Imperial Tobacco Says FY08 Trading In Line With Forecast; To Take GBP 140 Mln Charge On Altadis Cons

Source from:  news.ino.com (RTTNews) 03/20/2008

Imperial Tobacco Group Plc (ITY, IMT.L, ITYBF.PK) on Wednesday reported that its fiscal 2008 anticipated trading performance continued in line with management's estimates, including the operating performance of Altadis S.A. Additionally, the tobacco firm estimates to report a GBP 140 million write-down for its fiscal 2008 operating profit related to the Altadis buyout. Reporting on other matters related to the acquisition, Imperial added that the GBP 5 billion rights issue would be completed by July 18. The Bristol, U.K.-based firm noted that the trading trends as outlined in the January 29 AGM Interim Management Statement have continued. Further, the operating performance of Altadis, a French-Spanish tobacco firm, since completion of the acquisition on January 25 has been meeting company's forecast, it added. Imperial made the EUR 50 pence per share takeover offer through its wholly owned subsidiary Imperial Tobacco Overseas Holdings Ltd. The company noted that 241.867 million Altadis shareholders, representing about 95.81% of the targeted stake, have accepted the offer. Regarding the Altadis acquisition, Imperial reported that the integration process is currently underway. The firm reported that there would be a number of one-off acquisition accounting adjustments, as required under IFRS, on the consolidation of Altadis' results for the first time. These accounting adjustments will impact the adjusted profit from operations, but will have no effect on the underlying business performance or cash flows, it noted. Of these adjustments, the most significant one relates to increasing the fair value of stocks and the elimination of inter-company sales, whereas the others relate to depreciation, assets held for sale, derivatives, and intangible assets, the company added. Imperial currently estimates these adjustments to reduce adjusted profit from operations by about GBP 110 million in the first half and around GBP 30 million in the second half, or a total of GBP 140 million for fiscal 2008. The maker of Davidoff and West cigarettes noted that at the time of its recommended offer in July 2007, it had estimated that the enlarged group would be able to generate annual operational efficiencies of around 300 million euros by the end of fiscal 2010. The company said it is still confident of achieving the above operational efficiencies. The company further reported that out of the 650 million euros worth of non-core assets identified by Altadis in April 2007 as being available for disposal, proceeds amounting to 331 million euros have been realized by end of February 2008. This included the sale of Compania de Distribucion Integral Logista, S.A., or Logista's stake in Iberia for 220 million euros. The remaining unsold assets are primarily surplus properties. By the end of fiscal 2009, the company expects to sell a major part of these properties. Imperial also stated that it was progressing on the small number of brand divestments as required by the European Commission and expects to complete these in the coming months. Also, Imperial and its counter-party, Cubatabaco, have agreed to continue and enhance the Habanos cigar joint venture. In addition, Imperial reported that Altadis, which currently holds approximately 59.62% stake in Logista, has made an open offer for the remaining Logista shares at 52.50 euros per Logista share. The offer awaits the approval of the Spanish Securities and Exchange Commission, the Comision Nacional del Mercado de Valores, or CNMV. Following the CNMV approval, which is expected in the next few weeks, Logista minority shareholders will be able to lodge their acceptance of the offer period within 15 days. Further, Imperial stated that the rights issue, currently estimated to be no more than GBP 5 billion, would be completed by July 18. According to the company, the rights issue will be sized at the minimum amount of equity that is needed to ensure that the enlarged group maintains its investment grade credit rating. However, the actual size of the rights issue is dependent upon numerous factors and will not be materially impacted by the Logista offer or Aldeasa sale, it added. The company said that a detailed presentation would be provided in its interim results for the year, scheduled to be released on May 20. IMT.L is currently trading on the LSE at 2,255.00 pence, down 9.00 pence, or 0.40%, on a volume of 933,477 shares. ITY closed Tuesday's regular trading on NYSE at $91.50, up $0.61, on a volume of 33,100 shares, whereas ITYBF.PK closed Tuesday at $46.68. Enditem