11. Earnings per share

Bottling AppletiseBrewery scenePilsener beer
 
 
2005
US cents
2004
US cents
Basic earnings per share 94.1 54.1
Headline earnings per share 97.5 76.7
Adjusted basic earnings per share 103.2 77.6
Diluted earnings per share 91.1 53.0
Adjusted diluted earnings per share 99.8 75.2

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 1,212,075,231 (2004: 1,192,192,647).

At 31 March 2005 there were 11,608,464 share purchase options outstanding under the SABMiller plc Executive Share Purchase Scheme (South Africa), 8,120,480 share purchase options outstanding under the SABMiller plc Executive Share Option Scheme (Approved Scheme and (No 2) Scheme combined), 2,515,331 conditional awards under the SABMiller plc Performance Share Award Schemes and 2,709,964 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 1,272,728,491, after adjusting for 60,653,260 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$19 million, on the 4.25% guaranteed convertible bond up until its conversion. 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$13.46, compared with an average strike price on the outstanding options of US$9.32.

The group has also presented an adjusted earnings per share figure to exclude the impact of amortisation and other non-recurring 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:


 
 
2005
US$m
2004
US$m
Profit for the financial year 1,141 645
Amortisation of goodwill 366 355
Share of associate’s profit on disposal of fixed assets (Hotels and Gaming) (11)
Profit on disposal of Tumwater (North America) (4)
Brewery closure costs in Tumwater (North America) (1) (4)
Brewery closure costs (Italy) 21
Impairment costs 9
Profit on sale of investments (Africa and Asia, Central Administration) (355)
Loss on sale of fixed assets and investments 16 3
Profit on disposal of trademarks (Appletiser, Other Beverage Interests) (13)
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)
Surplus on pension fund of disposed operation (47)
Share of associate’s profit on disposal of a CSD business and brands in Morocco and a brand in Angola (Africa and Asia) (7)
Asset impairment (North America) 5
Tax effects of the above items 30
Minority interests’ share of the above items (31) (26)
Headline earnings (basic) 1,181 915
Integration/reorganisation costs* 32 19
Tax effects of the above items (7)
South African STC on non-recurring dividends 38
Minority interests’ share of the above items (2)
Adjusted earnings 1,251 925

*In 2005 this comprised restructuring costs in the Canary Islands (Europe) of US$16 million, restructuring costs in Italy (Europe) of US$14 million, share of associate’s restructuring costs in Hotels and Gaming of US$4 million and a reversal of restructuring and integration costs in North America of US$2 million (2004: restructuring and integration costs in North America of US$13 million and reorganisation costs in Central America of US$6 million).

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