6th Dec 2005 07:02
Greene King PLC06 December 2005 6 December 2005 GREENE KING PLC Interim results for the 24 weeks ended 16 October 2005 RECORD RESULTS DRIVEN BY ORGANIC GROWTH, MARGIN IMPROVEMENT AND SUCCESSFULACQUISITIONS • Turnover £359.9m, +19% • EBITDA* £102.6m, +24% • Trading profit* £86.2m, +25% • Trading profit margin* 24.0%, +1.2 %pts • Profit before tax* £55.8m, +23% • Adjusted earnings per share* 26.6p, +20% • Interim dividend per share 5.8p, +11% • Progress in all divisions - o Pub Company trading profit +26% o Pub Partners trading profit per pub +9% o Brewing Company own-brewed volume +8% • Laurel and Ridley's fully integrated and delivering synergies ahead of plan • Completion of Belhaven acquisition; integration and synergy capture on track • Strong balance sheet, interest cover 2.8 times • Potential to fund future earnings growth * before exceptional items.All figures include the impact of IFRS Rooney Anand, Greene King chief executive, comments: "This is another strong set of results with all of our divisions delivering goodorganic growth at improved margins. We have also benefited from our targetedacquisitions of Laurel and Ridley's, both of which have been successfullyintegrated ahead of plan. "Trading in our divisions remains in line with our expectations and there willbe a full contribution from Belhaven in the second half. As a result, we remainconfident of achieving a successful outcome for the year as a whole. We believethat the inherent strength of our business, in particular the quality of ourpeople, our brands and our pub estate, combined with a proven strategy, willcreate further opportunities for profitable growth in the future." A copy of the results presentation is available on our website:www.greeneking.co.uk. For further information: Greene King plc Rooney Anand, chief executive Tel: 01284 763222 Michael Shallow, finance director Financial Dynamics Ben Foster / Charles Watenphul Tel: 020 7831 3113 GREENE KING plc Interim results for the 24 weeks ended 16 October 2005 Chairman's Statement Results We have produced another strong set of results for the 24 weeks ended 16 October2005. These include contributions from the Laurel neighbourhood estate acquiredin August 2004 (the full 24 weeks), Ridley's, acquired on 4 July 2005 (15 weeks)and Belhaven, acquired on 2 October 2005 (2 weeks). Each of the three trading divisions contributed fully to the continued successof our integrated business model. Our turnover was up 19% to £359.9m, andtrading profit before exceptional items up 25% to £86.2m. Profit before tax andexceptional items rose by 23% to £55.8m, and adjusted earnings per share by 20%to 26.6p. Dividend Our good growth, our ability to convert profits into cash, and the financialstrength of the company, have enabled the board to declare an interim dividendof 5.8p per share, which is an increase of 11%. We believe this approachbalances increased income for shareholders with retaining an appropriate levelof financial flexibility for the company. This dividend will be paid on 30January 2006, to all those shareholders on the register at close of business on23 December 2005. Share Split On 5 September we carried out a 2-for-1 share split. Our equity had beentrading at more than 1300p per share, which is a high price for shares traded onthe London Stock Exchange. We felt that many shareholders would prefer to dealat a lower price per share and therefore sub-divided each existing ordinaryshare into two new ordinary shares. Board In September, Justin Adams joined us as managing director of our BrewingCompany. He has many years' experience in branded drinks, with Diageo andlatterly Maxxium Worldwide, and is very well qualified to drive the furtherdevelopment of our brands and distribution business. Michael Shallow, who has been our finance director for fourteen distinguishedyears, will be leaving us on 31 December. I would like to record our thanks tohim for his great service to the company. I particularly enjoyed working withMichael and we all wish him well for the future. We announced in November that Ian Bull, who is currently chief executive of BTRetail Enterprises, will be joining us as finance director on 9 January and welook forward to welcoming him to the board. People The success of Greene King is above all else about the commitment, dedicationand passion of the people who bring our pubs and brands to life. My sincerethanks go to all those we employ and to our tenants and lessees. I hope that,like me, they will feel very proud of these results and of what, together, wehave been able to achieve. Tim BridgeChairman 5 December 2005 Chief Executive's Review Trading This has been another successful half year for Greene King. Turnover was up 19%to £359.9m, and trading margins overall grew from 22.8% to 24.0%. As a result,we achieved trading profit growth before exceptional items of 25% to £86.2m. Both Laurel and Ridley's have been fully integrated into the company, withsynergy capture on schedule. The integration of Belhaven is also running toplan. The interim results include two weeks of Belhaven trading. Our integrated structure provides us with a unique understanding of the consumerfor our drinks brands, as we are both buyers and sellers of beer. In the 24weeks, own brewed volumes were up 8%, against the backdrop of an ale market inlong-term overall decline. Operating all three major models in pubs - leased, tenanted and managed -enables us to optimise the mix to maximise economic profit per site, as well asto develop successful brands and trading formats. Our approach is guided by quality and sustainability. This has enabled us tomaintain and improve margins, to produce drinks brands that trade at a premiumto their categories, and to focus on community pub sites rather than the morevolatile high street. We continue to invest in our predominantly freeholdestate, to recruit the best pub managers, and to develop long-term relationshipswith tenants and lessees in true partnership. Pub Company Turnover in our managed houses division, Pub Company, was up 18% at £244.4m.Trading profit was up 26% at £50.3m, and the trading profit margin thereforeimproved from 19.2% to 20.6%. Pub Company 2004 2005 Change24 weeks £m £m % Turnover £207.9m £244.4m +18%Trading profit £39.9m £50.3m +26%Trading profit margin 19.2% 20.6% +1.4 %pts Figures include 24 weeks of trading for the Laurel neighbourhood estate in 2005versus 11 weeks in 2004. 125 pubs benefited from capital developments, representing £14m of capitalspend. Total capital investment in the division was £17.1m, with a fully-costedreturn on investment of 16%. Total (invested and uninvested) like-for-like sales in the 24 weeks improved by1.7%. Following the successful acquisition of the Laurel neighbourhood estate, theaverage number of pubs trading during the period was 786, against 721 in theequivalent period in 2004/5. At the period end, there were 783 pubs in the division, categorised as follows: Real Pubs 349Town Local 156Inns 152Hungry Horse 126Total 783 The only overtly branded pubs are the Hungry Horse outlets, which are largecommunity pubs with great value food businesses. The smaller community pubs areunbranded and make up the Real Pubs division, often with a strong focus onsporting events. Town Local pubs were previously called High Street, butrenamed to reflect their relatively low presence on the over-populated highstreet circuits. The fourth division is Inns, a mixture of inns with rooms,which include the Old English Inns we acquired in 2001, and quality destinationfood businesses. Pub Partners Pub Partners turnover rose 21% to £67.2m, while trading profit rose 22% to£29.0m. The trading profit margin therefore improved from 42.8% to 43.2%. Pub Partners 2004 2005 Change24 weeks £m £m % Turnover £55.6m £67.2m +21%Trading profit £23.8m £29.0m +22%Trading profit margin 42.8% 43.2% +0.4 %pts Over the 24 weeks, £4.7m of capital was invested in improvements in the PubPartners estate, with £2.1m being spent from the revenue account on maintenance. The average number of pubs trading over the period was 1,290 compared to 1,158in the same period last year. The total number of pubs at the period end was1,346, categorised as follows: Non-assignable agreements (9 years or less) 1063Assignable agreements (10 years or more) 283Total 1,346 Total like-for-like turnover grew 2.4%. Trading profit per pub was up 9% at£48,700 (annualised). Pub Partners has continued to focus successfully on attracting, recruiting,developing and retaining the highest quality tenants and lessees. In theperiod, a new suite of extranet-based tools was launched to assist tenants,providing them with detailed information on customer trends and giving them theability to analyse in depth their business performance. At any one time during the period, we had at least seven fully-funded applicanttenants in the pipeline per vacant pub. Brewing Company Turnover in our brewing, sales and distribution division rose by 13% to £43.7m,and trading profit by 18% to £9.9m. Revenues were boosted by assuming volumesfrom Ridley's and by increased distribution through the Laurel neighbourhoodestate. Brewing Company 2004 2005 Change24 weeks £m £m %Turnover £38.6m £43.7m +13%Trading profit £8.4m £9.9m +18%Trading profit margin 21.8% 22.7% +0.9 %pts Greene King continues to support its real ale brands, even as the majority ofthe industry has shifted marketing to lagers. The period saw innovative newadvertising campaigns for Greene King IPA and Abbot Ale, and format andpackaging innovation for Old Speckled Hen. Greene King IPA continues to enjoythe number one position by volume in the real ale market, while Abbot Ale isstrong in the premium segment, and Old Speckled Hen is the number one premiumale brand in take-home. In the 24 weeks, own-brewed volume was up 8%. Greene King IPA grew 7% by volumeand Old Speckled Hen by 10%. The Beer To Dine For now has distribution in 50%of UK supermarkets. We were able to improve trading margins from 21.8% to 22.7% as a result ofpurchasing synergies and other efficiencies. The Bury St Edmunds brewhouse is running at 95% capacity. We have an option todeploy a third shift as and when required, and have been piloting this optionduring the period. A new bottling line, located just outside Bury St Edmunds, is due to open inMarch 2006. This facility will increase our operational flexibility and costefficiency. Laurel and Ridley's The integrations of Laurel and Ridley's have been successfully completed, aheadof schedule. The Laurel neighbourhood pubs have been allocated between PubCompany's operating formats and Pub Partners. Ridley's pubs have all been successfully integrated into the Pub Partnersestate. Ridley's ales continue to be brewed and marketed through our seasonaland guest programmes; and Ridley's Old Bob has been selling at twice itspre-acquisition rate. Belhaven Belhaven has been trading strongly, and in the 26 weeks of their first half,completed on 2 October and prior to being acquired by Greene King, recorded atrading profit (adjusted for Greene King accounting policies) of £11.3m, up 10%on the £10.3m recorded in the equivalent period of the prior year. Overall beervolumes were up 7% and Belhaven Best volume was up 8%. Greene King acquired Belhaven on 2 October; these interim results thereforeinclude a £0.7m trading profit contribution from Belhaven from the two weeksfollowing acquisition. We have been greatly impressed by the quality of the Belhaven management underthe leadership of Stuart Ross, and the teams in Dunbar and Bury St Edmunds areworking very well together. Belhaven owns Scotland's Number 1 draught ale brand, Belhaven Best, as well as anumber of other quality cask, keg, bottled and canned products. The brewery islocated in Dunbar, alongside the bottling line and distribution centre. As at16 October there were 283 pubs, split between 97 managed and 186 tenanted orleased. Over 90% of the pub estate is freehold. Belhaven represents a uniqueopportunity for us to achieve instant scale in Scotland, a market in which wehad little presence previously. There are substantial synergies to be made from purchasing, and additional gainsfrom cross-sales (of the Belhaven brand into England and Greene King brands intoScotland) as well as more modest economies in back-office and administrativefunctions. Together, we predict these synergies to total approximately £3m in2006/7, rising to approximately £5m over the next two years. The integration ison track to deliver these synergies. The Belhaven team are currently focused on preparing for the Scottish smokingban due in March 2006. The team have derived best practice from the experiencesof the Irish licensed trade and elsewhere. Solutions, devised on a pub-by-pubbasis, range from awnings and jumbo parasols through new part-sheltered beergardens or roof gardens to bespoke shelters and extensions. Planningapplications have been submitted expeditiously, and all works are on course tobe completed in time. Belhaven already has a strong record of growth. The approach going forward isto enhance its well-established strategy. We see significant potential to growboth the pub estate and the free trade customer base. Food development is animportant area of focus, and one in which our experience will be of great use. Finance The Belhaven acquisition was financed through a combination of a new bankingfacility, where the interest costs have been fixed at under 6%; and a 5% shareplacing at 1300p a share (prior to the two-for-one share split effected on 5September). This facility complements the financing previously in place,including the £600m long-term securitised bond finance we had arranged inFebruary 2005. Our balance sheet remains strong and effective. Our strength is demonstratedthrough long-term borrowings being secured against high quality freehold assets,a fixed charge cover of 2.6 times and an interest cover of 2.8 times. Ourbalance sheet has also been effective in taking advantage of lower rates ofinterest to provide benefits for our shareholders. We believe this balancedapproach is appropriate and provides the flexibility in the future forselectively making acquisitions or buying back shares. Business and regulatory environment The new licensing regime is now in place, and provides us with the opportunityto enhance our customer offer. The company has taken the necessary steps toensure that changes to trading hours are made responsibly, mindful of thecommunities we serve. All of our applications were made on time and, onaverage, our managed houses will remain open for an additional four hours aweek. We have also provided extensive support to our tenants in their licensingapplications. Greene King's estate, which is largely made up of community and food-led pubs,is well-placed to take advantage of the new rules. Over time, we believe thatthe extra hours will provide additional trading opportunities, particularly atweekends. The majority of our pubs are already responding to existing customerdemands, such as an appetite for brunch, by opening earlier on Sundays. We cannow also serve both food and drink later on Friday and Saturday nights tocustomers who prefer to remain in their local rather than having to travelfurther afield to nightclubs or late-night restaurants, and to new customers whohave different working hours and lifestyles. We continue to develop non-smoking areas in Pub Company. Over 90% of the pubshave exterior areas that can be developed. Approximately 85% of our pubs have asubstantial food offer, and food continues to grow as a proportion of sales. InScotland, a full programme of preparedness for the smoking ban due in March 2006is on schedule. From the Scottish experience we will be uniquely positioned toderive learnings in all sectors of trade (managed, tenanted/leased, free trade)that can be applied in England. We remain fully and actively committed to responsible drinking. Our relativelylow exposure to the high street, coupled with our stance against excessivepromotional discounting, stands us in good stead against any additionalregulation in this arena. Outlook Trading in our divisions remains in line with our expectations. In the 30 weeksto 27 November, like-for-like sales in Pub Company and Pub Partners were up 1.4%and 2.2% respectively on the prior year, and Brewing Company volume was up 7%.We remain confident of achieving a successful outcome for the year as a whole,and there will be a full contribution from Belhaven in the second half. Webelieve that the inherent strength of our business, in particular the quality ofour people, our brands and our pub estate, combined with a proven strategy, willcreate further opportunities for profitable growth in the future. Rooney AnandChief Executive 5 December 2005. Income statementfor the twenty-four weeks ended 16 October 2005 24 weeks to 24 weeks to 52 weeks to 16.10.05 17.10.04 01.05.05 Before exceptional Exceptional Change items items Total Total Total Note % £m £m £m £m £m TurnoverContinuing operations 351.9 - 351.9 302.1 707.5Acquisitions 8.0 - 8.0 - - +19 359.9 - 359.9 302.1 707.5 Trading profitContinuing operations 85.0 2.6 87.6 72.2 164.4Acquisitions 1.2 (1.7) (0.5) - - Total 86.2 0.9 87.1 72.2 164.4Finance costs (30.4) - (30.4) (23.6) (76.8) Profit before tax 55.8 0.9 56.7 48.6 87.6Income tax expense 4 (17.0) (0.6) (17.6) (14.6) (23.3) Net profit from ordinary activities 38.8 0.3 39.1 34.0 64.3 Trading profit before exceptional +25 86.2 68.9 158.3itemsProfit before tax and exceptional +23 55.8 45.3 95.7items Earnings per share- adjusted 5 +20 26.6 p 22.1 p 46.5 p- basic 5 26.8 p 23.8 p 45.0 p- adjusted diluted 5 26.3 p 21.8 p 45.9 p- diluted 5 +21 26.5 p 23.5 p 44.4 p Dividend paid and proposed per sharein respect of the period +11 5.80 p 5.225 p 18.15 p Adjusted trading profit/turnover 24.0% 22.8% 22.4%Adjusted income tax/profit 30.5% 30.5% 30.5%Adjusted interest cover 2.8 2.9 2.5 Adjusted earnings per share, trading profit, and income tax exclude the effectof exceptional items. Statement of recognised income and expensefor the twenty-four weeks ended 16 October 2005 24 weeks to 24 weeks to 52 weeks to 16.10.05 17.10.04 01.05.05 £m £m £m Cashflow hedges: losses taken to equity (3.4) - -Pension actuarial losses - - (9.0)Tax on items taken directly to equity 1.0 - 2.7Net expense recognised directly in equity (2.4) - (6.3) Profit for the period 39.1 34.0 64.3 Total recognised income for the period 36.7 34.0 58.0 Balance sheetas at 16 October 2005 As at As at As at 16.10.05 17.10.04 01.05.05 Note £m £m £m Non current assetsProperty, plant and equipment 1,749.1 1,592.2 1,572.3Intangible assets 502.0 361.9 360.0Other financial assets 39.4 15.4 15.2 2,290.5 1,969.5 1,947.5 Current assetsInventories 18.0 14.5 14.2Trade and other receivables 52.3 33.3 28.2Prepayments 8.7 9.7 12.0Derivative financial instruments 1.0 - -Cash and cash equivalents 11 23.2 13.8 34.4 103.2 71.3 88.8 Total assets 2,393.7 2,040.8 2,036.3 Current liabilities Borrowings (58.3) (5.0) (26.0)Derivative financial instruments (3.7) - -Trade and other payables (147.8) (116.3) (112.0)Income tax payable (21.5) (18.9) (18.5) (231.3) (140.2) (156.5) Non current liabilitiesBorrowings (1,219.3) (1,083.0) (1,028.6)Derivative financial instruments (21.9) - -Deferred tax (154.0) (134.6) (138.0)Post-employment liabilities (64.8) (47.5) (61.3) (1,460.0) (1,265.1) (1,227.9) Total liabilities (1,691.3) (1,405.3) (1,384.4) Total net assets 702.4 635.5 651.9 Issued capital and reservesCalled-up share capital 9 19.0 18.1 18.1Share premium account 9 239.9 191.0 192.2Other reserve 9 278.5 283.7 279.2Investment in own shares 9 (12.7) (8.5) (10.7)Retained earnings 9 177.7 151.2 173.1Total equity 702.4 635.5 651.9 Net debt 1,254.4 1,074.2 1,020.2 Cash flow statementfor the twenty-four weeks ended 16 October 2005 24 weeks to 24 weeks to 52 weeks to Change 16.10.05 17.10.04 01.05.05 Note % £m £m £m Operating activitiesTrading profit 87.1 72.2 164.4Operating exceptional items 3 (0.9) (3.3) (6.1)Depreciation 16.4 13.9 33.2 EBITDA* +24 102.6 82.8 191.5Working capital and non cash movements 10 8.1 26.3 22.3Exceptional items (2.8) (0.7) (5.1)Income tax paid (10.4) (6.5) (9.5) Net cashflow from operating activities 97.5 101.9 199.2 Investing activitiesSales of property, plant and equipment 11.2 10.7 45.6Interest paid (29.8) (25.2) (77.0)Purchase of property, plant and equipment (28.2) (25.4) (42.9)Movements in trade loans (0.7) (0.4) (0.4)Acquisition of subsidiaries, net of cash acquired 7 (233.6) (200.7) (199.6) Net cashflow from investing activities (281.1) (241.0) (274.3) Financing activities Equity dividends paid 6 (18.8) (16.7) (24.3)Issue of shares 9 49.9 1.9 4.7Purchase of own shares 9 (3.3) - (3.8)Financing issue costs (4.2) - (7.2)Repayment of loan capital - - (600.0)Advance of loan capital 132.2 159.7 726.3 Net cashflow from financing activities 155.8 144.9 95.7 Net (decrease)/increase in cash and cash (27.8) 5.8 20.6equivalents Opening cash and cash equivalents 23.6 3.0 3.0Closing cash and cash equivalents 11 (4.2) 8.8 23.6 * EBITDA represents earnings before interest, tax, depreciation, amortisationand exceptional items Notes to the accountsfor the twenty-four weeks ended 16 October 2005 1 Basis of preparation With effect from 2 May 2005, Greene King plc has moved to reporting its financial results in accordance with International Financial Reporting Standards (IFRS) as required by European Union Law. Accordingly the interim results announcement has been prepared in accordance with the IFRS accounting policies expected to apply at 30 April 2006. These policies are set out on the company's website at www.greeneking.co.uk in a document which restates the consolidated financial information at 3 May 2004 (date of transition), for the 52 weeks ended 1 May 2005, and for the 24 weeks ended 17 October 2004, in accordance with IFRS policies. The results for prior periods have been restated under the new accounting policies so that proper comparison can be made with the results for the current period. For the 52 weeks to 1 May 2005 profit before tax and exceptional items has increased by £1.7m and net assets have reduced by £31.8m. This represents an increase of profits of 1.8% and a reduction in net assets of 4.7%. The corresponding figures for the 24 weeks to 17 October 2004 are £0.9m and £42.7m respectively. Note 12 provides the further detail. As permitted, this interim report has been prepared in accordance with UK listing rules and not in accordance with IAS34 'Interim Financial Reporting' and is therefore not fully compliant with IFRS. The group anticipates that the amendments to IAS 19 'Actuarial gains and losses, group plans and disclosures', will be endorsed in time to be applicable to the next financial statements. As allowed by the transition arrangements in IFRS 1, 'First time adoption of Internal Financial Reporting Standards', the comparative figures have not been adjusted for the provisions of IAS 32 'Financial instruments: disclosure and presentation' and IAS 39 'Financial instruments: recognition and measurement'. These have been applied from 2 May 2005 and the impact is disclosed in Note 9. IFRS 5 'Non-current assets held for sale and discontinued operations' will be implemented for the 52 weeks ended 30 April 2006. The taxation charge is calculated by applying the directors' best estimate of the annual effective tax rate to the profit for the period after adjusting for exceptional items. Actuarial valuations of the pension schemes are not carried out at the half year and consequently, actuarial gains or losses are not recognised in the interim 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 figures for the year ended 1 May 2005 have been derived from the UK GAAP statutory accounts, which have been filed with the registrar of companies and on which the auditors gave an unqualified report, as restated for the transition to IFRS. 2 Business segment analysis Trading2005/06 (24 weeks) Assets Trading profit employed EBITDA Turnover Profit change £m £m £m £m % Pub Company 932.0 62.1 244.4 50.3 +26Pub Partners 573.0 31.4 67.2 29.0 +22Brewing Company 60.0 11.4 43.7 9.9 +18Belhaven 185.0 0.9 4.6 0.7Corporate 206.8 (3.2) - (3.7) 1,956.8 102.6 359.9 86.2 +25Exceptional items (note 3) - - - 0.9Net debt (1,254.4) - - - 702.4 102.6 359.9 87.1 Assets Trading2004/05 (24 weeks) employed EBITDA Turnover Profit £m £m £m £m Pub Company 1,033.4 49.8 207.9 39.9Pub Partners 464.0 25.8 55.6 23.8Brewing Company 56.4 9.9 38.6 8.4Corporate 155.9 (2.7) - (3.2) 1,709.7 82.8 302.1 68.9 Exceptional items (note 3) - - - 3.3Net debt (1,074.2) - - - 635.5 82.8 302.1 72.2 Assets Trading2004/05 (52 weeks) employed EBITDA Turnover Profit £m £m £m £m Pub Company 942.9 118.3 495.9 93.8Pub Partners 526.0 58.4 125.1 54.0Brewing Company 58.7 21.1 86.5 17.8Corporate 144.5 (6.3) - (7.3) 1,672.1 191.5 707.5 158.3Exceptional items (note 3) - - - 6.1Net debt (1,020.2) - - - 651.9 191.5 707.5 164.4 Pub Company covers the results of managed houses, Pub Partners covers theresults of tenanted houses and Brewing Company covers the results of brewing,marketing and selling beer. Belhaven covers two weeks trading of the acquiredScottish business. 3 Exceptional items 24 weeks to 24 weeks to 52 weeks to 16.10.05 17.10.04 01.05.05 £m £m £m OperatingIntegration of Laurel Neighbourhood business (1.1) (0.7) (7.3)Integration of Ridley's business (1.7) - -Disposal of property, plant and equipment 3.7 4.0 13.4 0.9 3.3 6.1FinancingTermination of interest rate swaps and loan facilities - - (14.2) 0.9 3.3 (8.1) 4 Income tax 24 weeks to 16.10.05 24 weeks to 52 weeks to On profits 17.10.04 01.05.05 before exceptional Exceptional items items Total Total Total £m £m £m £m £m Income taxCorporation tax before exceptional items 14.0 - 14.0 11.5 22.2Recoverable on exceptional items - (0.5) (0.5) (0.2) (6.5) Corporation tax 14.0 (0.5) 13.5 11.3 15.7Adjustment in respect of prior periods - - - - (1.8) 14.0 (0.5) 13.5 11.3 13.9 Deferred taxOrigination and reversal of temporary 3.0 1.1 4.1 3.3 9.4differences Total 17.0 0.6 17.6 14.6 23.3 5 Earnings per share Basic earnings per share has been calculated by dividing the profit aftertaxation of £39.1 million (2004 - £34.0 million) by the weighted average number of shares in issue of 146.0 million (2004 - 142.6 million). Adjusted earnings per share excludes the effect of exceptional items and ispresented to show the underlying performance of the group. Adjusted earnings per share Earnings Earnings per share 24 weeks to 24 weeks to 24 weeks to 24 weeks to 16.10.05 17.10.04 16.10.05 17.10.04 £m £m p p Basic 39.1 34.0 26.8 23.8Exceptional items (0.3) (2.5) (0.2) (1.7) Adjusted 38.8 31.5 26.6 22.1 Diluted earnings per share has taken account of 1.8 million (2004 - 1.8 million)contingent shares under option. A two-for-one share split was completed during the period. Historic earningsper share and dividend per share have been restated accordingly. 6 Dividends paid 24 weeks to 24 weeks to 52 weeks to 16.10.05 17.10.04 01.05.05 £m £m £m Declared and paid in the periodFinal dividend for 2004/05 - 12.925p (2003/04 - 11.75p) 18.8 16.9 16.9Interim dividend for 2004/05 - 5.225p (2003/04 - 4.75p) - - 7.4 18.8 16.9 24.3 7 Acquisitions The results of Ridley's were accounted with effect from 4 July 2005 and ofBelhaven from 2 October 2005. Estimated fair value of assets acquired Ridley's Belhaven Total £m £m £m Property, plant and equipment 33.9 140.6 174.5Other financial assets - 23.9 23.9Cash and cash equivalents 0.2 0.2 0.4Bank overdraft - (10.1) (10.1)Net current assets/(liabilities) 0.1 (4.9) (4.8)Pension liabilities (0.7) (4.0) (4.7)Deferred tax (7.4) (11.6) (19.0) 26.1 134.1 160.2Estimated goodwill 18.5 123.6 142.1 44.6 257.7 302.3 Satisfied by: Cash 36.7 183.9 220.6 Loan notes - 6.7 6.7 Debt acquired 7.6 64.1 71.7 44.3 254.7 299.0 Fees 0.3 3.0 3.3 44.6 257.7 302.3 The values attributed to the acquisition of Belhaven are determinedprovisionally due to the proximity of the acquisition to the interim date. 8 Movements in net debt 24 weeks to 24 weeks to 52 weeks to 16.10.05 17.10.04 01.05.05 £m £m £m (Decrease)/increase in cash and cash equivalents (27.8) 5.8 20.6Cash inflow from increase in debt (132.2) (159.7) (126.3)Financing issue costs 4.2 - 7.2 Increase in net debt resulting from cash flows (155.8) (153.9) (98.5)Debt acquired - acquisitions (note 7) (71.7) (473.7) (463.4)Debt issued - acquisitions (note 7) (6.7) - (11.4)Non-cash movement in net debt - - (0.3) Increase in net debt (234.2) (627.6) (573.6)Opening net debt (1,020.2) (446.6) (446.6) Closing net debt (1,254.4) (1,074.2) (1,020.2) Net debt excludes balances relating to derivative financial instruments. 9 Movement in equity Share Share Other Investment in Retained Total capital premium Reserve own shares earnings £m £m £m £m £m £m At 2 May 2005 18.1 192.2 279.2 (10.7) 173.1 651.9Effect of adoption of IAS 32 and IAS 39 - - - - (14.8) (14.8) At 2 May 2005 (restated) 18.1 192.2 279.2 (10.7) 158.3 637.1Total recognised income andexpense for the period - - - - 36.7 36.7Issue of share capital 0.9 47.7 - 1.3 - 49.9Repurchase of own shares - - - (3.3) - (3.3)Accrued share based payments - - - - 0.8 0.8Equity dividends paid - - - - (18.8) (18.8)Transfer - - (0.7) - 0.7 - At 16 October 2005 19.0 239.9 278.5 (12.7) 177.7 702.4 10 Working capital and non cash movements 24 weeks to 24 weeks to 52 weeks to 16.10.05 17.10.04 01.05.05 £m £m £m Increase in provision against investments and other financial assets 0.3 0.1 0.3(Increase)/decrease in stocks (0.6) (0.1) 0.2(Increase)/decrease in debtors (8.9) 3.0 (1.4)Increase in creditors 16.8 23.9 25.3Decrease in provisions (1.7) (1.3) (3.6)Increase in accrued share based payments 0.8 0.7 1.5Other non cash movement 1.4 - - Working capital and non cash movements 8.1 26.3 22.3 11 Cash and cash equivalents 24 weeks to 24 weeks to 52 weeks to 16.10.05 17.10.04 01.05.05 £m £m £m Cash at bank and in hand 14.4 13.8 20.9Short term deposits 8.8 - 13.5 Cash and cash equivalents (balance sheet) 23.2 13.8 34.4Bank overdrafts (27.4) (5.0) (10.8) Cash and cash equivalents (cash flow) (4.2) 8.8 23.6 12 Impact of IFRS on prior period reporting 24 weeks to 17.10.04 52 weeks to 01.05.05 Profit before Net Profit Net before tax and assets tax and assets exceptional exceptional items items £m £m £m £m Share based payment (0.3) 1.6 (0.5) 1.7Pension accounting 1.2 (42.4) 2.4 (50.2)Income tax and deferred tax - (99.4) - (100.1)Goodwill - 92.6 - 100.7Dividends - 7.4 - 18.8Other - (2.5) (0.2) (2.7) Total 0.9 (42.7) 1.7 (31.8) 13 Post balance sheet events An interim dividend of 5.80p per share (2004: 5.225p) amounting to a dividend of£8.9m (2004: £7.4m) was proposed by the Directors at their meeting on 25November 2005. These financial statements do not reflect this dividend payable. 14 Interim report The interim report will be posted to shareholders on 30 December 2005. Copieswill be available after that date from the Company Secretary, Greene King plc,Westgate Brewery, Bury St Edmunds, Suffolk IP33 1QT. - ends - This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Greene King