1. BASIS OF PREPARATION

These interim financial statements, which are unaudited, comply with relevant accounting standards and should be read in conjunction with the Annual Report & Accounts for the 12 months ended 31 August 1998. With the following two exceptions, the accounting policies have been applied on a basis consistent with those applied in 1998, which are prepared in accordance with accounting principles generally accepted in the United Kingdom (UK GAAP):

i) Following the adoption of FRS 10 (Goodwill and intangible assets), goodwill and brand values arising on acquisitions are being capitalised and depreciated over their estimated useful economic lives. Goodwill previously eliminated against reserves has not been reinstated.

ii) FRS 12 (Provisions and contingencies) has been adopted, with no effect on either the period being reported on or the prior period.

The periods ended 28 February 1999 and 28 February 1998 are regarded as distinct financial periods for accounting purposes with the exception of taxation where the periods are allocated an appropriate proportion of the expected total annual charge.

The figures for the 12 months ended 31 August 1998 are an abridged version of the group's published financial statements which have been reported on by the group's auditor and filed with the Registrar of Companies.

These interim financial statements were approved by the Board on 29 April 1999.

2. ACTIVITY ANALYSIS

On 29 August 1998 the group merged its interests in Victoria Wine with the Thresher off licence business of Whitbread Plc by contribution of the businesses into a joint venture, First Quench Retailing. The results of Victoria Wine were disclosed as a discontinued activity in the Annual Report & Accounts for the twelve months ended 31 August 1998.

3. GEOGRAPHICAL ANALYSIS

4. RECONCILIATION TO NORMALISED EARNINGS

5. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS