Interim results for 6 months to 28 February 1998

Summary of Results	Group Profit & Loss Account
Main Points	Group Balance Sheet
Chairman's Statement	Group Cash Flow Statement
Chief Executive's Review	Review Report to Allied Domecq PLC
Financial Performance	Notes 1-3, Notes 4-6, Notes 7-10
Further Information	City Presentation - Slides

CHAIRMAN'S STATEMENT

In previous statements I have emphasised the priority given by the Board to improving financial performance. I am therefore pleased to report further progress in our performance in the first half of the current year.

Profit before taxation is marginally ahead, both of our own earlier expectations and of the corresponding period last year, despite a £35 million adverse currency impact on transactions and translation combined. At level exchange rates, earnings per share were 10% ahead of the corresponding six months - building on the 25% increase achieved in the 1996/97 year. After adjusting last year's tax rate to that for the year as a whole, normalised earnings per share at actual exchange rates have increased by 4%. The Board has decided to increase the interim dividend by 3% to 9.73p per share.

We have continued the consistent implementation of operating strategies designed to sharpen our focus on main brands, to improve our customer service and to cut costs. These strategies are essentially long term in their impact but, in the half year under review, we have seen growth for our lead brands in European spirits, UK pubs and USA franchising and further efficiency gains have been made. Difficult trading conditions in Asia have impacted our businesses there adversely but we have avoided major problems and our exposure to the region is relatively small.

Trading experience in the second half so far is in line with expectations and, after the reduced first half sales of spirits brands in the USA, which I mentioned in my AGM statement, volumes are increasing.

In the AGM statement I also referred to the Board's exploration of opportunities to join forces with other players in the spirits industry. To identify new arrangements which will genuinely add value for shareholders and for which agreement can be secured is a complex challenge which we are addressing with persistence and objectivity. Whatever the outcome, improving business performance is the essential basis for enhancing long term value, and today's results underpin our confidence on this score.

Sir Christopher Hogg

30 April 1998