11. Earnings per share

Bottling AppletiseBrewery scenePilsener beer
 
 
2004
US cents
2003
US cents
Basic earnings per share 54.1 27.5
Headline earnings per share 76.7 52.6
Adjusted basic earnings per share 77.6 54.0
Diluted earnings per share 53.0 27.4
Adjusted diluted earnings per share 75.2 52.7

The calculation of basic earnings per share has been based on the profit for the financial year as shown below, and on a weighted average number of shares in issue of 1,192,192,647 (2003: 1,076,143,990).

At 31 March 2004 there were 12,879,064 share purchase options outstanding under the SABMiller plc Executive Share Purchase Scheme (South Africa), 7,738,766 share purchase options outstanding under the SABMiller plc Executive Share Option Scheme (Approved Scheme and (No 2) Scheme combined), 1,738,147 conditional awards under the SABMiller plc Performance Share Awards Scheme and 1,825,976 share purchase options outstanding under the SABMiller plc International Employee Share Scheme which have not yet vested.

The calculation of diluted earnings per share is based on a weighted average number of shares in issue of 1,264,700,452, after adjusting for 72,507,805 weighted potentially dilutive ordinary shares arising from the share options and the guaranteed convertible bond, and the profit for the financial year as shown below, adjusted for a net interest saving of US$26 million, on the 4.25% guaranteed convertible bond. The average share price of SABMiller plc since the beginning of the financial year, used in determining the number of potentially dilutive shares, is US$8.43, compared with an average strike price on the outstanding options of US$8.05. The guaranteed convertible bond was not dilutive in respect of basic earnings per share for the year ended 31 March 2003.

The group has also presented an adjusted earnings per share figure to exclude the impact of amortisation and other nonrecurring items in order to present a more meaningful comparison for the years shown in the consolidated financial statements. Adjusted earnings per share has been based on adjusted headline earnings for each financial year and on the same number of weighted average shares in issue as the basic earnings per share calculation. Headline earnings per share has been calculated in accordance with the Institute of Investment Management and Research (IIMR)’s Statement of Investment Practice No.1 entitled ‘The Definition of Headline Earnings’. The adjustments made to arrive at headline earnings and adjusted earnings are as follows:

 
 
2004
US$m
2003
US$m
Profit for the financial year 645 296
Amortisation of goodwill 355 271
Share of associate’s profit on disposal of CSD business and brands in Morocco and a brand in Angola (Africa and Asia) (7)
Profit on disposal of trademarks (Appletiser, Other Beverage Interests) (13)
Surplus on pension fund of disposed operation (47)
Brewery closure costs in Tumwater (North America) (4) 35
Asset impairment (North America) 5
Water plant closure costs in the Canary Islands (Europe) 6
Share of associate’s profit for compensation for cancellation of distribution rights (Distell, Other Beverage Interests) (2)
Loss on sale of fixed assets and investments 3
Profit on partial disposal of subsidiary (Hotels and Gaming) (4)
Impairment costs in South Africa 4
Tax effects of the above items (15)
Minority interests’ share of the above items (26) (21)
Headline earnings (basic) 915 566
Integration/reorganisation costs* 19 35
Tax effects of the above items (7) (9)
Deferred tax adjustments due to assessed loss (ABI) (9)
Minority interests’ share of the above items (2) (2)
Adjusted earnings 925 581

*Comprises restructuring and integration costs in North America of US$13 million (2003: US$23 million) and reorganisation costs in Central America of US$6 million (2003: US$12 million).

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