Interim results for the six months to 29 February 2000

Highlights	Group Balance Sheet
Key Performance Indicators	Group Cash Flow Statement
Key Initiatives	Review Report (Auditors)
Review	Notes 1 - 7, Notes 8 - 15
Financial Information	Further Information
Group Profit & Loss Account	City Presentation

Notes 8 - 15

8. CAPITAL AND RESERVES   Share capital £m Share premium £m Merger reserve £m Revaluation reserve £m Profit and loss account £m   Total £m At 31 August 1999 3,470 26 -2,586 960 403   2,273 Capital reduction due to disposal of UK Retail business -3,203 0 1,763 -958 104   -2,294 Profit earned for shareholders for the period 0 0 0 0 171   171 Currency translation differences on foreign currency net investments 0 0 0 0 17   17 Ordinary dividends 0 0 0 0 -42   -42                                 At 29 February 2000 267 26 -823 2 653   125                 9. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES   1998/99       1999/00   1998/99 12 months       6 months   6 months £m       £m   £m 406   Operating profit   240   240 235   Exceptional operating costs   6   96 101   Depreciation   25   55 -20   Increase in stocks   -64   -14 -34   Increase in debtors   -19   -17 -32   Decrease in creditors   -56   -90 -26   Expenditure against provisions for : acquisition 0   -12 -68     reorganisation and restructuring costs -16   -1 -11   Other items   0   -16                             349   Continuing operations   116   174 202   Discontinued operations   0   67               551   Net cash inflow from operating activities   116   241                               10. RECONCILIATION OF NET CASH INFLOW FROM OPERATING ACTIVITIES TO FREE CASH FLOW 1998/99       1999/00   1998/99 12 months       6 months   6 months £m       £m   £m               551   Net cash inflow from operating activities   116   241 -151   Capital expenditure net of sale of tangible assets   -4   -74 38   Acquisition/disposal provision expenditure   0   12 -1   Net decrease in franchise loans   2   2 12   Dividends received from associated undertakings   3   5                             346   Continuing operations   117   175 103   Discontinued operations   0   11 449   Operating cash flow net of fixed assets   117   186 -161   Taxation paid   34   -82 -115   Net interest paid (excludes premia arising on repayment of debt)   -48   -65 -320   Dividends paid - ordinary shareholders 0   -163 -4     - minorities -2   -2                             -209   Continuing operations   101   -127 58   Discontinued operations   0   1                             -151   Free cash flow (before acquisitions and disposals)   101   -126                 Cash at Borrowings Loan capital Loan capital       bank and due within due within due after 29 February 28 February   in hand one year one year one year 2000 1999 11. NET DEBT £m £m £m £m £m £m               At 31 August 1999 236 -647 -124 -780 -1,315 -1,401 Increase/(decrease) in cash -49 -114 0 0 -163 35 Increase/(decrease) in liquid resources -58 0 0 0 -58 80 (Increase)/decrease in loan capital 0 0 0 7 7 219 Non cash movements on recourse finance 0 0 0 0 0 -6 Exchange adjustments 0 -6 9 35 38 -45                             At 29 February 2000 129 -767 -115 -738 -1,491                                             At 28 February 1999 270 -376 -385 -627   -1,118

12. DISPOSAL OF UK RETAIL BUSINESS

On 6 September 1999 the group completed the disposal of the UK Retail business to Punch Taverns as a result of which net assets reduced by £2,294m which included £75m paid to Punch representing the value of the group's investment in Britannia and £54m paid to Punch during the period representing the net movements on the UK Retail business inter-company accounts between 6 February and 6 September 1999.
The disposal was effected by way of a capital reduction process giving rise to no profit or loss.

13. ACQUISITION OF JINRO WHISKY BUSINESS

On 15 February 2000 the group completed the previously announced joint venture arrangements with Jinro Limited , Korea's leading spirits distributor. Only the acquired balance sheet has been included within the half year results. The purchase consideration of £75m was for 70% of the joint venture which has net assets of £113m including £101m of intangible assets. In addition £25m was paid for the purchase of Jinro's bulk Scotch whisky inventory.

14. ORDINARY DIVIDEND

The board has declared an interim dividend of 4.0p per ordinary share (1999: 15.0p) on 1 September 2000; the shares will go ex-dividend on 31 July 2000. No final dividend was paid for the year to 31 August 1999.

15. FINANCIAL CALENDAR