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SABMiller PLC - ABI Interim Results

RNS Number:5680E
SABMiller PLC
28 October 2004

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     Unaudited interim results for the ABI group for the six months ended
                                30 September 2004


Amalgamated Beverage Industries Limited (ABI), a subsidiary of SABMiller plc,
has reported its unaudited interim group results in Johannesburg, South Africa
for the six months ended 30 September 2004.  The text of ABI's announcement
follows.  It should be noted that the interim group results have been prepared
to conform to South African Statements of Generally Accepted Accounting
Practice.

Enquiries to:

Sandra Pienaar

Company secretary

Telephone: +27 11 719 1400


Highlights


*        Beverage volumes up 7.9% to 5.7 million hectolitres

*        Sales revenue grows by 14.0% to R2.6 billion

*        Trading profit increases by 50.4% to R340 million

*        Headline earnings increase by 24.1% to R211 million

*        Dividends per share increase by 24.5% to 61 cents per share


Overview

Following on from the good results for the year ended March 2004, real growth in
earnings has been maintained for the half-year ended September 2004 through
sustained volume growth, revenue management and productivity gains.  The primary
driver of the 7.9% volume growth has been increased consumer spending, led by
improved disposable income in middle and upper income groups.  This was further
assisted by effective marketing activity and relatively favourable weather
conditions.  Mainstream carbonated soft drink volumes increased by 7.2%, while
other soft drinks grew by 20.8%.  The latter contributed 5.2% to total volumes
sold, up from 5.0% over the previous financial year.


Financial performance

Headline earnings increased by 24.1% compared to the six months ended 30
September 2003.  These earnings are determined after absorbing non-recurring
taxation and interest charges totalling R27 million on the Immediate Consumption
Programme (ICP: a subsidy towards cooler investment received in 1998 and 1999
from the Coca-Cola Southern and East Africa division).  The taxation and related
interest on ICP funds, disclosed as a contingent liability of R69 million in the
2004 annual report, has been settled with the South African Revenue Services.
The net impact to the income statement is interest payable of R10 million and a
taxation charge of R17 million.  Excluding the effect of this, the growth in
headline earnings would have been 40%.


The 14% increase in sales revenue was primarily driven by the higher volumes
together with selling price increases.  Gross margins improved slightly over the
comparable period last year from 34.7% to 34.9%.  Higher selling prices and raw
material cost efficiencies have been offset to some extent by increased
container amortisation resulting from high container investment in the latter
half of the prior year.


As a consequence of the above, together with overhead productivity gains,
trading profit grew by 50.4% compared to the comparable period last year,
strengthening ABI's trading margin from 9.9% to 13.0%.


Net interest earned has seen a decline of R22 million despite an increase in the
average cash reserves relative to the comparable period last year.  This is due
to the ICP interest charge referred to earlier, as well as the progressive
reduction in interest rates.


The cash balance has improved by R209 million when measured against the same
period last year.  This is primarily due to the improved operating performance
as well as the improved net working capital position.  The decline in the cash
balance of R131 million, from R802 million at the last year-end to R671 million,
is mainly due to the final dividend as well as final and provisional taxation
payments made.


Sustainability

ABI continues to take a holistic approach to business sustainability with
appropriate investment in quality, health and safety, the environment and the
communities within which the company operates.  To this end ABI continues to
improve NOSA and ISO 14000 ratings and product quality results across all
plants.  The company remains active in its support of HIV/Aids orphans through
the NOAH (Nurturing Orphans of Aids for Humanity) and Starfish Foundation
initiatives.  Other areas of support include participation in environmental
projects and assistance to smaller businesses through training and other
programs.  ABI is also a member of the JSE Socially Responsible Investment (SRI)
Index.


Outlook

Sales are expected to continue on a positive growth trend for the balance of the
year, albeit at a lower rate than that achieved in the first half.  Given an
expectation of stable economic growth, with moderate input cost increases and
further productivity gains, real earnings growth is expected for the full year.


Scheme of arrangement

The attention of shareholders is drawn to the scheme of arrangement as detailed
in the circular to ABI shareholders issued on Thursday, 14 October 2004.


Accounting policies

These results have been compiled in accordance with the South African Statements
of Generally Accepted Accounting Practice and the listing requirements of the
JSE Securities Exchange South Africa and Schedule 4 of the South African
Companies Act.  With the exception noted below, the accounting policies and
methods of computation used in the preparation of the results are consistent in
all material respects with those adopted in the annual financial statements for
the year ended 31 March 2004.  The following exception should be noted:

*        AC140: Business combinations, has been applied which necessitates a
discontinuation of the amortisation of goodwill from 1 April 2004, subject to
the requirements of AC128: Impairment of assets.


The effect of this change in accounting policy is a R40 million reduction in
amortisation charged to the income statement as compared to the comparable
period last year.  Headline earnings are not affected as the amortisation of
goodwill is added back in the calculation of headline earnings.


Ernst & Young, the company's external auditors, have not reviewed or audited the
financial results for the six months ended 30 September 2004.


Declaration of dividend No.58

Notice is hereby given that on 27 October 2004, the board of directors declared
an interim dividend of 61 cents per share (2003: 49 cents) for the year ending
31 March 2005. This dividend will be paid out of profit on ordinary activities
after taxation, as determined by the directors, to ordinary shareholders
recorded as such in the register at the close of business on the record date,
Friday, 10 December 2004. The last date to trade to participate in the dividend
is Friday, 3 December 2004. Shares will commence trading ex-dividend from
Monday, 6 December 2004.


The important dates pertaining to this dividend are as follows:


Last day to trade 'cum' dividend                     Friday, 3 December 2004
Shares trade 'ex' dividend                           Monday, 6 December 2004
Record date                                          Friday, 10 December 2004
Payment date                                         Monday, 13 December 2004


Share certificates may not be dematerialised or rematerialised between Monday, 6
December 2004 and Friday, 10 December 2004, both days inclusive.


Group income statements
                                              Half-year ended        Half-year                        Year
                                                 30 September            ended                       ended
                                                         2004               30                          31
                                                           Rm        September                       March
                                                                          2003      % Change          2004
                                                                            Rm                          Rm
                                                  (Unaudited)      (Unaudited)                   (Audited)

Revenue                                                 2,667            2,349                       5,666

Sales revenue                                           2,616            2,294            14         5,571

Cost of sales                                         (1,702)          (1,499)                     (3,339)

Gross profit                                              914              795                       2,232

Net operating costs                                     (574)            (569)                     (1,192)

Trading profit                                            340              226            50         1,040

Goodwill amortisation                                       -             (40)                        (78)

Operating profit                                          340              186                         962

Income from an associate                                   22               18                          48

Profit on ordinary activities before                      362              204            77         1,010
interest and taxation

Net finance income                                         18               40                          66

Profit on ordinary activities before                      380              244                       1,076
taxation

Taxation                                                (166)            (110)                       (377)

Profit on ordinary activities after                       214              134                         699
taxation

Equity minority interests                                 (4)              (5)                        (11)
Net profit for the period                                 210              129                         688

Reconciliation of headline earnings (Rm)
Net profit for the period                                 210              129            63           688
Loss on disposal of property, plant and                     1                1                           9
equipment after taxation
Goodwill amortisation                                       -               40                          78
Headline earnings                                         211              170            24           775

Earnings per share (cents)
Basic earnings                                            137               85            61           450
Headline earnings                                         138              112            23           507

Dividends per share (cents)                                61               49            24           280
Net asset value per share (cents)                       2,272            2,053            11         2,359
Number of ordinary shares in issue                        153              152                         153
(million)
Weighted average number of ordinary shares                153              152                         153
in issue (million)


Group balance sheets
                                                         30 September                 30                31
                                                                 2004          September             March
                                                                   Rm               2003              2004
                                                                                      Rm                Rm
                                                          (Unaudited)        (Unaudited)         (Audited)
Assets

Non-current assets                                              3,117              3,047             3,011

Property, plant and equipment                                   1,719              1,615             1,615
Investment properties                                               3                  3                 3
Goodwill                                                        1,107              1,145             1,107
Investment in an associate                                        241                221               236
Deferred taxation asset                                            47                 63                50

Current assets                                                  1,621              1,285             1,580

Inventories                                                       359                325               309
Trade and other receivables                                       343                285               309
Prepayments                                                       175                101               160
Current taxation asset                                             73                112                 -
Cash and cash equivalents                                         671                462               802

Total assets                                                    4,738              4,332             4,591


Equity and liabilities

Capital and reserves

Share capital and premium                                       1,619              1,608             1,614
Non-distributable reserves                                        (1)                (3)               (5)
Accumulated profits                                             1,833              1,492             1,976
Ordinary shareholders' funds                                    3,451              3,097             3,585


Minority interests                                                 25                 24                24

Total shareholders' funds                                       3,476              3,121             3,609

Non-current liabilities                                           199                249               214
Long-term loans                                                     6                  7                 6
Deferred taxation liability                                        97                133               107
Deferred income                                                    66                 81                74
Retirement benefit obligation                                      30                 28                27

Current liabilities                                             1,063                962               768

Trade and other payables                                        1,037                944               708
Provisions                                                         26                 18                47
Current taxation                                                    -                  -                13

Total equity and liabilities                                    4,738              4,332             4,591


Future capital expenditure
Contracted                                                          -                 29                 6
Authorised by the directors but not yet contracted                487                177               437


Group cash flow statements
                                                            Half-year          Half-year              Year
                                                                ended              ended             ended
                                                         30 September                 30                31
                                                                 2004          September             March
                                                                   Rm               2003              2004
                                                                                      Rm                Rm
                                                          (Unaudited)        (Unaudited)         (Audited)


Trading profit                                                    340                226             1,040
Depreciation                                                      126                108               217
Non-cash items                                                     17                 26                 1
Decrease/(increase) in working capital                            150                 88             (126)
Cash generated from operating activities                          633                448             1,132


Dividend income received                                           16                 13                28
Normal taxation paid                                            (216)              (244)             (394)
Secondary tax on companies paid                                  (42)               (35)              (42)
Net cash inflow from operating activities                         391                182               724


Finance income received                                            36                 46                73

Finance costs paid                                               (16)                (3)                 -

Dividends paid                                                  (353)              (290)             (366)
Net cash retained                                                  58               (65)               431

Cash utilised in investment activities

Investment to maintain and upgrade operations                   (118)              (135)             (209)
Investment to expand operations                                  (80)              (139)             (241)
Proceeds on disposal of assets                                      4                 26                41
Net cash invested                                               (194)              (248)             (409)

Cash effects of financing activities

Long-term loans repaid                                              -                (2)               (5)
Premium on issue of share capital used for share
options
                                                                    5                  9                15
Net cash received                                                   5                  7                10

(Decrease)/increase in cash and cash equivalents

                                                                (131)              (306)                32
Balance at the beginning of the period                            802                773               773
Currency translations                                               -                (5)               (3)
Balance at the end of the period                                  671                462               802


Statements of changes in equity

                            Ordinary Ordinary Non-distri-butable Accu-mulated    Ordinary    Minority      Total
                            share     share        reserves        profits    share-holders' interests share-holders'
                                     premium                                      funds                    funds
                            capital
                            Rm             Rm                 Rm           Rm             Rm        Rm             Rm


Balance at 31 March 2003           1    1,598                  2        1,652          3,253        21          3,274

Premium on issue of share          -        9                  -            -              9         -              9
capital used for share
options
Foreign currency                   -        -                (5)            -            (5)       (2)            (7)
translation differences
Net profit for the period          -        -                  -          129            129         5            134
Dividend                           -        -                  -        (289)          (289)         -          (289)
Balance at 30 September            1    1,607                (3)        1,492          3,097        24          3,121
2003

Premium on issue of share          -        6                  -            -              6         -              6
capital used for share
options
Foreign currency                   -        -                (2)            -            (2)       (4)            (6)
translation differences
Net profit for the period          -        -                  -          559            559         6            565
Dividend                           -        -                  -         (75)           (75)       (2)           (77)
Balance at 31 March 2004           1    1,613                (5)        1,976          3,585        24          3,609


Premium on issue of share          -        5                  -            -              5         -              5
capital used for share
options

Foreign currency                   -        -                  4            -              4       (3)              1
translation differences

Net profit for the period          -        -                  -          210            210         4            214

Dividend                           -        -                  -        (353)          (353)         -          (353)

Balance at 30 September            1    1,618                (1)        1,833          3,451        25          3,476
2004


By order of the board

MJ Bowman                                           V Pillay

Managing director                                   Financial director


27 October 2004


Directorate and administration


Non-executive chairman

EAG Mackay


Independent non-executive directors

MP Adonisi

PM Bester


Non-executive directors

JA Mabuza

MI Wyman (British)


Executive directors

MJ Bowman (managing director)

EM Borcherds

TK Gibbon

HBB Lloyd

V Pillay

TC Sanderson


Company secretary

S Pienaar


Registered office

ABI House

14 Pongola Crescent

Eastgate Extension 17

Sandton 2199

P O Box 76202

Wendywood 2144

South Africa


Transfer secretaries

Computershare Investor Services 2004 (Proprietary) Limited

70 Marshall Street

Johannesburg 2001

P.O. Box 61051

Marshalltown 2107

South Africa


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