Allied Domecq in its new form has considerable operating strengths. We can see clear scope to add value by further improving business performance and we are determined to do so. The year has seen the birth of a new Allied Domecq. The sale of the UK Retail business was finalised after the accounting year end and therefore these figures include UK Retail profits and assets. New Allied Domecq is now in being; the share price was adjusted at the beginning of September to reflect the demerger and we are experiencing the considerable benefits of being a more focused group. At the outset of disposing of the UK Retail assets, in order to avoid a tax burden which would have rendered the transaction uneconomic, the board decided to undertake the disposal through the prolonged and complicated reduction of capital process. We also sought to try to obtain for shareholders as much ongoing advantage as possible from the synergies in merging our UK Retail assets with those of another party. These two decisions made it difficult to accommodate alternative bidders. In the event, however, the board was able to achieve its basic objectives and the shareholders received directly a very satisfactory price, the group was effectively demerged and the liabilities accruing to the new Allied Domecq as a result of the sale were able to be satisfactorily defined. With the reshaping of Allied Domecq, Tony Hales, Stephen Alexander and Ramon Mora-Figueroa have left the board and Graham Hetherington and Richard Turner have been welcomed to it. I am glad to have this opportunity of paying warm tribute to the contributions each of the departing directors made to Allied Domecq, particularly to Tony Hales for his eight years as chief executive. Philip Bowman, as Tony Hales' successor, inherits a group which has built up some momentum and has many opportunities for development. Philip's skills and drive, strongly evident since he joined us at the end of 1998, have already had a considerable impact which augurs well for the new Allied Domecq. In the last three years the Spirits & Wine operations have made much progress in clarifying strategy, reigniting the growth of key brands and tackling costs and capital employed. However, much remains to be done and will be done. It is certainly a challenge to grow the volume of leading brands consistently year after year and this must be the overriding objective. We shall also strive to continue the process of cost reduction in the business and to improve returns on capital. Allied Domecq in its new form has considerable operating strengths. We can see clear scope to add value by further improving business performance and we are determined to do so. Sir Christopher Hogg Chairman