It has been a high point in my business career to have resumed the chairmanship - after a two-year secondment on government service - at a dramatic moment in the life of the Company and to have been involved in the presentation of the maiden results of South African Breweries plc ("SAB plc").

I am delighted to report that the Group delivered a strong underlying profit performance in the face of difficult trading conditions.

Restructuring
On 4 December 1998 the Board of The South African Breweries Limited ("SAB Ltd") announced its intention to restructure and to transfer, inter alia, the core beverage, hotel and gaming businesses to SAB plc in order to obtain a primary listing of SAB plc on the London Stock Exchange ("LSE") and a listing on the Johannesburg Stock Exchange.

In the context of the Group's continuing international development plans, the Board had concluded that improved access to international capital markets - by way of a primary listing on the LSE for SAB plc - and the support of a widespread international investor base were crucial prerequisites for the Group to fund international growth opportunities.

These plans were successfully realised in March of this year, together with the raising of new capital of £200 million (US$322 million) for SAB plc through an international share placement.

Resilient results In difficult markets
The year's financial results represent a satisfactory outcome against the background of a challenging economic environment, which included the emerging markets turmoil of 1998. Underlying operating performance has been commendable across the Group. During the year SAB plc produced 70 million hectolitres of beer and other beverages, up 11 per cent in total, and the core businesses overall gained market share and improved operating margins.

The South African rand came under pressure during 1998 and earnings per share, expressed in US dollars, declined 5 per cent. However, underlying operating profit before exceptionals, when stated in rands, was up by a healthy 25 per cent.

Dividend policy
In SAB plc's listing particulars dated 1 March 1999, the directors stated their intention to adopt a new dividend policy. This would take account of the Group's underlying performance; the opportunities for the profitable investment of retained profits; and would maintain an appropriate level of dividend cover, considering, among other factors, the level of dividend cover generally maintained by FT-SE All-Share companies and the Group's peers in the international alcoholic beverages sector.

In the light of these statements, and having regard to the level of dividends paid by SAB Ltd in the past, the directors have determined to move the dividend cover - in the medium term - from the prior year's approximately 1.8 times, to a range of 2.2 to 2.5.

Appreciation
The results of the past financial year are a measure of the commitment and dedication of all SAB's people. I express my sincere appreciation and congratulations to Graham Mackay, his senior executive colleagues, management and staff for their achievement.

It is unfortunate that the restructuring of the Group caused the departure of long-standing and valued colleagues. My deep appreciation goes to the directors who made their mark on the previous SAB Ltd main board.

It is a pleasure to welcome a number of directors, not previously associated with the Group, to the Board of SAB plc: Hugh Collum as chairman of the audit committee, Lord Renwick as chairman of the remuneration and nomination committees, Sir Robert Fellowes, Miles Morland, Hank Slack and Conrad Strauss as non-executive directors. I personally consider it a tribute to the stature of SAB plc that it has succeeded in attracting directors of such singular calibre. Their extensive combined business experience will be of significant value to the Group as it moves forward.