BTR PLC - Interim Results

RNS No 7412t
BTR PLC
10th September 1998


                           BTR INTERIM RESULTS 1998

BTR  plc  today announces its interim results for the six months  to  30  June
1998.

-    Engineering  Group  sales  of  #2,442  million,  including  acquisitions,
     compared  to #2,145 million in 1997 at constant exchange rates,  up  14%,
     and  profit  before  interest and tax of #337 million  compared  to  #349
     million in 1997, down 3%.

-    Excluding  the  incremental effect of acquisitions made in 1997,  overall
     sales in the Engineering Group remained flat compared to first half 1997,
     and profits down 12%.

-    Businesses  continued  to be affected by adverse economic  conditions  in
     South America and South East Asia, and strength of sterling.

 -   Phase  1  and  2  divestments  now 95% complete  totalling  #5.3  billion
     proceeds,  well ahead of expectations of timing and value.   In addition,
     sale of Aerospace Group for #510 million announced on 31 July.

 -   #1.5  billion  capital  returned to shareholders;  further  #0.5  billion
     already announced in March.

 -   Strong  balance  sheet  and  healthy interest cover  provide  substantial
     capacity for future investment to enhance growth prospects of Engineering
     Group.

 -   Interim dividend of 4p to be paid as a Foreign Income Dividend.


Ian Strachan, Chief Executive of BTR plc, said:

"Since  January  1996,   BTR has been transformed from  a  conglomerate  to  a
focused engineering group.  Divestments of over #5 billion of annualised sales
have  been completed, raising #5.8 billion - an overall multiple of 1.2  times
sales.  Both the proceeds and the timing have been well ahead of expectations.
Targeted acquisitions,  with a total cost of  #1 billion since 1996,  such  as
Pollux and Exide, have also been successfully completed.

"We  have  a  strong  balance  sheet and healthy interest  cover,  substantial
advantages  in the current market.  We are therefore well positioned  to  take
advantage of attractive investment opportunities.

"1998  has  seen  overall performance adversely impacted by  the  strength  of
sterling and deteriorating economic conditions in South America and South East
Asia, and this has contributed to a level of performance which has not met our
expectations.   We will continue to take all necessary steps  to  improve  our
competitiveness, and accelerate critical cost reductions and  cash  generation
actions across the Group."


For enquiries contact:

Ian Strachan, Chief Executive           Tel: [phone]
Kathleen O'Donovan, Finance Director    Tel: [phone]
David Robbie, Investor Relations        Tel: [phone]
Peter Gavan, Corporate Communications   Tel: [phone]
Jonathan Glass, Brunswick               Tel: [phone]


BTR plc INTERIM RESULTS 1998
Highlights

# million                         30 June     30 June       30 June
                                   1998        1997           1997
                                             Restated*      Reported

Engineering Group Sales**           2,442        2,145           2,259
Divestment Group Sales                145          157             172

Continuing Sales                    2,587        2,302           2,431

Engineering Group PBIT**              337          349             361
Divestment Group PBIT                   4           13              15

Continuing PBIT                       341          362             376

Profit Before Tax pre Corporate       284          285             297
Activities
Profit Before Tax                    (45)          516             540

Earnings pre Corporate                198          194             203
Activities
Earnings                            (242)          355             370

Earnings per Share - Basic          (6.3)p         8.7p            9.1p

Earnings per Share -                 6.0p                       
Underlying***
Dividend per Share - payable as      4.0p         4.0p            4.0p
a Foreign Income Dividend
('FID')

*At 1998 exchange rates.
**Excluding Aerospace.
***Earnings pre Corporate Activities divided by period end number of shares.

Performance Overview

Sales  in  BTR's  Engineering Group increased by 14%  over  1997  at  constant
exchange rates, with PBIT down by #12 million, some 3%.  Acquisitions made  in
1997 and 1998,  contributed an additional  #297 million sales and  #31 million
profits   in the period to 30 June 1998 compared to the same period  in  1997.
Excluding  the effect of these acquisitions, overall sales have remained  flat
compared to the first half of 1997, and profits have fallen by 12%. Good sales
growth  was experienced in certain parts of the Engineering Group,  but  other
areas have been adversely impacted by the continuing strength of sterling  and
sustained difficult economic conditions in South America and South East Asia.

In  1998,  currency   movements had  an adverse  translation  impact   against
1997  of   #12  million in terms of Engineering Group PBIT.  In addition,  the
transaction  impact  (through import substitution and  competition  in  export
markets)  on certain UK businesses, totals some #8 million for the six  months
to June.

Investment

Several  small acquisitions were made in each of the Power Drives and  Control
Systems  groups,   bringing   both  technology,   new  products  and   greater
geographic  reach,  costing  a  total of  #71 million.  In Automotive  Sealing
Systems,  we  announced the acquisition of a 70% interest in  Saiag,  for  #41
million;  an initial payment of #18 million was made in the first  half  year,
and  the  balance was paid on completion in July 1998.  Saiag  is  the  market
leader in Italy for Sealing Systems.

Since 1996, acquisitions representing some #1.1 billion annualised sales  have
been completed (including Saiag), for consideration of #1 billion - a multiple
of 0.9 times sales.

Overall  net capital expenditure for the Group, including businesses  divested
during the period was #260 million (1997 #286 million).  The Engineering Group
net   capital  expenditure  was  #175  million  (1997  #153  million),   which
represented  7.2% of sales, with the emphasis remaining on technology  related
areas  and  product development.  Given this programme, we expect a continuing
reduction in our capex in the second half and through next year.

Divestment Programme

The  announced  Phase 1 and Phase 2 divestment programme is now 95%  complete,
ahead of expectations both in timing and value.  In March, the disposals  were
announced  of  the  Glass  and  PET Packaging  group  for  #2.2  billion,  the
Australian  Building Products activities (including Formica) for #650  million
and  MBCI  for  #330  million.    Proceeds for  Phase  2  divestments  already
announced total #3.7 billion, representing a multiple of 1.4 times sales.

The  disposal of BTR's Aerospace Group, for #510 million, was announced at the
end  of  July.   The transaction is expected to complete by 30 September,  and
proceeds represent a multiple of 2.1 times sales.

Since  1996,  divestments representing over #5 billion annualised  sales  have
been  completed  (including  Aerospace), raising #5.8  billion  -  an  overall
multiple  of  1.2  times sales.  This represents one of the  largest  non-core
divestment  programmes ever undertaken in the UK, and it has  transformed  BTR
from  a  conglomerate with a wide range of largely unrelated businesses  to  a
focused engineering group.

In  the  six  months  to  June 1998, discontinued businesses  contributed  #87
million  of  profit to the date of divestment.  Many of these businesses  were
based in Australia, and their contribution reflects the translation impact  of
the weakening Australian dollar in 1998.

Finance Costs, Interest Cover and Gearing

The finance charge for the period was #57 million (1997: #79 million).  This
reduction reflects the net impact of acquisitions, divestments and the return
of capital.  Interest cover based on operating profits before corporate
exceptionals was 7.5 times compared to 7.8 times for 1997.  The Group's
gearing is 19% (1997: 35%) with goodwill added back.

Return of Capital

#1.5 billion was returned to shareholders in May, reducing the number of
issued shares by some 19% (from 4,090 million to 3,318 million).  As
previously announced, BTR expected to return a further #0.5 billion to
shareholders in April 1999; however, we intend to accelerate an element of
this return through on-market purchases from time to time, in accordance with
the authority granted by shareholders.

The return of capital  reflects the Board's continued commitment to an
efficient capital structure, while providing BTR with substantial capacity for
investment to enhance the growth prospects of the Engineering Group.

Year 2000

BTR's Year 2000 Project to address the issues arising as a result of the
change of millennium is ongoing.  Fuller details are given in the Interim
Report prepared for our shareholders.

Dividend Payment

The interim dividend is 4p per Ordinary share.  This dividend will be paid as
a Foreign Income Dividend on 27 November to Ordinary shareholders on the
Register on 25 September 1998.

Operational Review

Automotive

#m                 June         June         June       % Change
                   1998         1997         1997     on Restated
                           Restated*     Reported

Sales                651         638          679           2.0%
Profit                47          64           67         (26.6%)

*At 1998 exchange rates

The  first half of 1998 has been a difficult period for the Automotive  Group,
with profits down on 1997 levels despite an increase in sales.

Vehicle  production in the major developed markets has been stable.  In  North
America,  the major OEMs are achieving production levels slightly below  those
of  1997, and the General Motors strike in June closed virtually all of  their
assembly  plants  until settlement was reached at the end  of  July.   The  GM
strike  had  a profits impact of approximately #2 million on BTR's  automotive
businesses  in the first half.  Australian vehicle production was  similar  to
last  year  and European production is up somewhat on last year, enabling  our
operations in these countries to achieve modest sales increases.

The  group's sales increase has not resulted in profit improvement due to  the
high  start up costs associated with new vehicle launches; competitive pricing
pressure  on  these  platforms  has caused  margins  to  decline  as  existing
platforms  have been  replaced  with new  lower  margin  ones.  Lower  labour
productivity  and  higher  material scrap costs which  have  been  experienced
during  platform  startups are expected to improve  as  the  platform  volumes
increase.   The Automotive Group is focusing on cost reductions,  productivity
improvements  and  the transfer of production to lower labour  cost  areas  to
combat these issues.

The adverse economic conditions in South America and South East Asia which  we
identified  in  our  1997  results  presentation  and  AGM  Announcement  have
continued:  Indonesian production has been halted altogether and shipments  of
transmissions  to Korea have been severely limited.  The situation  in  Brazil
has  been  disappointing with vehicle sales 23% lower than the first  half  of
1997.  Despite interest rates returning to pre-crisis levels, vehicle sales in
Brazil  have  stalled  in  recent  months and  all  OEMs  are  reducing  their
production schedules.

In  April, BTR Sealing Systems announced the acquisition of a 70% interest  in
Saiag's  automotive  sealing  systems  business,  and  this  transaction   was
completed  in  July.   Saiag is the market leader in Italy  for  extruded  and
moulded vehicle seals, and has emerging market operations in Poland and China,
thereby  adding  to  the  global  scale of  BTR  Sealing  Systems  and  better
positioning  the  Group to take advantage of the premium growth  opportunities
expected   to   be   offered   by   these  markets   in   the   medium   term.

Control Systems

#m                  June        June         June       % Change
                    1998        1997         1997     on Restated
                            Restated*    Reported

Sales                840         600          624           40.0%
Profit               123         104          106           18.3%

*At 1998 exchange rates

The  Control Systems Group has achieved sales and profit growth of 40% and 18%
respectively in the first half of 1998 as the impact of the acquisitions  made
in  the  second  half of 1997 has come through.   Excluding  this  acquisition
impact,  organic sales growth in the remaining businesses has been  flat,  and
profits  are  down  by  some  #6  million.   This  fall  in  profits  occurred
principally  in  the  Metering Systems group, which was  affected  by  reduced
profitability in gas meters and a strike in the US water meters plant  in  the
first quarter, and due to South East Asia and sterling strength impacts in the
Power Systems and Flow Control Groups.

Lower growth in Asia has had a knock-on impact in other regions as OEMs try to
reduce  inventory  levels due to general caution about short-term  growth  and
credit  issues  in the region.   The Group's UK operations have  continued  to
suffer  from the strength of sterling, which has led to reduced export volumes
and   increased  pricing  pressure.   The  group  has  been  impacted  by  the
rescheduling  of  orders  due  to downturns in  a  number  of  markets.   Some
businesses  in  Flow Control have suffered from weakness in the  oil  and  gas
sector, although other domestic US markets have been generally buoyant.

The   integration   of   acquisitions  has  progressed  satisfactorily,   with
significant  management  changes at Exide which,   despite  difficult  pricing
conditions in Europe, has met its internal plan for half year profits.  Orders
to  June saw an increase of 10% to the underlying rate of order intake  versus
the  fourth quarter of 1997. The turnaround at Limitorque has proceeded  well,
with  the  business now returned to profitability, while the other major  1997
acquisitions,  Saturnia  (Power Systems) and Pollux (Metering  Systems),  have
also  produced good profit performances, despite Saturnia's sales being  lower
than expected due to reduced Brazilian government spending.

In 1998, Control Systems Group have completed several small acquisitions, at a
cost  of   some #41 million.  These acquisitions have continued to extend  the
group's product range and geographic reach.


Power Drives

#m                  June        June         June        % Change
                    1998        1997         1997     on Restated
                            Restated*    Reported

Sales                545         505          517            7.9%
Profit               100         106          108           (5.7)%

*At 1998 exchange rates

BTR Power Drives has experienced mixed market conditions in the first half  of
the  year.   The  results include the full six months' impact of  acquisitions
made  in 1997, and excluding these, sales growth was flat, and profits reduced
by  #11 million.  Strong orders from continental European customers have  been
offset  by  the economic crisis in Asia and the impact of strong  sterling  on
volumes  and  margins in the UK.  Newly acquired companies in France  (Parvex)
and  the Netherlands (MCC) have made solid contributions.  Both are active  in
high performance products of motion control and conveying chain.

The  UK  based Brook Hansen motors business has been held back in  orders  and
margins  by  the  strength of sterling impacting both home and export  markets
through  import  substitution  and increased competition  in  export  markets.
However our competitive position has been strengthened by the acquisition of a
small  Polish motor manufacturer in June, and the further development  of  the
motor operations in India and Thailand.  The extended range of high efficiency
W-motors received wider recognition, being selected as a "Millennium"  product
in the UK, and will benefit from the proposed European efficiency legislation.
The  production of electronic variable speed motors in our strategic  alliance
with Danfoss is coming on stream to meet customer demand.

The  Fasco  fractional motors and blowers business continues to  be  adversely
affected  by the state of the HVAC (Heating, Ventilation and Air Conditioning)
market, which has been weak due to unfavourable weather conditions as well  as
competition brought about by weakness of the Asian currencies against  the  US
dollar.   The relocation of fractional horse power motors manufacture from the
US and Australia to Mexico and Thailand is progressing well.


Specialist Engineering

#m                  June        June         June        % Change
                    1998        1997         1997     on Restated
                            Restated*    Reported

Sales                406         402          439            1.0%
Profit                67          75           80          (10.7)%

*At 1998 exchange rates

In  overall  terms,  the  results  of the Specialist  Engineering  group  were
adversely  affected by poor results in Nylex Malaysia, which has continued  to
suffer  from  depressed demand across the region, resulting  in  profits  well
below 1997 levels.

Within  the  Paper  Group,  the rolls business performed  well,  achieving  an
especially  strong  performance in Continental Europe  where  demand  improved
markedly  over  1997.    This was partially offset by the  effects  of   Asian
economic   conditions  on  BTR's  Australian  and  Japanese   paper   clothing
operations.   New  products  have played a significant  part  in  the  growth,
notably in the supercalender roll and laminated felt markets.

BTR Environmental has experienced mixed market conditions in the first half of
the  year  resulting  in  modest sales growth compared  to  1997  and  reduced
profitability.  Further integration of the UK and French operations and strong
growth  in exports to Eastern Europe have mitigated the effect of the strength
of  sterling  and  the  decline in Far East markets.  Continental  Europe  has
performed strongly, particularly Germany, Spain and Benelux.

Rail  Group  has  been  affected by the deferral of several  major  signalling
contracts  which  were  scheduled for the  first  half  of  the  year  and  by
continuing high levels of research and development expenditure associated with
the  development of leading edge signalling technology.  Sales and profits are
therefore below last year's level.

The  sale  of  the  Aerospace Group was announced on  31  July.   The  trading
performance of Aerospace to June is now included in discontinued activities.


BTR GROUP 1998 INTERIM RESULTS
UNAUDITED PROFIT AND LOSS ACCOUNT

# million                              June      June       June       Dec
                                       1998      1997       1997      1997
                                             Restated*
SALES                                                                     
Continuing operations:   Ongoing      2,579      2,302     2,431     4,924
                    Acquisitions          8 
                              
                                      2,587      2,302     2,431     4,924

Discontinued operations                 787      1,566     1,689     3,167

                                      3,374      3,868     4,120     8,091

Operating costs less other income   (2,950)    (3,292)   (3,519)   (6,889)
                                                                          
Operating Profit
Continuing operations:    Ongoing       339        360       374       742
                     Acquisitions         -   
                            
                                        339        360       374       742

Discontinued operations                  85        216       227       460

                                        424        576       601     1,202
Share of operating profit in                                          
associates:    Continuing                 2          2         2         1
               Discontinued               2          9        10        17
                                                                          
Corporate Exceptionals
Costs of closure within                 (6)          -         -         -
continuing operations

(Loss)/Profit on disposal/closure     (407)         16        16       229
of discontinued operations

Profit on sale of fixed asset             1          -         -        26
investments

Reorganisation provisions in            (4)       (10)      (10)      (27)
respect of acquisitions

Profit Before Interest and               12        593       619     1,448
Taxation

Finance costs                          (57)       (77)      (79)     (155)

(Loss)/Profit Before Taxation          (45)        516       540     1,293

Taxation                              (196)      (155)     (162)     (397)

(Loss)/Profit After Taxation          (241)        361       378       896

Minority interests (including non       (1)        (6)       (8)      (14)
equity interests)

Earnings                              (242)        355       370       882
*At 1998 average exchange rates 
                                          
Earnings per share  - basic          (6.3)p       8.7p      9.1p     21.6p
Dividend per Ordinary share            4.0p       4.0p      4.0p      9.6p
Average number of shares              3,859      4,088     4,088     4,088
(millions)
                         
Loss on disposals of #407 million (1997, profit of #16 million for the half
year and #229 million for the full year) includes a goodwill write-off of
#1,676 million (#39 million for the half year and #130 million for the full
year in 1997).

BTR GROUP 1998 INTERIM RESULTS
UNAUDITED SUPPLEMENTARY ANALYSIS

#million                  Sales                   Profit Before Interest
                                                          and Tax

              June    June     June    Dec    June     June     June   Dec
              1998    1997     1997    1997   1998     1997     1997   1997
                    Restated                         Restated*
                        *
Business                                                              
Groups

Automotive      651       638     679  1,323     47         64     67    135
Control         840       600     624  1,352    123        104    106    242
Systems
Power           545       505     517  1,047    100        106    108    203
Drives
Specialist      406       402     439    865     67         75     80    138
Engineering

Engineering   2,442     2,145   2,259  4,587    337        349    361    718
Group

Building         62        67      77    152      3          6      6     10
Products
Polymeric        28        32      36     71      1          3      4     10
Products
Phase 1          55        58      59    114      -          4      5      5
Divestment
Group

Divestment      145       157     172    337      4         13     15     25
Groups

Continuing    2,587     2,302   2,431  4,924    341        362    376    743

Corporate       787     1,566   1,689  3,167  (329)        231    243    705
Activities

              3,374     3,868   4,120  8,091     12        593    619  1,448

Geographic                                                                  
Analysis
(by source)

United          417       400     400    787     50         63     63     90
Kingdom
Other           596       497     540  1,072     64         53     56    129
Europe
The           1,200     1,033   1,042  2,186    191        197    199    409
Americas
Australasia     252       249     294    583     21         29     34     69
Asia            102       101     131    257     14         17     21     39
Africa           20        22      24     39      1          3      3      7

Continuing    2,587     2,302   2,431  4,924    341        362    376    743

Corporate       787     1,566   1,689  3,167  (329)        231    243    705
Activities

              3,374     3,868   4,120  8,091     12        593    619  1,448

*At 1998 average exchange rates

Corporate Activities includes the pre disposal trading results of discontinued
operations of #85 million, the share of operating profits in discontinued
associates of #2 million,  the loss on disposal of discontinued operations of
#407 million (net of goodwill of #1,676 million), the profit on sale of fixed
asset investments of #1 million, costs of closure within continuing operations
of #6 million and reorganisation provisions in respect of acquisitions charged
to the profit and loss account of #4 million.


BTR GROUP 1998 INTERIM RESULTS
UNAUDITED SUMMARY BALANCE SHEET

#million                               30 June     30 June       31 Dec
                                          1998        1997         1997
CAPITAL EMPLOYED 
                                           
Fixed assets  
                                                         
Intangible assets                           19           -            -
Tangible assets                          1,985       3,442        3,300
Investments                                 37         163          148

                                         2,041       3,605        3,448

Current assets, liabilities and                                        
provisions
Inventories                                860       1,277        1,254
Debtors and current assets               1,886       2,248        2,101
Creditors and other current            (1,523)     (1,771)      (1,855)
liabilities
Provisions for liabilities and           (308)       (497)        (406)
charges
                                           915       1,257        1,094

                                         2,956       4,862        4,542

FINANCED BY                                                            
BTR Shareholders' interests                                            
Called up share capital (including       1,089       1,009        1,023
non equity interests)
Reserves                                   775       1,269        1,133

                                         1,864       2,278        2,156

Minority interests (including non          100         178          167
equity interests)

Total equity interests                   1,964       2,456        2,323

Net debt                                                               
Long term                                   84       1,070          773
Short term (net)                           908       1,336        1,446

                                           992       2,406        2,219

                                         2,956       4,862        4,542
                                                                       
Gearing (excluding goodwill added          51%         98%          96%
back)


UNAUDITED RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS

#million                               30 June     30 June       31 Dec
                                          1998        1997         1997

(Loss)/Profit for the period             (242)         370          882
Dividends                                (133)       (166)        (395)

                                         (375)         204          487

Other recognised gains and losses        (130)        (37)        (160)
relating to the period (net)
Return of Capital/new share capital    (1,436)          10           10
issued
Net Goodwill written back                1,649       (158)        (440)

Net reduction to shareholders'           (292)          19        (103)
funds
Opening shareholders' funds              2,156       2,259        2,259

Closing shareholders' funds              1,864       2,278        2,156

BTR GROUP 1998 INTERIM RESULTS
UNAUDITED CASH FLOW

#million                                  June        June          Dec
                                          1998        1997         1997

Net cash inflow from operating             328         556        1,306
activities (see below)
Dividends received from associated           2           6           11
undertakings
Returns on investment and servicing                                    
of finance:
     Interest paid (net)                  (69)        (76)        (149)
     Minority dividends paid               (1)         (3)          (7)
Taxation                                 (149)       (177)        (367)
Capital expenditure and financial                                      
investment:

Purchase of tangible fixed               (265)       (309)        (655)
assets (net)
Sale of tangible fixed assets                5          23           48
Purchase of investments (net)              (9)         (7)         (19)
Disposal of investments                      4           6           62

Acquisitions and disposals:                                            

Acquisition of subsidiary                 (62)       (207)        (568)
undertakings (net of
cash acquired)
Disposal of subsidiary undertakings      3,139         145          704
(net of cash divested)
                                                                       
Equity dividends paid - BTR plc          (229)       (287)        (453)

Net cash inflow/(outflow) before         2,694       (330)         (87)
use of liquid resources and
financing

Management of liquid resources           (566)           5        (135)
Financing - (share buyback)/issue      (1,436)           9           10
of shares
Financing - (decrease)/increase of       (756)         371          164
debt

Increase/(decrease) in cash in the        (64)          55         (48)
period
     
Reconciliation of net cashflow to                                      
movement in net debt

Cash outflow/(inflow) from                 756       (371)        (164)
decrease/(increase) in debt
Cash outflow/(inflow) from                 566         (5)          135
increase/(decrease) in liquid
resources

Change in net debt resulting from        1,258       (321)         (77)
cash flows

Loans and finance leases                     5          21        (132)
divested/(acquired) with
subsidiaries
Exchange movements                        (36)         (6)           90

Movement in net debt in the period       1,227       (306)        (119)
Opening net debt                       (2,219)     (2,100)      (2,100)

Closing net debt                         (992)     (2,406)      (2,219)

Cash comprises cash in hand, deposits repayable on demand and overdrafts.
In overall terms, the Group's net borrowing position at 30 June 1998, which
includes short term deposits, loan finance and loans receivable, is #992
million (#2,219 million as at 31 December 1997).

CASH INFLOW FROM OPERATING                                  
ACTIVITIES
Profit before interest and tax              12         619        1,448
                                                                       
Depreciation charge                        157         199          389
Profits of associates                      (4)        (13)         (18)
Movement in trade working capital        (167)       (178)        (108)
Movement in other working capital         (37)        (18)         (44)
Movement in provisions                    (45)        (38)        (110)
Loss on disposal of fixed assets             -           1            4
Loss/(Profit) on disposal/closure          412        (16)        (255)
                                                                       
Net cash inflow from operating             328         556        1,306
activities
     

BTR GROUP 1998 INTERIM RESULTS
UNAUDITED ADDITIONAL INFORMATION


1.   Statement of Total Recognised Gains and Losses

     #million                      June      June       Dec
                                   1998      1997      1997

     (Loss)/Profit for the         (242)      370       882
     financial period
     Exchange movements            (130)     (37)      (160)

                                   (372)      333       722

2.   Taxation and Dividends

     The taxation charge on profit pre corporate exceptionals for the period
     ended 30 June 1998 is based on the estimated rate for the full year of
     31%.  This compares with 30% for the first half and the whole of 1997.
     The taxation charge on corporate exceptionals for the period ended 30
     June 1998 is estimated at #81 million.

     The interim dividend is 4 pence per Ordinary share, and will be paid as a
     Foreign Income Dividend.  The 185.5 million 'B' shares outstanding at 30
     June 1998, issued as part of the return of capital, earn dividends at an
     annual rate of 4.75%.

3.   New Accounting Standards

     From 1 January 1998 the Group has applied three new accounting standards,
     FRS 9 (Associates and Joint Ventures), FRS 10 (Goodwill and Intangible
     Assets) and FRS 11 (Impairment of Fixed Assets and Goodwill). Neither FRS
     9 nor FRS 11 have had a significant impact on the Group during the six
     month period to 30 June 1998.  In accordance with FRS 10, goodwill
     arising on acquisitions in 1998 has been capitalised and is being
     amortised over a twenty year life.  Goodwill previously written off to
     reserves has not been reinstated.

     In connection with the introduction of FRS10, the Group has reviewed the
     cumulative goodwill written off to reserves.  As a result, #218 million
     of goodwill relating to businesses disposed pre UITF3 (Treatment of
     Goodwill on Disposal of a Business) has been transferred, within
     reserves, from the goodwill account.  In addition, #311 million relating
     to the accumulated currency impact on goodwill at 31 December 1997 has
     been recognised.  These transfers have no material  impact on prior year
     earnings or reserves.  The cumulative goodwill now eliminated against
     reserves totals #3.1 billion, after the goodwill transfer on divestments
     in 1998.

4.   Exchange Rates

     The results for the period have been translated into sterling at the
     appropriate average rates.  The balance sheet has been translated at
     period end rates.

                                 30      30          31
                                June    June        Dec
                                1998    1997       1997

     US$ period end rate to      1.67    1.66      1.65
     #1
     Aus$ period end rate to     2.69    2.22      2.53
     #1
     US$ average rate to #1      1.65    1.64      1.65
     Aus$ average rate to #1     2.53    2.13      2.22

5.   Prior Year Results

     The financial information for the year ended 31 December 1997 is derived
     from the full accounts for that year, which received an unqualified
     report from the auditors and which have been filed with the Registrar of
     Companies.


END

IR FCCCPNDKBKCK