19th Mar 2008 07:00
Imperial Tobacco Group PLC19 March 2008 19 March 2008 Trading Update Imperial Tobacco Group's anticipated trading performance for the financial yearto 30 September 2008 remains in line with management's expectations. The tradingtrends for Imperial Tobacco outlined in the AGM Interim Management Statement on29 January 2008 have continued. Furthermore, the operating performance ofAltadis S.A. (Altadis) since completion of the acquisition on 25 January 2008has been in line with our expectations. On the consolidation of Altadis' results for the first time, there will be anumber of one-off acquisition accounting adjustments required under IFRS, whichwill impact the adjusted profit from operations but have no effect on theunderlying business performance or cash flows. Imperial Tobacco will hold a presentation for analysts and investors at 12 noontoday to discuss accounting adjustments relating to the Altadis acquisition andregulatory and litigation matters. Altadis Update Following completion of the acquisition of Altadis, the integration process iscurrently underway. At the time of our recommended offer in July 2007, weestimated that the enlarged group would be able to generate annual operationalefficiencies of around €300 million by the end of our 2010 financial year.Gaining full access to the Altadis business is providing greater visibility ofthe level and timing of cost savings. We remain very confident of achieving theabove operational efficiencies and we anticipate being in a position to give amore detailed update on progress in our Interim results announcement. Of the €650 million non-core assets identified by Altadis in April 2007 as beingavailable for disposal, proceeds of €331 million have been realised to the endof February 2008, including the sale of Logista's stake in Iberia for €220million. The remaining unsold assets are mainly surplus properties and we expectthe majority of these disposals to be completed by the end of our 2009 financialyear. We are making good progress with the small number of brand divestments requiredby the European Commission and expect to be able to conclude these in the comingmonths. Following a number of very productive meetings, Imperial and its counter-party,Cubatabaco, have agreed to continue and enhance the Habanos cigar joint venture. Logista On 26 February 2008, we filed the offer document for the unconditional cashoffer for the shares in Compania de Distribucion Integral Logista, S.A.(Logista) that are not already owned by Altadis for approval by the SpanishSecurities and Exchange Commission, the Comision Nacional del Mercado de Valores(the CNMV). Altadis currently owns approximately 59.62% of the entire issuedshare capital of Logista. The Offer is being made by Altadis at a price of€52.50 per Logista share and is subject to the formal authorisation of the CNMV,which is expected in the next few weeks. Following approval by the CNMV, therewill be a period of 15 days for Logista minority shareholders to lodge theiracceptance of the offer. Aldeasa On 10 March 2008, we announced the sale of Altadis' 49.95% share in Aldeasa, theSpanish airport based duty free retailer, to its joint venture partner,Autogrill. The total cash consideration was €275 million, which represents ashare of the enterprise value (including Imperial Tobacco's portion of Aldeasa'snet debt) of €355 million. Aldeasa is not included in the €650 million non-coreassets mentioned above. Rights Issue Since completion on 25 January, the Altadis acquisition has been wholly debtfinanced through bank and equity bridge facilities, pending completion of therights issue. As previously announced, the rights issue is currently estimated to be no morethan £5 billion and will be completed by 18 July 2008. The rights issue will besized at the minimum amount of equity needed to ensure that the enlarged groupmaintains its investment grade credit rating. The actual size of the rightsissue will be dependent upon a number of factors and will not be materiallyimpacted by the offer for the Logista minorities or the disposal of the Aldeasastake. Acquisition Accounting Adjustments There will be a number of one-off acquisition accounting adjustments required byIFRS which will affect adjusted profit from operations. The most significant ofthese relate to the uplift to fair value of stocks and the elimination ofinter-company sales. Other adjustments relate to depreciation, assets held forsale, derivatives and intangible assets. There is still further work to be done to enable us to determine the exact levelof these adjustments but we currently estimate the impact on adjusted profitfrom operations will be a reduction of around £110 million in the first half andaround £30 million in the second half, bringing the total to £140 million forour financial year ended 30 September 2008. We will be in a position to give afull breakdown at our Interim results presentation. The adjustments will have no effect on the underlying business performance orcash flows of the Group. The presentation will begin at 12.00 noon (GMT). A live audio webcast and a copyof the presentation and script will be available on www.imperial-tobacco.comfrom 12 noon. An archive of the audio webcast will also be available during theafternoon. Interim results for the year ended 30 September 2008 will be announced onTuesday 20 May 2008. ENDS ENQUIRIES Alex Parsons John Nelson-SmithImperial Tobacco Group Imperial Tobacco GroupHead of Corporate Communications Investor Relations ManagerTel: +44 (0) 7967 467 241 Tel: +44 (0) 7919 391 866 Simon Evans Nicola TateImperial Tobacco Group Imperial Tobacco GroupGroup Press Officer Investor Relations ManagerTel: +44 (0) 7967 467 684 Tel: +44 (0) 7967 467 082 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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