----------Exceptional costs (14.6) (3.1) (5.8)----------------------------- ---------- ---------- ---------- "Listing costs" relates to various costs incurred in pursuit of the listing onthe London Stock Exchange which include advisors fees. "Incentive schemes directly associated with the flotation" include all-employeeshare schemes and management incentives. "Restructuring Costs" includes the costs of the "In shape for growth"restructuring programme. The exceptional costs incurred in the period to 17 April 2005 have been restatedcompared to previously published proforma numbers to reflect additional costswhich were incurred in relation to the listing on the London Stock Exchange, butwhich were not previously recognised in the income statement in that period. 7. Analysis of changes in interest bearing loans and borrowings--------------------------------------------------------------- £m------------------------------- -------------Non-current liabilities (219.3)Current liabilities (13.9)------------------------------- -------------At 3 October 2005 (233.2)New unsecured bank loans (364.4)Issue costs of new loans 0.1Amortisation of issue costs (0.1)Borrowings repaid 233.9------------------------------- -------------At 16 April 2006 (363.7)------------------------------- -------------Non-current liabilities (354.2)Current liabilities (9.5)------------------------------- ------------- 8. Tax------ The tax charge on profit before tax, excluding the impact of exceptional itemshas been calculated using an estimated effective annual rate of 30.9%. After taxon exceptional items, this leaves an estimated tax charge of £0.2m for the 28weeks ended 16 April 2006. 9. Earnings per share--------------------- 28 weeks ended 28 weeks ended Year ended 16 April 2006 17 April 2005 2 October 2005 -------- -------- -------- £m £m £m-------------------------------- -------- -------- --------Basic earnings per share for reported earnings-------------------------------- Net (loss)/profit for the periodattributable to ordinaryshareholders (5.5) 13.7 43.4-------------------------------- -------- -------- --------Weighted average number of ordinary shares in issue forbasic earnings per share 214.9 214.8 214.8-------------------------------- -------- -------- --------Basic earnings per share for(loss)/profit for the period (2.6p) 6.4p 20.2p-------------------------------- -------- -------- -------- Diluted earnings per share for reported earnings--------------------------------Net (loss)/profit for the periodattributable to ordinaryshareholders (5.5) 13.7 43.4-------------------------------- -------- -------- --------Weighted average number of ordinary shares in issue fordiluted earnings per share 218.4 214.8 214.8-------------------------------- -------- -------- --------Diluted earnings per share for(loss)/profit for the period (2.5p) 6.4p 20.2p-------------------------------- -------- -------- -------- Basic earnings per share for pre-exceptional earnings--------------------------------Net (loss)/profit for the periodattributable to ordinaryshareholders (5.5) 13.7 43.4Add: Net impact of exceptionalitems 12.0 3.1 5.8-------------------------------- -------- -------- --------Net profit for the periodattributable to ordinaryshareholders (beforeexceptional items) 6.5 16.8 49.2-------------------------------- -------- -------- --------Weighted average numberof ordinary shares inissue for basic earningsper share 214.9 214.8 214.8-------------------------------- -------- -------- --------Basic earnings per share forpre-exceptional earnings 3.0p 7.8p 22.9p-------------------------------- -------- -------- -------- Diluted earnings per share for pre-exceptional earnings--------------------------------Net profit for the period attributable to ordinaryshareholders (beforeexceptional items) 6.5 16.8 49.2-------------------------------- -------- -------- --------Weighted average numberof ordinary shares inissue for dilutedearnings per share 218.4 214.8 214.8-------------------------------- -------- -------- --------Diluted earnings per share forpre-exceptional earnings 3.0p 7.8p 22.9p-------------------------------- -------- -------- -------- 10. Statement of changes in equity for the period ended 16 April 2006--------------------------------------------------------------------- Called up Share Own Share Profit share premium Share scheme Hedging Other and loss capital account reserve reserve reserve reserves account Total -------- -------- ------- ------- ------- -------- --------- ------ £m £m £m £m £m £m £m £m At 3 October 2005 (12.3) (25.4) - (0.8) - (7.1) 23.4 (22.2)Adoption of IAS 39 on 3October 2005 - - - - 1.0 - - 1.0 -------- -------- ------- ------- ------- -------- --------- ------ At 3 October 2005 (Revised) (12.3) (25.4) - (0.8) 1.0 (7.1) 23.4 (21.1)Reserve changes as aresult of IPO (30.7) 25.4 - - - 7.1 (1.8) -Loss for the year - - - - - - 5.5 5.5Issue of shares (0.2) - - 0.2 - - - -Hedging gains - - - - (1.0) - - (1.0)Actuarial gain on pensionscheme - - - - - - (6.7) (6.7)Current tax on pensionsliabilities - - - - - - (9.0) (9.0)Deferred tax on pensions - - - - - - 11.0 11.0Deferred tax on shareoptions granted toemployees - - - - - - (1.1) (1.1)Current tax on share optionsexercised - - - - - - (0.6) (0.6)Own shares purchased forshare schemes - - 0.5 (0.5) - - - -Charge for share basedpayments - - - (4.7) - - (2.6) (7.3) -------- -------- ------- ------- ------- -------- --------- ------ Total recognisedincome and expense forthe period (30.9) 25.4 0.5 (5.0) (1.0) 7.1 (5.2) (9.2) -------- -------- ------- ------- ------- -------- --------- ------ Payment of dividend - - - - - - 98.5 98.5 -------- -------- ------- ------- ------- -------- --------- ------ At 16 April 2006 (43.2) - 0.5 (5.7) 0.0 - 116.6 68.2 -------- -------- ------- ------- ------- -------- --------- ------ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Britvic