Revenue increased 3% at actual rates to £3,125 million in 1999. At comparable rates revenue increased 1% compared with 9% growth in 1998.
Underlying revenue excluding Reuters Business Briefing and TIBCO Software Inc. increased 4% at actual rates to £3,081 million in 1999. At comparable rates underlying revenue increased 2% compared with 7% growth in 1998.
Operating profit before currency hedging grew by 6% at actual rates and 3% at comparable rates, compared to growth of 14% at comparable rates in 1998. Actual rates performance benefited from the weakness of sterling against the US and Japanese currencies. Operating profit after currency hedging was flat at £549 million.
Total goodwill in the year was £61 million, of which £14 million was charged to associates and joint ventures. This compares to goodwill of £51 million in 1998 of which £5 million was charged to associates, and total goodwill of £51 million in 1997.
Incremental external millennium costs were £25 million in 1999, compared to £31 million in 1998. Total millennium costs were £42 million in 1999, compared to an original budget of £28 million. Spend in 1998 was £55 million.
Recognised currency hedging gains in the year were £9 million compared with £45 million in 1998 and £56 million in 1997. The reduction in 1999 was due mainly to the relative strength of sterling when hedging for 1999 was undertaken.
Operating profit margin was 17.6%, slightly lower than the 1998 margin of 18.2%, (1997 margin 18.8%).
Disposal of fixed asset investments realised
a profit of £50 million, compared to £26 million in 1998, mainly relating to Greenhouse Fund disposals.
The successful Initial Public Offering (IPO)
of TIBCO Software Inc. on NASDAQ resulted in an accounting profit of £52 million in 1999.
Earnings before interest, tax, depreciation and amortisation (EBITDA) increased 5% at actual rates to £1,008 million, and increased 6% at comparable rates. This compares with growth in 1998 of 6% at actual rates and 14% at comparable rates.
EBITDA has been restated to include profits and losses derived from the disposal of subsidiary undertakings and fixed asset investments. Comparatives have been restated accordingly.
Net interest payable was £4 million compared with net interest receivable of £2 million in 1998 and £80 million in 1997. This reflected the return of £1.5 billion of cash to shareholders in February 1998.
Profit before tax increased 9% to £632 million in 1999, compared with a decline of 7% in 1998 at actual rates.
The tax charge for 1999 is based on an effective tax rate of 30% on profit before goodwill amortisation compared with a rate of 31% in 1998 (34.9% in 1997) and the UK corporate tax rate of 30.25% for 1999.
Earnings per share increased 13% in 1999 to 30.2p from 26.7p in 1998 ahead of profit before tax growth. This is principally a result of the reduction in the tax rate. Earnings per share growth in 1998 was 11%.
Free cash flow per share was 28.4p, down 17% from 34.1p in 1998 reflecting higher working capital requirements. Free cash flow per share in 1997 was 27.7p.
Investment in the business continued with £244 million of fixed asset additions, £197 million of development expenditure and £89 million of acquisitions and investments net of disposal proceeds. The impact of acquisitions and disposals was not material to group revenue and operating profit growth.
