Tate & Lyle Regulatory News (TATE)

6 Nov 2008 07:00

6 NOVEMBER 2008 TATE & LYLE PLC ANNOUNCEMENT OF INTERIM RESULTS For the six months ended 30 September 2008 \* TSix months ended 30 September (Unaudited) Change at constant 2008 2007 Change currency---------------------------------------------- ------------ ------------ ------------ ------------ Continuing operations (1) Sales £1 698m £1 359m + 25% + 18% Adjusted profit before taxation (2) £128m £123m + 4% - 2% Adjusted diluted earnings per share (2) 19.1p 16.6p + 15% + 6% Dividend per share 6.8p 6.5p + 4.6% + 4.6%\* T Highlights -- Excellent results from Food & Industrial Ingredients, Americas, which achieved a 30% increase in adjusted operating profits (25% in constant currency) -- Adjusted operating profits from core value added food ingredients (3) increased by 28% (20% in constant currency) -- Sucralose sales ahead by 11% (7% in constant currency), in line with our strategy to grow volume (up 20%) -- Exposure to commodity pricing volatility reduced through the sale of international Sugar Trading -- Four-year major capital investment programme near completion - New value added capacity in Singapore and Sagamore, Indiana on-stream and operating in line with our plans - Corn wet mill in Loudon, Tennessee will be capable of full output at the beginning of the next financial year - New corn wet mill in Fort Dodge, Iowa on track for mechanical completion by March 2009 -- Interim dividend increased by 4.6% to 6.8p per share Financial strength -- Net debt increased by 8% from 31 March 2008 to £1,128 million but remained flat in constant currency -- Conservative debt maturity profile -- Notwithstanding this final year of heavy capital expenditure, solid cash flows underpin our progressive dividend policy Statutory information \* TSix months ended 30 September (Unaudited) 2008 2007------------------------------------------------------ ----------------------- ---------------- Continuing operations - profit before tax (4) £121m £87m Total operations (5) - profit for the period £65m £139m Total operations (5) - diluted earnings per share 14.0p 27.9p\* T 1 Excluding the results of international Sugar Trading and Eastern Sugar in bothperiods, and of Redpath, Occidente and the disposed of European starch plants inthe six months ended 30 September 2007 2 Before exceptional costs of £nil million (2007 - £30 million) and amortisationof acquired intangible assets of £7 million (2007 - £6 million) 3 Core value added food ingredients comprise value added food ingredients andexclude sugar and sucralose 4 Continuing operations are defined in note 1; statutory profit before tax isreported after the exceptional costs and amortisation of acquired intangibleassets defined in note 2 5 Total operations includes continuing operations and both the operating profitsand the profits or losses on the disposal of discontinued operations ------------------------------------------------------------------------------ Commenting on the results for the six months ended 30 September 2008, Sir David Lees, Chairman, said: "Tate & Lyle produced a sound performance during the first half of the year. Wehave established a solid platform of efficient, low-cost and fully investedassets, leaving us well-positioned to benefit from growth opportunities in ourchosen markets. "The Board has declared an interim dividend of 6.8p per share, an increase of4.6% over the prior year, reflecting our confidence in the outlook for the Groupand our continued commitment to our progressive dividend policy." Iain Ferguson, Chief Executive, said: "Tate & Lyle performed well, slightly ahead of our expectations in the firsthalf of the year, with profits from continuing operations ahead of thecorresponding period last year. "We continue to make good progress in growing the business in our areas ofstrategic focus and investment. In addition, we are beginning to see thebenefits of our strategic reshaping and simplified management structure. Food &Industrial Ingredients, Americas again performed very strongly with adjustedoperating profits increasing by 30% whilst the Group's adjusted operatingprofits from core value added food ingredients increased by 28%, driven bystrong performances in both the Americas and Europe. "Tate & Lyle is a strong business, well-placed to cope with the slowing economicenvironment and to deliver increasingly positive cash flows and growth in ourchosen markets." Outlook Whilst the increasing uncertainty in global economic conditions makes anystatement about the outlook particularly difficult, Tate & Lyle's diverse andbalanced portfolio of ingredients, consumed by hundreds of millions of peoplearound the world every day, makes us, in common with our sector, more resilientthan many others to recessionary pressures in the wider economy. Lookingforward: -- We anticipate that our Food & Industrial Ingredients businesses in the Americas and Europe will continue to perform well in the second half of the year. Current corn prices have improved industry fundamentals for the 2009 calendar year sweetener pricing rounds in both the US and Europe. -- The EU sugar market continues to be very difficult although we expect some improvement in the second half of our financial year as raw material costs decline. We see encouraging signs of market equilibrium being re-established, albeit slightly more slowly than expected, and we continue to expect this will lead to progressively firmer refining margins over time. -- We expect further sales growth from our fully invested Sucralose business and operating margins to remain at levels similar to those seen in the first half for the rest of the financial year. The rate of FMCG product launches, where, typically, higher margins can be achieved, has reduced as a consequence of the global slowdown. However, we continue to win the major share of these launches. Tate & Lyle is a strong and well-financed business. Despite the increasedturmoil in the external environment since our last outlook statement on 18September, but reinforced by the strengthening US currency, the Board remainsconfident that we are on track to continue to make progress for the year as awhole. Cautionary statement This Interim Statement contains certain forward-looking statements with respectto the financial condition, results, operations and businesses of Tate & LylePLC. These statements and forecasts involve risk and uncertainty because theyrelate to events and depend upon circumstances that will occur in the future.There are a number of factors that could cause actual results or developments todiffer materially from those expressed or implied by these forward-lookingstatements and forecasts. Nothing in this Interim Statement should be construedas a profit forecast. A copy of this Interim Statement for the six months ended 30 September 2008 canbe found on our website at www.tateandlyle.com. A hard copy of this statement isalso available from The Company Secretary, Tate & Lyle PLC, Sugar Quay, LowerThames Street, London EC3R 6DQ. SPLENDA(R) is a trademark of McNeil Nutritionals, LLC Webcast and conference call A presentation of the results by Chief Executive, Iain Ferguson and Acting GroupFinance Director, Tim Lodge will be audio webcast live at 10.00 (UKT) today. Toview and/or listen to a live audio webcast of the presentation, visit: http://www.thomson-webcast.net/uk/dispatching/?event_id=d74c02277ebb3799e9934c4a78a76912&portal_id=39b37fe9dc2bfc6ead9b7087924f0a2e (link viawww.tateandlyle.com). (Due to its length, the above URL may need to be copied/pasted into yourInternet browser's address field. Remove the extra space if one exists.) Please note that remote listeners will not be able to ask questions during thequestion and answer session. A webcast replay of the presentation will beavailable for six months, at the links above. For those without video-streaming facilities, there will also be ateleconference facility for the presentation. Details are given below: UK: +44 (0) 203 003 2666US: +1 866 966 5335 Replay numbers (available for 1 week): UK: +44 (0) 208 196 1998US: +1 866 583 1039Replay Access code: 691691 STATEMENT OF INTERIM RESULTS for the six months ended 30 September 2008 Results for the continuing operations are adjusted to exclude exceptional itemsand amortisation of acquired intangible assets. Except where specifically statedto the contrary, this commentary relates only to the adjusted results for thecontinuing operations. A reconciliation of reported and adjusted information isincluded in note 17. Overview Tate & Lyle continues to trade soundly. Sales grew by 25% to £1,698 million(£1,359 million) in the six months to 30 September 2008. Group operating profitincreased by 3% to £150 million (£145 million) and profit before tax was 4%higher at £128 million (£123 million). Exchange translation accounted for a £78million improvement in sales, a £9 million improvement in operating profit andan £8 million improvement in profit before tax. Adjusted diluted earnings pershare increased by 15% to 19.1 pence (16.6 pence). We have successfully weathered difficult and volatile commodity markets in thefirst half year, particularly in Food & Industrial Ingredients, Americas, whichdelivered a very strong performance with a 30% increase in operating profit overthe comparative period and generated two-thirds of the Group's adjustedoperating profit before central costs. It is our largest division and has beenthe focus of the majority of our recent investment for growth. A key aspect ofour strategy is to grow our value added business, and core value added foodingredient profits grew by 28% in the six months as we benefited from increasedproduction capacity at Sagamore, Indiana and from the acquisition of Hahn inEurope. As widely reported, the EU sugar market has been extremely difficult for allparticipants as it undergoes reform. The impact of this is reflected in thelosses made in our refining operations in the period. We continue to believe ina strong future for our EU cane refineries due to their unique competitiveposition as we emerge from the most challenging period of the reform process. Sugar prices also affect Food & Industrial Ingredients, Europe, althoughconsiderably less so following the restructuring of this division over the pasttwo years. The sale of five starch plants in September 2007 and the acquisitionof Hahn in June 2007 have not only reduced the absolute size of our exposure tocereal-based sweeteners in the EU but have also increased the proportion of thedivision's operating profits from core value added food ingredients to 68% inthe half year. Higher corn and energy prices affected profits, but werepartially offset by a full period contribution from Hahn. Sucralose sales grew by 11% in the period although operating profits wereslightly lower due to changes in customer mix. Energy costs increased by 21% to £91 million, due to higher prices. Reported profits benefited from strengthening US and European exchange rates.With over 80% of operating profit in the first half reported in US dollars,reported results are sensitive to the strengthening US currency. The averageexchange rate used in the translation of profits was US$1.93 to £1, comparedwith US$2.00 in the six months to 30 September 2007. The period end rate wasUS$1.78 (US$2.03). The US dollar has continued to strengthen significantlyagainst sterling since the period end. On 4 November 2008, the rate was US$1.61to £1. As we near the end of the four-year reshaping of the Group and the completion ofthe remaining major capital projects, we are now fully focused on deliveringreturns on the asset base, generating stronger free cash flow across thebusiness and making progress towards our longer term target of a 20% Return onNet Operating Assets. Dividend The Board has declared an interim dividend of 6.8p, an increase of 4.6% over theprior year, reflecting our confidence in the outlook for the Group and ourcontinued commitment to a progressive dividend policy. This will be paid on 9January 2009 to shareholders on the register on 5 December 2008. Group financial performance Sales grew by 25% to £1,698 million (£1,359 million). Excluding the effect ofexchange translation, which was to increase sales by £78 million, growth was18%. This sales increase was driven largely by an improvement in Food &Industrial Ingredients, Americas where sales grew by 21% (16% in constantcurrency) as a result of both higher production and the recovery of higher inputcosts through improved pricing. Operating profit was £150 million (£145 million) and benefited from a favourable£9 million currency movement. The net interest expense was unchanged at £22million, despite an unfavourable currency variance of £1 million. Interest coverbased on total operations was 7.3 times (8.4 times) and for continuingoperations was 6.8 times (6.6 times). Profit before tax was £128 million (£123million). The effective tax rate on adjusted profit from continuing operations was 30.4%(32.5%). This is based on our expectations for the year to 31 March 2009. Thereduction compared with the prior year includes the anticipated savings from thenew internal financing for our US operations. The effective tax rate remainssensitive to the geographical mix of profits. Total shareholders' equity at 30 September 2008 was £1,002 million, which is £52million higher than at 31 March 2008. The increase is due mainly to the profitfor the period and the effects of translation as sterling weakened against theUS dollar, offset by the 2008 year-end dividend. Net debt was £1,128 millioncompared to £1,041 million at 31 March 2008, the increase being principallyaccounted for by the £90 million effect of weaker sterling exchange rates on thetranslation of debt held in foreign currencies. Segmental analysis In this segmental analysis, we discuss performance as reported, with sales andoperating profits earned in foreign currencies translated at the appropriateaverage exchange rates. In the text we also discuss performance in constantcurrency terms to assist analysis. To arrive at a constant currency result, wehave retranslated the results for the six months to 30 September 2007 using theaverage exchange rates used for the six months to 30 September 2008. Food & Industrial Ingredients, Americas \* T Six months to 30 September 2008 Six months to 30 September 2007 ---------------------------------- ------------------------------------ Primary Value Total Primary Value Total added added £m £m £m £m £m £m----------------------------------------------------------------------------------------Sales - Food 388 164 552 323 146 469 - Industrial 180 79 259 136 66 202 ------- -------- --------- -------- -------- ----------- 568 243 811 459 212 671 ------- -------- --------- -------- -------- -----------Operating profit - Food 48 46 94 32 38 70 - Industrial 13 2 15 16 (2) 14 ------- -------- --------- -------- -------- ----------- 61 48 109 48 36 84 ------- -------- --------- -------- -------- -----------Margin - Food 12.4% 28.0% 17.0% 9.9% 26.0% 14.9% - Industrial 7.2% 2.5% 5.8% 11.8% (3.0)% 6.9% 10.7% 19.8% 13.4% 10.5% 17.0% 12.5%----------------------------------------------------------------------------------------\* T Food & Industrial Ingredients, Americas was again the engine of growth, enjoyinganother six months of strong momentum whilst also successfully weatheringdifficult and volatile commodity markets. Sales of £811 million were 21% higherthan the comparative period (16% in constant currency). Operating profit, whichaccounted for 66% of the Group's adjusted operating profit before central costs,increased by 30% to £109 million (25% in constant currency). The effect ofexchange translation was a £3 million increase in operating profit. Value added food ingredient profits increased by 21% (15% in constant currency),benefiting from initial volume growth from the expanded capacity at Sagamore,Indiana and firmer margins across almost the entire product range. Primary foodingredient profits were 50% higher than the comparative period (48% in constantcurrency), as a result of margin improvements achieved in the pricing round forcalendar year 2008 and high prices for corn oil. Almex, our Mexican joint venture, continued to perform well, although lowersugar prices are likely to limit volume growth and sweetener pricing in the 2009calendar year. Tate & Lyle Custom Ingredients also performed well. Industrial ingredients profits increased by 7% (nil in constant currency),although primary product profits were held back by lower ethanol margins. Therewas additional demand for starches following the floods earlier in the year inIowa, which affected production at competitor plants. In value added industrialingredients, the comparison with the six months to 30 September 2007 benefitedfrom the absence of £5 million of losses and closure costs at astaxanthin. We incurred additional costs in commissioning patented new technology at theLoudon corn wet mill as achieving full output is taking longer than anticipated.The profit impact in the first half was £17 million. We are in the process ofinstalling some additional equipment at Loudon, where we remain on schedule tobe capable of full output at the beginning of the next financial year after thefinal tranche of equipment has been fitted. As announced in our trading updateon 18 September, at current corn prices, a further £10 million to £15 million ofprofit impact is expected during the second half of this financial year. Construction of the new corn wet mill in Fort Dodge, Iowa is progressingsatisfactorily and the experience we have gained in working with the newtechnology at Loudon increases our confidence that this new plant will meet itsproduction targets. We continue to anticipate mechanical completion by the endof March 2009, at which point commissioning will start. The corn price has now fallen to around US$4 per bushel and is at similar levelsto prices at the same time a year ago, having reached highs in June this year ofalmost US$8 per bushel. In the half year we were able to benefit fromcorresponding higher by-product prices. The US corn harvest is much later thannormal and it is expected that the 2009 calendar year sweetener pricing roundwill also complete later than last year. Energy costs were higher, although the impact was mitigated by our long-termcoal contracts. Food & Industrial Ingredients, Europe \* T Six months to 30 September 2008 Six months to 30 September 2007 ---------------------------------- ------------------------------------ Primary Value Total Primary Value Total added added £m £m £m £m £m £m----------------------------------------------------------------------------------------Sales - Food 98 104 202 81 64 145 - Industrial 90 - 90 63 - 63 ------- -------- --------- -------- -------- ----------- 188 104 292 144 64 208 ------- -------- --------- -------- -------- -----------Operating profit - Food 4 13 17 13 8 21 - Industrial 2 - 2 5 - 5 ------- -------- --------- -------- -------- ----------- 6 13 19 18 8 26 ------- -------- --------- -------- -------- -----------Margin - Food 4.1% 12.5% 8.4% 16.0% 12.5% 14.5% - Industrial 2.2% - 2.2% 7.9% - 7.9% 3.2% 12.5% 6.5% 12.5% 12.5% 12.5%----------------------------------------------------------------------------------------\* T Food & Industrial Ingredients, Europe performed better than expected in the sixmonths. Higher corn prices from the 2007 harvest were the main driver of lowerprofits over the comparative period, as was the case in the second half of theprior year, but were offset partially by a full contribution to profit fromHahn, which was acquired in June 2007. Sales of £292 million were 40% higherthan the comparative period (21% in constant currency). Operating profit, whichaccounted for 12% of the Group's adjusted operating profit before central costs,decreased by 27% to £19 million (37% in constant currency). The effect ofexchange translation was a £4 million increase in profit. The Single Ingredients operations, which primarily comprise the corn wet millsin the Netherlands and the Eaststarch joint venture partnerships, were affectedby higher corn and energy costs. Value added food ingredients benefited fromgrowing sales of crystalline fructose following the recent upgrade of thefacility in Turkey. Higher corn costs were recovered through higher by-productreturns and price increases except in Primary Food ingredients, which areessentially cereal-based sweeteners, sold in the EU. Cereal-based sweeteners areeffectively priced against regulated sugar prices and there is a partialmismatch with corn pricing. Volumes of HFCS (isoglucose) increased in line withthe increased quotas awarded as part of the EU Sugar Regime reforms, andcapacity was expanded in the joint venture plants in Hungary and Bulgaria.Industrial ingredients profits were lower than the comparative period but higherthan the six months to 31 March 2008. Corn prices have fallen considerablyfollowing the recent good corn harvest. The small corn wet mill in Greece was closed without disruption at the end ofSeptember. The HFCS quota has been surrendered and demolition of the plant andenvironmental remediation have already started. The small HFCS quota in theNetherlands was surrendered on 1 October 2008. In our Food Systems operations, Hahn continued to perform well, and accountedfor the improvement in value added food ingredients. Integration with the otherFood Systems operations and the Food & Industrial Ingredients, Europe backoffice functions continues. A new Health and Wellness Innovation Centre inLille, France was opened in September. This new facility will complement theexisting Food Systems activities by supporting the development of new functionalstarches and fibres. It will also provide technical expertise for beveragecustomers in the region, including in our speciality sweetener portfolio andSPLENDA(R) Sucralose, which is sold through the Food & Industrial Ingredients,Europe sales force. Sugars \* T Six months to 30 September 2008 Six months to 30 September 2007 ---------------------------------- ------------------------------------ Primary Value Total Primary Value Total added added £m £m £m £m £m £m----------------------------------------------------------------------------------------Sales - Products 352 33 385 290 36 326 - Molasses 132 - 132 84 - 84 ------- -------- --------- -------- -------- ----------- 484 33 517 374 36 410 ------- -------- --------- -------- -------- -----------Operating profit - Products (6) 3 (3) 9 3 12 - Molasses 10 - 10 5 - 5 ------- -------- --------- -------- -------- ----------- 4 3 7 14 3 17 ------- -------- --------- -------- -------- -----------Margin - Products (1.7)% 9.1% (0.8)% 3.1% 8.3% 3.7% - Molasses 7.6% - 7.6% 6.0% - 6.0% 0.8% 9.1% 1.4% 3.7% 8.3% 4.1%----------------------------------------------------------------------------------------\* T Sugars faced a challenging six months. Sales of £517 million were 26% higherthan the comparative period (22% in constant currency). Operating profit, whichaccounted for 4% of the Group's adjusted operating profit before central costs,decreased by 59% to £7 million (61% in constant currency). The effect ofexchange translation was a £1 million increase in profit. As expected, the EUsugar market was extremely difficult in the period and Products made a loss of£3 million compared with a profit of £12 million in the comparative period.Molasses performed extremely well, doubling profit even after a strongperformance in the comparative period. There was strong demand from customersand we were able to sell stocks into a rising market driven by higher cerealprices at the beginning of the year, with molasses pricing holding up welldespite the later reduction in EU cereal prices. The significant changes brought about by the reform of the EU sugar regimecontinued to disrupt the EU sugar market. The reforms have made significantprogress with the majority of the targeted reduction in quotas now agreed. Themarket has been absorbing surplus stocks against a backdrop of reducinginstitutional prices and this has created an extremely difficult market. Weremain confident that, during the second half of the year, equilibrium betweensupply and demand for EU sugar will be restored. This in turn should lead toprogressively firmer refining margins over the medium term. The deficitproduction areas of the EU, including the Iberian peninsula which is supplied byour Portuguese refinery, and Italy which is supplied through our Eridania Tate &Lyle joint venture, are showing signs of price improvement, although the marketin total remains difficult as we move through the final stages of the reform. Negotiations remain on track for raw sugar supplies under the new regulatoryarrangements, which come into force on 1 October 2009. We continue to be pleasedwith our customers' response to the ongoing conversion of our UK retail sugarsrange to Fairtrade. Gas prices increased substantially in the UK. The biomass boiler project at theThames refinery is on target for completion by the end of March 2009. It willreplace up to 70% of current fossil fuel consumption in due course, providingboth cost and environmental benefits. In July we announced the disposal of the international Sugar Trading operations,whose results are now included as part of discontinued businesses. Thetransaction will complete at the end of March 2009, and we estimate that afurther £40 million of working capital will be released through the course ofthe second half. The disposal represents another step in delivering on Tate &Lyle's strategy of reducing its exposure to volatile commodity markets. Sucralose \* T Six months to 30 September 2008 Six months to 30 September 2007 ---------------------------------- ------------------------------------ Primary Value Total Primary Value Total added added £m £m £m £m £m £m----------------------------------------------------------------------------------------Sales - 78 78 - 70 70Operating profit - 30 30 - 32 32Margin - 38.5% 38.5% - 45.7% 45.7%----------------------------------------------------------------------------------------\* T Sales of SPLENDA(R) Sucralose of £78 million were 11% ahead of the comparativeperiod (7% in constant currency). Operating profit, which accounted for 18% ofthe Group's adjusted operating profit before central costs, was £30 million, 6%lower than the comparative period (9% lower in constant currency). The effect ofexchange translation was a £1 million increase in profit. Global sales volumes of sucralose increased by 20%, higher than the 7% increasein sales values at constant currency. We focused on driving volume from our newcapacity and this, together with good sales in Europe, accounts for much of thevolume growth. The major volume growth was in some high-volume customer accountswhich we believe were buying relatively less in the comparative period as theyran down their own stocks following the commissioning of the Singapore facilityand resultant increased security of supply. The resulting changes in sales andcustomer mix have led to a decline in operating margins from 46% to 39%. Whilesucralose is taking the major share of new product launches, where, typically,higher margins can be achieved, the current economic downturn is having animpact on the number of FMCG new product launches, particularly in the USA. We continue to work successfully to reduce our unit cost of production at ourtwo plants. As previously reported, efficiency gains largely offset the higherenergy costs in the first half year. Our investments in a pilot plant and adedicated process development team have enabled us to identify potentialopportunities for material molar yield improvements for further development. In September, the preliminary ruling of the Administrative Law Judge at the USInternational Trade Commission (ITC) in our case against certain manufacturersand importers of Chinese sucralose was announced. We were disappointed that theJudge, in this preliminary ruling, did not agree with our claims and have nowlodged our petition for an appeal by the full Commission of the ITC. We expectto hear by the end of November whether our petition for appeal has been allowed. In addition to our patent estate, of which only a small proportion is underconsideration at the ITC, we continue to develop the other elements which defineTate & Lyle's formidable competitive advantage in the global sucralose business.Our facilities in the USA and Singapore, which operate at a level of cost,efficiency and environmental stewardship surpassed by none, produce sucralosewhich meets the highest standards of quality, purity and hygiene. Our businessis built on long-standing relationships with some of the world's leading food,beverage and pharmaceutical manufacturers, as well as on the establishedSPLENDA(R) Sucralose brand which is renowned as a high quality, reliable andtrusted product in a number of markets. Central costs Central costs, which include head office, treasury and reinsurance activities,increased by £1 million to £15 million. Reductions relating to the simplifiedGroup management and organisational structure were more than offset by theexcess borne by our captive reinsurance company in relation to claims followingsome boiler problems at our Decatur, Illinois facility. We continue to expectfull year central costs to be lower than the previous year. Energy The Group's energy cost at £91 million in the first half was 21% higher than thecomparative period (18% in constant currency) as a result of higher prices. Thereduction in cost through energy efficiency was offset by the additional energyused in our increased capacity. We have in place contracts and hedges that covermore than 80% of our estimated energy use for the current financial year. Exceptional items Exceptional items from discontinued operations reflect the anticipated £22million loss in relation to the disposal of our international Sugar Tradingoperations as sold to Bunge. A small number of minority interests related to thesugar trading business were not included in the sale and are being addressedseparately in accordance with the related shareholders' agreements. The sale ofthe international Sugar Trading business and the anticipated disposal of theminority interests are together unlikely to generate a material profit or losson disposal. The sales of some of the minority interests, with associatedprofits, are expected to occur in the 2010 financial year; the appropriate fairvalue gains have been recognised in the period through the statement ofrecognised income and expense. Net debt and financing profile Net debt at 30 September 2008 was £1,128 million, an increase of £87 millionsince 31 March 2008. The effect of exchange translation since 31 March 2008 wasto increase net debt by £90 million. Working capital outflows include a £75million inflow from inventory reductions offset by £100 million outflows fromvariation margin calls in respect of corn positions for contracted business,primarily in the USA. In addition to our bonds and other debt facilities, the Group has committed bankfacilities of US$1,110 million, of which US$110 million matures in 2009 andUS$1,000 million matures in 2012. Of the committed facilities, £298 million wasundrawn at 30 September 2008. The average maturity of gross debt is 5.2 yearsand the first capital market issue to reach maturity is the US$300 million 144Abond in June 2011. Management is fully focused on optimising capital both through the efficientutilisation of working capital and through constraining capital expenditure to amaximum of 1.25 times the depreciation charge from the end of the currentfinancial year when the current major capital projects will have been completed.This compares with capital expenditure of 2.1 times in the six months to 30September 2008. Risks and uncertainties The principal risks and uncertainties affecting the business activities of theGroup remain those detailed on pages 34 to 36 in the Report and Accounts for theyear ended 31 March 2008, a copy of which is available on the Company's websiteat www.tateandlyle.com. In the view of the Board there is no material change inthese factors in respect of the remaining six months of the year, although anyimpacts could be larger given the current turmoil in financial markets. TheGroup has some exposure to energy and raw material markets, especially toEuropean corn, and in its ability to achieve satisfactory sales prices,particularly from some sizeable annual contracts which are effective for thecalendar year 2009. The Group also retains an exposure to foreign currencymovements for the translation of profits. Outlook Whilst the increasing uncertainty in global economic conditions makes anystatement about the outlook particularly difficult, Tate & Lyle's diverse andbalanced portfolio of ingredients, consumed by hundreds of millions of peoplearound the world every day, makes us, in common with our sector, more resilientthan many others to recessionary pressures in the wider economy. Lookingforward: -- We anticipate that our Food & Industrial Ingredients businesses in the Americas and Europe will continue to perform well in the second half of the year. Current corn prices have improved industry fundamentals for the 2009 calendar year sweetener pricing rounds in both the US and Europe. -- The EU sugar market continues to be very difficult although we expect some improvement in the second half of our financial year as raw material costs decline. We see encouraging signs of market equilibrium being re-established, albeit slightly more slowly than expected, and we continue to expect this will lead to progressively firmer refining margins over time. -- We expect further sales growth from our fully invested Sucralose business and operating margins to remain at levels similar to those seen in the first half for the rest of the financial year. The rate of FMCG product launches, where, typically, higher margins can be achieved, has reduced as a consequence of the global slowdown. However, we continue to win the major share of these launches. Tate & Lyle is a strong and well-financed business. Despite the increasedturmoil in the external environment since our last outlook statement on 18September, but reinforced by the favourable trend of a strengthening UScurrency, the Board remains confident that we are on track to continue to makeprogress for the year as a whole. \* TSir David Lees Iain Ferguson CBEChairman Chief Executive\* T Statement of Directors' responsibilities The Directors confirm that this condensed set of financial statements has beenprepared in accordance with IAS 34 Interim Financial Reporting as adopted by theEuropean Union, and that the interim management report herein includes a fairreview of the information required by the Disclosure Rules and TransparencyRules of the Financial Services Authority, paragraphs DTR 4.2.7 and DTR 4.2.8. The Directors of Tate & Lyle PLC are listed in the Tate & Lyle Annual Report forthe year ended 31 March 2008. The following changes to the Board occurred in theperiod: Stanley Musesengwa (Chief Executive - International) stepped down from the Boardon 23 July 2008. Stuart Strathdee (Corporate Development Director) stepped down from the Board on23 July 2008. John Nicholas (Group Finance Director) stepped down from the Board on 30September 2008. For and on behalf of the Board of Directors: \* TSir David Lees Iain Ferguson CBEDirectors5 November 2008\* T Independent review report to Tate & Lyle PLC Introduction We have been engaged by the Company to review the condensed interim financialstatements in the interim report for the six months ended 30 September 2008,which comprises the consolidated interim income statement, the consolidatedinterim statement of recognised income and expense, the consolidated interimbalance sheet, the consolidated interim cash flow statement and related notes.We have read the other information contained in the interim report andconsidered whether it contains any apparent misstatements or materialinconsistencies with the information in the condensed interim financialstatements. Directors' responsibilities The interim report is the responsibility of, and has been approved by, thedirectors. The directors are responsible for preparing the interim report inaccordance with the Disclosure and Transparency Rules of the United Kingdom'sFinancial Services Authority. As disclosed in note 1, the annual financial statements of the Group areprepared in accordance with IFRSs as adopted by the European Union. Thecondensed interim financial statements included in this interim report have beenprepared in accordance with International Accounting Standard 34, "InterimFinancial Reporting", as adopted by the European Union. Our responsibility Our responsibility is to express to the Company a conclusion on the condensedinterim financial statements in the interim report based on our review. Thisreport, including the conclusion, has been prepared for and only for the Companyfor the purpose of the Disclosure and Transparency Rules of the FinancialServices Authority and for no other purpose. We do not, in producing thisreport, accept or assume responsibility for any other purpose or to any otherperson to whom this report is shown or into whose hands it may come save whereexpressly agreed by our prior consent in writing. Scope of review We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, 'Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity' issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly, wedo not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believethat the condensed interim financial statements in the interim report for thesix months ended 30 September 2008 is not prepared, in all material respects, inaccordance with International Accounting Standard 34 as adopted by the EuropeanUnion and the Disclosure and Transparency Rules of the United Kingdom'sFinancial Services Authority. PricewaterhouseCoopers LLPChartered AccountantsLondon5 November 2008 CONSOLIDATED INTERIM INCOME STATEMENT (UNAUDITED) \* T Six months to Six months to Year to 30 September 30 September 31 March 2008 2007 2008 Notes £m £m £m-----------------------------------------------------------------------------------------------------Continuing operationsSales 2 1 698 1 359 2 867 ------------- ------------- ------------- Operating profit 2 143 109 224Finance income 4 18 24 38Finance expense 4 (40) (46) (80) ------------- ------------- -------------Profit before tax 121 87 182Income tax expense 5 (37) (40) (76) ------------- ------------- -------------Profit for the period from continuing operations 84 47 106(Loss)/profit for the period from discontinued operations 8 (19) 92 81 ------------- ------------- -------------Profit for the period 65 139 187 ------------- ------------- ------------- Profit/(loss) for the period attributable to:Equity holders of the Company 64 138 194Minority interests 1 1 (7) ------------- ------------- -------------Profit for the period 65 139 187 ------------- ------------- ------------- Earnings per share attributable to the equity holders of the Company from continuing and discontinued operations Pence Pence Pence- Basic 6 14.1 28.5 40.9- Diluted 6 14.0 27.9 40.4 ------------- ------------- ------------- Earnings per share attributable to the equity holders of the Company from continuing operations Pence Pence Pence- Basic 6 18.1 9.5 23.8- Diluted 6 18.0 9.3 23.6 ------------- ------------- ------------- Dividends per share Pence Pence Pence- Proposed at the end of the period 7 6.8 6.5 16.1 ------------- ------------- -------------- Paid in the period 7 16.1 15.3 21.8 ------------- ------------- ------------- -----------------------------------------------------------------------------------------------------Analysis of profit before tax from continuing operations £m £m £m ------------- ------------- -------------Profit before tax 121 87 182Add back:Exceptional items 3 - 30 59Amortisation of acquired intangible assets 7 6 12 ------------- ------------- ------------- Profit before tax, exceptional items and amortisation of acquired intangible assets 128 123 253 ------------- ------------- -------------\* T CONSOLIDATED INTERIM STATEMENT OF RECOGNISED INCOME AND EXPENSE (UNAUDITED) \* T Six months to Six months to Year to 30 September 30 September 31 March 2008 2007 2008 £m £m £m--------------------------------------------------------------- -----------------------------------------Net exchange differences 50 8 57Employee post-employment benefits:- net actuarial (losses)/gains in post-employment benefit plans (1) 71 3- deferred taxation recognised directly in equity (1) (23) (10)Net valuation gains/(losses) on available-for-sale financial assets 19 - (3)Net (losses)/gains on cash flow hedges, net of tax (11) - 1 ------------- ------------- -----------Net profit recognised directly in equity (note 10) 56 56 48Profit for the period 65 139 187 ------------- ------------- -----------Total recognised income and expense for the period 121 195 235 ------------- ------------- ----------- Attributable to:Equity holders of the Company 119 196 242Minority interests 2 (1) (7) ------------- ------------- ----------- 121 195 235 ------------- ------------- -----------\* T CONSOLIDATED INTERIM BALANCE SHEET (UNAUDITED) \* T 30 September 30 September 31 March Notes 2008 2007 2008 £m £m £m----------------------------------------------------------------------------------------------------ASSETSNon-current assetsIntangible assets 321 298 320Property, plant and equipment 1 363 1 123 1 196Investments in associates 7 6 7Available-for-sale financial assets 8 18 15Derivative financial instruments 24 36 36Deferred tax assets 1 - 1Trade and other receivables 15 35 11Retirement benefit surplus 67 77 53 ------------- ------------- ------------ 1 806 1 593 1 639 ------------- ------------- ------------Current assetsInventories 467 437 562Trade and other receivables 691 670 675Current tax assets 7 27 18Derivative financial instruments 162 78 275Cash and cash equivalents 9 259 114 165Assets held for sale 11 205 - - ------------- ------------- ------------ 1 791 1 326 1 695 ------------- ------------- ------------TOTAL ASSETS 3 597 2 919 3 334 ------------- ------------- ------------ SHAREHOLDERS' EQUITYCapital and reserves attributable to the Company's equity holders:Share capital 114 120 114Share premium 404 404 404Capital redemption reserve 8 2 8Other reserves 149 47 91Retained earnings 310 456 317 ------------- ------------- ------------ 985 1 029 934Minority interests 17 29 16 ------------- ------------- ------------TOTAL SHAREHOLDERS' EQUITY 10 1 002 1 058 950 ------------- ------------- ------------ LIABILITIESNon-current liabilitiesTrade and other payables 17 46 27Borrowings 9 926 814 858Derivative financial instruments 43 18 30Deferred tax liabilities 115 97 107Retirement benefit obligations 168 104 144Provisions for other liabilities and charges 25 34 14 ------------- ------------- ------------ 1 294 1 113 1 180 ------------- ------------- ------------ Current liabilitiesTrade and other payables 400 318 488Current tax liabilities 57 63 35Borrowings and bank overdrafts 9 459 156 360Derivative financial instruments 165 132 267Provisions for other liabilities and charges 34 79 54Liabilities held for sale 11 186 - - ------------- ------------- ------------ 1 301 748 1 204 ------------- ------------- ------------TOTAL LIABILITIES 2 595 1 861 2 384 ------------- ------------- ------------TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 3 597 2 919 3 334 ------------- ------------- ------------\* T CONSOLIDATED INTERIM CASH FLOW STATEMENT (UNAUDITED) \* T Six months to Six months Year to 30 September to 30 31 March September Notes 2008 2007 2008 £m £m £m----------------------------------------------------------------------------------------------------Cash flows from operating activitiesProfit before tax 121 87 182Adjustments for: Depreciation and impairment of property, plant andequipment 53 48 100 Non-cash exceptional items - 30 59 Amortisation of intangible assets 9 8 15 Share based payments charge 3 2 7 Finance income 4 (18) (24) (38) Finance expense 4 40 46 80Changes in working capital (58) 38 (159) ------------- ------------ ------------Cash generated from continuing operations 150 235 246 Interest paid (45) (43) (87) Income tax paid (2) (32) (75)Cash inflow/(outflow) from discontinued operations 8 66 57 (84) ------------- ------------ ------------Net cash inflow from operating activities 169 217 - ------------- ------------ ------------ Cash flows from investing activities Proceeds on disposal of property, plant and equipment 1 - 7 Interest received 20 18 53 Purchase of available-for-sale financial assets (3) - (4) Disposal of available-for-sale financial assets 4 - 4 Acquisitions of subsidiaries, net of cash acquired (1) (81) (75) Disposals of subsidiaries, net of cash disposed - 101 341 Disposals of joint ventures, net of cash disposed - - 42 Purchase of property, plant and equipment 12 (112) (133) (264) Purchase of intangible assets and other non- current assets 12 (3) (2) (7) ------------- ------------ ------------Net cash (outflow)/inflow from investing activities (94) (97) 97 ------------- ------------ ------------ Cash flows from financing activities Proceeds from issue of ordinary shares 2 7 8 Repurchase of ordinary shares - (49) (159) Cash inflow/(outflow) from drawdown/(repayment) of borrowings 87 (78) 129 Cash outflow from repayment of capital element offinance leases (1) - (1) Dividends paid to the Company's equity holders 7 (73) (74) (105) Dividends paid to minority interests (1) - (1) ------------- ------------ ------------Net cash inflow/(outflow) from financing activities 14 (194) (129) ------------- ------------ ------------ ------------- ------------ ------------Net increase/(decrease) in cash and cash equivalents 9 89 (74) (32) ------------- ------------ ------------ Cash and cash equivalents: Balance at beginning of period 165 189 189 Effect of changes in foreign exchange rates 5 (1) 8 Net increase/(decrease) in cash and cash equivalents 89 (74) (32) ------------- ------------ ------------ Balance at end of period 9 259 114 165 ------------- ------------ ------------\* T TATE & LYLE PLC NOTES TO INTERIM STATEMENT (UNAUDITED) For the six months to 30 September 2008 1. Presentation of interim financial statements General information The principal activities of Tate & Lyle PLC are the development, manufacture andmarketing of food and industrial ingredients that have been made from renewableresources. The Group has more than 50 production facilities mainly in Europe,the Americas and South East Asia. It operates through its subsidiary companiesand numerous partnerships and joint ventures. The Company is a public limited company incorporated and domiciled in the UnitedKingdom. The address of its registered office is Sugar Quay, Lower ThamesStreet, London EC3R 6DQ. The Company has its primary listing on the London StockExchange. Basis of preparation This condensed consolidated interim financial information for the six monthsended 30 September 2008 has been prepared in accordance with the Disclosure andTransparency Rules of the Financial Services Authority and with IAS 34, 'InterimFinancial Reporting' as adopted by the European Union. The interim condensedconsolidated financial information has been prepared applying the accountingpolicies that have applied in the preparation of the annual financial statementsfor the year ended 31 March 2008. It should be read in conjunction with theannual financial statements for the year ended 31 March 2008. The financial information for the year ended 31 March 2008 is derived from thestatutory financial statements for that year except that the results ofinternational Sugar Trading have been reclassified as discontinued. The resultsof international Sugar Trading and Occidente have been reclassified asdiscontinued in the financial information for the six months ended 30 September2007. Statutory financial statements The financial information presented here does not represent statutory financialstatements as defined in the Companies Act 1985. The Group's statutory financialstatements for the year to 31 March 2008 were prepared under InternationalFinancial Reporting Standards as adopted by the European Union and have beenfiled with the Registrar of Companies. The auditors, PricewaterhouseCoopers LLP,reported on those accounts and their report was unqualified, did not include areference to any matters to which the auditors drew attention by way of emphasiswithout qualifying their report, and did not contain a statement under section237(2) or (3) of the Companies Act 1985. Use of adjusted measures Tate & Lyle presents adjusted operating profit, profit before tax and earningsper share information. These measures are used by Tate & Lyle for internalperformance analysis and incentive compensation arrangements for employees. Theterms 'adjusted' and 'exceptional items' are not defined terms under IFRS andmay therefore not be comparable with similarly titled measures reported by othercompanies. They are not intended to be a substitute for, or superior to, GAAPmeasurements of profit. The term 'adjusted' refers to the relevant measure beingreported excluding exceptional items and amortisation of intangible assetsarising on acquisition of businesses. A reconciliation to reported informationis provided in note 17. Seasonality The Group's principal exposure to seasonality is in relation to working capital.The Group's inventories are subject to seasonal fluctuations reflecting cropharvesting and purchases. Inventory levels typically increase progressively fromSeptember to November and gradually reduce in the first six months of thecalendar year. 2. Segment information Discontinued operations comprise international Sugar Trading, Eastern Sugar,Redpath, Occidente, and the disposed of European starch plants (see note 8). The segment results for the six months to 30 September 2008 were as follows: \* T Continuing operations ------------------------------------------------------------------ Food & Food & Industrial Industrial Discontinued Ingredients, Ingredients, Central operations Americas Europe Sugars Sucralose costs Total (note 8) Total £m £m £m £m £m £m £m £m------------------------------------------------------------------------------------------------------------------SalesTotal sales 814 293 517 78 - 1 702 433 2 135Inter-segment sales (3) (1) - - - (4) (9) (13) ------------ ------------ -------- --------- -------- ------- ------------ --------External sales 811 292 517 78 - 1 698 424 2 122 ------------ ------------ -------- --------- -------- ------- ------------ -------- Operating profit/(loss)Before exceptional items and amortisation of acquired intangible assets 109 19 7 30 (15) 150 3 153Exceptional items (note 3) - - - - - - (22) (22)Amortisation of acquired intangible assets (1) (4) - (2) - (7) - (7) ------------ ------------ -------- --------- -------- ------- ------------ --------Operating profit/(loss) 108 15 7 28 (15) 143 (19) 124 ------------ ------------ -------- --------- --------Net finance(expense)/income (22) 1 (21) ------- ------------ --------Profit/(loss) before tax 121 (18) 103 ------- ------------ --------\* T The segment results for the six months to 30 September 2007 were as follows: \* T Continuing operations ------------------------------------------------------------------ Food & Food & Industrial Industrial Discontinued Ingredients, Ingredients, Central operations Americas Europe Sugars Sucralose costs Total (note 8) Total £m £m £m £m £m £m £m £m-------------------------------------------------------------------------------------------------------------------SalesTotal sales 672 215 423 70 - 1 380 688 2 068Inter-segment sales (1) (7) (13) - - (21) (41) (62) ------------ ------------ -------- --------- -------- ------- ------------ ---------External sales 671 208 410 70 - 1 359 647 2 006 ------------ ------------ -------- --------- -------- ------- ------------ --------- Operating profitBefore exceptional items and amortisation of acquired intangible assets 84 26 17 32 (14) 145 40 185Exceptional items (note 3) - (30) - - - (30) 60 30Amortisation of acquired intangible assets (2) (2) - (2) - (6) - (6) ------------ ------------ -------- --------- -------- ------- ------------ ---------Operating profit 82 (6) 17 30 (14) 109 100 209 ------------ ------------ -------- --------- --------Net finance expense (22) - (22) ------- ------------ ---------Profit before tax 87 100 187 ------- ------------ ---------\* T The segment results for the year to 31 March 2008 were as follows: \* T Continuing operations ----------------------------------------------------------------- Food & Food & Industrial Industrial Discontinued Ingredients, Ingredients, Central operations Americas Europe Sugars Sucralose costs Total (note 8) Total £m £m £m £m £m £m £m £m-----------------------------------------------------------------------------------------------------------------SalesTotal sales 1 390 470 888 148 - 2 896 1 002 3 898Inter-segment sales (4) (9) (16) - - (29) (51) (80) ------------ ------------ -------- --------- ------- ------- ------------ ---------External sales 1 386 461 872 148 - 2 867 951 3 818 ------------ ------------ -------- --------- ------- ------- ------------ --------- Operating profitBefore exceptional items and amortisation ofacquired intangible assets 186 41 33 66 (31) 295 36 331Exceptional items (note 3) (12) (47) - - - (59) 60 1Amortisation of acquired intangible assets (3) (5) - (4) - (12) - (12) ------------ ------------ -------- --------- ------- ------- ------------ ---------Operating profit 171 (11) 33 62 (31) 224 96 320 ------------ ------------ -------- --------- -------Net finance(expense)/income (42) 1 (41) ------- ------------ ---------Profit before tax 182 97 279 ------- ------------ ---------\* T 3. Exceptional items \* T Six months to Six months to Year to 30 September 30 September 31 March 2008 2007 2008 £m £m £m------------------------------------------------------------------------------------------------------ContinuingRestructuring costs (a) - (30) (30)Impairment and closure costs (b) - - (29) ------------- ------------- ------------ - (30) (59) ------------- ------------- ------------DiscontinuedInternational Sugar Trading (c) (22) - -European starch plants (a) - 1 (8)Redpath (d) - 59 60Occidente (d) - - 8 ------------- ------------- ------------ (22) 60 60 ------------- ------------- ------------\* T (a) In the year to 31 March 2008, the overall net loss on disposal of theEuropean starch plants in France, Belgium, Italy, Spain and the UK was £38million, comprising £30 million of redundancy and other restructuring costswithin continuing operations, and a net loss of £8 million in discontinuedoperations (comprising £7 million profit on disposal offset by goodwill writtenoff of £15 million). The restructuring costs resulted from the significantreduction in central support functions required by the retained Food &Industrial Ingredients, Europe business. The overall net loss in the six monthsended 30 September 2007 was based on the initial assessment of the costs ofdisposal. (b) Following a review of the global citric acid business in the year to 31March 2008, an impairment charge of £12 million relating to property, plant andequipment was recognised. The citric acid business is reported in the Food &Industrial Ingredients, Americas segment. The Group also recognised an impairment charge of £17 million on its monosodiumglutamate business in China in the year to 31 March 2008. £10 million of thisimpairment related to minority interests. This business is reported in the Food& Industrial Ingredients, Europe segment. (c) During the period the Group recorded a loss of £22 million in relation tothe disposal of its international Sugar Trading business (note 8). This businesswas previously reported in the Sugars segment. (d) In the year to 31 March 2008 the Group disposed of its shareholding of Tate& Lyle Canada Limited (Redpath) and its Mexican cane sugar business, Occidente,resulting in profits on disposal of £60 million and £8 million respectively.Both businesses were previously reported in the Sugars segment. The profit onthe disposal of Redpath in the six months ended 30 September 2007 of £59 millionwas booked on the initial assessment of the proceeds of disposal. There was no tax impact on exceptional items for the six months to 30 September2008 and 2007. In the year to 31 March 2008 the tax impact on continuing netexceptional items was a £5 million credit and on total net exceptional items wasa £3 million charge. Tax credits on exceptional items are only recognised to theextent that they are expected to be recoverable in the future. 4. Finance income and finance expense \* T Six months to Six months to Year to 30 September 30 September 31 March 2008 2007 2008Continuing £m £m £m-----------------------------------------------------------------------------------------------------Finance incomeInterest receivable 18 22 34Net finance income/(cost) arising on defined benefit retirement schemes:- interest cost - (34) (67)- expected return on plan assets - 36 71 ------------- ------------- ------------Total finance income 18 24 38 ------------- ------------- ------------ Finance expenseInterest payable on bank and other borrowings (38) (43) (75)Net finance (cost)/income arising on defined benefit retirement schemes: - interest cost (38) - - - expected return on plan assets 37 - -Unwinding of discounts in provisions - (1) (1)Finance lease charges (2) (1) (3)Fair value (loss)/gain on interest-related derivative instruments: - Interest rate swaps - fair value hedges (3) (1) 16 - Derivatives not designated as hedges 1 - 1Fair value adjustment of borrowings attributable to interest rate risk 3 - (18) ------------- ------------- ------------Total finance expense (40) (46) (80) ------------- ------------- ------------ Net finance expense (22) (22) (42) ------------- ------------- ------------\* T Discontinued Included within profit for the six months in relation to discontinued operations(note 8) is net finance income of £1 million (30 September 2007 - nil; 31 March2008 - £1 million). 5. Income tax expense \* T Six months to Six months to Year to 30 September 30 September 31 March 2008 2007 2008Continuing £m £m £m-----------------------------------------------------------------------------------------------------Current taxIn respect of the current period - UK taxation - - - - Overseas taxation 29 39 87Adjustments in respect of previous years 5 - (4) ------------- ------------- ------------ 34 39 83Deferred tax 3 1 (7) ------------- ------------- ------------Income tax expense 37 40 76 ------------- ------------- ------------\* T \* T Six months to Six months to Year to 30 September 30 September 31 March 2008 2007 2008Discontinued £m £m £m-----------------------------------------------------------------------------------------------------Current tax - UK taxation - - - - Overseas taxation 1 8 13 ------------- ------------- ------------ 1 8 13Deferred tax - - 3 ------------- ------------- ------------Income tax expense 1 8 16 ------------- ------------- ------------\* T 6. Earnings per share Basic Basic earnings per share is calculated by dividing the profit attributable toequity holders of the Company by the weighted average number of ordinary sharesin issue during the period, excluding ordinary shares purchased by the Companyand held in the employee share ownership trust or in treasury. \* T Six months to 30 September 2008 Six months to 30 September 2007 ------------------------------------ ------------------------------------- Continuing Discontinued Continuing Discontinued operations operations Total operations operations Total------------------------------------------------------------------------------------------------------------------Profit/(loss) attributable to equity holders of the Company (£million) 83 (19) 64 46 92 138Weighted average number of ordinary shares in issue (millions) 456.2 456.2 456.2 483.9 483.9 483.9Basic earnings/(loss) per share 18.1p (4.0)p 14.1p 9.5p 19.0p 28.5p ----------- ------------ --------- ------------ ------------ ---------\* T \* T Year to 31 March 2008 ------------------------------------- Continuing Discontinued operations operations Total--------------------------------------------------------------------------Profit attributable to equity holders of the Company (£million) 113 81 194Weighted average number of ordinary shares in issue (millions) 474.7 474.7 474.7Basic earnings per share 23.8p 17.1p 40.9p ---------- ------------- ----------\* T Diluted Diluted earnings per share is calculated by adjusting the weighted averagenumber of ordinary shares outstanding to assume conversion of all potentialdilutive ordinary shares. Potential dilutive ordinary shares arise from shareoption and award plans. For these, a calculation is performed to determine thenumber of shares that could have been acquired at fair value (determined as theannual average market share price of the Company's shares) based on the monetaryvalue of the subscription rights attached to outstanding share options. \* T Six months to 30 September 2008 Six months to 30 September 2007 -------------------------------------- -------------------------------------- Continuing Discontinued Continuing Discontinued operations operations Total operations operations Total------------------------------------ --------------------------------------------------------------------------------Profit/(loss) attributable to equity holders of the Company (£million) 83 (19) 64 46 92 138Weighted average number of diluted shares in issue (millions) 459.4 459.4 459.4 493.9 493.9 493.9Diluted earnings/(loss) per share 18.0p (4.0)p 14.0p 9.3p 18.6p 27.9p ----------- ------------ ----------- ----------- ------------- ----------\* T \* T Year to 31 March 2008 ------------------------------------ Continuing Discontinued operations operations Total------------------------------------ ------------------------------------Profit attributable to equity holders of the Company (£million) 113 81 194Weighted average number of diluted shares in issue (millions) 480.4 480.4 480.4Diluted earnings per share 23.6p 16.8p 40.4p ---------- ------------ ----------\* T The adjustment for the dilutive effect of share options at 30 September 2008 was3.2 million (30 September 2007 - 10.0 million; 31 March 2008 - 5.7 million). Adjusted earnings per share Adjusted earnings per share is stated excluding exceptional items andamortisation of acquired intangible assets, as follows: \* TContinuing Operations Six months to Six months to Year to 30 September 30 September 31 March 2008 2007 2008-----------------------------------------------------------------------------------------------------Profit attributable to equity holders of the Company (£million) 83 46 113Adjustments for:- exceptional items (note 3)- amortisation of acquired intangible assets - 30 59- tax effect on the above adjustments and exceptional tax 7 6 12 items (2) - (8)- minority interest share of exceptional items - - (10) ------------- ------------- ------------Adjusted profit (£million) 88 82 166 ------------- ------------- ------------ Adjusted basic earnings per share from continuing operations 19.2p 16.9p 35.0pAdjusted diluted earnings per share from continuing operations 19.1p 16.6p 34.6p ------------- ------------- ------------\* T 7. Dividends The Directors have declared an interim dividend of £31 million out of the profitfor the six months to 30 September 2008 (30 September 2007 - £31 million),representing 6.8p per share (30 September 2007 - 6.5p), payable on 9 January2009. The final dividend for the year to 31 March 2008 of £73 million,representing 16.1p per share, was paid during the six months to 30 September2008. 8. Discontinued operations On 2 July 2008, the Group reached an agreement for the sale of its internationalSugar Trading operations to Bunge Limited. Accordingly, the results of theinternational Sugar Trading operations are presented as discontinued operationsfor the periods ended 30 September 2008 and 30 September 2007 and for the yearended 31 March 2008. Under the agreement, the Group will manage the workingcapital of the business until 31 March 2009, when the balance will be assumed byBunge. Accordingly, the related assets and liabilities were classified as heldfor sale at 30 September 2008 (note 11). As previously reported, as a result of the new EU Sugar Regime, the Group'sEastern Sugar joint venture ceased processing beets by March 2007 and renouncedits sugar quotas in Hungary, Czech Republic and Slovakia in return forRestructuring Aid. Accordingly, the results of Eastern Sugar are presented asdiscontinued operations for the periods ended 30 September 2008, 30 September2007 and the year ended 31 March 2008. On 22 April 2007, the Group completed the sale of Tate & Lyle Canada Limited(Redpath) to American Sugar Refining, Inc. Accordingly, the results of Redpathare presented as discontinued operations for the period ended 30 September 2007and for the year ended 31 March 2008. On 1 October 2007, the Group completed the sale to Syral SAS (a subsidiary ofTereos of France) of its starch facilities, which formed part of the Food &Industrial Ingredients, Europe segment, in the UK, Belgium, France, Spain andItaly (together "the European starch plants"). Accordingly, the results of theEuropean starch plants that have been disposed of are presented as discontinuedoperations for the period ended 30 September 2007 and for the year ended 31March 2008. On 28 December 2007, the Group disposed of its 49% indirect shareholding inOccidente to ED&F Man Holdings Limited. Accordingly, the results of Occidenteare presented as discontinued operations for the period ended 30 September 2007and the year ended 31 March 2008. The results of international Sugar Trading, Eastern Sugar, Redpath and Occidentewere previously reported in the Sugars segment. The disposed of European starchplants were previously reported as part of the Food & Industrial Ingredients,Europe segment. \* T Six months to 30 September 2008 ------------------------------------------- International Sugar Eastern Trading Sugar Total £m £m £m----------------------------------------------------------- -------------- --------------Sales 424 - 424 ------------- -------------- -------------- Operating profit before exceptional items 1 2 3Exceptional items (note 3) (22) - (22) ------------- -------------- --------------Operating (loss)/profit (21) 2 (19)Finance income - 1 1 ------------- -------------- --------------(Loss)/profit before tax from discontinued operations (21) 3 (18)Income tax expense (note 5) - (1) (1) ------------- -------------- --------------(Loss)/profit for the period from discontinued operations (21) 2 (19) ------------- -------------- --------------\* T In calculating the loss on disposal of the international Sugar Tradingoperations at 30 September 2008, the Group has made provisions in respect of thecommercial premium transferred and the costs of running down certain contractualarrangements. A small number of minority interests related to the sugar tradingbusiness were not included in the sale and are being addressed separately inaccordance with the related shareholders' agreements. The sale of theinternational Sugar Trading business and the anticipated disposal of theminority interests are together unlikely to generate a material profit or losson disposal. The sales of some of the minority interests, with associatedprofits, are expected to occur in the 2010 financial year; the appropriate gainshave been recognised in the period through the statement of recognised incomeand expense. \* T Six months to 30 September 2007 ---------------------------------------------------------------- Internat'l European Sugar Eastern Starch Trading Sugar Redpath Plants Occidente Total £m £m £m £m £m £m------------------------------------------------------- ---------- ---------- ---------- ---------- ---------Sales 275 25 11 308 28 647 ---------- ---------- ---------- ---------- ---------- --------- Operating (loss)/profit before exceptional items (6) 5 - 38 3 40Exceptional items (note 3) - - 59 1 - 60 ---------- ---------- ---------- ---------- ---------- ---------Operating (loss)/profit (6) 5 59 39 3 100Finance income - 1 - - - 1Finance expense - - - (1) - (1) ---------- ---------- ---------- ---------- ---------- ---------(Loss)/profit before tax from discontinued operations (6) 6 59 38 3 100Income tax expense (note 5) - - - (7) (1) (8) ---------- ---------- ---------- ---------- ---------- ---------(Loss)/profit for the year from discontinued operations (6) 6 59 31 2 92 ---------- ---------- ---------- ---------- ---------- ---------\* T \* T Year to 31 March 2008 ---------------------------------------------------------------- Internat'l European Sugar Eastern Starch Trading Sugar Redpath Plants Occidente Total £m £m £m £m £m £m------------------------------------------------------- --------- ----------- ----------- ----------- -------Sales 557 31 11 308 44 951 ---------- --------- ----------- ----------- ----------- ------- Operating (loss)/profit before exceptional items (9) 5 - 38 2 36Exceptional items (note 3) - - 60 (8) 8 60 ---------- --------- ----------- ----------- ----------- -------Operating (loss)/profit (9) 5 60 30 10 96Finance income - 2 - - 1 3Finance expense - - - (1) (1) (2) ---------- --------- ----------- ----------- ----------- -------(Loss)/profit before tax from discontinued operations (9) 7 60 29 10 97Income tax expense (note 5) - (1) - (7) (8) (16) ---------- --------- ----------- ----------- ----------- -------(Loss)/profit for the year from discontinued operations (9) 6 60 22 2 81 ---------- --------- ----------- ----------- ----------- -------\* T Net cash flows from discontinued operations are as follows: \* T Six months to 30 September 2008 Internat'l Sugar Eastern Trading Sugar Total £m £m £m------------------------------------------------- ---------- ---------- Net cash inflow from operating activities 46 20 66 ----------- ---------- ----------\* T \* T Six months to 30 September 2007 --------------------------------------------------------------------- Internat'l European Sugar Eastern Starch Trading Sugar Redpath Plants Occidente Total £m £m £m £m £m £m------------------------------------------------- ---------- ---------- ---------- ---------- ------------- Net cash inflow/(outflow) from operating activities 27 27 (8) 8 3 57Net cash outflow from investing activities - - - (23) (1) (24) ----------- ---------- ---------- ---------- ---------- -------------\* T \* T Year to 31 March 2008 --------------------------------------------------------------------- Internat'l European Sugar Eastern Starch Trading Sugar Redpath Plants Occidente Total £m £m £m £m £m £m------------------------------------------------- ---------- ---------- ---------- ---------- ------------- Net cash (outflow)/inflow from operating activities (120) 22 (8) 22 - (84)Net cash (outflow)/inflow from investing activities (9) 1 - (23) (2) (33) ----------- ---------- ---------- ---------- ---------- -------------\* T 9. Net debt The components of the Group's net debt profile are as follows: \* T 30 September 30 September 31 March 2008 2007 2008 £m £m £mNon-current borrowings (926) (814) (858)Current borrowings and overdrafts (1) (459) (156) (360)Debt-related derivative instruments (2) (2) 16 12Cash and cash equivalents 259 114 165 -------------- -------------- ------------Net debt (1 128) (840) (1 041) -------------- -------------- ------------\* T Movements in the Group's net debt profile are as follows: \* T Six months to Six months to Year to 30 September 30 September 31 March 2008 2007 2008 £m £m £m-----------------------------------------------------------------------------------------------------Balance at beginning of period (1 041) (900) (900)Increase/(decrease) in cash and cash equivalents in the period 89 (74) (32)(Proceeds from)/repayments of borrowings (86) 78 (128)Borrowings arising on acquisitions - - (2)Debt transferred on disposal of subsidiaries - 43 55Inception of finance leases - - (2)Exchange differences (90) 13 (32) -------------- -------------- ------------(Increase)/decrease in net debt in the period (87) 60 (141) -------------- -------------- ------------Balance at end of period (1 128) (840) (1 041) -------------- -------------- ------------\* T (1) Current borrowings and overdrafts at 30 September 2008 include £70 million(30 September 2007 - £49 million, 31 March 2008 - £50 million) in respect ofsecuritised receivables. (2) Derivative financial instruments presented within assets and liabilities inthe balance sheet of £22 million net liability (30 September 2007 - £36 millionnet liability; 31 March 2008 - £14 million net asset) comprise net debt-relatedinstruments of £2 million liability (30 September 2007 - £16 million asset; 31March 2008 - £12 million asset) and non debt-related instruments of £20 millionliability (30 September 2007 - £52 million liability; 31 March 2008 - £2 millionasset). 10. Consolidated statement of changes in shareholders' equity \* T Share Attributable capital Capital Other Retained to the Minority Total and redemption reserves earnings equity interests equity premium holders of the Company £m £m £m £m £m £m £m----------------------------------------- ------------ --------- --------- ------------ ---------- --------Balance at 1 April 2008 518 8 91 317 934 16 950Net profit/(loss) recognised directly in equity - - 58 (3) 55 1 56Profit for the period - - - 64 64 1 65Share-based payments charge,including tax - - - 3 3 - 3Proceeds from shares issued - - - 2 2 - 2Dividends paid - - - (73) (73) (1) (74) ---------- ------------ --------- --------- ------------ ---------- --------Balance at 30 September 2008 518 8 149 310 985 17 1 002 ---------- ------------ --------- --------- ------------ ---------- --------\* T \* T Share Attributable capital Capital Other Retained to the Minority Total and redemption reserves earnings equity interests equity premium holders of the Company £m £m £m £m £m £m £m----------------------------------------- ------------ --------- --------- ------------ ---------- --------Balance at 1 April 2007 525 - 50 385 960 35 995Net profit/(loss) recognised directlyin equity - - 10 48 58 (2) 56Profit for the period - - - 138 138 1 139Share-based payments, including tax - - - 2 2 - 2Proceeds from shares issued 1 - - 6 7 - 7Exchange differences transferred toincome on disposal - - (13) - (13) - (13)Share buybacks (2) 2 - (49) (49) - (49)Dividends paid - - - (74) (74) - (74)Minority interest acquired - - - - - (5) (5) ---------- ------------ --------- --------- ------------ ---------- --------Balance at 30 September 2007 524 2 47 456 1 029 29 1 058 ---------- ------------ --------- --------- ------------ ---------- --------\* T 11. Assets and liabilities classified as held for sale On 2 July 2008 the Group announced the sale of its international Sugar Tradingoperations to Bunge Limited. The first stage of the sale was completed on 2 July2008 when the operations and employees were transferred to Bunge Limited. Thenet exceptional charge relating to the first stage is £22 million. The working capital in the business will remain with, and be collected and paidby, the Group through to 31 March 2009 at which point it will be assumed byBunge upon final completion of the transaction. Assets and liabilities as at 30 September 2008 are shown as held for sale asfollows: \* T £m------------------------------------------------------------------------------- ----------------AssetsInventories 39Trade and other receivables 88Derivative financial instruments 50Available-for-sale financial assets 28------------------------------------------------------------------------------- ----------------Total assets held for sale 205------------------------------------------------------------------------------- ---------------- LiabilitiesTrade and other payables 87Derivative financial instruments 99------------------------------------------------------------------------------- ----------------Total liabilities held for sale 186------------------------------------------------------------------------------- ----------------\* T 12. Capital expenditure In the six months to 30 September 2008, there were additions to intangibleassets of £3 million (2007 - £2 million) and additions to property, plant andequipment of £112 million (2007 - £133 million). There were no materialdisposals of property, plant and equipment during the period (2007 - £nilmillion). \* T 30 September 30 September 31 March 2008 2007 2008 £m £m £m-----------------------------------------------------------------------------------------------------Commitments for the acquisition of property, plant and equipment 44 87 69\* T 13. Contingent liabilities There have been no material changes to the Group's contingent liabilities since31 March 2008. 14. Related party disclosures The Group's significant related parties are its associates and joint ventures asdisclosed in the Tate & Lyle Annual Report for the year ended 31 March 2008.There were no material differences in related parties or related partytransactions in the period or prior period. 15. Post balance sheet events There are no post balance sheet events requiring disclosure. 16. Foreign exchange rates The following exchange rates have been applied in the translation of thefinancial statements of the Group's principal overseas operations: \* T Six months to Six months to Year to 30 September 30 September 31 MarchAverage exchange rates 2008 2007 2008----------------------------------------------------------------------------------------------------US Dollar £1 = $ 1.93 2.00 2.01Euro £1 = 1 EUR 1.26 1.47 1.42\* T \* T 30 September 30 September 31 MarchPeriod end exchange rates 2008 2007 2008----------------------------------------------------------------------------------------------------US Dollar £1 = $ 1.78 2.03 1.99Euro £1 = 1 EUR 1.26 1.43 1.26\* T 17. Reconciliation of adjusted financial information Adjusted information is presented as it provides both management and investorswith valuable additional information on the performance of the business. Thefollowing items are excluded from adjusted information: -- Discontinued operations; -- Exceptional items including profits/losses on disposal of businesses and impairments; and -- Amortisation of acquired intangibles. The following table shows the reconciliation of the statutory informationpresented in the income statement to the adjusted information: \* T Six months to 30 September Six months to 30 September 2008 2007 ------------------------------ ------------------------------ Exceptional/ Exceptional/ Reported amortisation Adjusted Reported amortisation Adjusted £m £m £m £m £m £m------------------------------------------------------------------- ------------ ----------------- ------------ --------Continuing operationsSales 1 698 - 1 698 1 359 - 1 359 -------- ------------ -------- -------- ------------ --------Operating profit 143 7 150 109 36 145Net finance expense (22) - (22) (22) - (22) -------- ------------ -------- -------- ------------ --------Profit before tax 121 7 128 87 36 123Income tax expense (37) (2) (39) (40) - (40)Minority interest (1) - (1) (1) - (1) -------- ------------ -------- -------- ------------ --------Profit attributable to equity shareholders of the Company 83 5 88 46 36 82 -------- ------------ -------- -------- ------------ -------- Basic earnings per share (pence) 18.1 1.1 19.2 9.5 7.4 16.9Diluted earnings per share (pence) 18.0 1.1 19.1 9.3 7.3 16.6 Tax rate 30.7% 30.4% 46.0% 32.5% Discontinued operationsSales 424 - 424 647 - 647 -------- ------------ ----------------- ------------ --------Operating profit/(loss) (19) 22 3 100 (60) 40Net finance income 1 - 1 - - - -------- ------------ ----------------- ------------ --------Profit before tax (18) 22 4 100 (60) 40Income tax expense (1) - (1) (8) - (8)Minority interest - - - - - - -------- ------------ ----------------- ------------ --------Profit attributable to equity shareholders of the Company (19) 22 3 92 (60) 32 -------- ------------ ----------------- ------------ -------- Basic (loss)/earnings per share (pence) (4.0) 4.8 0.8 19.0 (12.3) 6.7Diluted (loss)/earnings per share (pence) (4.0) 4.8 0.8 18.6 (12.1) 6.5 Tax rate (2.8)% 12.5% 8.0% 20.0% Total operationsSales 2 122 - 2 122 2 006 - 2 006 -------- ------------ ----------------- ------------ --------Operating profit/(loss) 124 29 153 209 (24) 185Net finance expense (21) - (21) (22) - (22) -------- ------------ ----------------- ------------ --------Profit before tax 103 29 132 187 (24) 163Income tax expense (38) (2) (40) (48) - (48)Minority interest (1) - (1) (1) - (1) -------- ------------ ----------------- ------------ --------Profit attributable to equity shareholders of the Company 64 27 91 138 (24) 114 -------- ------------ ----------------- ------------ -------- Basic earnings/(loss) per share (pence) 14.1 5.9 20.0 28.5 (4.9) 23.6Diluted earnings/(loss) per share (pence) 14.0 5.9 19.9 27.9 (4.8) 23.1 Tax rate 36.5% 29.8% 25.7% 29.4%\* T ADDITIONAL INFORMATION (UNAUDITED) For the six months to 30 September 2008 Additional Information (i) Adjusted operating profit margin analysis (ii) Ratio analysis (i) Adjusted operating profit margin analysis \* T Six months to 30 September 2008 Six months to 30 September 2007 ----------------------------------- ---------------------------------- Primary Value added Total Primary Value added Total £m £m £m £m £m £m------------------------------------------- ------------ ----------------------- ------------ -----------Sales --------- ------------ ------------ --------- ------------ -----------Food & Industrial Ingredients, Americas - Food 388 164 552 323 146 469 - Industrial 180 79 259 136 66 202 --------- ------------ ------------ --------- ------------ ----------- 568 243 811 459 212 671 --------- ------------ ------------ --------- ------------ -----------Food & Industrial Ingredients, Europe - Food 98 104 202 81 64 145 - Industrial 90 - 90 63 - 63 --------- ------------ ------------ --------- ------------ ----------- 188 104 292 144 64 208 --------- ------------ ------------ --------- ------------ -----------Sugars - Products 352 33 385 290 36 326 - Molasses 132 - 132 84 - 84 --------- ------------ ------------ --------- ------------ ----------- 484 33 517 374 36 410 --------- ------------ ------------ --------- ------------ -----------Sucralose - 78 78 - 70 70 --------- ------------ ------------ --------- ------------ -----------Total 1 240 458 1 698 977 382 1 359 --------- ------------ ------------ --------- ------------ ----------- Operating profit --------- ------------ ------------ --------- ------------ -----------Food & Industrial Ingredients, Americas - Food 48 46 94 32 38 70 - Industrial 13 2 15 16 (2) 14 --------- ------------ ------------ --------- ------------ ----------- 61 48 109 48 36 84 --------- ------------ ------------ --------- ------------ -----------Food & Industrial Ingredients, Europe - Food 4 13 17 13 8 21 - Industrial 2 - 2 5 - 5 --------- ------------ ------------ --------- ------------ ----------- 6 13 19 18 8 26 --------- ------------ ------------ --------- ------------ -----------Sugars - Products (6) 3 (3) 9 3 12 - Molasses 10 - 10 5 - 5 --------- ------------ ------------ --------- ------------ ----------- 4 3 7 14 3 17 --------- ------------ ------------ --------- ------------ -----------Sucralose - 30 30 - 32 32 --------- ------------ ------------ --------- ------------ -----------Total 71 94 165 80 79 159 --------- ------------ --------- ------------Central costs (15) (14) ------------ -----------Adjusted operating profit 150 145 ------------ ----------- Operating margin --------- ------------ ------------ --------- ------------ -----------Food & Industrial Ingredients, Americas - Food 12.4% 28.0% 17.0% 9.9% 26.0% 14.9% - Industrial 7.2% 2.5% 5.8% 11.8% (3.0)% 6.9% 10.7% 19.8% 13.4% 10.5% 17.0% 12.5% --------- ------------ ------------ --------- ------------ -----------Food & Industrial Ingredients, Europe - Food 4.1% 12.5% 8.4% 16.0% 12.5% 14.5% - Industrial 2.2% - 2.2% 7.9% - 7.9% 3.2% 12.5% 6.5% 12.5% 12.5% 12.5% --------- ------------ ------------ --------- ------------ -----------Sugars - Products (1.7)% 9.1% (0.8)% 3.1% 8.3% 3.7% - Molasses 7.6% - 7.6% 6.0% - 6.0% 0.8% 9.1% 1.4% 3.7% 8.3% 4.1% --------- ------------ ------------ --------- ------------ -----------Sucralose - 38.5% 38.5% - 45.7% 45.7% --------- ------------ ------------ --------- ------------ -----------Margin before central costs 5.7% 20.5% 9.7% 8.2% 20.7% 11.7% --------- ------------ --------- ------------Margin after central costs 8.8% 10.7% ------------ -----------\* T (ii) Ratio analysis (a) \* T Six months to Six months to Year to 30 September 30 September 31 March 2008 2007 2008----------------------------------------------------------------------------------------------- Net debt to EBITDA (b) = Net debt 1 128 840 1 041-------------------------------------------------------------- --------------- ------------- Annualised pre-exceptional EBITDA (2 x 208) (2 x 241) 442 = 2.7 times = 1.7 times = 2.4 times Gearing = Net debt 1 128 840 1 041-------------------------------------------------------------- --------------- ------------- Total net assets 1 002 1 058 950 = 113% = 79% = 110% Interest cover = Operating profit before amortisation of acquired intangibles and exceptional itemsNet interest and finance expense----------------------------------------------------------------------------------------------- 153 185 331 --------------- -------------- -------------- 21 22 41 = 7.3 times = 8.4 times = 8.1 times Return on Net Operating Assets = Annualised profit before interest, tax and exceptional items----------------------------------------------------------------- Average net operating assets (2 x 146) (2 x 179) 319 --------------- -------------- -------------- 2 204 2 013 2 054 = 13.2% = 17.8% = 15.5% Net operating assets are calculated as:Total net assets 1 002 1 058 950Add back net borrowings (see note 9) 1 128 840 1 041Add back net tax liabilities 164 133 123 --------------- -------------- --------------Net operating assets 2 294 2 031 2 114 --------------- -------------- -------------- Average net operating assets 2 204 2 013 2 054 --------------- -------------- --------------\* T (a) Ratios are based on financial information from total operations. (b) Includes depreciation and amortisation related to discontinued operations of£nil million (30 September 2007 - £6 million, 31 March 2008 - £8 million). Copyright Business Wire 2008